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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): February 25, 1999
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
(AS DEPOSITOR UNDER THE POOLING AND SERVICING AGREEMENT,
DATED AS OF FEBRUARY 1, 1999, PROVIDING FOR THE ISSUANCE OF
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-2)
Salomon Brothers Mortgage Securities VII, Inc.
----------------------------------------------
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-62737 13-3439681
-------- --------- ----------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
390 Greenwich Street, 4th Floor
New York, New York 10013
- ------------------ -----
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (212) 723-6391
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<PAGE>
-2-
Item 2. Acquisition Or Disposition Of Assets
------------------------------------
Description of the Certificates and the Mortgage Pool
On February 25, 1999, a single series of certificates,
entitled Salomon Brothers Mortgage Securities VII, Inc., Mortgage Pass-Through
Certificates, Series 1999-2 (the "Certifi cates"), were issued pursuant to a
pooling and servicing agreement, dated as of February 1, 1999 (the "Agreement"),
attached hereto as Exhibit 4.1, among Salomon Brothers Mortgage Securities VII,
Inc. as depositor (the "Depositor") and Cendant Mortgage Corporation ("Cendant")
as master servicer (in such capacity, the "Master Servicer") and The Chase
Manhattan Bank, as trustee (the "Trustee"). The Certificates consist of eighteen
classes of certificates (collectively, the "Certificates"). The Certificates
evidence in the aggregate the entire beneficial ownership interest in a trust
fund (the "Trust Fund"), consisting primarily of a segregated pool (the
"Mortgage Pool") of conventional, one- to four- family, fixed rate, first lien
mortgage loans having original terms to maturity not greater than 30 years (the
"Mortgage Loans"). The Mortgage Pool consists of Mortgage Loans having an
aggregate principal balance of $223,305,365 as of February 1, 1999 (the "Cut-off
Date"). The Mortgage Loans were purchased pursuant to the Mortgage Loan Purchase
Agreement (the "Purchase Agreement"), dated February 22, 1999, among the
Depositor, Salomon Brothers Realty Corp., Cendant and Bishop's Gate Residential
Mortgage Trust. The Certificates were sold by the Depositor to Salomon Smith
Barney Inc., an affiliate of the Depositor, pursuant to an underwriting
agreement, dated February 22, 1999, between the Depositor and Salomon.
The Certificates have the following initial Certificate
Balances and initial Pass- Through Rates:
Initial Certificate
Class Principal Balance Pass-through Rate
----- ----------------- -----------------
A1-1 $60,123,603.00 6.50% per annum
A1-2 $9,545,000.00 6.25% per annum
A1-3 $9,545,000.00 6.75% per annum
A1-4 $15,000,000.00 6.50% per annum
A1-5 $49,800,000.00 6.50% per annum
A1-6 $200,000.00 6.50% per annum
A2 $68,254,245.00 6.50% per annum
IO $223,305,364.36 Variable
<PAGE>
-3-
PO $1,904,951.79 N/A
B-1 $4,466,000.00 6.50% per annum
B-2 $2,010,000.00 6.50% per annum
B-3 $781,000.00 6.50% per annum
B-4 $782,000.00 6.50% per annum
B-5 $335,000.00 6.50% per annum
B-6PO $558,364.57 6.50% per annum
B-6IO $558,364.57 6.50% per annum
R-I $100.00 6.50% per annum
R-II $200.00 6.50% per annum
The Certificates (except for the Class B-4, B-5, B-6PO and
B-6IO Certificates) and the Mortgage Loans are more particularly described in
the Prospectus, dated November 13, 1998, and the Prospectus Supplement, dated
February 22, 1999, as previously filed with the Securities and Exchange
Commission pursuant to Rule 424(b). The Class B-4, B-5, B-6PO and B-6IO
Certificates have not been and will not be publicly offered by the Depositor.
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to them in the Prospectus Supplement.
Item 7. Financial Statements and Exhibits
---------------------------------
(a) Not applicable
(b) Not applicable
(c) Exhibits
<PAGE>
-4-
Exhibit No. Description
----------- -----------
4.1 Pooling and Servicing Agreement,
dated as of February 1, 1999, by and
among Salomon Brothers Mortgage
Securities VII, Inc. as Depositor,
Cendant Mortgage Corporation as
Master Servicer and The Chase
Manhattan Bank, as Trustee, relating
to the Series 1999-2 Certificates.
<PAGE>
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.
Dated: February 25, 1999
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Vincent J. Varca
----------------------------
Name: Vincent J. Varca
Title: Assistant Vice President
<PAGE>
Index to Exhibits
-----------------
Exhibit No. Description
----------- -----------
4.1 Pooling and Servicing Agreement, dated as of
February 1, 1999, by and among Salomon Brothers
Mortgage Securities VII, Inc. as Depositor, Cendant
Mortgage Corporation as Master Servicer and The
Chase Manhattan Bank as Trustee, relating to the
Series 1999-2 Certificates.
Exhibit 4.1
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Depositor
CENDANT MORTGAGE CORPORATION
Master Servicer
and
THE CHASE MANHATTAN BANK
Trustee
-----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 1999
-----------------------------------------
Mortgage Pass-Through Certificates
Series 1999-2
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION PAGE
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<S> <C>
ARTICLE I
DEFINITIONS
1.01. Defined Terms..................................................................................3
Affiliate......................................................................................3
Agreement......................................................................................3
Assignment.....................................................................................3
Available Distribution Amount..................................................................3
Bankruptcy Amount..............................................................................4
Bankruptcy Code................................................................................4
Bankruptcy Loss................................................................................4
Bishop's Gate..................................................................................4
Book-Entry Certificate.........................................................................4
Book-Entry Custodian...........................................................................5
Business Day...................................................................................5
Buydown Account................................................................................5
Buydown Agreement..............................................................................5
Buydown Funds..................................................................................5
Buydown Mortgage Loan..........................................................................5
Buydown Period.................................................................................5
Cash-out Refinancing...........................................................................5
Certificate....................................................................................5
Certificate Factor.............................................................................5
Certificateholder or Holder....................................................................6
Certificate Owner..............................................................................6
Certificate Principal Balance..................................................................6
Certificate Register and Certificate Registrar.................................................6
Class .......................................................................................6
Class A Certificate............................................................................7
Class A Percentage.............................................................................7
Class A Prepayment Percentage..................................................................7
Class A Principal Adjustment Amount............................................................7
Class A Principal Distribution Amount..........................................................7
Class A1-1 Certificate.........................................................................7
Class A1-2 Certificate.........................................................................7
Class A1-3 Certificate.........................................................................7
Class A1-4 Certificate.........................................................................8
Class A1-5 Certificate.........................................................................8
Class A1-6 Certificate.........................................................................8
Class A2 Certificate...........................................................................8
i
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Class B Percentage.............................................................................8
Class B-1 Certificate..........................................................................8
Class B-2 Certificate..........................................................................8
Class B-3 Certificate..........................................................................9
Class B-4 Certificate..........................................................................9
Class B-5 Certificate..........................................................................9
Class B-6 Certificate..........................................................................9
Class B-6IO Certificate........................................................................9
Class B-6PO Certificate........................................................................9
Class Exemption................................................................................9
Class IO Certificate...........................................................................9
Class IO Mortgage Loan.........................................................................9
Class PO Certificate...........................................................................9
Class PO Mortgage Loan........................................................................10
Class PO Percentage...........................................................................10
Class PO Principal Distribution Amount........................................................10
Class R-I Certificate.........................................................................11
Class R-II Certificate........................................................................11
Closing Date..................................................................................11
Code ......................................................................................11
Collection Account............................................................................12
Commission....................................................................................12
Component.....................................................................................12
Component Balance.............................................................................12
Corporate Trust Office........................................................................12
Cross-Collateralization Date..................................................................13
Cut-off Date..................................................................................13
Debt Service Reduction........................................................................13
Deficient Valuation...........................................................................13
Definitive Certificates.......................................................................13
Deleted Mortgage Loan.........................................................................13
Depositor.....................................................................................13
Depository....................................................................................13
Depository Institution........................................................................13
Depository Participant........................................................................14
Determination Date............................................................................14
Directly Operate..............................................................................14
Disqualified Organization.....................................................................14
Distribution Account..........................................................................14
Distribution Date.............................................................................15
Diversion Fraction............................................................................15
Diverted Interest Amount......................................................................15
DOL ......................................................................................15
ii
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SECTION PAGE
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DOL Regulations...............................................................................15
Due Date......................................................................................15
Due Period....................................................................................15
Eligible Account..............................................................................15
ERISA ......................................................................................15
Estate in Real Property.......................................................................15
Excess Bankruptcy Loss........................................................................15
Excess Fraud Loss.............................................................................16
Excess Loss...................................................................................16
Excess Special Hazard Loss....................................................................16
Extraordinary Loss............................................................................16
Extraordinary Trust Fund Expenses.............................................................16
Fannie Mae....................................................................................17
FDIC ......................................................................................17
Final Recovery Determination..................................................................17
Fitch ......................................................................................17
Fraud Loss....................................................................................17
Fraud Loss Amount.............................................................................17
Freddie Mac...................................................................................17
Group 1 Class A Certificate...................................................................17
Group 1 Class A Percentage....................................................................18
Group 1 Class A Principal Distribution Amount.................................................18
Group 1 Subordinate Percentage................................................................20
Group 1 Subordinate Prepayment Percentage.....................................................20
Group 1 Subordinate Principal Distribution Amount.............................................20
Group 2 Class A Percentage....................................................................21
Group 2 Class A Principal Distribution Amount.................................................22
Group 2 Subordinate Percentage................................................................23
Group 2 Subordinate Prepayment Percentage.....................................................23
Group 2 Subordinate Principal Distribution Amount.............................................23
Independent...................................................................................25
Independent Contractor........................................................................25
Insurance Proceeds............................................................................26
Interest Accrual Period.......................................................................26
Interest Distribution Amount..................................................................26
Late Collections..............................................................................26
Liquidation Event.............................................................................26
Liquidation Proceeds..........................................................................27
Loan-to-Value Ratio...........................................................................27
Lockout Certificates..........................................................................27
Lockout Certificate Percentage................................................................27
Lockout Distribution Percentage...............................................................28
Master Servicer...............................................................................28
iii
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Master Servicer Event of Default..............................................................28
Master Servicer Remittance Date...............................................................28
Monthly Payment...............................................................................28
Mortgage......................................................................................29
Mortgage File.................................................................................29
Mortgage Loan.................................................................................29
Mortgage Loan Purchase Agreement..............................................................29
Mortgage Loan Remittance Rate.................................................................29
Mortgage Loan Schedule........................................................................29
Mortgage Note.................................................................................31
Mortgage Pool.................................................................................31
Mortgage Rate.................................................................................31
Mortgaged Property............................................................................31
Mortgagor.....................................................................................31
Net Mortgage Rate.............................................................................31
New Lease.....................................................................................31
Non-Class PO Percentage.......................................................................31
Non-Relocation Mortgage Loans.................................................................31
Nonrecoverable P&I Advance....................................................................31
Non-United States Person......................................................................31
Notional Amount...............................................................................31
Officers' Certificate.........................................................................32
Opinion of Counsel............................................................................32
Original Mortgage Loan........................................................................32
Original Sub-Pool 1 Mortgage Loan.............................................................32
Original Sub-Pool 2 Mortgage Loan.............................................................32
Originator....................................................................................32
Overcollateralization Amount..................................................................32
Overcollateralized Sub-Pool...................................................................32
Ownership Interest............................................................................33
Pass-Through Rate.............................................................................33
Percentage Interest...........................................................................33
Permitted Investments.........................................................................33
Permitted Transferee..........................................................................34
Person ......................................................................................34
P&I Advance...................................................................................34
Plan ......................................................................................34
Prepayment Assumption.........................................................................35
Prepayment Diversion Amount...................................................................35
Prepayment Interest Shortfall.................................................................35
Prepayment Period.............................................................................35
Primary Mortgage Insurance Policy.............................................................35
Principal Prepayment..........................................................................35
iv
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PTCE ......................................................................................35
Purchase Price................................................................................35
Qualified Insurer.............................................................................36
Qualified Substitute Mortgage Loan............................................................36
Rate/Term Refinancing.........................................................................37
Rating Agency or Rating Agencies..............................................................37
Realized Loss.................................................................................37
Record Date...................................................................................38
Refinanced Mortgage Loan......................................................................38
Regular Certificate...........................................................................38
Regular Interest..............................................................................38
Relief Act....................................................................................38
Relief Act Interest Shortfall.................................................................38
Relocation Mortgage Loans.....................................................................38
REMIC ......................................................................................38
REMIC I ......................................................................................38
REMIC I Regular Interest......................................................................39
REMIC I Regular Interest LT1..................................................................39
REMIC I Regular Interest LT2..................................................................39
REMIC I Regular Interest LTIO.................................................................39
REMIC I Regular Interest LTPO.................................................................39
REMIC I Remittance Rate.......................................................................40
REMIC II......................................................................................40
REMIC II Certificate..........................................................................40
REMIC Provisions..............................................................................40
Remittance Report.............................................................................40
Rents from Real Property......................................................................40
REO Account...................................................................................40
REO Disposition...............................................................................40
REO Imputed Interest..........................................................................40
REO Principal Amortization....................................................................41
REO Property..................................................................................41
Request for Release...........................................................................41
Residential Dwelling..........................................................................41
Residual Certificate..........................................................................41
Residual Interest.............................................................................41
Responsible Officer...........................................................................41
Scheduled Principal Balance...................................................................41
Seller ......................................................................................42
Senior Certificate............................................................................42
Senior Support Lockout Certificate............................................................42
Servicing Account.............................................................................42
Servicing Advances............................................................................42
v
<PAGE>
SECTION PAGE
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Servicing Fee.................................................................................43
Servicing Fee Rate............................................................................43
Servicing Officer.............................................................................43
Single Certificate............................................................................43
Special Hazard Amount.........................................................................43
Special Hazard Loss...........................................................................43
S&P ......................................................................................44
Standard Prepayment Assumption................................................................44
Startup Day...................................................................................44
Stated Principal Balance......................................................................44
Stayed Funds..................................................................................45
Stripped Interest Rate........................................................................45
Sub-Pool......................................................................................45
Sub-Pool Prepayment Percentage................................................................45
Sub-Pool 1....................................................................................45
Sub-Pool 1 Components.........................................................................45
Sub-Pool 1 Prepayment Percentage..............................................................45
Sub-Pool 2....................................................................................46
Sub-Pool 2 Components.........................................................................46
Sub-Pool 2 Prepayment Percentage..............................................................46
Subordinate Certificate.......................................................................47
Subordinate Percentage........................................................................47
Subordinate Prepayment Percentage.............................................................47
Subordinate Principal Adjustment Amount.......................................................48
Subordinate Principal Distribution Amount.....................................................48
Sub-Servicer..................................................................................48
Sub-Servicing Account.........................................................................48
Sub-Servicing Agreement.......................................................................48
Super Senior Certificates.....................................................................48
Super Senior Optimal Percentage...............................................................48
Super Senior Optimal Principal Distribution Amount............................................48
Tax Returns...................................................................................48
Termination Price.............................................................................49
Transfer......................................................................................49
Transferee....................................................................................49
Transferor....................................................................................49
Trust Fund....................................................................................49
Trustee ......................................................................................49
Uncertificated Balance........................................................................49
Uncertificated Interest.......................................................................49
Uncertificated LTPO Percentage................................................................50
PO Principal Distribution Amount..............................................................50
Uncertificated Notional Amount................................................................51
vi
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Uncertificated Principal Distribution Amount..................................................51
Undercollateralization Amount.................................................................51
Undercollateralized Sub-Pool..................................................................52
Uninsured Cause...............................................................................52
United States Person..........................................................................52
Value ......................................................................................52
Voting Rights.................................................................................52
Weighted Average Stripped Interest Rate.......................................................53
1.02. Allocation of Certain Interest Shortfalls.....................................................53
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans..................................................................54
2.02. Acceptance of REMIC I by the Trustee..........................................................56
2.03. Repurchase or Substitution of Mortgage Loans by the Originator, Bishop's Gate,
the Seller or the Depositor...................................................................58
2.04. Representations and Warranties of the Depositor...............................................61
2.05. Representations, Warranties and Covenants of the Master Servicer..............................64
2.06. Issuance of Class R-I Certificates............................................................66
2.07. Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by the
Trustee.......................................................................................66
2.08. Issuance of REMIC II Certificates.............................................................67
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
3.01. Master Servicer to Act as Master Servicer.....................................................68
3.02. Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers........................69
3.03. Successor Sub-Servicers.......................................................................71
3.04. Liability of the Master Servicer..............................................................71
3.05. No Contractual Relationship Between Sub-Servicers and Trustee or
Certificateholders............................................................................71
3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee..............................72
3.07. Collection of Certain Mortgage Loan Payments..................................................72
3.08. Sub-Servicing Accounts........................................................................73
3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts........................73
3.10. Collection Account and Distribution Account...................................................74
3.11. Withdrawals from the Collection Account and Distribution Account..............................77
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3.12. Investment of Funds in the Collection Account and the Distribution Account....................79
3.13. Maintenance of the Primary Mortgage Insurance Policies;
Collections Thereunder........................................................................80
3.14. Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.........................................................................81
3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................83
3.16. Realization Upon Defaulted Mortgage Loans.....................................................84
3.17. Trustee to Cooperate; Release of Mortgage Files...............................................86
3.18. Servicing Compensation........................................................................87
3.19. Reports to the Trustee; Collection Account Statements.........................................87
3.20. Statement as to Compliance....................................................................88
3.21. Independent Public Accountants' Servicing Report..............................................88
3.22. Access to Certain Documentation...............................................................89
3.23. Title, Management and Disposition of REO Property.............................................89
3.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls................................................................92
3.25. Administration of Buydown Funds...............................................................93
3.26. Obligations of the Master Servicer in Respect of Mortgage Rates
and Monthly Payments..........................................................................93
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
4.01. Distributions.................................................................................94
4.02. Statements to Certificateholders.............................................................100
4.03. Remittance Reports; P&I Advances.............................................................103
4.04. Allocation of Extraordinary Trust Fund Expenses and Realized Losses..........................105
4.05. Compliance with Withholding Requirements.....................................................106
4.06. Distributions on the REMIC I Regular Interests...............................................107
4.07. Commission Reporting.........................................................................107
ARTICLE V
THE CERTIFICATES
5.01. The Certificates.............................................................................109
5.02. Registration of Transfer and Exchange of Certificates........................................111
5.03. Mutilated, Destroyed, Lost or Stolen Certificates............................................116
5.04. Persons Deemed Owners........................................................................116
5.05. Certain Available Information................................................................116
viii
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
6.01. Liability of the Depositor and the Master Servicer...........................................118
6.02. Merger or Consolidation of the Depositor or the Master Servicer..............................118
6.03. Limitation on Liability of the Depositor, the Master Servicer and Others.....................118
6.04. Limitation on Resignation of the Master Servicer.............................................119
6.05. Rights of the Depositor in Respect of the Master Servicer....................................120
ARTICLE VII
DEFAULT
7.01. Master Servicer Events of Default............................................................121
7.02. Trustee to Act; Appointment of Successor.....................................................123
7.03. Notification to Certificateholders...........................................................125
7.04. Waiver of Master Servicer Events of Default..................................................125
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of Trustee............................................................................126
8.02. Certain Matters Affecting the Trustee........................................................127
8.03. Trustee Not Liable for Certificates or Mortgage Loans........................................128
8.04. Trustee May Own Certificates.................................................................129
8.05. Trustee's Expenses...........................................................................129
8.06. Eligibility Requirements for Trustee.........................................................129
8.07. Resignation and Removal of the Trustee.......................................................130
8.08. Successor Trustee............................................................................131
8.09. Merger or Consolidation of Trustee...........................................................131
8.10. Appointment of Co-Trustee or Separate Trustee................................................131
8.11. [intentionally omitted]......................................................................133
8.12. Appointment of Office or Agency..............................................................133
8.13. Representations and Warranties of the Trustee................................................133
ix
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ARTICLE IX
TERMINATION
9.01 Termination Upon Repurchase or Liquidation of the
REMIC I Regular Interests....................................................................135
9.02 Additional Termination Requirements..........................................................137
ARTICLE X
REMIC PROVISIONS
10.01. REMIC Administration.........................................................................138
10.02. Prohibited Transactions and Activities.......................................................141
10.03. Master Servicer and Trustee Indemnification..................................................141
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment....................................................................................142
11.02. Recordation of Agreement; Counterparts.......................................................143
11.03. Limitation on Rights of Certificateholders...................................................143
11.04. Governing Law................................................................................144
11.05. Notices......................................................................................144
11.06. Severability of Provisions...................................................................145
11.07. Notice to Rating Agencies....................................................................145
11.08. Article and Section References...............................................................146
11.09. Grant of Security Interest...................................................................146
x
</TABLE>
<PAGE>
Exhibits
--------
Exhibit A-1 Form of Class A1-1 Certificate
Exhibit A-2 Form of Class A1-2 Certificate
Exhibit A-3 Form of Class A1-3 Certificate
Exhibit A-4 Form of Class A1-4 Certificate
Exhibit A-5 Form of Class A1-5 Certificate
Exhibit A-6 Form of Class A1-6 Certificate
Exhibit A-7 Form of Class A2 Certificate
Exhibit A-8 Form of Class IO Certificate
Exhibit A-9 Form of Class PO Certificate
Exhibit A-10 Form of Class B-1 Certificate
Exhibit A-11 Form of Class B-2 Certificate
Exhibit A-12 Form of Class B-3 Certificate
Exhibit A-13 Form of Class B-4 Certificate
Exhibit A-14 Form of Class B-5 Certificate
Exhibit A-15 Form of Class B-6IO Certificate
Exhibit A-16 Form of Class B-6PO Certificate
Exhibit A-17 Form of Class R-I Certificate
Exhibit A-18 Form of Class R-II Certificate
Exhibit B [Reserved]
Exhibit C-1 Form of Trustee's Initial Certification
Exhibit C-2 Form of Trustee's Interim Certification
Exhibit C-3 Form of Trustee's Final Certification
Exhibit D Form of Mortgage Loan Purchase Agreement
Exhibit E-1 Request for Release
Exhibit E-2 Request for Release Mortgage Loans paid in full
Exhibit F-1 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with
Transfer of Class B-4 Certificates, Class B-5
Certificates and Class B-6 Certificates Pursuant to
Rule 144A Under the 1933 Act
Exhibit F-2 Form of Transfer Affidavit and Agreement and Form of
Transferor Affidavit in Connection with Transfer of
Residual Certificates
Exhibit G Form of Certification with respect to ERISA and the
Code
Schedule 1 Mortgage Loan Schedule with respect to Sub-Pool 1
Schedule 2 Mortgage Loan Schedule with respect to Sub-Pool 2
Schedule 3 Mortgage Loan Schedule with respect to Mortgage Loans
with Loan-to-Value Ratios in excess of 80%
<PAGE>
This Pooling and Servicing Agreement, is dated and effective
as of February 1, 1999, among SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., as
Depositor, CENDANT MORTGAGE CORPORATION, as Master Servicer and THE CHASE
MANHATTAN BANK, as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
REMIC I created hereunder.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a REMIC (as defined herein) for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I". The Class R-I Certificates will be the sole class of
"residual interests" in REMIC I and will have an initial Certificate Principal
Balance of $100 and a fixed Pass-Through Rate of 6.50% per annum. The following
table irrevocably sets forth the designation, the REMIC I Remittance Rate, the
initial Uncertificated Balance and, solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC I Regular Interests (as defined herein). None of the REMIC I
Regular Interests will be certificated.
<TABLE>
<CAPTION>
Latest Possible
Designation Remic I Remittance Rate Initial Uncertificated Balance Maturity Date(1)
----------- ----------------------- ------------------------------ ----------------
<S> <C> <C> <C>
LT1 6.50% $220,842,048.00 February 25, 2029
LT2 6.50% $558,364.57 February 25, 2029
LTIO Variable(2) $223,305,364.36(3) February 25, 2029
LTPO 0.00%(4) $1,904,951.79 February 25, 2029
</TABLE>
- -----------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance Rate"
herein.
(3) Initial Uncertificated Notional Amount. As provided herein, REMIC I
Regular Interest LTIO is entitled solely to distributions of interest
accrued on the Uncertificated Notional Amount of such REMIC I Regular
Interest LTIO.
(3) REMIC I Regular Interest LTPO is not entitled to distributions of
interest.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-II Certificates will be the sole class of
"residual interests" in REMIC II and will have an initial Certificate Principal
Balance of $200 and a fixed Pass-Through Rate of 6.50% per annum. The following
table irrevocably sets forth the designation, the Pass-Through Rate, the initial
Certificate Principal Balance and, solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the Classes of Certificates or Components thereof representing the
"regular interests" in REMIC II.
<PAGE>
<TABLE>
<CAPTION>
Initial Aggregate Certificate
Principal Balance or Latest Possible
Designation Pass-through Rate Component Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
<S> <C> <C> <C>
Class A1-1 6.50% per annum $60,123,603.00 February 25, 2029
Class A1-2 6.25% per annum $9,545,000.00 February 25, 2029
Class A1-3 6.75% per annum $9,545,000.00 February 25, 2029
Class A1-4 6.50% per annum $15,000,000.00 February 25, 2029
Class A1-5 6.50% per annum $49,800,000.00 February 25, 2029
Class A1-6 6.50% per annum $200,000.00 February 25, 2029
Class A2 6.50% per annum $68,254,245.00 February 25, 2029
Class PO 0.00%(2) $1,904,951.79 February 25, 2029
Class IO Variable(3) $223,305,364.36(4) February 25, 2029
Component B-1-1 6.50% per annum $3,009,032.45 February 25, 2029
Component B-1-2 6.50% per annum $1,456,967.55 February 25, 2029
Component B-2-1 6.50% per annum $1,354,364.60 February 25, 2029
Component B-2-2 6.50% per annum $655,635.40 February 25, 2029
Component B-3-1 6.50% per annum $526,030.68 February 25, 2029
Component B-3-2 6.50% per annum $254,969.32 February 25, 2029
Component B-4-1 6.50% per annum $527,030.68 February 25, 2029
Component B-4-2 6.50% per annum $254,969.32 February 25, 2029
Component B-5-1 6.50% per annum $225,727.44 February 25, 2029
Component B-5-2 6.50% per annum $109,272.56 February 25, 2029
Component B-6PO-1 0.00%(2) $376,243.63 February 25, 2029
Component B-6PO-2 0.00%(2) $182,120.94 February 25, 2029
Class B-6IO 6.50% per annum $558,364.57(4) February 25, 2029
</TABLE>
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each Class of Certificates or
Components thereof evidencing a "regular interest" in REMIC II.
(2) The Class PO Certificates, Component B-6PO-1 and Component B-6PO-2 are not
entitled to distributions of interest. (
3) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(4) Initial Notional Amounts. As provided herein, the Class IO Certificates
and the Class B-6IO Certificates entitle the Holders of each such Class
solely to distributions of interest accrued on the related Notional Amount
of such Class IO Certificates or such Class B-6IO Certificates.
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<PAGE>
As of the Cut-off Date, the Original Sub-Pool 1 Mortgage Loans
had an aggregate Scheduled Principal Balance equal to $150,456,996.96. As of the
Cut-off Date, the Original Sub- Pool 2 Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $72,848,367.40.
As of the Closing Date, the REMIC I Regular Interests have an
aggregate Uncertificated Balance equal to $223,305,364.36.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Available Distribution Amount": With respect to either
Sub-Pool and any Distribution Date, an amount equal to (1) the sum of (a) the
aggregate of the amounts on deposit in the Collection Account and Distribution
Account as of the close of business on the related Determination Date allocable
to such Sub-Pool, (b) the aggregate of any amounts received in respect of an REO
Property in such Sub-Pool withdrawn from any REO Account and deposited in the
Distribution Account for such Distribution Date pursuant to Section 3.23, (c)
the aggregate of any amounts deposited in the Distribution Account by the Master
Servicer in respect of Prepayment Interest Shortfalls allocable to such Sub-Pool
for such Distribution Date pursuant to
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<PAGE>
Section 3.24, (d) the aggregate of any P&I Advances allocable to such Sub-Pool
made by the Master Servicer for such Distribution Date pursuant to Section 4.03
and (e) the aggregate of any advances allocable to such Sub-Pool made by the
Trustee for such Distribution Date pursuant to Section 7.02, reduced (to not
less than zero) by (2) the sum of (x) the portion of the amount described in
clause (1)(a) above that represents (i) Monthly Payments on the Mortgage Loans
in the related Sub-Pool received from a Mortgagor on or prior to the
Determination Date but due during any Due Period subsequent to the related Due
Period, (ii) Principal Prepayments on the Mortgage Loans in such Sub-Pool
received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans in such Sub-Pool during a
period subsequent to the related Prepayment Period), (iii) Liquidation Proceeds
and Insurance Proceeds received in respect of the Mortgage Loans in such
Sub-Pool after the related Prepayment Period, (iv) amounts reimbursable or
payable to the Depositor, the Master Servicer, the Trustee, the Originator, the
Seller or any Sub-Servicer pursuant to Section 3.11(a) or Section 3.12 or
otherwise payable in respect of such Sub-Pool and any Extraordinary Trust Fund
Expenses allocable to such Sub-Pool, (v) Stayed Funds in respect of such
Sub-Pool, (vi) [intentionally omitted]; and (vii) amounts in respect of such
Sub-Pool deposited in the Collection Account or the Distribution Account in
error, and (y) amounts in respect of such Sub-Pool reimbursable to the Trustee
for an advance made pursuant to Section 7.02(b), which advance the Trustee has
determined to be nonrecoverable from the Stayed Funds in respect of which it was
made. Notwithstanding the foregoing, the Available Distribution Amount for
either Sub-Pool for any Distribution Date (A) shall be increased (in the case of
an Undercollateralized Sub-Pool) or decreased (in the case of an
Overcollateralized Sub- Pool) by any applicable Diverted Interest Amount, Class
A Principal Adjustment Amount or Subordinate Principal Adjustment Amount, in
each case for such Distribution Date and (B) shall be decreased by any
Prepayment Diversion Amounts diverted from such Sub-Pool and increased by the
share of any Prepayment Diversion Amounts distributable to such Sub-Pool.
"Bankruptcy Amount": As of any date of determination, an
amount equal to the excess, if any, of (A) $100,000 over (B) the aggregate
amount of Bankruptcy Losses allocated solely to the Subordinate Certificates in
accordance with Section 4.04.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.
"Bishop's Gate": Bishop's Gate Residential Mortgage Trust, or
its successor in interest.
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee. Initially, the Book-Entry Certificates
will be the Class A Certificates of each Class, the Class B-1 Certificates, the
Class B-2 Certificates and the Class B-3 Certificates.
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<PAGE>
"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of California
or the State of New York, or in the city in which the Corporate Trust Office of
the Trustee is located, are authorized or obligated
by law or executive order to be closed.
"Buydown Account": The custodial account or accounts created
and maintained pursuant to Section 3.25.
"Buydown Agreement": An agreement between the Originator and a
Mortgagor, or an agreement among the Originator, a Mortgagor and an employer of
a relocated Mortgagor which, in each case, provides for the application of
Buydown Funds.
"Buydown Funds": In respect of any Buydown Mortgage Loan, any
amount contributed by the Originator or the employer of a relocated borrower in
order to enable the Mortgagor to reduce the payments required to be made from
the Mortgagor's funds during the Buydown Period.
"Buydown Mortgage Loan": Any Mortgage Loan in respect of
which, pursuant to a Buydown Agreement, (i) the Mortgagor pays less than the
full monthly payment specified in the Mortgage Note during the Buydown Period
and (ii) the difference between the payments required under such Buydown
Agreement and the Mortgage Note is paid from the related Buydown Funds.
"Buydown Period": The period during which Buydown Funds are
required to be applied to the related Buydown Mortgage Loans as provided in
Section 3.25.
"Cash-out Refinancing": A Refinanced Mortgage Loan the
proceeds of which were in excess of the principal balance of any existing first
mortgage on the related Mortgaged Property and related closing costs, and were
used to pay any such existing first mortgage, related closing costs and
subordinate mortgages on the related Mortgaged Property.
"Certificate": Any one of the Mortgage Pass-Through
Certificates, Series 1999-2, issued under this Agreement.
"Certificate Factor": With respect to any Class of
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Certificate
Principal Balance or Notional Amount of such Class of Certificates on such
Distribution Date (after giving effect to any distributions of principal and
allocations of Realized Losses and Extraordinary Trust Fund Expenses in
reduction of the Certificate Principal Balance or Notional Amount of such Class
of Certificates to be made on such Distribution Date), and the denominator of
which is the initial aggregate Certificate Principal Balance or Notional Amount
of such Class of Certificates as of the Closing Date.
-5-
<PAGE>
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the rights of Certificate Owners as they
may indirectly exercise such rights through the Depository and participating
members thereof, except as otherwise specified herein; provided, however, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to any
Certificate, other than a Class IO Certificate or a Class B-6IO Certificate, as
of any date of determination, the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date of
determination, reduced by the aggregate of (a) all distributions of principal
made thereon on such immediately prior Distribution Date and (b) without
duplication of amounts described in clause (a) above, reductions in the
Certificate Principal Balance thereof in connection with allocations thereto of
Realized Losses on the Mortgage Loans and Extraordinary Trust Fund Expenses on
such immediately prior Distribution Date (or, in the case of any date of
determination up to and including the initial Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof); provided, however, that the Certificate Principal Balance of each
Subordinate Certificate (other than the Class B-6IO Certificates) of the Class
of Subordinate Certificates outstanding with the highest numerical designation
at any given time shall be calculated to equal the Percentage Interest evidenced
by such Certificate multiplied by the excess, if any, of (A) the then aggregate
Stated Principal Balance of the Mortgage Loans over (B) the then aggregate
Certificate Principal Balances of all other Classes of Certificates then
outstanding. The Class IO Certificates and the Class B-6IO Certificates shall
not have Certificate Principal Balances and shall not be entitled to any
distributions of principal.
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Class": Collectively, all of the Certificates bearing the
same class designation.
-6-
<PAGE>
"Class A Certificate": Any Group 1 Class A Certificate or
Class A2 Certificate. With respect to Sub-Pool 1, the "related Class A
Certificates" shall refer to the Group 1 Class A Certificates and with respect
to Sub-Pool 2, the "related Class A Certificates" shall refer to the Class A2
Certificates.
"Class A Percentage": Either the Group 1 Class A Percentage or
the Group 2 Class A Percentage. With respect to Sub-Pool 1 and Sub-Pool 2, the
Group 1 Class A Percentage and the Group 2 Class A Percentage, respectively, is
sometimes referred to as the "related Class A
Percentage".
"Class A Prepayment Percentage": With respect to Sub-Pool 1,
the Sub-Pool 1 Prepayment Percentage. With respect to Sub-Pool 2, the Sub-Pool 2
Prepayment Percentage. Notwithstanding the foregoing, (a) if the Class A
Prepayment Percentage for one Sub-Pool is 100%, then the Class A Prepayment
Percentage for the other Sub-Pool shall also be 100% and (b) if on any
Distribution Date occurring after the first five years following the Closing
Date, Realized Losses on the Mortgage Loans in both Sub-Pools to date exceed 50%
of the initial sum of the Certificate Principal Balances of the Subordinate
Certificates, then the Class A Prepayment Percentage for each Sub-Pool will be
the greater of the Sub-Pool Prepayment Percentages.
"Class A Principal Adjustment Amount": As to any Distribution
Date on which there is an Undercollateralized Sub-Pool and an Overcollateralized
Sub-Pool, the product of (x) the then-applicable Diversion Fraction and (y) the
related Class A Principal Distribution Amount
for the Overcollateralized Sub-Pool.
"Class A Principal Distribution Amount": Either the Group 1
Class A Principal Distribution Amount or the Group 2 Class A Principal
Distribution Amount. With respect to Sub- Pool 1 and Sub-Pool 2, the Group 1
Class A Principal Distribution Amount and the Group 2 Class A Principal
Distribution Amount, respectively, is sometimes referred to as the "related
Class A Principal Distribution Amount".
"Class A1-1 Certificate": Any one of the Class A1-1
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-1
and evidencing a Regular Interest in REMIC II for purposes of the
REMIC Provisions.
"Class A1-2 Certificate": Any one of the Class A1-2
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2
and evidencing a Regular Interest in REMIC II for purposes of the
REMIC Provisions.
"Class A1-3 Certificate": Any one of the Class A1-3
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-3
and evidencing a Regular Interest in REMIC II for purposes of the
REMIC Provisions.
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<PAGE>
"Class A1-4 Certificate": Any one of the Class A1-4
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-4
and evidencing a Regular Interest in REMIC II for purposes of the
REMIC Provisions.
"Class A1-5 Certificate": Any one of the Class A1-5
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-5
and evidencing a Regular Interest in REMIC II for purposes of the
REMIC Provisions.
"Class A1-6 Certificate": Any one of the Class A1-6
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-6
and evidencing a Regular Interest in REMIC II for purposes of the
REMIC Provisions.
"Class A2 Certificate": Any one of the Class A2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7 and
evidencing a Regular Interest in REMIC II for purposes of the
REMIC Provisions.
"Class B Percentage": With respect to any Component of the
Class B-1 Certificates, the Class B-2 Certificates, the Class B-3 Certificates,
the Class B-4 Certificates, the Class B-5 Certificates or the Class B-6PO
Certificates and any Distribution Date, a fraction, expressed as a percentage,
the numerator of which is the excess, if any, of the aggregate Component Balance
of such Component immediately prior to such date over the aggregate amount, if
any, payable on such Component on such date pursuant to Section 4.01(b)(ii)(Z),
and the denominator of which is the sum of (i) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the Mortgage Loans in
the related Sub-Pool, plus (ii) the aggregate of the Non-Class PO Percentage of
the Scheduled Principal Balance of each of the REO Properties in the related
Sub-Pool, in each case before reduction for any Realized Losses on such
Distribution Date, plus (iii) the Undercollateralization Amount for the related
Sub-Pool, if any, minus (iv) the Overcollateralization Amount for the related
Sub-Pool, if any.
"Class B-1 Certificate": Any one of the Class B-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-10 and
consisting of two Components each evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class B-2 Certificate": Any one of the Class B-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-11 and
consisting of two Components each evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
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<PAGE>
"Class B-3 Certificate": Any one of the Class B-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-12 and
consisting of two Components each evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class B-4 Certificate": Any one of the Class B-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-13 and
consisting of two Components each evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class B-5 Certificate": Any one of the Class B-5 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-14 and
consisting of two Components each evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class B-6 Certificate": Any Class B-6IO Certificate or Class
B-6PO Certificate.
"Class B-6IO Certificate": Any one of the Class B-6IO
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-15
and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.
"Class B-6PO Certificate": Any one of the Class B-6PO
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-16
and consisting of two Components each evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions. The Class B-6PO Certificates shall have a
Pass-Through Rate of 0% per annum and shall not be entitled to any distributions
of interest.
"Class Exemption": A class exemption granted by the DOL, which
provides relief from certain of the prohibited transaction provisions of ERISA
and the related excise tax provisions of the Code.
"Class IO Certificate": Any one of the Class IO Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-8 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.
The Class IO Certificates shall not have a Certificate Principal Balance and
shall not be entitled to any distributions of principal.
"Class IO Mortgage Loan": Each Mortgage Loan with a Net
Mortgage Rate equal to or greater than 6.50% per annum.
"Class PO Certificate": Any one of the Class PO Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form
-9-
<PAGE>
annexed hereto as Exhibit A-9 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions. The Class PO Certificates shall have a
Pass-Through Rate of 0% per annum
and shall not be entitled to any distributions of interest.
"Class PO Mortgage Loan": Each Mortgage Loan with a Net
Mortgage Rate below 6.50% per annum.
"Class PO Percentage": With respect to each Class PO Mortgage
Loan, the quotient of (i) 6.50% per annum minus the related Net Mortgage Rate
divided by (ii) 6.50% per annum. With respect to each Class IO Mortgage Loan, 0%
per annum.
"Class PO Principal Distribution Amount": For any Distribution
Date, an amount equal to the aggregate of:
(a) the sum of the following:
(i) the related Class PO Percentage of the principal
portion of each Monthly Payment due during the related Due
Period in respect of each Class PO Mortgage Loan whether or
not received;
(ii) the related Class PO Percentage of the principal
portion of all Insurance Proceeds and Liquidation Proceeds
(other than amounts described in clause (c) below) received in
respect of each Class PO Mortgage Loan during the related
Prepayment Period (other than any such Class PO Mortgage Loan
that was purchased, sold or replaced pursuant to or as
contemplated by Section 2.03, Section 3.16(c) or Section 9.01
during the related Prepayment Period), net of any portion
thereof that represents a recovery of principal for which an
advance was made by the Master Servicer pursuant to Section
4.03 in respect of a preceding Distribution Date;
(iii) the related Class PO Percentage of the Stated
Principal Balance (calculated immediately prior to such
Distribution Date) of each Class PO Mortgage Loan that was
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01 during the
related Prepayment
Period;
(iv) the related Class PO Percentage of all REO
Principal Amortization collected in respect of any REO
Property acquired in respect of any Class PO Mortgage Loan
during the related Prepayment Period; and
(v) in connection with the substitution of one or more
Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans which were Class PO Mortgage Loans pursuant to
Section 2.03 during the related Prepayment Period, the excess,
if any, of (A) the related Class PO Percentage of the
aggregate
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<PAGE>
of the Stated Principal Balances (calculated as of the
respective dates of substitution) of such Deleted Mortgage
Loans, net of the aggregate of the related Class PO Percentage
of the principal portions of the Monthly Payments due during
the related Prepayment Period (to the extent received from the
related Mortgagor or advanced by the Master Servicer and
distributed pursuant to Section 4.01 on the Distribution Date
in the related Prepayment Period) in respect of each such
Deleted Mortgage Loan that was replaced prior to the
Distribution Date in the related Prepayment Period, over (B)
the related Class PO Percentage of the Stated Principal
Balances (calculated as of the respective dates of
substitution) of such Qualified Substitute Mortgage Loans;
(b) the related Class PO Percentage of all Principal
Prepayments received in respect of each Class PO Mortgage Loan during
the related Prepayment Period;
(c) with respect to any Class PO Mortgage Loan which was the
subject of a Final Recovery Determination in the related Prepayment
Period, the related Class PO Percentage of the Stated Principal Balance
of such Mortgage Loan at the time of such Final Recovery Determination
(net of the principal portion of any Realized Loss allocated to the
Class PO Certificates) to the extent of the principal portion of all
Liquidation Proceeds with respect to such Class PO Mortgage Loan; and
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of
the Class PO Principal Distribution Amount for the immediately
preceding Distribution Date, over the aggregate distributions of
principal made in respect of the Class PO Certificates on such
immediately preceding Distribution Date pursuant to Section 4.01 to the
extent that any such amounts are not attributable to Realized Losses
which were allocated to the Subordinate Certificates pursuant to
Section 4.04.
"Class R-I Certificate": Any one of the Class R-I Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-17 and
evidencing the Residual Interest in REMIC I for purposes of
the REMIC Provisions.
"Class R-II Certificate": Any one of the Class R-II
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit A-18
and evidencing the Residual Interest in REMIC II for purposes of the REMIC
Provisions.
"Closing Date": February 25, 1999.
"Code": The Internal Revenue Code of 1986.
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<PAGE>
"Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled, "Cendant Mortgage Corporation, as Master Servicer for The Chase
Manhattan Bank, as Trustee, in trust for the registered holders of Salomon
Brothers Mortgage Securities VII, Inc., Mortgage Pass-Through Certificates,
Series 1999-2". The Collection Account must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Component": With respect to the Class B-1 Certificates,
either of the two components of the partial beneficial ownership interest
evidenced by the Class B-1 Certificates in REMIC II, designated as Component
B-1-1 and Component B-1-2, respectively, each such component constituting a
separate "regular" interest in REMIC II. With respect to the Class B-2
Certificates, either of the two components of the partial beneficial ownership
interest evidenced by the Class B-2 Certificates in REMIC II, designated as
Component B-2-1 and Component B-2-2, respectively, each such component
constituting a separate "regular" interest in REMIC II. With respect to the
Class B-3 Certificates, either of the two components of the partial beneficial
ownership interest evidenced by the Class B-3 Certificates in REMIC II,
designated as Component B-3-1 and Component B-3-2, respectively, each such
component constituting a separate "regular" interest in REMIC II. With respect
to the Class B-4 Certificates, either of the two components of the partial
beneficial ownership interest evidenced by the Class B-4 Certificates in REMIC
II, designated as Component B-4-1 and Component B-4-2, respectively, each such
component constituting a separate "regular" interest in REMIC II. With respect
to the Class B-5 Certificates, either of the two components of the partial
beneficial ownership interest evidenced by the Class B-5 Certificates in REMIC
II, designated as Component B-5-1 and Component B-5-2, respectively, each such
component constituting a separate "regular" interest in REMIC II. With respect
to the Class B-6PO Certificates, either of the two components of the partial
beneficial ownership interest evidenced by the Class B-6PO Certificates in REMIC
II, designated as Component B-6PO-1 and Component B-6PO-2, respectively, each
such component constituting a separate "regular" interest in REMIC II.
"Component Balance": With respect to any Component, as of any
date of determination, the Component Balance of such Component on the
Distribution Date immediately prior to such date of determination, reduced by
the aggregate of (a) all distributions of principal made thereon on such
immediately prior Distribution Date and (b) without duplication of amounts
described in clause (a) above, reductions in the Component Balance thereof in
connection with allocations thereto of Realized Losses on the Mortgage Loans and
Extraordinary Trust Fund Expenses on such immediately prior Distribution Date
(or, in the case of any date of determination up to and including the initial
Distribution Date, the initial Component Balance of such Component, as stated in
the Preliminary Statement hereto).
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 450 West 33rd Street, 14th
Floor, New York, New York 10001, Attention: Capital Markets Fiduciary
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<PAGE>
Services, or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor and the Master Servicer.
"Cross-Collateralization Date": Any Distribution Date on which
an Undercollateralization Amount exists.
"Cut-off Date": With respect to each Original Mortgage Loan,
February 1, 1999. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding
initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Depositor": Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation, or its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated F-1 by Fitch (if rated by Fitch) and A-1 by S&P (or comparable ratings
if Fitch and S&P are not the Rating Agencies).
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"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I, other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Freddie Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause either REMIC I or REMIC II or any
Person having an Ownership Interest in any Class of Certificates (other than
such Person) to incur a liability for any federal tax imposed under the Code
that would not otherwise be imposed but for the Transfer of an Ownership
Interest in a Residual Certificate to such Person. The terms "United States,"
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "The Chase Manhattan Bank, as Trustee, in trust for the registered
holders of Salomon Brothers Mortgage Securities VII, Inc., Mortgage Pass-Through
Certificates, Series 1999-2". The Distribution Account must be an
Eligible Account.
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"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in March 1999.
"Diversion Fraction": With respect to any Distribution Date,
the percentage equivalent of the fraction, the numerator of which is the
Overcollateralization Amount for such date and the denominator of which is the
sum of (i) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the Mortgage Loans in the Overcollateralized
Sub-
Pool, plus (ii) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the REO Properties in the Overcollateralized
Sub-Pool, in each case before reduction
for any Realized Losses on such Distribution Date.
"Diverted Interest Amount": With respect to any Distribution
Date, (x) one month's interest accrued during the related Interest Accrual
Period on the Overcollateralization Amount at 6.50% per annum.
"DOL": The United States Department of Labor or any successor
in interest.
"DOL Regulations": The regulations promulgated by the DOL at
29 C.F.R. ss.2510.3-101.
"Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is the
day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the calendar month preceding the calendar
month in which such Distribution Date occurs and ending on the related Due Date.
"Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which are rated F-1 by
Fitch (if rated by Fitch) and A-1 by S&P (or comparable ratings if Fitch and S&P
are not the Rating Agencies) at the time any amounts are held on deposit
therein, (ii) an account or accounts the deposits in which are fully insured by
the FDIC or (iii) a trust account or accounts maintained with the corporate
trust department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the then applicable Bankruptcy Amount.
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"Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the then applicable Fraud Loss Amount.
"Excess Loss": Any Excess Bankruptcy Loss, Excess Special
Hazard Loss, Excess Fraud Loss or Extraordinary Loss.
"Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the then applicable Special Hazard Amount.
"Extraordinary Loss": Any Realized Loss or portion thereof
caused by or resulting from:
(i) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled
or uncontrolled and whether such loss be direct or indirect,
proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by the
definition of the term "Special Hazard Loss";
(ii) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual,
impending or expected attack by any government or sovereign
power, DE JURE or DE FACTO, or by any authority maintaining or
using military, naval or air forces, or by military, naval or
air forces, or by an agent of any such government, power,
authority or forces;
(iii) any weapon of war employing atomic fission or radioactive
forces whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped power
or action taken by governmental authority in hindering,
combating or defending against such an occurrence, seizure or
destruction under quarantine or customs regulations,
confiscation by order of any government or public authority,
or risks of contraband
or illegal transactions or trade.
"Extraordinary Trust Fund Expenses": Any amounts reimbursable to
the Master Servicer or the Depositor pursuant to Section 6.03, any amounts
payable from the Distribution Account in respect of taxes pursuant to Section
10.01(g)(iii), any amounts reimbursable to the Trustee from the Trust Fund
pursuant to Section 8.05, any interest on any amounts advanced pursuant to
Section 7.02(b) payable when such advances are recovered pursuant to Section
7.02(b) and any other costs, expenses, liabilities and losses borne by the Trust
Fund (exclusive of any cost, expense, liability or loss that is specific to a
particular Mortgage Loan or REO Property and is taken into account in
calculating a Realized Loss in respect thereof) for which the Trust Fund has not
and, in the reasonable good faith judgment of the Trustee, shall not, obtain
reimbursement or indemnification from any other Person. Notwithstanding the
foregoing, any interest on any amounts advanced pursuant to Section 7.02(b) will
only be deemed Extraordinary Trust Fund
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Expenses until the Certificate Principal Balances of the Class B-6PO, the Class
B-5 and the Class B-4 Certificates have been reduced to zero. After such time,
such amounts will no longer be Extraordinary Trust Fund Expenses and will not be
recoverable by the Trustee.
"Fannie Mae": Fannie Mae, formerly known as the Federal National
Mortgage Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator, the Seller, the Depositor or the Master Servicer
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section
9.01), a determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Master Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery Determination
made thereby.
"Fitch": Fitch IBCA, Inc. or its successor in interest.
"Fraud Loss": Any Realized Loss or portion thereof sustained by
reason of a default arising from intentional fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including by
reason of the denial of coverage under any related Primary Mortgage
Insurance Policy.
"Fraud Loss Amount": As of any date of determination after the
Cut-off Date, an amount equal to: (X) prior to the third anniversary of the
Cut-off Date, 1.00% of the aggregate Stated Principal Balance of the Original
Mortgage Loans as of the Cut-off Date (initially $2,233,054) minus the aggregate
amount of Fraud Losses allocated solely to the Subordinate Certificates in
accordance with Section 4.04 since the Cut-off Date up to such date of
determination and (Y) from the third to the fifth anniversary of the Cut-off
Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount as of the
most recent anniversary of the Cut-off Date and (b) 0.50% of the aggregate
outstanding principal balance of the Mortgage Loans as of the most recent
anniversary of the Cut-off Date minus (2) the Fraud Losses allocated solely to
the Subordinate Certificates in accordance with Section 4.04 since the most
recent anniversary of the Cut-off Date up to such date of determination. On and
after the fifth anniversary of the Cut-off Date the Fraud Loss Amount shall be
zero.
"Freddie Mac": Freddie Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
"Group 1 Class A Certificate": Any Class A1-1 Certificate, Class
A1-2 Certificate, Class A1-3 Certificate, Class A1-4 Certificate, Class A1-5
Certificate or Class A1-6 Certificate.
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"Group 1 Class A Percentage": With respect to any Distribution
Date, the lesser of (a) 100% and (b) a fraction, expressed as a percentage, the
numerator of which is the excess, if any, of the aggregate Certificate Principal
Balance of the Group 1 Class A Certificates and the Class R-II Certificates for
such Distribution Date over the aggregate amount, if any, payable to the Holders
of the Group 1 Class A Certificates and the Class R-II Certificates on such date
pursuant to clause (d) of the definition of "Group 1 Class A Principal
Distribution Amount", and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Mortgage Loans in Sub-Pool 1, plus (ii) the aggregate of the
Non-Class PO Percentage of the Scheduled Principal Balance of each of the REO
Properties in Sub-Pool 1, in each case before reduction for any Realized Losses
on such Distribution Date, plus (iii) the Undercollateralization Amount for
Sub-Pool 1, if any, minus (iv) the Overcollateralization Amount for Sub-Pool 1,
if any.
"Group 1 Class A Principal Distribution Amount": For any
Distribution Date and the Group 1 Class A Certificates, an amount equal to the
sum of:
(a) the product of (x) the then-applicable Group 1 Class A
Percentage and (y) the sum of the following:
(i) the related Non-Class PO Percentage of the aggregate of the
principal portions of all Monthly Payments due during the related
Due Period in respect of the Mortgage Loans in the related
Sub-Pool whether or not received;
(ii) the related Non-Class PO Percentage of the principal portion
of all Insurance Proceeds and Liquidation Proceeds (other than
amounts described in clause (c) below) received in respect of the
Mortgage Loans in the related Sub-Pool during the related
Prepayment Period (other than any such Mortgage Loan that was
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01 during the related
Prepayment Period), net of any portion thereof that represents a
recovery of principal for which an advance was made by the Master
Servicer pursuant to Section 4.03 in respect of a preceding
Distribution Date;
(iii) the related Non-Class PO Percentage of the Stated Principal
Balance (calculated immediately prior to such Distribution Date)
of each Mortgage Loan in the related Sub-Pool that was purchased,
sold or replaced pursuant to or as contemplated by Section 2.03,
Section 3.16(c) or Section 9.01 during the related Prepayment
Period;
(iv) the related Non-Class PO Percentage of all REO Principal
Amortization collected in respect of any REO Property in the
related Sub-Pool during the related Prepayment Period; and
(v) in connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans
in the related Sub-Pool pursuant to Section 2.03 during the
related Prepayment Period, the excess, if any, of (A) the
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aggregate of the related Non-Class PO Percentage of the Stated
Principal Balances (calculated as of the respective dates of
substitution) of such Deleted Mortgage Loans, net of the aggregate
of the related Non-Class PO Percentage of the principal portions
of the Monthly Payments due during the related Prepayment Period
(to the extent received from the related Mortgagor or advanced by
the Master Servicer and distributed pursuant to Section 4.01 on
the Distribution Date in the related Prepayment Period) in respect
of each such Deleted Mortgage Loan that was replaced prior to the
Distribution Date in the related Prepayment Period, over (B) the
aggregate of the related Non-Class PO Percentage of the Stated
Principal Balances (calculated as of the respective dates of
substitution) of such Qualified Substitute Mortgage Loans;
(b) the product of (x) the then-applicable Class A Prepayment
Percentage and (y) the related Non-Class PO Percentage of all Principal
Prepayments received in respect of the Mortgage Loans in the related
Sub-Pool during the related Prepayment Period;
(c) with respect to any Mortgage Loan in the related Sub-Pool
which was the subject of a Final Recovery Determination in the related
Prepayment Period, the least of (a) the then-applicable Class A
Prepayment Percentage of the Non-Class PO Percentage multiplied by the
net Liquidation Proceeds and Insurance Proceeds allocable to principal
in respect of such Mortgage Loans, (b) the then-applicable Group 1
Class A Percentage of the Non-Class PO Percentage multiplied by the
Scheduled Principal Balance of such Mortgage Loan at the time of such
Final Recovery Determination; and (c) the principal portion of all
amounts collected in connection with such a Final Recovery
Determination to the extent not distributed to the Class PO
Certificates; and
(d) in the case of any Distribution Date subsequent to the initial
Distribution Date, an amount equal to the excess, if any, of the Group
1 Class A Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made
in respect of the Group 1 Class A Certificates on such immediately
preceding Distribution Date pursuant to Section 4.01 to the extent that
any such amounts are not attributable to Realized Losses which were
allocated to the Subordinate Certificates pursuant to Section 4.04.
Notwithstanding the foregoing, on any Cross-Collateralization Date, (i)
if Sub-Pool 1 is an Undercollateralized Sub-Pool, the Group 1 Class A Principal
Distribution Amount distributable to the Group 1 Class A Certificates will be
increased, and the Group 2 Class A Principal Distribution Amount distributable
to the Class A2 Certificates will be decreased by the applicable Class A
Principal Adjustment Amount for such date. In addition, the Group 1 Class A
Principal Distribution Amount distributable to the Group 1 Class A Certificates
will be increased for any Distribution Date by the amount of any Prepayment
Diversion Amounts payable to the Group 1 Class A Certificates pursuant to
Section 4.01(c)(i).
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"Group 1 Subordinate Percentage": With respect to any Distribution
Date and Sub- Pool 1, a percentage equal to 100% minus the Group 1 Class A
Percentage for such Distribution
Date.
"Group 1 Subordinate Prepayment Percentage": With respect to any
Distribution Date and Sub-Pool 1, a percentage equal to 100% minus the Class A
Prepayment Percentage for Sub- Pool 1.
"Group 1 Subordinate Principal Distribution Amount": For any
Distribution Date and Sub-Pool 1 and the Sub-Pool 1 Components, an amount equal
to the sum of:
(a) the product of (x) the then-applicable Group 1 Subordinate
Percentage and (y) the sum of the following:
(i) the related Non-Class PO Percentage of the aggregate of the
principal portions of all Monthly Payments due during the related
Due Period in respect of the Mortgage Loans in the related
Sub-Pool whether or not received;
(ii) the related Non-Class PO Percentage of the principal portion
of all Insurance Proceeds and Liquidation Proceeds (other than
amounts described in clause (c) below) received in respect of the
Mortgage Loans in the related Sub-Pool during the related
Prepayment Period (other than any such Mortgage Loan that was
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01 during the related
Prepayment Period), net of any portion thereof that represents a
recovery of principal for which an advance was made by the Master
Servicer pursuant to Section 4.03 in respect of a preceding
Distribution Date;
(iii) the related Non-Class PO Percentage of the Stated Principal
Balance (calculated immediately prior to such Distribution Date)
of each Mortgage Loan in the related Sub-Pool that was purchased,
sold or replaced pursuant to or as contemplated by Section 2.03,
Section 3.16(c) or Section 9.01 during the related Prepayment
Period;
(iv) the related Non-Class PO Percentage of all REO Principal
Amortization collected in respect of any REO Property in the
related Sub-Pool during the related Prepayment Period; and
(v) in connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans
in the related Sub-Pool pursuant to Section 2.03 during the
related Prepayment Period, the excess, if any, of (A) the
aggregate of the related Non-Class PO Percentage of the Stated
Principal Balances (calculated as of the respective dates of
substitution) of such Deleted Mortgage Loans, net of the aggregate
of the related Non-Class PO Percentage of the principal portions
of the Monthly Payments due during the related Prepayment Period
(to the extent received from the related Mortgagor or advanced by
the Master Servicer and
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distributed pursuant to Section 4.01 on the Distribution Date in
the related Prepayment Period) in respect of each such Deleted
Mortgage Loan that was replaced prior to the Distribution Date in
the related Prepayment Period, over (B) the aggregate of the
related Non-Class PO Percentage of the Stated Principal Balances
(calculated as of the respective dates of substitution) of such
Qualified Substitute Mortgage Loans;
(b) the product of (x) the then-applicable Group 1 Subordinate
Prepayment Percentage and (y) related Non-Class PO Percentage of all
Principal Prepayments received in respect of the Mortgage Loans in the
related Sub-Pool during the related Prepayment
Period;
(c) with respect to any Mortgage Loans in the related Sub-Pool
which were the subject of a Final Recovery Determination in the related
Prepayment Period, the amount, if any, by which the net Liquidation
Proceeds and Insurance Proceeds allocable to principal in respect of
such Mortgage Loans exceed the amount distributable to the Group 1
Class A Certificates and the portion of the Class PO Certificates
evidencing an interest in such Sub-Pool pursuant to clause (c) of the
definition of "Group 1 Class A Principal Distribution Amount" and
clause (c) of the definition of "Class PO Principal Distribution
Amount"; and
(d) in the case of any Distribution Date subsequent to the initial
Distribution Date, an amount equal to the excess, if any, of the Group
1 Subordinate Principal Distribution Amount for the immediately
preceding Distribution Date, over the aggregate distributions of
principal made in respect of the Sub-Pool 1 Components on such
immediately preceding Distribution Date pursuant to Section 4.01 to the
extent that any such amounts are not attributable to Realized Losses
that were allocated to the Subordinate Certificates pursuant to Section
4.04.
Notwithstanding the foregoing, on any Cross-Collateralization Date, (i)
if Sub-Pool 1 is an Undercollateralized Sub-Pool, the Group 1 Subordinate
Principal Distribution Amount distributable to the Sub-Pool 1 Components will be
increased, and the Group 2 Subordinate Principal Distribution Amount
distributable to the Sub-Pool 2 Components will be decreased by the applicable
Subordinate Principal Adjustment Amount for such date. In addition, the Group 1
Subordinate Principal Distribution Amount distributable to the Related Eligible
Components will be increased for any Distribution Date by the amount of any
Prepayment Diversion Amounts payable to the Related Eligible Components pursuant
to Section 4.01(c)(ii).
"Group 2 Class A Percentage": With respect to any Distribution
Date, the lesser of (a) 100% and (b) a fraction, expressed as a percentage, the
numerator of which is the excess, if any, of the Certificate Principal Balance
of the Class A2 Certificates for such Distribution Date over the aggregate
amount, if any, payable to the Holders of the Class A2 Certificates on such date
pursuant to clause (d) of the definition of "Group 2 Class A Principal
Distribution Amount", and the denominator of which is the sum of (i) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the Mortgage Loans in Sub-Pool 2, plus (ii) the aggregate of the
Non-Class PO Percentage of the Scheduled Principal Balance of each of the REO
Properties
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in Sub-Pool 2, in each case before reduction for any Realized Losses on such
Distribution Date, plus (iii) the Undercollateralization Amount for Sub-Pool 2,
if any, minus (iv) the Overcollateralization Amount for Sub-Pool 2, if any.
"Group 2 Class A Principal Distribution Amount": For any
Distribution Date and the Class A2 Certificates, an amount equal to the sum of:
(a) the product of (x) the then-applicable Group 2 Class A
Percentage and (y) the sum of the following:
(i) the related Non-Class PO Percentage of the aggregate of the
principal portions of all Monthly Payments due during the related
Due Period in respect of the Mortgage Loans in the related
Sub-Pool whether or not received;
(ii) the related Non-Class PO Percentage of the principal portion
of all Insurance Proceeds and Liquidation Proceeds (other than
amounts described in clause (c) below) received in respect of the
Mortgage Loans in the related Sub-Pool during the related
Prepayment Period (other than any such Mortgage Loan that was
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01 during the related
Prepayment Period), net of any portion thereof that represents a
recovery of principal for which an advance was made by the Master
Servicer pursuant to Section 4.03 in respect of a preceding
Distribution Date;
(iii) the related Non-Class PO Percentage of the Stated Principal
Balance (calculated immediately prior to such Distribution Date)
of each Mortgage Loan in the related Sub-Pool that was purchased,
sold or replaced pursuant to or as contemplated by Section 2.03,
Section 3.16(c) or Section 9.01 during the related Prepayment
Period;
(iv) the related Non-Class PO Percentage of all REO Principal
Amortization collected in respect of any REO Property in the
related Sub-Pool during the related Prepayment Period; and
(v) in connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans
in the related Sub-Pool pursuant to Section 2.03 during the
related Prepayment Period, the excess, if any, of (A) the
aggregate of the related Non-Class PO Percentage of the Stated
Principal Balances (calculated as of the respective dates of
substitution) of such Deleted Mortgage Loans, net of the aggregate
of the related Non-Class PO Percentage of the principal portions
of the Monthly Payments due during the related Prepayment Period
(to the extent received from the related Mortgagor or advanced by
the Master Servicer and distributed pursuant to Section 4.01 on
the Distribution Date in the related Prepayment Period) in respect
of each such Deleted Mortgage Loan that was replaced prior to the
Distribution Date in the related Prepayment Period, over (B) the
aggregate of the
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related Non-Class PO Percentage of the Stated Principal Balances
(calculated as of the respective dates of substitution) of such
Qualified Substitute Mortgage Loans;
(b) the product of (x) the then-applicable Class A Prepayment
Percentage and (y) the related Non-Class PO Percentage of all Principal
Prepayments received in respect of the Mortgage Loans in the related
Sub-Pool during the related Prepayment Period;
(c) with respect to any Mortgage Loan in the related Sub-Pool
which was the subject of a Final Recovery Determination in the related
Prepayment Period, the least of (a) the then-applicable Class A
Prepayment Percentage of the Non-Class PO Percentage multiplied by the
net Liquidation Proceeds and Insurance Proceeds allocable to principal
in respect of such Mortgage Loans, (b) the then-applicable Group 2
Class A Percentage of the Non-Class PO Percentage multiplied by the
Scheduled Principal Balance of such Mortgage Loan at the time of such
Final Recovery Determination; and (c) the principal portion of all
amounts collected in connection with such a Final Recovery
Determination to the extent not distributed to the Class PO
Certificates; and
(d) in the case of any Distribution Date subsequent to the initial
Distribution Date, an amount equal to the excess, if any, of the Group
2 Class A Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made
in respect of the Class A2 Certificates on such immediately preceding
Distribution Date pursuant to Section 4.01 to the extent that any such
amounts are not attributable to Realized Losses which were allocated to
the Subordinate Certificates pursuant to Section 4.04.
Notwithstanding the foregoing, on any Cross-Collateralization Date, (i)
if Sub-Pool 2 is an Undercollateralized Sub-Pool, the Group 2 Class A Principal
Distribution Amount distributable to the Class A2 Certificates will be
increased, and the Group 1 Class A Principal Distribution Amount distributable
to the Group 1 Class A Certificates will be decreased by the applicable Class A
Principal Adjustment Amount for such date. In addition, the Group 2 Class A
Principal Distribution Amount distributable to the Class A2 Certificates will be
increased for any Distribution Date by the amount of any Prepayment Diversion
Amounts payable to the Class A2 Certificates pursuant to Section 4.01(c)(i).
"Group 2 Subordinate Percentage": With respect to any Distribution
Date and Sub- Pool 2, a percentage equal to 100% minus the Group 2 Class A
Percentage for such Distribution
Date.
"Group 2 Subordinate Prepayment Percentage": With respect to any
Distribution Date and Sub-Pool 2, a percentage equal to 100% minus the Class A
Prepayment Percentage for Sub- Pool 2.
"Group 2 Subordinate Principal Distribution Amount": For any
Distribution Date and Sub-Pool 2 and the Sub-Pool 2 Components, an amount equal
to the sum of:
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(a) the product of (x) the then-applicable Group 2 Subordinate
Percentage and (y) the sum of the following:
(i) the related Non-Class PO Percentage of the aggregate of the
principal portions of all Monthly Payments due during the related
Due Period in respect of the Mortgage Loans in the related
Sub-Pool whether or not received;
(ii) the related Non-Class PO Percentage of the principal portion
of all Insurance Proceeds and Liquidation Proceeds (other than
amounts described in clause (c) below) received in respect of the
Mortgage Loans in the related Sub-Pool during the related
Prepayment Period (other than any such Mortgage Loan that was
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01 during the related
Prepayment Period), net of any portion thereof that represents a
recovery of principal for which an advance was made by the Master
Servicer pursuant to Section 4.03 in respect of a preceding
Distribution Date;
(iii) the related Non-Class PO Percentage of the Stated Principal
Balance (calculated immediately prior to such Distribution Date)
of each Mortgage Loan in the related Sub-Pool that was purchased,
sold or replaced pursuant to or as contemplated by Section 2.03,
Section 3.16(c) or Section 9.01 during the related Prepayment
Period;
(iv) the related Non-Class PO Percentage of all REO Principal
Amortization collected in respect of any REO Property in the
related Sub-Pool during the related Prepayment Period; and
(v) in connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans
in the related Sub-Pool pursuant to Section 2.03 during the
related Prepayment Period, the excess, if any, of (A) the
aggregate of the related Non-Class PO Percentage of the Stated
Principal Balances (calculated as of the respective dates of
substitution) of such Deleted Mortgage Loans, net of the aggregate
of the related Non-Class PO Percentage of the principal portions
of the Monthly Payments due during the related Prepayment Period
(to the extent received from the related Mortgagor or advanced by
the Master Servicer and distributed pursuant to Section 4.01 on
the Distribution Date in the related Prepayment Period) in respect
of each such Deleted Mortgage Loan that was replaced prior to the
Distribution Date in the related Prepayment Period, over (B) the
aggregate of the related Non-Class PO Percentage of the Stated
Principal Balances (calculated as of the respective dates of
substitution) of such Qualified Substitute Mortgage Loans;
(b) the product of (x) the then-applicable Group 2 Subordinate
Prepayment Percentage and (y) related Non-Class PO Percentage of all
Principal Prepayments received in respect of the Mortgage Loans in the
related Sub-Pool during the related Prepayment Period;
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(c) with respect to any Mortgage Loans in the related Sub-Pool
which were the subject of a Final Recovery Determination in the related
Prepayment Period, the amount, if any, by which the net Liquidation
Proceeds and Insurance Proceeds allocable to principal in respect of
such Mortgage Loans exceed the amount distributable to the Class A2
Certificates and the portion of the Class PO Certificates evidencing an
interest in such Sub- Pool pursuant to clause (c) of the definition of
"Group 2 Class A Principal Distribution Amount" and clause (c) of the
definition of "Class PO Principal Distribution Amount"; and
(d) in the case of any Distribution Date subsequent to the initial
Distribution Date, an amount equal to the excess, if any, of the Group
2 Subordinate Principal Distribution Amount for the immediately
preceding Distribution Date, over the aggregate distributions of
principal made in respect of the Sub-Pool 2 Components on such
immediately preceding Distribution Date pursuant to Section 4.01 to the
extent that any such amounts are not attributable to Realized Losses
that were allocated to the Subordinate Certificates pursuant to Section
4.04.
Notwithstanding the foregoing, on any Cross-Collateralization Date, (i)
if Sub-Pool 2 is an Undercollateralized Sub-Pool, the Group 2 Subordinate
Principal Distribution Amount distributable to the Sub-Pool 2 Components will be
increased, and the Group 1 Subordinate Principal Distribution Amount
distributable to the Sub-Pool 1 Components will be decreased by the applicable
Subordinate Principal Adjustment Amount for such date. In addition, the Group 2
Subordinate Principal Distribution Amount distributable to the Related Eligible
Components will be increased for any Distribution Date by the amount of any
Prepayment Diversion Amounts payable to the Related Eligible Components pursuant
to Section 4.01(c)(ii).
"Independent": When used with respect to any specified Person, any
such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Originator and their respective Affiliates, (b) does not have any
direct financial interest in or any material indirect financial interest in the
Depositor, the Originator, the Master Servicer or any Affiliate thereof, and (c)
is not connected with the Depositor, the Originator, the Master Servicer or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor, the Originator,
the Master Servicer or any Affiliate thereof merely because such Person is the
beneficial owner of 1% or less of any class of securities issued by the
Depositor or the Master Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Master Servicer) that would be an "independent contractor" with respect to REMIC
I within the meaning of Section 856(d)(3) of the Code if REMIC I were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Master Servicer) if the Trustee has received an Opinion of
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Counsel to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent Contractor will not
cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.
"Insurance Proceeds": Proceeds of any Primary Mortgage Insurance
Policy, title policy, hazard policy or other insurance policy covering a
Mortgage Loan, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date,
the one-month period ending on the last day of the calendar month preceding the
month in which such Distribution Date occurs.
"Interest Distribution Amount": With respect to any Class of
Certificates (other than the Class PO Certificates and the Class B-6PO
Certificates) for any Distribution Date, an amount equal to one month's interest
accrued during the most recently ended Interest Accrual Period at the applicable
Pass-Through Rate on the Certificate Principal Balance or Notional Amount
thereof immediately prior to such Distribution Date. The Class PO Certificates
and the Class B-6PO Certificates are not entitled to distributions in respect of
interest and, accordingly, will not accrue interest. The Interest Distribution
Amount for any Class of Certificates (a) will also include, in the case of any
Distribution Date subsequent to the initial Distribution Date, the excess, if
any, of the Interest Distribution Amount in respect of such Certificates for the
immediately preceding Distribution Date, over the aggregate distributions of
interest made in respect of such Certificates pursuant to Section 4.01(a) on
such immediately preceding Distribution Date, and (b) will be reduced, in the
case of any Distribution Date, by the amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 3.24) and Relief Act Interest Shortfalls that were allocated
to such Certificates on such Distribution Date pursuant to Section 1.02. The
Interest Distribution Amount for any Class of Certificates will be based on a
360 day year consisting of twelve 30 day months.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any Due
Period, whether as late payments of Monthly Payments or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which represent late payments or collections
of principal and/or interest due (without regard to any acceleration of payments
under the related Mortgage and Mortgage Note) but delinquent for such Due Period
and not previously recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such
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Mortgage Loan; or (iii) such Mortgage Loan is removed from REMIC I by reason of
its being purchased, sold or replaced pursuant to or as contemplated by Section
2.03, Section 3.16(c) or Section 9.01. With respect to any REO Property, either
of the following events: (i) a Final Recovery Determination is made as to such
REO Property; or (ii) such REO Property is removed from REMIC I by reason of its
being purchased pursuant to Section 9.01.
"Liquidation Proceeds": The amount (other than Insurance Proceeds
or amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the Master Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan
through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.
"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.
"Lockout Certificates": The Class A1-4 Certificates.
"Lockout Certificate Percentage": For each Distribution Date: (i)
with respect to the Lockout Certificates, the percentage equal to the aggregate
Certificate Principal Balance of the Lockout Certificates divided by the sum of
the aggregate Certificate Principal Balances of the Group 1 Class A Certificates
and (ii) with respect to the Senior Support Lockout Certificates, the percentage
equal to the aggregate Certificate Principal Balance of the Senior Support
Lockout Certificates divided by the sum of the aggregate Certificate Principal
Balances of the Group 1 Class A Certificates.
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"Lockout Distribution Percentage": With respect to any
Distribution Date and either the Lockout Certificates or the Senior Support
Lockout Certificates, the percentage indicated below:
<TABLE>
<CAPTION>
Distribution Date Lockout Distribution Percentage
--------------------------------------- ------------------------------------------------------------
<S> <C>
March 1999 through 0%
February 2004
March 2004 through 30% of the related Lockout Certificate Percentage
February 2005
March 2005 through 40% of the related Lockout Certificate Percentage
February 2006
March 2006 through 60% of the related Lockout Certificate Percentage
February 2007
March 2007 through 80% of the related Lockout Certificate Percentage
February 2008
March 2008 and thereafter 100% of the related Lockout Certificate Percentage
</TABLE>
Notwithstanding the foregoing, if the Certificate Principal Balances of the
Group 1 Class A Certificates (other than the Lockout Certificates and the Senior
Support Lockout Certificates) have been reduced to zero, each Lockout
Distribution Percentage will be equal to 100%.
"Master Servicer": Cendant Mortgage Corporation or any
successor master servicer appointed as herein provided, in its capacity as
Master Servicer hereunder.
"Master Servicer Event of Default": One or more of the events
described in Section 7.01.
"Master Servicer Remittance Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the 18th day of the calendar month
in which such Distribution Date occurs or, if such 18th day is not a Business
Day, the Business Day immediately preceding such 18th day; provided, however,
that if such immediately preceding Business Day is the Determination Date, the
Master Servicer Remittance Date shall be the next succeeding Business Day.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.07; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
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"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as
from time to time held as a part of REMIC I, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement among the
Depositor, the Seller, Bishop's Gate and the Originator, regarding the transfer
of the Mortgage Loans by the Seller to or at the direction of the Depositor,
substantially in the form of Exhibit D annexed hereto.
"Mortgage Loan Remittance Rate": With respect to any Mortgage
Loan or REO Property, as of any date of determination, the then applicable Net
Mortgage Rate.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans separately identifying the Mortgage Loans included in each Sub-Pool on
such date, attached hereto as Schedule 1 and Schedule 2 with respect to Sub-Pool
1 and Sub-Pool 2, respectively. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:
(i) the Originator's Mortgage Loan identifying number;
(ii) the Mortgagor's first and last name;
(iii) the street address of the Mortgaged Property including the state
and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the original date of the mortgage;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate;
(x) the date on which the first Monthly Payment was due on the
Mortgage Loan;
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(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment as of the Cut-off Date;
(xiv) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Scheduled Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xvii) a code indicating the purpose of the Mortgage Loan (I.E.,
purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
(xviii) a code indicating the documentation style (i.e., full,
alternative or reduced);
(xix) a code indicating if the Mortgage Loan is subject to a Primary
Mortgage Insurance
Policy;
(xx) the Value of the Mortgaged Property;
(xxi) the sale price of the Mortgaged Property, if applicable;
(xxii) the actual unpaid principal balance of the Mortgage Loan as of
the Cut-off Date;
(xxiii) the Servicing Fee;
(xxiv) whether the Mortgage Loan is a Buydown Mortgage Loan; and
(xxv) the Class PO Percentage.
The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in each Sub-Pool in the aggregate
as of the Cut-off Date: (1) the number of Mortgage Loans in each Sub-Pool; (2)
the current principal balance of the Mortgage Loans in each Sub-Pool; (3) the
weighted average Mortgage Rate of the Mortgage Loans in each Sub-Pool; and (4)
the weighted average maturity of the Mortgage Loans in each Sub-Pool. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date
for such Mortgage Loan, determined in accordance with the definition of Cut-off
Date herein.
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"Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, consisting of
Sub-Pool 1 and Sub- Pool 2, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, without regard to
any reduction thereof as a result of a Debt Service
Reduction or operation of the Relief Act.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.
"Non-Class PO Percentage": With respect to each Class IO
Mortgage Loan, 100%. With respect to each Class PO Mortgage Loan, 100% less the
Class PO Percentage.
"Non-Relocation Mortgage Loans": Any Mortgage Loan that is not
a Relocation Mortgage Loan.
"Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan
or REO Property as provided herein.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": For any Distribution Date, (a) with respect
to the Class IO Certificates, the Uncertificated Notional Amount of REMIC I
Regular Interest LTIO for such Distribution Date and (b) with respect to the
Class B-6IO Certificates, the Uncertificated Balance of REMIC I Regular Interest
LT2 for such Distribution Date.
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"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Originator, the Seller or
the Depositor, as applicable; with respect to the Master Servicer, any officer
who is authorized to act for the Master Servicer in matters relating to this
Agreement, and whose action is binding upon the Master Servicer, initially
including those individuals whose names appear on the list of authorized
officers delivered at the closing.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Master Servicer
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of either REMIC I or REMIC II as a REMIC or (b) compliance
with the REMIC Provisions must be an opinion of Independent counsel.
"Original Mortgage Loan": Any Original Sub-Pool 1 Mortgage
Loan or Original Sub-Pool 2 Mortgage Loan and together, the "Original Mortgage
Loans".
"Original Sub-Pool 1 Mortgage Loan": Any Mortgage Loan
included in Sub-Pool 1 as of the Closing Date.
"Original Sub-Pool 2 Mortgage Loan": Any Mortgage Loan
included in Sub-Pool 2 as of the Closing Date.
"Originator": Cendant Mortgage Corporation, or its successor
in interest, in its capacity as originator under the Mortgage Loan Purchase
Agreement.
"Overcollateralization Amount": As to any Distribution Date
and Sub-Pool 1, the excess, if any, of the sum of (i) the aggregate of the
Non-Class PO Percentage of the Scheduled Principal Balance of each of the
Mortgage Loans in such Sub-Pool, plus (ii) the aggregate of the Non-Class PO
Percentage of the Scheduled Principal Balance of each of the REO Properties in
such Sub-Pool, in each case before reduction for any Realized Losses on such
Distribution Date over the sum of the Certificate Principal Balances of the
Group 1 Class A Certificates (and with respect to the first Distribution Date,
the Class R-II Certificates) and the Sub-Pool 1 Components immediately prior to
such Distribution Date. As to any Distribution Date and Sub-Pool 2, the excess,
if any, of the sum of (i) the aggregate of the Non-Class PO Percentage of the
Scheduled Principal Balance of each of the Mortgage Loans in such Sub-Pool, plus
(ii) the aggregate of the Non-Class PO Percentage of the Scheduled Principal
Balance of each of the REO Properties in such Sub-Pool, in each case before
reduction for any Realized Losses on such Distribution Date over the sum of the
Certificate Principal Balance of the Class A2 Certificates and the Sub-Pool 2
Components immediately prior to such Distribution Date.
"Overcollateralized Sub-Pool": As to any Distribution Date,
any Sub-Pool for which an Overcollateralization Amount greater than zero is
calculated.
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"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to any Class of Certificates
or any Component thereof (other than the Class A1-2 Certificates, the Class A1-3
Certificates, Class IO Certificates, the Class PO Certificates and the Class
B-6PO Certificates) for any Distribution Date, 6.50% per annum. With respect to
the Class A1-2 Certificates for any Distribution Date, 6.25% per annum. With
respect to the Class A1-3 Certificates for any Distribution Date, 6.75% per
annum. With respect to the Class IO Certificates, for any Distribution Date, the
Weighted Average Stripped Interest Rate for such Distribution Date. The Class PO
Certificates and the Class B-6PO Certificates shall have a Pass-Through Rate of
0% per annum and shall not be entitled to any distributions of interest.
"Percentage Interest": With respect to any Class of
Certificates, the portion of the respective Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the initial Certificate
Principal Balance or Notional Amount represented by such Certificate, and the
denominator of which is the initial aggregate Certificate Principal Balance or
Notional Amount of all of the Certificates of such Class. The Book-Entry
Certificates are issuable only in Percentage Interests corresponding to initial
Certificate Principal Balances of $10,000 and integral multiples of $1.00 in
excess thereof. The Class PO Certificates, Class IO Certificates, the Class B-4
Certificates, the Class B-5 Certificates and the Class B-6 Certificates are
issuable only in Percentage Interests corresponding to the initial Certificate
Principal Balances or Notional Amounts of $10,000 and integral multiples of
$1,000 in excess thereof; provided, however, that a single Certificate of each
such Class of Certificates may be issued having a Percentage Interest
corresponding to the remainder of the aggregate initial Certificate Principal
Balance or Notional Amount of such Class or to an otherwise authorized
denomination for such Class plus such remainder. The Residual Certificates are
issuable only in Percentage Interests corresponding to initial Certificate
Principal Balances of $20 and integral multiples thereof.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) demand and time deposits in, certificates of
deposit of, or bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars and issued by, any Depository Institution;
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(iii) repurchase obligations with respect to any
security described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a
discount that are issued by any corporation incorporated under the laws
of the United States of America or any state thereof and that are rated
by each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than 30
days after the date of acquisition thereof) that is rated by each
Rating Agency that rates such securities in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds, including money
market funds advised by the Trustee or an Affiliate thereof, that have
been rated "AAA" by Fitch (if rated by Fitch) and "AAA" by S&P; and
(viii) if previously confirmed in writing to the
Trustee, any other demand, money market or time deposit, or any other
obligation, security or investment, as may be acceptable to the Rating
Agencies as a permitted investment of funds backing securities having
ratings equivalent to its highest initial rating of the Senior
Certificates;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date pursuant
to Section 4.03.
"Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds and insurance company general
or separate accounts in which such
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plans, accounts or arrangements are invested, that are subject to ERISA and
Section 4975 of the Code.
"Prepayment Assumption": A prepayment rate for the Mortgage
Loans of 275% SPA. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes.
"Prepayment Diversion Amount": As defined in Section 4.01(c).
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was during the related Prepayment
Period the subject of a Principal Prepayment in full or in part that was applied
by the Master Servicer to reduce the outstanding principal balance of such loan
on a date preceding the Due Date in the succeeding Prepayment Period, an amount
equal to interest at the applicable Mortgage Loan Remittance Rate on the amount
of such Principal Prepayment for the number of days commencing on the date on
which the prepayment is applied and ending on the last day of the related
Prepayment Period. The obligations of the Master Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date,
the calendar month preceding the calendar month in which such Distribution Date
occurs.
"Primary Mortgage Insurance Policy": Each primary policy of
mortgage guaranty insurance in effect as represented in the Mortgage Loan
Purchase Agreement and as so indicated on the Mortgage Loan Schedule, or any
replacement policy therefor obtained by the Master Servicer or any Sub-Servicer
pursuant to Section 3.13. Any Mortgage Loan which has a Primary Mortgage
Insurance Policy is set forth on Schedule 3 attached hereto.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"PTCE": A Prohibited Transaction Class Exemption.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of: (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Mortgage Loan
Remittance Rate in effect from time to time from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an advance by the
Master Servicer, which payment or advance had as of the date of purchase been
distributed pursuant to Section 4.01, through the end of the calendar month in
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which the purchase is to be effected, and (y) an REO Property, the sum of (1)
accrued interest on such Stated Principal Balance at the applicable Mortgage
Loan Remittance Rate in effect from time to time from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an advance by the
Master Servicer through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, minus the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and P&I Advances
that as of the date of purchase had been distributed as or to cover REO Imputed
Interest pursuant to Section 4.01; (iii) any unreimbursed Servicing Advances and
P&I Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or
REO Property; (iv) any amounts previously withdrawn from the Collection Account
in respect of such Mortgage Loan or REO Property pursuant to Sections
3.11(a)(ix) and Section 3.16(b); and (v) in the case of a Mortgage Loan required
to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be
incurred by the Master Servicer or the Trustee in respect of the breach or
defect giving rise to the purchase obligation.
"Qualified Insurer": Any insurer which meets the requirements
of Fannie Mae and Freddie Mac.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) be covered under a Primary Mortgage
Insurance Policy if such Qualified Substitute Mortgage Loan has a Loan-to-Value
Ratio in excess of 80%, (iv) have a remaining term to maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan, (v)
have the same Due Date as the Due Date on the Deleted Mortgage Loan, (vi) have a
Loan-to-Value Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (vii)
[intentionally omitted]; and (viii) conform to each representation and warranty
set forth in Section 6 of the Mortgage Loan Purchase Agreement applicable to the
Deleted Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Deleted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Rates described in clause (ii) hereof shall be determined
on the basis of weighted average Mortgage Rates, the Net Mortgage Rates
described in clause (iii) hereof shall be satisfied as to each such mortgage
loan, the terms described in clause (iv) shall be determined on the basis of
weighted average remaining terms to maturity, the Loan- to-Value Ratios
described in clause (vi) hereof shall be satisfied as to each such mortgage loan
and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (viii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.
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"Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not in excess of the existing first mortgage loan on the
related Mortgaged Property and related closing costs, and were used exclusively
to satisfy the then existing first mortgage loan of the Mortgagor on the related
Mortgaged Property and to pay related closing costs.
"Rating Agency or Rating Agencies": S&P and Fitch or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, written
notice of which designation shall be given to the Trustee and the Master
Servicer.
"Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Stated Principal Balance of such Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv)
the proceeds, if any, received in respect of such Mortgage Loan during the
calendar month in which such Final Recovery Determination was made, net of
amounts that are payable therefrom to the Master Servicer with respect to such
Mortgage Loan pursuant to Section 3.11(a)(iii).
With respect to any REO Property as to which a Final Recovery
Determination has been made an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(v) the aggregate of all P&I Advances made by the Master Servicer in respect of
such REO Property or the related Mortgage Loan for which the Master Servicer has
been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.23 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such
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REO Property that has been, or in connection with such Final Recovery
Determination, will be transferred to the Distribution Account pursuant to
Section 3.23.
With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as
reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the portion, if any, of the reduction in
each affected Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a court of competent jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due Date for each affected
Monthly Payment.
"Record Date": With respect to each Distribution Date and any
Book-Entry Certificate, the Business Day immediately preceding such Distribution
Date. With respect to each Distribution Date and any other Certificates,
including any Definitive Certificates, the last Business Day of the month
immediately preceding the month in which such Distribution Date
occurs.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any Senior Certificate or Subordinate
Certificate.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.
"Relocation Mortgage Loans": Any Mortgage Loan made to
employees of corporations who have a substantial portion of the costs related to
such Mortgage Loan reimbursed by their employer. Some of the expenses eligible
for consideration include closing costs, discount
points or real estate commissions.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election
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is to be made, consisting of: (i) such Mortgage Loans as from time to time are
subject to this Agreement, together with the Mortgage Files relating thereto,
and together with all collections thereon and proceeds thereof; (ii) any REO
Property, together with all collections thereon and proceeds thereof; (iii) the
Trustee's rights with respect to the Mortgage Loans under all insurance policies
required to be maintained pursuant to this Agreement and any proceeds thereof;
(iv) the Depositor's rights under the Mortgage Loan Purchase Agreement
(including any security interests created thereby and excluding Section 17
thereof); and (v) the Collection Account, the Distribution Account and any REO
Account and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, REMIC I
specifically excludes all payments and other collections of principal and
interest due on the Mortgage Loans on or before the Cut-off Date.
"REMIC I Regular Interest": Any of the four separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal (other than REMIC I
Regular Interest LTIO), subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance or Uncertificated
Notional Amount as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.
"REMIC I Regular Interest LT1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I which shall accrue interest at the
REMIC I Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary statement hereto.
"REMIC I Regular Interest LT2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I which shall accrue interest at the
REMIC I Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary statement hereto.
"REMIC I Regular Interest LTIO": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I which shall accrue interest at the
REMIC I Remittance Rate on its Uncertificated Notional Amount in effect from
time to time, but which shall not be entitled to any distributions of principal.
The initial Uncertificated Notional Amount is as set forth in the Preliminary
statement hereto.
"REMIC I Regular Interest LTPO": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I which shall be entitled to
distributions of principal, subject to the terms and conditions hereof,
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in an aggregate amount equal to its initial Uncertificated Balance as set forth
in the Preliminary statement hereto. REMIC I Regular Interest LTPO shall not be
entitled to distributions of interest.
"REMIC I Remittance Rate": With respect to REMIC I Regular
Interest LT1 and REMIC I Regular Interest LT2, 6.50% per annum. With respect to
REMIC I Regular Interest LTIO, the Weighted Average Stripped Interest Rate for
such Distribution Date. REMIC I Regular Interest LTPO shall have a REMIC I
Remittance Rate of 0% per annum and shall not be entitled to any distribution of
interest.
"REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee for the benefit
of the REMIC II Certificateholders pursuant to Section 2.07, with respect to
which a separate REMIC election is
to be made.
"REMIC II Certificate": Any Regular Certificate or Class R-II
Certificate.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time
to time.
"Remittance Report": A report in form and substance that would
be acceptable to Fannie Mae on a magnetic disk or tape prepared by the Master
Servicer pursuant to Section 4.03 with such additions, deletions and
modifications as agreed to by the Trustee and the Master Servicer.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
"REO Account": The account or accounts maintained by the
Master Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Mortgage Loan Remittance Rate on the
Stated Principal Balance of such REO Property (or, in the case of the first such
calendar month, of the related Mortgage Loan if appropriate) as of the close of
business on the Distribution Date in such calendar month.
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"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
9.01 that is allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.23(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.23(d) for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and P&I Advances in respect of such REO Property or the
related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO
Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E-1 or Exhibit E-2 attached hereto.
"Residential Dwelling": Any one of the following: (i) an
attached or detached one-family dwelling, (ii) a detached two- to four-family
dwelling, (iii) a one-family dwelling unit in a Fannie Mae eligible condominium
project, or (iv) a detached one-family dwelling in a planned unit development,
none of which is a co-operative, mobile or manufactured home (as defined in 42
United States Code, Section 5402(6)).
"Residual Certificate": Any one of the Class R-I Certificates
or Class R-II Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any vice president, any assistant vice president, the Secretary, any
assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any
assistant cashier, any trust officer or assistant trust officer, the Controller
and any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and, with respect to a particular matter, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any
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Due Date subsequent to the Cut-off Date up to and including the Due Date in the
calendar month in which a Liquidation Event occurs with respect to such Mortgage
Loan, the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off
Date, minus the sum of (i) the principal portion of each Monthly Payment due on
or before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of REMIC I up
to and including the Due Date in the calendar month in which a Liquidation Event
occurs with respect to such REO Property, an amount (not less than zero) equal
to the Scheduled Principal Balance of the related Mortgage Loan as of the Due
Date in the calendar month in which such REO Property was acquired, minus the
aggregate amount of REO Principal Amortization, if any, in respect of such REO
Property for all previously ended calendar months; and (b) as of any Due Date
subsequent to the occurrence of a Liquidation Event with respect to such REO
Property, zero.
"Seller": Salomon Brothers Realty Corp. or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Certificate": Any Class A Certificate, Class PO
Certificate or Class IO Certificate.
"Senior Support Lockout Certificate": The Class A1-6
Certificates.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property,
and (iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.13, Section 3.14, Section 3.16 and Section 3.23. The Master Servicer
shall not be required to make any Servicing Advance in respect of a Mortgage
Loan or REO Property that, in the good faith business judgment of the Master
Servicer, would not be ultimately recoverable from
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related Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO
Property as provided herein.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month's interest (or in the event of
any payment of interest which accompanies a Principal Prepayment in full made by
the Mortgagor during such calendar month, interest for the number of days
covered by such payment of interest) at the applicable Servicing Fee Rate on the
same principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation. The portion of the Servicing Fee
which accrued at the portion of any Servicing Fee Rate in excess of 0.200% per
annum will be set aside by the Master Servicer to pay for lender funded mortgage
insurance and will not be treated as servicing compensation and will not be
available to make payments of Compensating Interest.
"Servicing Fee Rate": A rate between 0.2000% per annum and
1.075% per annum.
"Servicing Officer": Any employee of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans, whose name and specimen signature appear on a list of Servicing
Officers furnished by the Master Servicer to the Trustee and the Depositor on
the Closing Date, as such list may from time to time be
amended.
"Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance or Notional Amount of $1,000. With
respect to the Residual Certificates, a hypothetical Certificate of such Class
evidencing a 20% Percentage Interest in such Class.
"Special Hazard Amount": Initially, an amount equal to
$3,604,579. As of each anniversary of the Cut-off Date, an amount equal to the
lesser of (a) the Special Hazard Amount as of the immediately preceding
anniversary of the Cut-off Date minus the aggregate amount of Special Hazard
Losses allocated solely to the Subordinate Certificates in accordance with
Section 4.04 since such immediately preceding anniversary and (b) the Adjustment
Amount (as defined below) as most recently calculated. For each anniversary of
the Cut-off Date, the Adjustment Amount shall be equal to the greatest of (i)
the product of 1.00% multiplied by the outstanding principal balance of the
Mortgage Loans on the Distribution Date immediately preceding such anniversary,
(ii) the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the Mortgage Loans secured by Mortgaged
Properties located in the same zip code area in the State of California and
(iii) twice the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the largest Mortgage Loan.
"Special Hazard Loss": Any Realized Loss or portion thereof
not in excess of the lesser of the cost of repair or replacement of a Mortgaged
Property suffered by such Mortgaged Property by reason of damage caused by
certain hazards (including earthquakes, mudflows, and, to a limited extent,
floods) not insured against under the hazard insurance policies or fire or flood
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insurance policies required to be maintained in respect of such Mortgaged
Property pursuant to Section 3.14, or by reason of the application of any
co-insurance provision. Special Hazard Losses shall not include any
Extraordinary Loss or any of the following:
(i) wear and tear, deterioration, rust or corrosion,
mold, wet or dry rot; inherent vice or latent defect;
animals, birds, vermin, insects;
(ii) smog, smoke, vapor, liquid or dust discharge from
agricultural or industrial operations; pollution;
contamination;
(iii) settling, subsidence, cracking, shrinkage, bulging or
expansion of pavements, foundations, walls, floors,
roofs or ceilings; and
(iv) errors in design, faulty workmanship or faulty
materials, unless the collapse of the property or a
part thereof ensues and then only for the ensuing
loss.
"S&P": Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc., or its successor in interest.
"Standard Prepayment Assumption": A 100% standard prepayment
assumption assumes a constant rate of prepayment of mortgage loans of 0.2% per
annum of the then outstanding principal balance of such mortgage loans in the
first month of the life of the mortgage loans, increasing by an additional 0.2%
per annum in each succeeding month until the thirtieth month, and a constant 6%
per annum rate of prepayment thereafter for the life of the mortgage loans.
"Startup Day": With respect to each of REMIC I and REMIC II,
the day designated as such pursuant to Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Master Servicer and distributed pursuant to Section 4.01 on
or before such date of determination, (ii) all Principal Prepayments received
after the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or
before such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the Master Servicer as recoveries of principal in accordance
with the provisions of Section 3.16, to the extent distributed pursuant to
Section 4.01 on or before such date of determination, and (iv) any Realized Loss
incurred with respect thereto as a result of a Deficient Valuation made during
or prior to the Prepayment Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds,
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if any, of a Liquidation Event with respect to such Mortgage Loan would be
distributed, zero. With respect to any REO Property: (a) as of any date of
determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Master Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, and (ii) the
aggregate amount of REO Principal Amortization in respect of such REO Property
for all previously ended calendar months, to the extent distributed pursuant to
Section 4.01 on or before such date of determination; and (b) as of any date of
determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such REO Property
would be distributed, zero.
"Stayed Funds": If the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of a Remittance (as
defined in Section 7.02(b)) is prohibited by Section 362 of the federal
Bankruptcy Code, funds which are in the custody of the Master Servicer, a
trustee in bankruptcy or a federal bankruptcy court and should have been the
subject of such Remittance absent such prohibition.
"Stripped Interest Rate": With respect to any Mortgage Loan or
related REO Property, the excess, if any, of the Net Mortgage Rate minus 6.50%
per annum.
"Sub-Pool": Either Sub-Pool 1 or Sub-Pool 2.
"Sub-Pool Prepayment Percentage": Either the Sub-Pool 1
Prepayment Percentage or the Sub-Pool 2 Prepayment Percentage.
"Sub-Pool 1": The Sub-Pool consisting of fixed-rate,
Non-Relocation Mortgage Loans and designated on the Mortgage Loan Schedule as
Sub-Pool 1. With respect to the Group 1 Class A Certificates and the Sub-Pool 1
Components, Sub-Pool 1 is sometimes referred to herein as the related Sub-Pool
and the Mortgage Loans in such Sub-Pool are sometimes referred to herein as the
related Mortgage Loans.
"Sub-Pool 1 Components": Collectively, Component B-1-1,
Component B-2-1, Component B-3-1, Component B-4-1, Component B-5-1 and Component
B-6PO-1. With respect to Sub-Pool 1, such Components shall be referred to as the
"related Components".
"Sub-Pool 1 Prepayment Percentage": With respect to Sub-Pool 1
and any Distribution Date within the range indicated below, the percentage as
indicated below:
<TABLE>
<CAPTION>
Distribution Date Sub-Pool 1 Prepayment Percentage
- ------------------------------------------------- --------------------------------------------------------------
<S> <C>
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March 1999 through February 2004 100%
March 2004 through February 2005 the Group 1 Class A Percentage, plus 70% of the
Group 1 Subordinate Percentage
March 2005 through February 2006 the Group 1 Class A Percentage, plus 60% of the
Group 1 Subordinate Percentage
March 2006 through February 2007 the Group 1 Class A Percentage, plus 40% of the
Group 1 Subordinate Percentage
March 2007 through February 2008 the Group 1 Class A Percentage, plus 20% of the
Group 1 Subordinate Percentage
March 2008 and thereafter the Group 1 Class A Percentage;
</TABLE>
provided, however, no reduction to the Sub-Pool 1 Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Mortgage Loans in both Sub-Pools delinquent
60 days or more (including REO Properties and Mortgage Loans in foreclosure)
averaged over the last six months does not exceed 50% of the sum of the then
current Certificate Principal Balances of the Subordinate Certificates and (ii)
Realized Losses on the Mortgage Loans in both Sub-Pools to date are less than
the then applicable Trigger Amount. The "Trigger Amount" for any Distribution
Date occurring after the first five years will be as follows: for any
Distribution Date during the sixth year after the Closing Date, 30% of the
initial sum of the Certificate Principal Balances of the Subordinate
Certificates; for any Distribution Date during the seventh year after the
Closing Date, 35% of the initial sum of the Certificate Principal Balances of
the Subordinate Certificates; for any Distribution Date during the eighth year
after the Closing Date, 40% of the initial sum of the Certificate Principal
Balances of the Subordinate Certificates; for any Distribution Date during the
ninth year after the Closing Date, 45% of the initial sum of the Certificate
Principal Balances of the Subordinate Certificates; and for any Distribution
Date during the tenth year (or any year thereafter) after the Closing Date, 50%
of the initial sum of the Certificate Principal Balances of the Subordinate
Certificates. In addition, on any Distribution Date on which the Group 1 Class A
Percentage exceeds the initial Group 1 Class A Percentage, the Sub-Pool 1
Prepayment Percentage shall be 100%.
"Sub-Pool 2": The Sub-Pool consisting of fixed-rate,
Relocation Mortgage Loans and designated on the Mortgage Loan Schedule as
Sub-Pool 2. With respect to the Class A2 Certificates and the Sub-Pool 2
Components, Sub-Pool 2 is sometimes referred to herein as the related Sub-Pool
and the Mortgage Loans in such Sub-Pool are sometimes referred to herein as the
related Mortgage Loans.
"Sub-Pool 2 Components": Collectively, Component B-1-2,
Component B-2-2, Component B-3-2, Component B-4-2, Component B-5-2 and Component
B-6PO-2. With respect to Sub-Pool 2, such Components shall be referred to as the
"related Components".
"Sub-Pool 2 Prepayment Percentage": With respect to Sub-Pool 2
and any Distribution Date within the range indicated below, the percentage as
indicated below:
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<PAGE>
<TABLE>
<CAPTION>
Distribution Date Sub-Pool 2 Prepayment Percentage
- ------------------------------------------------- --------------------------------------------------------------
<S> <C>
March 1999 through February 2004 100%
March 2004 through February 2005 the Group 2 Class A Percentage, plus 70% of the
Group 2 Subordinate Percentage
March 2005 through February 2006 the Group 2 Class A Percentage, plus 60% of the
Group 2 Subordinate Percentage
March 2006 through February 2007 the Group 2 Class A Percentage, plus 40% of the
Group 2 Subordinate Percentage
March 2007 through February 2008 the Group 2 Class A Percentage, plus 20% of the
Group 2 Subordinate Percentage
March 2008 and thereafter the Group 2 Class A Percentage;
</TABLE>
provided, however, no reduction to the Sub-Pool 2 Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Mortgage Loans in both Sub-Pools delinquent
60 days or more (including REO Properties and Mortgage Loans in foreclosure)
averaged over the last six months does not exceed 50% of the sum of the then
current Certificate Principal Balances of the Subordinate Certificates and (ii)
Realized Losses on the Mortgage Loans in both Sub-Pools to date are less than
the then applicable Trigger Amount. The "Trigger Amount" for any Distribution
Date occurring after the first five years will be as follows: for any
Distribution Date during the sixth year after the Closing Date, 30% of the
initial sum of the Certificate Principal Balances of the Subordinate
Certificates; for any Distribution Date during the seventh year after the
Closing Date, 35% of the initial sum of the Certificate Principal Balances of
the Subordinate Certificates; for any Distribution Date during the eighth year
after the Closing Date, 40% of the initial sum of the Certificate Principal
Balances of the Subordinate Certificates; for any Distribution Date during the
ninth year after the Closing Date, 45% of the initial sum of the Certificate
Principal Balances of the Subordinate Certificates; and for any Distribution
Date during the tenth year (or any year thereafter) after the Closing Date, 50%
of the initial sum of the Certificate Principal Balances of the Subordinate
Certificates. In addition, on any Distribution Date on which the Group 2 Class A
Percentage exceeds the initial Group 2 Class A Percentage, the Sub-Pool 1
Prepayment Percentage shall be 100%.
"Subordinate Certificate": Any Class B-1 Certificate, Class
B-2 Certificate, Class B-3 Certificate, Class B-4 Certificate, Class B-5
Certificate or Class B-6 Certificate.
"Subordinate Percentage": Either the Group 1 Subordinate
Percentage or the Group 2 Subordinate Percentage. With respect to Sub-Pool 1 and
Sub-Pool 2, the Group 1 Subordinate Percentage and the Group 2 Subordinate
Percentage, respectively, is sometimes referred to as the "related Subordinate
Percentage".
"Subordinate Prepayment Percentage": Either the Group 1
Subordinate Prepayment Percentage or the Group 2 Subordinate Prepayment
Percentage. With respect to Sub-Pool 1 and Sub-Pool 2, the Group 1 Subordinate
Prepayment Percentage and the Group 2 Subordinate
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Prepayment Percentage, respectively, is sometimes referred to as the "related
Subordinate Prepayment Percentage".
"Subordinate Principal Adjustment Amount": As to any
Distribution Date on which there is an Undercollateralized Sub-Pool and an
Overcollateralized Sub-Pool, the product of (x) the then-applicable Diversion
Fraction and (y) the related Subordinate Principal Distribution Amount for the
Overcollateralized Sub-Pool.
"Subordinate Principal Distribution Amount": Either the Group
1 Subordinate Principal Distribution Amount or the Group 2 Subordinate Principal
Distribution Amount. With respect to Sub-Pool 1 and Sub-Pool 2, the Group 1
Subordinate Principal Distribution Amount and the Group 2 Subordinate Principal
Distribution Amount, respectively, is sometimes referred to as the "related
Subordinate Principal Distribution Amount".
"Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.
"Super Senior Certificates": The Class A1-5 Certificates.
"Super Senior Optimal Percentage": As of any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Super Senior Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Certificate Principal Balance of the Group 1 Class A Certificates
immediately prior to such Distribution Date.
"Super Senior Optimal Principal Distribution Amount": The
product of (a) the then-applicable Super Senior Optimal Percentage and (b) the
Group 1 Class A Principal Distribution Amount.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC I or REMIC II due to its classification
as a REMIC under the REMIC Provisions, together with any and all other
information reports or returns that may be required to be furnished to the
Certificateholders or
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<PAGE>
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
"Termination Price": As defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trust Fund": Collectively, all of the assets of REMIC I and
REMIC II.
"Trustee": The Chase Manhattan Bank, a New York banking
corporation, or its successor in interest, or any successor trustee appointed as
herein provided.
"Uncertificated Balance": The amount of any REMIC I Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest (other than REMIC I
Regular Interest LTIO) shall equal the amount set forth in the Preliminary
Statement hereto as its initial uncertificated amount. On each Distribution
Date, the Uncertificated Balance of each REMIC I Regular Interest (other than
REMIC I Regular Interest LTIO) shall be reduced by all distributions of
principal deemed to have been made on such REMIC I Regular Interest on such
Distribution Date pursuant to Section 4.06 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date as provided
in Section 4.06.
"Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the related REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance or Uncertificated
Notional Amount of such REMIC I Regular Interest outstanding immediately prior
to such Distribution Date. Uncertificated Interest in respect of any REMIC I
Regular Interest shall accrue on the basis of a 360-day year consisting of
twelve 30-day months. Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest shall be reduced by an amount equal to
the portion allocable to such Regular Interest pursuant to Section 1.02 hereof
of the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered by payments pursuant to Section 3.24
and (b) the aggregate amount of any Relief Act Interest Shortfall, if any, for
such Distribution Date.
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<PAGE>
"Uncertificated LTPO Percentage": With respect to each Class
PO Mortgage Loan, the quotient of (i) 6.50% per annum minus the related Net
Mortgage Rate divided by (ii) 6.50% per annum. With respect to each Class IO
Mortgage Loan, 0% per annum.
"Uncertificated LTPO Principal Distribution Amount": For any
Distribution Date, an amount equal to the aggregate of:
(a) the sum of the following:
(i) the related Uncertificated LTPO Percentage of the
principal portion of each Monthly Payment due during the
related Due Period in respect of each
Class PO Mortgage Loan whether or not received;
(ii) the related Uncertificated LTPO Percentage of the
principal portion of all Insurance Proceeds and Liquidation
Proceeds (other than amounts described in clause (c) below)
received in respect of each Class PO Mortgage Loan during the
related Prepayment Period (other than any such Class PO
Mortgage Loan that was purchased, sold or replaced pursuant to
or as contemplated by Section 2.03, Section 3.16(c) or Section
9.01 during the related Prepayment Period), net of any portion
thereof that represents a recovery of principal for which an
advance was made by the Master Servicer pursuant to Section
4.03 in respect of a preceding Distribution Date;
(iii) the related Uncertificated LTPO Percentage of the
Stated Principal Balance (calculated immediately prior to such
Distribution Date) of each Class PO Mortgage Loan that was
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01 during the
related Prepayment Period;
(iv) the related Uncertificated LTPO Percentage of all
REO Principal Amortization collected in respect of any REO
Property during the related Prepayment Period; and
(v) in connection with the substitution of one or more
Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans which were Class PO Mortgage Loans pursuant to
Section 2.03 during the related Prepayment Period, the excess,
if any, of (A) the related Uncertificated LTPO Percentage of
the aggregate of the Stated Principal Balances (calculated as
of the respective dates of substitution) of such Deleted
Mortgage Loans, net of the aggregate of the related
Uncertificated LTPO Percentage of the principal portions of
the Monthly Payments due during the related Prepayment Period
(to the extent received from the related Mortgagor or advanced
by the Master Servicer and distributed pursuant to Section
4.01 on the Distribution Date in the related Prepayment
Period) in respect of each such Deleted Mortgage Loan that was
replaced prior to the Distribution Date in the
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related Prepayment Period, over (B) the related Uncertificated
LTPO Percentage of the Stated Principal Balances (calculated
as of the respective dates of substitution) of such Qualified
Substitute Mortgage Loans;
(b) the related Uncertificated LTPO Percentage of all
Principal Prepayments received in respect of each Class PO Mortgage
Loan during the related Prepayment Period;
(c) with respect to any Class PO Mortgage Loan which was the
subject of a Final Recovery Determination in the related Prepayment
Period, the related Uncertificated LTPO Percentage of the Stated
Principal Balance of such Mortgage Loan at the time of such Final
Recovery Determination (net of the principal portion of any Realized
Loss allocated to the REMIC I Regular Interest LTPO ) to the extent of
the principal portion of all Liquidation Proceeds with respect to such
Class PO Mortgage Loan; and
(d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of
the Uncertificated LTPO Principal Distribution Amount for the
immediately preceding Distribution Date, over the aggregate
distributions of principal made in respect of the REMIC I Regular
Interest LTPO Certificates on such immediately preceding Distribution
Date pursuant to Section 4.01 to the extent that any such amounts are
not attributable to Realized Losses which were allocated to the
Subordinate Certificates pursuant to Section 4.04.
"Uncertificated Notional Amount": With respect to REMIC I
Regular Interest LTIO, the aggregate Certificate Principal Balance of all of the
Certificates (other than the Class R-I Certificates) for such Distribution Date.
"Uncertificated Principal Distribution Amount": With respect
to REMIC I Regular Interest LT1, each Class A Principal Distribution Amount and
the portion of each Subordinate Principal Distribution Amount that relates to
all Subordinate Certificates (other the Class B-6 Certificates). With respect to
REMIC I Regular Interest LT2, the portion of each Subordinate Principal
Distribution Amount that relates to the Class B-6 Certificates. With respect to
REMIC I Regular Interest LTPO, the Uncertificated LTPO Principal Distribution
Amount. REMIC I Regular Interest LTIO is not entitled to any payments of
principal.
"Undercollateralization Amount": As to any Distribution Date
and Sub-Pool 1, the excess, if any, of the sum of the Certificate Principal
Balances of the Group 1 Class A Certificates and the Class R-II Certificates and
the Sub-Pool 1 Components immediately prior to such Distribution Date over the
sum of (i) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the Mortgage Loans in such Sub-Pool, plus (ii) the
aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance of
each of the REO Properties in such Sub-Pool, in each case before reduction for
any Realized Losses on such Distribution Date. As to any Distribution Date and
Sub-Pool 2, the excess, if any, of the sum of the Certificate Principal Balance
of the Class A2 Certificates and the Sub-Pool 2 Components immediately prior to
such Distribution Date over the sum of (i) the aggregate of the Non-Class PO
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<PAGE>
Percentage of the Scheduled Principal Balance of each of the Mortgage Loans in
such Sub-Pool, plus (ii) the aggregate of the Non-Class PO Percentage of the
Scheduled Principal Balance of each of the REO Properties in such Sub-Pool, in
each case before reduction for any Realized Losses
on such Distribution Date.
"Undercollateralized Sub-Pool": At any time of determination,
any Sub-Pool for which an Undercollateralization Amount greater than zero is
calculated.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations),
or an estate whose income is subject to United States federal income tax
regardless of its source, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States Persons have the authority to control all substantial
decisions of the trust. The term "United States" shall have the meaning set
forth in Section 7701 of the Code.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of Fannie Mae and Freddie Mac, and
(ii) the purchase price paid for the related Mortgaged Property by the Mortgagor
with the proceeds of the Mortgage Loan, provided, however, in the case of a
Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely
upon the value determined by an appraisal made for the originator of such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by an appraiser who met the minimum requirements of Fannie Mae and Freddie
Mac. In connection with any requirement to maintain Primary Mortgage Insurance
Policies as provided in Section 3.13, the value thereof as determined by an
appraisal provided by the Mortgagor and acceptable to the Master Servicer.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, (i) 97% of all of the Voting Rights shall be allocated
to the Regular Certificates, other than the Class IO Certificates, in proportion
to their then outstanding Certificate Principal Balances, (ii) 1% of all of the
Voting Rights shall be allocated to the Class IO Certificates, in proportion to
their then outstanding Notional Amounts, (iii) 1% of all of the Voting Rights
shall be allocated to the Class B-6IO Certificates, in proportion to their then
outstanding Notional Amounts and (iv) 1/2 of 1% of all Voting Rights will be
allocated among the holders of each Class of Residual Certificates, in
proportion to their Percentage Interests in each such Class. All Voting Rights
allocated to any Class of Certificates shall be allocated among such
Certificates PRO RATA in accordance with the respective Percentage Interests
evidenced thereby.
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<PAGE>
"Weighted Average Stripped Interest Rate": With respect to any
Distribution Date, the weighted average of the Stripped Interest Rates in effect
during the most recently ended calendar month for the Mortgage Loans and REO
Properties based on the respective Scheduled Principal Balances thereof as of
the Due Date in such most recently ended calendar month (or, in the case of the
initial Distribution Date, as of the Cut-off Date).
SECTION 1.02. Allocation of Certain Interest Shortfalls.
The aggregate amount of any Prepayment Interest Shortfalls (to
the extent not covered by payments by the Master Servicer pursuant to Section
3.24) and any Relief Act Interest Shortfall incurred in respect of the Mortgage
Loans for any Distribution Date shall be allocated among the Certificates (other
than the Class PO Certificates and the Class B-6PO Certificates), PRO RATA in
accordance with, and to the extent of one month's interest at the Pass-Through
Rate on the respective Certificate Principal Balance or Notional Amount of such
Certificate immediately prior to such Distribution Date.
The aggregate amount of any Prepayment Interest Shortfalls (to
the extent not covered by payments by the Master Servicer pursuant to Section
3.24) and any Relief Act Interest Shortfall allocated to the Class B-6IO
Certificates shall be deemed allocated to REMIC I Regular Interest LT2, the
aggregate amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Master Servicer pursuant to Section 3.24) and any
Relief Act Interest Shortfall allocated to the Class IO Certificates shall be
deemed allocated to REMIC I Regular Interest LTIO and the aggregate amount of
any Prepayment Interest Shortfalls (to the extent not covered by payments by the
Master Servicer pursuant to Section 3.24) and any Relief Act Interest Shortfall
allocated to any other Class of Regular Certificates shall be deemed allocated
to REMIC I Regular Interest LT1.
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<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement (except Section 17 thereof), and all other
assets included or to be included in REMIC I. Such assignment includes all
interest and principal received by the Depositor or the Master Servicer on or
with respect to the Mortgage Loans (other than payments of principal and
interest due on such Mortgage Loans on or before the Cut-off Date). The
Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan
Purchase Agreement.
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee, the following documents
or instruments with respect to each Mortgage Loan so transferred and assigned (a
"Mortgage File"):
(i) the original Mortgage Note, endorsed in the
following form: "Pay to the order of The Chase Manhattan Bank,
as Trustee under the applicable agreement, without recourse,"
with all prior and intervening endorsements showing a complete
chain of endorsement from the originator to the Person so
endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording
thereon. If in connection with any Mortgage Loan, the
Depositor has not caused the original recorded Mortgage to be
delivered to the Trustee because of a delay caused by the
public recording office were such Mortgage has been delivered
for recordation or because such Mortgage has been lost or
because such public recording office retains the original
recorded Mortgage, the Mortgage File shall include, in lieu of
such Mortgage, a photocopy of such Mortgage, together with (a)
in the case of a delay caused by the public recording office,
an Officer's Certificate of the title insurer insuring the
Mortgage stating that such Mortgage has been delivered to the
appropriate public recording office for recordation and that
the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be
promptly delivered to the Trustee upon receipt by the
Depositor; or (b) in the case where a public recording office
retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording
office, a copy of such
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Mortgage with the recording information thereon certified by
such public recording office to be a true and complete copy of
the original recorded Mortgage;
(iii) an original Assignment of the Mortgage executed in
the following form: "The Chase Manhattan Bank, as Trustee
under the applicable agreement";
(iv) the original recorded Assignment or Assignments of
the Mortgage showing a complete chain of assignment from the
originator to the Person assigning the Mortgage to the Trustee
as contemplated by the immediately preceding clause (iii), or
if any such intervening assignment has not been returned from
the applicable public recording office or has been lost or if
such public recording office retains the original recorded
Assignments of Mortgage, the Mortgage File shall include a
photocopy of such intervening assignment, together with (a) in
the case of a delay caused by the public recording, an
Officer's Certificate of the title insurer insuring the
Mortgage stating that such intervening Assignment of Mortgage
has been delivered to the appropriate public recording office
for recordation and that such original recorded intervening
Assignment of Mortgage or a copy of such intervening
Assignment of Mortgage certified by the appropriate public
recording office to be a true and complete copy of the
original recorded intervening Assignment of Mortgage will be
promptly delivered to the Trustee upon receipt thereof by the
Depositor; or (b) in the case of an intervening Assignment of
Mortgage where a public recording office retains the original
recorded intervening Assignment of Mortgage or in the case
where an intervening Assignment of Mortgage is lost after
recordation in a public recording office, a copy of such
intervening Assignment with recording information thereon
certified by such public recording office to be a true and
complete copy of the original recorded intervening Assignment
of Mortgage;
(v) the originals of all assumption, modification,
consolidation or extension agreements, with evidence of
recording thereon, if any;
(vi) the original of any guarantee executed in
connection with the Mortgage Note;
(vii) with respect to any Mortgage Loan listed on
Schedule 3 attached hereto, the original Primary Mortgage
Insurance Policy or certificate;
(viii) the original mortgagee title insurance policy;
(ix) the original of any security agreement, chattel
mortgage or equivalent document executed in connection with
the Mortgage;
(x) the original power of attorney, if applicable; and
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(xi) if such Mortgage Loan is a Buydown Mortgage Loan
(as shown in the Mortgage Loan Schedule), the original Buydown
Agreement.
Within 30 Business Days following the Closing Date, the Master
Servicer will deliver any documents required pursuant to Section 2.01(vii) and
Section 2.01(xi) of this Agreement to the Trustee, if it has not already done
so.
The Master Servicer (in its capacity as Originator) shall
promptly (and in no event later than five Business Days following the later of
the Closing Date and the date of receipt by the Master Servicer of the recording
information for a Mortgage) submit or cause to be submitted for recording, at no
expense to REMIC I or the Trustee, in the appropriate public office for real
property records, each Assignment delivered to it pursuant to Sections 2.01(iii)
and (iv) above. In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Master Servicer (in its capacity as
Originator) shall promptly prepare or cause to be prepared a substitute
Assignment or cure or cause to be cured such defect, as the case may be, and
thereafter cause each such Assignment to be duly recorded.
With respect to a maximum of approximately 0.5% of the
Original Mortgage Loans, by outstanding principal balance of the Original
Mortgage Loans as of the Cut-off Date, if any original Mortgage Note referred to
in Section 2.01(i) above cannot be located, the obligations of the Depositor to
deliver such documents shall be deemed to be satisfied upon delivery to the
Trustee of a photocopy of such Mortgage Note, if available, with a lost note
affidavit. If any of the original Mortgage Notes for which a lost note affidavit
was delivered to the Trustee is subsequently located, such original Mortgage
Note shall be delivered to the Trustee within three Business Days.
The Depositor shall deliver or cause to be delivered to the
Trustee promptly upon receipt thereof any other original documents constituting
a part of a Mortgage File received with respect to any Mortgage Loan, including,
but not limited to, any original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are
not delivered to the Trustee are and shall be held by or on behalf of the
Seller, the Depositor or the Master Servicer, as the case may be, in trust for
the benefit of the Trustee on behalf of the Certificateholders. In the event
that any such original document is required pursuant to the terms of this
Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Trustee. Any such original document delivered to or held by the
Depositor that is not required pursuant to the terms of this Section to be a
part of a Mortgage File, shall be delivered promptly to the Master Servicer.
SECTION 2.02. Acceptance of REMIC I by the Trustee.
Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Trustee acknowledges receipt of the documents referred to in Section 2.01
(other than such documents described in Section 2.01(v))
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above and all other assets included in the definition of "REMIC I" under clauses
(i), (iii), (iv) and (v) (to the extent of amounts deposited into the
Distribution Account) and declares that it holds and will hold such documents
and the other documents delivered to it constituting the Mortgage File, and that
it holds or will hold all such assets and such other assets included in the
definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders,
to review each Mortgage File on or before the Closing Date and to certify in
substantially the form attached hereto as Exhibit C-1 that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in the exception report
annexed thereto as not being covered by such certification), (i) all documents
constituting part of such Mortgage File (other than such documents described in
Section 2.01(v)) required to be delivered to it pursuant to this Agreement are
in its possession, (ii) such documents have been reviewed by it and are not
torn, mutilated, defaced or otherwise altered (except if initialed by the
obligor) and relate to such Mortgage Loan, (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (i) through (iii), (vi), (vii), (ix), (x),
(xi) and (xv) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. It is herein acknowledged that, in
conducting such review, the Trustee is under no duty or obligation (i) to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose or whether they have actually been recorded or that
they are other than what they purport to be on their face, or (ii) to determine
whether any Mortgage File should include any of the documents specified in
clause (v) of Section 2.01.
The Trustee agrees, for the benefit of the Certificateholders,
to review each Mortgage File within 60 days following the Closing Date and to
certify in substantially the form attached hereto as Exhibit C-2 that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(v)) required to be delivered to it pursuant to this
Agreement are in its possession, (ii) such documents have been reviewed by it
and are not torn, mutilated, defaced or otherwise altered (except if initialed
by the obligor) and appear regular on their face and relate to such Mortgage
Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(i) through (iii), (vi), (vii), (ix), (x), (xi) and (xv) of the definition of
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Trustee is under no duty or obligation (i) to inspect, review or examine any
such documents, instruments, certificates or other papers to determine whether
they are genuine, enforceable, or appropriate for the represented purpose or
whether they have actually been recorded or that they are other than what they
purport to be on their face, or (ii) to determine whether any Mortgage File
should include any of the documents specified in clause (v) of Section 2.01.
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Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor and the Master Servicer a final
certification in the form annexed hereto as Exhibit C-3 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Trustee shall so notify the Depositor and the Master Servicer. In
addition, upon the discovery by the Depositor, the Master Servicer or the
Trustee of a breach of any of the representations and warranties made by any of
Bishop's Gate, the Originator or the Seller in the Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially adversely affects
such Mortgage Loan or the interests of the related Certificateholders in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report to such Certificateholder of all
Mortgage Files released to the Master Servicer for servicing purposes.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
the Originator, Bishop's Gate, the Seller or the
Depositor.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Originator, Bishop's Gate or the Seller of any representation,
warranty or covenant under the Mortgage Loan Purchase Agreement in respect of
any Mortgage Loan which materially adversely affects the value of such Mortgage
Loan or the interest therein of the Certificateholders, the Trustee shall
promptly notify the Originator or Bishop's Gate, as the case may be, and the
Seller and the Master Servicer of such defect, missing document or breach and
request that the Originator, Bishop's Gate or the Seller, as the case may be,
deliver such missing document or cure such defect or breach within 60 days from
the date the Originator, Bishop's Gate or the Seller, as the case may be, was
notified of such missing document, defect or breach, and if the Originator,
Bishop's Gate or the Seller, as the case may be, does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Master Servicer (or, in accordance with Section 3.02(b), the
Trustee) shall enforce the obligations of the Originator, Bishop's Gate or the
Seller, as the case may be, under the Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from REMIC I at the Purchase Price within 60 days
after the date on which the Originator, Bishop's Gate or the Seller, as the case
may be, was notified (subject to Section 2.03(e)) of such missing document,
defect or breach, if and to the extent that the Originator, Bishop's Gate or the
Seller, as the case may be, is obligated to do so under the Mortgage Loan
Purchase Agreement. The Purchase Price for the repurchased Mortgage Loan shall
be deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to the
Originator, Bishop's Gate or the Seller, as the case may be, the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each
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case without recourse, as the Originator, Bishop's Gate or the Seller, as the
case may be, shall furnish to it and as shall be necessary to vest in the
Originator, Bishop's Gate or the Seller, as the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility
with regard to such Mortgage File. In lieu of repurchasing any such Mortgage
Loan as provided above, if so provided in the Mortgage Loan Purchase Agreement,
the Originator, Bishop's Gate or the Seller, as the case may be, may cause such
Mortgage Loan to be removed from REMIC I (in which case it shall become a
Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage
Loans in the manner and subject to the limitations set forth in Section 2.03(d).
It is understood and agreed that the obligation of the Originator, Bishop's Gate
or the Seller, as the case may be, to cure or to repurchase (or to substitute
for) any Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such omission, defect or
breach available to the Trustee on behalf of the Certificateholders.
(b) Subject to Section 2.03(e), within 60 days of the earlier
of discovery by the Depositor or receipt of notice by the Depositor of the
breach of any representation or warranty of the Depositor set forth in Section
2.04 with respect to any Mortgage Loan, which materially adversely affects the
value of such Mortgage Loan or the interest therein of the Certificateholders,
the Depositor shall (i) cure such breach in all material respects, (ii)
repurchase the Mortgage Loan from REMIC I at the Purchase Price or (iii) remove
such Mortgage Loan from REMIC I (in which case it shall become a Deleted
Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in
the manner and subject to the limitations set forth in Section 2.03(d). If any
such breach is a breach of any of the representations and warranties included in
Section 2.04(a)(iv), and the Depositor is unable to cure such breach, the
Depositor shall repurchase or substitute the smallest number of Mortgage Loans
as shall be required to make such representation or warranty true and correct.
The Purchase Price for any repurchased Mortgage Loan shall be delivered to the
Master Servicer for deposit in the Collection Account, and the Trustee, upon
receipt of written certification from the Master Servicer of such deposit, shall
at the Depositor's direction release to the Depositor the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment
furnished by the Depositor, in each case without recourse, as the Depositor
shall furnish to it and as shall be necessary to vest in the Depositor any
Mortgage Loan released pursuant hereto.
(c) Within 60 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
(d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a), in the case of the
Originator, Bishop's Gate or the Seller, or Section 2.03(b), in the case of the
Depositor, must be effected prior to the date
which is two years after the Startup Day for REMIC I.
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As to any Deleted Mortgage Loan for which the Originator,
Bishop's Gate, the Seller or the Depositor substitutes a Qualified Substitute
Mortgage Loan or Loans, such substitution shall be effected by the Originator,
Bishop's Gate, the Seller or the Depositor, as the case may be, delivering to
the Trustee, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage
Note, the Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in connection with
such substitution. The Trustee shall acknowledge receipt for such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents in the manner specified in Section 2.02 and deliver to the
Depositor and the Master Servicer, with respect to such Qualified Substitute
Mortgage Loan or Loans, a certification substantially in the form attached
hereto as Exhibit C-1, with any applicable exceptions noted thereon. Within one
year of the date of substitution, the Trustee shall deliver to the Depositor and
the Master Servicer a certification substantially in the form of Exhibit C-3
hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
REMIC I and will be retained by the Depositor, the Originator, Bishop's Gate or
the Seller, as the case may be. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Deleted Mortgage
Loan on or before the Due Date in the month of substitution, and the Depositor,
the Originator, Bishop's Gate or the Seller, as the case may be, shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Mortgage Loan. The Depositor shall give or cause to be given
written notice to the Certificateholders that such substitution has taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall constitute part of the
Mortgage Pool and shall be subject in all respects to the terms of this
Agreement and, in the case of a substitution effected by the Originator,
Bishop's Gate or the Seller, the Mortgage Loan Purchase Agreement, including, in
the case of a substitution effected by the Originator or the Seller, all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement, and in the case of a substitution effected by the Depositor,
all applicable representations and warranties thereof set forth in Section 2.04,
in each case as of the date of substitution.
For any month in which the Depositor, the Originator, Bishop's
Gate or the Seller substitutes one or more Qualified Substitute Mortgage Loans
for one or more Deleted Mortgage Loans, the Master Servicer will determine the
amount (the "Substitution Shortfall Amount"), if any, by which the aggregate
Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate of, as
to each such Qualified Substitute Mortgage Loan, the Scheduled Principal Balance
thereof as of the date of substitution, together with one month's interest on
such Scheduled Principal Balance at the applicable Mortgage Loan Remittance
Rate. On the date of such substitution, the Depositor, the Originator, Bishop's
Gate or the Seller, as the case may be, will
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deliver or cause to be delivered to the Master Servicer for deposit in the
Collection Account an amount equal to the Substitution Shortfall Amount, if any,
and the Trustee, upon receipt of the related Qualified Substitute Mortgage Loan
or Loans and certification by the Master Servicer of such deposit, shall release
to the Depositor, the Originator, Bishop's Gate or the Seller, as the case may
be, the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Depositor, the Originator, Bishop's Gate or the Seller, as the case may be,
shall deliver to it and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.
In addition, the Depositor, the Originator, Bishop's Gate or
the Seller, as the case may be, shall obtain at its own expense and deliver to
the Trustee an Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on either REMIC I or REMIC II, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860F(a)(1) of the Code or on "contributions after the startup date"
under Section 860G(d)(1) of the Code, or (b) either REMIC I or REMIC II to fail
to qualify as a REMIC at any time that any Certificate is outstanding.
(e) Upon discovery by the Depositor, the Originator, Bishop's
Gate, the Seller, the Master Servicer or the Trustee that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the
Originator, Bishop's Gate, the Seller or the Depositor shall repurchase or,
subject to the limitations set forth in Section 2.03(d), substitute one or more
Qualified Substitute Mortgage Loans for the affected Mortgage Loan within 60
days of the earlier of discovery or receipt of such notice with respect to such
affected Mortgage Loan. Such repurchase or substitution shall be made by (i) the
Originator, Bishop's Gate or the Seller, as the case may be, if the affected
Mortgage Loan's status as a non-qualified mortgage is or results from a breach
of any representation, warranty or covenant made by the Originator, Bishop's
Gate or the Seller under the Mortgage Loan Purchase Agreement, or (ii) the
Depositor, if the affected Mortgage Loan's status as a non-qualified mortgage is
a breach of any representation or warranty of the Depositor set forth in Section
2.04 or if the status as a non-qualified mortgage is a breach of no
representation or warranty. Any such repurchase or substitution shall be made in
the same manner as set forth in Sections 2.03(a), if made by the Originator,
Bishop's Gate or the Seller, or 2.03(b), if made by the Depositor. The Trustee
shall reconvey to the Depositor, the Originator, Bishop's Gate or the Seller, as
the case may be, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
SECTION 2.04. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the
Trustee for the benefit of the Certificateholders that as of the Closing Date or
as of such other date specifically provided herein:
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(i) The information set forth in the Mortgage Loan
Schedule for the Original Mortgage Loans is complete, true and
correct in all material respects at the date or dates
respecting which such information is furnished;
(ii) As of the Cut-off Date, the Monthly Payment due
under each Original Mortgage Loan is not 30 or more days
delinquent in payment and has not been 30 or more days
delinquent in payment more than once in the twelve month
period prior to the Cut-off Date (assuming that a "rolling" 30
day Delinquency is considered to be delinquent only once);
(iii) Each Original Mortgage Loan had an original term to
maturity of not greater than 30 years; each Original Mortgage
Loan is a fixed-rate, fully amortizing mortgage loan with
payments due on the first day of each month;
(iv) (A) no more than approximately 39.68%,
approximately 9.94%, approximately 6.17%, approximately 3.83%
and approximately 3.05% of the Original Sub-Pool 1 Mortgage
Loans, by outstanding principal balance of the Original
Sub-Pool 1 Mortgage Loans as of the Cut-off Date, will be
secured by Mortgaged Properties located in California, New
Jersey, New York, Washington and Texas, respectively, and no
more than approximately 3.00% of the Original Sub-Pool 1
Mortgage Loans, by outstanding principal balance of the
Original Mortgage Loans as of the Cut-off Date, will be
secured by Mortgaged Properties located in any other single
state; (B) no more than approximately 21.82%, approximately
10.18%, approximately 8.18%, approximately 7.37%,
approximately 5.84%, approximately 5.58%, approximately 5.17%,
approximately 4.31%, approximately 3.94%, approximately 3.10%
and approximately 3.08% of the Original Sub-Pool 2 Mortgage
Loans, by outstanding principal balance of the Original
Sub-Pool 2 Mortgage Loans as of the Cut-off Date, will be
secured by Mortgaged Properties located in California,
Connecticut, Washington, New Jersey, Pennsylvania, Virginia,
Illinois, New York, Texas, North Carolina and Colorado,
respectively, and no more than approximately 3.00% of the
Original Sub-Pool 2 Mortgage Loans, by outstanding principal
balance of the Original Mortgage Loans as of the Cut-off Date,
will be secured by Mortgaged Properties located in any other
single state; (C) as of the Cut-off Date, no more than
approximately 2.20% of the Original Sub-Pool 1 Mortgage Loans,
by outstanding principal balance of the Original Sub-Pool 1
Mortgage Loans as of the Cut-off Date, are secured by
Mortgaged Properties located in any one California zip code
area, and no more than approximately 26.04% of the Original
Sub-Pool 1 Mortgage Loans, by outstanding principal balance of
the Original Sub-Pool 1 Mortgage Loans as of the Cut-off Date
are secured by units in two- to four-family dwellings,
condominiums and planned unit developments; (D) as of the
Cut-off Date, no more than approximately 1.29% of the Original
Sub-Pool 2 Mortgage Loans, by outstanding principal balance of
the Original Sub-Pool 2 Mortgage Loans as of the Cut-off Date,
are secured by Mortgaged Properties located in any
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one California zip code area, and no more than approximately
38.55% of the Original Sub-Pool 2 Mortgage Loans, by
outstanding principal balance of the Original Sub-Pool 2
Mortgage Loans as of the Cut-off Date are secured by units in
two- to four-family dwellings, condominiums and planned unit
developments; (E) at least approximately 73.96% of the
Original Mortgage Loans, by outstanding principal balance of
the Original Sub-Pool 1 Mortgage Loans as of the Cut-off Date,
are secured by real property with a single family residence
erected thereon; and (F) at least approximately 61.45% of the
Original Mortgage Loans, by outstanding principal balance of
the Original Sub-Pool 2 Mortgage Loans as of the Cut-off Date,
are secured by real property with a single family residence
erected thereon;
(v) If the Mortgaged Property securing an Original
Mortgage Loan is identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special
flood hazards, a flood insurance policy is in effect at the
Closing Date which met the requirements of FEMA at the time
such policy was issued;
(vi) With respect to at least approximately 75.01% of
the Original Sub- Pool 1 Mortgage Loans and 67.36% of the
Original Sub-Pool 2 Mortgage Loans, in each case by
outstanding principal balance of the Original Mortgage Loans
in such Sub-Pool as of the Cut-off Date, the Loan-to-Value
Ratio was not more than 80.00% at the origination of such
Original Mortgage Loan and with respect to approximately
24.99% of the Original Sub-Pool 1 Mortgage Loans and 32.64% of
the Original Sub-Pool 2 Mortgage Loans, in each case by
outstanding principal balance of the Original Mortgage Loans
in such Sub-Pool as of the Cut-off Date, the Loan-to-Value
Ratio was between 80.01% and 95.00% and each such Mortgage
Loan is subject to a Primary Mortgage Insurance Policy, issued
by a Qualified Insurer, which insures as to payment defaults
that portion of the Mortgage Loan in excess of the portion of
the Value of the Mortgaged Property required by Fannie Mae;
and
(vii) With respect to at least approximately 97.95% of
the Original Sub- Pool 1 Mortgage Loans and at least
approximately 100.00% of the Original Sub- Pool 2 Mortgage
Loans, in each case by outstanding principal balance of the
Original Mortgage Loans in such Sub-Pool as of the Cut-off
Date, at the time that the Mortgage Loan was made, the
Mortgagor represented that the Mortgagor would occupy the
Mortgaged Property as the Mortgagor's primary residence. With
respect to approximately 2.04% of the Original Sub-Pool 1
Mortgage Loans and approximately 0.00% of the Original
Sub-Pool 2 Mortgage Loans, in each case by outstanding
principal balance of the Original Mortgage Loans in such
Sub-Pool as of the Cut-off Date, at the time that the Mortgage
Loan was made, the Mortgagor represented that the Mortgagor
would occupy the Mortgaged Property as the
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Mortgagor's secondary residence or that the Mortgaged Property
would be an investor property.
(b) It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. Upon
discovery by any of the Depositor, the Master Servicer or the Trustee of a
breach of any of the foregoing representations and warranties which materially
and adversely affects the value of any Mortgage Loan or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice to the other parties, and in no event later than two Business
Days from the date of such discovery. It is understood and agreed that the
obligations of the Depositor set forth in Section 2.03(b) to cure, substitute
for or repurchase a Mortgage Loan constitute the sole remedies available to the
Certificateholders or to the Trustee on their behalf respecting a breach of the
representations and warranties contained in this Section 2.04.
SECTION 2.05. Representations, Warranties and Covenants of the
Master Servicer.
The Master Servicer hereby represents, warrants and covenants
to the Trustee, for the benefit of each of the Trustee, the Certificateholders
and to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is a corporation duly
organized, validly existing and in good standing under the
laws of the State of New Jersey and is duly authorized and
qualified to transact any and all business contemplated by
this Agreement to be conducted by the Master Servicer in any
state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan and to service the
Mortgage Loans in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full corporate power
and authority to service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of
the Master Servicer the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Depositor
and the Trustee, constitutes a legal, valid and binding
obligation of the Master Servicer, enforceable against the
Master Servicer in accordance with its terms, except to the
extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (b)
the remedy of specific performance and
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injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the
Master Servicer hereunder, the consummation of any other of
the transactions herein contemplated, and the fulfillment of
or compliance with the terms hereof are in the ordinary course
of business of the Master Servicer and will not (A) result in
a breach of any term or provision of the charter or by-laws of
the Master Servicer or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to
which the Master Servicer is a party or by which it may be
bound, or any statute, order or regulation applicable to the
Master Servicer of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the
Master Servicer; and the Master Servicer is not a party to,
bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the
Master Servicer's knowledge, would in the future materially
and adversely affect, (x) the ability of the Master Servicer
to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or
assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer
for Fannie Mae or Freddie Mac in good standing and is a HUD
approved mortgagee pursuant to Section 203 of the National
Housing Act;
(v) No litigation is pending against the Master
Servicer that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the
ability of the Master Servicer to service the Mortgage Loans
or to perform any of its other obligations hereunder in
accordance with the terms hereof; and
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Master Servicer of,
or compliance by the Master Servicer with, this Agreement or
the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations
or orders, if any, that have been obtained prior to the
Closing Date; and
(vii) The Master Servicer's computer and other systems
used in servicing the Mortgage Loans will be modified and
maintained to operate in a manner such that at all times,
including on and after January 1, 2000, (a) the Master
Servicer
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can service the Mortgage Loans in accordance with the terms of
the Agreement and (b) the Master Servicer can operate its
business in the same manner as it is operating on the Closing
Date.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Master Servicer or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee. Subject to Section 7.01, the obligation of the Master Servicer
set forth in Section 2.03(c) to cure breaches shall constitute the sole remedies
against the Master Servicer available to the Certificateholders, the Depositor
or the Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.05. The
preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders, pursuant to the Mortgage Loan Purchase Agreement signed by
the Master Servicer in its capacity as Originator, respecting a breach of the
representations, warranties and covenants of the Master Servicer in its capacity
as Originator contained in such Mortgage Loan Purchase Agreement.
SECTION 2.06. Issuance of Class R-I Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Section 2.01 and Section 2.02, together with the assignment to it of all other
assets included in REMIC I delivered on the date hereof, receipt of which is
hereby acknowledged. Concurrently with such assignment and delivery of such
assets delivered on the date hereof and in exchange therefor, the Trustee,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R-I Certificates in authorized denominations. The interests
evidenced by the Class R-I Certificates, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership interest in REMIC I.
SECTION 2.07. Conveyance of REMIC I Regular Interests;
Acceptance of REMIC II by the Trustee.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the REMIC II
Certificateholders. The Trustee acknowledges receipt of the REMIC I Regular
Interests and declares that it holds and will hold the same in trust for the
exclusive use and benefit of all present and future REMIC II Certificateholders.
The rights of the REMIC II Certificateholders to receive distributions from the
proceeds of REMIC II in respect of the REMIC II Certificates, and all
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ownership interests of the REMIC II Certificateholders in and to such
distributions, shall be as set forth in this Agreement.
SECTION 2.08. Issuance of REMIC II Certificates.
The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the REMIC II Certificates in authorized denominations evidencing
the entire beneficial ownership interest in REMIC II.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of prudent mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Master Servicer, any
Sub-Servicer or any Affiliate of the Master Servicer or any
Sub-Servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the Master
Servicer or any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make P&I
Advances or Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right
to receive compensation for its services hereunder or with
respect to any particular transaction.
To the extent consistent with the foregoing, the Master Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title
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to such properties, on behalf of the Trustee and Certificateholders. The Master
Servicer shall service and administer the Mortgage Loans in accordance with
applicable state and federal law and shall provide to the Mortgagors any reports
required to be provided to them thereby. The Master Servicer shall also comply
in the performance of this Agreement with all reasonable rules and requirements
of each insurer under each Primary Mortgage Insurance Policy and any standard
hazard insurance policy. Subject to Section 3.17, the Trustee shall execute, at
the written request of the Master Servicer, and furnish to the Master Servicer
and any Sub-Servicer such documents as are necessary or appropriate to enable
the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder, and the Trustee hereby grants to the Master
Servicer a power of attorney to carry out such duties. The Trustee shall not be
liable for the actions of the Master Servicer or any Sub-Servicers under such
powers of attorney.
In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub-Servicers in effecting the timely payment of taxes and
assessments on a Mortgaged Property shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid principal balance of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan
so permit.
Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause either REMIC I or REMIC II to fail to qualify as a REMIC under the
Code or the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions.
The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.
SECTION 3.02. Sub-Servicing Agreements Between the Master
Servicer and Sub-Servicers.
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(a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Certificates)
with Sub-Servicers, for the servicing and administration of the Mortgage Loans.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the
Sub-Servicing Agreement, (ii) an institution approved as a mortgage loan
originator by the Federal Housing Administration or an institution the deposit
accounts of which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae
approved mortgage servicer. Each Sub-Servicing Agreement must impose on the
Sub-Servicer requirements conforming to the provisions set forth in Section 3.08
and provide for servicing of the Mortgage Loans consistent with the terms of
this Agreement. The Master Servicer will examine each Sub-Servicing Agreement
and will be familiar with the terms thereof. The terms of any Sub-Servicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
The Master Servicer and the Sub-Servicers may enter into and make amendments to
the Sub-Servicing Agreements or enter into different forms of Sub- Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the Sub-
Servicers to the Master Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Master Servicer shall deliver
to the Trustee copies of all Sub- Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub- Servicing Agreement and
of the Originator and the Seller under the Mortgage Loan Purchase Agreement,
including, without limitation, any obligation to make advances in respect of
delinquent payments as required by a Sub-Servicing Agreement, or to purchase a
Mortgage Loan on account of missing or defective documentation or on account of
a breach of a representation, warranty or covenant, as described in Section
2.03(a). Such enforcement, including, without limitation, the legal prosecution
of claims, termination of Sub-Servicing Agreements, and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Master
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the
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related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the Mortgage Loan Purchase Agreement against the Originator shall
be effected by the Master Servicer to the extent it is not the Originator, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Default).
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub- Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub-Servicer for indemnification of the Master Servicer by such Sub-Servicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The
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Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such
fees.
SECTION 3.06. Assumption or Termination of Sub-Servicing
Agreements by Trustee.
In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Default), the Trustee or its designee shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor Master Servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.
SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Primary Mortgage Insurance Policy
and any other applicable insurance policies, follow such collection procedures
as it would follow with respect to mortgage loans comparable to the Mortgage
Loans and held for its own account. Consistent with the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or, if
applicable, penalty interest, only upon determining that the coverage of such
Mortgage Loan by the related Primary Mortgage Insurance Policy, if any, will not
be affected, or (ii) extend the due dates for Monthly Payments due on a Mortgage
Note for a period of not greater than 180 days; provided that any extension
pursuant to clause (ii) above shall not affect the amortization schedule of any
Mortgage Loan for purposes of any computation hereunder, except as provided
below. In the event of any such arrangement pursuant to clause (ii) above, the
Master Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.03 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements.
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Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Master Servicer, such default is reasonably
foreseeable, the Master Servicer, consistent with the standards set forth in
Section 3.01, may also, waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan (such
payment, a "Short Pay-off") or consent to the postponement of strict compliance
with any such term or otherwise grant indulgence to any Mortgagor.
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Sub-Servicer's receipt thereof, all proceeds of Mortgage Loans received by
the Sub-Servicer less its servicing compensation to the extent permitted by the
Sub-Servicing Agreement, and shall thereafter deposit such amounts in the
Sub-Servicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Sub-Servicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Master Servicer for deposit in the Collection Account not later than two
Business Days after the deposit of such amounts in the Sub-Servicing Account.
For purposes of this Agreement, the Master Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
SECTION 3.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"), into which all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of ground
rents, taxes, assessments, fire and hazard insurance premiums, Primary Mortgage
Insurance Premiums, water charges, sewer rents and comparable items for the
account of the Mortgagors ("Escrow Payments") shall be deposited and retained.
Servicing Accounts shall be Eligible Accounts. The Master Servicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more than
two Business Days after the deposit of such funds in the clearing account, for
the purpose of effecting the
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payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from a Servicing Account may be made only to (i) effect
payment of Escrow Payments; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related Sub- Servicing Agreement) out
of related collections for any advances made pursuant to Section 3.01 (with
respect to taxes and assessments) and Section 3.14 (with respect to hazard
insurance); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to Mortgagors
on balances in the Servicing Account; (v) clear and terminate the Servicing
Account at the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX; or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the payment of all such bills
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments.
SECTION 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal or interest
on the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the
related Servicing Fee) on each Mortgage Loan;
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(iii) all Insurance Proceeds and Liquidation Proceeds
(other than proceeds collected in respect of any particular
REO Property and amounts paid by the Master Servicer in
connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on
Permitted Investments with respect to funds held in the
Collection Account;
(v) any amounts required to be deposited by the Master
Servicer pursuant to the second paragraph of Section 3.14(a)
in respect of any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03 or Section 9.01;
(vii) all amounts required to be deposited in
connection with shortfalls in principal amount of Qualified
Substitute Mortgage Loans pursuant to Section 2.03; and
(viii) any amounts required to be transferred from any
Buydown Account pursuant to Section 3.25.
For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Qualified Substitute Mortgage Loan shall be deemed to be the date
of substitution.
The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges or assumption fees need not be deposited by the Master Servicer in the
Collection Account. In the event the Master Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 3:00 p.m.
New York time (i) on the Master Servicer Remittance Date, that portion of the
Available Distribution Amount for each Sub-Pool (calculated without regard to
the references in clause (2) of the definition thereof to amounts that may be
withdrawn from the Distribution Account) for the related Distribution Date then
on deposit in the Collection Account, and (ii) on each Business Day as of the
commencement of which the balance on deposit in the Collection Account exceeds
$75,000 following any withdrawals pursuant to the next succeeding sentence, the
amount of such excess, but only if the Collection Account constitutes an
Eligible Account solely
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pursuant to clause (ii) of the definition of "Eligible Account." If the balance
on deposit in the Collection Account exceeds $75,000 as of the commencement of
business on any Business Day and the Collection Account constitutes an Eligible
Account solely pursuant to clause (ii) of the definition of "Eligible Account,"
the Master Servicer shall, on or before 3:00 p.m. New York time on such Business
Day, withdraw from the Collection Account any and all amounts payable or
reimbursable to the Depositor, the Master Servicer, the Trustee, the Originator,
the Seller or any Sub-Servicer pursuant to Section 3.11 and shall pay such
amounts to the Persons entitled thereto.
(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Master Servicer shall give notice to
the Trustee and the Depositor of the location of the Collection Account
maintained by it when established and prior to any change thereof. The Trustee
shall give notice to the Master Servicer and the Depositor of the location of
the Distribution Account when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the Distribution Account and remit to it
any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer shall deliver to the Trustee from time to time for
deposit, and upon written notification from the Master Servicer, the Trustee
shall so deposit, in the Distribution Account:
(i) any P&I Advances, as required pursuant to Section
4.03;
(ii) any amounts required to be deposited pursuant to
Section 3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid by the Master Servicer in
connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01;
(iv) any amounts required to be deposited pursuant to
Section 3.24 in connection with any Prepayment Interest
Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the
federal bankruptcy court having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from
the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source, the Trustee shall
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deposit such funds in the Distribution Account, subject to withdrawal thereof
pursuant to Section 7.02(b) or as otherwise permitted hereunder.
(f) The Master Servicer shall deposit in the Collection
Account any amounts required to be deposited pursuant to Section 3.12(b) in
connection with losses realized on Permitted Investments with respect to funds
held in the Collection Account.
SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
(a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.03:
(i) to remit to the Trustee for deposit in the
Distribution Account the amounts required to be so remitted
pursuant to Section 3.10(b) or permitted to be so remitted
pursuant to the first sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master
Servicer for P&I Advances, but only to the extent of amounts
received which represent Late Collections (net of the related
Servicing Fees) of Monthly Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance
with the provisions of Section 4.03;
(iii) subject to Section 3.16(d), to pay the Master
Servicer or any Sub- Servicer any unpaid Servicing Fees and
reimburse any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Liquidation
Proceeds, Insurance Proceeds or other amounts as may be
collected by the Master Servicer from a Mortgagor, or
otherwise received with respect to such Mortgage Loan;
(iv) to pay to the Master Servicer as servicing
compensation (in addition to the Servicing Fee) on the Master
Servicer Remittance Date any interest or investment income
earned on funds deposited in the Collection Account;
(v) to pay to the Master Servicer, the Depositor, the
Originator, Bishop's Gate or the Seller, as the case may be,
with respect to each Mortgage Loan that has previously been
purchased or replaced pursuant to Section 2.03 or Section
3.16(c) all amounts received thereon subsequent to the date of
purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any P&I
Advance previously made which the Master Servicer has
determined to be a Nonrecoverable P&I Advance in accordance
with the provisions of Section 4.03;
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(vii) to reimburse the Master Servicer or the Depositor
for expenses incurred by or reimbursable to the Master
Servicer or the Depositor, as the case may be, pursuant to
Section 6.03;
(viii) to reimburse the Master Servicer or the Trustee, as
the case may be, for expenses reasonably incurred in respect
of the breach or defect giving rise to the purchase obligation
under Section 2.03 or Section 2.04 of this Agreement that were
included in the Purchase Price of the Mortgage Loan, including
any expenses arising out of the enforcement of the purchase
obligation;
(ix) to pay, or to reimburse the Master Servicer for
advances in respect of, expenses incurred in connection with
any Mortgage Loan pursuant to Section 3.16(b); and
(x) to clear and terminate the Collection Account
pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above. The Master Servicer shall provide written notification to the
Trustee, on or prior to the next succeeding Master Servicer Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclause
(vii) above.
(b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:
(i) to make distributions to Certificateholders in
accordance with Section 4.01;
(ii) to pay to itself amounts to which it is entitled
pursuant to Section 8.05;
(iii) to pay itself any interest income earned on funds
deposited in the Distribution Account pursuant to Section
3.12(c);
(iv) to reimburse itself pursuant to Section 7.02;
(v) to pay any amounts in respect of taxes pursuant to
10.01(g)(iii); and
(vi) to clear and terminate the Distribution Account
pursuant to Section 9.01.
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SECTION 3.12. Investment of Funds in the Collection Account
and the Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, also an "Investment Account"), to invest the funds in such
Investment Account in one or more Permitted Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee (in its capacity
as such) or in the name of a nominee of the Trustee. The Trustee shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Permitted Investment would not
constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Master Servicer,
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Master Servicer shall deposit in
the Collection Account the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution
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Account, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
SECTION 3.13. Maintenance of the Primary Mortgage Insurance
Policies; Collections Thereunder.
The Master Servicer will maintain or cause the related
Sub-Servicer, if any, to maintain in full force and effect, if required under
the Mortgage Loan Purchase Agreement and to the extent available, a Primary
Mortgage Insurance Policy conforming in all respects to the description set
forth in Section 6(xxxiii) of the Mortgage Loan Purchase Agreement with respect
to each Mortgage Loan so insured as of the Closing Date (or, in the case of a
Qualified Substitute Mortgage Loan, on the date of substitution). Such coverage
will be maintained with respect to each such Mortgage Loan for so long as it is
outstanding, subject to any applicable laws or until the related Loan-to-Value
Ratio is reduced to less than or equal to 80% based on Mortgagor payments. The
Master Servicer shall cause the premium for each Primary Mortgage Insurance
Policy to be paid on a timely basis and shall pay such premium out of its own
funds if it is not otherwise paid. The Master Servicer or the related
Sub-Servicer, if any, will not cancel or refuse to renew any such Primary
Mortgage Insurance Policy in effect on the Closing Date (or, in the case of a
Qualified Substitute Mortgage Loan, on the date of substitution) that is
required to be kept in force under this Agreement unless a replacement Primary
Mortgage Insurance Policy for such canceled or non-renewed policy is obtained
from and maintained with an insurer that satisfies the standards set forth in
Section 6 (xxxiii) of the Mortgage Loan Purchase Agreement.
The Master Servicer shall not take, or permit any Sub-Servicer
to take, any action which would result in non-coverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of the
Master Servicer or Sub-Servicer, would have been covered thereunder. The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under each Primary Mortgage Insurance
Policy. In connection with any assumption and modification agreement or
substitution of liability agreement entered into or to be entered into pursuant
to Section 3.15, the Master Servicer shall promptly notify the insurer under the
related Primary Mortgage Insurance Policy, if any, of such assumption in
accordance with the terms of such policies and shall take all actions which may
be required by such insurer as a condition to the continuation of coverage under
the Primary Mortgage Insurance Policy. If any such Primary Mortgage Insurance
Policy is terminated as a result of such assumption, the Master Servicer or the
related Sub-Servicer shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.
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In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to prepare and
present, on behalf of itself, the Trustee and the Certificateholders, claims to
the insurer under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such policies and, in this regard, to take such
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Any amounts collected by
the Master Servicer under any Primary Mortgage Insurance Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.11; and any amounts collected by the Master Servicer under any Primary
Mortgage Insurance Policy in respect of any REO Property shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 3.23. In those
cases in which a Mortgage Loan is serviced by a Sub-Servicer, the Sub-Servicer,
on behalf of itself, the Trustee, and the Certificateholders, will present
claims to the insurer under any Primary Mortgage Insurance Policy and all
collections thereunder shall be deposited initially in the Sub-Servicing
Account.
SECTION 3.14. Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The Master
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Mortgage
Rate and related Servicing Advances. The Master Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.23, if received in respect of an REO
Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property
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is at any time in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, the Master Servicer
will cause to be maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance available for the related Mortgaged Property under the national
flood insurance program (assuming that the area in which such Mortgaged Property
is located is participating in such program).
In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of A:X
or better in Best's Key Rating Guide (or such other rating that is comparable to
such rating) insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first two sentences of this Section 3.14, it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall
provide the Trustee (upon the Trustee's reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.
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SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Master Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the Master
Servicer will enter into an assumption and modification agreement from or with
the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer and has a credit risk rating at least equal to
that of the original Mortgagor. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable Primary Mortgage Insurance Policy or hazard
insurance policy, or a new policy meeting the requirements of this Section is
obtained. Any fee collected by the Master Servicer in respect of an assumption
or substitution of liability agreement will be retained by the Master Servicer
as additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The Master Servicer
shall notify the Trustee that any such substitution or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term
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"assumption" is deemed to also include a sale (of the Mortgaged Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall, consistent with the servicing
standard set forth in Section 3.01, foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.07. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.11 and Section 3.23. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it would be in
the best economic interest of the Trust Fund to take such
actions as are necessary to bring the Mortgaged Property into
compliance therewith; and
(2) there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal
of any hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials for which investigation,
testing, monitoring, containment, clean-up or remediation
could be required under any federal, state or local law or
regulation, or that if any such materials are present for
which such action could be required, that it would be in the
best
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economic interest of the Trust Fund to take such actions with
respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.23 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Master Servicer may at its option purchase from REMIC
I any Mortgage Loan that is 90 days or more delinquent, which the Master
Servicer determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan purchased hereunder shall be deposited in the
Collection Account, and the Trustee, upon receipt of written certification from
the Master Servicer of such deposit, shall release or cause to be released to
the Master Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Master Servicer shall furnish and as shall be necessary to vest in the Master
Servicer title to any Mortgage Loan released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: FIRST, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); SECOND,
to accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and THIRD, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Master Servicer as follows: FIRST, to
unpaid Servicing Fees; and SECOND, to the balance of the interest then due and
owing. The portion of the recovery so allocated to unpaid
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Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(a)(iii).
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
immediately notify the Trustee by a certification in the form of Exhibit E-2
(which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 3.10 have been or
will be so deposited) of a Servicing Officer and shall request delivery to it of
the Mortgage File. Upon receipt of such certification and request, the Trustee
shall promptly release the related Mortgage File to the Master Servicer. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Mortgage Insurance Policy or any other insurance policy relating to
the Mortgage Loans, the Trustee shall, upon request of the Master Servicer and
delivery to the Trustee of a Request for Release in the form of Exhibit E-l,
release the related Mortgage File to the Master Servicer, and the Trustee shall,
at the direction of the Master Servicer, execute such documents as shall be
necessary to the prosecution of any such proceedings. Such Request for Release
shall obligate the Master Servicer to return each and every document previously
requested from the Mortgage File to the Trustee when the need therefor by the
Master Servicer no longer exists, unless the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, a copy of the Request for
Release shall be released by the Trustee to the Master Servicer.
(c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Each such
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certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest and
Buydown Funds in respect of such Mortgage Loan, subject to Section 3.24. In
addition, the Master Servicer shall be entitled to recover unpaid Servicing Fees
out of Insurance Proceeds or Liquidation Proceeds to the extent permitted by
Section 3.11(a)(iii) and out of amounts derived from the operation and sale of
an REO Property to the extent permitted by Section 3.23. The right to receive
the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement.
Additional servicing compensation in the form of assumption
fees, late payment charges and other similar fees and charges shall be retained
by the Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums due under the Primary Insurance
Policies, if any, premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent
provided herein in Section 8.05, the fees and expenses of the Trustee) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.
SECTION 3.19. Reports to the Trustee; Collection Account
Statements.
Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee and the Depositor a statement
prepared by the Master Servicer setting forth the status of the Collection
Account as of the close of business on such Distribution Date and showing, for
the period covered by such statement, the aggregate amount of deposits into and
withdrawals from the Collection Account of each category of deposit specified in
Section 3.10(a) and each category of withdrawal specified in Section 3.11. Such
statement may be in the form of the then current Fannie Mae Monthly Accounting
Report for its Guaranteed Mortgage Pass- Through Program with appropriate
additions and changes, and shall also include information as to the aggregate of
the outstanding principal balances of all of the Mortgage Loans as of the last
day of the calendar month immediately preceding such Distribution Date. Copies
of such statement shall be provided by the Trustee to any Certificateholder and
to any Person identified
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to the Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Master Servicer to the Trustee.
SECTION 3.20. Statement as to Compliance.
The Master Servicer will deliver to the Trustee, the Depositor
and each Rating Agency on or before April 15 of each calendar year commencing in
2000, an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon the request and at the expense
of the requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.
SECTION 3.21. Independent Public Accountants' Servicing
Report.
Not later than April 15 of each calendar year commencing in
2000, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall furnish a copy of such report to the Trustee and each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided that
such statement is delivered by the Master Servicer to the Trustee. In the event
such firm of independent certified public accountants requires the Trustee to
agree to the procedures performed by such firm, the Master Servicer shall direct
the Trustee in writing to so agree; it being understood and agreed that the
Trustee will deliver such letter of agreement in conclusive reliance upon the
direction of the Master Servicer, and the Trustee has not made any independent
inquiry or investigation as to, and shall have no obligation or liability in
respect of, the sufficiency, validity or correctness of such procedures.
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SECTION 3.22. Access to Certain Documentation.
The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, the
Trustee and to any Person identified to the Master Servicer as a prospective
transferee of a Certificate, upon reasonable request during normal business
hours at the offices of the Master Servicer designated by it at the expense of
the Person requesting such access.
SECTION 3.23. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property within three years after the Trust Fund acquires
ownership of such REO Property for purposes of Section 860G(a)(8) of the Code or
request from the Internal Revenue Service, no later than 60 days before the day
on which the three-year grace period would otherwise expire, an extension of the
three-year grace period, unless the Master Servicer shall have delivered to the
Trustee and the Depositor an Opinion of Counsel, addressed to the Trustee and
the Depositor, to the effect that the holding by the Trust Fund of such REO
Property subsequent to three years after its acquisition will not result in the
imposition on REMIC I or REMIC II of taxes on "prohibited transactions" thereof,
as defined in Section 860F of the Code, or cause REMIC I or REMIC II to fail to
qualify as a REMIC under Federal law at any time that any Certificates are
outstanding. The Master Servicer shall manage, conserve, protect and operate
each REO Property for the Certificateholders solely for the purpose of its
prompt disposition and sale in a manner which does not cause such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code or result in the receipt by REMIC I or REMIC II of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions.
(b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the Trustee
for the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.
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(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the REO Account, in
no event more than two Business Days after the deposit of such funds into the
clearing account, all revenues received by it with respect to an REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of
such REO Property;
(ii) all real estate taxes and assessments in respect of
such REO Property that may result in the imposition of a lien
thereon; and
(iii) all costs and expenses necessary to maintain such
REO Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer's judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Master Servicer nor
the Trustee shall:
(i) authorize the Trust Fund to enter into, renew or
extend any New Lease with respect to any REO Property, if the
New Lease by its terms will give rise to any income that does
not constitute Rents from Real Property;
(ii) authorize any amount to be received or accrued
under any New Lease other than amounts that will constitute
Rents from Real Property;
(iii) authorize any construction on any REO Property,
other than the completion of a building or other improvement
thereon, and then only if more than ten percent of the
construction of such building or other improvement was
completed before default on the related Mortgage Loan became
imminent, all within the meaning of Section 856(e)(4)(B) of
the Code; or
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(iv) authorize any Person to Directly Operate any REO
Property on any date more than 90 days after its date of
acquisition by the Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall
not be inconsistent herewith;
(ii) any such contract shall require, or shall be
administered to require, that the Independent Contractor pay
all costs and expenses incurred in connection with the
operation and management of such REO Property, including those
listed above and remit all related revenues (net of such costs
and expenses) to the Master Servicer as soon as practicable,
but in no event later than thirty days following the receipt
thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c)
relating to any such contract or to actions taken through any
such Independent Contractor shall be deemed to relieve the
Master Servicer of any of its duties and obligations to the
Trustee on behalf of the Certificateholders with respect to
the operation and management of any such REO Property; and
(iv) the Master Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all
duties and obligations in connection with the operation and
management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and P&I Advances
made in respect of such REO Property or the related Mortgage Loan. On the
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Master Servicer Remittance Date, the Master Servicer shall withdraw from each
REO Account maintained by it and deposit into the Distribution Account in
accordance with Section 3.10(d)(ii), for distribution on the related
Distribution Date in accordance with Section 4.01, the income from the related
REO Property received during the prior calendar month, net of any withdrawals
made pursuant to Section 3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), and further subject to obtaining the approval of the insurer under any
related Primary Mortgage Insurance Policy (if and to the extent that such
approvals are necessary to make claims under such policies in respect of the
affected REO Property), each REO Disposition shall be carried out by the Master
Servicer at such price and upon such terms and conditions as the Master Servicer
shall deem necessary or advisable, as shall be normal and usual in its general
servicing activities for similar properties.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).
(g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
SECTION 3.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 3:00 p.m. New York time on the Master
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting from full or partial Principal Prepayments during the related
Prepayment Period and (ii) the portion of its aggregate Servicing Fee which
accrued at a Servicing Fee Rate of 0.20% per annum for the most recently ended
calendar month.
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SECTION 3.25. Administration of Buydown Funds.
The Buydown Account established and maintained by the Master
Servicer with respect to each Buydown Mortgage Loan shall be a non-interest
bearing Eligible Account. Upon receipt from the Mortgagor of the amount due on a
Due Date for each Buydown Mortgage Loan, the Master Servicer will withdraw from
the related Buydown Account the predetermined amount that, when added to the
amount due on such date from the Mortgagor, equals the Monthly Payment and will
deposit that amount together with the related payment made by the Mortgagor in
the Collection Account.
If any Mortgagor on a Buydown Mortgage Loan prepays such
Mortgage Loan in its entirety during the Buydown Period, the Master Servicer
will withdraw from the related Buydown Account and remit to such Mortgagor in
accordance with the related Buydown Agreement any Buydown Funds remaining in the
Buydown Account. If a Principal Prepayment by a Mortgagor during the Buydown
Period, together with any Buydown Funds in the related Buydown Account, will
result in a Principal Prepayment in full, the Master Servicer will withdraw from
the related Buydown Account for deposit in the Collection Account the Buydown
Funds, which together with such Principal Prepayment, will result in a Principal
Prepayment in full. If a Mortgagor defaults during the Buydown Period with
respect to a Buydown Mortgage Loan and the Mortgaged Property is sold at
foreclosure or title thereto is acquired on behalf of the Certificateholders,
the Master Servicer will withdraw from the Buydown Account the Buydown Funds
(which shall thereupon constitute "Liquidation Proceeds" for purposes of this
Agreement) for deposit in the Collection Account.
SECTION 3.26. Obligations of the Master Servicer in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
Stated Principal Balances that were made by the Master Servicer in a manner not
consistent with the terms of the related Mortgage Note and this Agreement, the
Master Servicer, upon discovery or receipt of notice thereof, immediately shall
deliver to the Trustee for deposit in the Distribution Account from its own
funds the amount of any such shortfall and shall indemnify and hold harmless the
Trust Fund, the Trustee, the Depositor and any successor master servicer in
respect of any such liability. Such indemnities shall survive the termination or
discharge of this Agreement.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a)(i) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the sum of the Available
Distribution Amount for Sub-Pool 1 and the Available Distribution Amount for
Sub-Pool 2 and distribute to the Certificateholders in the related Sub-Pool from
the related Available Distribution Amount (and, in the case of the Class IO
Certificates and the Class PO Certificates, from the Available Distribution
Amount for each Sub- Pool) the following amounts, in the following order of
priority:
FIRST, to distributions of interest in respect of the Class A
Certificates, the Class IO Certificates and the Class R-II
Certificates, (in the case of the Class R-II Certificates
from the Available Distribution Amount for Sub-Pool 1), in an
amount equal to the Interest Distribution Amount in respect
of each such Class of Certificates for such Distribution
Date;
SECOND, to the extent of the Class PO Principal Distribution
Amount, to distributions of principal to the Class PO
Certificates (applied to reduce the Certificate Principal
Balances of such Certificates);
THIRD, to the extent of the related Class A Principal
Distribution Amount, to distributions of principal to the
related Class A Certificates and in the case of amounts
available from the Available Distribution Amount for Sub-Pool
1, the Class R-II Certificates (applied to reduce the
Certificate Principal Balances of such Certificates) in the
priorities and amounts set forth in Section 4.01(b)(i);
FOURTH, to distributions of interest in respect of the
Subordinate Certificates, other than the Class of Subordinate
Certificates with the highest numerical designation then
outstanding, in an amount (allocable among such Certificates
PRO RATA in accordance with the respective amounts payable as
to each pursuant to this clause FOURTH, in the order of
priority from the Class of Subordinate Certificates with the
lowest numerical designation to the Class of Subordinate
Certificates with the highest numerical designation entitled
to a distribution of interest pursuant to this clause FOURTH)
equal to the aggregate of the Interest Distribution Amounts in
respect of such Certificates for such Distribution Date;
FIFTH, to distributions of principal to the Class PO
Certificates (applied to reduce the Certificate Principal
Balance of such Certificates) in an amount equal to the
excess, if any, of the Class PO Percentage of the Stated
Principal Balance of each Class PO Mortgage Loan as to which a
Final Liquidation has occurred, over the amount distributed in
respect of such Class PO Mortgage Loan to the Class PO
Certificates pursuant to clause SECOND above;
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SIXTH, to distributions in respect of the Class of Subordinate
Certificates with the highest numerical designation then
outstanding, in an amount equal to the Interest Distribution
Amount in respect of such Certificates for such Distribution
Date;
SEVENTH, to the Holders of the Classes of the Subordinate
Certificates, on the related Components thereof in each
Sub-Pool, an aggregate amount equal to the related Subordinate
Principal Distribution Amount for such Distribution Date
(applied to reduce the Component Balances of such Components),
allocable among the related Components PRO RATA in accordance
with the respective amounts payable as to each such Component
pursuant to the priorities and amounts set forth in Section
4.01(b)(ii); and
EIGHTH, to the Holders of the Class R-II Certificates, any
remaining amounts from either Available Distribution Amount.
(ii) All references above to the Certificate Principal Balance
of any Class of Certificates or to the Component Balance of any
Component shall be to the Certificate Principal Balance of such Class
or the Component Balance of such Component, respectively, immediately
prior to the relevant Distribution Date, reduced (to not less than
zero) by any Extraordinary Trust Fund Expenses and Realized Losses, in
each case allocated to such Class of Certificates or such Component, on
such Distribution Date pursuant to Section 4.04.
(b)(i)(a) On each Distribution Date, the aggregate
distributions of principal made on such date in respect of the Group 1
Class A Certificates and the Class R-II Certificates pursuant to
Section 4.01(a)(i) THIRD above shall be applied among the various
Classes thereof in the following order of priority, in each case to the
extent of remaining available funds from the Group 1 Class A Principal
Distribution Amount:
FIRST, to the holders of the Class R-II Certificates on the
Distribution Date in March 1999, an amount equal to the entire
Certificate Principal Balance thereof; and
SECOND, concurrently, the holders of the Lockout Certificates
and the Senior Support Lockout Certificates, the related
Lockout Distribution Percentage of the remaining Group 1 Class
A Principal Distribution Amount, until the related Certificate
Principal Balance thereof has been reduced to zero;
THIRD, concurrently, until the Certificate Principal Balance
of the Class A1-1 Certificates has been reduced to zero,
59.4555585603% to the holders of the Class A1-1 Certificates
and 40.5444414397% to the holders of the Super Senior
Certificates;
FOURTH, concurrently, until the Certificate Principal Balance
of the Super Senior Certificates has been reduced to zero,
23.9351934127% to the holders of the Class
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A1-2 Certificates, 23.9351934127% to the holders of the Class
A1-3 Certificates and 52.1296131746% to the holders of the
Super Senior Certificates;
FIFTH, concurrently, on a PRO RATA basis, to the holders of
the Class A1-2 Certificates and the holders of the Class A1-3
Certificates, until the Certificate Principal Balances thereof
have been reduced to zero; and
SIXTH, concurrently, on a PRO RATA basis, to the holders of
the Lockout Certificates and the holders of the Super Senior
Lockout Certificates, until the Certificate Principal Balances
thereof have been reduced to zero.
Notwithstanding the foregoing priorities, upon the reduction of the
Certificate Principal Balances of the Subordinate Certificates to zero but prior
to the reduction of the Senior Support Lockout Certificates to zero, the
sequential nature of distributions of principal among the Group 1 Class A
Certificates will be disregarded and distributions allocable to principal will
be paid on each succeeding Distribution Date to holders of the Group 1 Class A
Certificates on a PRO RATA basis, based on the Certificate Principal Balances
thereof; provided, however that the aggregate amount distributable to the Super
Senior Certificates and the Senior Support Lockout Certificates will be
distributed among such Certificates in the following priority: FIRST, to the
Super Senior Certificates, up to an amount equal to the Interest Distribution
Amount thereon; SECOND, to the Super Senior Certificates, up to an amount equal
to the Super Senior Optimal Principal Distribution Amount, in reduction of the
Certificate Principal Balance thereof; THIRD; to the Senior Support Lockout
Certificates, up to an amount equal to the Interest Distribution Amount thereon;
and FOURTH, to the Senior Support Lockout Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
Notwithstanding the foregoing priorities, upon the reduction of the
Certificate Principal Balances of the Subordinate Certificates and the Senior
Support Lockout Certificates to zero, the sequential nature of distributions of
principal among the Group 1 Class A Certificates will be disregarded and
distributions allocable to principal will be paid on each succeeding
Distribution Date to holders of the Group 1 Class A Certificates on a PRO RATA
basis, based on the Certificate Principal Balances thereof.
(b) On each Distribution Date, the aggregate
distributions of principal made on such date in respect of the Class A2
Certificates pursuant to Section 4.01(a)(i) THIRD above shall be distributed to
the Class A2 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero to the extent of remaining available funds from the Group 2
Class A Principal Distribution Amount.
(ii) With respect to Sub-Pool 1 and Sub-Pool 2, on each
Distribution Date, the aggregate distributions of principal made on
such date in respect of the related Components of the Subordinate
Certificates pursuant to Section 4.01(a)(i) SEVENTH above shall be
applied among such Components, in the order of priority from the
Component with the lowest numerical designation to the Component with
the highest numerical designation (i.e. from
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B-1 to B-6), in each case to the extent of the remaining related
Available Distribution Amount up to the amount allocable to such
Component for such Distribution Date and in each case until the
Component Balance of each such Component is reduced to zero, in an
amount with respect to each such Component equal to the sum of (X) the
related Class B Percentage of the amounts described in clauses (i)
through (v) of clause (a) of the definition of the related Subordinate
Principal Distribution Amount, (Y) the portion of the amounts described
in clauses (b) and (c) of the definition of the related Subordinate
Principal Distribution Amount allocable to such Component pursuant to
Section 4.01(b)(iii) below and (Z) the excess, if any, of the amount
required to be distributed to such Component pursuant to this Section
4.01(b)(ii) for the immediately preceding Distribution Date, over the
aggregate distributions of principal made in respect of such Component
on such immediately preceding Distribution Date pursuant to Section
4.01 to the extent that any such excess is not attributable to Realized
Losses which were allocated to a related or unrelated Component of the
Subordinate Certificates bearing a lower priority pursuant to Section
4.04.
(iii) On any Distribution Date and with respect to each
Sub-Pool, the portion of (a) all net Liquidation Proceeds and Insurance
Proceeds with respect to any Mortgage Loans in such Sub-Pool that were
the subject of a Final Recovery Determination in the related Prepayment
Period and (b) all Principal Prepayments received in respect of the
Mortgage Loans in such Sub-Pool in the related Prepayment Period,
allocable to principal and not included in the related Class A
Principal Distribution Amount and the Class PO Principal Distribution
Amount, will be allocated on a PRO RATA basis among the following
Components of related Subordinate Certificates (each, an "Eligible
Component") in proportion to the respective outstanding Component
Balances thereof: (a) in the case of the related Components in Sub-Pool
1 (i) Component B-1-1, (ii) Component B-2-1, if on such Distribution
Date the aggregate percentage interest in the Trust Fund evidenced by
the Class B-2 Certificates, the Class B-3 Certificates, the Class B-4
Certificates, the Class B-5 Certificates and the Class B-6PO
Certificates equal or exceeds 2.00% before giving effect to
distributions on such Distribution Date, (iii) Component B-3-1, if on
such Distribution Date the aggregate percentage interest in the Trust
Fund evidenced by the Class B-3 Certificates, the Class B-4
Certificates, the Class B-5 Certificates and the Class B-6PO
Certificates equals or exceeds 1.10% before giving effect to
distributions on such Distribution Date; (iv) Component B-4-1, if on
such Distribution Date the percentage interest in the Trust Fund
evidenced by the Class B-4 Certificates, the Class B-5 Certificates and
the Class B-6PO Certificates equals or exceeds 0.75% before giving
effect to distributions on such Distribution Date; (v) Component B-5-1,
if on such Distribution Date the percentage interest in the Trust Fund
evidenced by the Class B-5 Certificates and the Class B-6PO
Certificates equals or exceeds 0.40% before giving effect to
distributions on such Distribution Date; and (vi) Component B-6PO-1, if
on such Distribution Date the percentage interest in the Trust Fund
evidenced by the Class B-6PO Certificates equals or exceeds 0.25%
before giving effect to distributions on such Distribution Date and (b)
in the case of the related Components in Sub-Pool 2 (i) Component
B-1-2, (ii) Component B- 2-2, if on such Distribution Date the
aggregate percentage interest in the Trust Fund
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evidenced by the Class B-2 Certificates, the Class B-3 Certificates,
the Class B-4 Certificates, the Class B-5 Certificates and the Class
B-6PO Certificates equal or exceeds 2.00% before giving effect to
distributions on such Distribution Date, (iii) Component B-3- 2, if on
such Distribution Date the aggregate percentage interest in the Trust
Fund evidenced by the Class B-3 Certificates, the Class B-4
Certificates, the Class B-5 Certificates and the Class B-6PO
Certificates equals or exceeds 1.10% before giving effect to
distributions on such Distribution Date; (iv) Component B-4-2, if on
such Distribution Date the percentage interest in the Trust Fund
evidenced by the Class B-4 Certificates, the Class B-5 Certificates and
the Class B-6PO Certificates equals or exceeds 0.75% before giving
effect to distributions on such Distribution Date; (v) Component B-5-2,
if on such Distribution Date the percentage interest in the Trust Fund
evidenced by the Class B-5 Certificates and the Class B-6PO
Certificates equals or exceeds 0.40% before giving effect to
distributions on such Distribution Date; and (vi) Component B-6PO-2, if
on such Distribution Date the percentage interest in the Trust Fund
evidenced by the Class B-6PO Certificates equals or exceeds 0.25%
before giving effect to distributions on such Distribution Date.
Notwithstanding the foregoing, if the application of the foregoing on
any Distribution Date as provided in Section 4.01 would result in a
distribution in respect of principal to any Component or Components of
Subordinate Certificates in a related Sub- Pool in an amount greater
than the remaining Component Balance thereof (any such Component, a
"Maturing Component") then: (a) the amount to be allocated to each
Maturing Component shall be reduced to a level that, when applied as
described above, would exactly reduce the Component Balance of such
Component to zero and (b) the total amount of the reductions pursuant
to clause (a) above in the amount to be allocated to the Maturing
Component or Components shall be allocated among the remaining Eligible
Components in such Sub-Pool on a PRO RATA basis in proportion to the
respective outstanding Component Balances thereof prior to the
allocation thereto of any of the amounts described in the preceding
sentence.
(c)(i) If on any Distribution Date (x) clause (a) or clause
(b) of the definition of "Class A Prepayment Percentage" is in effect and (y)
the allocation to the related Class A Certificates of full and partial principal
prepayments and other amounts at the Class A Prepayment Percentage would reduce
the aggregate outstanding Certificate Principal Balance of such Class A
Certificates to zero, any amounts (a "Prepayment Diversion Amount") in excess of
the Certificate Principal Balances of such Class A Certificates shall be
diverted to pay the non-related Class A Certificates in the other Sub-Pool until
the Certificate Principal of the non-related Class A Certificates are reduced to
zero.
(ii) Notwithstanding the allocations described in Section
4.01(b)(iii) above, if for any Distribution Date with respect to either Sub-Pool
the amounts distributable pursuant to Section 4.01(b)(iii) would reduce the most
subordinate Eligible Component in such Sub-Pool to zero, any amount (a
"Prepayment Diversion Amount") in excess of the Component Balances of such
Eligible Components shall be diverted to pay the Components in the other
Sub-Pool relating to the same Certificates (the "Related Eligible Components")
in the same manner as the Eligible
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Components are paid in Section 4.01(b)(iii) until the Component Balances thereof
shall be reduced to zero prior to paying any Components of more Subordinate
Certificates.
(d) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(f) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Certificates having an initial
aggregate Certificate Principal Balance or Notional Amount that is in excess of
the lesser of (i) $5,000,000 or (ii) two-thirds of the initial Certificate
Principal Balance or Notional Amount of such Class of Certificates, or otherwise
by check mailed by first class mail to the address of such Holder appearing in
the Certificate Register. The final distribution on each Certificate will be
made in like manner, but only upon presentment and surrender of such Certificate
at the Corporate Trust Office or such other location specified in the notice to
Certificateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. Neither the Holders of any Class of Certificates nor the Trustee nor
the Master Servicer shall in any way be responsible or liable to the Holders of
any other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.
(f) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five days after the related Determination Date, mail on such date to
each Holder of such Class of Certificates a notice to the effect that:
(i) the Trustee expects that the final distribution
with respect to such Class of Certificates will be made on
such Distribution Date, but only upon
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presentation and surrender of such Certificates at the office
of the Trustee therein specified, and
(ii) no interest shall accrue on such Certificates from
and after the end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 4.01(f) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining
non-tendering Certificateholders concerning surrender of their Certificates and
shall continue to hold any remaining funds for the benefit of non-tendering
Certificateholders. The costs and expenses of maintaining the funds in trust and
of contacting such Certificateholders shall be paid out of the assets remaining
in such trust fund. If within one year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to Salomon Smith Barney Inc. all such amounts, and all rights of
non-tendering Certificateholders in or to such amounts shall thereupon cease. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(f).
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date, the Trustee shall prepare and
forward by mail to each Holder of the Regular Certificates, a statement as to
the distributions made on such Distribution Date setting forth:
(i) the amount of the distribution made on such
Distribution Date to the Holders of Certificates of each such
Class allocable to principal;
(ii) the amount of the distribution made on such
Distribution Date to the Holders of Certificates of each such
Class allocable to interest;
(iii) the aggregate amount of servicing compensation
received by the Master Servicer during the related Due Period
and such other customary information as the Trustee deems
necessary or desirable, or which a Certificateholder
reasonably requests, to enable Certificateholders to prepare
their tax returns;
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(iv) the aggregate amount of P&I Advances for each
Sub-Pool for such Distribution Date;
(v) the aggregate Stated Principal Balance of the
Mortgage Loans and any REO Properties in each Sub-Pool at the
close of business on such Distribution Date;
(vi) the number, aggregate principal balance, weighted
average remaining term to maturity and weighted average
Mortgage Rate of the Mortgage Loans in each Sub-Pool as of the
related Due Date;
(vii) the number and aggregate unpaid principal balance
of Mortgage Loans in each Sub-Pool that are (a) delinquent 30
to 59 days, (b) delinquent 60 to 89 days, (c) delinquent 90 or
more days in each case, as of the last day of the preceding
calendar month, (d) as to which foreclosure proceedings have
been commenced and (e) with respect to which the related
Mortgagor has filed for protection under applicable bankruptcy
laws, with respect to whom bankruptcy proceedings are pending
or with respect to whom bankruptcy protection is in force;
(viii) with respect to any Mortgage Loan in each
Sub-Pool that became an REO Property during the preceding
calendar month, the loan number of such Mortgage Loan, the
unpaid principal balance and the Stated Principal Balance of
such Mortgage Loan as of the date it became an REO Property;
(ix) the book value and the Stated Principal Balance of
any REO Property as of the close of business on the last
Business Day of the calendar month preceding the Distribution
Date;
(x) the aggregate amount of Principal Prepayments made
during the related Prepayment Period;
(xi) the aggregate amount of Realized Losses with
respect to the Mortgage Loans in each Sub-Pool incurred during
the related Prepayment Period (or, in the case of Bankruptcy
Losses allocable to interest, during the related Due Period),
separately identifying whether such Realized Losses
constituted Fraud Losses, Special Hazard Losses or Bankruptcy
Losses;
(xii) the aggregate amount of Extraordinary Trust Fund
Expenses withdrawn from the Collection Account or the
Distribution Account for such Distribution Date;
(xiii) the aggregate Certificate Principal Balance or
Notional Amount of each such Class of Certificates, after
giving effect to the distributions, and allocations of
Realized Losses and Extraordinary Trust Fund Expenses, made on
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such Distribution Date, separately identifying any reduction
thereof due to allocations of Realized Losses and
Extraordinary Trust Fund Expenses;
(xiv) the Certificate Factor for each such Class of
Certificates applicable to such Distribution Date;
(xv) the Interest Distribution Amount in respect of each
such Class of Certificates (other than the Class PO
Certificates and the Class B-6PO Certificates) for such
Distribution Date (separately identifying any reductions in
the case of Subordinate Certificates resulting from the
allocation of Realized Losses allocable to interest and
Extraordinary Trust Fund Expenses on such Distribution Date)
and the respective portions thereof, if any, remaining unpaid
following the distributions made in respect of such
Certificates on such Distribution Date;
(xvi) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not
covered by payments by the Master Servicer pursuant to Section
3.24;
(xvii) the aggregate amount of Relief Act Interest
Shortfalls for such Distribution Date;
(xviii) the then-applicable Bankruptcy Amount, Fraud
Loss Amount, and Special Hazard Amount;
(xix) the Weighted Average Stripped Interest Rate with
respect to the Mortgage Loans for such Distribution Date;
(xx) with respect to any Mortgage Loan as to which
foreclosure proceedings have been concluded, the loan number
and unpaid principal balance of such Mortgage Loan as of the
date of such conclusion of foreclosure proceedings;
(xxi) with respect to Mortgage Loans as to which a Final
Liquidation has occurred, the number of Mortgage Loans, the
unpaid principal balance of such Mortgage Loans as of the date
of such Final Liquidation and the amount of proceeds
(including Liquidation Proceeds and Insurance Proceeds)
collected in respect of such Mortgage Loans; and
(xxii) with respect to each Class IO Certificates, the
related Pass-Through Rate for such Distribution Date and the
immediately succeeding Distribution Date.
In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed as a dollar amount per
Single Certificate of the relevant Class.
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Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Regular Certificate a statement containing
the information set forth in subclauses (i) through (iii) above, aggregated for
such calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.
On each Distribution Date, the Trustee shall forward to the
Depositor, each Holder of a Residual Certificate and the Master Servicer, a copy
of the reports forwarded to the Regular Certificateholders on such Distribution
Date and a statement setting forth the amounts, if any, actually distributed
with respect to the Residual Certificates, respectively, on such Distribution
Date.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared by the Trustee and
furnished to such Holders pursuant to the rules and regulations of the Code as
are in force from time to time.
The Trustee shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide. For
purposes of this Section 4.02, the Trustee's duties are limited to the extent
that the Trustee receives timely reports as required from the Master Servicer.
On each Distribution Date, the Trustee shall provide Bloomberg
Financial Markets, L.P. ("Bloomberg") cusip level factors for each class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.
SECTION 4.03. Remittance Reports; P&I Advances.
(a) On the Business Day following each Determination Date, the
Master Servicer shall deliver to the Trustee by telecopy (or by such other means
as the Master Servicer and the Trustee may agree from time to time) a Remittance
Report with respect to the related Distribution Date. Such Remittance Report
will include (i) the amount of P&I Advances to be made by the Master Servicer in
respect of the related Distribution Date, the aggregate amount of P&I Advances
outstanding after giving effect to such P&I Advances, and the aggregate amount
of Nonrecoverable P&I Advances in respect of such Distribution Date and (ii)
such other
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information with respect to the Mortgage Loans as the Trustee may reasonably
require to perform the calculations necessary to make the distributions
contemplated by Section 4.01 and to prepare the statements to Certificateholders
contemplated by Section 4.02. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
(b) The amount of P&I Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
sum of (i) the aggregate amount of Monthly Payments (with each interest portion
thereof net of the related Servicing Fee), due on the related Due Date in
respect of the Mortgage Loans, which Monthly Payments were delinquent as of the
close of business on the related Determination Date and (ii) with respect to
each REO Property, which REO Property was acquired during or prior to the
related Prepayment Period and as to which such REO Property an REO Disposition
did not occur during the related Prepayment Period, an amount equal to the
excess, if any, of the Monthly Payments (with each interest portion thereof net
of the related Servicing Fee) that would have been due on the related Due Date
in respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.23 for
distribution on such Distribution Date.
On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such P&I Advance) or (iii) in the form of
any combination of (i) and (ii) aggregating the total amount of P&I Advances to
be made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance Date to the extent that the Available Distribution
Amount for the related Distribution Date (determined without regard to P&I
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make P&I Advances. The Trustee will
provide notice to the Master Servicer by telecopy by the close of business on
the Business Day following any Master Servicer Remittance Date in the event that
the amount remitted by the Master Servicer to the Trustee on such Master
Servicer Remittance Date is less than the P&I Advances required to be made by
the Master Servicer for the related Distribution Date.
(c) The obligation of the Master Servicer to make such P&I
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery
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Determination in connection therewith or the removal thereof from REMIC I
pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance shall be required to be made hereunder by the Master Servicer if such
P&I Advance would, if made, constitute a Nonrecoverable P&I Advance. The
determination by the Master Servicer that it has made a Nonrecoverable P&I
Advance or that any proposed P&I Advance, if made, would constitute a
Nonrecoverable P&I Advance, shall be evidenced by an Officers' Certificate of
the Master Servicer delivered to the Depositor and the Trustee.
SECTION 4.04. Allocation of Extraordinary Trust Fund Expenses
and Realized Losses.
(a) Prior to each Determination Date, the Master Servicer
shall determine as to each Mortgage Loan and REO Property: (i) the total amount
of Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Fraud Losses or Special Hazard
Losses; and (iii) the respective portions of such Realized Losses allocable to
interest and allocable to principal. Prior to each Determination Date, the
Master Servicer shall also determine as to each Mortgage Loan: (A) the total
amount of Realized Losses, if any, incurred in connection with any Deficient
Valuations made during the related Prepayment Period; and (B) the total amount
of Realized Losses, if any, incurred in connection with Debt Service Reductions
in respect of Monthly Payments due during the related Due Period. The
information described in the two preceding sentences that is to be supplied by
the Master Servicer shall be evidenced by an Officers' Certificate delivered to
the Trustee by the Master Servicer prior to the Determination Date immediately
following the end of (x) in the case of Bankruptcy Losses allocable to interest,
the Due Period during which any such Realized Loss was incurred, and (y) in the
case of all other Realized Losses, the Prepayment Period during which any such
Realized Loss was incurred.
(b) All Realized Losses on the Mortgage Loans (other than
Excess Losses) in Sub-Pool 1 shall be allocated by the Trustee on each
Distribution Date as follows: first, to Component B-6PO-1; second, to Component
B-6PO-2; third, to Component B-5-1; fourth, to Component B-5-2; fifth, to
Component B-4-1; sixth, to Component B-4-2; seventh, to Component B-3-1; eighth,
to Component B-3-2; ninth, to Component B-2-1; tenth, to Component B-2-2;
eleventh, to Component B-1-1; and twelfth, to Component B-1-2, in each case
until the Component Balance thereof has been reduced to zero. All Realized
Losses on the Mortgage Loans (other than Excess Losses) in Sub-Pool 2 shall be
allocated by the Trustee on each Distribution Date as follows: first, to
Component B-6PO-2; second, to Component B-6PO-1; third, to Component B-5-2;
fourth, to Component B-5-1; fifth, to Component B-4-2; sixth, to Component
B-4-1; seventh, to Component B-3-2; eighth, to Component B-3-1; ninth, to
Component B-2-2; tenth, to Component B-2-1; eleventh, to Component B-1-2; and
twelfth, to Component B-1-1, in each case until the Component Balance thereof
has been reduced to zero. Thereafter, upon the reduction of the Certificate
Principal Balances of the Subordinate Certificates to zero, all Realized
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Losses shall be allocated among the Senior Certificates as follows: the related
Class PO Percentage of such Realized Losses shall be allocated to the Class PO
Certificates and the related Non-Class PO Percentage of such Realized Losses
shall be allocated to the related Class A Certificates in the related Sub-Pool;
provided, however, that all such Realized Losses otherwise allocable to the
Super Senior Certificates will be allocated to the Senior Support Lockout
Certificates until the Certificate Principal Balance of Senior Support Lockout
Certificates is reduced to zero.
Extraordinary Trust Fund Expenses shall be allocated by the Trustee on
each Distribution Date as follows: first, to the Class B-6PO Certificates;
second, to the Class B-5 Certificates; third, to the Class B-4 Certificates;
fourth, to the Class B-3 Certificates; fifth, to the Class B-2 Certificates; and
sixth, to the Class B-1 Certificates, in each case until the Certificate
Principal Balance thereof has been reduced to zero. Thereafter, upon the
reduction of the Certificate Principal Balances of the Subordinate Certificates
to zero, such Extraordinary Trust Fund Expenses shall be allocated among the
Senior Certificates (other than the Class IO Certificates) on a PRO RATA basis;
provided, however, that all such Extraordinary Trust Fund Expenses otherwise
allocable to the Super Senior Certificates will be allocated to the Senior
Support Lockout Certificates until the Certificate Principal Balance of Senior
Support Lockout Certificates is reduced to zero.
Any Excess Losses attributable to any Mortgage Loan shall be allocated
among all the Certificates (other than the Class IO Certificates) as follows:
the related Class PO Percentage of such Realized Losses shall be allocated to
the Class PO Certificates and the related Non-Class PO Percentage of such
Realized Losses in a Sub-Pool shall be allocated among the related Class A
Certificates and the related Components on a PRO RATA basis. Any allocation of a
Realized Loss to a Certificate or Component will be made by reducing the
Certificate Principal Balance or Component Balance thereof by the amount so
allocated as of the Distribution Date in the month following the calendar month
in which such Realized Loss was incurred.
As used herein, an allocation of a Realized Loss or
Extraordinary Trust Fund Expense on a "PRO RATA basis" among two or more
specified Classes of Certificates or Components means an allocation on a PRO
RATA basis, among the various Classes or Component so specified, to each such
Class of Certificates or Component on the basis of their then outstanding
Certificate Principal Balances or Component Balances, as applicable, prior to
giving effect to distributions to be made on such Distribution Date. All
Realized Losses and all other losses allocated to a Class of Certificates
hereunder will be allocated among the Certificates of such Class in proportion
to the Percentage Interests evidenced thereby.
(c) Notwithstanding anything to the contrary herein, in no
event shall the Certificate Principal Balance of a Class A Certificate be
reduced more than once in respect of any particular amount both (i) allocable to
such Certificate in respect of Realized Losses or Extraordinary Trust Fund
Expenses pursuant to Section 4.04 and (ii) payable to the Holder of such
Certificate pursuant to Section 4.01(a) as a portion of the related Class A
Principal Distribution Amount.
SECTION 4.05. Compliance with Withholding Requirements.
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Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
SECTION 4.06. Distributions on the REMIC I Regular Interests.
(a) On the first Distribution Date, the Trustee shall distribute to the
holders of the Class R-I Certificates an amount equal to the Interest
Distribution Amount thereof and the entire Certificate Principal Balance thereof
from cash amounts deposited by the Depositor with the Trustee on the Closing
Date.
(b) On each Distribution Date, the Trustee shall be deemed to
distribute to itself, as the holder of the REMIC I Regular Interests, the
Uncertificated Interest and the Uncertificated Principal Distribution Amount in
the following order of priority to the extent of the Available Distribution
Amount;
(i) Uncertificated Interest on the REMIC I Regular Interests for
such Distribution Date, plus any Uncertificated Interest thereon
remaining unpaid from any previous Distribution Date; and
(ii) the Uncertificated Principal Distribution Amount for such
Distribution Date.
(b) Realized Losses allocated to the Certificates (other than the Class
PO and the Class B-6PO Certificates) under Section 4.04 shall be deemed
allocated to REMIC I Regular Interest LT1. Realized Losses allocated to the
Class B-6PO Certificates under Section 4.04 shall be deemed allocated to REMIC I
Regular Interest LT2. Realized Losses allocated to the Class PO under Section
4.04 shall be deemed allocated to REMIC I Regular Interest LTPO.
(c) Notwithstanding the deemed distributions on the REMIC I Regular
Interests described in this Section 4.06, distributions of funds from the
Collection Account shall be made only in accordance with Section 4.01.
SECTION 4.07. Commission Reporting.
Within 15 days after each Distribution Date, the Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System,
a Form 8-K with a copy of the statement to Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30, 2000, the Trustee
shall file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable. Prior to March 30, 2000, the Trustee shall file a Form 10-K, in
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substance conforming to industry standards, with respect to the Trust Fund. The
Depositor hereby grants to the Trustee a limited power of attorney to execute
and file each such document on behalf of the Depositor. Such power of attorney
shall continue until the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. At least three Business Days prior to filing any
Form 8-K or Form 10-K pursuant to this Section 4.07, the Trustee shall deliver a
copy of such Form 8-K or Form 10- K, as the case may be, to the Depositor. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems appropriate to prepare and file all necessary reports with the
Commission.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I. At the Closing Date, the aggregate Certificate Principal
Balance of the Certificates will equal the aggregate Stated Principal Balance of
the Mortgage Loans.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-18. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and
delivered by the Trustee, and the Trustee shall cause the Certificates to be
authenticated by the Certificate Registrar to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Certificate Registrar by manual
signature, and such certificate of authentication shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
(b) The Class A Certificates, the Class B-1 Certificates, the
Class B-2 Certificates and the Class B-3 Certificates shall initially be issued
as one or more Certificates held by the Book-Entry Custodian or, if appointed to
hold such Certificates as provided below, the Depository and registered in the
name of the Depository or its nominee and, except as provided below,
registration of such Certificates may not be transferred by the Trustee except
to another Depository that agrees to hold such Certificates for the respective
Certificate Owners with Ownership Interests therein. The Certificate Owners
shall hold their respective Ownership Interests in and to such Certificates
through the book-entry facilities of the Depository and, except as provided
below, shall not be entitled to definitive, fully registered Certificates
("Definitive Certificates") in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in the
Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
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Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures. The Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Master Servicer, the Trustee (if the Trustee is
not the Book-Entry Custodian) and any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Trustee
resigns or is removed in accordance with the terms hereof, the successor trustee
or, if it so elects, the Depository shall immediately succeed to its
predecessor's duties as Book-Entry Custodian. The Depositor shall have the right
to inspect, and to obtain copies of, any Certificates held as Book-Entry
Certificates by the Book-Entry Custodian.
The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to the Book-Entry Certificates for the purposes of
exercising the rights of Certificateholders hereunder. The rights of Certificate
Owners with respect to the Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Certificates with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Certificateholders
and shall give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of $10,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $10,000 immediately prior to the
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issuance of a Definitive Certificate shall be issued in a minimum denomination
equal to the amount represented by such Book-Entry Certificate. None of the
Depositor, the Master Servicer nor the Trustee shall be liable for any delay in
the delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates, and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
SECTION 5.02. Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Master Servicer and the Depositor, any other
bank or trust company to act as Certificate Registrar under such conditions as
the predecessor Certificate Registrar may prescribe, provided that the
predecessor Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.
(b) No transfer of any Class B-4 Certificate, Class B-5
Certificate or Class B-6 Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of a Class B-4 Certificate, Class B-5 Certificate or
Class B-6 Certificate is to be made without registration or qualification (other
than in connection with the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor), the Trustee and the Certificate
Registrar shall each require, receipt of: (i) if such transfer is purportedly
being made in reliance upon Rule 144A under the 1933 Act, written certifications
from the Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the forms attached
hereto as Exhibit F- 1; and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Master Servicer, in its capacity as such, or the
Trust Fund), together with copies of the written certification(s) of the
Certificateholder desiring to effect the transfer and/or such
Certificateholder's prospective transferee upon which such Opinion of Counsel is
based, if any. None of the Depositor, the Certificate Registrar or the Trustee
is obligated to register or qualify the Class B-4 Certificates, Class B-5
Certificates or Class B-6
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Certificates under the 1933 Act or any other securities laws or to take any
action not otherwise required under this Agreement to permit the transfer of
such Certificates without registration or qualification. Any Certificateholder
desiring to effect the transfer of a Class B-4 Certificate, Class B-5
Certificate or Class B-6 Certificate shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Certificate Registrar and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
(c) No transfer of a Senior Support Lockout Certificate, a
Subordinate Certificate or a Residual Certificate or any interest therein shall
be made to any Plan subject to ERISA or Section 4975 of the Code, any Person
acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with "Plan Assets" of a Plan within the meaning of
the Department of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101
("Plan Assets") unless the Depositor, the Trustee and the Master Servicer are
provided with an Opinion of Counsel which establishes to the satisfaction of the
Depositor, the Trustee and the Master Servicer that the purchase of such
Certificates is permissible under applicable law, will not constitute or result
in any prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Depositor, the Master Servicer, the Trustee or the Trust Fund to
any obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Master
Servicer, the Trustee or the Trust Fund. In lieu of such Opinion of Counsel, any
prospective Transferee of such Certificates may provide a certification (which
in the case of the Senior Support Lockout Certificates, the Class B-1
Certificates, the Class B-2 Certificates and the Class B-3 Certificates, the
Transferee will be deemed to have represented such certification) in the form of
Exhibit G to this Agreement (or other form acceptable to the Depositor, the
Trustee and the Master Servicer), which the Trustee may rely upon without
further inquiry or investigation. An Opinion of Counsel, any certification or a
deemed representation will not be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.
(d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. The rights of each Person
acquiring any Ownership Interest in a Residual Certificate are expressly subject
to the following provisions:
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(A) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall be
a Permitted Transferee and shall promptly notify the
Trustee of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer
of any Ownership Interest in a Residual Certificate,
the Trustee shall require delivery to it and shall
not register the Transfer of any Residual Certificate
until its receipt of an affidavit and agreement (a
"Transfer Affidavit and Agreement"), in the form
attached hereto as Exhibit F-2, from the proposed
Transferee, in form and substance satisfactory to the
Trustee, representing and warranting, among other
things, that such Transferee is a Permitted
Transferee, that it is not acquiring its Ownership
Interest in the Residual Certificate that is the
subject of the proposed Transfer as a nominee,
trustee or agent for any Person that is not a
Permitted Transferee, that for so long as it retains
its Ownership Interest in a Residual Certificate, it
will endeavor to remain a Permitted Transferee, and
that it has reviewed the provisions of this Section
5.02(d) and agrees to be bound by them.
(C) Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed
Transferee under clause (B) above, if a Responsible
Officer of the Trustee who is assigned to this
transaction has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer
of an Ownership Interest in a Residual Certificate to
such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall
agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person
attempts to transfer its Ownership Interest in a
Residual Certificate and (y) not to transfer its
Ownership Interest unless it provides a transferor
affidavit (a "Transferor Affidavit"), in the form
attached hereto as Exhibit F-2, to the Trustee
stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted
Transferee.
(E) Each Person holding or acquiring an
Ownership Interest in a Residual Certificate, by
purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is
a "pass-through interest holder" within the meaning
of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it
is, or is holding an Ownership Interest in a Residual
Certificate on behalf of, a "pass-through interest
holder."
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(ii) The Trustee will register the Transfer of any
Residual Certificate only if it shall have received the
Transfer Affidavit and Agreement and all of such other
documents as shall have been reasonably required by the
Trustee as a condition to such registration. In addition, no
Transfer of a Residual Certificate shall be made unless the
Trustee shall have received a representation letter from the
Transferee of such Certificate to the effect that such
Transferee is a Permitted Transferee.
(iii) (A) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
provisions of this Section 5.02(d), then the last preceding
Permitted Transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive
to the date of registration of such Transfer of such Residual
Certificate. The Trustee shall be under no liability to any
Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section
5.02(d) or for making any payments due on such Certificate to
the holder thereof or for taking any other action with respect
to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become
a holder of a Residual Certificate in violation of the
restrictions in this Section 5.02(d) and to the extent that
the retroactive restoration of the rights of the holder of
such Residual Certificate as described in clause (iii)(A)
above shall be invalid, illegal or unenforceable, then the
Trustee shall have the right, without notice to the holder or
any prior holder of such Residual Certificate, to sell such
Residual Certificate to a purchaser selected by the Depositor
on such terms as the Depositor may choose. Such purported
Transferee shall promptly endorse and deliver each Residual
Certificate in accordance with the instructions of the
Trustee. Such purchaser may be the Trustee itself or any
Affiliate of the Trustee. The proceeds of such sale, net of
the commissions (which may include commissions payable to the
Trustee or its Affiliates), expenses and taxes due, if any,
will be remitted by the Trustee to such purported Transferee.
The terms and conditions of any sale under this clause
(iii)(B) shall be determined in the sole discretion of the
Trustee, and the Trustee shall not be liable to any Person
having an Ownership Interest in a Residual Certificate as a
result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal
Revenue Service and those Persons specified by the REMIC
Provisions all information necessary to compute any tax
imposed (A) as a result of the Transfer of an Ownership
Interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information described
in Treasury regulations sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such
Residual Certificate and (B) as a result of any regulated
investment company, real estate investment trust, common trust
fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a
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Residual Certificate having as among its record holders at any
time any Person which is a Disqualified Organization.
Reasonable compensation for providing such information may be
accepted by the Trustee.
(v) The provisions of this Section 5.02(d) set forth
prior to this subsection (v) may be modified, added to or
eliminated, provided that there shall have been delivered to
the Trustee at the expense of the party seeking to modify, add
to or eliminate any such provision the following:
(A) written notification from each Rating
Agency to the effect that the modification, addition
to or elimination of such provisions will not cause
such Rating Agency to downgrade its then-current
ratings of any Class of Certificates; and
(B) an Opinion of Counsel, in form and
substance satisfactory to the Trustee, to the effect
that such modification of, addition to or elimination
of such provisions will not cause either REMIC I or
REMIC II to cease to qualify as a REMIC and will not
cause (x) either REMIC I or REMIC II, as the case may
be, to be subject to an entity-level tax caused by
the Transfer of any Residual Certificate to a Person
that is not a Permitted Transferee or (y) a Person
other than the prospective transferee to be subject
to a REMIC-tax caused by the Transfer of a Residual
Certificate to a Person that is not a Permitted
Transferee.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and cause the Certificate
Registrar to authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
(g) No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, but the Trustee may require
payment of a sum sufficient to cover any
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tax or governmental charge that may be imposed in connection with any transfer
or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Certificate Registrar in accordance with
its customary procedures.
(i) The Trustee will cause the Certificate Registrar (unless
the Trustee is acting as Certificate Registrar) to provide notice to the Trustee
of each transfer of a Certificate and to provide the Trustee with an updated
copy of the Certificate Register on the first Business Day in
January and June of each year, commencing June 1999.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee
or the Certificate Registrar, or the Trustee and the Certificate Registrar
receive evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of actual knowledge by the Trustee or the
Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
the same Class and of like denomination and Percentage Interest. Upon the
issuance of any new Certificate under this Section, the Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the applicable REMIC created hereunder, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.01 and for all other
purposes whatsoever, and none of the Depositor, the Master Servicer, the
Trustee, the Certificate Registrar or any agent of any of them shall be affected
by notice to the contrary.
SECTION 5.05. Certain Available Information.
On or prior to the date of the first sale of any Class B-4
Certificate, Class B-5 Certificate or Class B-6 Certificate to an Independent
third party, the Depositor shall provide to the Trustee ten copies of any
private placement memorandum or other disclosure document used by the Depositor
in connection with the offer and sale of the Class B-4 Certificates, Class B-5
Certificates or Class B-6 Certificates. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery
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thereof to the Trustee, the Depositor promptly shall inform the Trustee of such
event and shall deliver to the Trustee ten copies of the private placement
memorandum or disclosure document, as revised, amended or supplemented. The
Trustee shall maintain at its Corporate Trust Office and shall make available
free of charge during normal business hours for review by any Holder of a
Certificate or any Person identified to the Trustee as a prospective transferee
of a Certificate, originals or copies of the following items: (i) in the case of
a Holder or prospective transferee of a Class B-4 Certificate, Class B-5
Certificate or Class B-6 Certificate, the private placement memorandum or other
disclosure document relating to such Certificates in the form most recently
provided to the Trustee; and (ii) in all cases, (A) this Agreement and any
amendments hereof entered into pursuant to Section 11.01, (B) all monthly
statements required to be delivered to Certificateholders of the relevant Class
pursuant to Section 4.02 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class pursuant to this Agreement since the Closing Date, (C) all
certifications delivered by a Responsible Officer of the Trustee since the
Closing Date pursuant to Section 10.01(h), (D) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date to evidence the Master Servicer's determination that any P&I Advance was,
or if made, would be a Nonrecoverable P&I Advance and (E) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date pursuant to Section 4.04(a). Copies and mailing of any and all of the
foregoing items will be available from the Trustee upon request at the expense
of the person requesting the same.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the
Master Servicer.
Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and its qualification as an approved conventional seller/servicer
for Fannie Mae or Freddie Mac in good standing. The Depositor and the Master
Servicer each will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.
The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Fannie Mae or Freddie Mac; and provided further that the Rating Agencies'
ratings of the Senior Certificates in effect immediately prior to such merger or
consolidation will not be qualified, reduced or withdrawn as a result thereof
(as evidenced by a letter to such effect from the Rating Agencies).
SECTION 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others.
None of the Depositor, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however,
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that this provision shall not protect the Depositor, the Master Servicer or any
such person against any breach of warranties, representations or covenants made
herein, or against any specific liability imposed on the Master Servicer
pursuant hereto, or against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor, the Master Servicer and any director, officer, employee or agent
of the Depositor or the Master Servicer may rely in good faith on any document
of any kind which, PRIMA FACIE, is properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Master Servicer and
any director, officer, employee or agent of the Depositor or the Master Servicer
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense to
any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor and the Master Servicer
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, unless the Depositor or the Master Servicer acts without the consent of
Holders of Certificates entitled to at least 51% of the Voting Rights (which
consent shall not be necessary in the case of litigation or other legal action
by either to enforce their respective rights or defend themselves hereunder),
the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder) shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor (subject to
the limitations set forth above) and the Master Servicer shall be entitled to be
reimbursed therefor from the Collection Account as and to the extent provided in
Section 3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account.
SECTION 6.04. Limitation on Resignation of the Master
Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) with the
written consent of the Trustee, which consent may not be unreasonably withheld,
and written confirmation from each Rating Agency (which confirmation shall be
furnished to the Depositor and the Trustee) that such resignation will not cause
such Rating Agency to reduce the then current rating of the Class A
Certificates. Any such determination pursuant to clause (i) of the preceding
sentence permitting the resignation of the Master Servicer shall be evidenced by
an Opinion of Counsel to such effect obtained at the expense of the Master
Servicer and delivered to the Trustee. No resignation of the Master Servicer
shall
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become effective until the Trustee or a successor servicer shall have assumed
the Master Servicer's responsibilities, duties, liabilities (other than those
liabilities arising prior to the appointment of such successor) and obligations
under this Agreement.
Except as expressly provided herein, the Master Servicer shall
not assign nor transfer any of its rights, benefits or privileges hereunder to
any other Person, nor delegate to or subcontract with, nor authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.
SECTION 6.05. Rights of the Depositor in Respect of the Master
Servicer.
The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor and
the Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Master Servicer (and any such
Sub-
Servicer) in respect of the Master Servicer's rights and obligations hereunder
and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. Upon request, the Master
Servicer shall furnish to the Depositor and the Trustee its (and any such
Sub-Servicer's) most recent financial statements and such other information
relating to the Master Servicer's capacity to perform its obligations under this
Agreement that it possesses. To the extent such information is not otherwise
available to the public, the Depositor and the Trustee shall not disseminate any
information obtained pursuant to the preceding two sentences without the Master
Servicer's written consent, except as required pursuant to this Agreement or to
the extent that it is appropriate to do so (i) in working with legal counsel,
auditors, taxing authorities or other governmental agencies, rating agencies or
reinsurers or (ii) pursuant to any law, rule, regulation, order, judgment, writ,
injunction or decree of any court or governmental authority having jurisdiction
over the Depositor, the Trustee or the Trust Fund, and in either case, the
Depositor or the Trustee, as the case may be, shall use its best efforts to
assure the confidentiality of any such disseminated non-public information. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer under this Agreement and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
under this Agreement or exercise the rights of the Master Servicer under this
Agreement; provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
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ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein,
means any one of the following events:
(i) any failure by the Master Servicer to remit to the
Trustee for distribution to the Certificateholders any payment
(other than a P&I Advance required to be made from its own
funds on any Master Servicer Remittance Date pursuant to
Section 4.03) required to be made under the terms of the
Certificates and this Agreement which continues unremedied for
a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Depositor
or the Trustee (in which case notice shall be provided by
telecopy), or to the Master Servicer, the Depositor and the
Trustee by the Holders of Certificates entitled to at least
25% of the Voting Rights; or
(ii) any failure on the part of the Master Servicer duly
to observe or perform in any material respect any of the
covenants or agreements on the part of the Master Servicer
contained in the Certificates or in this Agreement (or, if the
Master Servicer is an Originator, the failure of the
Originator to repurchase a Mortgage Loan as to which a breach
has been established that requires a repurchase pursuant to
the terms of Section 7 of the Mortgage Loan Purchase
Agreement) which continues unremedied for a period of 45 days
after the earlier of (i) the date on which written notice of
such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by the Depositor or the
Trustee, or to the Master Servicer, the Depositor and the
Trustee by the Holders of Certificates entitled to at least
25% of the Voting Rights and (ii) actual knowledge of such
failure by a Servicing Officer of the Master Servicer; or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in
an involuntary case under any present or future federal or
state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of
its affairs, shall have been entered against the Master
Servicer and if such proceeding is being contested by the
Master Servicer in good faith such decree or order shall have
remained in force undischarged or unstayed for a period of 60
days or results in the entry of an order for relief or any
such adjudication or appointment; or
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(iv) the Master Servicer shall consent to the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the
Master Servicer or of or relating to all or substantially all
of its property; or
(v) the Master Servicer shall admit in writing its
inability to pay its debts generally as they become due, file
a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of
its creditors, or voluntarily suspend payment of its
obligations; or
(vi) any failure of the Master Servicer to make any P&I
Advance on any Master Servicer Remittance Date required to be
made from its own funds pursuant to Section 4.03 which
continues unremedied until 3:00 p.m. New York time on the
second Business Day immediately following the Master Servicer
Remittance Date.
If a Master Servicer Event of Default described in clauses (i) through (v) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Master Servicer (and to the Depositor if given by the Trustee or
to the Trustee if given by the Depositor), terminate all of the rights and
obligations of the Master Servicer in its capacity as a Master Servicer under
this Agreement, to the extent permitted by law, and in and to the Mortgage Loans
and the proceeds thereof. If a Master Servicer Event of Default described in
clause (vi) hereof shall occur, the Trustee shall, by notice in writing to the
Master Servicer and the Depositor, terminate all of the rights and obligations
of the Master Servicer in its capacity as a Master Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver on behalf of
and at the expense of the Master Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees, at its sole cost
and expense, promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide the Trustee with all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement, and to cooperate with the Trustee in effecting the termination
of the Master Servicer's responsibilities and rights under this Agreement,
including, without limitation, the transfer within one Business Day to the
Trustee for administration by it of all cash amounts which at the time shall be
or should have been credited by the Master Servicer to the Collection Account
held by or on behalf of the Master Servicer, the Distribution Account or any REO
Account or Servicing Account held by or on behalf of the Master Servicer or
thereafter be received with respect to the Mortgage Loans or any REO
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Property serviced by the Master Servicer (provided, however, that the Master
Servicer shall continue to be entitled to receive all amounts accrued or owing
to it under this Agreement on or prior to the date of such termination, whether
in respect of P&I Advances or otherwise, and shall continue to be entitled to
the benefits of Section 6.03, notwithstanding any such termination, with respect
to events occurring prior to such termination). For purposes of this Section
7.01, the Trustee shall not be deemed to have knowledge of a Master Servicer
Event of Default unless a Responsible Officer of the Trustee assigned to and
working in the Trustee's Corporate Trust Office has actual knowledge thereof or
unless written notice of any event which is in fact such a Master Servicer Event
of Default is received by the Trustee and such notice references the
Certificates, REMIC I or this Agreement.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement, the
Master Servicer shall not have the right to withdraw any funds from the
Collection Account without the consent of the Trustee and the transactions set
forth or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto and arising thereafter placed on the
Master Servicer (except for any representations or warranties of the Master
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.03(c) and its obligation to deposit amounts in respect of
losses pursuant to Section 3.12) by the terms and provisions hereof including,
without limitation, the Master Servicer's obligations to make P&I Advances
pursuant to Section 4.03; provided, however, that if the Trustee is prohibited
by law or regulation from obligating itself to make advances regarding
delinquent mortgage loans, then the Trustee shall not be obligated to make P&I
Advances pursuant to Section 4.03; and provided further, that any failure to
perform such duties or responsibilities caused by the Master Servicer's failure
to provide information required by Section 7.01 shall not be considered a
default by the Trustee as successor to the Master Servicer hereunder. As
compensation therefor, the Trustee shall be entitled to the Servicing Fees and
all funds relating to the Mortgage Loans to which the Master Servicer would have
been entitled if it had continued to act hereunder (other than amounts which
were due or would become due to the Master Servicer prior to its termination or
resignation). Notwithstanding the above and subject to the next paragraph, the
Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so
act or if it is prohibited by law from making advances regarding delinquent
mortgage loans, or if the Holders of Certificates entitled to at least 51% of
the Voting Rights so request in writing to the Trustee, promptly appoint or
petition a court of competent jurisdiction to appoint, an established mortgage
loan servicing institution acceptable to each Rating Agency and having a net
worth of not less than $15,000,000 as the successor to the Master Servicer under
this Agreement in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer under this Agreement. No
appointment of a successor to the Master Servicer under this Agreement shall be
effective until the assumption by the successor of all of the Master Servicer's
responsibilities, duties and liabilities hereunder. In connection with such
appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided,
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however, that no such compensation shall be in excess of that permitted the
Master Servicer as such hereunder. The Depositor, the Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Pending appointment of a successor to the Master
Servicer under this Agreement, the Trustee shall act in such capacity as
hereinabove provided.
Upon removal or resignation of the Master Servicer, the
Trustee, with the cooperation of the Depositor, (x) shall solicit bids for a
successor Master Servicer as described below and (y) pending the appointment of
a successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth above (including the Trustee or any affiliate
thereof). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Trustee, the successor Master Servicer and the Depositor; provided, however,
that no such fee shall exceed the related Servicing Fee. Within thirty days
after any such public announcement, the Trustee, with the cooperation of the
Depositor, shall negotiate in good faith and effect the sale, transfer and
assignment of the servicing rights and responsibilities hereunder to the
qualified party submitting the highest satisfactory bid as to the price they
will pay to obtain such servicing. The Trustee upon receipt of the purchase
price shall pay such purchase price to the Master Servicer being so removed,
after deducting from any sum received by the Trustee from the successor to the
Master Servicer in respect of such sale, transfer and assignment all costs and
expenses of any public announcement and of any sale, transfer and assignment of
the servicing rights and responsibilities reasonably incurred hereunder. After
such deductions, the remainder of such sum shall be paid by the Trustee to the
Master Servicer at the time of such sale.
(b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made under the
terms of the Certificates and this Agreement (for purposes of this Section
7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of such Remittance
is prohibited by Section 362 of the federal Bankruptcy Code, the Trustee shall
upon notice of such prohibition, regardless of whether it has received a notice
of termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee, can reasonably be expected
to be ultimately recoverable from Stayed Funds and (ii) the Trustee is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trustee or the deposit thereof in the
Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trustee may recover the amount so advanced, with
interest, if such interest is allowed as an Extraordinary Trust Fund Expense, at
the then prevailing Federal Funds Rate, by withdrawing such amount from the
Distribution Account; however, nothing in this Agreement shall be deemed to
affect the Trustee's rights to recover from the Master Servicer's own funds
interest on the amount of any such advance. If the Trustee at any time makes an
advance under this Subsection which it later determines in its good faith
judgment will not be
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ultimately recoverable from the Stayed Funds with respect to which such advance
was made, the Trustee shall be entitled to reimburse itself for such advance,
without interest, by withdrawing from the Distribution Account, out of amounts
on deposit therein, an amount equal to the portion
of such advance attributable to the Stayed Funds.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses
appearing in the Certificate Register.
(b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Holders of Certificates notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.
SECTION 7.04. Waiver of Master Servicer Events of Default.
Subject to Section 11.09(d), the Holders representing at least
66% of the Voting Rights evidenced by all Classes of Certificates affected by
any default or Master Servicer Event of Default hereunder may waive such default
or Master Servicer Event of Default; provided, however, that a default or Master
Servicer Event of Default under clause (i) or (vi) of Section 7.01 may be waived
only by all of the Holders of the Regular Certificates. Upon any such waiver of
a default or Master Servicer Event of Default, such default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's satisfaction,
the Trustee will provide notice thereof to the Certificateholders.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of a Master Servicer Event
of Default, and after the curing of all such Master Servicer
Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith
on the part of the Trustee, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee that conform to the requirements of
this Agreement;
(ii) The Trustee shall not be personally liable for any
error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts;
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(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the
Holders of Certificates entitled to at least 25% of the Voting
Rights relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Agreement; and
(iv) The Trustee shall not be required to take notice or
be deemed to have notice or knowledge of any default unless a
Responsible Officer of the Trustee shall have received written
notice thereof or a Responsible Officer shall have actual
knowledge thereof. In the absence of receipt of such notice or
actual knowledge, the Trustee may conclusively assume there is
no default.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee and any director, officer, employee or
agent of the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and
to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with
such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon
the occurrence of a Master Servicer Event of Default (which
has not been cured or waived), to exercise such of the rights
and powers vested in it by this Agreement, and to use the same
degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct
of such person's own affairs;
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(iv) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event
of Default hereunder and after the curing of all Master
Servicer Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document,
unless requested in writing to do so by the Holders of
Certificates entitled to at least 25% of the Voting Rights;
provided, however, that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by such Certificateholders,
the Trustee may require reasonable indemnity against such
cost, expense, or liability from such Certificateholders as a
condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys;
(vii) The Trustee shall not be personally liable for any
loss resulting from the investment of funds held in the
Collection Account at the direction of the Master Servicer
pursuant to Section 3.12; and
(viii) Any request or direction of the Depositor, the
Master Servicer or the Certificateholders mentioned herein
shall be sufficiently evidenced in writing.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.12) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.12) or of the Certificates (other than the
signature of the Trustee and authentication of the Certificate Registrar on the
Certificates) or of any Mortgage Loan or related document. The Trustee shall not
be accountable for the use or application by the Depositor of any of the
Certificates or of the
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proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Master Servicer,
other than any funds held by or on behalf of the
Trustee in accordance with Section 3.10.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.
SECTION 8.05. Trustee's Expenses.
(a) The Trustee, any director, officer, employee or agent of
the Trustee, shall be indemnified by REMIC I and held harmless against any loss,
liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee, including the compensation and the expenses and
disbursements of its agents and counsel, in the ordinary course of the Trustee's
performance in accordance with the provisions of this Agreement) incurred by the
Trustee in connection with any claim or legal action or any pending or
threatened claim or legal action arising out of or in connection with the
acceptance or administration of its obligations and duties under this Agreement,
other than any loss, liability or expense (i) resulting from the Master
Servicer's actions or omissions in connection with this Agreement and the
Mortgage Loans, (ii) that constitutes a specific liability of the Trustee
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder or as a result of a breach of the Trustee's obligations under Article
X hereof. Any amounts payable to the Trustee, or any director, officer, employee
or agent of the Trustee, in respect of the indemnification provided by this
paragraph (a), or pursuant to any other right of reimbursement from the Trust
Fund that the Trustee, or any director, officer, employee or agent of the
Trustee, may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.
(b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment hereunder made by the
Master Servicer to the Trustee shall be from the Master Servicer's own funds,
without reimbursement from the Trust Fund therefor.
(c) The indemnity provisions of this Section 8.05 shall
survive the termination of this Agreement.
SECTION 8.06. Eligibility Requirements for Trustee.
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The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Originator, the Seller, the Master
Servicer or any Affiliate of the foregoing) organized and doing business under
the laws of any state or the United States of America, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. If such corporation or association publishes reports of
conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Master Servicer by the Depositor. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Master Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Master Servicer by the
Depositor.
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Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements, as well as all moneys, held
by it hereunder and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly
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shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of REMIC I, and to vest in such Person or Persons, in such capacity,
such title to REMIC I, or any part thereof, and, subject to the other provisions
of this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee. No co-trustee (other than the Trustee) shall be held personally liable
by reason of any act or omission of any other co-trustee hereunder.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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SECTION 8.11. [intentionally omitted]
SECTION 8.12. Appointment of Office or Agency.
The Trustee will appoint an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trustee in respect of the Certificates
and this Agreement may be served.
SECTION 8.13. Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants to the Master
Servicer and the Depositor, as of the Closing Date, that:
(i) The Trustee is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the
State of New York.
(ii) The execution and delivery of this Agreement by the
Trustee, and the performance and compliance with the terms of this
Agreement by the Trustee, will not violate the Trustee's charter or
bylaws or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets.
(iii) The Trustee has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement,
has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Master Servicer and the Depositor, constitutes a valid,
legal and binding obligation of the Trustee, enforceable against the
Trustee in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, receivership, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally,
and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law,
any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Trustee's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of the Trustee to perform its obligations under this Agreement
or the financial condition of the Trustee.
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(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee which would prohibit the
Trustee from entering into this Agreement or, in the Trustee's good
faith reasonable judgment, is likely to materially and adversely affect
either the ability of the Trustee to perform its obligations under this
Agreement or the financial condition of the Trustee.
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ARTICLE IX
TERMINATION
SECTION 9.01 Termination Upon Repurchase or Liquidation of the
REMIC I Regular Interests.
(a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee with respect to the Mortgage Loans (other than the obligations of
the Master Servicer to the Trustee pursuant to Section 8.05 and of the Master
Servicer to provide for and the Trustee to make payments to the Holders of the
related Class(es) of REMIC II Certificates and Class R-I Certificates as
hereinafter set forth) shall terminate upon payment to the Certificateholders
and the deposit of all amounts held by or on behalf of the Trustee and required
hereunder to be so paid or deposited on the Distribution Date coinciding with or
following the earlier to occur of (i) the purchase by the Master Servicer of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. The purchase by the Master Servicer of all Mortgage
Loans and each REO Property remaining in REMIC I shall be at a price (the
"Termination Price") equal to the greater of (A) the aggregate Purchase Price of
all the Mortgage Loans included in REMIC I, plus the appraised value of each REO
Property, if any, included in REMIC I, such appraisal to be conducted by an
appraiser mutually agreed upon by the Master Servicer and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets in REMIC I (as determined by the Master Servicer, with the consent of the
Trustee, as of the close of business on the third Business Day next preceding
the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the third paragraph of this Section 9.01).
(b) The Master Servicer shall have the right to purchase all
of the Mortgage Loans and each REO Property remaining in REMIC I pursuant to
clause (i) of the preceding paragraph no later than the Determination Date in
the month immediately preceding the Distribution Date on which the Certificates
will be retired; provided, however, that the Master Servicer, as provided above,
may elect to purchase all of the Mortgage Loans and each REO Property remaining
in REMIC I pursuant to clause (i) above only if the aggregate Stated Principal
Balance of the Mortgage Loans and each REO Property remaining in the Trust Fund
at the time of such election is reduced to less than 10% of the aggregate Stated
Principal Balance of the Mortgage Loans at the Cut-off Date. For federal income
tax purposes, the purchase by the Master Servicer of all Mortgage Loans and all
REO Properties underlying the REMIC I Regular Interests is intended to
facilitate a redemption of such REMIC I Regular Interests pursuant to a "cleanup
call" within the meaning of Treasury regulation section 1.860G-2(j). The Master
Servicer must give notice to the Trustee no later than the Determination Date in
the month next preceding the
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month of the purchase by the Master Servicer of all Mortgage Loans and each REO
Property remaining in REMIC I.
(c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trustee by letter to Certificateholders mailed
(a) in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property remaining in REMIC I by the Master
Servicer, not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of the final distribution on the Certificates or
(b) otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and final payment of the REMIC II
Certificates will be made upon presentation and surrender of the REMIC II
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC II Certificates from and after the Interest Accrual Period relating to the
final Distribution Date therefor and (iv) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the REMIC II Certificates at the office of
the Trustee. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to REMIC II Certificateholders. In the event such
notice is given in connection with the purchase of all of the Mortgage Loans and
each REO Property remaining in REMIC I by the Master Servicer, the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
not later than the last Business Day of the month next preceding the month in
which such distribution will be made an amount in immediately available funds
equal to the Termination Price. Upon certification to the Trustee by a Servicing
Officer of the making of such final deposit, the Trustee shall promptly release
or cause to be released to the Master Servicer the Mortgage Files for the
remaining Mortgage Loans, and the Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.
(d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the
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Trustee shall pay to Salomon Smith Barney Inc. all such amounts, and all rights
of non-tendering Certificateholders in or to such amounts shall thereupon cease.
No interest shall accrue or be payable to any Certificateholder on any amount
held in trust by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 9.01.
Immediately following the deposit of funds in trust hereunder
in respect of the REMIC I Regular Interests, the Trust Fund shall terminate.
SECTION 9.02 Additional Termination Requirements.
(a) In the event that the Master Servicer purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:
(i) The Trustee shall specify the first day in the
90-day liquidation period in a statement attached to REMIC I's
and REMIC II's final Tax Return pursuant to Treasury
regulation Section 1.860F-1, and such termination shall
satisfy all requirements of a qualified liquidation under
Section 860F of the Code and any regulations thereunder, as
evidenced by an Opinion of Counsel obtained at the expense of
the Master Servicer;
(ii) During such 90-day liquidation period, and at or
prior to the time of making of the final payment on the
Certificates, the Trustee shall sell all of the assets of
REMIC I to the Master Servicer for cash; and
(iii) At the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or
cause to be distributed or credited, to the Holders of the
applicable Class of Residual Certificates all cash on hand in
each or REMIC I and REMIC II (other than cash retained to meet
claims), and the Trust Fund shall terminate at that time.
(b) At the expense of the Master Servicer (or in the event of
termination under Section 9.01(a)(ii), at the expense of the Trustee), the
Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of
each of REMIC I and REMIC II pursuant to this Section 9.02.
(c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each of REMIC I and REMIC II, which authorization shall be binding upon all
successor Certificateholders.
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ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee shall elect to treat each of REMIC I and REMIC
II as a REMIC under the Code and, if necessary, under applicable state law. Each
such election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
the purposes of the REMIC election in respect of REMIC I, REMIC I Regular
Interests shall be designated as the Regular Interests in REMIC I and the Class
R-I Certificates shall be designated as the Residual Interests in REMIC I. Each
of the Classes and Components listed in the Preliminary Statement hereto shall
be designated as the Regular Interests in REMIC II and the Class R-II
Certificates shall be designated as the Residual Interests in REMIC II. The
Trustee shall not permit the creation of any "interests" in REMIC I or REMIC II
(within the meaning of Section 860G of the Code) other than the REMIC I Regular
Interests and the interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day"
of REMIC I and REMIC II within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to either REMIC I or REMIC
II that involve the Internal Revenue Service or state tax authorities), other
than the expense of obtaining any tax related Opinion of Counsel or any
litigation expenses except as specified herein. The Trustee, as agent for both
of REMIC I's and REMIC II's tax matters person, shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving either REMIC I
or REMIC II and (ii) represent the Trust Fund in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto. The holder of the largest Percentage Interest of
each Class of Residual Certificates shall be designated, in the manner provided
under Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-I, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the Trust Fund.
(d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust Fund as is in its possession and reasonably required by the Trustee to
enable it to perform its obligations under this Article.
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(e) The Trustee shall perform on behalf of each of REMIC I and
REMIC II all reporting and other tax compliance duties that are the
responsibility of the REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of REMIC I and REMIC II. The
Master Servicer shall provide on a timely basis to the Trustee such information
with respect to the assets of the Trust Fund, including, without limitation, the
Mortgage Loans, as is in its possession and reasonably required by the Trustee
to enable it to perform its obligations under this subsection. In addition, the
Depositor shall provide or cause to be provided to the Trustee, within ten (10)
days after the Closing Date, all information or data that the Trustee reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) The Trustee shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of REMIC I or REMIC II as a REMIC or (ii) result in the imposition of a
tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event"); provided that the Trustee shall be fully
protected in taking or not taking action if it has received an Opinion of
Counsel, addressed to the Trustee (at the expense of the party seeking to take
such action but in no event at the expense of the Trustee) to the effect that
the contemplated action will not, with respect to either REMIC I or REMIC II,
endanger such status or result in the imposition of such a tax, nor shall the
Master Servicer take or fail to take any action (whether or not authorized
hereunder) as to which the Trustee has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to REMIC I or REMIC II or the respective assets of each, or causing
REMIC I or REMIC II to take any action, which is not contemplated under the
terms of this Agreement, the Master Servicer will consult with the Trustee or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to either REMIC I or REMIC II, and the
Master Servicer shall not take any such action or cause either REMIC I or REMIC
II to take any such action as to which the Trustee has advised it in writing
that an Adverse REMIC Event could occur. The Trustee may consult with counsel to
make such written advice, and the cost of same shall be
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borne by the party seeking to take the action not permitted by this Agreement,
but in no event shall such cost be an expense of the Trustee. At all times as
may be required by the Code, the Trustee will ensure that substantially all of
the assets of both REMIC I and REMIC II will consist of "qualified mortgages" as
defined in Section 860G(a)(3) of the Code and "permitted investments" as defined
in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited
transactions" of either REMIC created hereunder as defined in Section 860F(a)(2)
of the Code, on the "net income from foreclosure property" of such REMIC as
defined in Section 860G(c) of the Code, on any contributions to either such
REMIC after the Startup Day therefor pursuant to Section 860G(d) of the Code, or
any other tax is imposed by the Code or any applicable provisions of state or
local tax laws, such tax shall be charged (i) to the Trustee pursuant to Section
10.03 hereof, if such tax arises out of or results from a breach by the Trustee
of any of its obligations under this Article X, (ii) to the Master Servicer
pursuant to Section 10.03 hereof, if such tax arises out of or results from a
breach by the Master Servicer of any of its obligations under Article III or
this Article X, or otherwise (iii) against amounts on deposit in the
Distribution Account and shall be paid by withdrawal therefrom.
(h) On or before April 15 of each calendar year, commencing
April 15, 2000, the Trustee shall deliver to the Master Servicer and each Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each of REMIC I and REMIC II on a
calendar year and on an accrual basis.
(j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to either REMIC I or REMIC II other than in
connection with any Qualified Substitute Mortgage Loan delivered in accordance
with Section 2.03 unless it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund will not cause the
related REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding or subject such REMIC to any tax under the REMIC Provisions or
other applicable provisions of federal, state and local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which REMIC I or REMIC II will receive a fee or other
compensation for services nor permit either such REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
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SECTION 10.02. Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for either REMIC I
or REMIC II (other than REO Property acquired in respect of a defaulted Mortgage
Loan), nor sell or dispose of any investments in the Collection Account or the
Distribution Account for gain, nor accept any contributions to either REMIC I or
REMIC II after the Closing Date (other than a Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03), unless it has received an Opinion of
Counsel, addressed to the Trustee (at the expense of the party seeking to cause
such sale, disposition, substitution, acquisition or contribution but in no
event at the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of either
REMIC I or REMIC II as a REMIC or (b) cause either REMIC I or REMIC II to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions.
SECTION 10.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees (collectively, "Losses") imposed on or
incurred by the Trust Fund, the Depositor or the Master Servicer, as a result of
a breach of the Trustee's covenants set forth in this Article X; provided,
however, the Trustee shall not have to so indemnify if the breach of the
Trustee's covenants were attributable to the action or inaction of the Master
Servicer, the Depositor or the Holders of the Residual Certificates, as
applicable, nor if such breach of the Trustee's covenants resulted from
misinformation provided by the Depositor, the Master Servicer or the Holder of
the Residual Certificates on which the Trustee has relied. The foregoing shall
not be deemed to limit or restrict the rights and remedies of the Trust Fund,
the Depositor and the Master Servicer now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Trustee
have any liability (i) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (ii) for any Losses other than
arising out of a negligent performance by the Trustee of its covenants set forth
in this Article X and (3) for any special or consequential damages.
(b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in Article III or this Article X.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct, modify
or supplement any provisions herein (including to give effect to the
expectations of Certificateholders) or (iii) to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, provided that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder.
No amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel shall be required to address the effect of any such amendment
on any such consenting Certificateholder.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Trustee with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner, other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66% of the Voting Rights
allocated to such Class, or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not result in the imposition of any tax on either REMIC I or REMIC II pursuant
to the REMIC Provisions or cause either REMIC I or REMIC II to fail to qualify
as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.
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It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.
Notwithstanding the foregoing, the Trustee may, but shall not
be obligated to enter into any amendment pursuant to this Section that affects
its rights, duties and immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless (i)
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and (ii) the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 11.04. Governing Law.
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 11.05. Notices.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to (a) in
the case of the Depositor, 390 Greenwich Street, New York, New York 10013,
Attention: Mortgage Finance Group (telecopy number (212) 723-8604), or such
other address or telecopy number as may hereafter be furnished to the Master
Servicer and the Trustee in writing by the Depositor, (b) in the case of Cendant
Mortgage Corporation, 6000 Atrium Way, Mount Laurel, New Jersey 08054,
Attention: Phil McGoldrick (telecopy number (609) 414-4198), or such other
address or telecopy number as may hereafter be furnished to the Trustee and the
Depositor in writing by Cendant Mortgage Corporation and (c) in the case of the
Trustee, 450 West 33rd Street, 14th Floor, New York, New York 10001, Attention:
Capital Markets Fiduciary Services (telecopy number (212) 946-8191), or such
other address or telecopy number as may hereafter be furnished to the Master
Servicer and the Depositor in writing by the Trustee. Any notice required or
permitted to be given to a Certificateholder shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given when mailed, whether or
not the Certificateholder receives such notice. A copy
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of any notice required to be telecopied hereunder also shall be mailed to the
appropriate party in the manner set forth above.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Notice to Rating Agencies.
The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of
Default that has not been cured or waived;
3. The resignation or termination of the Master Servicer
or the Trustee;
4. The repurchase or substitution of Mortgage Loans
pursuant to or as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of
Certificates;
6. Any change in the location of the Collection Account
or the Distribution Account;
7. Any event that would result in the inability of the
Trustee, were it to succeed as Master Servicer, to
make advances regarding delinquent Mortgage Loans;
and
8. The filing of any claim under the Master Servicer's
blanket bond and errors and omissions insurance
policy required by Section 3.14 or the cancellation
or material modification of coverage under any such
instrument.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of each report to Certificateholders described in Section 4.02 and
the Master Servicer, as required pursuant to Section 3.20 and Section 3.21,
shall promptly furnish to each Rating Agency copies of the following:
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1. Each annual statement as to compliance described in
Section 3.20; and
2. Each annual independent public accountants' servicing
report described in Section 3.21.
Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Fitch IBCA, Inc., One State Street Plaza, 33rd Floor, New York, New York
10004 and to Standard & Poor's Ratings Services, 25 Broadway, New York, New York
10004, or such other addresses as the Rating Agencies may designate in writing
to the parties hereto.
SECTION 11.08. Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
SECTION 11.09. Grant of Security Interest.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor. However, in the event that, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Depositor,
then, (a) it is the express intent of the parties that such conveyance be deemed
a pledge of the Mortgage Loans by the Depositor to the Trustee to secure a debt
or other obligation of the Depositor and (b)(1) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
Uniform Commercial Code as in effect from time to time in the State of New York;
(2) the conveyance provided for in Section 2.01 hereof shall be deemed to be a
grant by the Depositor to the Trustee of a security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and all
amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account and the Distribution Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the purpose of securing to the
-146-
<PAGE>
Trustee the performance by the Depositor of the obligations described in clause
(3) of the preceding sentence. Notwithstanding the foregoing, the parties hereto
intend the conveyance pursuant to Section 2.01 to be a true, absolute and
unconditional sale of the Mortgage Loans and assets constituting the Trust Fund
by the Depositor to the Trustee.
-147-
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.,
as Depositor
By: /s/ Vincent J. Varca
----------------------------------
Name: Vincent J. Varca
Title: Assistant Vice President
CENDANT MORTGAGE CORPORATION,
as Master Servicer
By: /s/ Peter A. Thomas
----------------------------------
Name: Peter A. Thomas
Title: Vice President
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Cynthia Kerpen
----------------------------------
Name: Cynthia Kerpen
Title: Vice President
-148-
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 25th day of February 1999, before me, a notary public
in and for said State, personally appeared Vincent J. Varca, known to me to be
an Assistant Vice President of Salomon Brothers Mortgage Securities VII, Inc.,
one of the corporations that executed the within instrument, and also known to
me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ June Liu
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW JERSEY )
) ss.:
COUNTY OF BURLINGTON )
On the 24th day of February 1999, before me, a notary public
in and for said State, personally appeared Peter A. Thomas, known to me to be a
Vice President of Cendant Mortgage Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Tracey Peters
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 25thday of February 1999, before me, a notary public in
and for said State, personally appeared Cynthia Kerpen, known to me to be a Vice
President of The Chase Manhattan Bank, one of the entities that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Margaret M. Price
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
EXHIBIT A-1
-----------
FORM OF CLASS A1-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series 1999-2, Class A1-1 Aggregate Certificate Principal Balance
of Class A1-1 Certificates as of the
Issue Date: $60,123,603.00
Pass-Through Rate: 6.50% per annum
Denomination: $____________
Date of Agreement and Cut-off Date: Master Servicer:
February 1, 1999 Cendant Mortgage Corporation
Trustee: The Chase Manhattan Bank
First Distribution Date:
March 25, 1999 Issue Date: February 25, 1999
No. __ CUSIP: 79548K G8 5
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A1-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A1-1 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A1-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A1-1 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A1-1 Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register. Notwithstanding the above,
the final distribution
<PAGE>
-3-
on this Certificate will be made after due notice by the Trustee of the pendency
of such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
<PAGE>
-4-
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February __, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A1-1 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-2
-----------
FORM OF CLASS A1-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
Series 1999-2, Class A1-2 Aggregate Certificate Principal Balance
of Class A1-2 Certificates as of the
Pass-Through Rate: 6.25% per annum Issue Date: $9,545,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K G9 3
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A1-2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A1-2 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A1-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A1-2 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-3-
A1-2 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-4-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A1-2 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-3
-----------
FORM OF CLASS A1-3 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
Series 1999-2, Class A1-3 Aggregate Certificate Principal Balance
of Class A1-3 Certificates as of the
Pass-Through Rate: 6.75% per annum Issue Date: $9,545,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K H2 7
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A1-3
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A1-3 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A1-3 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A1-3 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-3-
A1-3 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-4-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A1-3 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-4
-----------
FORM OF CLASS A1-4 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
Series 1999-2, Class A1-4 Aggregate Certificate Principal Balance
of Class A1-4 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $15,000,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K H3 5
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A1-4
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A1-4 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A1-4 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A1-4 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-3-
A1-4 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-4-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
ee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A1-4 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-5
-----------
FORM OF CLASS A1-5 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
Series 1999-2, Class A1-5 Aggregate Certificate Principal Balance
of Class A1-5 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $49,800,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K H4 3
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A1-5
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A1-5 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A1-5 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A1-5 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-3-
A1-5 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-4-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A1-5 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-6
-----------
FORM OF CLASS A1-6 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A1-5
CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-2, Class A1-6 Aggregate Certificate Principal Balance
of Class A1-6 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $200,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K J6 6
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A1-6
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A1-6 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A1-6 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A1-6 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-3-
A1-6 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-4-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A1-6 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-7
-----------
FORM OF CLASS A2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
Series 1999-2, Class A2 Aggregate Certificate Principal Balance
of Class A2 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $68,254,245.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K H7 6
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A2 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A2 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-3-
A2 Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon the presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-4-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A2 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-8
-----------
FORM OF CLASS IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT", AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
THIS CERTIFICATE IS FEBRUARY 25, 1999. BASED ON THE OID
REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_______ OF OID PER $100,000 OF
INITIAL NOTIONAL AMOUNT, THE YIELD TO MATURITY IS ____% AND
THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD
IS NO MORE THAN $____ PER $100,000 OF INITIAL NOTIONAL
AMOUNT, COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS
MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
Series 1999-2, Class IO Aggregate Notional Amount of Class IO
Certificates as of the Issue Date:
Variable Pass-Through Rate $223,305,364.36
Date of Agreement and Cut-off Date: Notional Amount of this Class IO
February 1, 1999 Certificate: $_____________
First Distribution Date: Master Servicer:
March 25, 1999 Cendant Mortgage Corporation
No. ____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
<PAGE>
-2-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the Notional Amount of this
Certificate by the aggregate Notional Amount of the Class IO Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class IO Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class IO Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class IO Certificates, the
aggregate initial Notional Amount of which is in excess of the lesser of (i)
$5,000,000 or (ii)
<PAGE>
-3-
two-thirds of the aggregate initial Notional Amount of the Class IO
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon the presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Notional Amount of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are
<PAGE>
-4-
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and each REO Property remaining therein, and (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
or REO Property remaining in REMIC I. The Agreement permits, but does not
require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining therein at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-9
-----------
FORM OF CLASS PO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT", AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
THIS CERTIFICATE IS FEBRUARY 25, 1999. BASED ON THE OID
REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_________ OF OID PER $1,000 OF
INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY
IS _____% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $_______ PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR
AT ANY OTHER RATE.
Series 1999-2, Class PO Aggregate Certificate Principal Balance
of Class PO Certificates as of the
Pass-Through Rate: 0.00% per annum Issue Date: $1,904,951.79
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
<PAGE>
-2-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the Certificate Principal
Balance of this Certificate by the aggregate Certificate Principal Balance of
the Class PO Certificates as of the Issue Date) in that certain beneficial
ownership interest evidenced by all the Class PO Certificates in REMIC II
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Salomon Brothers Mortgage Securities VII, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Master Servicer and the Trustee, a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class PO Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class PO Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i)
<PAGE>
-3-
$5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal
Balance of the Class PO Certificates, or otherwise by check mailed by first
class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
<PAGE>
-4-
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and each REO Property remaining therein, and (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
or REO Property remaining in REMIC I. The Agreement permits, but does not
require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining therein at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class PO Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-10
------------
FORM OF CLASS B-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES
AND THE RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-2, Class B-1 Aggregate Certificate Principal Balance
of Class B1 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $4,466,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K H8 4
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class B-1
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-1 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-1 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class B-1 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register.
<PAGE>
-3-
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon the presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are
<PAGE>
-4-
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-1 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-11
------------
FORM OF CLASS B-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
THIS CERTIFICATE IS FEBRUARY 25, 1999. BASED ON THE OID
REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $30.82 OF OID PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS 6.92%
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL
PERIOD IS NO MORE THAN $0.18 PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR
AT ANY OTHER RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES,
THE RESIDUAL CERTIFICATES AND THE CLASS B- 1 CERTIFICATES TO
THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
<PAGE>
Series 1999-2, Class B-2 Aggregate Certificate Principal Balance
of Class B2 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $2,010,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K H9 2
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class B-2
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-2 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"), in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class B-2 Certificates on
such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-2 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i)
<PAGE>
-4-
$5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal
Balance of the Class B-2 Certificates, or otherwise by check mailed by first
class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class B-2 Certificates specified on
the face hereof equal to the denomination specified on the face hereof divided
by the aggregate Certificate Principal Balance of the Class B-2 Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
<PAGE>
-5-
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-2 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-12
------------
FORM OF CLASS B-3 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
THIS CERTIFICATE IS FEBRUARY 25, 1999. BASED ON THE OID
REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $97.85 OF OID PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS 7.92%
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL
PERIOD IS NO MORE THAN $0.54 PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR
AT ANY OTHER RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES,
THE RESIDUAL CERTIFICATES, THE CLASS B-1 CERTIFICATES AND THE
CLASS B-2 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
<PAGE>
Series 1999-2, Class B-3 Aggregate Certificate Principal Balance
of Class B-3 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $781,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K J2 5
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class B-3
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-3 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-3 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-3 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-4-
B-3 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-5-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-3 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-13
------------
FORM OF CLASS B-4 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
THIS CERTIFICATE IS FEBRUARY 25, 1999. BASED ON THE OID
REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $245.04 OF OID PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS
10.55% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $1.22 PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR
AT ANY OTHER RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES,
THE RESIDUAL CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE
CLASS B-2 CERTIFICATES AND THE CLASS B- 3 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR
TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
<PAGE>
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-2, Class B-4 Aggregate Certificate Principal Balance
of Class B-4 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $782,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class B-4
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-4 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on Record Date, in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount required to
be distributed to the Holders of Class B-4 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-4 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-4-
B-4 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-5-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
<PAGE>
-6-
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-4 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-14
------------
FORM OF CLASS B-5 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT (OID) RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
THIS CERTIFICATE IS FEBRUARY 25, 1999. BASED ON THE OID
REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $377.54 OF OID PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS
13.65% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $1.66 PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR
AT ANY OTHER RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES,
THE RESIDUAL CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE
CLASS B-2 CERTIFICATES, THE CLASS B-3 CERTIFICATES AND THE
CLASS B-4 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR
TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
<PAGE>
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-2, Class B-5 Aggregate Certificate Principal Balance
of Class B-5 Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $335,000.00
Date of Agreement and Cut-off Date: Denomination: $______________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class B-5
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-5 Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-5 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-5 Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-4-
B-5 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-5-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
<PAGE>
-6-
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in REMIC I, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from REMIC I of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from REMIC I all the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-5 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-15
------------
FORM OF CLASS B-6IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
THIS CERTIFICATE IS FEBRUARY __, 1999. BASED ON THE OID
REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_____ OF OID PER $100,000 OF
INITIAL NOTIONAL AMOUNT, THE YIELD TO MATURITY IS _____% AND
THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD
IS NO MORE THAN $___ PER $100,000 OF INITIAL NOTIONAL AMOUNT,
COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE
THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE
PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES,
THE RESIDUAL CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE
CLASS B-2 CERTIFICATES, THE CLASS B-3 CERTIFICATES, THE CLASS
B-4 CERTIFICATES AND THE CLASS B- 5 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR
TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
<PAGE>
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-2, Class B-6IO Aggregate Certificate Principal Balance
of Class B-6IO Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $558,364.57
Date of Agreement and Cut-off Date: Notional Amount of this Class B-6IO
February 1, 1999 Certificate: $______________
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Notional Amount of the Class B-6IO Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-6IO Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-6IO Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-6IO Certificates, the
aggregate initial Notional Amount of which is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the aggregate initial Notional Amount of the
Class B-6IO Certificates, or
<PAGE>
-4-
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon the presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Notional Amount of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are
<PAGE>
-5-
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of
<PAGE>
-6-
all amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all the Mortgage Loans and all property acquired in respect of such
Mortgage Loans remaining therein. The Agreement permits, but does not require,
the party designated in the Agreement to purchase from the Trust Fund all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining therein at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-6IO Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-16
------------
FORM OF CLASS B-6PO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT", AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF
THIS CERTIFICATE IS FEBRUARY __, 1999. BASED ON THE OID
REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT
275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_____ OF OID PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS
_____% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $___ PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR
AT ANY OTHER RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES,
THE RESIDUAL CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE
CLASS B-2 CERTIFICATES, THE CLASS B-3 CERTIFICATES, THE CLASS
B-4 CERTIFICATES AND THE CLASS B- 5 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR
TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
<PAGE>
STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
Series 1999-2, Class B-6PO Aggregate Certificate Principal Balance
of Class B-6PO Certificates as of the
Pass-Through Rate: 0.00% per annum Issue Date: $558,364.57
Date of Agreement and Cut-off Date: Denomination: $____________________
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class B-6PO
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-6PO Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-6PO Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-6PO Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-4-
B-6PO Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-5-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
<PAGE>
-6-
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the final payment (or any advance with respect thereto) on or other
liquidation of the last Mortgage Loan remaining in the Trust Fund, and (ii) the
purchase by the party designated in the Agreement at a price determined as
provided in the Agreement from the Trust Fund of all the Mortgage Loans and all
property acquired in respect of such Mortgage Loans remaining therein. The
Agreement permits, but does not require, the party designated in the Agreement
to purchase from the Trust Fund all the Mortgage Loans and all property acquired
in respect of any Mortgage Loan remaining therein at a price determined as
provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class B-6PO Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-17
------------
FORM OF CLASS R-I CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED
STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
5.02 OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1)
THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT
OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX,
AND (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
<PAGE>
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE
AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.
Series 1999-2, Class R-I Aggregate Certificate Principal Balance
of Class R-I Certificates as of the
Pass-Through Rate: 0.00% per annum Issue Date: $100.00
Date of Agreement and Cut-off Date: Denomination: $100.00
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K H5 0
<PAGE>
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class R-I
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class R-I Certificates in REMIC I created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-I Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-I Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-4-
R-I Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-5-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-I Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-I Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC. No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of
<PAGE>
-6-
all amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all the Mortgage Loans and all property acquired in respect of such
Mortgage Loans remaining therein. The Agreement permits, but does not require,
the party designated in the Agreement to purchase from the Trust Fund all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining therein at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-18
------------
FORM OF CLASS R-II CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED
STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
5.02 OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1)
THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN 1 SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT
OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX,
AND (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
<PAGE>
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE
AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.
Series 1999-2, Class R-II Aggregate Certificate Principal Balance
of Class R-II Certificates as of the
Pass-Through Rate: 6.50% per annum Issue Date: $200.00
Date of Agreement and Cut-off Date: Denomination: $200.00
February 1, 1999
Master Servicer:
First Distribution Date: Cendant Mortgage Corporation
March 25, 1999
No. _____ Trustee: The Chase Manhattan Bank
Issue Date: February 25, 1999
CUSIP: 79548K H6 8
<PAGE>
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class R-II
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class R-II Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-II Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R-II Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class
<PAGE>
-4-
R-II Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As
<PAGE>
-5-
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-II Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-II Certificates. Notwithstanding the
registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Disqualified Organization or an agent
(including a broker, nominee or middleman) of a Disqualified Organization, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Person shall not be deemed to be a Certificateholder for any purpose,
including, but not limited to, the receipt of distributions in respect of this
Certificate.
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of
<PAGE>
-6-
all amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all the Mortgage Loans and all property acquired in respect of such
Mortgage Loans remaining therein. The Agreement permits, but does not require,
the party designated in the Agreement to purchase from the Trust Fund all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining therein at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: February 25, 1999
THE CHASE MANHATTAN BANK
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:
-----------------------------
Authorized Signatory
<PAGE>
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ______________________________, account number _____________,
or, if mailed by check, to ______________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT B
[RESERVED]
<PAGE>
EXHIBIT C-1
-----------
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[Date]
Salomon Brothers Mortgage Cendant Mortgage Corporation
Securities VII, Inc. 6000 Atrium Way
390 Greenwich Street Mount Laurel, New Jersey 08054
New York, New York 10013
Re: Pooling and Servicing Agreement, dated as of February 1, 1999,
among Salomon Brothers Mortgage Securities VII, Inc.,
Cendant Mortgage Corporation and The Chase Manhattan Bank
Mortgage Pass-Through Certificates, Series 1999-2
--------------------------------------------------------------
Ladies and Gentlemen:
Attached is the Trustee's preliminary exceptions in accordance with
Section 2.02 of the referenced Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"). Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Pooling and Servicing Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File of any of the Mortgage Loans identified
on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan, or (iii) whether any
Mortgage File included any of the documents specified in clause (v) of Section
2.01 of the Pooling and Servicing Agreement.
THE CHASE MANHATTAN BANK
By:__________________________
Name:________________________
Title:_______________________
<PAGE>
EXHIBIT C-2
-----------
FORM OF TRUSTEE'S INTERIM CERTIFICATION
[Date]
Salomon Brothers Mortgage Cendant Mortgage Corporation
Securities VII, Inc. 6000 Atrium Way
390 Greenwich Street Mount Laurel, New Jersey 08054
New York, New York 10013
Re: Pooling and Servicing Agreement, dated as of February 1, 1999,
among Salomon Brothers Mortgage Securities VII, Inc.,
Cendant Mortgage Corporation and The Chase Manhattan Bank
Mortgage Pass-Through Certificates, Series 1999-2
--------------------------------------------------------------
Ladies and Gentlemen:
Attached is the Trustee's exceptions in accordance with Section 2.02 of
the referenced Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"). Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File of any of the Mortgage Loans identified
on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan, or (iii) whether any
Mortgage File included any of the documents specified in clause (v) of Section
2.01 of the Pooling and Servicing Agreement.
THE CHASE MANHATTAN BANK
By:__________________________
Name:________________________
Title:_______________________
<PAGE>
EXHIBIT C-3
-----------
FORM OF TRUSTEE FINAL CERTIFICATION
[Date]
Salomon Brothers Mortgage
Securities VII, Inc.
390 Greenwich Street
New York, New York 10013
Cendant Mortgage Corporation
6000 Atrium Way
Mount Laurel, New Jersey 08054
Re: Pooling and Servicing Agreement, dated as of February 1, 1999,
among Salomon Brothers Mortgage Securities VII, Inc.,
Cendant Mortgage Corporation and The Chase Manhattan Bank
Mortgage Pass-Through Certificates, Series 1999-2
--------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or specifically identified in the exception report annexed
hereto), (i) all documents constituting part of such Mortgage File (other than
such documents described in Section 2.01(v) of the Pooling and Servicing
Agreement) required to be delivered to it pursuant to the Pooling and Servicing
Agreement are in its possession, (ii) such documents have been reviewed by it
and appear regular on their face and relate to such Mortgage Loan, (iii) based
on its examination and only as to the foregoing, the information set forth in
the Mortgage Loan Schedule that corresponds to items (i) through (iii), (vi),
(vii), (ix), (x), (xi) and (xv) of the definition of "Mortgage Loan Schedule"
accurately reflects information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
THE CHASE MANHATTAN BANK
By:__________________________
Name:________________________
Title:_______________________
<PAGE>
EXHIBIT D
---------
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated February 22, 1999, among Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation (the "Purchaser"), Cendant Mortgage Corporation, a New
Jersey corporation (the "Originator"), Bishop's Gate Residential Mortgage Trust,
a Delaware business trust ("Bishop's Gate") and Salomon Brothers Realty Corp., a
New York corporation (the "Seller").
Preliminary Statement
---------------------
The Seller intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. Certain of the Mortgage Loans, identified on Part A of the
Closing Schedule (as hereinafter defined) (the "Originator Mortgage Loans"),
were purchased by the Seller from the Originator pursuant to a certain Mortgage
Loan Purchase and Servicing Agreement, dated as of January 1, 1999 (the "Cendant
Purchase and Servicing Agreement"), between the Seller, as initial purchaser and
the Originator, as seller and servicer. Certain of the Mortgage Loans,
identified on Part B of the Closing Schedule (the "Bishop's Gate's Mortgage
Loans"), were purchased by the Seller from Bishop's Gate pursuant to a certain
Mortgage Loan Purchase and Servicing Agreement, dated as of January 1, 1999 (the
"Bishop's Gate Purchase and Servicing Agreement", and together with the Cendant
Purchase and Servicing Agreement, the "Purchase and Servicing Agreements"),
among the Seller as initial purchaser, the Originator as servicer, and Bishop's
Gate as seller. The Purchaser intends to deposit the Mortgage Loans into a
mortgage pool comprising the trust fund. The trust fund will be evidenced by a
single series of mortgage pass-through certificates designated as Series 1999-2,
(the "Certificates"). The Certificates will consist of eighteen classes of
certificates. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement, dated as of February 1, 1999 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor, The Chase Manhattan Bank as
trustee (the "Trustee") and the Originator as master servicer (in such capacity,
the "Master Servicer"). Capi talized terms used but not defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before February 25, 1999 (the
"Closing Date"), certain fixed-rate conventional residential mortgage loans (the
"Mortgage Loans"), having an aggregate principal balance as of the close of
business on February 1, 1999 (the "Cut-off Date") of approximately
$223,305,364.36 (the "Closing Balance"), after giving effect to all payments due
on the Mortgage Loans on or before the Cut-off Date, whether or not received.
SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that together shall describe such Mortgage Loans and
set forth all of the Mortgage Loans to be purchased under this Agreement. The
Closing Schedule will conform to the requirements set forth in this Agreement
and to the definition of "Mortgage Loan
<PAGE>
-2-
Schedule" under the Pooling and Servicing Agreement. The Closing Schedule shall
be used as the Mortgage Loan Schedule under the Pooling and Servicing Agreement.
SECTION 3. CONSIDERATION.
(a) In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, pay to or
upon the order of the Seller in immediately available funds an amount (the
"Purchase Price") equal to approximately 99.03125% times the Closing Balance,
plus accrued interest thereon from the Cut-off Date up to but not including the
Closing Date.
(b) The Purchaser or any assignee, transferee or
designee of the Purchaser shall be entitled to all scheduled payments of
principal due after the Cut-off Date, all other payments of principal due and
collected after the Cut-off Date, and all payments of interest on the Mortgage
Loans allocable to the period after the Cut-off Date. All scheduled payments of
principal and interest due on or before the Cut-off Date and collected after the
Cut-off Date shall belong to the Seller.
(c) Pursuant to the Pooling and Servicing Agreement,
the Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the related Certificateholders.
SECTION 4. TRANSFER OF THE MORTGAGE LOANS.
(a) POSSESSION OF MORTGAGE FILES. The Seller does
hereby sell, transfer, assign, set over and convey to the Purchaser, without
recourse but subject to the terms of this Agreement, all of its right, title and
interest in, to and under the Mortgage Loans. The contents of each Mortgage File
not delivered to the Purchaser or to any assignee, transferee or designee of the
Purchaser on or prior to the Closing Date are and shall be held in trust by the
Seller for the benefit of the Purchaser or any assignee, transferee or designee
of the Purchaser. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the other contents of the related
Mortgage File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or that come
into the possession of the Seller on or after the Closing Date shall immediately
vest in the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.
(b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. In
connection with such transfer and assignment, the Seller does hereby deliver to,
and deposit with, the Purchaser, the following documents or instruments with
respect to each Mortgage Loan so transferred and assigned (a "Mortgage File"):
(i) the original Mortgage Note, endorsed in the
following form: "Pay to the order of The Chase Manhattan Bank,
as Trustee under the applicable agreement, without recourse,"
with all prior and intervening endorsements showing a complete
chain of endorsement from the Originator to the Person so
endorsing to the Trustee;
<PAGE>
-3-
(ii) the original Mortgage with evidence of recording
thereon. If in connection with any Mortgage Loan, the Seller
has not caused the original recorded Mortgage to be delivered
to the Purchaser because of a delay caused by the public
recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because
such public recording office retains the original recorded
Mortgage, the Mortgage File shall consist of a photocopy of
such Mortgage, together with (a) in the case of a delay caused
by the public recording office, an Officer's Certificate of
the title insurer insuring the Mortgage stating that such
Mortgage has been delivered to the appropriate public
recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such
public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the
Purchaser upon receipt by the Seller; or (b) in the case where
a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such
Mortgage with the recording information thereon certified by
such public recording office to be a true and complete copy of
the original recorded Mortgage;
(iii) an original Assignment of the Mortgage executed in
the following form: "The Chase Manhattan Bank, as Trustee
under the applicable agreement";
(iv) the original recorded Assignment or Assignments of
Mortgage showing a complete chain of assignment from the
originator to the Person assigning the Mortgage to the Trustee
as contemplated by the immediately preceding clause (iii), or
if any such intervening assignment has not been returned from
the applicable public recording office or has been lost or if
such public recording office retains the original recorded
Assignments of Mortgage, the Mortgage File shall include a
photocopy of such intervening assignment, together with (a) in
the case of a delay caused by the public recording, an
Officer's Certificate of the title insurer insuring the
Mortgage stating that such intervening Assignment of Mortgage
has been delivered to the appropriate public recording office
for recordation and that such original recorded intervening
Assignment of Mortgage or a copy of such intervening
Assignment of Mortgage certified by the appropriate public
recording office to be a true and complete copy of the
original recorded intervening Assignment of Mortgage will be
promptly delivered to the Purchaser upon receipt thereof by
the Seller; or (b) in the case of an intervening Assignment of
Mortgage where a public recording office retains the original
recorded intervening Assignment of Mortgage or in the case
where an intervening Assignment of Mortgage is lost after
recordation in a public recording office, a copy of such
intervening Assignment with recording information thereon
certified by such public recording office to be a true and
complete copy of the original recorded intervening Assignment
of Mortgage;
(v) the originals of all assumption, modification,
consolidation or extension agreements, with evidence of
recording thereon, if any;
<PAGE>
-4-
(vi) the original of any guarantee executed in
connection with the Mortgage Note;
(vii) the original Primary Mortgage Insurance Policy or
certificate, if any;
(viii) the original mortgagee title insurance policy;
(ix) the original of any security agreement, chattel
mortgage or equivalent document executed in connection with
the Mortgage;
(x) the original power of attorney, if applicable; and
(xi) if such Mortgage Loan is a Buydown Mortgage Loan
(as shown in the Mortgage Loan Schedule), the original Buydown
Agreement.
Within 30 Business Days following the Closing Date, the
originator will deliver any documents required pursuant to Section 4(b)(vii) and
Section 4(b)(xi) to the Seller or its designee, if it has not already done so.
The Master Servicer (in its capacity as Originator) shall
promptly (and in no event later than five Business Days following the later of
the Closing Date and the date of receipt by the Master Servicer of the recording
information for a Mortgage) submit or cause to be submitted for recording, at no
expense to the Trust Fund or the Trustee, in the appropriate public office for
real property records, each Assignment referred to in Sections 2.01(iii) and
(iv) above. In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Master Servicer (in its capacity as Originator)
shall promptly prepare or cause to be prepared a substitute Assignment or cure
or cause to be cured such defect, as the case may be, and thereafter cause each
such Assignment to be duly recorded.
The Seller shall deliver or cause to be delivered to the
Purchaser promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are
not delivered to the Purchaser are and shall be held by or on behalf of the
Originator, Bishop's Gate, the Seller, the Purchaser or the Master Servicer, as
the case may be, in trust for the benefit of the Trustee on behalf of the
Certificateholders. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Mortgage File, such
document shall be delivered promptly to the Purchaser. Any such original
document delivered to or held by the Seller that is not required pursuant to the
terms of this Section to be a part of a Mortgage File, shall be delivered
promptly to the Master Servicer.
<PAGE>
-5-
(c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
(d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller, Bishop's Gate or the
Originator, and the assignee shall succeed to the rights and obligations
hereunder of the Purchaser. Any expense reasonably incurred by or on behalf of
the Purchaser or the Trustee in connection with enforcing any obligations of the
Seller, Bishop's Gate or the Originator under this Agreement will be promptly
reimbursed by the Seller, Bishop's Gate or the Originator, as applicable.
(e) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or
to any assignee, transferee or designee of the Purchaser, for examination, the
Mortgage File pertaining to each Mortgage Loan, or (ii) make such Mortgage Files
available to the Purchaser or to any assignee, transferee or designee of the
Purchaser for examination. Such examination may be made by the Purchaser or the
Trustee, and their respective designees, upon reasonable notice to the Seller
during normal business hours before the Closing Date and within 60 days after
the Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Closing Schedule. The Purchaser may, at its option and without
notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing Agreement.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER, BISHOP'S GATE AND THE ORIGINATOR.
(a) The Originator hereby represents and warrants to the
Seller and the Purchaser, as of the date hereof and as of the Closing Date, and
covenants, that:
(i) The Originator is duly organized, validly
existing and in good standing under the laws of New Jersey and is and will
remain in compliance with the laws of each state in which any Mortgaged Property
is located to the extent necessary to ensure the enforceability of each
Originator Mortgage Loan and the servicing of the Mortgage Loans in accordance
with the terms of the Pooling and Servicing Agreement;
<PAGE>
-6-
(ii) The Originator had and has the full power and authority to
hold and to sell each Originator Mortgage Loan pursuant to the Cendant Purchase
and Servicing Agreement and to execute, deliver and perform, and to enter into
and consummate, all transactions contemplated by this Agreement. The Originator
has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Purchaser, the Seller and Bishop's
Gate, constitutes a legal, valid and binding obligation of the Originator,
enforceable against it in accordance with its terms to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the direction
of the court before which any proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;
(iv) The Originator is not in violation of, and the execution and
delivery of this Agreement by the Originator and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Originator
or its assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Originator or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(v) The Originator is an approved originator/servicer for Fannie
Mae and Freddie Mac in good standing and is a HUD approved mortgagee pursuant to
Section 203 of the National Housing Act. No event has occurred, including but
not limited to a change in insurance coverage, which would make the Originator
unable to comply with Fannie Mae, Freddie Mac or HUD eligibility requirements or
which would require notification to Fannie Mae, Freddie Mac or HUD;
(vi) The Originator does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(vii) With respect to each Originator Mortgage Loan, the Mortgage
File has been delivered to the Seller or its designee;
(viii) Immediately prior to the payment of the purchase price for
each Originator Mortgage Loan pursuant to the Cendant Purchase and Servicing
Agreement, the Originator was the owner of record of the related Mortgage and
the indebtedness evidenced by the related Mortgage Note and upon the payment of
the purchase price by the Seller pursuant to the Cendant Purchase and
<PAGE>
-7-
Servicing Agreement, in the event that the Originator retained record title, the
Originator retained such record title to each Mortgage, each related Mortgage
Note and the related Mortgage Files with respect thereto in trust for the
Purchaser as the owner thereof and only for the purpose of servicing and
supervising the servicing of each Mortgage Loan;
(ix) There are no actions or proceedings against, or
investigations of, the Originator before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement, (B) seeking
to prevent the consummation of the transactions contemplated by this Agreement
or (C) that might prohibit or materially and adversely affect the performance by
the Originator of its obligations under, or the validity or enforceability of,
this Agreement;
(x) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the Closing Date;
(xi) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Originator pursuant to the Cendant Purchase and Servicing Agreement were not
subject to the bulk transfer or any similar statutory provisions;
(xii) The information delivered by the Originator to the Seller
and the Purchaser pursuant to the Cendant Purchase and Servicing Agreement with
respect to the Originator's loan loss, foreclosure and delinquency experience on
fixed rate level payment mortgage loans underwritten to the same standards as
the Mortgage Loans and covering mortgaged properties similar to the Mortgaged
Properties, is true and correct in all material respects;
(xiii) Neither this Agreement nor any written statement, report or
other document prepared and furnished or to be prepared and furnished by the
Originator pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading; and.
(xiv) With respect to each Originator Mortgage Loan, the Originator
prior to the consummation of the Cendant Purchase and Servicing Agreement was,
the sole legal, beneficial and equitable owner of the Mortgage Note and the
Mortgage and had full right to transfer and sell such Mortgage Loan to the
Seller free and clear of any encumbrance, equity, lien, pledge, charge, claim or
security interest.
(b) Bishop's Gate hereby represents and warrants to the Seller and the
Purchaser as of the date hereof and as of the Closing Date, and covenants, that:
<PAGE>
-8-
(i) Bishop's Gate is duly organized, validly existing and in
good standing under the laws of Delaware and is and will remain in compliance
with the laws of each state in which any Mortgaged Property is located to the
extent necessary to ensure the enforceability of each Bishop's Gate Mortgage
Loan;
(ii) Bishop's Gate had and has the full power and authority to
hold and to sell each Bishop's Gate Mortgage Loan pursuant to the Bishop's Gate
Purchase and Servicing Agreement, and to execute, deliver and perform, and to
enter into and consummate, all transactions contemplated by this Agreement.
Bishop's Gate has duly authorized the execution, delivery and performance of
this Agreement, has duly executed and delivered this Agreement, and this
Agreement, assuming due authorization, execution and delivery by the Purchaser,
the Seller and the Originator, constitutes a legal, valid and binding obligation
of Bishop's Gate, enforceable against it in accordance with its terms except to
the extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the direction of the court before which any proceeding therefor
mat be brought;
(iii) The execution and delivery of this Agreement by Bishop's
Gate and the performance of and compliance with the terms of this Agreement will
not violate the terms of Bishop's Gate's organizational documents or constitute
a default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which Bishop's Gate is a party or which may be
applicable to Bishop's Gate or its assets;
(iv) Bishop's Gate is not in violation of, and the execution and
delivery of this Agreement by Bishop's Gate and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over Bishop's Gate
or its assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of
Bishop's Gate or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(v) Bishop's Gate does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(vi) With respect to each Bishop's Gate Mortgage Loan, the
Mortgage File has been delivered to the Seller or its designee;
(vii) Immediately prior to the payment of the purchase price for
each Bishop's Gate Mortgage Loan, pursuant to the Bishop's Gate Purchaser and
Servicing Agreement, Bishop's Gate was the owner of record of the related
Mortgage and the indebtedness evidenced by the related Mortgage Note;
<PAGE>
-9-
(viii) There are no actions or proceedings against, or
investigations of, Bishop's Gate before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement, (B) seeking
to prevent the consummation of the transactions contemplated by this Agreement
or (C) that might prohibit or materially and adversely affect the performance by
Bishop's Gate of its obligations under, or the validity or enforceability of,
this Agreement;
(ix) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Bishop's Gate of, or compliance by Bishop's Gate with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the Closing Date;
(x) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of Bishop's Gate, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
Bishop's Gate pursuant to the Bishop's Gate Purchase and Servicing Agreement
were not subject to the bulk transfer or any similar statutory provisions;
(xi) Neither this Agreement nor any written statement, report or
other document prepared and furnished or to be prepared and furnished by
Bishop's Gate pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading; and
(xii) With respect to each Bishop's Gate Mortgage Loan, Bishop's
Gate prior to the consummation of the Bishop's Gate Purchase and Servicing
Agreement, was the sole legal, beneficial and equitable owner of the Mortgage
Note and the Mortgage and had full right to transfer and sell such Mortgage Loan
to the Seller free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest.
(c) The Seller hereby represents and warrants, as of the date
hereof and as of the Closing Date, and covenants, that:
(i) The Seller is a corporation, duly organized and
validly existing and in good standing under the laws of the State of New York
with full corporate power and authority to conduct its business as presently
conducted by it to the extent material to the consummation of the transactions
contemplated herein. The Seller had the full corporate power and authority to
acquire the Mortgage Loans. The Seller has the full corporate power and
authority to own the Mortgage Loans and to transfer and convey the Mortgage
Loans to the Purchaser and has the full corporate power and authority to execute
and deliver, engage in the transactions contemplated by, and perform and observe
the terms and conditions of this Agreement;
(ii) This Agreement has been duly and validly
authorized, executed and delivered by the Seller, all requisite corporate action
having been taken, and (assuming the due authorization, execution and delivery
hereof by the Purchaser, Bishop's Gate and the Originator)
<PAGE>
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constitutes the valid, legal and binding obligation of the Seller, enforceable
in accordance with its terms, except as such enforcement may be limited by (A)
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting the rights of creditors generally, (B)
general equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law) or (C) public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this Agreement
which purport to provide indemnification from securities laws liabilities;
(iii) No consent, approval, authorization or order
of, registration or filing with, or notice to any governmental authority or
court is required, under federal laws or the laws of the State of New York, for
the execution, delivery and performance by the Seller of, or compliance by the
Seller with, this Agreement or the consummation by the Seller of any other
transaction contemplated hereby and by the Pooling and Servicing Agreement;
provided, however, that the Seller makes no representation or warranty regarding
federal or state securities laws in connection with the sale or distribution of
the Certificates;
(iv) No certificate of an officer, statement or other
information furnished in writing or report delivered by the Seller to the
Purchaser, any affiliate of the Purchaser or the Trustee for use in connection
with the purchase of the Mortgage Loans and the transactions contemplated
hereunder and under the Pooling and Servicing Agreement will contain any untrue
statement of a material fact, or omit a material fact necessary to make the
information, certificate, statement or report not misleading in any material
respect.
(v) Neither the sale of the Mortgage Loans to the
Purchaser, nor the execution, delivery or performance of this Agreement by the
Seller, conflicts or will conflict with or results or will result in a breach of
or constitutes or will constitute a default (or an event, which with notice or
lapse of time or both, would constitute a default) under (A) any terms or
provisions of the certificate of incorporation or by-laws of the Seller, (B) any
term or provision of any material agreement, contract, instrument or indenture,
to which the Seller is a party or by which the Seller or any of its property is
bound, or (C) any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Seller or any of its property, or results or will result in the creation or
imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans;
(vi) The Seller has not dealt with any broker,
investment banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans;
(vii) There is no litigation currently pending or, to
the best of the Seller's knowledge, threatened against the Seller that would
reasonably be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of the Certificates, the execution, delivery, performance or
enforceability of this Agreement or that would result in a material adverse
change in the financial condition of the Seller;
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(viii) Each Mortgage Note, each Mortgage, each
Assignment and any other document required to be delivered by or on behalf of
the Seller under this Agreement or the Pooling and Servicing Agreement to the
Purchaser or any assignee, transferee or designee of the Purchaser for each
Mortgage Loan has been or will be, in accordance with Section 4(b) hereof,
delivered to the Purchaser or any such assignee, transferee or designee. With
respect to each Mortgage Loan, the Seller is in possession of a complete
Mortgage File in compliance with the Pooling and Servicing Agreement, except for
such documents that (A) have been delivered (1) to the Purchaser or any
assignee, transferee or designee of the Purchaser or (2) for recording to the
appropriate public recording office and have not yet been returned or (B) are
not required to be delivered to the Purchaser or any assignee, transferee or
designee of the Purchaser until 90 days following the Closing Date or such later
date as provided in Section 4;
(ix) The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any relevant jurisdiction, except any as may have been complied with;
(x) The Seller (A) is a solvent entity and is paying
its debts as they become due and (B) after giving effect to the transfer of the
Mortgage Loans, will be a solvent entity and will have sufficient resources to
pay its debts as they become due;
(xi) The form of endorsement of each Mortgage Note
satisfied the requirement, if any, of endorsement in order to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note; and each Assignment to be delivered
hereunder is in recordable form and is sufficient to effect the assignment of
and to transfer to the assignee thereunder the benefits of the assignor, as
mortgagee or assignee thereof, under each Mortgage to which that Assignment
relates;
(xii) The transfer of the Mortgage Loans to the
Purchaser at the Closing Date will be treated by the Seller for financial
accounting and reporting purposes as a sale of assets;
(xiii) Immediately prior to the sale of the Mortgage
Loans to the Purchaser as herein contemplated, the Seller had good title to, and
was the sole owner of, the Mortgage Loans, and such sale validly transfers the
Mortgage Loans to the Purchaser free and clear of any pledge, lien, encumbrance
or security interest; and
(xiv) With respect to the Mortgage Loans, the Seller
hereby represents and warrants, as of the date hereof and as of the Closing
Date, that each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860(G)(a)(3) of the Code.
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SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
RELATING TO THE MORTGAGE LOANS.
The Originator hereby represents and warrants to the Seller and the
Purchaser that, as to each Mortgage Loan, as of the Closing Date for such
Mortgage Loan:
(i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct;
(ii) The Mortgage Rates on the Mortgage Loans range between
5.875% and 9.000% and the weighted average Mortgage Rate as of the Closing Date
for the Mortgage Loans is 7.001%;
(iii) All payments required to be made up to the close of
business on the Cut-off Date for such Mortgage Loan under the terms of the
Mortgage Note have been made; the Originator has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party other than the
owner of the related Mortgaged Property, directly or indirectly, for the payment
of any amount required by the Mortgage Note or Mortgage; and there has been no
delinquency, exclusive of any period of grace, in any payment by the Mortgagor
thereunder during the last twelve (12) months;
(iv) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges
affecting the related Mortgaged Property;
(v) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
Seller or its designee; the substance of any such waiver, alteration or
modification has been approved by the insurer under the Primary Mortgage
Insurance Policy, if any, and the title insurer, to the extent required by the
related policy, and is reflected on the Mortgage Loan Schedule. No instrument of
waiver, alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the insurer under the Primary Mortgage Insurance Policy, if any, and
the title insurer, to the extent required by the policy, and which assumption
agreement has been delivered to the Purchaser or its designee and the terms of
which are reflected in the Mortgage Loan Schedule;
(vi) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
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(vii) All buildings upon the Mortgaged Property are insured by an
insurer acceptable to Fannie Mae or Freddie Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, pursuant to insurance policies conforming to the
requirements of Subsection 11.10 of the Cendant Purchase and Servicing
Agreement. All such insurance policies contain a standard mortgagee clause
naming the Originator, its successors and assigns as mortgagee and all premiums
thereon have been paid. If the Mortgaged Property is in an area identified on a
Flood Hazard Map or Flood Insurance Rate Map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available), a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect, which
policy conforms to the requirements of Fannie Mae and Freddie Mac. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at Mortgagor's
cost and expense and to seek reimbursement therefor from the Mortgagor;
(viii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, fair housing
or disclosure laws applicable to the origination and servicing of mortgage loans
of a type similar to the Mortgage Loans have been complied with;
(ix) The Mortgage has not been satisfied, cancelled, subordinated
or rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction, cancellation,
subordination, rescission or release;
(x) The Mortgage is a valid, existing and enforceable first lien
on the Mortgaged Property, including all improvements on the Mortgaged Property
subject only to (a) the lien of current real property taxes and assessments not
yet due and payable, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
being acceptable to mortgage lending institutions generally and specifically
referred to in the lender's title insurance policy delivered to the originator
of the Mortgage Loan and which do not adversely affect the Value of the
Mortgaged Property, and (c) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable first
lien and first priority security interest on the property described therein and
the Originator had full right to sell and assign the same to the Seller or its
designee, in the case of an Originator Mortgage Loan, or to Bishop's Gate or its
designee in the case of a Bishop's Gate Mortgage Loan. Substantially all of the
Mortgaged Properties were not, as of the date of origination of the related
Mortgage Loans, subject to mortgages, deeds of trust, deeds to secure debt or
other security instruments creating liens subordinate to the liens of the
related Mortgages;
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(xi) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties. As disclosed to the Seller, except with
respect to one Mortgage Loan for which the related Mortgagor is a revocable
trust, the Mortgagor is a natural person;
(xiii) The proceeds of the Mortgage Loan have been fully disbursed
to or for the account of the Mortgagor and there is no obligation for the
Mortgagee to advance additional funds thereunder and any and all requirements as
to completion of any on-site or off-site improvement and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(xiv) [intentionally omitted];
(xv) All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) in compliance
with any and all applicable "doing business" and licensing requirements of the
laws of the state wherein the Mortgaged Property is located;
(xvi) The Mortgage Loan is covered by an American Land Title
Association lender's title insurance policy acceptable to Fannie Mae or Freddie
Mac, issued by a title insurer acceptable to Fannie Mae and Freddie Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained in (x)(a) and (b) above)
the Originator, its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress to
and from the Mortgaged Property, and against encroachments by or upon the
Mortgaged Property or any interest therein. The Originator is the sole insured
of such lender's title insurance policy, and such lender's title insurance
policy is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Originator, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;
(xvii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and the Originator has not waived any default, breach, violation
or event of acceleration;
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(xviii) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(xix) All improvements which were considered in determining the
Value of the related Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach upon the Mortgaged Property. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(xx) The Mortgage Loan was originated by the Originator or by a
savings and loan association, a savings bank, a commercial bank or similar
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved as such by the Secretary of HUD;
(xxi) Principal payments on the Mortgage Loan commenced no more
than sixty (60) days after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Rate. With respect to each Mortgage
Loan, the Mortgage Note is payable on the first day of each month in Monthly
Payments which will fully amortize the Stated Principal Balance of the Mortgage
Loan over its remaining term at the Mortgage Rate. The Mortgage Note does not
permit negative amortization;
(xxii) The origination and collection practices used by the
Originator with respect to each Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage origination and
servicing industry. The Mortgage Loan has been serviced by the Originator and
any predecessor servicer in accordance with the terms of the Mortgage Note. With
respect to escrow deposits and Escrow Payments, if any, all such payments are in
the possession of, or under the control of, the Originator and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or Escrow Payments or
other charges or payments due the Originator have been capitalized under any
Mortgage or the related Mortgage Note;
(xxiii) The Mortgaged Property is free of damage and waste and there
is no proceeding pending for the total or partial condemnation thereof;
(xxiv) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure. The Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed
for protection under applicable bankruptcy laws. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage.
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The Mortgagor has not notified the Originator and the Originator has no
knowledge of any relief requested or allowed to the Mortgagor under the Soldiers
and Sailors Civil Relief Act of 1940;
(xxv) The Mortgage Loan was underwritten in accordance with
underwriting standards which are acceptable to Fannie Mae and Freddie Mac in
effect at the time the Mortgage Loan was originated; and the Mortgage Note and
Mortgage are on forms acceptable to Fannie Mae and Freddie Mac;
(xxvi) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(xxvii) The Mortgage File contains an appraisal of the related
Mortgaged Property made and signed, prior to the approval of the Mortgage Loan
application, by a qualified appraiser, duly appointed by the Originator, who had
no interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, whose compensation is not affected by the approval or
disapproval of the Mortgage Loan and who met the minimum qualifications of
Fannie Mae and Freddie Mac;
(xxviii) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Seller or its designee to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxix) The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(xxx) The Mortgagor has executed a statement to the effect that
the Mortgagor has received all disclosure materials required by applicable law
with respect to the making of fixed rate mortgage loans and rescission materials
with respect to Refinanced Mortgage Loans, and such statement is and will remain
in the Mortgage File;
(xxxi) Except with respect to construction to permanent loans which
have been converted to permanent loans on or prior to the Cut-off Date, no
Mortgage Loan was made in connection with (a) the construction or rehabilitation
of a Mortgaged Property or (b) facilitating the trade-in or exchange of a
Mortgaged Property;
(xxxii) The Originator has no knowledge of any circumstances or
condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor or
the Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan;
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(xxxiii) Each Mortgage Loan with a Loan-to-Value Ratio at origination
in excess of 80% is and will be subject to a Primary Mortgage Insurance Policy,
issued by a Qualified Insurer, which insures as to payment defaults that portion
of the Mortgage Loan in excess of the portion of the Value of the Mortgaged
Property required by Fannie Mae. All provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. Except with
respect to any Mortgage Loan listed on Exhibit 6 attached hereto, any Mortgage
subject to any such Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain such insurance and to pay all premiums and charges in
connection therewith and the Mortgage Rate for the Mortgage Loan does not
include any such insurance premium;
(xxxiv) The Mortgaged Property is lawfully occupied under applicable
law; all inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities;
(xxxv) No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of any person, including without limitation the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
(xxxvi) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(xxxvii) Any principal advances made to the Mortgagor prior to the
Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(xxxviii) No Mortgage Loan has a balloon payment feature;
(xxxix) Interest on each Mortgage Loan is calculated on the basis of
a 360-day year consisting of twelve 30-day months;
(xl) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets Fannie Mae's and Freddie Mac's eligibility requirements and the
applicable Qualified Insurer's eligibility requirements;
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(xli) No more than 20.19% of the Mortgage Loans are Rate/Term
Refinancings and no more than 11.45% of the Mortgage Loans are Cash-Out
Refinancings in each case by aggregate principal balance as of the Cut-off Date;
(xlii) No less than 93.87% of the Mortgage Loans are secured by
detached one-family dwellings or detached one-family dwellings in planned unit
developments, and, no more than 6.03% of the Mortgage Loans are secured by
one-family dwelling units in Fannie Mae eligible condominium projects, attached
one-family dwellings in planned unit developments or detached two-to-four family
dwellings, in each case by aggregate principal balance as of the Cut-off Date;
(xliii) No more than 27.48% of the Mortgage Loans had Loan-to-Value
Ratio at origination in excess of 80%, and the weighted average Loan-to-Value
for all Mortgage Loans at origination did not exceed 78.442%, in each case by
aggregate principal balance as of the Cut-off Date;
(xliv) Approximately 98.62% of the Mortgage Loans are secured by
Mortgaged Properties that are maintained by the Mortgagors as primary
residences, approximately 0.97% of the Mortgage Loans are secured by Mortgaged
Properties maintained by the Mortgagors as second homes, and approximately 0.41%
of the Mortgage Loans are secured by investor properties, in each case by
aggregate principal balance as of the Cut-off Date;
(xlv) No Mortgage Loan had a principal balance at origination in
excess of $741,750 and the average principal balance of the Mortgage Loans on
the Cut-off Date was not in excess of $318,099;
(xlvi) The Mortgage Loan was not prepaid in full prior to the
Closing Date and the Originator has not received any notification from a
Mortgagor that a prepayment in full shall be made after the Closing Date;
(xlvii) The Mortgage Loans had original terms of not more than 360
months. As of the Closing Date, each of the Mortgage Loans had a term to
maturity of not less than 177 months and not more than 360 months. The weighted
average term to maturity of the Mortgage Loans as of the Closing Date is 353
months;
(xlviii) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards including,
without limitation, asbestos, and neither the Originator nor, to the
Originator's knowledge, the related Mortgagor, has received any notice of any
violation or potential violation of such law; and
(xlix) With respect to each Buydown Mortgage Loan:
(a) On or before the date of origination of such Mortgage
Loan, the Originator and the Mortgagor, or the Originator, the
Mortgagor and the Originator of the Mortgaged Property or a third party
entered into a Buydown Agreement. The Buydown Agreement
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provides that the seller of the Mortgaged Property (or third party)
shall deliver to the Originator temporary Buydown Funds in an amount
equal to the aggregate undiscounted amount of payments that, when added
to the amount the Mortgagor on such Mortgage Loan is obligated to pay
on each Due Date in accordance with the terms of the Buydown Agreement,
is equal to the full scheduled Monthly Payment due on such Mortgage
Loan.
(b) The Mortgage and Mortgage Note reflect the permanent
payment terms rather than the payment terms of the Buydown Agreement.
The Buydown Agreement provides for the payment by the Mortgagor of the
full amount of the Monthly Payment on any Due Date that the Buydown
Funds are not available. The Buydown Funds were not used to reduce the
original principal balance of the Mortgage Loan or to increase the
Value of the Mortgaged Property when calculating the Loan-to-Value
Ratios for purposes of this Agreement and, if the Buydown Funds were
provided by the Originator and if required under Fannie Mae and Freddie
Mac guidelines, the terms of the Buydown Agreement were disclosed to
the appraiser of the Mortgaged Property;
(c) The Buydown Funds may not be refunded to the Mortgagor
unless the Mortgagor makes a principal payment for the outstanding
balance of the Mortgage Loan;
(d) No more than 0.89% of the Mortgage Loans, by aggregate
principal balance as of the Cut-off Date, are Buydown Mortgage Loans;
(e) As of the Cut-off Date, the Buydown Funds are .07% or less
of the aggregate Stated Principal Balance of the Mortgage Loans. Each
of the Buydown Mortgage Loans provide that the amount of the Buydown
Funds is determined through a discounting process using a discount rate
of 0.0% and at origination the aggregate Buydown Funds were .07% or
less of the aggregate original principal balances of the Mortgage
Loans;
(f) As of the date of origination of the Mortgage Loan, the
provisions of the related Buydown Agreement complied with the
requirements of Fannie Mae and Freddie Mac regarding buydown
agreements; and
(g) The Buydown Period is not less than one year and not more
than five years.
SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
AND FOR BREACH OF REPRESENTATION AND WARRANTY.
(a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of Mortgage
Pass-Through Certificates evidencing an interest in all or a portion of the
Mortgage Loans.
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Upon discovery by the Originator, Bishop's Gate, the Seller,
the Purchaser or any assignee, transferee or designee of the Purchaser of any
materially defective document in, or that any material document was not
transferred by the Seller, and not transferred by the Originator or Bishop's
Gate, as the case may be, to the Seller (as listed on the Trustee's Preliminary
Exception Report), as part of, any Mortgage File or of a breach of any of the
representations and warranties contained in Section 5(a) and (b) or Section 6
that materially and adversely affects the value of any Mortgage Loan, the
Purchaser or the Purchaser's assignee, transferee or designee, the party
discovering the breach shall give prompt written notice to the others. Within
sixty (60) days of its discovery or its receipt of notice of any such missing
documentation which was not transferred to the Seller as described above or
materially defective documentation or any such breach of a represen tation and
warranty the Originator or Bishop's Gate, as the case may be, promptly shall
deliver such missing document or cure such defect or breach in all material
respects, or in the event the Originator or Bishop's Gate, as the case may be,
cannot deliver such missing document or such defect or breach cannot be cured,
the Originator or Bishop's Gate, as the case may be, shall, within 60 days of
its discovery or receipt of notice, either (i) repurchase the affected Mortgage
Loan at the Purchase Price (as such term is defined in the Pooling and Servicing
Agreement) or (ii) pursuant to the provisions of the Pooling and Servicing
Agreement, cause the removal of such Mortgage Loan from the Trust Fund and
substitute one or more Qualified Substitute Mortgage Loans. With respect to
Mortgage Loans where the Mortgage File is missing a material document that was
transferred from the Originator or Bishop's Gate, as the case may be, to the
Seller or upon discovery by the Originator, Bishop's Gate, the Seller, the
Purchaser or any assignee, transferee or designee of the Purchaser of a breach
of any of the representations and warranties contained in Section 5(c)(xi),
(xiii) and (xiv) that materially and adversely affects the value of any Mortgage
Loan, the Purchaser or the Purchaser's assignee, transferee or designee, the
party discovering such breach shall give prompt written notice to the others.
Within sixty (60) days of its discovery or its receipt of notice of any such
missing document or any such breach of a representation and warranty the Seller
promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Seller cannot deliver such missing
document or such defect or breach cannot be cured, the Seller shall, within 60
days of its discovery or receipt of notice, either (i) repurchase the affected
Mortgage Loan at the Purchase Price (as such term is defined in the Pooling and
Servicing Agreement) or (ii) pursuant to the provisions of the Pooling and
Servicing Agreement, cause the removal of such Mortgage Loan from the Trust Fund
and substitute one or more Qualified Substitute Mortgage Loans. The Originator
or the Seller, as the case may be, shall amend the Closing Schedule to reflect
the withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Originator or the Seller, as the case may be,
shall deliver to the Purchaser such amended Closing Schedule and shall deliver
such other documents as are required by this Agreement or the Pooling and
Servicing Agreement within five (5) days of any such amendment. Any repurchase
pursuant to this Section 7(a) shall be accomplished by deposit in the Collection
Account of the amount of the Purchase Price in accordance with Section 2.03 of
the Pooling and Servicing Agreement. In connection with the repurchase of any
Mortgage Loan by the Originator at the price indicated in clause (i) above, any
amounts in excess of the Purchase Price shall not be deposited in the Collection
Account, but instead shall be paid to the Purchaser or its designee. Any
repurchase or substitution
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required by this Section shall be made in a manner consistent with Section 2.03
of the Pooling and Servicing Agreement.
(b) It is understood and agreed that the obligations of the
Originator, Bishop's Gate or the Seller, as the case may be, set forth in this
Section 7 to cure, repurchase or substitute for a defective Mortgage Loan
constitute the sole remedies of the Seller and the Purchaser against the
Originator or Bishop's Gate, as applicable, respecting a missing or defective
document or a breach of the representations and warranties contained in Section
5(a) and (b) or Section 6. It is understood and agreed that the obligations of
the Seller set forth in this Section 7 to repurchase or substitute for a
Mortgage Loan as to which a material document is missing constitute the sole
remedies of the Purchaser against the Seller respecting a missing document.
SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.
The closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the
Seller under this Agreement shall be true and correct
in all material respects as of the date as of which
they are made and no event shall have occurred which,
with notice or the passage of time, would constitute
a default under this Agreement;
(b) All of the representations and warranties of the
Originator under this Agreement shall be true and
correct in all material respects as of the date as of
which they are made and no event shall have occurred
which, with notice or the passage of time, would
constitute a default under this Agreement;
(c) All of the representations and warranties of Bishop's
Gate under this Agreement shall be true and correct
in all material respects as of the date as of which
they are made and no event shall have occurred which,
with notice or the passage of time, would constitute
a default under this Agreement;
(d) The Purchaser shall have received, or the attorneys
of the Purchaser shall have received in escrow (to be
released from escrow at the time of closing), all
Closing Documents as specified in Section 9 of this
Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required
pursuant to the respective terms thereof;
(e) The Seller shall have delivered or caused to be
delivered and released to the Purchaser or to its
designee, all documents (including without
limitation, the Mortgage Loans) required to be so
delivered by the Purchaser pursuant to Section 2.01
of the Pooling and Servicing Agreement; and
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(f) All other terms and conditions of this Agreement
shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Seller of the Purchase Price in immediately available funds.
SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:
(a) An Officers' Certificate of the Seller,
dated the Closing Date, upon which the
Originator, Bishop's Gate, the Purchaser and
Salomon Smith Barney Inc. (the
"Underwriter") may rely, in the form of
Exhibit 1 hereto, and attached thereto
copies of the certificate of incorporation,
by-laws and certificate of good standing of
the Seller under the laws of New York;
(b) An Officers' Certificate of the Seller,
dated the Closing Date, upon which the
Purchaser and the Underwriter may rely, in
the form of Exhibit 2 hereto, with respect
to certain facts regarding the sale of the
Mortgage Loans by the Seller to the
Purchaser;
(c) An Opinion of Counsel of the Seller, dated
the Closing Date and addressed to the
Purchaser and the Underwriter, substantially
in the form attached hereto as Exhibit 3;
(d) An Officer's Certificate of the Originator,
dated the Closing Date, upon which the
Seller, the Purchaser and the Underwriter
may rely, in the form of Exhibit 4 hereto,
and attached thereto copies of the
certificate of incorporation, by-laws and
certificate of good standing of the
Originator under the laws of its state of
incorporation;
(e) An opinion of Counsel of the Originator,
dated the Closing Date and addressed to the
Seller, the Purchaser and the Underwriter
substantially in the form attached hereto as
Exhibit 5;
(f) An Administrator's Certificate of Bishop's
Gate, dated the Closing Date, upon which the
Seller, the Purchaser and the Underwriter
may rely, in the form of Exhibit 6 hereto,
and attached thereto copies of the
organizational documents and certificate of
good standing of Bishop's Gate under the
laws of its state of organization;
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(g) An opinion of Counsel of Bishop's Gate,
dated the Closing Date and addressed to the
Seller, the Purchaser and the Underwriter
substantially in the form attached hereto as
Exhibit 7;
(h) Such opinions of counsel as the Rating
Agencies or the Trustee may request in
connection with the sale of the Mortgage
Loans by the Seller to the Purchaser or the
Seller's execution and delivery of, or
performance under, this Agreement;
(i) A letter from Deloitte & Touche L.L.P.,
certified public accountants, dated the date
hereof and to the effect that they have
performed certain specified procedures as a
result of which they determined that certain
information of an accounting, financial or
statistical nature set forth in the
Purchaser's Prospectus Supplement, dated
February 22, 1999 in the Summary under the
subheading "The Mortgage Loans", "Risk
Factors" and under the captions "The
Mortgage Pool" and "Pooling and Servicing
Agreement--The Originator and Master
Servicer", agrees with the records of the
Originator;
(j) The Originator shall deliver to the Seller
for inclusion in the Prospectus Supplement
for Salomon Brothers Mortgage Securities
VII, Inc., Mortgage Pass-Through
Certificates Series 1999-2, under the
captions "The Mortgage Pool--Underwriting
Standards" and "Pooling and Servicing
Agreement--The Master Servicer", or for
inclusion in other offering material such
publicly available information regarding the
Originator, its financial condition and its
mortgage loan delinquency, foreclosure and
loss experience, underwriting standards,
lending activities and loan sales,
production, and servicing and collection
practices, and any similar nonpublic,
unaudited financial information;
(k) A letter from Deloitte & Touche L.L.P.,
certified public accountants, dated the date
hereof and to the effect that they have
performed certain specified procedures as a
result of which they determined that certain
information of an accounting, financial or
statistical nature set forth in the
Purchaser's Prospectus Supplement, dated
February 22, 1999 under the captions "Yield
on the Certificates" and "Description of the
Certificates" agrees with the records of the
Seller; and
(l) Such further information, certificates,
opinions and documents as the Purchaser or
the Underwriter may reasonably request.
SECTION 10. COSTS. The Originator shall pay (or shall
reimburse the Purchaser or any other Person to the extent that the Purchaser or
such other Person shall pay) all costs and
<PAGE>
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expenses incurred in connection with the transfer and delivery of the Mortgage
Loans, including without limitation, recording fees, fees for title policy
endorsements and continuations and the fees for recording Assignments of
Mortgage, the fees and expenses of the Originator's and/or Bishop's Gate's
in-house accountants and in-house attorneys, the costs and expenses incurred in
connection with producing the Originator's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9(d) through (g), (i) and (k).
The Seller shall pay (or shall reimburse the Purchaser or any other Person to
the extent that the Purchaser or such other Person shall pay) the costs and
expenses of printing (or otherwise reproducing) and delivering this Agreement,
the Pooling and Servicing Agreement, the Certificates, the prospectus,
prospectus supplement, and private placement memorandum relating to the
Certificates and other related documents, the initial fees, costs and expenses
of the Trustee, the fees and expenses of the Seller's counsel in connection with
the preparation of all documents relating to the securitization of the Mortgage
Loans, the filing fee charged by the Securities and Exchange Commission for
registration of the Certificates and the fees charged by any rating agency to
rate the Certificates. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expense.
SECTION 11. SERVICING. The Seller has represented to the
Purchaser that the Mortgage Loans are being serviced under the related Purchase
and Servicing Agreement with the Originator, and it is understood and agreed by
and among the Seller, the Originator, Bishop's Gate and the Purchaser that the
interim servicing arrangements under the Purchase and Servicing Agreements with
the Originator will be superseded by the servicing arrangements set forth in the
Pooling and Servicing Agreement.
SECTION 12. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement, and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. The Seller agrees that, upon acceptance of
the Mortgage Loans by the Purchaser or its designee and delivery of payment to
the Seller, that its security interest in the Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
<PAGE>
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Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 12
shall be deemed to have been released.
SECTION 13. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at Seven World Trade Center, New
York, New York 10048, Attention: Mortgage Finance Group, or such other address
as may hereafter be furnished to the Seller, Bishop's Gate and the Originator in
writing by the Purchaser; if to the Seller, addressed to the Seller at Seven
World Trade Center, New York, New York 10048, Attention: Mortgage Finance Group,
or to such other address as the Seller may designate in writing to the
Purchaser, Bishop's Gate and the Originator; if to the Originator, addressed to
the Originator at 6000 Atrium Way, Mount Laurel, New Jersey 08054 Attention:
Phil McGoldrick, or to such other address as the Originator may designate in
writing to the Purchaser, Bishop's Gate and the Seller; if to Bishop's Gate,
addressed to Bishop's Gate at c/o Cendant Mortgage Corporation 6000 Atrium Way
Mount Laurel, New Jersey 08054 Attention: Phil McGoldrick, or to such other
address as Bishop's Gate may designate in writing to the Purchaser, the
Originator and the Seller.
SECTION 14. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 15. AGREEMENT OF PARTIES. The Originator, the Seller,
Bishop's Gate and the Purchaser each agree to execute and deliver such
instruments and take such actions as either of the others may, from time to
time, reasonably request in order to effectuate the purpose and to carry out the
terms of this Agreement and the Pooling and Servicing Agreement.
SECTION 16. SURVIVAL. (a) The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect,
<PAGE>
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notwithstanding any restrictive or qualified endorsement on the Mortgage Notes
and notwithstanding subsequent termination of this Agreement, the Pooling and
Servicing Agreement or the Trust Fund.
(b) The Originator agrees that the representations, warranties
and agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by the Seller and
the Purchaser notwithstanding any investigation heretofore or hereafter made by
the Seller or the Purchaser or on the behalf of either of them, and that the
representations, warranties and agreements made by the Originator herein or in
any such certificate shall continue in full force and effect, notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
(c) Bishop's Gate agrees that the representations, warranties
and agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by the Seller and
the Purchaser notwithstanding any investigation heretofore or hereafter made by
the Seller or the Purchaser or on the behalf of either of them, and that the
representations, warranties and agreements made by Bishop's Gate herein or in
any such certificate shall continue in full force and effect, notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.
SECTION 17. INDEMNIFICATION. (a) The Originator will indemnify
and hold harmless each of (i) the Seller, (ii) the Purchaser and (iii) each
person, if any, who controls the Seller or the Purchaser within the meaning of
the Securities Act of 1933, as amended (the "1933 Act") (i) through (iii)
collectively, the "Indemnified Party"), against any losses, claims, damages or
liabilities to which such Indemnified Party may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any material fact contained in the
Prospectus Supplement dated February 22, 1999 (the "Prospectus Supplement"), as
amended or supplemented, relating to the public offering of the Certificates,
representing interests in the Mortgage Loans, or in any other offering document
(the "Private Placement Memorandum") relating to the offering by the Purchaser
or an affiliate thereof, of the Class B-4, Class B-5, Class B-6IO and Class
B-6PO Certificates or in any revision or amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading in
each case to the extent and only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission relates to information
furnished by the Originator specifically for use in the Prospectus Supplement,
under the captions "Summary--The Mortgage Loans", "Risk Factors", "The Mortgage
Pool" and "Pooling and Servicing Agreement--The Originator and Master Servicer"
(and substantially identical information approved by the Originator set forth in
the Private Placement Memorandum relating to the Class B-4, Class B-5, Class
B-6IO and Class B-6PO Certificates), (b) any representation, warranty or
covenant made by the Originator in this Agreement or the Pooling and Servicing
Agreement and (c) any updated collateral information provided by the Underwriter
to a Purchaser of the certificates derived from the data provided by the
Originator or in the Remittance Report or a current collateral tape obtained
from the
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Originator or an affiliate of the Originator, including the current loan
balances of the Mortgage Loans to the extent such information was inaccurate
((a) through (c) collectively, the "Originator Information") and will reimburse
each such Indemnified Party for any legal or other expenses reasonably incurred
by such Purchaser and each such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
The Originator's liability under this Section 17 shall be in addition to any
other liability the Originator may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the
Originator, its officers and its directors, and each person who controls the
Originator within the meaning of the 1933 Act against any and all losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the 1933 Act, or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based in
whole or in part upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus Supplement, the Prospectus or Private
Placement Memorandum, or in any revision or amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading, as of the date thereof and as of the Closing Date, except
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made therein in
reliance upon and in conformity with the Originator Information and will
reimburse the Originator and each such controlling person for any legal or other
expenses reasonably incurred by such Originator and each such controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action. The Purchaser's liability under this Section 17 shall be in
addition to any other liability the Purchaser may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either Section 17(a) or 17(b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the reasonable fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties.
Such firm shall be designated in writing by the Purchaser, in the case of
parties indemnified pursuant to clause 17(a) and by the Originator, in the case
of parties indemnified pursuant to clause 17(b). The indemnifying party may, at
its option, at any time upon written notice
<PAGE>
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to the indemnified party, assume the defense of any proceeding and may designate
counsel satisfactory to the indemnified party in connection therewith provided
that the counsel so designated would have no actual or potential conflict of
interest in connection with such representation. Unless it shall assume the
defense of any proceeding, the indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. If the
indemnifying party assumes the defense of any proceeding, it shall be entitled
to settle such proceeding with the consent of the indemnified party or, if such
settlement provides for release of the indemnified party in connection with all
matters relating to the proceeding which have been asserted against the
indemnified party in such proceeding by the other parties to such settlement,
without the consent of the indemnified party.
(d) If the indemnification provided for in this Section 17 is
unavailable to an indemnified party under Section 17(a) or 17(b) hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect the relative fault of the
indemnified and indemnifying parties in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
indemnified and indemnifying parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such parties and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Purchaser and the Originator agree that it would not
be just and equitable if contribution pursuant to Section 17 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the considerations referred to in Section 17(d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in this Section 17 shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim, except where the indemnified party is
required to bear such expenses pursuant to this Section 17, which expenses the
indemnifying party shall pay as and when incurred, at the request of the
indemnified party, to the extent that the indemnifying party will be ultimately
obligated to pay such expenses. In the event that any expenses so paid by the
indemnifying party are subsequently determined to not be required to be borne by
the indemnifying party hereunder, the party which received such payment shall
promptly refund the amount so paid to the party which made such payment. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in
this Section 17 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii)
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any investigation made by the Seller, the Purchaser or any person controlling
the Purchaser or by or on behalf of the Originator and their respective
directors or officers or any person controlling the Originator, and (iii)
acceptance of and payment for any of the Certificates.
SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.
SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the con version, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as
<PAGE>
-30-
applicable) of the Purchaser for the purpose of perfecting such security
interest under applicable law. Any assignment of the interest of the Purchaser
pursuant to Section 4(d) hereof shall also be deemed to be an assignment of any
security interest created hereby. The Seller and the Purchaser shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement and the Pooling and Servicing
Agreement.
<PAGE>
IN WITNESS WHEREOF, the Purchaser, the Seller, the Originator
and Bishop's Gate have caused their names to be signed by their respective
officers thereunto duly authorized as of the date first above written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:___________________________________
Name:
Title: Assistant Vice President
SALOMON BROTHERS REALTY CORP.
By:___________________________________
Name:
Title: Authorized Agent
CENDANT MORTGAGE CORPORATION
By:___________________________________
Name:
Title:
BISHOP'S GATE RESIDENTIAL MORTGAGE
TRUST
By: CENDANT MORTGAGE CORPORATION, as
Administrative Agent
By:___________________________________
Name:
Title:
<PAGE>
EXHIBIT 1
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER]
Salomon Brothers Realty Corp.
Officer's Certificate
I, ________________, hereby certify that I am the duly
appointed Authorized Agent of Salomon Brothers Realty Corp., a New York
corporation (the "Seller"), and further certify as follows:
1. Attached hereto is a true and correct copy of the
Certificate of Incorporation and By-laws of the Seller, all of which
are in full force and effect on the date hereof. There has been no
amendment or other document filed affecting the Certificate of
Incorporation of the Seller since December 20, 1982, and no such
amendment has been authorized. There has been no amendment or other
document filed affecting the By-laws of the Seller since October 7,
1986, and no such amendment has been authorized. Attached hereto is a
good standing certificate issued by the Secretary of State of the State
of New York with respect to the Seller. No event has occurred since the
date thereof that, to the best knowledge of the undersigned, has
affected the good standing of the Seller under the laws of New York.
2. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the Seller
which, if adversely determined, individually or in the aggregate, would
materially and adversely affect the Seller's ability to perform its
obligations under the Mortgage Loan Purchase Agreement (the "Mortgage
Loan Purchase Agreement"), dated February 22, 1999, among the Seller,
Cendant Mortgage Corporation, Bishop's Gate Residential Mortgage Trust
and Salomon Brothers Mortgage Securities VII, Inc (the "Depositor"). No
proceedings looking toward merger, consolidation or liquidation,
dissolution or bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or representative of the
Seller, signed the Mortgage Loan Purchase Agreement and any other
document delivered prior hereto or on the date hereof in connection
with the purchase described in the Mortgage Loan Purchase Agreement
was, at the respective times of such signing and delivery, and is now,
duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents are their genuine signatures.
4. All of the representations and warranties of the Seller
under the Mortgage Loan Purchase Agreement are true and correct in all
material respects as of the Closing Date subject, in the case of the
Closing Schedule delivered pursuant to the Mortgage Loan Purchase
Agreement, to such amendments thereto as were duly made on or before
the date hereof and no event has occurred with respect to the Seller
which, with notice or the passage of time or both, would constitute a
default under the Mortgage Loan Purchase Agreement.
<PAGE>
-2-
5. The information set forth in the Mortgage Loan Schedule
attached as an exhibit to the Pooling and Servicing Agreement is true
and correct in all material respects.
6. The transactions contemplated in the Mortgage Loan Purchase
Agreement will be reported as a sale in the Seller's financial reports.
7. With respect to its sale of the Mortgage Loans and the
transactions and undertakings contemplated by the Mortgage Loan
Purchase Agreement, the Seller has complied in all material respects
with all the obligations by which it is bound and has satisfied in all
material respects all the conditions on its part to be performed or
satisfied prior to the Closing Date.
8. Capitalized terms used but not defined herein shall have
the meanings assigned in the Mortgage Loan Purchase Agreement.
<PAGE>
-3-
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
By:___________________________________
Name:
Title: Authorized Agent
I, _______________, an ________________ of Salomon Brothers
Realty Corp., hereby certify that ________________ is a duly appointed,
qualified and acting Authorized Agent of the Seller and that the signature
appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
By:___________________________________
Name:
Title:
<PAGE>
EXHIBIT 2
[FORM OF OFFICER'S CERTIFICATE OF THE SELLER]
Salomon Brothers Mortgage Securities VII, Inc.
Mortgage Pass-Through Certificates
Series 1999-2
CERTIFICATE OF
SALOMON BROTHERS REALTY CORP.
Reference is made to the sale of mortgage loans (the "Mortgage
Loans") by Salomon Brothers Realty Corp. ("SBRC") to Salomon Brothers Mortgage
Securities VII, Inc. (the "Depositor") pursuant to a Mortgage Loan Purchase
Agreement, dated February 22, 1999, among SBRC, Cendant Mortgage Corporation,
Bishop's Gate Residential Mortgage Trust and the Depositor (the "Purchase
Agreement"), and the simultaneous issuance of Mortgage Pass-Through
Certificates, Series 1999-2 (the "Certificates"), pursuant to a Pooling and
Servicing Agreement, dated as of February 1, 1999 (the "Pooling and Servicing
Agreement") among the Depositor as depositor, Cendant Mortgage Corporation as
master servicer (the "Master Servicer") and The Chase Manhattan Bank as trustee
(the "Trustee"). In consideration for its purchase of the Mortgage Loans, the
Depositor will deliver to SBRC immediately available funds. The Depositor will
sell the Certificates to Salomon Smith Barney Inc. (the "Underwriter") for offer
and sale pursuant to the terms of an Underwriting Agreement, dated February 22,
1999 (the "Underwriting Agreement"), between the Depositor and the Underwriter.
The Purchase Agreement, the Pooling and Servicing Agreement and the Underwriting
Agreement together, are hereinafter collectively referred to as the
"Agreements". Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Agreements.
The undersigned is a duly appointed Authorized Agent of SBRC
and hereby certifies after reasonable investigation that:
1. The price to be paid to SBRC for the Mortgage Loans will
have been paid in full at the closing of the sale pursuant to the Purchase
Agreement, and no agreement or arrangement exists or will exist that permits the
modification of the consideration for the Mortgage Loans subsequent to that
sale. SBRC will not have any right or obligation to repurchase any Mortgage
Loan, except as provided in the Purchase Agreement.
2. Each Mortgage Note and each related Mortgage has been
appropriately prepared and duly executed and delivered by the related Mortgagor,
and each Mortgage has been appropriately recorded in the applicable jurisdiction
and any intervening endorsement of any Mortgage Note, and any intervening
assignment of any Mortgage, which was required in order to transfer to SBRC
ownership of the Mortgage Loans, was obtained and completed.
3. Each Mortgage Note has been endorsed or assigned in a
manner that satisfies any requirement necessary to transfer to the Trustee all
right, title and interest of the party so
<PAGE>
-2-
endorsing or assigning, as noteholder or transferee thereof, in and to that
Mortgage Note, as provided in the Purchase Agreement and the Pooling and
Servicing Agreement. Each Assignment to the Trustee is in recordable form and is
sufficient to effect the assignment and transfer to the Depositor of the
benefits of the assignor, as original mortgagee or assignee thereof, under each
Mortgage to which that Assignment relates, as provided in the Purchase Agreement
and the Pooling and Servicing Agreement. Each Assignment to the Trustee has been
or will be appropriately recorded to the extent required under applicable law,
as provided in the Pooling and Servicing Agreement.
4. Each original Mortgage Note, each original recorded
Mortgage, each original recorded intervening Assignment and each Assignment to
the Trustee has been delivered to the Trustee at the direction of the Depositor,
and the Trustee will maintain continuous actual possession of each of the
foregoing in the State of New York. Neither the Trustee nor any agent of the
Trustee that has or will have possession of any Mortgage Note, Mortgage or
Assignment is, or will be, at any time during the term of the Pooling and
Servicing Agreement, an affiliate of SBRC or otherwise under the direct or
indirect control of SBRC.
5. Immediately prior to the transfer of the Mortgage Loans by
SBRC to the Depositor, SBRC was the sole owner of each Mortgage Loan, free and
clear of any and all prior liens, mortgages, security interests, pledges,
participation interests, adverse claims, charges or other equities or
encumbrances of any nature, and had full right and authority to sell, assign and
transfer the Mortgage Loans.
6. No Mortgage Note, Mortgage or other document constituting
part of the Mortgage File reflects or will reflect on its face any interest that
is inconsistent with the ownership interest of SBRC in and to the Mortgage Loans
or the transfer of the Mortgage Loans by SBRC to the Depositor.
7. The transfer of the Mortgage Loans by SBRC to the Depositor
as provided in the Purchase Agreement is intended by SBRC to be, and is in fact,
a contemporaneous exchange in which SBRC receives new value.
8. SBRC was solvent at all relevant times prior to, and will
not be rendered insolvent by, the transfer of the Mortgage Loans to the
Depositor.
9. SBRC did not transfer the Mortgage Loans to the Depositor
with any intent to hinder, delay or defraud any of SBRC's creditors.
10. None of SBRC, the Depositor, the Master Servicers or the
Trustee, or any agent acting on behalf of any of them, has been or will become a
party to any fraud or illegality affecting any Mortgage Loan or Certificate.
11. No breach of the Agreements by any party,
misrepresentation or failure by any party to perform all acts required to be
performed prior to the Closing Date, or fraud or mistake on
<PAGE>
-3-
the part of any party to the Agreements in connection with the transactions
contemplated by the Agreements, has occurred or will occur.
12. No party to the Agreements has taken or will take any
action that is unreasonable, arbitrary or capricious, or that is not taken in
good faith or in a commercially reasonable manner, affecting the Mortgage Loans
in connection with the transactions contemplated by the Agreements.
13. There is not and will not be any other agreement among the
parties to the Agreements that modifies or otherwise supplements the agreement
of the parties as expressed in the Agreements.
14. SBRC does not have and will not have any right to modify
or alter the terms of the transfer of the Mortgage Loans by SBRC to the
Depositor, or to substitute or add any mortgage loan thereafter, except as
provided in the Agreements.
15. SBRC will not take any action that is inconsistent with
the ownership interest in the Mortgage Loans evidenced by the Certificates. SBRC
will promptly indicate to other persons or entities, when a response is
appropriate, that the Mortgage Loans were transferred by SBRC to the Depositor.
SBRC will not claim any ownership interest directly in the Mortgage Loans other
than that represented by Certificates in which it may have an ownership interest
from time to time.
16. Under generally accepted accounting principles ("GAAP")
and for federal income tax purposes, SBRC will report the transfer of the
Mortgage Loans to the Depositor, as provided in the respective Purchase
Agreements as a sale of all of its interest in the Mortgage Loans. SBRC has been
advised by or has confirmed with its independent public accountants for similar
transactions that the sale will be so classified under GAAP in accordance with
Statement No. 125 of the Financial Accounting Standards Board.
<PAGE>
-4-
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of February ___, 1999.
SALOMON BROTHERS REALTY CORP.
By:___________________________________
Name:
Title: Authorized Agent
<PAGE>
EXHIBIT 3
[FORM OF OPINION OF COUNSEL TO THE SELLER]
February __, 1999
Salomon Brothers Mortgage
Securities VII, Inc.
Seven World Trade Center
New York, New York 10048
Salomon Smith Barney Inc.
Seven World Trade Center
New York, New York 10048
Re: Salomon Brothers Mortgage Securities VII, Inc.
Mortgage Pass-Through Certificates, Series 1999-2
-------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Salomon Brothers Realty Corp. (the
"Seller") in connection with the sale of mortgage loans (the "Mortgage Loans")
by the Seller to Salomon Brothers Mortgage Securities VII, Inc. (the
"Depositor") pursuant to a Mortgage Loan Purchase Agreement, dated February 22,
1999, among the Seller, Cendant Mortgage Corporation, Bishop's Gate Residential
Mortgage Trust and the Depositor (the "Agreement"). This opinion is being
delivered to you pursuant to Section 9(c) of the Agreement. Capitalized terms
used but not defined herein have the meanings set forth in the Agreement or in
agreements referred to therein.
In rendering this opinion letter, we do not express any
opinion concerning any law other than the law of the State of New York and the
federal law of the United States, and we do not express any opinion concerning
the application of the "doing business" laws or the securities laws of any
jurisdiction other than the federal securities laws of the United States. In
addition, we do not express any opinion on any issue not expressly addressed
below.
In rendering this opinion letter, we have examined the
Agreement, the certificate of incorporation and by-laws of the Seller and such
records and other documents as we have deemed necessary. As to matters of fact,
we have examined and relied upon representations of the Seller contained in the
Agreement, and where we have deemed appropriate, representations or
certifications of officers of the Seller, the Depositor or public officials. We
have assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents submitted to us as copies. We have
assumed, except as to the Seller, that all parties had the corporate power and
authority to enter into and perform all obligations thereunder and, as to such
parties, we also have assumed the due authorization by all requisite corporate
action, the due execution and delivery and the validity and binding effect and
enforceability of such documents. We have further assumed that there is not and
<PAGE>
Salomon Brothers Mortgage Securities VII, Inc.
Salomon Smith Barney Inc.
February __, 1999 Page 2.
will not be any other agreement that materially supplements or otherwise
modifies the agreements expressed in the Agreements. We have further assumed the
conformity of the Mortgage Loans and related documents to the requirements of
the Agreement.
Based upon the foregoing, we are of the opinion that:
1. The Seller is a corporation duly organized and validly
existing and in good standing under the laws of the State of
New York and has the requisite corporate power to own its
properties, to conduct its business as presently conducted by
it, to own the Mortgage Loans, to transfer and convey the
Mortgage Loans to the Depositor and to enter into and perform
its obligations under the Agreement.
2. The Agreement has been duly authorized, executed and delivered
by the Seller and, upon due authorization, execution and
delivery by the other parties thereto, it will constitute a
valid, legal and binding agreement of the Seller, enforceable
against the Seller in accordance with its terms, except as
enforceability may be limited by (a) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other
similar laws affecting the rights of creditors and (b) general
principles of equity, whether enforcement is sought in a
proceeding in equity or at law.
3. No consent, approval, authorization or order of any State of
New York or federal court or governmental agency or body is
required for the consummation by the Seller of the
transactions contemplated by the Agreement except for those
consents, approvals, authorizations or orders that previously
have been obtained.
4. Neither the transfer of the Mortgage Loans as provided in the
Agreement, nor the fulfillment of the terms of or the
consummation of any other of the transactions contemplated by
the Agreement, will result in a breach of any term or
provision of the certificate of incorporation or by-laws of
the Seller or, to the best of our knowledge, will conflict
with, result in a breach, violation or acceleration of or
constitute a default under, the terms of any indenture or
other agreement or instrument to which the Seller is a party
or by which it is bound, or any State of New York or federal
statute applicable to the Seller, or any order or regulation
of any State of New York or federal court, regulatory body,
administrative agency or governmental body having jurisdiction
over the Seller.
5. To the best of our knowledge, there are no actions,
proceedings or investigations pending or threatened against
the Seller before any court, administrative agency or other
tribunal (a) asserting the invalidity of the Agreement, (b)
seeking to prevent the consummation of any of the transactions
contemplated in the Agreement or (c) that
<PAGE>
Salomon Brothers Mortgage Securities VII, Inc.
Salomon Smith Barney Inc.
February __, 1999 Page 3.
might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or
enforceability of, the Agreement.
This opinion letter is rendered for the sole benefit of each
addressee hereof, and no other person is entitled to rely hereon. Copies of this
letter may not be furnished to any other person, nor may any portion of this
letter be quoted, circulated or referred to in any other document, without our
prior written consent.
Very truly yours,
THACHER PROFFITT & WOOD
By
<PAGE>
EXHIBIT 4
[FORM OF OFFICER'S CERTIFICATE OF ORIGINATOR]
Cendant Mortgage Corporation
Officer's Certificate
I, ____________________________, hereby certify that I am the
duly elected _____________________________________, of Cendant Mortgage
Corporation, a New Jersey corporation (the "Company"), and further certify, on
behalf of the Company as follows:
1. Attached hereto as Attachment I is a true and correct copy
of the Certificate of Incorporation and By-laws of the Company as in full force
and effect on the date hereof. Attached hereto as Attachment II is a certificate
of Good Standing dated February __, 1999 issued by the State of New Jersey. No
event has occurred since ________________ which has affected the good standing
of the Company under the laws of the State of New Jersey.
2. No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of the Company are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the
Company, signed (a) the Mortgage Loan Purchase Agreement (the "Purchase
Agreement") dated February 22, 1999 among the Company, Bishop's Gate Residential
Mortgage Trust, Salomon Brothers Realty Corp. and Salomon Brothers Mortgage
Securities VII, Inc. ("SBMS VII"), or (b) any other document delivered prior
hereto or on the date hereof in connection with the transactions contemplated by
the Purchase Agreement and the Pooling and Servicing Agreement dated as of
February 1, 1999 among SBMS VII, the Company and the Trustee (the "Pooling
Agreement") was, at the respective times of such signing and delivery, and is as
of the date hereof, duly elected or appointed, qualified and acting as such
officer or attorney-in-fact, and the signatures of such persons appearing on
such documents are their genuine signatures.
4. Attached hereto as Attachment III is a true and correct
copy of the resolutions duly adopted by the board of directors of the Company on
, 199_ (the "Resolutions") with respect to the transactions contemplated by the
Purchase Agreement and the Pooling Agreement; said Resolutions have not been
amended or modified, annulled or revoked and are in full force and effect on the
date hereof.
5. All of the representations and warranties of the Company
contained in the Purchase Agreement are true and correct in all material
respects as of the Closing Date, and no event has occurred which, with notice or
the passage of time or both, would constitute a default under the Purchase
Agreement.
6. The Company has performed all of its duties and has
satisfied all of the material conditions on its part to be performed or
satisfied prior to the Closing Date.
<PAGE>
7. The information contained in the Depositor's Prospectus
Supplement, Mortgage Pass-Through Certificates, Series 1999-2, dated
February 22, 1999, and the Depositor's Private Placement Memorandum,
dated February 25, 1999, relating to the Mortgage Loans, the Originator
and its loan portfolio, specifically the information in the summary
under the captions "Summary --The Mortgage Loans", "Risk Factors", "The
Mortgage Pool" and "The Pooling and Servicing Agreement--The Originator
and Master Servicer" is true and accurate in all material respects and
does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
All capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Pooling Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Company.
Dated: February ___, 1999
(Seal) CENDANT MORTGAGE CORPORATION
By:___________________________________
Name:
Title:
I, ________________________________, [Assistant] Secretary of
___________________________, hereby certify that ___________________________ is
the duly elected, qualified and acting ______________________________________ of
Cendant Mortgage Corporation and that the signature appearing above is his
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: February ___, 1999
CENDANT MORTGAGE CORPORATION
By:___________________________________
Name:
Title:
<PAGE>
EXHIBIT 5
[FORM OF OPINION OF COUNSEL FOR ORIGINATOR]
<PAGE>
EXHIBIT 6
[FORM OF ADMINISTRATOR'S CERTIFICATE OF BISHOP'S GATE]
Bishop's Gate Residential Mortgage Trust
Officer's Certificate
I, ____________________________, hereby certify that I am the
duly elected _____________________________________, of Cendant Mortgage
Corporation (the "Company"), a New Jersey Corporation, Administrator of Bishop's
Gate Residential Mortgage Trust, a Delaware business trust ("Bishop's Gate"),
and further certify, on behalf of Bishop's Gate as follows:
1. Attached hereto as Attachment I are (i) a true and correct
copy of the Certificates of Trust and (ii) a true and correct copy of the Second
Amended and Restated Trust Agreement between the Company and First Union Trust
Company National Association, dated as of November 24, 1998 (the "Trust
Agreement") each of which is in full force and effect on the date hereof.
Attached hereto as Attachment II is a Certificate of Good Standing dated
February ___, 1999 issued by the State of Delaware with respect to the Trust. No
event has occurred since the date thereof which has affected the good standing
of the Trust under the laws of the State of Delaware.
2. No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of Bishop's Gate are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the
Company, acting as Administrator of Bishop's Gate, signed (a) the Mortgage Loan
Purchase Agreement (the "Purchase Agreement") dated February 22, 1999 among
Bishop's Gate, the Company, Salomon Brothers Realty Corp. and Salomon Brothers
Mortgage Securities VII, Inc. ("SBMS VII"), or (b) any other document delivered
prior hereto or on the date hereof in connection with the transactions
contemplated by the Purchase Agreement and the Pooling and Servicing Agreement
dated as of February 1, 1999 among the Company, SBMS VII, and The Chase
Manhattan Bank (the "Trustee") (the "Pooling Agreement") was, at the respective
times of such signing and delivery, and is as of the date hereof, duly elected
or appointed, qualified and acting as such officer or attorney-in-fact, and the
signatures of such persons appearing on such documents are their genuine
signatures.
4. Attached hereto as Attachment III is a true and correct
copy of the resolutions duly adopted by _______________ of Bishop's Gate on ,
199_ (the "Resolutions") with respect to the transactions contemplated by the
Purchase Agreement; said Resolutions have not been amended or modified, annulled
or revoked and are in full force and effect on the date hereof.
5. All of the representations and warranties of the Trust
contained in the Purchase Agreement are true and correct in all material
respects as of the Closing Date, and no event has occurred which, with notice or
the passage of time or both, would constitute a default under the Purchase
Agreement.
<PAGE>
6. Bishop's Gate has performed all of its duties and has
satisfied all of the material conditions on its part to be performed or
satisfied prior to the Closing Date.
All capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Pooling Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of Bishop's Gate.
Dated: February ___, 1999
(Seal) BISHOP'S GATE RESIDENTIAL MORTGAGE TRUST
By: CENDANT MORTGAGE CORPORATION
By:____________________________________
Name:
Title:
I, ________________________________, [Assistant] Secretary of
Cendant Mortgage Corporation, Administrator of Bishop's Gate Residential
Mortgage Trust, hereby certify that _____________________________________ is the
duly elected, qualified and acting ________________________________________ of
Cendant Mortgage Corporation and that the signature appearing above is his
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: February ___, 1999
BISHOP'S GATE RESIDENTIAL MORTGAGE TRUST
By: CENDANT MORTGAGE CORPORATION
By:_____________________________________
Name:
Title:
<PAGE>
EXHIBIT 7
[FORM OF OPINION OF COUNSEL FOR BISHOP'S GATE]
<PAGE>
EXHIBIT E-1
-----------
REQUEST FOR RELEASE
(for Trustee/Custodian)
Loan Information
- ----------------
Name of Mortgagor: ______________________________
Master Servicer
Loan No.: ______________________________
Trustee/Custodian
- -----------------
Name: ______________________________
Address: ______________________________
______________________________
Trustee/Custodian
Mortgage File No.: ______________________________
Depositor
- ---------
Name: SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
Address: _______________________________
_______________________________
Certificates: Mortgage Pass-Through Certificates,
Series 1999-2.
<PAGE>
The undersigned Master Servicer hereby acknowledges that it
has received from _______________________, as Trustee for the Holders of
Mortgage Pass-Through Certificates, Series 1999-2, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of February 1, 1999, among the Trustee, the
Depositor and the Master Servicer (the "Pooling and Servicing Agreement").
( ) Promissory Note dated _______________, 19__, in the original principal
sum of $__________, made by _____________________, payable to, or
endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________________ as instrument no.
____________________ in the County Recorder's Office of the County of
_________________, State of __________________ in book/reel/docket
_________________ of official records at page/image _____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County
Recorder's Office of the County of _______________, State of
_______________________ in book/reel/docket ____________ of official
records at page/image ____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) _____________________________________________
( ) _____________________________________________
( ) _____________________________________________
( ) _____________________________________________
The undersigned Master Servicer hereby acknowledges and agrees
as follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Master Servicer shall not cause or permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of
<PAGE>
attachment or other impositions nor shall the Master Servicer assert or
seek to assert any claims or rights of setoff to or against the
Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Collection Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trustee, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
Dated:
[Master Servicer]
By:_____________________________
Name:___________________________
Title:__________________________
<PAGE>
EXHIBIT E-2
-----------
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICERS' CERTIFICATE AND TRUST RECEIPT
MORTGAGE PASS-THROUGH CERTIFICATES
Series 1999-2
____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER:__________________ BORROWER'S NAME:________________
COUNTY:_______________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
__________________________ DATED:____________________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT F-1
-----------
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
[Trustee]
____________________
____________________
[Certificate Registrar]
_______________________
_______________________
Re: Salomon Brothers Mortgage Securities VII, Inc.,
Mortgage Pass-Through Certificates, Series 1999-2,
Class ___, representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
February 1, 1999, among Salomon Brothers Mortgage Securities VII, Inc. as
Depositor, Cendant Mortgage Corporation as Master Servicer
<PAGE>
and The Chase Manhattan Bank as Trustee (the "Pooling and Servicing Agreement"),
pursuant to which Pooling and Servicing Agreement the Certificates were issued.
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:__________________________
Name:________________________
Title:_______________________
<PAGE>
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
[Trustee]
___________________
___________________
[Certificate Registrar]
___________________
___________________
Re: Salomon Brothers Mortgage Securities VII, Inc.,
Mortgage Pass-Through Certificates, Series 1999-2,
Class ___, representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of
1933 (the "1933 Act") and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. The
Transferee is aware that the sale to it is being made in reliance on
Rule 144A. The Transferee is acquiring the Certificates for its own
account or for the account of a qualified institutional buyer, and
understands that such Certificate may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933
Act.
2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the
Pooling and Servicing Agreement referred to below, and (d) any credit
enhancement mechanism associated with the Certificates, that it has
requested.
<PAGE>
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of February 1, 1999, among Salomon Brothers Mortgage
Securities VII, Inc. as Depositor, Cendant Mortgage Corporation as Master
Servicer and The Chase Manhattan Bank as Trustee, pursuant to which the
Certificates were issued.
[TRANSFEREE]
By:__________________________
Name:________________________
Title:_______________________
<PAGE>
ANNEX 1 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and The Chase Manhattan Bank, as Trustee and
Certificate Registrar, with respect to the mortgage pass-through certificates
(the "Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
- --------------------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
<PAGE>
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
<PAGE>
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
Dated:
----------------------------------
Print Name of Transferee
By:_______________________________
Name:_____________________________
Title:____________________________
<PAGE>
ANNEX 2 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and The Chase Manhattan Bank, as Trustee and
Certificate Registrar, with respect to the mortgage pass-through certificates
(the "Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other
than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
<PAGE>
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
_______________________________________
Print Name of Transferee or Advisor
By:____________________________________
Name:__________________________________
Title:_________________________________
IF AN ADVISER:
_______________________________________
Print Name of Transferee
<PAGE>
FORM OF TRANSFEREE REPRESENTATION LETTER
The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
as amended.
3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on
a discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser_______________________________________________________________
By: (Signature)____________________________________________________________
Name of Signatory_______________________________________________________________
Title___________________________________________________________________________
Date of this certificate________________________________________________________
Date of information provided in paragraph 3_____________________________________
<PAGE>
EXHIBIT F-2
-----------
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
___________________________________, being duly sworn,
deposes, represents and warrants as follows:
1. I am a ______________________ of __________________________
(the "Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Salomon Brothers Mortgage Securities VII,
Inc., Mortgage Pass-Through Certificates, Series 1999-2, [Class R-I] [and Class
R-II] (the "Class R Certificates"), on behalf of whom I make this affidavit and
agreement. Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement pursuant to
which the Class R Certificates were issued.
2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 199___ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the
<PAGE>
income on such residual interest, unless no significant purpose of the transfer
is to impede the assessment or collection of tax.
4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time during the taxable year
of the pass-through entity, a non-Permitted Transferee is the record holder of
an interest in such entity. (For this purpose, a "pass-through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is aware that the Trustee will not register the
transfer of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is
___________________.
8. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.
10. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.
11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.
12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
<PAGE>
13. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.
14. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.
15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the Class
R Certificates remains outstanding; and (iii) is not a "Permitted Transferee".
16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 199___.
[OWNER]
By:_______________________________________
Name:_____________________________________
Title: [Vice] President
ATTEST:
By:______________________________
Name:____________________________
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of __________,
199___.
_______________________
Notary Public
County of ____________________
State of _____________________
My Commission expires:
<PAGE>
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
: ss. :
COUNTY OF NEW YORK )
___________________________________, being duly sworn,
deposes, represents and warrants as follows:
1. I am a ____________________ of _____________________________ (the "Owner"), a
corporation duly organized and existing under the laws of ______________, on
behalf of whom I make this affidavit.
2. The Owner is not transferring the [Class R-I][and Class
R-II] (the "Residual Certificates") to impede the assessment or collection of
any tax.
3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 199___.
[OWNER]
By:____________________________
Name:__________________________
Title: [Vice] President
ATTEST:
By:______________________________
Name:____________________________
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of __________,
199___.
_____________________________
Notary Public
County of _____________________
State of ______________________
My Commission expires:
<PAGE>
EXHIBIT G
---------
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 199__
Salomon Brothers Mortgage Securities VII, Inc.
390 Greenwich Street
New York, New York 10013
The Chase Manhattan Bank,
450 West 33rd Street, 14th Floor
New York, New York 10001
Attention: Capital Markets Fiduciary Services
Cendant Mortgage Corporation
6000 Atrium Way
Mount Laurel, New Jersey 08054
Re: Salomon Brothers Mortgage Securities VII, Inc.
Mortgage Pass-Through Certificates, Series 1999-2, Class__
----------------------------------------------------------
Dear Sirs:
__________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Salomon Brothers Mortgage Securities VII, Inc.
Mortgage Pass-Through Certificates, Series 1999-2, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of February 1, 1999 among Salomon
Brothers Mortgage Securities VII, Inc. as depositor (the "Depositor"), Cendant
Mortgage Corporation as Master Servicer (the "Master Servicer") and The Chase
Manhattan Bank as trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee and the Master Servicer that
the following statements in either (1) or (2) are accurate:
_____ (1) The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and bank
collective investment funds and insurance company general or separate
accounts in which such plans, accounts or arrangements are invested,
that is subject to Section 406 of ERISA or Section 4975 of the Internal
Revenue Code of 1986 (the "Code") (any of the foregoing, a "Plan"),
(ii) are not being acquired with "plan assets" of a Plan within
<PAGE>
the meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.
ss. 2510.3-101, and (iii) will not be transferred to any entity that is
deemed to be investing in plan assets within the meaning of the DOL
regulation at 29 C.F.R. ss. 2510.3-101; or
_____ (2) The purchase of Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under
ERISA or Section 4975 of the Code, will not subject the Depositor, the
Trustee or the Master Servicer to any obligation in addition to those
undertaken in the Pooling and Servicing Agreement and one of the
following conditions are met:
(i) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificate is an
"insurance company general account" (as such term is defined
in PTCE 95-60), (B) the conditions set forth in PTCE 95-60
have been satisfied and (C) there is no Plan with respect to
which the amount of such general account's reserves and
liabilities for contracts held by or on behalf of such Plan
and all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 95-60) or by the same
employee organization, exceeds 10% of the total of all
reserves and liabilities of such general account (as
determined under PTCE 95-60) as of the date of the acquisition
of such Certificates;
(ii) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificates is an
insurance company general account, (B) the requirements of
Section 401(c) of ERISA and the regulations to be promulgated
thereunder ("401(c) Regulations") have been satisfied and will
continue to be satisfied and (C) the insurance company
represents that it understands that the operation of the
general account after December 31, 1998 may affect its ability
to continue to hold such Certificates after the date which is
18 months after the 401(c) Regulations become final and that
unless a Class Exemption or an exception under Section 401(c)
of ERISA is then available for the continued holding of such
Certificates, it will dispose of such Certificates prior to
the date which is 18 months after the 401(c) Regulations
become final;
(iii) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificates is an
"insurance company pooled separate account" (as such term is
defined in PTCE 90-1), (B) the conditions set forth in PTCE
90-1 have been satisfied and (C) there is no Plan, together
with all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 90-1) or by the same
employee organization, with assets which exceed 10% of the
total of all assets in such pooled separate account (as
determined under PTCE 90-1) as of the date of the acquisition
of such Certificates;
(iv) the transferee is a bank and (A) the source of
funds used to purchase such Certificates is a "collective
investment fund" (as defined in PTCE 91-38), (B) the
conditions set forth in PTCE 91-38 have been satisfied and (C)
<PAGE>
there is no Plan, the interests of which, together with the
interests of any other Plans maintained by the same employer
or employee organization, in the collective investment fund
exceed 10% of the total of all assets in the collective
investment fund (as determined under PTCE 91-38) as of the
date of acquisition of such Certificates;
(v) the transferee is a "qualified professional asset
manager" described in PTCE 84-14 and the conditions set forth
in PTCE 84-14 have been satisfied and will continue to be
satisfied; or
(vi) the transferee is an "in-house asset manager"
described in PTCE 96-23 and the conditions set forth in PTCE
96-23 have been satisfied and will continue to be satisfied.
Very truly yours,
By:___________________________
Name:
Title:
<PAGE>
Schedule 1
----------
MORTGAGE LOAN SCHEDULE WITH RESPECT TO SUB-POOL 1
[FILED BY PAPER]
<PAGE>
Schedule 2
----------
MORTGAGE LOAN SCHEDULE WITH RESPECT TO SUB-POOL 2
[FILED BY PAPER]
<PAGE>
Schedule 3
----------
MORTGAGE LOAN SCHEDULE WITH RESPECT TO MORTGAGE LOANS WITH
LOAN-TO-VALUE RATIOS IN EXCESS OF 80%
[AVAILABLE UPON REQUEST]
