SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
May 10, 1999
STRUCTURED ASSET SECURITIES CORPORATION (as Depositor under the Trust
Agreement, dated as of April 1, 1999, providing for the issuance of
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1999-SP1)
Structured Asset Securities Corporation
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 333-68513-04 74-2440850
- --------------------------- ------------ ------------------
State or Other Jurisdiction (Commission (I.R.S. Employer
Of Incorporation) File Number) Identification No.)
200 Vesey Street
New York, New York 10285
- --------------------- -----------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (212) 526-5594
No Change
------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events
The Registrant registered issuances of Structured Asset Securities
Corporation Mortgage Pass-Through Certificates on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"),
by a Registration Statement on Form S-3 (Registration File No. 333-68513) (the
"Registration Statement"). Pursuant to the Registration Statement, the
Registrant issued approximately $581,483,000 in aggregate principal amount of
Class A1, Class A2, Class A3, Class A4, Class AIO, Class M1, Class M2 and Class
B Certificates of its Structured Asset Securities Corporation Mortgage
Pass-Through Certificates, Series 1999-SP1 on May 10, 1999. This Current Report
on Form 8-K is being filed to satisfy an undertaking, contained in the
definitive Prospectus dated January 15, 1999, as supplemented by the Prospectus
Supplement dated May 5, 1999 (the "Prospectus Supplement"), to file a copy of
the Trust Agreement (as defined below) executed in connection with the issuance
of the Certificates, a form of which was filed as an exhibit to the
Registration Statement.
The Certificates were issued pursuant to a Trust Agreement (the "Trust
Agreement"), attached hereto as Exhibit 4.1, dated as of April 1, 1999, among
Structured Asset Securities Corporation, as depositor (the "Depositor"),
Norwest Bank Minnesota, National Association, as master servicer and The First
National Bank of Chicago, as trustee (the "Trustee"). The "Certificates"
consist of the following classes: Class A1, Class A2, Class A3, Class A4, Class
AIO, Class M1, Class M2, Class B, Class X and Class R. The Certificates
evidence all the beneficial ownership interest in a trust fund (the "Trust
Fund") that consists primarily of three pools of fixed and adjustable rate,
fully amortizing and balloon, conventional, first and second lien residential
mortgage loans (the "Mortgage Loans") with an aggregate outstanding principal
balance of $581,013,814 as of April 1, 1999, together with certain other
assets. Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Trust Agreement.
<PAGE>
Item 7. Financial Statements; Pro Forma Financial Information and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
1.1 Terms Agreement, dated May 5, 1999, between Structured Asset
Securities Corporation and Lehman Brothers Inc.
4.1 Trust Agreement, dated as of April 1, 1999, among Structured Asset
Securities Corporation, as Depositor, Norwest Bank Minnesota,
National Association, as Master Servicer and The First National Bank
of Chicago, as Trustee.
99.1 Mortgage Loan Sale and Assignment Agreement, dated as of April 1,
1999, between Lehman Capital, A Division of Lehman Brothers Holdings
Inc., as Seller, and Structured Asset Securities Corporation, as
Purchaser.
99.2 Servicing Agreement, dated as of April 1, 1999, between Lehman
Capital, A Division of Lehman Brothers Holdings Inc., and Aurora Loan
Services Inc., as servicer.
99.3*Flow Servicing Agreement, dated as of September 1, 1997, between
Lehman Capital, A Division of Lehman Brothers Holdings Inc., and
Aurora Loan Services Inc., as servicer.
99.4 Special Servicing Agreement, dated as of April 1, 1999, between
Lehman Capital, A Division of Lehman Brothers Holdings Inc., and
Ocwen Federal Bank FSB, as special servicer.
<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 hereunto duly authorized.
STRUCTURED ASSET SECURITIES
CORPORATION
By: /s/Stanley Labanowski
------------------------------
Name: Stanley Labanowski
Title: Vice President
Dated: May 21, 1999
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ------------ --------
1.1 Terms Agreement, dated May 5, 1999, between Structured
Asset Securities Corporation and Lehman Brothers Inc.
4.1 Trust Agreement, dated as of April 1, 1999, among
Structured Asset Securities Corporation, as Depositor,
Norwest Bank Minnesota, National Association, as
Master Servicer and The First National Bank of
Chicago, as Trustee.
99.1 Mortgage Loan Sale and Assignment Agreement, dated as
of April 1, 1999, between Lehman Capital, A Division
of Lehman Brothers Holdings Inc., as Seller, and
Structured Asset Securities Corporation, as Purchaser.
99.2 Servicing Agreement, dated as of April 1, 1999,
between Lehman Capital, A Division of Lehman Brothers
Holdings Inc., and Aurora Loan Services Inc., as
servicer.
99.3* Flow Servicing Agreement, dated as of September 1,
1997, between Lehman Capital, A Division of Lehman
Brothers Holdings Inc., and Aurora Loan Services Inc.,
as servicer.
99.4 Special Servicing Agreement, dated as of April 1,
1999, between Lehman Capital, A Division of Lehman
Brothers Holdings Inc., and Ocwen Federal Bank FSB, as
special servicer.
- --------
* Incorporated by reference to the Depositor's Current Report on Form
8-K dated March 30, 1998, filed with the Securities and Exchange
Commission on April 14, 1998 (File No. 333-47499).
* Incorporated by reference to the Depositor's Current Report on Form
8-K dated March 30, 1998, filed with the Securities and Exchange
Commission on April 14, 1998 (File No. 333-47499).
EXHIBIT 1.1
STRUCTURED ASSET SECURITIES CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-SP1
TERMS AGREEMENT
---------------
Dated: May 5, 1999
To: Structured Asset Securities Corporation, as Depositor under the Trust
Agreement dated as of April 1, 1999 (the "Trust Agreement").
Re: Underwriting Agreement Standard Terms dated as of April 16, 1996 (the
"Standard Terms," and together with this Terms Agreement, the
"Agreement").
Series Designation: Series 1999-SP1.
Terms of the Series 1999-SP1 Certificates: Structured Asset Securities
Corporation, Series 1999-SP1 Mortgage Pass-Through Certificates, Class A1,
Class A2, Class A3, Class A4, Class AIO, Class M1, Class M2, Class B, Class X
and Class R (the "Certificates") will evidence, in the aggregate, the entire
beneficial ownership interest in a trust fund (the "Trust Fund"). The primary
assets of the Trust Fund consist of three pools of adjustable and fixed rate,
fully amortizing and balloon, conventional, first and second lien residential
mortgage loans (the "Mortgage Loans"). Only the Class A1, Class A2, Class A3,
Class A4, Class AIO, Class M1, Class M2 and Class B Certificates (the "Offered
Certificates") are being sold pursuant to the terms hereof.
Registration Statement: File Number 333-68513.
Certificate Ratings: It is a condition to the issuance of the Class A1, Class
A2, Class A3 and Class A4 Certificates that they be rated "AAA" by each of Duff
& Phelps Credit Rating Co. ("DCR") and Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc. ("S&P," and together with DCR, the
"Rating Agencies"). It is a condition to the issuance of the Class AIO
Certificates that they be rated "AAA" by DCR and "AAAr" by S&P. It is a
condition to the issuance of the Class M1 Certificates that they be rated "AA"
by each of the Rating Agencies. It is a condition to the issuance of the Class
M2 Certificates that they be rated "A" by each of the Rating Agencies. It is a
condition to the issuance of the Class B Certificates that they be rated "BBB"
by each of the Rating Agencies.
Terms of Sale of Offered Certificates: The Depositor agrees to sell to Lehman
Brothers Inc. (the "Underwriter") and the Underwriter agrees to purchase from
the Depositor, the Offered Certificates in the principal amounts and prices set
forth on Schedule 1 annexed hereto. The purchase price for the Offered
Certificates shall be the Purchase Price Percentage set forth in Schedule 1
plus accrued interest at the initial interest rate per annum from and including
the Cut-off Date up to, but not including, the Closing Date.
The Underwriter will offer the Offered Certificates to the public from time to
time in negotiated transactions or otherwise at varying prices to be determined
at the time of sale.
Cut-off Date: April 1, 1999.
Closing Date: 10:00 A.M., New York time, on or about May 10, 1999. On the
Closing Date, the Depositor will deliver the Offered Certificates to the
Underwriter against payment therefor for the account of the Underwriter.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Depositor and the Underwriter in accordance with its terms.
LEHMAN BROTHERS INC.
By: /s/ Joseph J. Kelly
--------------------------------------------
Name: Joseph J. Kelly
Title: Vice President
Accepted:
STRUCTURED ASSET SECURITIES
CORPORATION
By: /s/ Stanley Labanowski
----------------------------------
Name: Stanley Labanowski
Title: Vice President
<PAGE>
Schedule 1
Purchase
Initial Certificate Certificate Price
Class Principal Amount(1) Interest Rate Percentage
- -------- -------------------- ------------- -----------
Class A1 $136,150,000 6.42%(2) 100.00000%
Class A2 244,430,000 (3) 100.00000%
Class A3 35,000,000 (3) 100.00000%
Class A4 55,421,000 (3) 100.00000%
Class AIO (4) 4.00% 8.21875%
Class M1 46,518,000 (3) 100.00000%
Class M2 29,075,000 (3) 100.00000%
Class B 34,889,000 9.00%(2) 100.00000%
- -----------------
(1) Approximate.
(2) Subject to the Net Funds Cap as described in the Prospectus Supplement.
(3) Interest will accrue on the Class A2, Class A3, Class A4, Class M1 and
Class M2 Certificates at the applicable per annum rate described in the
Prospectus Supplement. (4) The Class A-IO Certificate will be an
interest-only Certificate and will accrue interest on a "Notional Amount"
as described in the Prospectus Supplement.
EXHIBIT 4.1
Execution
STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Master Servicer,
and
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
---------------------------
TRUST AGREEMENT
Dated as of April 1, 1999
---------------------------
STRUCTURED ASSET SECURITIES CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-SP1
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.....................................................3
Section 1.02. Calculations Respecting Mortgage Loans.........................34
Section 1.03. Calculations Respecting Accrued Interest.......................34
ARTICLE II
DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.................................................34
Section 2.02. Acceptance of Trust Fund by Trustee: Review of Documentation
for Trust Fund.................................................37
Section 2.03. Representations and Warranties of the Depositor................39
Section 2.04. Discovery of Breach............................................40
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans.........41
Section 2.06. Grant Clause...................................................42
Section 2.07. Purchase of Defaulted Mortgage Loans...........................42
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates...............................................42
Section 3.02. Registration...................................................43
Section 3.03. Transfer and Exchange of Certificates..........................43
Section 3.04. Cancellation of Certificates...................................46
Section 3.05. Replacement of Certificates....................................46
Section 3.06. Persons Deemed Owners..........................................46
Section 3.07. Temporary Certificates.........................................46
Section 3.08. Appointment of Paying Agent....................................47
Section 3.09. Book-Entry Certificates........................................47
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account.............................................49
Section 4.02. Application of Funds in the Collection Account.................50
Section 4.03. Reports to Certificateholders..................................52
Section 4.04. Certificate Account............................................55
Section 4.05. Determination of LIBOR.........................................56
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally........................................57
Section 5.02. Distributions from the Certificate Account.....................58
Section 5.03. Allocation of Losses...........................................63
Section 5.04. Advances by Master Servicer and Trustee........................64
Section 5.05. Compensating Interest Payments.................................65
Section 5.06. REMIC 1, REMIC 2, REMIC 3, REMIC 4, and REMIC 5 Allocations....65
Section 5.07. Basis Risk Reserve Fund........................................68
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee..............................................69
Section 6.02. Certain Matters Affecting the Trustee..........................71
Section 6.03. Trustee Not Liable for Certificates............................72
Section 6.04. Trustee May Own Certificates...................................72
Section 6.05. Eligibility Requirements for Trustee...........................72
Section 6.06. Resignation and Removal of Trustee.............................73
Section 6.07. Successor Trustee..............................................73
Section 6.08. Merger or Consolidation of Trustee.............................74
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.......74
Section 6.10. Authenticating Agents..........................................76
Section 6.11. Indemnification of Trustee.....................................76
Section 6.12. Fees and Expenses of Trustee...................................77
Section 6.13. Collection of Monies...........................................77
Section 6.14. Events of Default; Trustee To Act; Appointment of Successor....77
Section 6.15. Additional Remedies of Trustee Upon Event of Default...........81
Section 6.16. Waiver of Defaults.............................................81
Section 6.17. Notification to Holders........................................81
Section 6.18. Directions by Certificateholders and Duties of Trustee During
Event of Default...............................................82
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon
Event of Default...............................................82
ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon
Purchase or Liquidation of All Mortgage Loans..................82
Section 7.02. Procedure Upon Termination of Trust Fund.......................83
Section 7.03. Additional Trust Fund Termination Requirements.................84
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders................................85
Section 8.02. Access to List of Holders......................................85
Section 8.03. Acts of Holders of Certificates................................86
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer..................................87
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors and
Omissions Insurance Policy.....................................87
Section 9.03. Master Servicer's Financial Statements and Related
Information....................................................88
Section 9.04. Power to Act; Procedures.......................................88
Section 9.05. Servicing Agreements Between the Master Servicer and Servicers;
Enforcement of Servicers' Obligations..........................89
Section 9.06. Collection of Taxes, Assessments and Similar Items.............90
Section 9.07. Termination of Servicing Agreements; Successor Servicers.......91
Section 9.08. Master Servicer Liable for Enforcement.........................91
Section 9.09. No Contractual Relationship Between Servicers and Trustee or
Depositor......................................................91
Section 9.10. Assumption of Servicing Agreement by Trustee...................92
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements...................92
Section 9.12. Release of Mortgage Files......................................92
Section 9.13. Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.........................................93
Section 9.14. Representations and Warranties of the Master Servicer..........94
Section 9.15. Closing Certificate and Opinion................................96
Section 9.16. Standard Hazard and Flood Insurance Policies...................97
Section 9.17. Presentment of Claims and Collection of Proceeds...............97
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies.........97
Section 9.19. Trustee To Retain Possession of Certain Insurance Policies and
Documents......................................................98
Section 9.20. Realization Upon Defaulted Mortgage Loans......................98
Section 9.21. Compensation to the Master Servicer............................98
Section 9.22. REO Property...................................................99
Section 9.23. Preparation of Tax Returns and Other Reports...................99
Section 9.24. Reports to the Trustee........................................100
Section 9.25. Annual Officer's Certificate as to Compliance.................101
Section 9.26. Annual Independent Accountants' Servicing Report..............101
Section 9.27. Merger or Consolidation.......................................102
Section 9.28. Resignation of Master Servicer................................102
Section 9.29. Assignment or Delegation of Duties by the Master Servicer.....102
Section 9.30. Limitation on Liability of the Master Servicer and Others.....103
Section 9.31. Indemnification; Third-Party Claims...........................103
Section 9.32. Alternative Index.............................................103
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration.........................................104
Section 10.02. Prohibited Transactions and Activities.......................106
Section 10.03. Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.................................................106
Section 10.04. REO Property.................................................107
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment......................108
Section 11.02. Entire Agreement.............................................108
Section 11.03. Amendment....................................................108
Section 11.04. Voting Rights................................................109
Section 11.05. Provision of Information.....................................109
Section 11.06. Governing Law................................................110
Section 11.07. Notices......................................................110
Section 11.08. Severability of Provisions...................................110
Section 11.09. Indulgences; No Waivers......................................110
Section 11.10. Headings Not To Affect Interpretation........................110
Section 11.11. Benefits of Agreement........................................110
Section 11.12. Special Notices to the Rating Agencies.......................111
Section 11.13. Counterparts.................................................111
Section 11.14. Transfer of Servicing........................................111
<PAGE>
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 Form of Initial Certification
Exhibit B-2 [Reserved]
Exhibit B-3 Form of Final Certification
Exhibit B-4 Form of Endorsement
Exhibit C Request for Release of Documents and Receipt
Exhibit D-l Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Residual Certificate Transfer Affidavit (Transferor)
Exhibit E Servicing Agreements
Exhibit F Form of Rule 144A Transfer Certificate
Exhibit G Form of Purchaser's Letter for Institutional Accredited
Investors
Exhibit H Form of ERISA Transfer Affidavit
Exhibit I Monthly Remittance Advice
Exhibit J Monthly Electronic Data Transmission
Exhibit K Custodial Agreements
Exhibit L Special Servicing Compensation Agreement
Schedule A Mortgage Loan Schedule
<PAGE>
This TRUST AGREEMENT, dated as of April 1, 1999 (the "Agreement"), is by
and among STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
master servicer (the "Master Servicer"), and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from Lehman Capital, A
Division of Lehman Brothers Holdings Inc. ("Lehman Capital"), and at the
Closing Date is the owner of the Mortgage Loans and the other property being
conveyed by it to the Trustee hereunder for inclusion in the Trust Fund. On the
Closing Date, the Depositor will acquire the Certificates from the Trust Fund,
as consideration for its transfer to the Trust Fund of the Mortgage Loans and
the other property constituting the Trust Fund. The Depositor has duly
authorized the execution and delivery of this Agreement to provide for the
conveyance to the Trustee of the Mortgage Loans and the other property
constituting the Trust Fund. All covenants and agreements made by the
Depositor, the Master Servicer and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust Fund are for the
benefit of the Holders from time to time of the Certificates. The Depositor and
the Master Servicer are entering into this Agreement, and the Trustee is
accepting the Trust Fund created hereby, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged.
As provided herein, the Trustee shall elect that the Trust Fund be treated
for federal income tax purposes as including five separate real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, "REMIC 1," "REMIC
2," "REMIC 3," "REMIC 4," and "REMIC 5," respectively, REMIC 5 also being
referred to as the "Upper Tier REMIC"). The Class A1, Class A2, Class A3, Class
A4, Class AIO, Class M1, Class M2, Class B, and Class X Certificates represent
ownership of all of the "regular interests" in REMIC 5 (the Class T5-1, Class
T5-2, Class T5-3, Class T5-4, Class T5-5, Class T5-6, Class T5-7, Class T5-8,
Class T5-9, Class T5-10, Class T5-11, Class T5-12, Class T5-13, Class T5-14,
Class T5-15 and Class T5-16 Interests), and the Class R5 Interest represents
the sole class of "residual interest" in REMIC 5 for purposes of the REMIC
Provisions. Each of the Class R1, Class R2, Class R3, and Class R4 Certificates
represents the sole class of "residual interest" in REMIC 1, REMIC 2, REMIC 3,
and REMIC 4, respectively, for purposes of the REMIC Provisions. There are also
two classes of uncertificated REMIC 1 Regular Interests issued under this
Agreement (the Class T1-1 and Class T1-2 Interests), each of which will
constitute regular interests in REMIC 1; four classes of uncertificated REMIC 2
Regular Interests (the Class T2-1, Class T2-2, Class T2-3 and Class T2-4
Interests), each of which will constitute regular interests in REMIC 2; five
classes of uncertificated REMIC 3 Regular Interests (the Class T3-1, Class
T3-2, Class T3-3, Class T3-4 and Class T3-5 Interests), each of which will
constitute regular interests in REMIC 3; and, eleven classes of uncertificated
REMIC 4 Regular Interests (Class T4-1, Class T4-2, Class T4-3, Class T4-4,
Class T4-5, Class T4-6, Class T4-7, Class T4-8, Class T4-9, Class T4-10 and
Class T4-11 Interests) each of which will constitute regular interests in REMIC
4. The REMIC 1 Regular Interests will be held as assets of REMIC 2, the REMIC 2
Regular Interests will be held as assets of REMIC 3, the REMIC 3 Regular
Interests will be held as assets of REMIC 4, and the REMIC 4 Regular Interests
will be held as assets of REMIC 5.
As used herein, (i) each of the Class A1, Class A2 and Class A3
Certificates is "related" to the Mortgage Pool having the identical numerical
designation, and (ii) each Class A4 Certificate is related to Pool 3.
The following table sets forth (or describes) the Class designation,
Certificate Interest Rate, initial Class Principal Amount and minimum
denomination for each Class of Certificates comprising the interests in the
Trust Fund created hereunder.
<TABLE>
<CAPTION>
Certificate Interest Initial Class Minimum
Class Designation Rate Principal Amount Denominations
----------------- -------------------- ---------------- -------------
<S> <C> <C> <C>
Class A1 (1) $135,603,059.00 $ 25,000
Class A2 (2) 244,597,522.00 25,000
Class A3 (3) 35,000,000.00 25,000
Class A4 (4) 55,420,607.00 25,000
Class AIO 4.00% (9) 250,000
Class M1 (5) 46,481,105.00 25,000
Class M2 (6) 29,050,690.00 25,000
Class B (7) 34,860,828.00 25,000
Class X (8) (8) (10)
Class R (8) (8) (10)
</TABLE>
---------------------------
(1) The Certificate Interest Rate with respect to any Distribution Date for
the Class A1 Certificates is the per annum rate equal to the lesser of (i)
6.42% and (ii) the Net Funds Cap for such Distribution Date.
(2) The Certificate Interest Rate with respect to any Distribution Date for
the Class A2 Certificates is the per annum rate equal to the least of (i)
LIBOR plus 0.30%, (ii) 10.00% and (iii) the Net Funds Cap for such
Distribution Date; provided, that if the holder of the Class X Certificate
does not exercise its option to purchase the Mortgage Loans and related
property pursuant to Section 7.01(b) on the Distribution Date on which it
is first entitled to do so, then with respect to such Distribution Date
and each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class A2 Certificates
will be LIBOR plus 0.60%.
(3) The Certificate Interest Rate with respect to any Distribution Date for
the Class A3 Certificates is the per annum rate equal to the least of (i)
LIBOR plus 0.10%, (ii) 10.00% and (iii) the Net Funds Cap for such
Distribution Date; provided, that if the holder of the Class X Certificate
does not exercise its option to purchase the Mortgage Loans and related
property pursuant to Section 7.01(b) on the Distribution Date on which it
is first entitled to do so, then with respect to such Distribution Date
and each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class A3 Certificates
will be LIBOR plus 0.20%.
(4) The Certificate Interest Rate with respect to any Distribution Date for
the Class A4 Certificates is the per annum rate equal to the least of (i)
LIBOR plus 0.33%, (ii) 10.00% and (iii) the Net Funds Cap for such
Distribution Date; provided, that if the holder of the Class X Certificate
does not exercise its option to purchase the Mortgage Loans and related
property pursuant to Section 7.01(b) on the Distribution Date on which it
is first entitled to do so, then with respect to such Distribution Date
and each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class A4 Certificates
will be LIBOR plus 0.66%.
(5) The Certificate Interest Rate with respect to any Distribution Date for
the Class M1 Certificates is the per annum rate equal to the least of (i)
LIBOR plus 0.58%, (ii) 10.00% and (iii) the Net Funds Cap for such
Distribution Date; provided, that if the holder of the Class X Certificate
does not exercise its option to purchase the Mortgage Loans and related
property pursuant to Section 7.01(b) on the Distribution Date on which it
is first entitled to do so, then with respect to such Distribution Date
and each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class M1 Certificates
will be LIBOR plus 1.08%.
(6) The Certificate Interest Rate with respect to any Distribution Date for
the Class M2 Certificates is the per annum rate equal to the least of (i)
LIBOR plus 1.04%, (ii) 10.00% and (iii) the Net Funds Cap for such
Distribution Date; provided, that if the holder of the Class X Certificate
does not exercise its option to purchase the Mortgage Loans and related
property pursuant to Section 7.01(b) on the Distribution Date on which it
is first entitled to do so, then with respect to such Distribution Date
and each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class M2 Certificates
will be LIBOR plus 1.54%.
(7) The Certificate Interest Rate with respect to any Distribution Date for
the Class B Certificates is the per annum rate equal to the lesser of (i)
9.00% and (ii) the Net Funds Cap for such Distribution Date.
(8) The Class X and Class R Certificates will be issued without a Certificate
Principal Amount and will not bear interest.
(9) The Class AIO Certificates are interest-only certificates and will not
receive distributions of principal. Interest will accrue on such Class at
the applicable Certificate Interest Rate on the basis of the Notional
Amount thereof. The initial Class Notional Amount of the Class AIO
Certificates is $90,000,000.
(10) The Class X and Class R Certificates will each be issued as a single
Certificate evidencing the entire Percentage Interest in such Class.
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $581,013,814.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage servicing practices of prudent
mortgage servicing institutions that service or master service mortgage loans
of the same type and quality as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located, to the extent applicable to the
Trustee or the Master Servicer (except in its capacity as successor to a
Servicer), or (y) as provided in the applicable Servicing Agreement, to the
extent applicable to any Servicer.
Accountant: A person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Accrual Period: With respect to any Distribution Date and any Class of
LIBOR Certificates, the Class AIO Certificates and any LIBOR Component, the
one-month period beginning on the immediately preceding Distribution Date (or
on April 25, in the case of the first Accrual Period) and ending on the day
immediately preceding the related Distribution Date. With respect to any
Distribution Date and the Class A1 and Class B Certificates, and any REMIC 1
Regular Interest, REMIC 2 Regular Interest, REMIC 3 Regular Interest or REMIC 4
Regular Interest, the one month period beginning immediately following the end
of the preceding Accrual Period (or from the Cut-off Date, in the case of the
first Accrual Period) and ending on the last day of the calendar month
immediately preceding the month in which such Distribution Date occurs.
Additional Collateral: None.
Adjustable Rate Mortgage Loan: Any Mortgage Loan as to which the related
Mortgage Note provides for the adjustment of the Mortgage Rate applicable
thereto.
Adjusted Overcollateralization Amount: With respect to any Distribution
Date, the amount, if any, by which (a) the Aggregate Loan Balance for such
Distribution Date (reduced to give effect to any Realized Losses and Advances
of principal) exceeds (b) the aggregate of the balances of the Class T4-1,
Class T4-2, Class T4-3, Class T4-4, Class T4-5, Class T4-6, and Class T4-7
Interests as of such Distribution Date (after giving effect to the distribution
of principal on such Regular Interests on such Distribution Date).
Adjusted Overcollateralization Release Amount: With respect to any
Distribution Date, the lesser of (x) the aggregate of the Principal Remittance
Amounts for such Distribution Date and (y) the amount, if any, by which (i) the
Adjusted Overcollateralization Amount for such date, calculated for this
purpose on the basis of the assumption that 100% of the Principal Remittance
Amount for such date is applied on such date in reduction of the principal
balances of the Class T4-1, Class T4-2, Class T4-3, Class T4-4, Class T4-5,
Class T4-6, and Class T4-7 Interests exceeds (ii) the Targeted
Overcollateralization Amount for such date.
Advance: An advance of the aggregate of payments of principal and interest
(net of the Master Servicing Fee and the applicable Servicing Fee) on one or
more Mortgage Loans that were due on the Due Date in the related Collection
Period and not received as of the close of business on the related
Determination Date, required to be made by or on behalf of the Master Servicer
and any Servicer (or by the Trustee) pursuant to Section 5.04.
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.
Aggregate Loan Balance: The aggregate of the Scheduled Principal Balances
of all Mortgage Loans (in all three Mortgage Pools) at the date of
determination.
Aggregate Master Servicing Compensation: As to any Distribution Date, the
aggregate of the Master Servicing Fees payable to the Master Servicer in
respect of such Distribution Date.
Aggregate Overcollateralization Release Amount: With respect to any
Distribution Date, the lesser of (x) the aggregate of the Principal Remittance
Amounts for such Distribution Date and (y) the amount, if any, by which (i) the
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the aggregate of the Principal Remittance
Amounts for such date is applied on such date in reduction of the aggregate of
the Certificate Principal Amounts of the Certificates, exceeds (ii) the
Targeted Overcollateralization Amount for such date.
Aggregate Voting Interests: The aggregate of the Voting Interests of all
the Certificates under this Agreement.
Agreement: This Trust Agreement and all amendments and supplements hereto.
Applied Loss Amount: With respect to any Distribution Date, the amount, if
any, by which (x) the aggregate Certificate Principal Amount of the
Certificates after giving effect to distributions on such date, but before
giving effect to any application of the Applied Loss Amount with respect to
such date, exceeds (y) the Aggregate Loan Balance for such Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the amount set forth
in an appraisal made in connection with the origination of such Mortgage Loan
as the value of the related Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that the Trustee shall
not be responsible for determining whether any such assignment is in recordable
form.
Aurora: Aurora Loan Services Inc., as Servicer under the applicable
Servicing Agreement.
Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 6.10.
Authorized Officer: Any Person who may execute an Officer's Certificate on
behalf of the Depositor.
B Principal Distribution Amount: With respect to any Distribution Date,
the amount, if any, by which (x) the sum of (i) the aggregate Certificate
Principal Amount of the Senior Certificates and the aggregate Certificate
Principal Amount of the Class M1 and Class M2 Certificates, in each case after
giving effect to distributions on such Distribution Date and (ii) the Class
Principal Amount of the Class B Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 92.60% and
(ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount,
if any, by which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii) 0.50% of the Cut-off Date Aggregate Loan Balance.
Balloon Mortgage Loan: Any Mortgage Loan having an original term to
maturity that is shorter than its amortization schedule, and a final Scheduled
Payment that is disproportionately large in comparison to other Scheduled
Payments.
Balloon Payment: The final Scheduled Payment in respect of a Balloon
Mortgage Loan.
Bankruptcy: As to any Person, the making of an assignment for the benefit
of creditors, the filing of a voluntary petition in bankruptcy, adjudication as
a bankrupt or insolvent, the entry of an order for relief in a bankruptcy or
insolvency proceeding, the seeking of reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief, or seeking,
consenting to or acquiescing in the appointment of a trustee, receiver or
liquidator, dissolution, or termination, as the case may be, of such Person
pursuant to the provisions of either the United States Bankruptcy Code of 1986,
as amended, or any other similar state laws.
Base Servicing Fee: As defined in the Special Servicing Compensation
Agreement.
Basis Risk Reserve Fund: A fund created as part of the Trust Fund pursuant
to Section 5.07 of this Agreement but which is not an asset of any of the
REMICs.
Basis Risk Shortfall: With respect to any Distribution Date and any Class
of Certificates other than the Class AIO Certificates and any Component, the
amount by which the Certificate Interest Rate or Component Interest Rate
applicable to such Certificate or Component for such date, determined without
regard to the Net Funds Cap for such date, exceeds such Net Funds Cap.
Benefit Plan Opinion: An Opinion of Counsel satisfactory to the Trustee to
the effect that any proposed transfer will not (i) cause the assets of the
Trust Fund to be regarded as plan assets for purposes of the Plan Asset
Regulations or (ii) give rise to any fiduciary duty on the part of the
Depositor or the Trustee.
Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.
Book-Entry Certificates: Beneficial interests in Certificates designated
as "Book-Entry Certificates" in this Agreement, ownership and transfers of
which shall be evidenced or made through book entries by a Clearing Agency as
described in Section 3.09; provided, that after the occurrence of a condition
whereupon book-entry registration and transfer are no longer permitted and
Definitive Certificates are to be issued to Certificate Owners, such Book-Entry
Certificates shall no longer be "Book-Entry Certificates." As of the Closing
Date, the following Classes of Certificates constitute Book-Entry Certificates:
the Class A1, Class A2, Class A3, Class A4, Class AIO, Class M1, Class M2 and
Class B Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a day on
which banking institutions in New York, New York or, if other than New York,
the city in which the Corporate Trust Office of the Trustee is located, or the
States of Maryland or Minnesota are closed, or (iii) with respect to any
Remittance Date or any Servicer reporting date, the States specified in the
definition of "Business Day" in the applicable Servicing Agreement, are
authorized or obligated by law or executive order to be closed.
Carryforward Interest: With respect to any Distribution Date and each
Class of Certificates or Component, the sum of (i) the amount, if any, by which
(x) the sum of (A) Current Interest for such Class or Component for the
immediately preceding distribution Date and (B) any unpaid Carryforward
Interest for such Class or Component from previous Distribution Dates exceeds
(y) the amount distributed in respect of interest on such Class or Component on
such immediately preceding Distribution Date, and (ii) interest on such amount
for the related Accrual Period at the applicable Certificate Interest Rate or
Component Interest Rate.
Certificate: Any one of the certificates signed and countersigned by the
Trustee in substantially the forms attached hereto as Exhibit A.
Certificate Account: The account maintained by the Trustee in accordance
with the provisions of Section 4.04.
Certificate Interest Rate: With respect to each Class of Certificates and
any Distribution Date, the applicable per annum rate set forth or described in
the Preliminary Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate (other than
the Class AIO, Class X and Class R Certificates), the initial Certificate
Principal Amount thereof, less the amount of all principal distributions
previously distributed with respect to such Certificate and any Applied Loss
Amount previously allocated to such Certificate. The Class AIO, Class X and
Class R Certificates are issued without Certificate Principal Amounts.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02.
Certificateholder: The meaning provided in the definition of "Holder."
Civil Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Class: All Certificates bearing the same class designation.
Class Notional Amount: With respect to the Class AIO Certificates and any
Distribution Date, the aggregate Notional Amount thereof, which will be
calculated as follows:
(i) from May 25, 1999 through April 25, 2001, the Class Notional
Amount will equal $90,000,000;
(ii) from May 25, 2001 through October 25, 2001, the Class Notional
Amount will equal $45,000,000;
(iii) from November 25, 2001 and thereafter, the Class Notional
Amount will equal zero.
Class Principal Amount: With respect to each Class of Certificates other
than the Class X and Class R Certificates and any Class of Notional
Certificates, the aggregate of the Certificate Principal Amounts of all
Certificates of such Class at the date of determination.
Class R Certificate: The Class R Certificate executed by the Trustee, and
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit A and evidencing the ownership of the Class R1
Interest, Class R2 Interest, Class R3 Interest, Class R4 interest, and Class R5
Interest.
Class R1 Interest: The uncertificated residual interest in REMIC 1.
Class R2 Interest: The uncertificated residual interest in REMIC 2.
Class R3 Interest: The uncertificated residual interest in REMIC 3.
Class R4 Interest: The uncertificated residual interest in REMIC 4.
Class R5 Interest: The uncertificated residual interest in REMIC 5.
Class T1-1 Interest: A regular interest in REMIC 1 held as an asset of
REMIC 2 that has an initial principal balance equal to the Cut-off Date
Aggregate Loan Balance less an amount equal to the Class Notional Amount of the
Class AIO Certificates as of the Cut-off Date, bears interest at a per annum
rate equal to the weighted average (by Scheduled Principal Balance) of the Net
Mortgage Rates on the Mortgage Loans as of the first day of the related
Collection Period, and has such other terms as are described in Section 5.06.
Class T1-2 Interest: A regular interest in REMIC 1 held as an asset of
REMIC 2 that has an initial principal balance equal to the Class Notional
Amount of the Class AIO Certificates as of the Cut-off Date, bears interest at
a per annum rate equal to the weighted average (by Scheduled Principal Balance)
of the Net Mortgage Rates on the Mortgage Loans as of the first day of the
related Collection Period, and has such other terms as are described in Section
5.06.
Class T2-1 Interest: A regular interest in REMIC 2 held as an asset of
REMIC 3 that has an initial principal balance equal to 98% of the Cut-off Date
Aggregate Loan Balance, bears interest at a per annum rate equal to the
weighted average of the rates payable on the Class T1-1 and Class T1-2
Interests, reducing the rate on the Class T1-2 Interest by 4% for purposes of
this calculation, and has such other terms as are described in Section 5.06.
Class T2-2 Interest: A regular interest in REMIC 2 held as an asset of
REMIC 3 that has an initial principal balance equal to 1% of the Cut-off Date
Aggregate Loan Balance, bears interest at a per annum rate equal to the
weighted average of the rates payable on the Class T1-1 and Class T1-2
Interests, reducing the rate on the Class T1-2 Interest by 4% for purposes of
this calculation, and has such other terms as are described in Section 5.06.
Class T2-3 Interest: A regular interest in REMIC 2 held as an asset of
REMIC 3 that has an initial principal balance equal to 1% of the Cut-off Date
Aggregate Loan Balance, bears interest at a per annum rate equal to the
weighted average of the rates payable on the Class T1-1 and Class T1-2
Interests, reducing the rate on the Class T1-2 Interest by 4% for purposes of
this calculation, and has such other terms as are described in Section 5.06.
Class T2-4 Interest: A regular interest in REMIC 2 held as an asset of
REMIC 3 that does not have a principal balance, but has a notional principal
balance that will at all times equal the principal balance of the Class T1-2
Interest and which bears interest at a rate of 4%.
Class T3-1 Interest. A regular interest in REMIC 3 held as an asset of
REMIC 4 that has an initial principal balance equal to 98% of the Cut-off Date
Aggregate Loan Balance, bears interest at a per annum rate equal to the rate
payable on the Class T2-1 Interest, and has such other terms as are described
in Section 5.06.
Class T3-2 Interest. A regular interest in REMIC 3 held as an asset of
REMIC 4 that has an initial principal balance equal to 1% of the Cut-off Date
Aggregate Loan Balance, bears interest at a per annum rate equal to the
Standard Rate, and has such other terms as are described in Section 5.06.
Class T3-3 Interest. A regular interest in REMIC 3 held as an asset of
REMIC 4 that has an initial principal balance equal to 1% of the Cut-off Date
Aggregate Loan Balance, bears interest at a per annum rate equal to the rate
payable on the Class T2-3 Interest, and has such other terms as are described
in Section 5.06.
Class T3-4 Interest. A regular interest in REMIC 3 held as an asset of
REMIC 4 that is entitled to the interest accruals on the Class T2-2 Interest in
excess of accruals at the Standard Rate, and that has such other terms and
conditions as are described in Section 5.06.
Class T3-5 Interest. A regular interest in REMIC 3 held as an asset of
REMIC 4 that is entitled on any Distribution Date to all amounts payable with
respect to the Class T2-4 Interest, and that has such other terms and
conditions as are described in Section 5.06.
Class T4-1 Interest: A regular interest in REMIC 4 held as an asset of
REMIC 5 that has an initial balance as of the Closing Date of $135,603,059.00,
bears interest at the Standard Rate, and has such other terms as are described
in Section 5.06.
Class T4-2 Interest. A regular interest in REMIC 4 held as an asset of
REMIC 5 that has an initial balance as of the Closing Date of $244,597,522.00,
bears interest at the Standard Rate, and has such other terms as are described
in Section 5.06.
Class T4-3 Interest. A regular interest in REMIC 4 held as an asset of
REMIC 5 that has an initial balance as of the Closing Date of $35,000,000.00,
bears interest at the Standard Rate, and has such other terms as are described
in Section 5.06.
Class T4-4 Interest. A regular interest in REMIC 4 held as an asset of
REMIC 5 that has an initial balance as of the Closing Date of $55,420,607.00,
bears interest at the Standard Rate, and has such other terms as are described
in Section 5.06.
Class T4-5 Interest. A regular interest in REMIC 4 held as an asset of
REMIC 5 that has an initial balance as of the Closing Date of $46,481,105.00,
bears interest at the Standard Rate, and has such other terms as are described
in Section 5.06.
Class T4-6 Interest. A regular interest in REMIC 4 held as an asset of
REMIC 5 that has an initial balance as of the Closing Date of $29,050,690.00,
bears interest at the Standard Rate, and has such other terms as are described
in Section 5.06.
Class T4-7 Interest. A regular interest in REMIC 4 held as an asset of
REMIC 5 that has an initial balance as of the Closing Date of $34,860,828.00,
bears interest at the Standard Rate, and has such other terms as are described
in Section 5.06.
Class T4-8 Distributable Amount: With respect to any Distribution Date, an
amount equal to the product of (i) a fraction, the numerator of which is the
number of days in the related Accrual Period and the denominator of which is
360, (ii) the Class T4-8 Notional Balance immediately prior to such
Distribution Date and (iii) the Class T4-8 Pass-Through Rate.
Class T4-8 Interest: A regular interest in REMIC 4 held as an asset of
REMIC 5 that has such terms as are described in Section 5.06.
Class T4-8 Notional Balance: A notional principal balance equal as of any
date to the sum of the principal balances of the Class T3-1 and T3-3 Interests
on such date.
Class T4-8 Pass-Through Rate: With respect to any Distribution Date, a per
annum rate equal to the excess of (i) the rate payable on the Class T3-1
Interest for such date over (ii) the product of (x) two and (y) a fraction, the
numerator of which is the product of the Standard Rate and the principal
balance of the Class T3-2 Interest immediately prior to such Distribution Date
and the denominator of which is the sum of the principal balances of the
related Class T3-2 and Class T3-3 Interests immediately prior to such
Distribution Date.
Class T4-9 Distributable Amount: With respect to any Distribution Date, an
amount equal to the product of (i) a fraction, the numerator of which is the
number of days in the related Accrual Period and the denominator of which is
360, (ii) the Class T4-9 Notional Balance immediately prior to such
Distribution Date and (iii) the Class T4-9 Pass-Through Rate.
Class T4-9 Interest: A regular interest in REMIC 4 held as an asset of
REMIC 5 that has such terms as are described in Section 5.06.
Class T4-9 Notional Balance: A notional principal balance equal as of any
date to the principal balance of the Class T3-2 Interest related to such
Mortgage Pool for such date.
Class T4-9 Pass-Through Rate: With respect to any Distribution Date, a per
annum rate equal to the excess of (i) the Standard Rate over (ii) the product
of (x) two and (y) a fraction, the numerator of which is the product of the
Standard Rate and the principal balance of the Class T3-2 Interest immediately
prior to such Distribution Date and the denominator of which is the sum of the
principal balances of the related Class T3-2 and Class T3-3 Interests
immediately prior to such Distribution Date.
Class T4-10 Distributable Amount: With respect to any Distribution Date,
an amount equal to the amount distributable in respect of the Class T3-4
Interest for such date.
Class T4-10 Interest: A regular interest in REMIC 4 held as an asset of
REMIC 5 that is entitled to the Class T4-11 Distributable Amount.
Class T4-11 Interest. A regular interest in REMIC 4 held as an asset of
REMIC 5 that is entitled on any Distribution Date to all amounts payable with
respect to the Class T3-5 Interest, and that has such other terms and
conditions as are described in Section 5.06.
Class T5-1 Interest: A regular interest in REMIC 5 that has an initial
balance as of the Closing Date of $135,603,059.00 and bears interest at the
Class A-1 Certificate Interest Rate the ownership of which is evidenced by the
Class A-1 Certificates.
Class T5-2 Interest: A regular interest in REMIC 5 that has an initial
balance as of the Closing Date of $244,597,522.00 and bears interest at the
Class A-2 Certificate Interest Rate the ownership of which is evidenced by the
Class A-2 Certificates.
Class T5-3 Interest: A regular interest in REMIC 5 that has an initial
balance as of the Closing Date of $35,000,000.00 and bears interest at the
Class A-3 Certificate Interest Rate the ownership of which is evidenced by the
Class A-3 Certificates.
Class T5-4 Interest: A regular interest in REMIC 5 that has an initial
balance as of the Closing Date of $55,420,607.00 and bears interest at the
Class A-4 Certificate Interest Rate the ownership of which is evidenced by the
Class A-4 Certificates.
Class T5-5 Interest: A regular interest in REMIC 5 that has an initial
balance as of the Closing Date of $46,481,105.00 and bears interest at the
Class M-1 Certificate Interest Rate the ownership of which is evidenced by the
Class M-1 Certificates.
Class T5-6 Interest: A regular interest in REMIC 5 that has an initial
balance as of the Closing Date of $29,050,690.00 and bears interest at the
Class M-2 Certificate Interest Rate the ownership of which is evidenced by the
Class M-2 Certificates.
Class T5-7 Interest: A regular interest in REMIC 5 that has an initial
balance as of the Closing Date of $34,860,828.00 and bears interest at the
Class B Certificate Interest Rate the ownership of which is evidenced by the
Class B Certificates.
Class T5-8 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class X Certificate, that is entitled to all interest accruals
on the Class T4-1 Interest in excess of interest accruing thereon at the Class
A-1 Certificate Interest Rate.
Class T5-9 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class X Certificate, that is entitled to all interest accruals
on the Class T4-2 Interest in excess of interest accruing thereon at the Class
A-2 Certificate Interest Rate.
Class T5-10 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class X Certificate, that is entitled to all interest accruals
on the Class T4-3 Interest in excess of interest accruing thereon at the Class
A-3 Certificate Interest Rate.
Class T5-11 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class X Certificate, that is entitled to all interest accruals
on the Class T4-4 Interest in excess of interest accruing thereon at the Class
A-4 Certificate Interest Rate.
Class T5-12 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class X Certificate, that is entitled to all interest accruals
on the Class T4-5 Interest in excess of interest accruing thereon at the Class
M-1 Certificate Interest Rate.
Class T5-13 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class X Certificate, that is entitled to all interest accruals
on the Class T4-6 Interest in excess of interest accruing thereon at the Class
M-2 Certificate Interest Rate.
Class T5-14 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class X Certificate, that is entitled to all interest accruals
on the Class T4-7 Interest in excess of interest accruing thereon at the Class
B Certificate Interest Rate.
Class T5-15 Distributable Amount: For any Distribution Date, the sum of
the Class T4-8, Class T4-9, and Class T4-10 Distributable Amounts.
Class T5-15 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class X Certificate, that is entitled to the Class T5-15
Distributable Amount.
Class T5-16 Interest: A regular interest in REMIC 5, ownership of which is
evidenced by the Class AIO Certificates, that is entitled on any Distribution
Date to all amounts payable on the Class T4-11 Interest
Class X Distributable Amount: With respect to any Distribution Date, the
aggregate of the amounts distributable on the Class T5-8, Class T5-9, Class
T5-10, Class T5-11, Class T5-12, Class T5-13, Class T5-14, and Class T5-15
Interests.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closing Date: May 10, 1999.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collection Account: A separate account established and maintained by the
Master Servicer pursuant to Section 4.01.
Collection Period: With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio
of the principal balance of such Mortgage Loan at origination or such other
date as is specified, plus, with respect to any Junior Mortgage Loan, the
outstanding principal balance of the mortgage loan senior thereto, to the
Original Value thereof.
Compensating Interest Payment: With respect to any Distribution Date, an
amount equal to the excess of (x) the aggregate of any Prepayment Interest
Shortfalls with respect to such Distribution Date over (y) the aggregate of any
amounts required to be paid by the Servicers in respect of such shortfalls but
not paid; provided, that such amount, to the extent payable by the Master
Servicer, shall not exceed the Aggregate Master Servicing Compensation that
would be payable to the Master Servicer in respect of such Distribution Date
without giving effect to any Compensating Interest Payment.
Component: None.
Component Certificate: None.
Component Group: None.
Component Interest Rate: Not applicable.
Component Notional Amount: Not applicable.
Component Principal Amount: Not applicable.
Conventional Loan: A Mortgage Loan that is not insured by the United
States Federal Housing Administration or guaranteed by the United States
Department of Veterans Affairs.
Converted Mortgage Loan: None.
Convertible Mortgage Loan: None.
Cooperative Corporation: The entity that holds title (fee or an acceptable
leasehold estate) to the real property and improvements constituting the
Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.
Cooperative Loan Documents: As to any Cooperative Loan, (i) the
Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon,
which has been filed in all places required to perfect the security interest in
the Cooperative Shares and the Proprietary Lease; and (vi) executed UCC-3
financing statements (or copies thereof) or other appropriate UCC financing
statements required by state law, evidencing a complete and unbroken line from
the mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: The principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at One First National
Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention: Global Corporate
Trust Services.
Current Interest: With respect to each Class of Certificates or Component
and any Distribution Date, the aggregate amount of interest accrued at the
applicable Certificate Interest Rate or Component Interest Rate during the
related Accrual Period on the Class Principal Amount or Class Notional Amount
of such Class or the Component Principal Amount or Component Notional Amount of
such Component immediately prior to such Distribution Date.
Custodial Agreement: The custodial agreement attached as Exhibit K hereto,
and any custodial agreement subsequently executed by the Trustee substantially
in the form thereof.
Custodian: Each custodian appointed by the Trustee pursuant to a Custodial
Agreement, and any successor thereto. The initial Custodian is Norwest Bank
Minnesota, National Association.
Cut-off Date: April 1, 1999.
Cut-off Date Aggregate Loan Balance: With respect to the Mortgage Loans in
the Trust Fund on the Closing Date, the Aggregate Loan Balance as of the
Cut-off Date.
Cut-off Date Pool Balance: With respect to each Mortgage Pool, the Pool
Balance thereof as of the Cut-off Date.
DCR: Duff & Phelps Credit Rating Co., or any successor in interest.
Deferred Amount: With respect to any Distribution Date and each
Certificate, the aggregate of Applied Loss Amounts previously applied in
reduction of the Certificate Principal Amount thereof, less any amounts
previously reimbursed in respect thereof.
Definitive Certificate: A Certificate of any Class issued in definitive,
fully registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the Trust
Fund pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.
Delinquency Rate: With respect to any calendar month, the fraction,
expressed as a percentage, the numerator of which is the aggregate outstanding
principal balance of all Mortgage Loans 60 or more days delinquent (including
all foreclosures and REO Properties) as of the close of business on the last
day of such month, and the denominator of which is the Aggregate Loan Balance
as of the close of business on the last day of such month.
Deposit Date: With respect to each Distribution Date, the Business Day
immediately preceding such Distribution Date.
Depositor: Structured Asset Securities Corporation, a Delaware corporation
having its principal place of business in New York, or its successors in
interest.
Determination Date: With respect to each Distribution Date, the 18th day
of the month in which such Distribution Date occurs, or, if such 18th day is
not a Business Day, the next succeeding Business Day.
Directing Holder: The holder of the Class X Certificate.
Disqualified Organization: Either (i) the United States, (ii) any state or
political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt organization (other than a cooperative described
in section 521 of the Code) which 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, (vii) any organization described in section 1381(a)(2)(C) of
the Code, or (viii) any "electing large partnership" described in section 775
of the Code, or (ix) any other entity designated as a Disqualified Organization
by relevant legislation amending the REMIC Provisions and in effect at or
proposed to be effective as of the time of the determination. In addition, a
corporation will not be treated as an instrumentality of the United States or
of any state or political subdivision thereof if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
governmental unit.
Distribution Date: The 25th day of each month or, if such 25th day is not
a Business Day, the next succeeding Business Day, commencing in May 1999.
Due Date: With respect to any Mortgage Loan, the date on which a Scheduled
Payment is due under the related Mortgage Note.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable
to the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided
that any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt or deposit obligations of such holding company
or depository institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category, or (iii) a segregated trust
account or accounts (which shall be a "special deposit account") maintained
with the Trustee or any other federal or state chartered depository institution
or trust company, acting in its fiduciary capacity, in a manner acceptable to
the Trustee and the Rating Agencies. Eligible Accounts may bear interest.
Eligible Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America ("Direct Obligations");
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company (including U.S. subsidiaries of foreign depositories and
the Trustee or any agent of the Trustee, acting in its respective
commercial capacity) incorporated or organized under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal or state banking authorities, so long as at the
time of investment or the contractual commitment providing for such
investment the commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal subsidiary
of a holding company, the commercial paper or other short-term debt or
deposit obligations of such holding company or deposit institution, as the
case may be) have been rated by each Rating Agency in its highest
short-term rating category or one of its two highest long-term rating
categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA, FNMA or FHLMC with any registered
broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which have a credit rating from each Rating Agency, at
the time of investment or the contractual commitment providing for such
investment, at least equal to one of the two highest long-term credit
rating categories of each Rating Agency; provided, however, that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and
held as part of the Trust Fund to exceed 20% of the sum of the Aggregate
Loan Balance and the aggregate principal amount of all Eligible
Investments in the Certificate Account; provided, further, that such
securities will not be Eligible Investments if they are published as being
under review with negative implications from either Rating Agency;
(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 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders of
such receipts; and
(viii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or
investment, (A) rated in the highest rating category by each Rating Agency
or (B) that would not adversely affect the then current rating by either
Rating Agency of any of the Certificates. Such investments in this
subsection (viii) may include money market mutual funds or common trust
funds, including any fund for which The First National Bank of Chicago
(the "Bank"), the Trustee, the Master Servicer or an affiliate thereof
serves as an investment advisor, administrator, shareholder servicing
agent, and/or custodian or subcustodian, notwithstanding that (x) the Bank
or an affiliate thereof charges and collects fees and expenses from such
funds for services rendered, (y) the Bank or an affiliate thereof charges
and collects fees and expenses for services rendered pursuant to this
Agreement, and (z) services performed for such funds and pursuant to this
Agreement may converge at any time. The Trustee specifically authorizes
the Bank or an affiliate thereof to charge and collect from the Trustee
such fees as are collected from all investors in such funds for services
rendered to such funds (but not to exceed investment earnings thereon);
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code.
ERISA-Restricted Certificate: Any Certificate.
Escrow Account: Any account established and maintained by the applicable
Servicer pursuant to the applicable Servicing Agreement.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 6.14(a).
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Scheduled Distribution Date: With respect to the Class A1, Class A2
and Class A4 Certificates, August 25, 2028; with respect to the Class A3
Certificates, January 25, 2015; with respect to the Class AIO Certificates,
October 25, 2001; with respect to the Class M1, Class M2 and Class B
Certificates, May 25, 2029.
Financial Intermediary: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant.
Fitch: Fitch IBCA, Inc., or any successor in interest.
FNMA: The Federal National Mortgage Association, a federally chartered and
privately owned corporation organized and existing under the Federal National
Mortgage Association Charter Act, or any successor thereto.
GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.
Holder or Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor, the Trustee, the
Master Servicer, any Servicer or any Affiliate thereof shall be deemed not to
be outstanding in determining whether the requisite percentage necessary to
effect any such consent has been obtained, except that, in determining whether
the Trustee shall be protected in relying upon any such consent, only
Certificates which a Responsible Officer of the Trustee knows to be so owned
shall be disregarded. The Trustee may request and conclusively rely on
certifications by the Depositor, the Master Servicer and any Servicer in
determining whether any Certificates are registered to an Affiliate of the
Depositor, the Master Servicer or such Servicer.
HUD: The United States Department of Housing and Urban Development, or any
successor thereto.
Incentive Fees: As defined in the Special Servicing Compensation
Agreement.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
Index: The index specified in the related Mortgage Note for calculation of
the Mortgage Rate thereof.
Initial LIBOR Rate: 4.9025%.
Initial Loss Mitigation Fee: As defined in the Special Servicing
Compensation Agreement.
Insurance Policy: Any Primary Mortgage Insurance Policy and any standard
hazard insurance policy, flood insurance policy, earthquake insurance policy or
title insurance policy relating to the Mortgage Loans or the Mortgaged
Properties, to be in effect as of the Closing Date or thereafter during the
term of this Agreement.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy, other than amounts (i) to cover expenses incurred by or on behalf of
the Servicer in connection with procuring such proceeds, (ii) to be applied to
restoration or repair of the related Mortgaged Property or (iii) required to be
paid over to the Mortgagor pursuant to law or the related Mortgage Note.
Interest Remittance Amount: With respect to any Distribution Date, (a) the
sum of (i) all interest collected (other than Payaheads) or advanced in respect
of Scheduled Payments on the Mortgage Loans, including any Prepayment Premiums,
during the related Collection Period, less (x) the related Servicing Fee (or
Base Servicing Fee, as applicable) and the Master Servicing Fee with respect to
the Mortgage Loans and (y) unreimbursed interest Advances and other amounts due
to the Master Servicer, the Servicers or the Trustee (other than with respect
to clause (b), below) with respect to the Mortgage Loans, to the extent
allocable to interest, (ii) any amounts paid by the Servicers with respect to
Prepayment Interest Shortfalls with respect to the Mortgage Loans and any
Compensating Interest Payment with respect to the Mortgage Loans with respect
to the related Prepayment Period, (iii) the portion of any Substitution Amount
paid with respect to the Mortgage Loans during the related Prepayment Period
allocable to interest and (iv) all Net Liquidation Proceeds, Insurance Proceeds
and other recoveries collected with respect to such Mortgage Loans during the
related Prepayment Period, to the extent allocable to interest, as reduced by
unreimbursed interest Advances and other amounts due the Master Servicer, the
Servicers or the Trustee, to the extent allocable to interest, as reduced by
(b) any expenses of the Trustee reimbursable pursuant to Section 6.11 and not
reimbursed pursuant to clauses (i) or (iv) above.
Intervening Assignments: The original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument.
Junior Mortgage Loan: Any Mortgage Loan that is secured by a junior lien
on the related Mortgaged Property.
Latest Possible Maturity Date: The Distribution Date occurring in May
2029.
Lehman Capital: Lehman Capital, A Division of Lehman Brothers Holdings
Inc., or any successor in interest.
LIBOR: With respect to the first Accrual Period, the Initial LIBOR Rate.
With respect to each subsequent Accrual Period, the per annum rate determined
pursuant to Section 4.05 on the basis of London interbank offered rate
quotations for one-month Eurodollar deposits, as such quotations may appear on
the display designated as page "LIUS01M" on the Bloomberg Financial Markets
Commodities News (or such other page as may replace such page on that service
for the purpose of displaying London interbank offered quotations of major
banks).
LIBOR Certificate: Any Class A2, Class A3, Class A4, Class M1 or Class M2
Certificate.
LIBOR Component: None.
LIBOR Determination Date: The second London Business Day immediately
preceding the commencement of each Accrual Period other than the first Accrual
Period for any LIBOR Certificates.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer or the applicable Servicer has determined that all amounts that
it expects to recover on behalf of the Trust Fund from or on account of such
Mortgage Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Master Servicer or
a Servicer in connection with the liquidation of any defaulted Mortgage Loan
and are not recoverable under the applicable Primary Mortgage Insurance Policy,
including, without limitation, foreclosure and rehabilitation expenses, legal
expenses and unreimbursed amounts expended pursuant to Sections 9.06, 9.16 or
9.22.
Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale, payment in full, discounted
payoff or otherwise, or the sale of the related Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the Mortgage Loan, including
any amounts remaining in the related Escrow Account.
London Business Day: Any day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.
Loss Mitigation Fee: As defined in the Special Servicing Compensation
Agreement.
M1 Principal Distribution Amount: With respect to any Distribution Date,
the amount, if any, by which (x) the sum of (i) the aggregate Certificate
Principal Amount of the Senior Certificates after giving effect to
distributions on such Distribution Date and (ii) the Class Principal Amount of
the Class M1 Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (A) the product of (i) 70.60% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Cut-off Date Aggregate Loan Balance.
M2 Principal Distribution Amount: With respect to any Distribution Date,
the amount, if any, by which (x) the sum of (i) the aggregate Certificate
Principal Amount of the Senior Certificates and the Class Principal Amount of
the Class M1 Certificates, in each case after giving effect to distributions on
such Distribution Date and (ii) the Class Principal Amount of the Class M2
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) 80.60% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) 0.50% of the Cut-off Date
Aggregate Loan Balance.
Maintenance: With respect to any Cooperative Unit, the rent or fee paid by
the Mortgagor to the Cooperative Corporation pursuant to the Proprietary Lease.
Master Servicer: Norwest Bank Minnesota, National Association, or any
successor in interest, or if any successor master servicer shall be appointed
as herein provided, then such successor master servicer.
Master Servicing Fee: As to any Distribution Date and each Mortgage Loan,
an amount equal to the product of the Master Servicing Fee Rate and the
outstanding principal balance of such Mortgage Loan as of the first day of the
related Collection Period. The Master Servicing Fee for any Mortgage Loan shall
be payable in respect of any Distribution Date solely from the interest portion
of the Scheduled Payment or other payment or recovery with respect to such
Mortgage Loan.
Master Servicing Fee Rate: 0.015% per annum.
Material Defect: As defined in Section 2.02(c) hereof.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
Corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage, or
an Assignment of Mortgage, has been or will be recorded in the name of MERS, as
agent for the holder from time to time of the Mortgage Note.
Monthly Excess Cashflow: With respect to any Distribution Date, the sum of
(x) Monthly Excess Interest for such date and (y) the Aggregate
Overcollateralization Release Amount for such date.
Monthly Excess Interest: With respect to any Distribution Date, the amount
of any Interest Remittance Amount for remaining after application pursuant to
clauses (i) through (v) of Section 5.02(b) on such date.
Moody's: Moody's Investors Service, or any successor in interest.
Mortgage: A mortgage, deed of trust or other instrument encumbering a fee
simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan required to be delivered to the Trustee pursuant
to this Agreement.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold,
assigned to or deposited with the Trustee pursuant to Section 2.01 or Section
2.05, including without limitation, each Mortgage Loan listed on the Mortgage
Loan Schedule, as amended from time to time.
Mortgage Loan Sale Agreement: The agreement, dated as of April 1, 1999,
for the sale of the Mortgage Loans by Lehman Capital to the Depositor.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A, which
shall identify each Mortgage Loan, as such schedule may be amended from time to
time to reflect the addition of Mortgage Loans to, or the deletion of Mortgage
Loans from, the Trust Fund.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Pool: Any of Pool 1, Pool 2 or Pool 3.
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan.
Mortgaged Property: Either of (x) the fee simple interest in real
property, together with improvements thereto including any exterior
improvements to be completed within 120 days of disbursement of the related
Mortgage Loan proceeds, or (y) in the case of a Cooperative Loan, the related
Cooperative Shares and Proprietary Lease, securing the indebtedness of the
Mortgagor under the related Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Excess Spread: With respect to any Distribution Date, (A) the
fraction, expressed as a percentage, the numerator of which is equal to the
product of (i) the amount, if any, by which (a) the Interest Remittance Amount
for such Distribution Date exceeds (b) the Current Interest payable with
respect to the Certificates and Components for such date and (ii) twelve, and
the denominator of which is the Aggregate Loan Balance for such Distribution
Date, multiplied by (B) a fraction, the numerator of which is thirty and the
denominator of which is the greater of thirty and the actual number of days in
the immediately preceding calendar month.
Net Funds Cap: With respect to any Distribution Date, (A) the fraction,
expressed as a percentage, the numerator of which is the product of (i) the
amount by which the Optimal Interest Remittance Amount for such date exceeds
the amount of interest distributable on the Class AIO Certificates for such
date and (ii) 12, and the denominator of which is the product of (a) the
Aggregate Loan Balance for the immediately preceding Distribution Date
multiplied by (b) a fraction, the numerator of which is 30 and the denominator
of which is the greater of 30 and the actual number of days in the immediately
preceding calendar month.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
the related Liquidation Proceeds net of (i) unreimbursed expenses, (ii) any
Incentive Fees and (iii) any unreimbursed Advances, if any, received and
retained in connection with the liquidation of such Mortgage Loan.
Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage Rate
thereof reduced by the sum of the applicable Servicing Fee Rate, the Master
Servicing Fee Rate and the Trustee Fee Rate.
Net Prepayment Interest Shortfall: With respect to any Distribution Date,
the excess, if any, of any Prepayment Interest Shortfalls with respect to the
Mortgage Loans for such date over the sum of any amounts paid by the Servicers
with respect to such shortfalls and any amount that is required to be paid by
the Master Servicer in respect of such shortfalls pursuant to this Agreement.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage Loan.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-U.S. Person: Any individual, corporation, partnership or other person
other than 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 state thereof, including for this purpose, the District of
Columbia; an estate that is subject to U.S. federal income tax regardless of
the source of its income; or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States trustees have authority to control all substantial
decisions of the trust.
Notional Amount: With respect to any Notional Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Class Notional
Amount of such Class of Certificates for such Distribution Date.
Notional Certificate: Any Class AIO Certificate.
Offering Document: The Prospectus and the PPM.
Officer's Certificate: A certificate signed by the Chairman of the Board,
any Vice Chairman, the President, any Vice President or any Assistant Vice
President of a Person, and in each case delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable in
form and substance to the Trustee, and who may be in-house or outside counsel
to the Depositor, the Master Servicer or a Servicer but which must be
Independent outside counsel with respect to any such opinion of counsel
concerning the transfer of any Residual Certificate or concerning certain
matters with respect to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the taxation, or the federal income tax status, of each
REMIC.
Optimal Interest Remittance Amount: With respect to each Distribution
Date, the product of (1)(x) the weighted average of the Net Mortgage Rates of
the Mortgage Loans as of the first day of the related Collection Period,
divided by (y) (12), and (2) the Aggregate Loan Balance for the immediately
preceding Distribution Date.
Original Value: The lesser of (a) the Appraised Value of a Mortgaged
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor
at the time the related Mortgage Loan was originated.
Overcollateralization Amount: With respect to any Distribution Date, the
amount, if any, by which (x) the Aggregate Loan Balance for such Distribution
Date exceeds (y) the aggregate Certificate Principal Amount of the Certificates
and the aggregate Component Principal Amount of the Components after giving
effect to distributions on such Distribution Date.
Overcollateralization Deficiency: With respect to any Distribution Date,
the amount, if any, by which (x) the Targeted Overcollateralization Amount for
such Distribution Date exceeds (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after giving effect to the
reduction on such Distribution Date of the Certificate Principal Amounts of the
Certificates and the Component Principal Amounts of the Components resulting
from the distribution of the Principal Remittance Amounts on such Distribution
Date, but prior to allocation of any Applied Loss Amount on such Distribution
Date.
Overcollateralization Release Amount: With respect to any Distribution
Date and each Mortgage Pool, the amount equal to the product of (i) the
Aggregate Overcollateralization Release Amount for such Distribution Date and
(ii) the Pool Percentage for such Mortgage Pool for such Distribution Date.
Payahead: With respect to any Mortgage Loan and any Due Date therefor, any
Scheduled Payment received by the applicable Servicer during any Collection
Period in addition to the Scheduled Payment due on such Due Date, intended by
the related Mortgagor to be applied on a subsequent Due Date.
Paying Agent: Any paying agent appointed pursuant to Section 3.08.
Percentage Interest: With respect to any Certificate, its percentage
interest in the undivided beneficial ownership interest in the Trust Fund
evidenced by all Certificates of the same Class as such Certificate. With
respect to any Certificate other than the Class X and Class R Certificates, the
Percentage Interest evidenced thereby shall equal the initial Certificate
Principal Amount thereof divided by the initial Class Principal Amount of all
Certificates of the same Class. With respect to the Class X and Class R
Certificates, the Percentage Interest evidenced thereby shall be 100%.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Placement Agent: Lehman Brothers Inc.
Plan Asset Regulations: The Department of Labor regulations set forth in
29 C.F.R. 2510.3-101.
Pool 1: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 1.
Pool 2: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 2.
Pool 3: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 3.
Pool Balance: With respect to each Mortgage Pool, the aggregate of the
Scheduled Principal Balances of all Mortgage Loans in such Mortgage Pool at the
date of determination.
Pool Percentage: With respect to each Mortgage Pool and any Distribution
Date, the fraction, expressed as a percentage, the numerator of which is the
Pool Balance for such Mortgage Pool for such date and the denominator of which
is the Aggregate Loan Balance for such date.
PPM: The private placement memorandum dated May 5, 1999, relating to the
Class X Certificate.
Prepayment Interest Shortfall: With respect to any full or partial
Principal Prepayment of a Mortgage Loan, the difference between (i) one full
month's interest at the applicable Mortgage Rate (giving effect to any
applicable Relief Act Reduction), as reduced by the Master Servicing Fee Rate
and the applicable Servicing Fee Rate, on the outstanding principal balance of
such Mortgage Loan immediately prior to such prepayment and (ii) the amount of
interest actually received with respect to such Mortgage Loan in connection
with such Principal Prepayment.
Prepayment Period: The applicable period specified in the applicable
Servicing Agreement (whether or not specifically defined as a "Prepayment
Period") during which amounts required to be remitted by the related Servicer
in respect of Mortgage Loan prepayments on the applicable Servicer Remittance
Date are received by such Servicer.
Prepayment Premiums: Any prepayment fees and penalties to be paid by the
Mortgagor on a Mortgage Loan.
Primary Mortgage Insurance Policy: Mortgage guaranty insurance, if any, on
an individual Mortgage Loan, as evidenced by a policy or certificate.
Principal Distribution Amount: With respect to each Mortgage Pool and any
Distribution Date, an amount equal to the Principal Remittance Amount for such
Mortgage Pool for such date minus the Overcollateralization Release Amount, if
any, for such Mortgage Pool for such date.
Principal Only Certificate: None.
Principal Prepayment: Any Mortgagor payment of principal (other than a
Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled Due
Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note or the applicable Servicing
Agreement.
Principal Remittance Amount: With respect to each Mortgage Pool and any
Distribution Date, the sum of (i) all principal collected (other than
Payaheads) or advanced in respect of Scheduled Payments on the Mortgage Loans
in such Mortgage Pool during the related Collection Period, (ii) all Principal
Prepayments in full or in part received during the related Prepayment Period,
(iii) the outstanding principal balance of each Mortgage Loan that was
purchased from the Trust Fund during the related Prepayment Period, (iv) the
portion of any Substitution Amount paid during the related Prepayment Period
allocable to principal, and (v) all Net Liquidation Proceeds, Insurance
Proceeds and other recoveries collected with respect to such Mortgage Loans
during the related Prepayment Period, to the extent allocable to principal, as
reduced, in each case to the extent applicable, by unreimbursed Advances and
other amounts due to the Master Servicer, the Servicers or the Trustee, to the
extent allocable to principal.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated May 5, 1999, together with the
accompanying prospectus dated January 15, 1999, relating to the Class A1, Class
A2, Class A3, Class A4, Class AIO, Class M1, Class M2 and Class B Certificates.
Purchase Price: With respect to the purchase of a Mortgage Loan or related
REO Property pursuant to this Agreement or the Special Servicing Agreement, an
amount equal to the sum of (a) 100% of the unpaid principal balance of such
Mortgage Loan and (b) accrued interest thereon at the applicable Mortgage Rate,
from the date as to which interest was last paid to (but not including) the Due
Date in the Collection Period immediately preceding the related Distribution
Date. The Master Servicer or the applicable Servicer (or the Trustee, if
applicable) shall be reimbursed from the Purchase Price for any Mortgage Loan
or related REO Property for any Advances made or other amounts advanced with
respect to such Mortgage Loan that are reimbursable to the Master Servicer or
the applicable Servicer under this Agreement or the applicable Servicing
Agreement (or to the Trustee hereunder), together with any accrued and unpaid
compensation due to the Master Servicer and Servicer hereunder or thereunder.
Qualified GIC: A guaranteed investment contract or surety bond providing
for the investment of funds in the Collection Account or the Certificate
Account and insuring a minimum, fixed or floating rate of return on investments
of such funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other
corporation whose long-term debt is rated by each Rating Agency in one of
its two highest rating categories or, if such insurance company has no
long-term debt, whose claims paying ability is rated by each Rating Agency
in one of its two highest rating categories, and whose short-term debt is
rated by each Rating Agency in its highest rating category;
(b) provide that the Trustee may exercise all of the rights
under such contract or surety bond without the necessity of taking any
action by any other Person;
(c) provide that if at any time the then current credit standing
of the obligor under such guaranteed investment contract is such that
continued investment pursuant to such contract of funds would result in a
downgrading of any rating of the Certificates, the Trustee shall terminate
such contract without penalty and be entitled to the return of all funds
previously invested thereunder, together with accrued interest thereon at
the interest rate provided under such contract to the date of delivery of
such funds to the Trustee;
(d) provide that the Trustee's interest therein shall be
transferable to any successor trustee hereunder: and
(e) provide that the funds reinvested thereunder and accrued
interest thereon be returnable to the Collection Account or the
Certificate Account, as the case may be, not later than the Business Day
prior to any Distribution Date.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the related Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability is
rated by each Rating Agency in its highest rating category or whose selection
as an insurer will not adversely affect the rating of the Certificates.
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan, a Mortgage Loan that, on the date of
substitution, (i) has a Scheduled Principal Balance (together with that of any
other mortgage loan substituted for the same Deleted Mortgage Loan) as of the
Due Date in the month in which such substitution occurs not in excess of the
Scheduled Principal Balance of the related Deleted Mortgage Loan, provided,
however, that, to the extent that the Scheduled Principal Balance of such
Mortgage Loan is less than the Scheduled Principal Balance of the related
Deleted Mortgage Loan, then such differential in principal amount, together
with interest thereon at the applicable Mortgage Rate from the date as to which
interest was last paid through the end of the Collection Period in which such
substitution occurs (such amount, a "Substitution Amount"), shall be paid by
the party effecting such substitution to the Trustee for deposit into the
Certificate Account, and shall be treated as a Principal Prepayment hereunder;
(ii) has a Net Mortgage Rate not lower than the Net Mortgage Rate of the
related Deleted Mortgage Loan; (iii) if the total principal balance of
Qualifying Substitute Mortgage Loans in the Trust is less than 5% of the
initial principal balance of the Mortgage Loans, has a remaining stated term to
maturity not longer than, and not more than one year shorter than, the
remaining term to stated maturity of the related Deleted Mortgage Loan; (iv)
(A) has a Loan-to-Value Ratio as of the date of such substitution of not
greater than 80%, provided, however, that if the related Deleted Mortgage Loan
has a Loan-to-Value Ratio of greater than 80%, then the Loan-to-Value Ratio of
such substitute Mortgage Loan may be greater than 80% but shall not be greater
than the Loan-to-Value Ratio of the related Deleted Mortgage Loan and (B) the
addition of such substitute Mortgage Loan does not increase the weighted
average Loan-to-Value Ratio of the related Mortgage Pool by more than 50%; (v)
will comply with all of the representations and warranties relating to Mortgage
Loans set forth herein, as of the date as of which such substitution occurs;
(vi) is not a Cooperative Loan unless the related Deleted Mortgage Loan was a
Cooperative Loan; (vii) if applicable, has the same index as and a margin not
less than that of the related Deleted Mortgage Loan and (viii) has not been
delinquent for a period of more than 30 days more than twice in the twelve
months immediately preceding such date of substitution. In the event that
either one mortgage loan is substituted for more than one Deleted Mortgage Loan
or more than one mortgage loan is substituted for one or more Deleted Mortgage
Loans, then (a) the Scheduled Principal Balance referred to in clause (i) above
shall be determined on a loan-by-loan basis, (b) the rate referred to in clause
(ii) above shall be determined on a loan-by-loan basis and (c) the remaining
term to stated maturity referred to in clause (iii) above, and the
Loan-to-Value Ratio referred to in clause (iv) above shall be determined on a
weighted average basis, provided that the final scheduled maturity date of any
Qualifying Substitute Mortgage Loan shall not exceed the latest Final Scheduled
Distribution Date of any Class of Certificates. Whenever a Qualifying
Substitute Mortgage Loan is substituted for a Deleted Mortgage Loan pursuant to
this Agreement, the party effecting such substitution shall certify such
qualification in writing to the Trustee.
Rating Agency: Each of S&P and DCR.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
equal to (i) the unpaid principal balance of such Mortgage Loan as of the date
of liquidation, minus (ii) Liquidation Proceeds received, to the extent
allocable to principal, net of amounts that are reimbursable therefrom to the
Master Servicer or any Servicer with respect to such Mortgage Loan (other than
Advances of principal) including expenses of liquidation. In determining
whether a Realized Loss is a Realized Loss of principal, Liquidation Proceeds
shall be allocated, first, to payment of expenses related to such Liquidated
Mortgage Loan, then to accrued unpaid interest and finally to reduce the
principal balance of the Mortgage Loan.
Recognition Agreement: With respect to any Cooperative Loan, an agreement
between the related Cooperative Corporation and the originator of such Mortgage
Loan to establish the rights of such originator in the related Cooperative
Property.
Record Date: With respect to the LIBOR Certificates and the Class AIO
Certificates and any Distribution Date, the close of business on the Business
Day immediately preceding such Distribution Date. With respect to the Class A1
and Class B Certificates and any Distribution Date, the last Business Day of
the month immediately preceding the month in which the Distribution Date occurs
(or, in the case of the first Distribution Date, the Closing Date).
Reference Banks: As defined in Section 4.05.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC
pursuant to Section 10.01(a) hereof.
REMIC 1 Regular Interest: Any of the Class T1-1 and Class T1-2 Interests.
REMIC 2 Regular Interest: Any of the Class T2-1, Class T2-2, Class T2-3
and Class T2-4 Interests.
REMIC 3 Regular Interest: Any of the Class T3-1, Class T3-2, Class T3-3,
Class T3-4 and Class T3-5 Interests.
REMIC 4 Regular Interest: Any of the Class T4-1, Class T4-2, Class T4-3,
Class T4-4, Class T4-5, Class T4-6, Class T4-7, Class T4-8, Class T4-9, Class
T4-10 and Class T4-11 Interests.
REMIC 5 Regular Interest Any of the Class T5-1, Class T5-2, Class T5-3,
Class T5-4, Class T5-5, Class T5-6, Class T5-7, Class T5-8, Class T5-9, Class
T5-10, Class T5-11, Class T5-12, Class T5-13, Class T5-14, Class T5-15 and
Class T5-16 Interests.
REMIC Provisions: The provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The day in each month on which each Servicer is required
to remit payments to the account maintained by the Master Servicer, as
specified in the related Servicing Agreement.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the
REMIC Provisions.
Required Reserve Fund Deposit: With respect to any Distribution Date on
which the Net Excess Spread is less than 0.25%, the amount, if any by which (a)
the product of 1.00% and the Aggregate Loan Balance for such date exceeds (b)
the amount on deposit in the Basis Risk Reserve Fund immediately prior to such
date. With respect to any Distribution Date on which the Net Excess Spread is
equal to or greater than 0.25%, the amount, if any, by which (i) $1,000 exceeds
(ii) the amount on deposit in the Basis Risk Reserve Fund immediately prior to
such date.
Reserve Interest Rate: As defined in section 4.05.
Residual Certificate: The Class R Certificate.
Responsible Officer: When used with respect to the Trustee, any Vice
President, Assistant Vice President, the Secretary, any assistant secretary,
the Treasurer, or any assistant treasurer, working in its corporate trust
department and having responsibility for the administration of this Agreement.
Restricted Certificate: Any Class X or Class R Certificate.
Rolling Three Month Delinquency Rate: With respect to any Distribution
Date, the fraction, expressed as a percentage, equal to the average of the
Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates) immediately preceding calendar months.
S&P: Standard & Poor's Rating Services, a division of The McGraw-Hill
Companies, Inc., or any successor in interest.
Scheduled Payment: Each scheduled payment of principal and interest (or of
interest only, if applicable) to be paid by the Mortgagor on a Mortgage Loan,
as reduced (except where otherwise specified herein) by the amount of any
related Debt Service Reduction (excluding all amounts of principal and interest
that were due on or before the Cut-off Date whenever received) and, in the case
of an REO Property, an amount equivalent to the Scheduled Payment that would
have been due on the related Mortgage Loan if such Mortgage Loan had remained
in existence. In the case of any bi-weekly payment Mortgage Loan, all payments
due on such Mortgage Loan during any Collection Period shall be deemed
collectively to constitute the Scheduled Payment due on such Mortgage Loan in
such Collection Period.
Scheduled Principal Balance: With respect to (i) any Mortgage Loan as of
any Distribution Date, the principal balance of such Mortgage Loan at the close
of business on the Cut-off Date, after giving effect to principal payments due
on or before the Cut-off Date, whether or not received, less an amount equal to
principal payments due after the Cut-off Date and on or before the Due Date in
the related Collection Period, whether or not received from the Mortgagor or
advanced by any Servicer or the Master Servicer, and all amounts allocable to
unscheduled principal payments (including Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and condemnation proceeds, in each case to the
extent identified and applied prior to or during the related Prepayment Period)
and (ii) any REO Property as of any Distribution Date, the Scheduled Principal
Balance of the related Mortgage Loan on the Due Date immediately preceding the
date of acquisition of such REO Property by or on behalf of the Trustee
(reduced by any amount applied as a reduction of principal on the Mortgage
Loan). With respect to any Mortgage Loan and the Cut-off Date, as specified in
the Mortgage Loan Schedule.
Security Agreement: With respect to any Cooperative Loan, the agreement
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note that defines the terms of the security interest in such
Cooperative Shares and the related Proprietary Lease.
Senior Certificate: Any Class A1, Class A2, Class A3, Class A4 or Class
AIO Certificate.
Senior Component: Any Component of a Senior Certificate.
Senior Enhancement Percentage: With respect to any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is the sum of the
aggregate Certificate Principal Amount of the Class M1, Class M2 and Class B
Certificates and the Overcollateralization Amount (which amount, for purposes
of this definition only, shall not be less than zero), in each case after
giving effect to distributions on such Distribution Date, and the denominator
of which is the Aggregate Loan Balance for such Distribution Date.
Senior Principal Distribution Amount: With respect to each Mortgage Pool
and any Distribution Date, the product of (i) the applicable Senior
Proportionate Percentage and (ii) the amount, if any, by which (x) the
aggregate Certificate Principal Amount of the Senior Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of
(i) 54.60% and (ii) the Aggregate Loan Balance for such Distribution Date and
(B) the amount, if any, by which (i) the Aggregate Loan Balance for such
Distribution Date exceeds (ii) 0.50% of the Cut-off Date Aggregate Loan
Balance.
Senior Proportionate Percentage: With respect to Pool 1 and any
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the Class Principal Amount of the Class A1 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Certificate Principal Amount of the Senior Certificates immediately prior to
such date. With respect to Pool 2 and any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the Class Principal Amount
of the Class A2 Certificates immediately prior to such Distribution Date and
the denominator of which is the aggregate Certificate Principal Amount of the
Senior Certificates immediately prior to such date. With respect to Pool 3 and
any Distribution Date, the fraction, expressed as a percentage, the numerator
of which is the aggregate Certificate Principal Amount of the Class A3 and
Class A4 Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Certificate Principal Amount of the
Senior Certificates immediately prior to such date.
Servicer: Any Servicer, including the Special Servicer, that has entered
into any of the Servicing Agreements attached as Exhibit E hereto, or any
successor in interest.
Servicing Agreement: Each Servicing Agreement, including the Special
Servicing Agreement, among a Servicer and Lehman Capital attached hereto as
Exhibit E.
Servicing Fee: The Servicing Fee or, in the case of the Special Servicer,
the Base Servicing Fee, specified in the applicable Servicing Agreement or, in
the case of the Special Servicer, in the Special Servicing Compensation
Agreement.
Servicing Fee Rate: With respect to any Servicer, as specified in the
applicable Servicing Agreement.
Servicing Officer: Any officer of the Master Servicer involved in or
responsible for the administration and servicing or master servicing of the
Mortgage Loans whose name appears on a list of servicing officers furnished by
the Master Servicer to the Trustee, as such list may from time to time be
amended.
Special Servicer: Ocwen Federal Bank FSB, as special servicer under the
Special Servicing Agreement, or any successor in interest.
Special Servicing Agreement: The Special Servicing Agreement between
Lehman Capital and the Special Servicer dated as of April 1, 1999, attached as
part of Exhibit E hereto.
Special Servicing Compensation Agreement: The agreement attached as
Exhibit L hereto specifying the compensation to which the Special Servicer is
entitled for its services under the Special Servicing Agreement.
Standard Rate: With respect to any Distribution Date, a rate equal to the
greater of the Certificate Interest Rate for the Class B Certificates and the
Certificate Interest Rate for the Class M-2 Certificates.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Stepdown Date: The later to occur of (x) the Distribution Date in May 2002
and (y) the first Distribution Date on which the Senior Enhancement Percentage
(calculated for this purpose after giving effect to payments or other
recoveries in respect of the Mortgage Loans during the related Collection
Period but before giving effect to distributions on the Certificates on such
Distribution Date) is greater than to equal to 45.40%.
Subordinate Certificate: Any Class M1, Class M2, Class B or Class X
Certificate.
Substitution Amount: As defined in the definition of Qualifying Substitute
Mortgage Loan.
Target Amount 1: With respect to any Distribution Date, the amount equal
to the sum of (1) Target Amount 2 for such Distribution Date and (2) the
Principal Distribution Amount for Pool 2 for such Distribution Date.
Target Amount 2: With respect to any Distribution Date, the amount equal
to the sum of (1) Target Amount 3 for such Distribution Date and (2) the
Principal Distribution Amount for Pool 3 for such Distribution Date.
Target Amount 3: With respect to any Distribution Date, the amount equal
to the Aggregate Loan Balance as of such Distribution Date minus the product of
(1) 3.70% and (2) the Cut-Off Date Aggregate Loan Balance.
Targeted Overcollateralization Amount: With respect to any Distribution
Date (x) prior to the Stepdown Date, the product of 3.70% and the Cut-off Date
Aggregate Loan Balance; (y) on and after the Stepdown Date and with respect to
which a Trigger Event has occurred with respect to such Distribution Date, the
amount calculated pursuant to clause (x) above, and (z) on and after the
Stepdown Date and with respect to which a Trigger Event has not occurred with
respect to such Distribution Date, the greater of (i) the product of 7.40% the
Aggregate Loan Balance as of the last day of the related Collection Period and
(ii) 0.50% of the Cut-off Date Aggregate Loan Balance.
Tax Matters Person: The "tax matters person" as specified in the REMIC
Provisions.
Telerate Page 120: The display designated as "Page 120" on the Dow Jones
Telerate Service (or such other page selected by the Trustee as may replace
Page 120 on that service for the purpose of displaying daily Federal Funds
rates).
Termination Price: As defined in Section 7.01.
Title Insurance Policy: A title insurance policy maintained with respect
to a Mortgage Loan.
Total Distribution Amount: With respect to any Distribution Date, the sum
of the Interest Remittance Amount for such date and the aggregate of the
Principal Remittance Amounts for such date.
Transfer Agreement: As defined in the Mortgage Loan Sale Agreement.
Transferor: The seller of Mortgage Loans to Lehman Capital pursuant to the
Transfer Agreements.
Trigger Event: A Trigger Event will have occurred with respect to any
Distribution Date if the Rolling Three Month Delinquency Rate as of the last
day of the immediately preceding Collection Period equals or exceeds 50% of the
Senior Enhancement Percentage for such Distribution Date.
Trust Fund: The corpus of the trust created pursuant to this Agreement,
consisting of the Mortgage Loans, the assignment of the Depositor's rights
under the Mortgage Loan Sale Agreement and each Servicing Agreement, such
amounts as shall from time to time be held in the Collection Account, the
Certificate Account, any Escrow Account, the Basis Risk Reserve Fund, the
Insurance Policies, any REO Property and the other items referred to in, and
conveyed to the Trustee under, Section 2.01(a).
Trustee: The First National Bank of Chicago, not in its individual
capacity but solely as Trustee, or any successor in interest, or if any
successor trustee or any co-trustee shall be appointed as herein provided, then
such successor trustee and such co-trustee, as the case may be.
Trustee Fee: $4,000 per year, payable monthly.
Trustee Fee Rate: With respect to each Distribution Date and each Mortgage
Pool, the per annum rate equal to the fraction, expressed as a percentage,
calculated by dividing the Trustee Fee by the Aggregate Loan Balance for such
Mortgage Pool for such Distribution Date.
Unpaid Basis Risk Shortfall: With respect to any Distribution Date and any
Certificate, the aggregate of all Basis Risk Shortfalls with respect to such
Certificate remaining unpaid from previous Distribution Dates, plus interest
accrued thereon at the applicable Certificate Interest Rate (calculated without
giving effect to the applicable Net Funds Cap).
Upper Tier REMIC: REMIC 5.
Voting Interests: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions of
this Agreement. At all times during the term of this Agreement, 92% of all
Voting Interests shall be allocated to the Certificates other than the Class
AIO and Class X Certificates; 2% of all Voting Interests shall be allocated to
the Class AIO Certificates, and 6% of all Voting Interests shall be allocated
to each Class X Certificate. Voting Interests shall be allocated among the
other Classes of Certificates (and among the Certificates within each such
Class) in proportion to their Class Principal Amounts (or Certificate Principal
Amounts).
Section 1.02. Calculations Respecting Mortgage Loans. Calculations
required to be made pursuant to this Agreement with respect to any Mortgage
Loan in the Trust Fund shall be made based upon current information as to the
terms of the Mortgage Loans and reports of payments received from the Mortgagor
on such Mortgage Loans and payments to be made to the Trustee as supplied to
the Trustee by the Master Servicer. The Trustee shall not be required to
recompute, verify or recalculate the information supplied to it by the Master
Servicer.
Section 1.03. Calculations Respecting Accrued Interest. Accrued interest,
if any, on any Certificate, other than the Class AIO Certificates, shall be
calculated based upon a 360-day year and the actual number of days in each
Accrual Period. Accrued interest, if any, on any Class AIO Certificate shall be
calculated based upon a 360-day year consisting of twelve 30-day months.
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans. (a) Concurrently with the execution and delivery of this
Agreement, the Depositor does hereby transfer, assign, set over, deposit with
and otherwise convey to the Trustee, without recourse, subject to Sections
2.02, 2.04, 2.05 and 2.06, in trust, all the right, title and interest of the
Depositor in and to the Mortgage Loans. Such conveyance includes, without
limitation, the right to all distributions of principal and interest received
on or with respect to the Mortgage Loans on and after the Cut-off Date (other
than payments of principal and interest due on or before such date), and all
such payments due after such date but received prior to such date and intended
by the related Mortgagors to be applied after such date, together with all of
the Depositor's right, title and interest in and to the Collection Account and
all amounts from time to time credited to and the proceeds of the Collection
Account, the Certificate Account and all amounts from time to time credited to
and the proceeds of the Certificate Account, any Escrow Account established
pursuant to Section 9.06 and all amounts from time to time credited to and the
proceeds of any such Escrow Account, any Basis Risk Reserve Fund established
pursuant to Section 5.07 and all amounts from time to time credited to and the
proceeds of any such Basis Risk Reserve Fund, any REO Property and the proceeds
thereof, the Depositor's rights under any Insurance Policies related to the
Mortgage Loans, the Depositor's security interest in any collateral pledged to
secure the Mortgage Loans, including the Mortgaged Properties and any
Additional Collateral, and any proceeds of the foregoing, to have and to hold,
in trust; and the Trustee declares that, subject to the review provided for in
Section 2.02, it has received and shall hold the Trust Fund, as trustee, in
trust, for the benefit and use of the Holders of the Certificates and for the
purposes and subject to the terms and conditions set forth in this Agreement,
and, concurrently with such receipt, has caused to be executed, authenticated
and delivered to or upon the order of the Depositor, in exchange for the Trust
Fund, Certificates in the authorized denominations evidencing the entire
ownership of the Trust Fund.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest
under the Mortgage Loan Sale Agreement, including all rights of Lehman Capital
under the Servicing Agreements and the Transfer Agreements to the extent
assigned under the Mortgage Loan Sale Agreement and delegates its obligations
thereunder. The Trustee hereby accepts such assignment and delegation, and
shall be entitled to exercise all rights of the Depositor under the Mortgage
Loan Sale Agreement as if, for such purpose, it were the Depositor.
(b) In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, or cause to be delivered to and deposited
with, the Trustee, and/or any custodian acting on the Trustee's behalf, if
applicable, the following documents or instruments with respect to each
Mortgage Loan (each a "Mortgage File") so transferred and assigned:
(i) with respect to each Mortgage Loan, the original Mortgage Note
endorsed without recourse in proper form to the order of the Trustee, or
in blank (in each case, with all necessary intervening endorsements as
applicable);
(ii) the original of any guarantee executed in connection with the
Mortgage Note, assigned to the Trustee;
(iii) with respect to any Mortgage Loan other than a Cooperative
Loan, the original recorded Mortgage with evidence of recording indicated
thereon. If, in connection with any Mortgage Loan, the Depositor cannot
deliver the Mortgage with evidence of recording thereon on or prior to the
Closing Date 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, the Depositor shall deliver or cause to be
delivered to the Trustee (or its custodian), in the case of a delay due to
recording, a true copy of such Mortgage, pending delivery of the original
thereof, together with an Officer's Certificate of the Depositor
certifying that the copy of such Mortgage delivered to the Trustee (or its
custodian) is a true copy and that the original of such Mortgage has been
forwarded to the public recording office, or, in the case of a Mortgage
that has been lost, a copy thereof (certified as provided for under the
laws of the appropriate jurisdiction) and a written Opinion of Counsel
acceptable to the Trustee and the Depositor that an original recorded
Mortgage is not required to enforce the Trustee's interest in the Mortgage
Loan;
(iv) The original of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loans, or, as to any
assumption, modification or substitution agreement which cannot be
delivered on or prior to the Closing Date because of a delay caused by the
public recording office where such assumption, modification or
substitution agreement has been delivered for recordation, a photocopy of
such assumption, modification or substitution agreement, pending delivery
of the original thereof, together with an Officer's Certificate of the
Depositor certifying that the copy of such assumption, modification or
substitution agreement delivered to the Trustee (or its custodian) is a
true copy and that the original of such agreement has been forwarded to
the public recording office;
(v) with respect to each Non-MERS Mortgage Loan other than a
Cooperative Loan, the original Assignment of Mortgage for each Mortgage
Loan;
(vi) If applicable, such original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument (each, an
"Intervening Assignment"), as may be necessary to show a complete chain of
assignment from the originator, or, in the case of an Intervening
Assignment that has been lost, a written Opinion of Counsel acceptable to
the Trustee that such original Intervening Assignment is not required to
enforce the Trustee's interest in the Mortgage Loans;
(vii) the original Primary Mortgage Insurance Policy or certificate,
if private mortgage guaranty insurance is required;
(viii) with respect to any Mortgage Loan other than a Cooperative
Loan, the original mortgagee title insurance policy or attorney's opinion
of title and abstract of title;
(ix) the original of any security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage or as to any security
agreement, chattel mortgage or their equivalent that cannot be delivered
on or prior to the Closing Date because of a delay caused by the public
recording office where such document has been delivered for recordation, a
photocopy of such document, pending delivery of the original thereof,
together with an Officer's Certificate of the Depositor certifying that
the copy of such security agreement, chattel mortgage or their equivalent
delivered to the Trustee (or its custodian) is a true copy and that the
original of such document has been forwarded to the public recording
office;
(x) with respect to any Cooperative Loan, the Cooperative Loan
Documents; and
(xi) in connection with any pledge of Additional Collateral, the
original additional collateral pledge and security agreement executed in
connection therewith, assigned to the Trustee.
The parties hereto acknowledge and agree that the form of endorsement
attached hereto as Exhibit B-4 is intended to effect the transfer to the
Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and
the Mortgages.
(c) (i) Assignments of Mortgage with respect to each Non-MERS Mortgage
Loan other than a Cooperative Loan shall be recorded; provided, however, that
such Assignments need not be recorded if, in the Opinion of Counsel (which must
be Independent counsel) acceptable to the Trustee and the Rating Agencies,
recording in such states is not required to protect the Trustee's interest in
the related Non-MERS Mortgage Loans. Subject to the preceding sentence, as soon
as practicable after the Closing Date (but in no event more than 3 months
thereafter except to the extent delays are caused by the applicable recording
office), the Trustee, at the expense of the Depositor and with the cooperation
of the Servicer, shall cause to be properly recorded by the Servicer in each
public recording office where the related Mortgages are recorded each
Assignment of Mortgage referred to in subsection (b)(v) above with respect to
each Non-MERS Mortgage Loan. With respect to each Cooperative Loan, the
Trustee, at the expense of the Depositor and with the cooperation of the
applicable Servicer, shall cause to be taken such actions as are necessary
under applicable law in order to perfect the interest of the Trustee in the
related Mortgaged Property.
(ii) With respect to each MERS Mortgage Loan, the Trustee, at the
expense of the Depositor and with the cooperation of the applicable
Servicer, shall cause to be taken such actions as are necessary to cause
the Trustee to be clearly identified as the owner of each such Mortgage
Loan on the records of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by MERS.
(d) In instances where a Title Insurance Policy is required to be
delivered to the Trustee or the Custodian on behalf of the Trustee under clause
(b)(viii) above and is not so delivered, the Depositor will provide a copy of
such Title Insurance Policy to the Trustee, or to the Custodian on behalf of
the Trustee, as promptly as practicable after the execution and delivery
hereof, but in any case within 180 days of the Closing Date.
(e) For Mortgage Loans (if any) that have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers to the Trustee, or to the
Custodian on behalf of the Trustee, an Officer's Certificate which shall
include a statement to the effect that all amounts received in connection with
such prepayment that are required to be deposited in the applicable Collection
Account pursuant to Section 4.01 have been so deposited. All original documents
that are not delivered to the Trustee shall be held by the Master Servicer or
the applicable Servicer in trust for the benefit of the Trustee and the
Certificateholders.
Section 2.02. Acceptance of Trust Fund by Trustee: Review of Documentation
for Trust Fund. (a) The Trustee, by execution and delivery hereof, acknowledges
receipt by it or by the Custodian on its behalf of the Mortgage Files
pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule. The
Trustee or the Custodian on behalf of the Trustee has reviewed each Mortgage
File to ascertain that all required documents set forth in Section 2.01 have
been received and appear on their face to contain the requisite signatures by
or on behalf of the respective parties thereto, and will execute and deliver on
the Closing Date to the Depositor, the Master Servicer and the Special Servicer
an Initial Certification in the form annexed hereto as Exhibit B-2 (or in the
form annexed to the Custodial Agreement as Exhibit B-1, as applicable) to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan specifically identified in such certification as
not covered by such certification), (i) all of the applicable documents
specified in Section 2.01(b) are in its possession and (ii) such documents have
been reviewed by it and appear to relate to such Mortgage Loan. The Trustee, or
the Custodian on behalf of the Trustee, shall make sure that the documents are
executed and endorsed, but shall be under no duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other papers
to determine that the same are valid, binding, legally effective, properly
endorsed, genuine, enforceable or appropriate for the represented purpose or
that they have actually been recorded or are in recordable form or that they
are other than what they purport to be on their face. Neither the Trustee nor
the Custodian shall have any responsibility for verifying the genuineness or
the legal effectiveness of or authority for any signatures of or on behalf of
any party or endorser.
(b) If in the course of the review described in paragraph (a) above the
Trustee or the Custodian discovers any document or documents constituting a
part of a Mortgage File that is missing, does not appear regular on its face
(i.e., is mutilated, damaged, defaced, torn or otherwise physically altered) or
appears to be unrelated to the Mortgage Loans identified in the Mortgage Loan
Schedule (each, a "Material Defect"), the Trustee, or the Custodian on behalf
of the Trustee, shall promptly identify the Mortgage Loan to which such
Material Defect relates in the certificate delivered to the Depositor and to
the Trustee. Within 90 days of its receipt of such notice, the Transferor, or,
if the Transferor does not do so, the Depositor shall be required to cure such
Material Defect (and, in such event, the Depositor shall provide the Trustee
with an Officer's Certificate confirming that such cure has been effected). If
the applicable Transferor or the Depositor, as applicable, does not so cure
such Material Defect, the Transferor, or, if the Transferor does not do so, the
Depositor, shall, if a loss has been incurred with respect to such Mortgage
Loan that would, if such Mortgage Loan were not purchased from the Trust Fund,
constitute a Realized Loss, and such loss is attributable to the failure of the
Depositor to cure such Material Defect, shall repurchase the related Mortgage
Loan from the Trust Fund at the Purchase Price. A loss shall be deemed to be
attributable to the failure of the Depositor to cure a Material Defect if, as
determined by the Depositor, upon mutual agreement with the Trustee acting in
good faith, absent such Material Defect, such loss would not have been
incurred. Within the two year period following the Closing Date, the Depositor
may, in lieu of repurchasing a Mortgage Loan pursuant to this Section 2.02,
substitute for such Mortgage Loan a Qualifying Substitute Mortgage Loan subject
to the provisions of Section 2.05. The failure of the Trustee or the Custodian
to give the notice contemplated herein within 45 days after the Closing Date
shall not affect or relieve the Depositor of its obligation to repurchase any
Mortgage Loan pursuant to this Section 2.02 or any other Section of this
Agreement requiring the repurchase of Mortgage Loans from the Trust Fund.
(c) Within 180 days following the Closing Date, the Trustee, or the
Custodian, shall deliver to the Depositor, the Master Servicer and the Special
Servicer a Final Certification substantially in the form annexed hereto as
Exhibit B-3 (or in the form annexed to the Custodial Agreement as Exhibit B-2,
as applicable) evidencing the completeness of the Mortgage Files in its
possession or control.
(d) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.
(e) Each of the parties hereto acknowledges that the Custodian shall
perform the applicable review of the Mortgage Loans and deliver the applicable
certifications as provided in the Custodial Agreement.
Section 2.03. Representations and Warranties of the Depositor. (a) The
Depositor hereby represents and warrants to the Trustee, for the benefit of
Certificateholders, and to the Master Servicer, as of the Closing Date or such
other date as is specified, that:
(i) the Depositor is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and existence
and has full corporate power and authority to own its property, to carry
on its business as presently conducted, to enter into and perform its
obligations under this Agreement, and to create the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part of
the Depositor; neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of,
or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties or the certificate of incorporation or bylaws
of the Depositor;
(iii) the execution, delivery and performance by the Depositor of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action in respect of,
any state, federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee and the Master Servicer, constitutes a valid and binding
obligation of the Depositor enforceable against it in accordance with its
terms except as such enforceability may be subject to (A) applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally and (B) general
principles of equity regardless of whether such enforcement is considered
in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened or likely to be asserted against or
affecting the Depositor, before or by any court, administrative agency,
arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any
other matter which in the judgment of the Depositor will be determined
adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect it or its business, assets,
operations or condition, financial or otherwise, or adversely affect its
ability to perform its obligations under this Agreement; and
(vi) immediately prior to the transfer and assignment of the Mortgage
Loans to the Trustee, the Depositor was the sole owner of record and
holder of each Mortgage Loan, and the Depositor had good and marketable
title thereto, and had full right to transfer and sell each Mortgage Loan
to the Trustee free and clear, subject only to (1) liens of current real
property taxes and assessments not yet due and payable and, if the related
Mortgaged Property is a condominium unit, any lien for common charges
permitted by statute, (2) covenants, conditions and restrictions, rights
of way, easements and other matters of public record as of the date of
recording of such Mortgage acceptable to mortgage lending institutions in
the area in which the related Mortgaged Property is located and
specifically referred to in the lender's Title Insurance Policy or
attorney's opinion of title and abstract of title delivered to the
originator of such Mortgage Loan, and (3) such other matters to which like
properties are commonly subject which do not, individually or in the
aggregate, materially interfere with the benefits of the security intended
to be provided by the Mortgage, of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and had full
right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan
pursuant to this Agreement.
(b) The representations and warranties of the Transferor with respect to
the Mortgage Loans in the applicable Transfer Agreement, which have been
assigned to the Trustee hereunder, were made as of the date of such Transfer
Agreement. To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of a representation or warranty made under a
Transfer Agreement, the Trustee or a Certificateholder shall have the right to
require that Lehman Capital cure such breach or effect such other remedy as is
specified in subsection 1.04(b) of the Mortgage Loan Sale Agreement.
Section 2.04. Discovery of Breach. It is understood and agreed that the
representations and warranties (i) set forth in Section 2.03, (ii) of Lehman
Capital set forth in the Mortgage Loan Sale Agreement and assigned to the
Trustee by the Depositor hereunder and (iii) of the Transferor and each
Servicer, assigned by Lehman Capital to the Depositor pursuant to the Mortgage
Loan Sale Agreement and assigned to the Trustee by the Depositor hereunder
shall each survive delivery of the Mortgage Files and the Assignment of
Mortgage of each Mortgage Loan to the Trustee and shall continue throughout the
term of this Agreement. Upon discovery by any of the Depositor, the Master
Servicer, or the Trustee of a breach of any of such representations and
warranties that adversely and materially affects the value of the related
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties. Within 90 days of the discovery of a breach of any
representation or warranty given to the Trustee by the Depositor or given by
Lehman Capital and assigned to the Trustee, the Depositor or Lehman Capital, as
applicable, shall either (a) cure such breach in all material respects, (b)
repurchase such Mortgage Loan or any property acquired in respect thereof from
the Trustee at the Purchase Price or (c) within the two year period following
the Closing Date, substitute a Qualifying Substitute Mortgage Loan for the
affected Mortgage Loan. In the event of discovery of a breach of any
representation and warranty of any Transferor assigned to the Trustee, the
Trustee shall enforce its rights under the applicable Transfer Agreement for
the benefit of Certificateholders.
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans. (a)
With respect to any Mortgage Loan repurchased by the Depositor pursuant to this
Agreement, by Lehman Capital pursuant to the Mortgage Loan Sale Agreement or by
the Transferor pursuant to the applicable Transfer Agreement, the principal
portion of the funds received by the Trustee in respect of such repurchase of a
Mortgage Loan will be considered a Principal Prepayment and shall be deposited
in the Collection Account. The Trustee, upon receipt of the full amount of the
Purchase Price for a Deleted Mortgage Loan, or upon receipt of the Mortgage
File for a Qualifying Substitute Mortgage Loan substituted for a Deleted
Mortgage Loan (and any applicable Substitution Amount), shall release or cause
to be released and reassign to the Depositor, Lehman Capital or the Transferor,
as applicable, the related Mortgage File for the Deleted Mortgage Loan and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as shall be necessary to
vest in such party or its designee or assignee title to any Deleted Mortgage
Loan released pursuant hereto, free and clear of all security interests, liens
and other encumbrances created by this Agreement, which instruments shall be
prepared by the Trustee (or its custodian), and the Trustee shall have no
further responsibility with respect to the Mortgage File relating to such
Deleted Mortgage Loan.
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Trustee (or its custodian) pursuant to the terms of this
Article II in exchange for a Deleted Mortgage Loan: (i) the Depositor, the
Transferor or Lehman Capital, as applicable, must deliver to the Trustee (or
its custodian) the Mortgage File for the Qualifying Substitute Mortgage Loan
containing the documents set forth in Section 2.01(b) along with a written
certification certifying as to the delivery of such Mortgage File and
containing the granting language set forth in Section 2.01(a); and (ii) the
Depositor will be deemed to have made, with respect to such Qualified
Substitute Mortgage Loan, each of the representations and warranties made by it
with respect to the related Deleted Mortgage Loan. As soon as practicable after
the delivery of any Qualifying Substitute Mortgage Loan hereunder, the Trustee,
at the expense of the Depositor and with the cooperation of the Servicer, shall
(i) with respect to a Qualifying Substitute Mortgage Loan that is a Non-MERS
Mortgage Loan, cause the Assignment of Mortgage to be recorded by the Servicer
if required pursuant to the first sentence of Section 2.01(c)(i), or (ii) with
respect to a Qualifying Substitute Mortgage Loan that is a MERS Mortgage Loan,
cause to be taken such actions as are necessary to cause the Trustee to be
clearly identified as the owner of each such Mortgage Loan on the records of
MERS if required pursuant to Section 2.01(c)(ii).
(c) Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Qualifying Substitute Mortgage
Loan for a Deleted Mortgage Loan shall be made unless the Trustee has received
an Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC Provisions.
Section 2.06. Grant Clause. It is intended that the conveyance of the
Depositor's right, title and interest in and to property constituting the Trust
Fund pursuant to this Agreement shall constitute, and shall be construed as, a
sale of such property and not a grant of a security interest to secure a loan.
However, if such conveyance is deemed to be in respect of a loan, it is
intended that: (1) the rights and obligations of the parties shall be
established pursuant to the terms of this Agreement; (2) the Depositor hereby
grants to the Trustee for the benefit of the Holders of the Certificates a
first priority security interest in all of the Depositor's right, title and
interest in, to and under, whether now owned or hereafter acquired, the Trust
Fund and all proceeds of any and all property constituting the Trust Fund to
secure payment of the Certificates; and (3) this Agreement shall constitute a
security agreement under applicable law. If such conveyance is deemed to be in
respect of a loan and the Trust created by this Agreement terminates prior to
the satisfaction of the claims of any Person holding any Certificate, the
security interest created hereby shall continue in full force and effect and
the Trustee shall be deemed to be the collateral agent for the benefit of such
Person, and all proceeds shall be distributed as herein provided.
Section 2.07. Purchase of Defaulted Mortgage Loans. (a) The initial Holder
(other than the Placement Agent or any nominee thereof) of the Class X
Certificate shall have the right to purchase defaulted Mortgage Loans from the
Trust Fund as and to the extent provided in the Special Servicing Agreement.
Such right shall be transferable to and exercisable by any subsequent Holder of
the Class X Certificate.
(b) The Special Servicer shall have the right to purchase certain
defaulted Mortgage Loans from the Trust Fund as and to the extent provided in
the Special Servicing Agreement. The aggregate of any such purchases by the
Special Servicer of Mortgage Loans in any Mortgage Pool pursuant to this
Section 2.07(b) shall not exceed 5% of the Cut-off Date Pool Balance thereof.
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. (a) The Certificates shall be issuable in
registered form only and shall be securities governed by Article 8 of the New
York Uniform Commercial Code. The Book-Entry Certificates will be evidenced by
one or more certificates, beneficial ownership of which will be held in the
dollar denominations in Certificate Principal Amount or Notional Amount, as
applicable, or in the Percentage Interests, specified herein. Each Class of
Book-Entry Certificates will be issued in the minimum denominations in
Certificate Principal Amount (or Notional Amount) specified in the Preliminary
Statement hereto and in integral multiples of $1 in excess thereof. The Class X
Certificate and the Class R Certificate shall each be issued as a single
Certificate and maintained in definitive, fully registered form in a
denomination equal to 100% of the Percentage Interest of such Class. The
Certificates may be issued in the form of typewritten certificates.
(b) The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Each Certificate shall, on
original issue, be authenticated by the Trustee upon the order of the Depositor
upon receipt by the Trustee of the Mortgage Files described in Section 2.01. 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 for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by
manual signature, and such certification upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates executed
by the Depositor to the Trustee or the Authenticating Agent for authentication
and the Trustee or the Authenticating Agent shall authenticate and deliver such
Certificates as in this Agreement provided and not otherwise.
Section 3.02. Registration. The Trustee is hereby appointed, and hereby
accepts its appointment as, Certificate Registrar in respect of the
Certificates and shall maintain books for the registration and for the transfer
of Certificates (the "Certificate Register"). The Trustee may appoint a bank or
trust company to act as Certificate Registrar. A registration book shall be
maintained for the Certificates collectively. The Certificate Registrar may
resign or be discharged or removed and a new successor may be appointed in
accordance with the procedures and requirements set forth in Sections 6.06 and
6.07 hereof with respect to the resignation, discharge or removal of the
Trustee and the appointment of a successor Trustee. The Certificate Registrar
may appoint, by a written instrument delivered to the Holders and the Master
Servicer, any bank or trust company to act as co-registrar under such
conditions as the Certificate Registrar may prescribe; provided, however, that
the Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment.
Section 3.03. Transfer and Exchange of Certificates. (a) A Certificate
(other than Book-Entry Certificates which shall be subject to Section 3.09
hereof) may be transferred by the Holder thereof only upon presentation and
surrender of such Certificate at the office of the Certificate Registrar duly
endorsed or accompanied by an assignment duly executed by such Holder or his
duly authorized attorney in such form as shall be satisfactory to the
Certificate Registrar. Upon the transfer of any Certificate in accordance with
the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class and evidencing, in the aggregate, the
same aggregate Certificate Principal Amount as the Certificate being
transferred. No service charge shall be made to a Certificateholder for any
registration of transfer of Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any registration of transfer of
Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number of
new Certificates of the same Class, in authorized denominations, representing
in the aggregate the same Certificate Principal Amount as the Certificate
surrendered, upon surrender of the Certificate to be exchanged at the office of
the Certificate Registrar duly endorsed or accompanied by a written instrument
of transfer duly executed by such Holder or his duly authorized attorney in
such form as is satisfactory to the Certificate Registrar. Certificates
delivered upon any such exchange will evidence the same obligations, and will
be entitled to the same rights and privileges, as the Certificates surrendered.
No service charge shall be made to a Certificateholder for any exchange of
Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any exchange of Certificates. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute, and the Trustee or the
Authenticating Agent shall authenticate, date and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will transfer such a Certificate only as provided herein.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:
The Certificate Registrar shall register the transfer of a Restricted
Certificate if the requested transfer is (x) to the Depositor or the Placement
Agent, an affiliate (as defined in Rule 144(a)(1) under the 1933 Act) of the
Depositor or the Placement Agent or (y) being made to a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Act") by a transferor who has provided the Trustee with a
certificate in the form of Exhibit F hereto.
(d) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person unless the Trustee has
received (A) a certificate substantially in the form of Exhibit H hereto from
such transferee or (B) an Opinion of Counsel satisfactory to the Trustee and
the Depositor to the effect that the purchase and holding of such a Certificate
will not constitute or result in the assets of the Trust Fund being deemed to
be "plan assets" subject to the prohibited transactions provisions of ERISA or
Section 4975 of the Code and will not subject the Trustee or the Depositor to
any obligation in addition to those undertaken in the Agreement; provided,
however, that the Trustee will not require such certificate or opinion in the
event that, as a result of a change of law or otherwise, counsel satisfactory
to the Trustee has rendered an opinion to the effect that the purchase and
holding of an ERISA-Restricted Certificate by a Plan or a Person that is
purchasing or holding such a Certificate with the assets of a Plan will not
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code. The preparation and delivery of the certificate and opinions referred
to above shall not be an expense of the Trust Fund, the Trustee or the
Depositor. Notwithstanding the foregoing, no opinion or certificate shall be
required for the initial issuance of the ERISA-Restricted Certificates.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of Certificate.
(f) Notwithstanding anything to the contrary contained herein, (i) no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person is (A) not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate
in connection with the conduct of a trade or business within the United States
and has furnished the transferor and the Trustee with an effective Internal
Revenue Service Form 4224 or successor form at the time and in the manner
required by the Code (any such person who is not covered by clause (A) or (B)
above is referred to herein as a "Non-permitted Foreign Holder").
Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Trustee an affidavit in substantially the form attached hereto
as Exhibit D-1 representing and warranting, among other things, that such
transferee is neither a Disqualified Organization an agent or nominee acting on
behalf of a Disqualified Organization, nor a Non-permitted Foreign Holder (any
such transferee, a "Permitted Transferee"), and the proposed transferor shall
deliver to the Trustee an affidavit in substantially the form attached hereto
as Exhibit D-2. In addition, the Trustee may (but shall have no obligation to)
require, prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, addressed to the Depositor and
the Trustee satisfactory in form and substance to the Depositor, that such
proposed transferee or, if the proposed transferee is an agent or nominee, the
proposed beneficial owner, is not a Disqualified Organization, agent or nominee
thereof, or a Non-Permitted Foreign Holder. Notwithstanding the registration in
the Certificate Register of any transfer, sale, or other disposition of a
Residual Certificate to a Disqualified Organization, an agent or nominee
thereof, or Non-Permitted Foreign Holder, such registration shall be deemed to
be of no legal force or effect whatsoever and such Disqualified Organization,
agent or nominee thereof, or Non-Permitted Foreign Holder shall not be deemed
to be a Certificateholder for any purpose hereunder, including, but not limited
to, the receipt of distributions on such Residual Certificate. The Trustee
shall not be under any liability to any person for any registration or transfer
of a Residual Certificate to a Disqualified Organization, agent or nominee
thereof or Non-permitted Foreign Holder or for the maturity of any payments due
on such Residual Certificate to the Holder thereof or for taking any other
action with respect to such Holder under the provisions of the Agreement, so
long as the transfer was effected in accordance with this Section 3.03(f),
unless the Trustee shall have actual knowledge at the time of such transfer or
the time of such payment or other action that the transferee is a Disqualified
Organization, or an agent or nominee thereof, or Non-permitted Foreign Holder.
The Trustee shall be entitled to recover from any Holder of a Residual
Certificate that was a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder at the time it became a Holder or any subsequent
time it became a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder, all payments made on such Residual Certificate at
and after either such times (and all costs and expenses, including but not
limited to attorneys' fees, incurred in connection therewith). Any payment (not
including any such costs and expenses) so recovered by the Trustee shall be
paid and delivered to the last preceding Holder of such Residual Certificate.
If any purported transferee shall become a registered Holder of a Residual
Certificate in violation of the provisions of this Section 3.03(f), then upon
receipt of written notice to the Trustee that the registration of transfer of
such Residual Certificate was not in fact permitted by this Section 3.03(f),
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of such registration of 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 3.03(f), for making any payment due on such
Certificate to the registered Holder thereof or for taking any other action
with respect to such Holder under the provisions of this Agreement so long as
the transfer was registered upon receipt of the affidavit described in the
preceding paragraph of this Section 3.03(f).
(g) Each Holder of a Restricted Certificate, ERISA-Restricted Certificate
or Residual Certificate, by such Holder's acceptance thereof, shall be deemed
for all purposes to have consented to the provisions of this section.
Section 3.04. Cancellation of Certificates. Any Certificate surrendered
for registration of transfer or exchange shall be cancelled and retained in
accordance with normal retention policies with respect to cancelled
certificates maintained by the Trustee or the Certificate Registrar.
Section 3.05. Replacement of Certificates. If (i) any Certificate is
mutilated and is surrendered to the Trustee or any Authenticating Agent or (ii)
the Trustee or any Authenticating Agent receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate, and there is delivered to
the Trustee or the Authenticating Agent such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Depositor and any Authenticating Agent that such destroyed, lost or
stolen Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute and the Trustee or any Authenticating Agent shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and Certificate
Principal Amount. Upon the issuance of any new Certificate under this Section
3.05, the Trustee and Authenticating Agent may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee or the Authenticating Agent) connected therewith. Any replacement
Certificate issued pursuant to this Section 3.05 shall constitute complete and
indefeasible evidence of ownership in the applicable Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 3.06. Persons Deemed Owners. Subject to the provisions of Section
3.09 with respect to Book-Entry Certificates, 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 upon the books
of the Certificate Registrar as the owner of such Certificate for the purpose
of receiving distributions pursuant to Sections 5.01 and 5.02 and for all other
purposes whatsoever, and neither the Depositor, the Master Servicer, the
Trustee, the Certificate Registrar nor any agent of any of them shall be
affected by notice to the contrary.
Section 3.07. Temporary Certificates. (a) Pending the preparation of
definitive Certificates, upon the order of the Depositor, the Trustee shall
execute and shall authenticate and deliver temporary Certificates that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Certificates in lieu of which they are issued and with such variations as the
authorized officers executing such Certificates may determine, as evidenced by
their execution of such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and authenticate and deliver in
exchange therefor a like aggregate Certificate Principal Amount of definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Certificates of the same
Class.
Section 3.08. Appointment of Paying Agent. The Trustee may appoint a
Paying Agent (which may be the Trustee) for the purpose of making distributions
to Certificateholders hereunder. The Trustee shall cause such Paying Agent to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums held by
it for the payment to Certificateholders in an Eligible Account in trust for
the benefit of the Certificateholders entitled thereto until such sums shall be
paid to the Certificateholders. All funds remitted by the Trustee to any such
Paying Agent for the purpose of making distributions shall be paid to
Certificateholders on each Distribution Date and any amounts not so paid shall
be returned on such Distribution Date to the Trustee. If the Paying Agent is
not the Trustee, the Trustee shall cause to be remitted to the Paying Agent on
or before the Business Day prior to each Distribution Date, by wire transfer in
immediately available funds, the funds to be distributed on such Distribution
Date. Any Paying Agent shall be either a bank or trust company or otherwise
authorized under law to exercise corporate trust powers.
Section 3.09. Book-Entry Certificates. (a) Each Class of Book-Entry
Certificates, upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Depositor. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Book-Entry Certificates,
except as provided in Section 3.09(c). Unless Definitive Certificates have been
issued to Certificate Owners of Book-Entry Certificates pursuant to Section
3.09(c):
(i) the provisions of this Section 3.09 shall be in full force and
effect;
(ii) the Depositor, the Master Servicer, the Paying Agent, the
Registrar and the Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on the Book-Entry
Certificates) as the authorized representatives of the Certificate Owners
and the Clearing Agency shall be responsible for crediting the amount of
such distributions to the accounts of such Persons entitled thereto, in
accordance with the Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09 conflict
with any other provisions of this Agreement, the provisions of this
Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only through
the Clearing Agency and the Clearing Agency Participants and shall be
limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued pursuant
to Section 3.09(c), the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal of and interest on the Book-Entry Certificates
to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the Trustee
shall give all such notices and communications specified herein to be given to
Holders of the Book-Entry Certificates to the Clearing Agency.
(c) If (i) (A) the Depositor advises the Trustee in writing that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Book-Entry Certificates, and (B) the
Trustee or 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 Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 50% of the Class Principal Amount of a
Class of Book-Entry Certificates identified as such to the Trustee by an
Officer's Certificate from the Clearing Agency advise the Trustee and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners of a Class of Book-Entry
Certificates, the Trustee shall notify or cause the Certificate Registrar to
notify the Clearing Agency to effect notification to all Certificate Owners,
through the Clearing Agency, 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
Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall issue the Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Clearing Agency 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.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account. (a) On the Closing Date, the Master
Servicer shall open and shall thereafter maintain a segregated account held in
trust (the "Collection Account"), entitled "Norwest Bank Minnesota, National
Association, as Master Servicer, in trust for the benefit of the Holders of
Structured Asset Securities Corporation Mortgage Pass-Through Certificates,
Series 1999-SP1". The Collection Account shall relate solely to the
Certificates issued by the Trust Fund hereunder, and funds in such Collection
Account shall not be commingled with any other monies.
(b) The Collection Account shall be an Eligible Account. If an existing
Collection Account ceases to be an Eligible Account, the Master Servicer shall
establish a new Collection Account that is an Eligible Account within 30 days
and transfer all funds on deposit in such existing Collection Account into such
new Collection Account.
(c) The Master Servicer will give to the Trustee prior written notice of
the name and address of the depository institution at which the Collection
Account is maintained and the account number of such Collection Account. The
Master Servicer shall take such actions as are necessary to cause the
depository institution holding the Collection Account to hold such account in
the name of the Trustee (subject to such Master Servicer's right to direct
payments and investments and its rights of withdrawal) under this Agreement. On
each Deposit Date, the entire amount on deposit in the Collection Account
(subject to permitted withdrawals set forth in Section 4.02), other than
amounts not included in the Total Distribution Amount for such Distribution
Date shall be remitted to the Trustee for deposit into the Certificate Account
by wire transfer in immediately available funds. The Master Servicer, at its
option, may choose to make daily remittances from the Collection Account to the
Trustee for deposit into the Certificate Account.
(d) The Master Servicer shall deposit or cause to be deposited into the
Collection Account, no later than the Business Day following the Closing Date,
any amounts representing Scheduled Payments on the Mortgage Loans due after the
Cut-off Date and received by the Master Servicer on or before the Closing Date.
Thereafter, the Master Servicer shall deposit or cause to be deposited in the
Collection Account on the applicable Remittance Date the following amounts
received or payments made by it (other than in respect of principal of and
interest on the Mortgage Loans due on or before the Cut-Off Date):
(i) all payments on account of principal, including Principal
Prepayments and late collections, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans (other
than payments due prior to the Cut-off Date), including Prepayment
Premiums or penalties, net of the Servicing Fee and Master Servicing Fee
with respect to each such Mortgage Loan, but only to the extent of the
amount permitted to be withdrawn or withheld from the Collection Account
in accordance with Sections 5.04 and 9.21;
(iii) any unscheduled payment or other recovery with respect to a
Mortgage Loan not otherwise specified in this paragraph (d), including all
Liquidation Proceeds with respect to the Mortgage Loans and REO Property,
and all amounts received in connection with the operation of any REO
Property, net of (x) any unpaid Servicing Fees and Master Servicing Fees
with respect to such Mortgage Loans (but only to the extent of the amount
permitted to be withdrawn or withheld from the Collection Account in
accordance with Sections 5.04 and 9.21) and (y) any amounts reimbursable
to the applicable Servicer under the related Servicing Agreement and
retained by the Servicer;
(iv) all Insurance Proceeds;
(v) all Advances made by the Master Servicer or any Servicer pursuant
to Section 5.04 or the applicable Servicing Agreement; and
(vi) all proceeds of any Mortgage Loan repurchased by the Depositor,
Lehman Capital, the Master Servicer or any other Person.
(e) Funds in the Collection Account may be invested in Eligible
Investments selected by and at the written direction of the Depositor, which
shall mature not later than the earlier of (a) the Deposit Date (except that if
such Eligible Investment is an obligation of the Trustee or the Paying Agent,
if other than the Trustee, and such Collection Account is maintained with the
Trustee or the Paying Agent, if other than the Trustee, then such Eligible
Investment shall mature not later than such applicable Distribution Date) or
(b) the day on which the funds in such Collection Account are required to be
remitted to the Trustee for deposit into the Certificate Account, and any such
Eligible Investment shall not be sold or disposed of prior to its maturity. All
such Eligible Investments shall be made in the name of the Trustee (in its
capacity as such) or its nominee. All income and gain realized from any such
investment shall be for the benefit of the Depositor and shall be subject to
its withdrawal or order from time to time, and shall not be part of the Trust
Fund. The amount of any losses incurred in respect of any such investments
shall be deposited in such Collection Account by the Depositor out of its own
funds, without any right of reimbursement therefor, immediately as realized.
The foregoing requirements for deposit in the Collection Account are exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments of interest on funds in the Collection Account and payments
in the nature of late payment charges, assumption fees and other incidental
fees and charges relating to the Mortgage Loans (other than Prepayment
Premiums) need not be deposited by the Master Servicer in the Collection
Account and may be retained by the Master Servicer or the applicable Servicer
as additional servicing compensation. If the Master Servicer deposits in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from such Collection Account. In the event the
Depositor does not provide written direction to the Master Servicer pursuant to
this Section, all funds on deposit in the Collection Account shall be invested
in a money market fund as described in paragraph (viii) of the definition of
"Eligible Investment" set forth in Article I.
Section 4.02. Application of Funds in the Collection Account. The Master
Servicer may, from time to time, make, or cause to be made, withdrawals from
the Collection Account for the following purposes:
(i) to reimburse itself or any Servicer for Advances made by it or by
such Servicer pursuant to Section 5.04 or the applicable Servicing
Agreement; the Master Servicer's right to reimburse itself pursuant to
this subclause (i) is limited to amounts received on or in respect of
particular Mortgage Loans (including, for this purpose, Liquidation
Proceeds and amounts representing Insurance Proceeds with respect to the
property subject to the related Mortgage) which represent late recoveries
(net of the applicable Servicing Fee and the Master Servicing Fee) of
payments of principal or interest respecting which any such Advance was
made, it being understood, in the case of any such reimbursement, that the
Master Servicer's or Servicer's right thereto shall be prior to the rights
of the Certificateholders;
(ii) to reimburse itself or any Servicer, following a final
liquidation of a Mortgage Loan, for any amounts advanced by it or by such
Servicer that it determines in good faith will not be recoverable from
amounts representing late recoveries of payments of principal or interest
respecting the particular Mortgage Loan as to which such Advance was made
or from Liquidation Proceeds or Insurance Proceeds with respect to such
Mortgage Loan, it being understood, in the case of any such reimbursement,
that such Master Servicer's or Servicer's right thereto shall be prior to
the rights of the Certificateholders;
(iii) to reimburse itself or any Servicer from Liquidation Proceeds
for Liquidation Expenses and for amounts expended by it pursuant to
Sections 9.20 and 9.22(a) or the applicable Servicing Agreement in good
faith in connection with the restoration of damaged property and, to the
extent that Liquidation Proceeds after such reimbursement exceed the
unpaid principal balance of the related Mortgage Loan, together with
accrued and unpaid interest thereon at the applicable Mortgage Rate less
the applicable Servicing Fee and the Master Servicing Fee for such
Mortgage Loan to the Due Date next succeeding the date of its receipt of
such Liquidation Proceeds, to pay to itself out of such excess the amount
of any unpaid assumption fees, late payment charges or other Mortgagor
charges on the related Mortgage Loan and to retain any excess remaining
thereafter as additional servicing compensation, it being understood, in
the case of any such reimbursement or payment, that such Master Servicer's
right thereto shall be prior to the rights of the Certificateholders;
(iv) in the event it has elected not to pay itself the Master
Servicing Fee out of any Mortgagor payment on account of interest or other
recovery with respect to a particular Mortgage Loan prior to the deposit
of such Mortgagor payment or recovery in the Collection Account, to pay to
itself the Master Servicing Fee for each Distribution Date and any unpaid
Master Servicing Fees for prior Distribution Dates, as reduced pursuant to
Section 5.05, from any Mortgagor payment as to interest or such other
recovery with respect to that Mortgage Loan, as is permitted by this
Agreement;
(v) to reimburse itself for expenses incurred by and recoverable by
or reimbursable to it or such Servicer pursuant to Sections 9.04, 9.06,
9.16, 9.22(a) or 9.30, or pursuant to the applicable Servicing Agreement,
and to reimburse itself for any expenses reimbursable to it pursuant to
Section 10.01(c);
(vi) to pay to the Depositor, Lehman Capital, the Transferor, the
Special Servicer or the Directing Holder, as applicable, with respect to
each Mortgage Loan or REO Property acquired in respect thereof that has
been purchased pursuant to this Agreement, all amounts received thereon
and not distributed on the date on which the related repurchase was
effected, and to pay to the applicable Person any Advances to the extent
specified in the definition of Purchase Price;
(vii) to pay to the Depositor income earned on the investment of
funds deposited in the Collection Account;
(viii) to make payments to the Trustee for deposit into the
Certificate Account in the amounts and in the manner provided for in
Section 4.04;
(ix) to make payment to itself and others pursuant to any provision
of this Agreement;
(x) to withdraw funds deposited in error in the Collection Account;
(xi) to clear and terminate any Collection Account pursuant to
Section 7.02;
(xii) to reimburse a successor Master Servicer (solely in its
capacity as successor Master Servicer), for any fee or advance occasioned
by a termination of the Master Servicer, and the assumption of such duties
by the Trustee or a successor Master Servicer appointed by the Trustee
pursuant to Section 6.14, in each case to the extent not reimbursed by the
terminated Master Servicer, it being understood, in the case of any such
reimbursement or payment, that the right of the Master Servicer or the
Trustee thereto shall be prior to the rights of the Certificateholders;
and
(xiii) to reimburse any Servicer for such amounts as are due thereto
under the applicable Servicing Agreement and have not been retained by or
paid to such Servicer, to the extent provided in such Servicing Agreement.
In connection with withdrawals pursuant to subclauses (i), (ii), (iii),
(iv) and (vi) above, the Master Servicer's or Servicer's entitlement thereto is
limited to collections or other recoveries on the related Mortgage Loan. The
Master Servicer shall therefore keep and maintain a separate accounting for
each Mortgage Loan it master services for the purpose of justifying any
withdrawal from the Collection Account it maintains pursuant to such subclause
(i), (ii), (iii), (iv) and (vi).
Section 4.03. Reports to Certificateholders. (a) On each Distribution
Date, the Trustee shall deliver or cause to be delivered by first class mail to
each Certificateholder a written report setting forth the following
information, which information the Master Servicer will determine (on the basis
of information obtained from the Servicers) and deliver to the Trustee no later
than two Business Days prior to such Distribution Date:
(i) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates and in
respect of each Component, to the extent applicable, allocable to
principal on the Mortgage Loans, including Liquidation Proceeds and
Insurance Proceeds, stating separately the amount attributable to
scheduled principal payments and unscheduled payments in the nature of
principal (with respect to each Mortgage Pool);
(ii) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates (other than
any Class of Principal Only Certificates) and in respect of each Component
allocable to interest;
(iii) the amount, if any, of any distribution to the Holders of the
Class X Certificate and the Residual Certificate;
(iv) (A) the aggregate amount of any Advances required to be made by
or on behalf of the Master Servicer or any Servicer (or the Trustee) with
respect to such Distribution Date, (B) the aggregate amount of such
Advances actually made, and (C) the amount, if any, by which (A) above
exceeds (B) above;
(v) the Aggregate Loan Balance and the Pool Balance of each Mortgage
Pool as of the close of business on the last day of the related Collection
Period, after giving effect to payments allocated to principal reported
under clause (i) above;
(vi) the Class Principal Amount (or Class Notional Amount) of each
Class of Certificates, to the extent applicable, and the Component
Principal Amount (or Component Notional Amount) of each Component, as of
such Distribution Date after giving effect to payments allocated to
principal reported under clause (i) above, separately identifying any
reduction of any of the foregoing Certificate Principal Amounts and
Component Principal Amounts due to Applied Loss Amounts;
(vii) the amount of all prepayment penalties or premiums distributed
to the Class P Certificates;
(viii) any Realized Losses realized with respect to the Mortgage
Loans in (x) in the applicable Prepayment Period and (y) in the aggregate
since the Cut-off Date;
(ix) the amount of the Master Servicing Fees, Servicing Fees and
Trustee Fee paid during the Collection Period to which such distribution
relates;
(x) the number and aggregate Scheduled Principal Balance of Mortgage
Loans in each Mortgage Pool, as reported to the Trustee by the Master
Servicer, (a) remaining outstanding (b) delinquent 30 to 59 days on a
contractual basis, (c) delinquent 60 to 89 days on a contractual basis,
(d) delinquent 90 or more days on a contractual basis, and (e) as to which
foreclosure proceedings have been commenced as of the close of business on
the last Business Day of the calendar month immediately preceding the
month in which such Distribution Date occurs;
(xi) the deemed principal balance of each REO Property as of the
close of business on the last Business Day of the calendar month
immediately preceding the month in which such Distribution Date occurs;
(xii) with respect to any Mortgage Loan in any Mortgage Pool that
became an REO Property during the preceding calendar month, the principal
balance of such Mortgage Loan and the number of such Mortgage Loans as of
the close of business on the Distribution Date in such preceding month;
(xiii) with respect to substitution of Mortgage Loans in the
preceding calendar month, the Scheduled Principal Balance of each Deleted
Mortgage Loan, and of each Qualifying Substitute Mortgage Loan;
(xiv) the aggregate outstanding Carryforward Interest, Net Prepayment
Interest Shortfalls, Basis Risk Shortfalls and Unpaid Basis Risk
Shortfalls, if any, if any, for each Class of Certificates and each
Component, after giving effect to the distribution made on such
Distribution Date;
(xv) the Certificate Interest Rate and Component Interest Rate
applicable to such Distribution Date with respect to each Class of
Certificates and each Component;
(xvi) if applicable, the amount of any shortfall (i.e., the
difference between the aggregate amounts of principal and interest which
Certificateholders would have received if there were sufficient available
amounts in the Certificate Account and the amounts actually distributed);
and
(xvii) any other "loan-level" information for any Mortgage Loans in
each Mortgage Pool that are delinquent 90 or more days on a contractual
basis and any REO Property held by the Trust that is reported by the
Master Servicer to the Trustee.
In the case of information furnished pursuant to subclauses (i), (ii) and
(viii) above, the amounts shall be expressed as a dollar amount per $1,000 of
original principal amount of Certificates.
In preparing or furnishing the foregoing information to the Trustee, the
Master Servicer shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO Property
that has been provided to the Master Servicer by each Servicer, and the Master
Servicer shall not be obligated to verify, recompute, reconcile or recalculate
any such information or data.
On each Distribution Date, the Trustee shall also deliver or cause to be
delivered by first class mail to the Depositor a copy of the above-described
written report, to the following address: Mortgage Finance Group, Lehman
Brothers Inc., Three World Financial Center, 200 Vesey Street, New York, New
York, 10285, Attention: Stanley Labanowski, or to such other address as the
Depositor may designate.
(b) Upon the reasonable advance written request of any Certificateholder
that is a savings and loan, bank or insurance company, which request, if
received by the Trustee, will be promptly forwarded to the Master Servicer, the
Master Servicer shall provide, or cause to be provided, (or, to the extent that
such information or documentation is not required to be provided by a Servicer
under the applicable Servicing Agreement, shall use reasonable efforts to
obtain such information and documentation from such Servicer, and provide) to
such Certificateholder such reports and access to information and documentation
regarding the Mortgage Loans as such Certificateholder may reasonably deem
necessary to comply with applicable regulations of the Office of Thrift
Supervision or its successor or other regulatory authorities with respect to
investment in the Certificates; provided, however, that the Master Servicer
shall be entitled to be reimbursed by such Certificateholder for such Master
Servicer's actual expenses incurred in providing such reports and access.
(c) Within 90 days, or such shorter period as may be required by statute
or regulation, after the end of each calendar year, the Trustee shall send to
each Person who at any time during the calendar year was a Certificateholder of
record, and make available to Certificate Owners (identified as such by the
Clearing Agency) in accordance with applicable regulations, a report
summarizing the items provided to Certificateholders pursuant to Section
4.03(a) on an annual basis as may be required to enable such Holders to prepare
their federal income tax returns. Such information shall include the amount of
original issue discount accrued on each Class of Certificates and information
regarding the expenses of the Trust Fund. The Master Servicer shall provide the
Trustee with such information as is necessary for the Trustee to prepare such
reports.
Section 4.04. Certificate Account. (a) The Trustee shall establish and
maintain in its name, as trustee, a special deposit trust account (the
"Certificate Account"), to be held in trust for the benefit of the
Certificateholders until disbursed pursuant to the terms of this Agreement. The
Certificate Account shall be an Eligible Account. If the existing Certificate
Account ceases to be an Eligible Account, the Trustee shall establish a new
Certificate Account that is an Eligible Account within 20 Business Days and
transfer all funds on deposit in such existing Certificate Account into such
new Certificate Account. The Certificate Account shall relate solely to the
Certificates issued hereunder and funds in the Certificate Account shall be
held separate and apart from and shall not be commingled with any other monies
including, without limitation, other monies of the Trustee held under this
Agreement.
(b) The Trustee shall cause to be deposited into the Certificate Account
on the day on which, or, if such day is not a Business Day, the Business Day
immediately following the day on which, any monies are remitted by the Master
Servicer to the Trustee, all such amounts. The Trustee shall make withdrawals
from the Certificate Account only for the following purposes:
(i) to withdraw amounts deposited in the Certificate Account in
error;
(ii) to pay the Depositor any investment income earned with respect
to funds in the Certificate Account invested in Eligible Investments as
set forth in subsection (c) below, and to make payment to the Depositor
and others pursuant to any provision of this Agreement;
(iii) to make payments of the Master Servicing Fee (to the extent not
already withheld or withdrawn from the Collection Account by the Master
Servicer) to the Master Servicer;
(iv) to make distributions to the Certificateholders pursuant to
Article V; and (v) to clear and terminate the Certificate Account pursuant
to Section 7.02.
(c) The Trustee may invest, or cause to be invested, funds held in the
Certificate Account at the direction of the Depositor, which funds, if
invested, shall be invested in Eligible Investments (which may be obligations
of the Trustee). All such investments must be payable on demand or mature no
later than the next Distribution Date, and shall not be sold or disposed of
prior to their maturity. All such Eligible Investments will be made in the name
of the Trustee (in its capacity as such) or its nominee. All income and gain
realized from any such investment shall be compensation for the Depositor and
shall be subject to its withdrawal on order from time to time. The amount of
any losses incurred in respect of any such investments shall be paid by the
Depositor for deposit in the Certificate Account out of its own funds, without
any right of reimbursement therefor, immediately as realized. In the event that
the Depositor does not provide written direction to the Trustee pursuant to
this Section, all funds on deposit in the Certificate Account shall be invested
in a money market or common trust fund as described in paragraph (ix) of the
definition of "Eligible Investment" set forth in Article I.
Section 4.05. Determination of LIBOR. (a) If the outstanding Certificates
include any LIBOR Certificates or consist of any LIBOR Components, then on each
LIBOR Determination Date the Master Servicer shall determine LIBOR on the basis
of the offered LIBOR quotations of the Reference Banks as of 11:00 a.m. London
time on such LIBOR Determination Date as follows:
(i) If on any LIBOR Determination Date two or more of the Reference
Banks provide such offered quotations, LIBOR for the next Accrual Period
will be the arithmetic mean of such offered quotations (rounding such
arithmetic mean if necessary to the nearest five decimal places;
(ii) If on any LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Accrual Period will be whichever is the higher of (x) LIBOR as determined
on the previous LIBOR Determination Date or (y) the Reserve Interest Rate.
The "Reserve Interest Rate" will be either (A) the rate per annum which
the Master Servicer determines to be the arithmetic mean (rounding such
arithmetic mean if necessary to the nearest five decimal places) of the
one-month Eurodollar lending rates that New York City banks selected by
the Depositor are quoting, on the relevant LIBOR Determination Date, to
the principal London offices of at least two leading banks in the London
interbank market or (B) in the event that the Master Servicer can
determine no such arithmetic mean, the lowest one-month Eurodollar lending
rate that the New York City banks selected by the Depositor are quoting on
such LIBOR Determination Date to leading European banks; and
(iii) If on any LIBOR Determination Date the Master Servicer is
required but is unable to determine the Reserve Interest Rate in the
manner provided in paragraph (ii) above, LIBOR for the next Accrual Period
will be LIBOR as determined on the previous LIBOR Determination Date or,
in the case of the first LIBOR Determination Date, the Initial LIBOR Rate.
(b) The establishment of LIBOR by the Master Servicer and the Master
Servicer's subsequent calculation of the Certificate Interest Rate or Component
Interest Rate (or Rates) applicable to the LIBOR Certificates and LIBOR
Components for the relevant Accrual Period, in the absence of manifest error,
will be final and binding. In all cases, the Master Servicer may conclusively
rely on quotations of LIBOR for the Reference Banks as such quotations appear
on the display designated "LIUS01M" on the Bloomberg Financial Markets
Commodities News.
(c) As used herein, "Reference Banks" shall mean four leading banks
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) whose quotations appear on the "Bloomberg Screen LIUS01M Index
Page" (as described in the definition of LIBOR) on the applicable LIBOR
Determination Date and (iii) which have been designated as such by the
Depositor and are able and willing to provide such quotations to the Depositor
on each LIBOR Determination Date. The Reference Banks initially shall be:
Barclay's plc, Bank of Tokyo, National Westminster Bank and Trust Company and
Bankers Trust Company. If any of the initial Reference Banks should be removed
from the Bloomberg Screen LIUS01M Index Page or in any other way fail to meet
the qualifications of a Reference Bank, the Depositor shall use its best
efforts to designate alternate Reference Banks.
(d) If (i) with respect to any LIBOR Determination Date LIBOR is
determined pursuant to clause (a)(iii) of this Section and (ii) on the next
succeeding LIBOR Determination Date LIBOR would, without giving effect to this
paragraph (d), be determined pursuant to such clause (a)(iii), then the
Depositor shall select an alternative interest rate index over which the
Depositor has no control that is used for determining Eurodollar lending rates
and is calculated and published (or otherwise made available) by an independent
third party, and such alternative interest rate index shall constitute LIBOR
for all purposes hereof.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally. (a) Subject to Section 7.01
respecting the final distribution on the Certificates, on each Distribution
Date the Trustee or the Paying Agent shall make distributions in accordance
with this Article V. Such distributions shall be made by check mailed to each
Certificateholder's address as it appears on the Certificate Register of the
Certificate Registrar (which shall initially be the Trustee) or, upon written
request made to the Trustee at least five Business Days prior to the related
Record Date by any Certificateholder owning an aggregate initial Certificate
Principal Amount of at least $2,500,000 (or an aggregate initial Notional
Amount of at least $25,000,000, in the case of a Class AIO Certificate), or, in
the case of a Class X Certificate, a Percentage Interest of 100%, by wire
transfer in immediately available funds to an account specified in the request
and at the expense of such Certificateholder; provided, however, that the final
distribution in respect of any Certificate shall be made only upon presentation
and surrender of such Certificate at the Corporate Trust Office. Wire transfers
will be made at the expense of the Holder requesting such wire transfer by
deducting a wire transfer fee from the related distribution. Notwithstanding
such final payment of principal of any of the Certificates, each Residual
Certificate will remain outstanding until the termination of each REMIC and the
payment in full of all other amounts due with respect to the Residual
Certificates and at such time such final payment in retirement of any Residual
Certificate will be made only upon presentation and surrender of such
Certificate at the Corporate Trust Office of the Trustee or at the office of
the New York Presenting Agent. If any payment required to be made on the
Certificates is to be made on a day that is not a Business Day, then such
payment will be made on the next succeeding Business Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in
proportion to their respective initial Class Principal Amounts (or initial
Class Notional Amounts).
Section 5.02. Distributions from the Certificate Account. (a) On each
Distribution Date the Trustee (or the Paying Agent on behalf of the Trustee)
shall withdraw from the Certificate Account the Total Distribution Amount with
respect to each Mortgage Pool for such date, shall allocate such amount to the
interests issued in respect of REMIC 1, REMIC 2, REMIC 3, REMIC 4 and REMIC 5
and shall distribute such amount as specified in this Section.
(b) On each Distribution Date, the Trustee shall distribute the Interest
Remittance Amount for such date in the following order of priority:
(i) to the Trustee, the Trustee Fee for such Distribution Date;
(ii) pro rata, on the basis of interest otherwise payable, to the
Class A1, Class A2, Class A3, Class A4 and Class AIO Certificates, Current
Interest for each such Class and such Distribution Date and any
Carryforward Interest for each such Class and such Distribution Date;
(iii) to the Class M1 Certificates, Current Interest for such Class
and such Distribution Date;
(iv) to the Class M2 Certificates, Current Interest for such Class
and such Distribution Date;
(v) to the Class B Certificates, Current Interest for such Class and
such Distribution Date; and
(vi) for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in subsection (d) of this Section, any
Interest Remittance Amount remaining after application pursuant to clauses
(i) through (v) above.
(c) On each Distribution Date, the Trustee shall distribute the Principal
Distribution Amount with respect to each Mortgage Pool for such date as
follows:
(i) On each Distribution Date (a) prior to the Stepdown Date or (b)
with respect to which a Trigger Event has occurred, the Trustee will make
the following distributions in the following order:
(1) until the aggregate Certificate Principal Amount of all of
the Certificates equals Target Amount 1 for such Distribution Date,
the Principal Distribution Amount for Pool 1 will be distributed in
the following order of priority:
(A) to the Class A1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(B) concurrently, pro rata, to the Class A2 Certificates
and to the Class A3 and Class A4 Certificates as a group, as
follows:
(I) to the Class A2 Certificates, until the Class Principal Amount
of such Class has been reduced to zero;
(II) to the Class A3 and Class A4 Certificates, sequentially in that
order, until the Class Principal Amount of each such Class has been
reduced to zero;
(C) to the Class M1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(D) to the Class M2 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(E) to the Class B Certificates, until the Class Principal
Amount of such Class has been reduced to zero; and
(F) for application as part of Monthly Excess Cashflow for
such Distribution Date, as provided in subsection (d) of this
Section, any Principal Distribution Amount remaining after
application pursuant to clauses (A) through (E) above.
(2) until the aggregate Certificate Principal Amount of all of
the Certificates equals Target Amount 2 for such Distribution Date,
the Principal Distribution Amount for Pool 2 will be distributed in
the following order of priority:
(A) to the Class A2 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(B) concurrently, pro rata, to the Class A1 Certificates
and to the Class A3 and Class A4 Certificates as a group, as
follows:
(I) to the Class A1 Certificates, until the Class
Principal Amount of such Class has been reduced to zero;
(II) to the Class A3 and Class A4 Certificates,
sequentially in that order, until the Class Principal
Amount of each such Class has been reduced to zero;
(C) to the Class M1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(D) to the Class M2 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(E) to the Class B Certificates, until the Class Principal
Amount of such Class has been reduced to zero; and
(F) for application as part of Monthly Excess Cashflow for
such Distribution Date, as provided in subsection (d) of this
Section, any Principal Distribution Amount remaining after
application pursuant to clauses (A) through (E) above.
(3) until the aggregate Certificate Principal Amount of all of
the Certificates equals Target Amount 3 for such Distribution Date,
the Principal Distribution Amount for Pool 3 will be distributed in
the following order of priority:
(A) to the Class A3 and Class A4 Certificates, sequentially
in that order, until the Class Principal Amount of each such
Class has been reduced to zero;
(B) concurrently, pro rata, to the Class A1 and Class A2
Certificates, until the Class Principal Amount of each such
Class has been reduced to zero;
(C) to the Class M1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(D) to the Class M2 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(E) to the Class B Certificates, until the Class Principal
Amount of such Class has been reduced to zero; and
(F) for application as part of Monthly Excess Cashflow for
such Distribution Date, as provided in subsection (d) of this
Section, any Principal Distribution Amount remaining after
application pursuant to clauses (A) through (E) above.
(ii) On each Distribution Date (a) on or after the Stepdown Date and
(b) with respect to which a Trigger Event has not occurred, the Principal
Distribution Amounts for all Mortgage Pools for such date will be
distributed in the following order of priority:
(1) to the Class A1 Certificates (in the case of Pool 1), to the
Class A2 Certificates (in the case of Pool 2), and to the Class A3
and Class A4 Certificates, sequentially in that order (in the case of
Pool 3), an amount equal to the lesser of (x) the Principal
Distribution Amount for the related Mortgage Pool for such
Distribution Date and (y) the Senior Principal Distribution Amount
for such Mortgage Pool for such date, in each case until the Class
Principal Amount of such Class (or each such Class) has been reduced
to zero;
(2) concurrently, pro rata on the basis of their Class Principal
Amounts after giving effect to distributions pursuant to clause (1)
above, to the Class A1 Certificates, to the Class A2 Certificates and
to the Class A3 and Class A4 Certificates, as a group, the lesser of
(x) the aggregate of the Principal Distribution Amounts for such
Distribution Date remaining after distributions pursuant to clause
(1) above and (y) the aggregate of the Senior Principal Distribution
Amounts for such date remaining after distributions pursuant to
clause (1) above, as follows:
(A) to the Class A1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(B) to the Class A2 Certificates, until the Class Principal
Amount of such Class has been reduced to zero; and
(C) to the Class A3 and Class A4 Certificates, sequentially
in that order, until the Class Principal Amount of each such
Class have been reduced to zero;
(3) to the Class M1 Certificates, an amount equal to the lesser
of (x) the excess of (a) the aggregate Principal Distribution Amounts
for each of Pool 1, Pool 2 and Pool 3 for such Distribution Date over
(b) the amount distributed to the Senior Certificates on such date
pursuant to clauses (1) and (2) above, and (y) the M1 Principal
Distribution Amount for such date, until the Class Principal Amount
of such Class has been reduced to zero;
(4) to the Class M2 Certificates, an amount equal to the lesser
of (x) the excess of (a) the aggregate Principal Distribution Amounts
for each of Pool 1, Pool 2 and Pool 3 for such Distribution Date over
(b) the amount distributed to the Senior Certificates and the Class
M1 Certificates on such date pursuant to clauses (1) through (3)
above, and (y) the M2 Principal Distribution Amount for such date,
until the Class Principal Amount of such Class has been reduced to
zero;
(5) to the Class B Certificates, an amount equal to the lesser
of (x) the excess of (a) the aggregate Principal Distribution Amounts
for each of Pool 1, Pool 2 and Pool 3 for such Distribution Date over
(b) the amount distributed to the Senior Certificates and the Class
M1 and Class M2 Certificates on such date pursuant to clauses (1)
through (4) above, and (y) the B Principal Distribution Amount for
such date, until the Class Principal Amount of such Class has been
reduced to zero; and
(6) for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in subsection (d) of this Section, any
Principal Distribution Amount remaining after application pursuant to
clauses (1) through (5) above.
Notwithstanding the foregoing, on any Distribution Date on which the Class
Principal Amount of each Class of Certificates having a higher priority of
distribution has been reduced to zero, any remaining Principal
Distribution Amount will be distributed to the remaining Certificates in
the order of priority set forth above until the Class Principal Amount of
each such Class has been reduced to zero.
(d) On each Distribution Date, the Trustee shall distribute the Monthly
Excess Cashflow for such date in the following order of priority:
(i) until the aggregate Certificate Principal Amount of all of the
Certificates equals the Aggregate Loan Balance for such Distribution Date
minus the Targeted Overcollateralization Amount for such date, on each
Distribution Date (a) prior to the Stepdown Date or (b) with respect to
which a Trigger Event has occurred, to the extent of Monthly Excess
Interest for such Distribution Date, to the Certificates, in the following
order of priority:
(1) concurrently, pro rata, in proportion to their respective
Class Principal Amounts after giving effect to distributions on such
Distribution Date, to the Class A1 Certificates, to the Class A2
Certificates and to the Class A3 and Class A4 Certificates as a
group, as follows:
(A) to the Class A1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(B) to the Class A2 Certificates. until the Class Principal
Amount of such Class has been reduced to zero;
(C) to the Class A3 and Class A4 Certificates, sequentially
in that order, until the Class Principal Amount of each such
Class has been reduced to zero;
(2) to the Class M1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(3) to the Class M2 Certificates, until the Class Principal
Amount of such Class has been reduced to zero; and
(4) to the Class B Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(ii) to the Basis Risk Reserve Fund, and then, concurrently, to the
Senior Certificates, in proportion to any outstanding Basis Risk Shortfall
and Unpaid Basis Risk Shortfall with respect to each such Senior
Certificate, and then sequentially, to the Class M1, Class M2 and Class B
Certificates, in that order, from the Basis Risk Reserve Fund, in an
amount equal to the unpaid amount of any applicable Basis Risk Shortfall
for such date and any applicable Unpaid Basis Risk Shortfall for such
date, as required by Section 5.07 of this Agreement;
(iii) to the Class M1 Certificates, any Carryforward Interest for
such Class and such date;
(iv) to the Class M1 Certificates, any Deferred Amount for such Class
and such date;
(v) to the Class M2 Certificates, any Carryforward Interest for such
Class and such date;
(vi) to the Class M2 Certificates, any Deferred Amount for such Class
and such date;
(vii) to the Class B Certificates, any Carryforward Interest for such
Class and such date;
(viii) to the Class B Certificates, any Deferred Amount for such
Class and such date;
(ix) to the Special Servicer, any monthly servicing compensation with
respect to the Mortgage Loans as provided in the Special Servicing
Compensation Agreement, other than the Base Servicing Fee and any
Incentive Fees with respect to the related Collection Period;
(x) to the Basis Risk Reserve Fund, an amount equal to the Required
Reserve Fund Deposit for such Distribution Date;
(xi) to the Class X Certificate, the Class X Distributable Amount for
such Distribution Date, together with any amounts withdrawn from the Basis
Risk Reserve Fund for distribution to such Class X Certificate pursuant to
Section 5.07(c) and (d) on such date; and
(xii) to the Class R Certificate, any amount remaining on such date
after application pursuant to clauses (i) through (xi) above.
Section 5.03. Allocation of Losses. On each Distribution Date, the Class
Principal Amounts of the Class M1, Class M2 and Class B Certificates will be
reduced by the amount of any Applied Loss Amount for such date, in the
following order of priority:
(i) to the Class B Certificates, until the Class Principal Amount
thereof has been reduced to zero;
(ii) to the Class M2 Certificates, until the Class Principal Amount
thereof has been reduced to zero; and
(iii) to the Class M1 Certificates, until the Class Principal Amount
thereof has been reduced to zero.
Section 5.04. Advances by Master Servicer and Trustee. (a) Advances shall
be made in respect of each Deposit Date as provided herein. If, on any
Determination Date, the Master Servicer determines that any Scheduled Payments
due during the related Collection Period (other than Balloon Payments) have not
been received, the Master Servicer shall, or cause the applicable Servicer to,
advance such amount, less an amount, if any, to be set forth in an Officer's
Certificate to be delivered to the Trustee on such Determination Date, which if
advanced the Master Servicer or the applicable Servicer has determined would
not be recoverable from amounts received with respect to such Mortgage Loan,
including late payments, Liquidation Proceeds, Insurance Proceeds or otherwise.
If the Master Servicer determines that an Advance is required, it shall on the
Deposit Date immediately following such Determination Date either (i) remit to
the Trustee from its own funds (or funds advanced by the applicable Servicer)
for deposit in the Certificate Account immediately available funds in an amount
equal to such Advance, (ii) cause to be made an appropriate entry in the
records of the Collection Account that funds in such account being held for
future distribution or withdrawal have been, as permitted by this Section 5.04,
used by the Master Servicer to make such Advance, and remit such immediately
available funds to the Trustee for deposit in the Certificate Account or (iii)
make Advances in the form of any combination of clauses (i) and (ii)
aggregating the amount of such Advance. Any funds being held in the Collection
Account for future distribution to Certificateholders and so used shall be
replaced by the Master Servicer from its own funds by remittance to the Trustee
for deposit in the Certificate Account on or before any future Deposit Date to
the extent that funds in the Certificate Account on such Deposit Date shall be
less than payments to Certificateholders required to be made on the related
Distribution Date. The Master Servicer and each Servicer shall be entitled to
be reimbursed from the Collection Account for all Advances made by it as
provided in Section 4.02.
(b) In the event that the Master Servicer fails for any reason to make an
Advance required to be made pursuant to Section 5.04 on or before the Deposit
Date, the Trustee, as successor Master Servicer pursuant to Section 6.14,
shall, on or before the related Distribution Date, deposit in the Certificate
Account an amount equal to the excess of (a) Advances required to be made by
the Master Servicer or any Servicer that would have been deposited in such
Certificate Account over (b) the amount of any Advance made by the Master
Servicer or any Servicer with respect to such Distribution Date; provided,
however, that the Trustee shall be required to make such Advance only if it is
not prohibited by law from doing so and it has determined that such Advance
would be recoverable from amounts to be received with respect to such Mortgage
Loan, including late payments, Liquidation Proceeds, Insurance Proceeds, or
otherwise. The Trustee shall be entitled to be reimbursed from the Certificate
Account for Advances made by it pursuant to this Section 5.04 as if it were the
Master Servicer.
Section 5.05. Compensating Interest Payments. The amount of the Aggregate
Master Servicing Compensation payable to the Master Servicer in respect of any
Distribution Date shall be reduced by the amount of any Compensating Interest
Payment for such Distribution Date, but only to the extent such Compensating
Interest Payment is not actually made by a Servicer on the applicable
Remittance Date. Such amount shall not be treated as an Advance and shall not
be reimbursable to the Master Servicer.
Section 5.06. REMIC 1, REMIC 2, REMIC 3, REMIC 4, and REMIC 5 Allocations.
(a) With respect to REMIC 1 and on each Distribution Date, all collections
and other recoveries allocable to principal of the Mortgage Loans shall be
allocated first to the Class T1-2 Interest in an amount sufficient to reduce
its principal balance so that it corresponds to the Class AIO Class Notional
Amount for such date; the balance will be allocated to the Class T1-1 Interest.
Realized Losses and Net Prepayment Interest Shortfalls with respect to the
Mortgage Loans will be allocated first to the Class T1-1 Interest and then to
the Class T1-2 Interest.
(b) The initial principal balances of the Class T2-1, Class T2-2 and Class
T2-3 Interests shall equal 98%, 1% and 1%, respectively, of the Cut-off Date
Aggregate Loan Balance. With respect to each Distribution Date, 98% of all
collections and other recoveries allocable to principal of the Class T1-1 and
Class T1-2 Interests will be allocated to the Class T2-1 Interest. Remaining
amounts allocable to principal of the Pool 1 Mortgage Loans on such
Distribution Date will be allocated first to the Class T2-3 Interest up to an
amount equal to 2% of any amount that represents an Adjusted
Overcollateralization Release Amount with respect to such Distribution Date and
then equally to the Class T2-2 and Class T2-3 Interests. Interest accruing on
the Class T2-3 Interest in respect of each Distribution Date in an amount equal
to 1% of the increase in the Adjusted Overcollateralization Amount from the
immediately preceding Distribution Date will be deferred and added to the
principal balance of the Class T2-3 Interest. The amount of interest accrued
and deferred on the Class T2-3 Interest in accordance with the preceding
sentence in respect of each Distribution Date shall be distributed as principal
on such date to the Class T2-2 Interest.
(c) On each Distribution Date, the Realized Losses attributable to the
Mortgage Loans for such date shall be allocated 98% to the Class T2-1 Interest.
The remaining 2% of such Realized Losses shall be allocated to the Class T2-3
Interest to the extent that the principal balance of the Class T2-3 Interest
exceeds that of the Class T2-2 Interests and then equally between the Class
T2-2 Interest and the Class T2-3 Interest.
(d) On each Distribution Date, Net Prepayment Interest Shortfalls with
respect to the Mortgage Loans shall be allocated ratably among the Class T2-1,
Class T2-2 and Class T2-3 Interests in proportion to their rights to receive
interest on such Distribution Date.
(e) The Class T2-4 Interest does not have a principal balance but is
entitled to receive interest payments on each Distribution Date in an amount
equal to the Interest Payments at the Class AIO Certificate Interest Rate on a
notional balance equal to the Class T1-2 Interest Balance on such date (without
regard to principal payments made on the Class T1-2 Interest on such date).
(f) The initial principal balances of the Class T3-1 Interest, Class T3-2
Interest and Class T3-3 Interest shall equal 98%, 1% and 1%, respectively, of
the Cut-off Date Aggregate Loan Balance. The Class T3-4 shall not have a
principal balance. On each Distribution Date, all collections and other
recoveries allocable to principal of the Mortgage Loans will be allocated 98%
to the Class T3-1 Interest. Remaining amounts allocable to principal of the
Mortgage Loans on such Distribution Date will be allocated first to the Class
T3-3 Interest up to an amount equal to 2% of any amount that represents an
Adjusted Overcollateralization Release Amount for such Distribution Date and
then equally to the Class T3-2 and Class T3-3 Interests. Interest accruing on
the Class T3-3 Interest in respect of such Distribution Date in an amount equal
to 1% of the increase in the Adjusted Overcollateralization Amount from the
immediately preceding Distribution Date will be deferred and added to the
principal balance of the Class T3-3 Interest. The amount of interest accrued
and deferred on the Class T3-3 Interest in accordance with the preceding
sentence in respect of each Distribution Date shall be distributed as principal
to the Class T3-2 Interest.
(g) On each Distribution Date, the Realized Losses on the Mortgage Loans
for such date shall be allocated 98% to the Class T3-1 Interest. The remaining
2% of such Realized Losses shall be allocated to the Class T3-3 Interest to the
extent that the principal balance of the Class T3-3 Interest exceeds that of
the Class T3-2 Interest and then equally between the Class T3-2 Interest and
the Class T3-3 Interests.
(h) On each Distribution Date, Net Prepayment Interest Shortfalls with
respect to the Pool 1 Mortgage Loans shall be allocated ratably among the Class
T3-1, Class T3-2, and the Class T3-3 Interests in proportion to their rights to
receive interest on such Distribution Date.
(i) The Class T3-5 Interest does not have a principal balance but is
entitled to receive interest payments on each Distribution Date in an amount
equal to the Interest Payments at the Class AIO Certificate Interest Rate on a
notional balance equal to the Class T1-2 Interest balance on such date (without
regard to principal payments made on the Class T1-2 Interest on such date).
(j) On each Distribution Date, the Class T4-1, Class T4-2, Class T4-3,
Class T4-4, Class T4-5, Class T4-6, and Class T4-7 Interests shall be entitled
to receive all collections and other recoveries allocable to principal on the
Mortgage Loans and such principal shall be distributed in a manner that
correspond to the distributions made with respect to the corresponding class of
Interests in REMIC 5 (the Class T5-1, Class T5-2, Class T5-3, Class T5-4, Class
T5-5, Class T5-6 and Class T5-7 Interests, respectively).
(k) On each Distribution Date, interest that accrues with respect to the
Class T4-8, Class T4-9, and Class T4-10 Interests during the related Accrual
Period shall be distributed as principal on the Class T4-1, Class T4-2, Class
T4-3, Class T4-4, Class T4-5, Class T4-6 and Class T4-7 Interests to the extent
needed to achieve the Targeted Overcollateralization Amount for such
Distribution Date, and, to the extent not needed for this purpose, shall be
distributed with respect to the Class T4-8, Class T4-9, and Class T4-10
Interests in proportion to their entitlements to current and accrued
undistributed interest. Interest that accrues on the Class T4-8, Class T4-9,
and Class T4-10 Interests shall not itself bear interest.
(l) On each Distribution Date, REMIC 4 shall allocate Realized Losses with
respect to the Mortgage Loans as follows:
first, to the Class T4-1 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T5-1 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
second, to the Class T4-2 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T5-2 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
third, to the Class T4-3 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T5-3 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
fourth, to the Class T4-4 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T5-4 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
fifth, to the Class T4-5 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T5-5 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
sixth, to the Class T4-6 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T5-6 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
seventh, proportionately, to the accrued interest balances of the
Class T4-8, Class T4-9, and Class T4-10 Interests; and
eighth, in a manner that will cause any amount due on each REMIC 4
Regular Interest to equal the amount due on the corresponding Class of
Regular interests in REMIC 5.
(m) The Class T4-11 Interest does not have a principal balance but is
entitled to receive interest payments on each Distribution Date in an amount
equal to the Interest Payments at the Class AIO Certificate Interest Rate on a
notional balance equal to the Class T1-2 Interest balance on such date (without
regard to principal payments made on the Class T1-2 Interest on such date).
(n) On each Distribution Date, Net Prepayment Interest Shortfalls shall be
allocated ratably among the REMIC 4 Regular Interests according to their right
to receive interest on such Distribution Date.
(o) On each Distribution Date, The Class T5-1, Class T5-2, Class T5-3,
Class T5-4, Class T5-6, and Class T5-7 Interests shall be entitled to receive
principal and interest payments that correspond to those to be made on the
Class A1, Class A2, Class A3, Class A4, Class M1, Class M2, and Class B
Certificates, respectively (determined without regard to any amounts due from
the Basis Risk Reserve Fund). On each Distribution Date, interest that accrues
with respect to the Class T5-8, Class T5-9, Class T5-10, Class T5-11, Class
T5-12, Class T5-13, Class T5-14, and Class T5-15 Interests during the related
Accrual Period shall be distributed as principal on the Class T5-1, Class T5-2,
Class T5-3, Class T5-4, Class T5-5, Class T5-6, and Class T5-7 Interests to the
extent needed to fund the Excess Principal Distribution Amount, and, to the
extent not needed for this purpose, shall be distributed with respect to the
Class T5-8, Class T5-9, Class T5-10, Class T5-11, Class T5-12, Class T5-13,
Class T5-14 and Class T5-15 Interests in proportion to their entitlement to
current and accrued undistributed interest. Interest that accrues on the Class
T5-8, Class T5-9, Class T5-10, Class T5-11, Class T5-12, Class T5-13, Class
T5-14, and Class T5-15 Interests shall not itself bear interest.
(p) The Class T5-16 Interest does not have a principal balance but is
entitled to receive interest payments on each Distribution Date in an amount
equal to the Interest Payments at the Class AIO Certificate Interest Rate on a
notional balance equal to the Class T1-2 Interest balance on such date (without
regard to principal payments made on the Class T1-2 Interest on such date).
(q) With respect to each Distribution Date, the Applied Loss Amount with
respect to REMIC 5 and any Distribution Date shall be allocated among the REMIC
5 Regular Interests in accordance with the allocations provided in Section 5.03
hereof for the corresponding Classes of Components.
(r) With respect to each Mortgage Pool and on each Distribution Date, Net
Prepayment Interest Shortfalls shall be allocated ratably among the Class T5-8,
Class T5-9, Class T5-10, Class T5-11, Class T5-12, Class T5-13, Class T5-14,
and Class T5-15 Interests in proportion to the interest accruing on those
Interests with resect to such Distribution Date.
Section 5.07. Basis Risk Reserve Fund. (a) On the Closing Date, the
Trustee shall establish and maintain in its name, in trust for the benefit of
the holders of the Class A1, Class A2, Class A3, Class A4, Class M1, Class M2
and Class B Certificates, a Basis Risk Reserve Fund, into which the Depositor
shall deposit $1,000. The Basis Risk Reserve Fund shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including, without limitation, other
moneys of the Trustee held pursuant to this Agreement.
(b) On each Distribution Date on which the Net Excess Spread is less than
0.25%, the Trustee shall transfer the Required Reserve Fund Deposit from the
Certificate Account to the Basis Risk Reserve Fund pursuant to Section
5.02(e)(xi). The Trustee shall make withdrawals from the Basis Risk Reserve
Fund to make distributions pursuant to Section 5.02(d)(ii).
(c) Funds in the Basis Risk Reserve Fund shall be invested in Permitted
Investments. Any earnings on such amounts shall be distributed to the related
Class X Certificate pursuant to Section 5.02(e)(xi). The Class X Certificate
shall evidence ownership of the Basis Risk Reserve Fund for federal income tax
purposes and the Holder thereof shall direct the Trustee, in writing, as to
investment of amounts on deposit therein. In the absence of written
instructions from the Class X Certificateholder as to investment of funds on
deposit in the Basis Risk Reserve Fund, such funds shall be invested in the
Trustee's Corporate Trust Short Term Investment Fund. Any amounts on deposit in
the Basis Risk Reserve Fund in excess of the Required Reserve Fund Deposit on
any Distribution Date shall be distributed to the Class X Certificate on the
following Distribution Date.
(d) Upon termination of the Trust Fund, any amounts remaining in the Basis
Risk Reserve Fund shall be distributed to the Class X Certificateholder
pursuant to Section 5.02(d)(xi).
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee. (a) The Trustee, except during the
continuance of an Event of Default, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement. Any permissive
right of the Trustee provided for in this Agreement shall not be construed as a
duty of the Trustee. If an Event of Default has occurred and has not otherwise
been cured or waived, 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 unless the Trustee is
acting as Master Servicer, in which case it shall use the same degree of care
and skill as the Master Servicer hereunder.
(b) 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 are
in the form required by this Agreement; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer, to the Trustee pursuant to this Agreement,
and shall not be required to recalculate or verify any numerical information
furnished to the Trustee pursuant to this Agreement.
(c) The Trustee shall not have any liability arising out of or in
connection with this Agreement, except for its negligence or willful
misconduct. Notwithstanding anything in this Agreement to the contrary, the
Trustee shall not be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits).
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 willful misconduct; provided, however, that:
(i) 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 Holders of Certificates as provided in
Section 6.19 hereof;
(ii) For all purposes under this Agreement, the Trustee shall not be
deemed to have notice of any Event of Default (other than resulting from a
failure by the Master Servicer (i) to remit funds (or to make Advances) or
(ii) to furnish information to the Trustee when required to do so) unless
a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Holders of the Certificates and this Agreement;
(iii) No provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; and
(iv) The Trustee shall not be responsible for any act or omission of
the Master Servicer.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided,
however, that the Trustee shall use its best efforts to remit to the Master
Servicer upon receipt any such complaint, claim, demand, notice or other
document (i) which is delivered to the Corporate Trust Office of the Trustee,
(ii) of which a Responsible Officer has actual knowledge, and (iii) which
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
(e) 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 Certificateholders of any Class holding Certificates which
evidence, as to such Class, Percentage Interests aggregating not less than 25%
as 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.
(f) The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability for the performance of any of its duties
hereunder or the exercise of any of its rights or powers if there is reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require the Trustee
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer or any Servicer under this Agreement except
during such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(g) Subject to Section 4.04, the Trustee shall not be held liable by
reason of any insufficiency in any account (including without limitation the
Collection Amount) held by or on behalf of the Trustee resulting from any
investment loss on any Eligible Investment included therein (except to the
extent that the Trustee is the obligor and has defaulted thereon).
(h) Except as otherwise provided herein, the Trustee shall have no duty
(A) to see to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or
any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund other than from funds available in the
Collection Account or the Certificate Account, or (D) to confirm or verify the
contents of any reports or certificates of the Master Servicer delivered to the
Trustee pursuant to this Agreement believed by the Trustee to be genuine and to
have been signed or presented by the proper party or parties.
Section 6.02. Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 6.01:
(i) The Trustee may request, and may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any advice of its
counsel or 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 advice or Opinion of
Counsel;
(iii) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, 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 (provided the same appears regular on its
face), unless requested in writing to do so by Holders of at least a
majority in Class Principal Amount (or Percentage Interest) of each Class
of Certificates; 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 the
security afforded to it by the terms of this Agreement, the Trustee may
require reasonable indemnity against such expense or liability or payment
of such estimated expenses as a condition to proceeding. The reasonable
expense thereof shall be paid by the Holders requesting such
investigation;
(v) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
custodians or attorneys, which agents, custodians or attorneys shall have
any and all of the rights, powers, duties and obligations of the Trustee
conferred on them by such appointment, provided that the Trustee shall
continue to be responsible for its duties and obligations hereunder to the
extent provided herein, and provided further that the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by the Trustee;
(vi) 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, in each case 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;
(vii) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act; and
(viii) The Trustee shall not be required to give any bond or surety
in respect of the execution of the Trust Fund created hereby or the powers
granted hereunder.
Section 6.03. Trustee Not Liable for Certificates. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates)
or of any Mortgage Loan, or related document save that the Trustee represents
that, assuming due execution and delivery by the other parties hereto, this
Agreement has been duly authorized, executed and delivered by it and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms except that such enforceability may be subject to (A)
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally, and (B) general principles of
equity regardless of whether such enforcement is considered in a proceeding in
equity or at law. The Trustee shall not be accountable for the use or
application by the Depositor of funds paid to the Depositor in consideration of
the assignment of the Mortgage Loans to the Trust Fund by the Depositor or for
the use or application of any funds deposited into the Collection Account, the
Certificate Account, any Escrow Account or any other fund or account maintained
with respect to the Certificates. The Trustee shall not be responsible for the
legality or validity of this Agreement or the validity, priority, perfection or
sufficiency of the security for the Certificates issued or intended to be
issued hereunder. Except as otherwise provided herein, the Trustee shall have
no responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to record this
Agreement.
Section 6.04. Trustee May Own Certificates. The Trustee and any Affiliate
or agent of the Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact banking and trust business
with the other parties hereto with the same rights it would have if it were not
Trustee or such agent.
Section 6.05. Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be (i) an institution insured by the FDIC and (ii) a
corporation or national banking association, 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 not less than $50,000,000 and subject to supervision or examination by
federal or state authority. If such corporation or national banking association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then, for the
purposes of this Section, the combined capital and surplus of such corporation
or national banking association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.06.
Section 6.06. Resignation and Removal of Trustee. (a) The Trustee may at
any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Depositor and the Master Servicer. Upon receiving
such notice of resignation, the Depositor will promptly appoint a successor
trustee by written instrument, one copy of which instrument shall be delivered
to the resigning Trustee, one copy to the successor trustee and one copy to the
Master Servicer. If no successor trustee shall have been so appointed and shall
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.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a 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, (iii) a
tax is imposed or threatened with respect to the Trust Fund by any state in
which the Trustee or the Trust Fund held by the Trustee is located, or (iv) the
continued use of the Trustee would result in a downgrading of the rating by the
Rating Agencies of any Class of Certificates with a rating, then the Depositor
shall remove the Trustee and appoint a successor trustee by written instrument,
one copy of which instrument shall be delivered to the Trustee so removed, one
copy to the successor trustee and one copy to the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Amount (or
Percentage Interest) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee and to the Depositor remove the Trustee by
such written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor,
one copy to the Trustee so removed and one copy to the Master Servicer; the
Depositor shall thereupon use its best efforts to appoint a mutually acceptable
successor trustee in accordance with this Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.07.
Section 6.07. Successor Trustee. (a) Any successor trustee appointed as
provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor, the Master Servicer 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
like effect as if originally named as trustee herein. The predecessor trustee
shall deliver to the successor trustee all Mortgage Files and documents and
statements related to each Mortgage Files held by it hereunder, and shall duly
assign, transfer, deliver and pay over to the successor trustee the entire
Trust Fund, together with all necessary instruments of transfer and assignment
or other documents properly executed necessary to effect such transfer and such
of the record or copies thereof maintained by the predecessor trustee in the
administration hereof as may be requested by the successor trustee and shall
thereupon be discharged from all duties and responsibilities under this
Agreement. In addition, the Master Servicer and the predecessor trustee shall
execute and deliver such other instruments and do such other things as may
reasonably be required to more fully and certainly vest and confirm in the
successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register and to the Rating Agencies. The expenses of such
mailing shall be borne by the Master Servicer.
Section 6.08. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Persons succeeding to the business of the Trustee,
shall be the successor to the Trustee 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 that such
Person shall be eligible under the provisions of Section 6.05.
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the Trustee, the
Depositor or the Certificateholders evidencing more than 50% of the Class
Principal Amount (or Percentage Interest) of each Class of Certificates shall
each have the power from time to time to appoint one or more Persons to act
either as co-trustees jointly with the Trustee, or as separate trustees, or as
custodians, for the purpose of holding title to, foreclosing or otherwise
taking action with respect to any Mortgage Loan outside the state where the
Trustee has its principal place of business where such separate trustee or
co-trustee is necessary or advisable (or the Trustee has been advised by the
Master Servicer that such separate trustee or co-trustee is necessary or
advisable) under the laws of any state in which a property securing a Mortgage
Loan is located or for the purpose of otherwise conforming to any legal
requirement, restriction or condition in any state in which a property securing
a Mortgage Loan is located or in any state in which any portion of the Trust
Fund is located. The separate Trustees, co-trustees, or custodians so appointed
shall be trustees or custodians for the benefit of all the Certificateholders
and shall have such powers, rights and remedies as shall be specified in the
instrument of appointment; provided, however, that no such appointment shall,
or shall be deemed to, constitute the appointee an agent of the Trustee. The
obligation of the Trustee to make Advances pursuant to Section 5.04 and 6.14
hereof shall not be affected or assigned by the appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other 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, co-trustee, or
custodian jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Trustee shall be incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties and obligations, including the
holding of title to the Trust Fund or any portion thereof in any such
jurisdiction, shall be exercised and performed by such separate trustee,
co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally liable by
reason of any act or omission of any other trustee or custodian hereunder;
and
(iv) the Trustee or the Certificateholders evidencing more than 50%
of the Aggregate Voting Interests of the Certificates may at any time
accept the resignation of or remove any separate trustee, co-trustee or
custodian, so appointed by it or them, if such resignation or removal does
not violate the other terms of this Agreement.
(c) 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, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the 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.
(d) Any separate trustee, co-trustee or custodian 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, co-trustee or custodian 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.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to Certificateholders of the appointment shall be
required under Section 6.07 hereof.
(f) The Trustee agrees to instruct the co-trustees, if any, to the extent
necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee shall pay the reasonable compensation of the co-trustees
to the extent, and in accordance with the standards, specified in Section 6.12
hereof (which compensation shall not reduce any compensation payable to the
Trustee under such Section).
Section 6.10. Authenticating Agents. (a) The Trustee may appoint one or
more Authenticating Agents which shall be authorized to act on behalf of the
Trustee in authenticating Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be a corporation organized
and doing business under the laws of the United States of America or of any
state, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to do a trust business and subject to supervision or
examination by federal or state authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent shall
be a party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.10, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment
to the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.10.
No Authenticating Agent shall have responsibility or liability for any action
taken by it as such at the direction of the Trustee. Any Authenticating Agent
shall be entitled to reasonable compensation for its services and, if paid by
the Trustee, it shall be a reimbursable expense pursuant to Section 6.12.
Section 6.11. Indemnification of Trustee. The Trustee and its directors,
officers, employees and agents shall be entitled to indemnification from the
Trust Fund for any loss, liability or expense incurred in connection with any
legal proceeding and incurred without negligence or willful misconduct on their
part, arising out of, or in connection with, the acceptance or administration
of the trusts created hereunder, including the costs and expenses of defending
themselves against any claim in connection with the exercise or performance of
any of their powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall have given the
Depositor, the Master Servicer and the Holders written notice thereof
promptly after the Trustee shall have knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Depositor in preparing such
defense; and
(iii) notwithstanding anything to the contrary in this Section 6.11,
the Trust Fund shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which
consent shall not be unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.
Section 6.12. Fees and Expenses of Trustee. The Trustee will receive
compensation and reimbursement or payment of its expenses hereunder and under
the Custodial Agreement from the Depositor as provided in the letter agreement
dated February 5, 1999 between the Depositor and the Trustee, which is attached
hereto as Exhibit M.
Section 6.13. Collection of Monies. Except as otherwise expressly provided
in this Agreement, the Trustee may demand payment or delivery of, and shall
receive and collect, all money and other property payable to or receivable by
the Trustee pursuant to this Agreement. The Trustee shall hold all such money
and property received by it as part of the Trust Fund and shall distribute it
as provided in this Agreement. If the Trustee shall not have timely received
amounts to be remitted with respect to the Mortgage Loans from the Master
Servicer, the Trustee shall request the Master Servicer to make such
distribution as promptly as practicable or legally permitted. If the Trustee
shall subsequently receive any such amount, it may withdraw such request.
Section 6.14. Events of Default; Trustee To Act; Appointment of Successor.
(a) The occurrence of any one or more of the following events shall constitute
an "Event of Default"):
(i) Any failure by the Master Servicer to furnish the Trustee the
Mortgage Loan data sufficient to prepare the reports described in Section
4.03(a) which continues unremedied for a period of one Business Day after
the date upon which written notice of such failure shall have been given
to such Master Servicer by the Trustee or to such Master Servicer and the
Trustee by the Holders of not less than 25% of the Class Principal Amount
(or Percentage Interest) of each Class of Certificates affected thereby;
or
(ii) Any failure on the part of the Master Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements on the part of such Master Servicer contained in this Agreement
which continues unremedied for a period of 30 days (or 15 days, in the
case of a failure to maintain any Insurance Policy required to be
maintained pursuant to this Agreement) after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to such Master Servicer by the Trustee, or to such Master Servicer
and the Trustee by the Holders of not less than 25% of the Class Principal
Amount (or Percentage Interest) of each Class of Certificates affected
thereby; or
(iii) A decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days or any Rating Agency
reduces or withdraws or threatens to reduce or withdraw the rating of the
Certificates because of the financial condition or loan servicing
capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to such 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) The Master Servicer shall be dissolved, or shall dispose of all
or substantially all of its assets, or consolidate with or merge into
another entity or shall permit another entity to consolidate or merge into
it, such that the resulting entity does not meet the criteria for a
successor servicer as specified in Section 9.27 hereof; or
(vii) If a representation or warranty set forth in Section 9.14
hereof shall prove to be incorrect as of the time made in any respect that
materially and adversely affects the interests of the Certificateholders,
and the circumstance or condition in respect of which such representation
or warranty was incorrect shall not have been eliminated or cured within
60 days after the date on which written notice of such incorrect
representation or warranty shall have been given to the Master Servicer by
the Trustee, or to the Master Servicer and the Trustee by the Holders of
not less than 25% of the Aggregate Certificate Principal Amount of each
Class of Certificates; or
(viii) A sale or pledge of the any of the rights of the Master
Servicer hereunder or an assignment of this Agreement by the Master
Servicer or a delegation of the rights or duties of the Master Servicer
hereunder shall have occurred in any manner not otherwise permitted
hereunder and without the prior written consent of the Trustee and
Certificateholders holding more than 50% of the Class Principal Amount (or
Percentage Interest) of each Class of Certificates; or
(ix) Any Servicer at any time is not either an FNMA- or FHLMC-
approved servicer, and the Master Servicer has not terminated the rights
and obligations of such Servicer under the applicable Servicing Agreement
and replaced such Servicer with an FNMA- or FHLMC-approved servicer within
45 days of the absence of such approval; or
(x) Any failure of the Master Servicer to remit to the Trustee any
payment required to be made to the Trustee for the benefit of
Certificateholders under the terms of this Agreement, including any
Advance, on any Deposit Date.
If an Event of Default described in clauses (i) through (ix) of this
Section 6.14 shall occur, then, in each and every case, subject to applicable
law, so long as any such Event of Default shall not have been remedied within
any period of time prescribed by this Section 6.14, the Trustee, by notice in
writing to the Master Servicer may, and shall, if so directed by
Certificateholders evidencing more than 50% of the Class Principal Amount (or
Percentage Interest) of each Class of Certificates affected thereby, terminate
all of the rights and obligations of the Master Servicer hereunder and in and
to the Mortgage Loans and the proceeds thereof. If an Event of Default
described in clause (x) of this Section 6.14 shall occur, then, in each and
every case, subject to applicable law, the Trustee, by notice in writing to the
Master Servicer, shall promptly terminate all of the rights and obligations of
the Master Servicer hereunder 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, and only in its capacity as
Master Servicer under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and
under the terms of this Agreement; and the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the defaulting Master Servicer
as attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related
documents or otherwise. The defaulting Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the defaulting Master Servicer's
responsibilities and rights hereunder as Master Servicer including, without
limitation, notifying Mortgagors of the assignment of the master servicing
function and providing the Trustee or its designee all documents and records in
electronic or other form reasonably requested by it to enable the Trustee or
its designee to assume the defaulting Master Servicer's functions hereunder and
the transfer to the Trustee for administration by it of all amounts which shall
at the time be or should have been deposited by the defaulting Master Servicer
in the Collection Account maintained by such defaulting Master Servicer and any
other account or fund maintained with respect to the Certificates or thereafter
received with respect to the Mortgage Loans. The Master Servicer being
terminated shall bear all costs of a master servicing transfer, including but
not limited to those of the Trustee reasonably allocable to specific employees
and overhead, legal fees and expenses, accounting and financial consulting fees
and expenses, and costs of amending the Agreement, if necessary.
Notwithstanding the termination of its activities as Master Servicer, each
terminated Master Servicer shall continue to be entitled to reimbursement to
the extent provided in Section 4.02(i), (ii), (iii), (iv), (v) and (ix) to the
extent such reimbursement relates to the period prior to such Master Servicer's
termination.
If any Event of Default shall occur, the Trustee shall promptly notify the
Rating Agencies of the nature and extent of such Event of Default. The Trustee
shall immediately give written notice to the Master Servicer upon such Master
Servicer's failure to remit funds on the Deposit Date.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee pursuant to Section 6.14(a) or the Trustee
receives the resignation of the Master Servicer evidenced by an Opinion of
Counsel pursuant to Section 9.29, the Trustee, unless another master servicer
shall have been appointed, shall be the successor in all respects to the Master
Servicer in its capacity as such under this Agreement and the transactions set
forth or provided for herein and shall have all the rights and powers and be
subject to all the responsibilities, duties and liabilities relating thereto
and arising thereafter placed on the Master Servicer hereunder, including the
obligation to make Advances; provided, however, that any failure to perform
such duties or responsibilities caused by the Master Servicer's failure to
provide information required by this Agreement shall not be considered a
default by the Trustee hereunder. In addition, the Trustee shall have no
responsibility for any act or omission of the Master Servicer prior to the
issuance of any notice of termination and shall have no liability relating to
the representations and warranties of the Master Servicer set forth in Section
9.14. In the Trustee's capacity as such successor, the Trustee shall have the
same limitations on liability herein granted to the Master Servicer. As
compensation therefor, the Trustee shall be entitled to receive all
compensation payable to the Master Servicer under this Agreement, including the
Master Servicing Fee.
(c) Notwithstanding the above, the Trustee may, if it shall be unwilling
to continue to so act, or shall, if it is unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution servicer, master servicer, servicing or mortgage
servicing institution having a net worth of not less than $15,000,000 and
meeting such other standards for a successor master servicer as are set forth
in this Agreement, as the successor to such Master Servicer in the assumption
of all of the responsibilities, duties or liabilities of a master servicer,
like the Master Servicer. Any entity designated by the Trustee as a successor
master servicer may be an Affiliate of the Trustee; provided, however, that,
unless such Affiliate meets the net worth requirements and other standards set
forth herein for a successor master servicer, the Trustee, in its individual
capacity shall agree, at the time of such designation, to be and remain liable
to the Trust Fund for such Affiliate's actions and omissions in performing its
duties hereunder. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted to the
Master Servicer hereunder. The Trustee and such successor shall take such
actions, consistent with this Agreement, as shall be necessary to effectuate
any such succession and may make other arrangements with respect to the
servicing to be conducted hereunder which are not inconsistent herewith. The
Master Servicer shall cooperate with the Trustee and any successor master
servicer in effecting the termination of the Master Servicer's responsibilities
and rights hereunder including, without limitation, notifying Mortgagors of the
assignment of the master servicing functions and providing the Trustee and
successor master servicer, as applicable, all documents and records in
electronic or other form reasonably requested by it to enable it to assume the
Master Servicer's functions hereunder and the transfer to the Trustee or such
successor master servicer, as applicable, all amounts which shall at the time
be or should have been deposited by the Master Servicer in the Collection
Account and any other account or fund maintained with respect to the
Certificates or thereafter be received with respect to the Mortgage Loans.
Neither the Trustee nor any other successor master servicer shall be deemed to
be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by (i) the
failure of the Master Servicer to deliver, or any delay in delivering, cash,
documents or records to it, (ii) the failure of the Master Servicer to
cooperate as required by this Agreement, (iii) the failure of the Master
Servicer to deliver the Mortgage Loan data to the Trustee as required by this
Agreement or (iv) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer.
Section 6.15. Additional Remedies of Trustee Upon Event of Default. During
the continuance of any Event of Default, so long as such Event of Default shall
not have been remedied, the Trustee, in addition to the rights specified in
Section 6.14, shall have the right, in its own name and as trustee of an
express trust, to take all actions now or hereafter existing at law, in equity
or by statute to enforce its rights and remedies and to protect the interests,
and enforce the rights and remedies, of the Certificateholders (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and
no delay or omission to exercise any right or remedy shall impair any such
right or remedy or shall be deemed to be a waiver of any Event of Default.
Section 6.16. Waiver of Defaults. 35% or more of the Aggregate Voting
Interests of Certificateholders may waive any default or Event of Default by
the Master Servicer in the performance of its obligations hereunder, except
that a default in the making of any required deposit to the Certificate Account
that would result in a failure of the Trustee to make any required payment of
principal of or interest on the Certificates may only be waived with the
consent of 100% of the affected Certificateholders. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
Section 6.17. Notification to Holders. Upon termination of the Master
Servicer or appointment of a successor to the Master Servicer, in each case as
provided herein, the Trustee shall promptly mail notice thereof by first class
mail to the Certificateholders at their respective addresses appearing on the
Certificate Register. The Trustee shall also, within 45 days after the
occurrence of any Event of Default known to the Trustee, give written notice
thereof to Certificateholders, unless such Event of Default shall have been
cured or waived prior to the issuance of such notice and within such 45-day
period.
Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default. Subject to the provisions of Section 8.01 hereof,
during the continuance of any Event of Default, Holders of Certificates
evidencing not less than 25% of the Class Principal Amount (or Percentage
Interest) of each Class of Certificates affected thereby may direct 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; provided, however, that the Trustee shall be under no
obligation to pursue any such remedy, or to exercise any of the trusts or
powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder or
in relation hereto and (ii) the terminating of the Master Servicer or any
successor master servicer from its rights and duties as master servicer
hereunder) at the request, order or direction of any of the Certificateholders,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the cost, expenses and liabilities which may be
incurred therein or thereby; and, provided further, that, subject to the
provisions of Section 8.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee, in accordance with an Opinion of
Counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability or be unjustly
prejudicial to the non-assenting Certificateholders.
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon
Event of Default. In the event that the Trustee shall have actual knowledge of
any action or inaction of the Master Servicer that would become an Event of
Default upon the Master Servicer's failure to remedy the same after notice, the
Trustee shall give notice thereof to the Master Servicer.
ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon
Purchase or Liquidation of All Mortgage Loans. (a) The respective obligations
and responsibilities of the Trustee and the Master Servicer created hereby
(other than the obligation of the Trustee to make payments to
Certificateholders as set forth in Section 7.02, the obligation of the Master
Servicer to make a final remittance to the Trustee for deposit into the
Certificate Account pursuant to Section 4.01 and the obligations of the Master
Servicer to the Trustee pursuant to Sections 9.10 and 9.14) shall terminate on
the earlier of (i) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the sale of the property held by the Trust Fund in accordance with Section
7.01(b) or (c); provided, however, that in no event shall the Trust Fund
created hereby continue beyond the earlier of (i) 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's, living on
the date hereof, and (ii) the Latest Possible Maturity Date. Any termination of
the Trust Fund shall be carried out in such a manner so that the termination of
each REMIC included therein shall qualify as a "qualified liquidation" under
the REMIC Provisions.
(b) On any Distribution Date occurring on after the date on which the
Aggregate Loan Balance is less than 10% of the Cut-off Date Aggregate Loan
Balance, the Class X Certificateholder has the option to cause the Trust Fund
to adopt a plan of complete liquidation pursuant to Section 7.03(a)(i) hereof
to sell all of its property. Upon exercise of such option, the property of the
Trust Fund shall be sold to the Class X Certificateholder at a price (the
"Termination Price") equal to the sum of (i) 100% of the unpaid principal
balance of each Mortgage Loan on the day of such purchase plus interest accrued
thereon at the applicable Mortgage Rate with respect to any Mortgage Loan to
the Due Date in the Collection Period immediately preceding the related
Distribution Date to the date of such repurchase and (ii) the fair market value
of any REO Property and any other property held by any REMIC, such fair market
value to be determined by an appraiser or appraisers mutually agreed upon by
the Master Servicer and the Trustee. If the Class X Certificateholder has not
exercised such option by the close of business on the third Distribution Date
following the Distribution Date specified above, the Depositor shall have the
option to cause the Trust Fund to adopt a plan of complete liquidation pursuant
to Section 7.03(a)(i) hereof to sell all of its property to the Depositor at
the Termination Price. If the Depositor elects to exercise such right, then
upon receipt of notice thereof the Trustee shall promptly notify the Class X
Certificateholder thereof, in writing, and shall effect the transfer of the
Mortgage Loans and related property to the Depositor as provided herein only if
the Trustee does not receive notification from the Class X Certificateholder
within ten Business Days of the sending of such notice that such
Certificateholder intends to promptly exercise its option to purchase such
Mortgage Loans and related property. The Master Servicer or the applicable
Servicer (or the Trustee, if applicable) shall be reimbursed from the
Termination Price for any Mortgage Loan or related REO Property for any
Advances made or other amounts advanced with respect to the Mortgage Loans that
are reimbursable to the Master Servicer or the applicable Servicer under this
Agreement or the applicable Servicing Agreement (or to the Trustee hereunder),
together with any accrued and unpaid compensation due to the Master Servicer
and Servicer hereunder or thereunder.
Section 7.02. Procedure Upon Termination of Trust Fund. (a) Notice of any
termination pursuant to the provisions of Section 7.01, specifying the
Distribution Date upon which the final distribution shall be made, shall be
given promptly by the Trustee by first class mail to Certificateholders mailed
upon (x) the sale of all of the property of the Trust Fund by the Trustee
pursuant to Section 7.01(b) or (y) upon the final payment or other liquidation
of the last Mortgage Loan or REO Property in the Trust Fund. Such notice shall
specify (A) the Distribution Date upon which final distribution on the
Certificates of all amounts required to be distributed to Certificateholders
pursuant to Section 5.02 will be made upon presentation and surrender of the
Certificates at the Corporate Trust Office, and (B) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distribution
being made only upon presentation and surrender of the Certificates at the
office or agency of the Trustee therein specified. The Trustee shall give such
notice to the Master Servicer and the Certificate Registrar at the time such
notice is given to Holders of the Certificates. Upon any such termination, the
duties of the Certificate Registrar with respect to the Certificates shall
terminate and the Trustee shall terminate, or request the Master Servicer to
terminate, the Collection Account it maintains, the Certificate Account and any
other account or fund maintained with respect to the Certificates, subject to
the Trustee's obligation hereunder to hold all amounts payable to
Certificateholders in trust without interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the remaining Certificateholders concerning surrender of such Certificates, and
the cost thereof shall be paid out of the amounts distributable to such
Holders. If within two years after the second notice any Certificates shall not
have been surrendered for cancellation, the Trustee shall, subject to
applicable state law relating to escheatment, hold all amounts distributable to
such Holders for the benefit of such Holders. No interest shall accrue on any
amount held by the Trustee and not distributed to a Certificateholder due to
such Certificateholder's failure to surrender its Certificate(s) for payment of
the final distribution thereon in accordance with this Section.
Section 7.03. Additional Trust Fund Termination Requirements. (a) Any
termination of the Trust Fund shall be effected in accordance with the
following additional requirements, unless the Trustee seeks (at the request of
the party exercising the option to purchase all of the Mortgage Loans pursuant
to Section 7.01(b)), and subsequently receives, an Opinion of Counsel (at the
expense of such requesting party), addressed to the Trustee to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
7.03 will not (i) result in the imposition of taxes on any REMIC under the
REMIC Provisions or (ii) cause any REMIC established hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 89 days prior to the time of the making of the final
payment on the Certificates, upon notification by the Directing Holder or
the Depositor that it intends to exercise its option to cause the
termination of the Trust Fund, the Trustee shall adopt a plan of complete
liquidation of the Trust Fund on behalf of each REMIC, meeting the
requirements of a qualified liquidation under the REMIC Provisions;
(ii) Any sale of the assets of the Trust Fund pursuant to Section
7.02 shall be a sale for cash and shall occur at or after the time of
adoption of such a plan of complete liquidation and prior to the time of
making of the final payment on the Certificates;
(iii) On the date specified for final payment of the Certificates,
the Trustee shall make final distributions of principal and interest on
the Certificates in accordance with Section 5.02 and, after payment of, or
provision for any outstanding expenses, distribute or credit, or cause to
be distributed or credited, to the Holders of the Residual Certificates
all cash on hand after such final payment (other than cash retained to
meet claims), and the Trust Fund (and each REMIC) shall terminate at that
time; and
(iv) In no event may the final payment on the Certificates or the
final distribution or credit to the Holders of the Residual Certificates
be made after the 89th day from the date on which the plan of complete
liquidation is adopted.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby (i) authorizes the Trustee to take such action as may be necessary to
adopt a plan of complete liquidation of the related REMIC and (ii) agrees to
take such other action as may be necessary to adopt a plan of complete
liquidation of the related REMIC, which authorization shall be binding upon all
successor Residual Certificateholders.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders. (a) The death or incapacity
of any Certificateholder shall not operate to terminate this Agreement or this
Trust Fund, nor entitle such Certificateholder's legal representatives or heirs
to claim an accounting or take any action or proceeding in any court for a
partition or winding up of this Trust Fund, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them. Except as
otherwise expressly provided herein, no Certificateholder, solely by virtue of
its status as a Certificateholder, shall have any right to vote or in any
manner otherwise control the Master Servicer or the operation and management of
the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed
so as to constitute the Certificateholders from time to time as partners or
members of an association, nor shall any Certificateholder be under any
liability to any third person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing 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 such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less than 25% of the Class
Principal Amount (or Percentage Interest) of Certificates of each Class
affected thereby 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 cost, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for sixty 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 and no direction inconsistent with such written request has been
given such Trustee during such sixty-day period by such Certificateholders; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing 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 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 8.02. Access to List of Holders. (a) If the Trustee is not acting
as Certificate Registrar, the Certificate Registrar will furnish or cause to be
furnished to the Trustee, within fifteen days after receipt by the Certificate
Registrar of a request by the Trustee in writing, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the
Certificateholders of each Class as of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter referred
to as "Applicants") apply in writing to the Trustee, and such application
states that the Applicants desire to communicate with other Holders with
respect to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt
of such application, afford such Applicants reasonable access during the normal
business hours of the Trustee to the most recent list of Certificateholders
held by the Trustee or shall, as an alternative, send, at the Applicants'
expense, the written communication proffered by the Applicants to all
Certificateholders at their addresses as they appear in the Certificate
Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing Agency,
by receiving and holding a Certificate, agrees with the Depositor, the Master
Servicer, the Certificate Registrar and the Trustee that neither the Depositor,
the Master Servicer, the Certificate Registrar nor the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source
from which such information was derived.
Section 8.03. Acts of Holders of Certificates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Holders or Certificate Owner, if the
Holder is a Clearing Agency, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where expressly required herein,
to the Master Servicer. Such instrument or instruments (as the action embodies
therein and evidenced thereby) are herein sometimes referred to as an "Act" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agents shall be sufficient
for any purpose of this Agreement and conclusive in favor of the Trustee and
Master Servicer, if made in the manner provided in this Section. Each of the
Trustee and Master Servicer shall promptly notify the other of receipt of any
such instrument by it, and shall promptly forward a copy of such instrument to
the other.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments or deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Whenever such execution is by an officer of a corporation or a member
of a partnership on behalf of such corporation or partnership, such certificate
or affidavit shall also constitute sufficient proof of his authority. The fact
and date of the execution of any such instrument or writing, or the authority
of the individual executing the same, may also be proved in any other manner
which the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates shall
be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and neither the Trustee, the Master Servicer, nor the
Depositor shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Certificate shall bind every future Holder
of the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Master Servicer in reliance thereon, whether or not notation of such action is
made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer. The Certificateholders, by
their purchase and acceptance of the Certificates, appoint Norwest Bank
Minnesota, National Association, as Master Servicer. For and on behalf of the
Depositor, the Trustee and the Certificateholders, the Master Servicer shall
master service the Mortgage Loans in accordance with the provisions of this
Agreement and the provisions of the applicable Servicing Agreement.
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors and
Omissions Insurance Policy. (a) The Master Servicer, at its expense, shall
maintain in effect a Master Servicer Fidelity Bond and a Master Servicer Errors
and Omissions Insurance Policy, affording coverage with respect to all
directors, officers, employees and other Persons acting on such Master
Servicer's behalf, and covering errors and omissions in the performance of the
Master Servicer's obligations hereunder. The Master Servicer Errors and
Omissions Insurance Policy and the Master Servicer Fidelity Bond shall be in
such form and amount that would be consistent with coverage customarily
maintained by master servicers of mortgage loans similar to the Mortgage Loans.
The Master Servicer shall (i) require each Servicer to maintain an Errors and
Omissions Insurance Policy and a Servicer Fidelity Bond in accordance with the
provisions of the applicable Servicing Agreement, (ii) cause each Servicer to
provide to the Master Servicer certificates evidencing that such policy and
bond is in effect and to furnish to the Master Servicer any notice of
cancellation, non-renewal or modification of the policy or bond received by it,
as and to the extent provided in the applicable Servicing Agreement, and (iii)
furnish copies of the certificates and notices referred to in clause (ii) to
the Trustee upon its request.
(b) The Master Servicer shall promptly report to the Trustee any material
changes that may occur in the Master Servicer Fidelity Bond or the Master
Servicer Errors and Omissions Insurance Policy and shall furnish to the
Trustee, on request, certificates evidencing that such bond and insurance
policy are in full force and effect. The Master Servicer shall promptly report
to the Trustee all cases of embezzlement or fraud, if such events involve funds
relating to the Mortgage Loans. The total losses, regardless of whether claims
are filed with the applicable insurer or surety, shall be disclosed in such
reports together with the amount of such losses covered by insurance. If a bond
or insurance claim report is filed with any of such bonding companies or
insurers, the Master Servicer shall promptly furnish a copy of such report to
the Trustee. Any amounts relating to the Mortgage Loans collected by the Master
Servicer under any such bond or policy shall be promptly remitted by the Master
Servicer to the Trustee for deposit into the Certificate Account. Any amounts
relating to the Mortgage Loans collected by any Servicer under any such bond or
policy shall be remitted to the Master Servicer to the extent provided in the
applicable Servicing Agreement.
Section 9.03. Master Servicer's Financial Statements and Related
Information. For each year this Agreement is in effect, the Master Servicer
shall submit to the Trustee, each Rating Agency and the Depositor a copy of its
annual unaudited financial statements on or prior to May 31 of each year,
beginning May 31, 2000. Such financial statements shall include a balance
sheet, income statement, statement of retained earnings, statement of
additional paid-in capital, statement of changes in financial position and all
related notes and schedules and shall be in comparative form, certified by a
nationally recognized firm of Independent Accountants to the effect that such
statements were examined and prepared in accordance with generally accepted
accounting principles applied on a basis consistent with that of the preceding
year.
Section 9.04. Power to Act; Procedures. (a) The Master Servicer shall
master service the Mortgage Loans and shall have full power and authority,
subject to the REMIC Provisions and the provisions of Article X hereof, and
each Servicer shall have full power and authority (to the extent provided in
the applicable Servicing Agreement) to do any and all things that it may deem
necessary or desirable in connection with the servicing and administration of
the Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided that the Master Servicer shall not
take, or knowingly permit any Servicer to take, any action that is inconsistent
with or prejudices the interests of the Trust Fund or the Certificateholders in
any Mortgage Loan or the rights and interests of the Depositor, the Trustee and
the Certificateholders under this Agreement. The Master Servicer shall
represent and protect the interests of the Trust Fund in the same manner as it
protects its own interests in mortgage loans in its own portfolio in any claim,
proceeding or litigation regarding a Mortgage Loan and shall not make or permit
any Servicer to make any modification, waiver or amendment of any term of any
Mortgage Loan that would cause the Trust Fund to fail to qualify as a REMIC or
result in the imposition of any tax under Section 860F(a) or Section 860G(d) of
the Code. Without limiting the generality of the foregoing, the Master Servicer
in its own name or in the name of a Servicer, and each Servicer, to the extent
such authority is delegated to such Servicer by the Master Servicer under the
applicable Servicing Agreement, is hereby authorized and empowered by the
Trustee when the Master Servicer or a Servicer, as the case may be, believes it
appropriate in its best judgment and in accordance with Accepted Servicing
Practices and the applicable Servicing Agreement, to execute and deliver, on
behalf of itself and the Certificateholders, the Trustee or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans and with respect to the Mortgaged Properties. The Trustee shall
furnish the Master Servicer, upon request, with any powers of attorney
empowering the Master Servicer or any Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with the applicable Servicing
Agreement and this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer may request, necessary or appropriate
to enable the Master Servicer to master service and administer the Mortgage
Loans and carry out its duties hereunder, in each case in accordance with
Accepted Servicing Practices (and the Trustee shall have no liability for
misuse of any such powers of attorney by the Master Servicer or any Servicer).
If the Master Servicer or the Trustee has been advised that it is likely that
the laws of the state in which action is to be taken prohibit such action if
taken in the name of the Trustee or that the Trustee would be adversely
affected under the "doing business" or tax laws of such state if such action is
taken in its name, then upon request of the Trustee, the Master Servicer shall
join with the Trustee in the appointment of a co-trustee pursuant to Section
6.09 hereof. In the performance of its duties hereunder, the Master Servicer
shall be an independent contractor and shall not, except in those instances
where it is taking action in the name of the Trustee, be deemed to be the agent
of the Trustee.
(b) In master servicing and administering the Mortgage Loans, the Master
Servicer shall employ procedures, and shall cause each Servicer to employ
procedures (including, but not limited to, collection procedures), consistent
with the applicable Servicing Agreement. Consistent with the foregoing, the
Master Servicer may, and may permit any Servicer to, in its discretion (i)
waive any late payment charge (but not any Prepayment Premium) and (ii) extend
the due dates for payments due on a Mortgage Note for a period not greater than
120 days; provided, however, that the maturity of any Mortgage Loan shall not
be extended past the date on which the final payment is due on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any extension
described in clause (ii) above, the Master Servicer shall make or cause the
applicable Servicer to make Advances on the related Mortgage Loan in accordance
with the provisions of Section 5.04 on the basis of the amortization schedule
of such Mortgage Loan without modification thereof by reason of such extension.
Notwithstanding anything to the contrary in this Agreement, the Master Servicer
shall not, unless default by the related Mortgagor is, in the reasonable
judgment of the Master Servicer, imminent, permit any modification, waiver or
amendment of any material term of any Mortgage Loan (including but not limited
to the interest rate, the principal balance, the amortization schedule, or any
other term affecting the amount or timing of payments on the Mortgage Loan or
the collateral therefor) unless the Master Servicer shall have provided or
caused to be provided to the Trustee an Opinion of Counsel in writing to the
effect that such modification, waiver or amendment would not be treated as
giving rise to a new debt instrument for federal income tax purposes and would
not adversely affect the status of the REMIC.
Section 9.05. Servicing Agreements Between the Master Servicer and
Servicers; Enforcement of Servicers' Obligations. (a) Each Servicing Agreement
requires the applicable Servicer to service the Mortgage Loans in accordance
with the provisions thereof. References in this Agreement to actions taken or
to be taken by the Master Servicer include actions taken or to be taken by a
Servicer on behalf of the Master Servicer. Any fees and other amounts payable
to such Servicers shall be deducted from amounts remitted to the Master
Servicer by the applicable Servicer and shall not be an obligation of the
Trust.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
terminate the rights and obligations of such Servicer thereunder and either act
as servicer of the related Mortgage Loans or cause Lehman Capital to enter into
a Servicing Agreement with a successor Servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of 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 initially (i)
from a general recovery resulting from such enforcement only to the extent, if
any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loans, (ii) from a specific recovery of costs, expenses or attorneys'
fees against the party against whom such enforcement is directed, and then,
(iii) to the extent that such amounts are insufficient to reimburse the Master
Servicer for the costs of such enforcement, from the Collection Account.
Section 9.06. Collection of Taxes, Assessments and Similar Items. (a) To
the extent provided in the applicable Servicing Agreement, the Master Servicer
shall cause each Servicer to establish and maintain one or more custodial
accounts at a depository institution (which may be a depository institution
with which the Master Servicer or any Servicer establishes accounts in the
ordinary course of its servicing activities), the accounts of which are insured
to the maximum extent permitted by the FDIC (each, an "Escrow Account") and to
deposit therein any collections of amounts received with respect to amounts due
for taxes, assessments, water rates, Standard Hazard Insurance Policy premiums
or any comparable items for the account of the Mortgagors. Withdrawals from any
Escrow Account may be made (to the extent amounts have been escrowed for such
purpose) only in accordance with the applicable Servicing Agreement. Each
Servicer shall be entitled to all investment income not required to be paid to
Mortgagors on any Escrow Account maintained by such Servicer. The Master
Servicer shall make (or cause to be made) to the extent provided in the
applicable Servicing Agreement advances to the extent necessary in order to
effect timely payment of taxes, water rates, assessments, Standard Hazard
Insurance Policy premiums or comparable items in connection with the related
Mortgage Loan (to the extent that the Mortgagor is required, but fails, to pay
such items), provided that it has determined that the funds so advanced are
recoverable from escrow payments, reimbursement pursuant to Section 4.02(v) or
otherwise.
(b) Costs incurred by the Master Servicer or by Servicers in effecting the
timely payment of taxes and assessments on the properties subject to the
Mortgage Loans may be added to the amount owing under the related Mortgage Note
where the terms of the Mortgage Note so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders. Such costs, to
the extent that they are unanticipated, extraordinary costs, and not ordinary
or routine costs shall be recoverable by the Master Servicer pursuant to
Section 4.02(v).
Section 9.07. Termination of Servicing Agreements; Successor Servicers.
(a) The Master Servicer shall be entitled to terminate the rights and
obligations of any Servicer under the applicable Servicing Agreement in
accordance with the terms and conditions of such Servicing Agreement and
without any limitation by virtue of this Agreement; provided, however, that in
the event of termination of any Servicing Agreement by the Master Servicer or
the related Servicer, the Master Servicer shall provide for the servicing of
the related Mortgage Loans as follows: (i) upon any such termination of Aurora
as Servicer, a successor Servicer shall be appointed as provided in the
Servicing Agreement; and (ii) upon any such termination of the Special
Servicer, a successor special servicer shall be appointed as provided in the
Special Servicing Agreement. In each such case, servicing of the related
Mortgage Loans shall be performed by the applicable successor in accordance
with the provisions of the Servicing Agreement to which such successor is a
party.
The Master Servicer agrees that it will use its best efforts to effect the
transfer of servicing to a successor Servicer within the first one to two weeks
after the termination of a Servicer. The parties acknowledge that
notwithstanding the preceding sentence, there may be a transition period, not
to exceed 60 days from the above-mentioned two-week period, in order to effect
the transfer of servicing to a successor Servicer.
Notwithstanding the foregoing provisions to the extent applicable to
termination of the rights and obligations of each of the Servicer and the
Special Servicer, the Directing Holder, if any, shall have the rights accorded
to it under each of the Servicing Agreement and Special Servicing Agreement.
(b) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of the Servicer, if any, that it
replaces. The Master Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties made
by the terminated Servicer in respect of the related Mortgage Loans, and in the
event of any such assumption by the successor Servicer, the Trustee or the
Master Servicer, as applicable, may, in the exercise of its business judgment,
release the terminated Servicer from liability for such representations and
warranties.
Section 9.08. Master Servicer Liable for Enforcement. Notwithstanding any
Servicing Agreement, the Master Servicer shall remain obligated and liable to
the Trustee and the Certificateholders in accordance with the provisions of
this Agreement, to the extent of its obligations hereunder, without diminution
of such obligation or liability by virtue of such Servicing Agreements or
arrangements. The Master Servicer shall ensure that the Mortgage Loans are
serviced in accordance with the provisions of this Agreement and shall enforce
the provisions of each Servicing Agreement for the benefit of the
Certificateholders. The Master Servicer shall be entitled to enter into any
agreement with its Servicers for indemnification of the Master Servicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 9.09. No Contractual Relationship Between Servicers and Trustee or
Depositor. Any Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Servicer in
its capacity as such and not as an originator shall be deemed to be between
such Servicer, Lehman Capital and the Master Servicer, and the Trustee and the
Depositor shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to such Servicer except as set
forth in Section 9.10 hereof.
Section 9.10. Assumption of Servicing Agreement by Trustee. (a) In the
event the Master Servicer shall for any reason no longer be the Master Servicer
(including by reason of any Event of Default under this Agreement), the Trustee
shall thereupon assume all of the rights and obligations of such Master
Servicer hereunder and under each Servicing Agreement entered into with respect
to the Mortgage Loans. The Trustee, its designee or any successor master
servicer appointed by the Trustee shall be deemed to have assumed all of the
Master Servicer's interest herein and therein to the same extent as if such
Servicing Agreement had been assigned to the assuming party, except that the
Master Servicer shall not thereby be relieved of any liability or obligations
of the Master Servicer under such Servicing Agreement accruing prior to its
replacement as Master Servicer, and shall be liable to the Trustee, and hereby
agrees to indemnify and hold harmless the Trustee from and against all costs,
damages, expenses and liabilities (including reasonable attorneys' fees)
incurred by the Trustee as a result of such liability or obligations of the
Master Servicer and in connection with the Trustee's assumption (but not its
performance, except to the extent that costs or liability of the Trustee are
created or increased as a result of negligent or wrongful acts or omissions of
the Master Servicer prior to its replacement as Master Servicer) of the Master
Servicer's obligations, duties or responsibilities thereunder.
(b) The Master Servicer that has been terminated shall, upon request of
the Trustee but at the expense of such Master Servicer, deliver to the assuming
party all documents and records relating to each Servicing Agreement and the
related Mortgage Loans and an accounting of amounts collected and held by it
and otherwise use its best efforts to effect the orderly and efficient transfer
of each Servicing Agreement to the assuming party.
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 9.12. Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the Master Servicer of
a notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Master Servicer will, or will cause the applicable Servicer to, promptly
notify the Trustee (or the Custodian) by a certification (which certification
shall include a statement to the effect that all amounts received in connection
with such payment that are required to be deposited in the Collection Account
maintained by the Master Servicer pursuant to Section 4.01 have been or will be
so deposited) of a Servicing Officer and shall request the Trustee or the
Custodian, to deliver to the applicable Servicer the related Mortgage File.
Upon receipt of such certification and request, the Trustee or the Custodian
(with the consent, and at the direction of the Trustee), shall promptly release
the related Mortgage File to the applicable Servicer and the Trustee shall have
no further responsibility with regard to such Mortgage File. Upon any such
payment in full, the Master Servicer is authorized, and each Servicer, to the
extent such authority is delegated to such Servicer by the Master Servicer
under the applicable Servicing Agreement, is authorized, to give, as agent for
the Trustee, as the mortgagee under the Mortgage that secured the Mortgage
Loan, an instrument of satisfaction (or assignment of mortgage without
recourse) regarding the Mortgaged Property subject to the Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor of
such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case may
be, shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with Accepted Servicing Practices and
the applicable Servicing Agreement, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by the Master Servicer, or by a
Servicer (in form reasonably acceptable to the Trustee) and as are necessary to
the prosecution of any such proceedings. The Trustee or Custodian, shall, upon
request of the Master Servicer, or of a Servicer, and delivery to the Trustee
or the Custodian, of a trust receipt signed by a Servicing Officer
substantially in the form of Exhibit C, release the related Mortgage File held
in its possession or control to the Master Servicer (or the applicable
Servicer). Such trust receipt shall obligate the Master Servicer or applicable
Servicer to return the Mortgage File to the Trustee or Custodian, as
applicable, when the need therefor by the Master Servicer or applicable
Servicer no longer exists unless the Mortgage Loan shall be liquidated, in
which case, upon receipt of a certificate of a Servicing Officer similar to
that hereinabove specified, the trust receipt shall be released by the Trustee
or the Custodian, as applicable, to the Master Servicer (or the applicable
Servicer).
Section 9.13. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee. (a) The Master Servicer shall transmit, or
cause the applicable Servicer to transmit, to the Trustee such documents and
instruments coming into the possession of the Master Servicer or such Servicer
from time to time as are required by the terms hereof to be delivered to the
Trustee. Any funds received by the Master Servicer or by a Servicer in respect
of any Mortgage Loan or which otherwise are collected by the Master Servicer or
by a Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the Master Servicer's right to retain or withdraw
from the Collection Account the Master Servicing Fee and other amounts provided
in this Agreement, and to the right of each Servicer to retain its Servicing
Fee as provided in the applicable Servicing Agreement. The Master Servicer
shall, and shall (to the extent provided in the applicable Servicing Agreement)
cause each Servicer to, provide access to information and documentation
regarding the Mortgage Loans to the Trustee, its agents and accountants at any
time upon reasonable request and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the Office of Thrift Supervision, the FDIC and the supervisory
agents and examiners of such Office and Corporation or examiners of any other
federal or state banking or insurance regulatory authority if so required by
applicable regulations of the Office of Thrift Supervision or other regulatory
authority, such access to be afforded without charge but only upon reasonable
request in writing and during normal business hours at the offices of the
Master Servicer designated by it. In fulfilling such a request the Master
Servicer shall not be responsible for determining the sufficiency of such
information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, or any Servicer, in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Master
Servicer, or by any Servicer, for and on behalf of the Trustee and the
Certificateholders and shall be and remain the sole and exclusive property of
the Trustee; provided, however, that the Master Servicer and each Servicer
shall be entitled to setoff against, and deduct from, any such funds any
amounts that are properly due and payable to the Master Servicer or such
Servicer under this Agreement or the applicable Servicing Agreement.
(c) The Master Servicer hereby acknowledges that concurrently with the
execution of this Agreement, the Trustee shall own or, to the extent that a
court of competent jurisdiction shall deem the conveyance of the Mortgage Loans
from Lehman Capital to the Depositor not to constitute a sale, the Trustee
shall have a security interest in the Mortgage Loans and in all Mortgage Files
representing such Mortgage Loans and in all funds now or hereafter held by, or
under the control of, a Servicer or the Master Servicer that are collected by
any Servicer or the Master Servicer in connection with the Mortgage Loans,
whether as scheduled installments of principal and interest or as full or
partial prepayments of principal or interest or as Liquidation Proceeds or
Insurance Proceeds or otherwise, and in all proceeds of the foregoing and
proceeds of proceeds (but excluding any fee or other amounts to which a
Servicer is entitled under its Servicing Agreement, or the Master Servicer or
the Depositor is entitled to hereunder); and the Master Servicer agrees that so
long as the Mortgage Loans are assigned to and held by the Trustee, all
documents or instruments constituting part of the Mortgage Files, and such
funds relating to the Mortgage Loans which come into the possession or custody
of, or which are subject to the control of, the Master Servicer or any Servicer
shall be held by the Master Servicer or such Servicer for and on behalf of the
Trustee as the Trustee's agent and bailee for purposes of perfecting the
Trustee's security interest therein as provided by the applicable Uniform
Commercial Code or other laws.
(d) The Master Servicer agrees that it shall not, and shall not authorize
any Servicer to, create, incur or subject any Mortgage Loans, or any funds that
are deposited in any custodial account, Escrow Account or the Collection
Account, or any funds that otherwise are or may become due or payable to the
Trustee, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, nor assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan or any funds collected on,
or in connection with, a Mortgage Loan.
Section 9.14. Representations and Warranties of the Master Servicer. (a)
The Master Servicer hereby represents and warrants to the Depositor and the
Trustee, for the benefit of the Certificateholders, as of the Closing Date
that:
(i) it is validly existing and in good standing under the laws of the
United States of America as a national banking association, and as Master
Servicer has full power and authority to transact any and all business
contemplated by this Agreement and to execute, deliver and comply with its
obligations under the terms of this Agreement, the execution, delivery and
performance of which have been duly authorized by all necessary corporate
action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is bound
or to which any of its assets are subject, which violation, default or
breach would materially and adversely affect the Master Servicer's ability
to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is an FNMAand FHLMC-approved seller/servicer;
(viii) 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 and
orders (if any) as have been obtained;
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer;
and
(x) the Master Servicer has obtained an Errors and Omissions
Insurance Policy and a Fidelity Bond in accordance with Section 9.02 each
of which is in full force and effect, and each of which provides at least
such coverage as is required hereunder.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 9.14 shall survive the execution and delivery of this
Agreement. The Master Servicer shall indemnify the Depositor and the Trustee
and hold them harmless against any loss, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Master Servicer's
representations and warranties contained in Section 9.14(a). It is understood
and agreed that the enforcement of the obligation of the Master Servicer set
forth in this Section to indemnify the Depositor and the Trustee as provided in
this Section constitutes the sole remedy (other than as set forth in Section
6.14) of the Depositor and the Trustee, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or arising out
of the breach of any representations and warranties made in this Section shall
accrue upon discovery of such breach by either the Depositor, the Master
Servicer or the Trustee or notice thereof by any one of such parties to the
other parties.
(c) It is understood and agreed that the representations and warranties of
the Depositor set forth in Sections 2.03(a) through (f) shall survive the
execution and delivery of this Agreement. The Depositor shall indemnify the
Master Servicer and hold it harmless against any loss, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Depositor's representations
and warranties contained in Sections 2.03(a) through (f) hereof. It is
understood and agreed that the enforcement of the obligation of the Depositor
set forth in this Section to indemnify the Master Servicer as provided in this
Section constitutes the sole remedy of the Master Servicer respecting a breach
by the Depositor of the representations and warranties in Sections 2.03(a)
through (f) hereof.
Any cause of action against the Depositor relating to or arising out of
the breach of the representations and warranties made in Sections 2.03(a)
through (f) hereof shall accrue upon discovery of such breach by either the
Depositor or the Master Servicer or notice thereof by any one of such parties
to the other parties.
Section 9.15. Closing Certificate and Opinion. On or before the Closing
Date, the Master Servicer shall cause to be delivered to the Depositor, Lehman
Brothers Inc. and the Trustee an Opinion of Counsel, dated the Closing Date, in
form and substance reasonably satisfactory to the Depositor and Lehman Brothers
Inc., as to the due authorization, execution and delivery of this Agreement by
the Master Servicer and the enforceability thereof.
Section 9.16. Standard Hazard and Flood Insurance Policies. For each
Mortgage Loan, the Master Servicer shall maintain, or cause to be maintained by
each Servicer, standard fire and casualty insurance and, where applicable,
flood insurance, all in accordance with the provisions of this Agreement and
the related Servicing Agreement, as applicable. It is understood and agreed
that such insurance shall be with insurers meeting the eligibility requirements
set forth in the applicable Servicing Agreement and that no earthquake or other
additional insurance is to be required of any Mortgagor or to be maintained on
property acquired in respect of a defaulted loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
Pursuant to Section 4.01, any amounts collected by the Master Servicer, or
by any Servicer, under any insurance policies maintained pursuant to this
Section 9.16 (other than amounts to be applied to the restoration or repair of
the property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Collection Account, subject to withdrawal pursuant to Section 4.02. Any cost
incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added
to the amount owing under the Mortgage Loan where the terms of the Mortgage
Loan so permit; provided, however, that the addition of any such cost shall not
be taken into account for purposes of calculating the distributions to be made
to Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.02(v).
Section 9.17. Presentment of Claims and Collection of Proceeds. The Master
Servicer shall, or shall cause each Servicer (to the extent provided in the
applicable Servicing Agreement) to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies with
respect to the Mortgage Loans, and take such actions (including the
negotiation, settlement, compromise or enforcement of the insured's claim) as
shall be necessary to realize recovery under such policies. Any proceeds
disbursed to the Master Servicer (or disbursed to a Servicer and remitted to
the Master Servicer) in respect of such policies or bonds shall be promptly
deposited in the Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition requisite to the presentation of claims on
the related Mortgage Loan to the insurer under any applicable Insurance Policy
need not be so deposited (or remitted).
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies. (a)
The Master Servicer shall not take, or permit any Servicer (consistent with the
applicable Servicing Agreement) to take, any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of such Master Servicer or Servicer, would have been
covered thereunder. The Master Servicer shall use its best reasonable efforts
to keep in force and effect, or to cause each Servicer to keep in force and
effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer to, cancel or refuse to renew any such Primary Mortgage Insurance
Policy that is in effect at the date of the initial issuance of the
Certificates and is required to be kept in force hereunder except in accordance
with the provisions of this Agreement and the related Servicing Agreement, as
applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 4.02.
Section 9.19. Trustee To Retain Possession of Certain Insurance Policies
and Documents. The Trustee (or its custodian, if any, as directed by the
Trustee), shall retain possession and custody of the originals of the Primary
Mortgage Insurance Policies or certificate of insurance if applicable and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect
of the Certificates have been distributed in full and the Master Servicer
otherwise has fulfilled its obligations under this Agreement, the Trustee (or
its custodian, if any, as directed by the Trustee) shall also retain possession
and custody of each Mortgage File in accordance with and subject to the terms
and conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or its custodian, if any, as directed by
the Trustee), upon the execution or receipt thereof the originals of the
Primary Mortgage Insurance Policies and any certificates of renewal thereof,
and such other documents or instruments that constitute portions of the
Mortgage File that come into the possession of the Master Servicer from time to
time.
Section 9.20. Realization Upon Defaulted Mortgage Loans. Subject to the
provisions of the Special Servicing Agreement, the Master Servicer shall use
its reasonable best efforts to, or to cause the Special Servicer to, foreclose
upon, repossess or otherwise comparably convert the ownership of Mortgaged
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, all in accordance with the applicable Servicing
Agreement.
Section 9.21. Compensation to the Master Servicer. The Master Servicer
shall (i) be entitled, at its election, either (a) to pay itself the Master
Servicing Fee, as reduced pursuant to Section 5.05, in respect of the Mortgage
Loans out of any Mortgagor payment on account of interest prior to the deposit
of such payment in the Collection Account it maintains or (b) to withdraw from
the Collection Account, subject to Section 5.05, the Master Servicing Fee to
the extent permitted by Section 4.02(iv). The Master Servicer shall also be
entitled, at its election, either (a) to pay itself the Master Servicing Fee in
respect of each delinquent Mortgage Loan master serviced by it out of
Liquidation Proceeds in respect of such Mortgage Loan or other recoveries with
respect thereto to the extent permitted in Section 4.02 or (b) to withdraw from
the Collection Account it maintains the Master Servicing Fee in respect of each
Liquidated Mortgage Loan to the extent of such Liquidation Proceeds or other
recoveries, to the extent permitted by Section 4.02. Servicing compensation in
the form of assumption fees, if any, late payment charges, as collected, if
any, or otherwise (but not including any Prepayment Premium) shall be retained
by the Master Servicer (or the applicable Servicer) and shall not be deposited
in the Collection Account. If the Master Servicer does not retain or withdraw
the Master Servicing Fee from the Collection Account as provided herein, the
Master Servicer shall be entitled to direct the Trustee to pay the Master
Servicing Fee to such Master Servicer by withdrawal from the Certificate
Account to the extent that payments have been received with respect to the
applicable Mortgage Loan. The Master Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder and shall
not be entitled to reimbursement therefor except as provided in this Agreement.
The provisions of this Section 9.21 are subject to the provisions of Section
6.14(b).
Section 9.22. REO Property. (a) In the event the Trust Fund acquires
ownership of any REO Property in respect of any Mortgage Loan, the deed or
certificate of sale shall be issued to the Trustee, or to its nominee, on
behalf of the Certificateholders. Subject to the provisions of the Special
Servicing Agreement, the Master Servicer shall use its reasonable best efforts
to sell, or, to the extent provided in the applicable Servicing Agreement,
cause the Special Servicer to sell, any REO Property as expeditiously as
possible and in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable, but in all events within the time
period, and subject to the conditions set forth in Article X hereof. Pursuant
to its efforts to sell such REO Property, the Master Servicer shall protect and
conserve, or cause the Special Servicer to protect and conserve, such REO
Property in the manner and to such extent required by the applicable Servicing
Agreement, subject to Article X hereof.
(b) The Master Servicer shall deposit or cause to be deposited all funds
collected and received by it, or recovered from any Servicer, in connection
with the operation of any REO Property in the Collection Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Advances and other unreimbursed advances as well as any
unpaid Master Servicing Fees or Servicing Fees from Liquidation Proceeds
received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Advances as well as any unpaid Master
Servicing Fees or Servicing Fees may be reimbursed or paid, as the case may be,
prior to final disposition, out of any net rental income or other net amounts
derived from such REO Property.
(d) The Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the applicable Servicer
as provided above and in the Special Servicing Agreement, shall be deposited in
the Collection Account on or prior to the Determination Date in the month
following receipt thereof (and the Master Servicer shall provide prompt written
notice to the Trustee upon such deposit) and be remitted by wire transfer in
immediately available funds to the Trustee for deposit into the Certificate
Account on the next succeeding Deposit Date.
Section 9.23. Preparation of Tax Returns and Other Reports. (a) The Master
Servicer shall prepare or cause to be prepared on behalf of the Trust Fund,
based upon information calculated in accordance with this Agreement pursuant to
instructions given by the Depositor, and the Trustee shall file, federal tax
returns and appropriate state income tax returns and such other returns as may
be required by applicable law relating to the Trust Fund, and the Trustee shall
forward copies to the Depositor of all such returns and Form 1099 information
and such other information within the control of the Trustee as the Depositor
may reasonably request in writing, and shall forward to each Certificateholder
such forms and furnish such information within the control of the Trustee as
are required by the Code and the REMIC Provisions to be furnished to them, and
the Master Servicer or the Trustee will prepare, to the extent that they are
familiar with applicable state requirements, and the Trustee will file, annual
reports (other than tax returns), if any, required by applicable state
authorities, will file copies of this Agreement with the appropriate state
authorities as may be required by applicable law, and will prepare and
disseminate to Certificateholders Form 1099 (or otherwise furnish information
within the control of the Trustee) to the extent required by applicable law.
The Master Servicer will indemnify the Trustee for any liability of or
assessment against the Trustee resulting from any error in any of such tax or
information returns resulting from errors in the information provided by such
Master Servicer (other than any such information that is derived solely from
information provided by a Servicer).
(b) The Master Servicer shall prepare and file with the Internal Revenue
Service ("IRS"), on behalf of the Trust Fund, an application on IRS Form SS-4.
The Master Servicer, upon receipt from the IRS of the Notice of Taxpayer
Identification Number Assigned, shall promptly forward a copy of such notice to
the Trustee and the Depositor.
(c) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K and thereafter the Master Servicer shall prepare or
cause to be prepared Form 10-Ks and Form 10-Qs (if necessary), or monthly
current reports on Form 8-K, on behalf of the Trust Fund, as may be required by
applicable law, for filing with the Securities and Exchange Commission (the
"SEC"). The Trustee will sign each such report on behalf of the Trust Fund. The
Master Servicer will forward a copy of each such report to the Depositor
promptly after such report has been filed with the SEC. The Master Servicer
agrees to use its best efforts to seek to terminate such filing obligation
promptly after the period during which such filings are required under the
Securities Exchange Act of 1934. Promptly after filing a Form 15 or other
applicable form with the SEC in connection with such termination, the Master
Servicer shall deliver to the Depositor a copy of such form together with
copies of confirmations of receipt by the SEC of each report filed therewith on
behalf of the Trust Fund.
Section 9.24. Reports to the Trustee. (a) Not later than 30 days after
each Distribution Date, the Master Servicer shall forward to the Trustee a
statement, deemed to have been certified by a Servicing Officer, setting forth
the status of the Collection Account maintained by the Master Servicer as of
the close of business on the related Distribution Date, indicating that all
distributions required by this Agreement to be made by the Master Servicer have
been made (or if any required distribution has not been made by the Master
Servicer, specifying the nature and status thereof) and showing, for the period
covered by such statement, the aggregate of deposits into and withdrawals from
the Collection Account maintained by the Master Servicer. Copies of such
statement shall be provided by the Master Servicer to the Depositor, Attention:
Contract Finance, and, upon request, to any Certificateholders (or by the
Trustee at the Master Servicer's expense if the Master Servicer shall fail to
provide such copies to the Certificateholders (unless (i) the Master Servicer
shall have failed to provide the Trustee with such statement or (ii) the
Trustee shall be unaware of the Master Servicer's failure to provide such
statement)).
(b) Not later than two Business Days following each Distribution Date, the
Master Servicer shall deliver to the Person designated by the Depositor, in a
format consistent with other electronic loan level reporting supplied by the
Master Servicer in connection with similar transactions, "loan level"
information with respect to the Mortgage Loans as of the related Determination
Date, to the extent that such information has been provided to the Master
Servicer by the Servicers or by the Depositor.
(c) The Master Servicer shall prepare a monthly statement to
Certificateholders which will set forth certain information regarding the
Certificates and the Mortgage Pools as provided in Section 4.03.
Section 9.25. Annual Officer's Certificate as to Compliance. (a) The
Master Servicer shall deliver to the Trustee and the Rating Agencies on or
before May 31 of each year, commencing on May 31, 2000, an Officer's
Certificate, certifying that with respect to the period ending on the
immediately preceding December 31: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or
portion thereof and its performance under this Agreement, (ii) to the best of
such Servicing Officer's knowledge, based on such review, such Master Servicer
has performed and fulfilled its duties, responsibilities and obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that any Servicer
has failed to perform any of its duties, responsibilities and obligations under
its Servicing Agreement in all material respects throughout such year, or, if
there has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof, and (iv) the Master
Servicer has received from each Servicer such Servicer's annual certificate of
compliance and a copy of such Servicer's annual audit report, in each case to
the extent required under the applicable Servicing Agreement, or, if any such
certificate or report has not been received by the Master Servicer, the Master
Servicer is using its best reasonable efforts to obtain such certificate or
report .
(b) Copies of such statements shall be provided to any Certificateholder
upon request, by the Master Servicer or by the Trustee at the Master Servicer's
expense if the Master Servicer failed to provide such copies (unless (i) the
Master Servicer shall have failed to provide the Trustee with such statement or
(ii) the Trustee shall be unaware of the Master Servicer's failure to provide
such statement).
Section 9.26. Annual Independent Accountants' Servicing Report. If the
Master Servicer (or any of its Affiliates) has, during the course of any fiscal
year, directly serviced any of the Mortgage Loans, then the Master Servicer at
its expense shall cause a nationally recognized firm of independent certified
public accountants to furnish a statement to the Trustee, the Rating Agencies
and the Depositor on or before May 31 of each year, commencing on May 31, 2000
to the effect that, with respect to the most recently ended fiscal year, such
firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to this
Agreement and to each other and that, on the basis of such examination
conducted substantially in compliance with the audit program for mortgages
serviced for FHLMC or the Uniform Single Attestation Program for Mortgage
Bankers, such firm is of the opinion that the Master Servicer's activities have
been conducted in compliance with this Agreement, or that such examination has
disclosed no material items of noncompliance except for (i) such exceptions as
such firm believes to be immaterial, (ii) such other exceptions as are set
forth in such statement and (iii) such exceptions that the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
Serviced by FHLMC requires it to report. Copies of such statements shall be
provided to any Certificateholder upon request by the Master Servicer, or by
the Trustee at the expense of the Master Servicer if the Master Servicer shall
fail to provide such copies. If such report discloses exceptions that are
material, the Master Servicer shall advise the Trustee whether such exceptions
have been or are susceptible of cure, and will take prompt action to do so.
Section 9.27. Merger or Consolidation. Any Person into which the Master
Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor to the Master Servicer 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 resulting Person to the Master
Servicer shall be a Person that shall be qualified and approved to service
mortgage loans for FNMA or FHLMC and shall have a net worth of not less than
$15,000,000.
Section 9.28. Resignation of Master Servicer. Except as otherwise provided
in Sections 9.27 and 9.29 hereof, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it unless it or the Trustee determines
that the Master Servicer's duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it and cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel that shall be Independent to such effect delivered to the
Trustee. No such resignation shall become effective until the Trustee shall
have assumed, or a successor master servicer shall have been appointed by the
Trustee and until such successor shall have assumed, the Master Servicer's
responsibilities and obligations under this Agreement. Notice of such
resignation shall be given promptly by the Master Servicer to the Depositor.
Section 9.29. Assignment or Delegation of Duties by the Master Servicer.
Except as expressly provided herein, the Master Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed
by the Master Servicer hereunder; provided, however, that the Master Servicer
shall have the right without the prior written consent of the Trustee, the
Depositor or the Rating Agencies to delegate or assign to or subcontract with
or authorize or appoint an Affiliate of the Master Servicer to perform and
carry out any duties, covenants or obligations to be performed and carried out
by the Master Servicer hereunder. In no case, however, shall any such
delegation, subcontracting or assignment to an Affiliate of the Master Servicer
relieve the Master Servicer of any liability hereunder. Notice of such
permitted assignment shall be given promptly by the Master Servicer to the
Depositor and the Trustee. If, pursuant to any provision hereof, the duties of
the Master Servicer are transferred to a successor master servicer, the entire
amount of the Master Servicing Fees and other compensation payable to the
Master Servicer pursuant hereto, including amounts payable to or permitted to
be retained or withdrawn by the Master Servicer pursuant to Section 9.21
hereof, shall thereafter be payable to such successor master servicer.
Section 9.30. Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Trustee or
the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Master
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in its
performance of its duties or by reason of reckless disregard for its
obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder. The Master Servicer
shall be under no obligation to appear in, prosecute or defend any legal action
that is not incidental to its duties to master service the Mortgage Loans in
accordance with this Agreement and that in its opinion may involve it in any
expenses or liability; provided, however, that the Master Servicer may in its
sole discretion undertake any such action that it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund and the
Master Servicer shall be entitled to be reimbursed therefor out of the
Collection Account it maintains as provided by Section 4.02.
The Master Servicer shall not be liable for any acts or omissions of any
Servicer. In particular, the Master Servicer shall not be liable for any
servicing errors or interruptions resulting from any failure of any Servicer to
maintain computer and other information systems that are year-2000 compliant.
Section 9.31. Indemnification; Third-Party Claims. The Master Servicer
agrees to indemnify the Depositor and the Trustee, and hold them harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liability, fees and expenses
that the Depositor and the Trustee may sustain as a result of the failure of
the Master Servicer to perform its duties and master service the Mortgage Loans
in compliance with the terms of this Agreement. The Depositor and the Trustee
shall immediately notify the Master Servicer if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans entitling the
Depositor or the Trustee to indemnification hereunder, whereupon the Master
Servicer shall assume the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim.
Section 9.32. Alternative Index. In the event that the Index for any
Mortgage Loan, as specified in the related Mortgage Note, becomes unavailable
for any reason, the Master Servicer shall select an alternative index, which in
all cases shall be an index that constitutes a qualified rate on a regular
interest under the REMIC Provisions, in accordance with the terms of such
Mortgage Note or, if such Mortgage Note does not make provision for the
selection of an alternative index in such event, the Master Servicer shall,
subject to applicable law, select an alternative index based on information
comparable to that used in connection with the original Index and, in either
case, such alternative index shall thereafter be the Index for such Mortgage
Loan.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration. (a) REMIC elections as set forth in
the Preliminary Statement shall be made by the Trustee on Forms 1066 or other
appropriate federal tax or information return for the taxable year ending on
the last day of the calendar year in which the Certificates are issued. The
regular interests and residual interest in each REMIC shall be as designated in
the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 86OG(a)(9) of the Code.
(c) The Master Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to such REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such expenses
are ordinary or routine expenses, including expenses of a routine audit but not
expenses of litigation (except as described in (ii)); or (ii) such expenses or
liabilities (including taxes and penalties) are attributable to the negligence
or willful misconduct of the Master Servicer in fulfilling its duties hereunder
(including its duties as tax return preparer). The Master Servicer shall be
entitled to reimbursement of expenses to the extent provided in clause (i)
above from the Collection Account.
(d) The Master Servicer shall prepare, and the Trustee shall sign and
file, all of each REMIC's federal and state tax and information returns as such
REMIC's direct representative. The expenses of preparing and filing such
returns shall be borne by the Master Servicer.
(e) The Master Servicer or its designee shall perform on behalf of each
REMIC all reporting and other tax compliance duties that are the responsibility
of such 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, if required by the Code, the REMIC
Provisions, or other such guidance, the Master Servicer shall provide (i) to
the Treasury or other governmental authority such information as is necessary
for the application of any tax relating to the transfer of a Residual
Certificate to any disqualified person or organization and (ii) to the
Certificateholders such information or reports as are required by the Code or
REMIC Provisions.
(f) The Trustee, the Master Servicer and the Holders of Certificates shall
take any action or cause any REMIC to take any action necessary to create or
maintain the status of any REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Master Servicer nor the Holder of any Residual Certificate
shall take any action, cause any REMIC 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 any
REMIC as a REMIC or (ii) result in the imposition of a tax upon any REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee and the Master Servicer have received an Opinion of Counsel
(at the expense of the party seeking to take such action) to the effect that
the contemplated action will not endanger such status or result in the
imposition of such a tax. In addition, prior to taking any action with respect
to any REMIC or the assets therein, or causing any REMIC to take any action,
which is not expressly permitted under the terms of this Agreement, any Holder
of a Residual Certificate will consult with the Trustee and the Master
Servicer, or their respective designees, in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur with respect to any
REMIC, and no such Person shall take any such action or cause any REMIC to take
any such action as to which the Trustee or the Master Servicer has advised it
in writing that an Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in any such REMIC or, if no such amounts are available, out of
other amounts held in the Collection Account, and shall reduce amounts
otherwise payable to holders of regular interests in any such REMIC, as the
case may be.
(h) The Master Servicer shall, for federal income tax purposes, maintain
books and records with respect to each REMIC on a calendar year and on an
accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement with respect to eligible
substitute mortgage loans.
(j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year beginning in 2000, the
Master Servicer shall deliver to the Trustee and each Rating Agency an
Officer's Certificate stating the Master Servicer's compliance with the
provisions of this Section 10.01.
(l) The Trustee shall treat the Basis Risk Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation Section 1.860G-2(h) that
is owned by the Holder of the Class X Certificate and that is not an asset of
the REMIC. The Trustee shall treat the rights of the Class A1, Class A2, Class
A3, Class A4, Class M1, Class M2, and Class B Certificateholders to receive
payments from any Basis Risk Reserve Fund in the event of a Basis Risk
Shortfall as rights in an interest rate cap contract written by the Class X
Certificateholder in favor of the Class A1, Class A2, Class A3, Class A4, Class
M1, Class M2, and Class B Certificateholders. Thus, each Class A1, Class A2,
Class A3, Class A4, Class AIO, Class M1, Class M2, and Class B Certificate
shall be treated as representing not only ownership of regular interests in
REMIC 4, but also ownership of an interest in two discrete interest rate cap
contracts. For purposes of determining the issue prices of the REMIC 4 regular
interests, the Trustee shall assume that the interest rate cap contracts have
only a nominal value of $1,000 each.
Section 10.02. Prohibited Transactions and Activities. Neither the
Depositor, the Master Servicer nor the Trustee shall sell, dispose of, or
substitute for any of the Mortgage Loans, except in a disposition pursuant to
(i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund,
(iii) the termination of each REMIC pursuant to Article VII of this Agreement,
(iv) a substitution pursuant to Article II of this Agreement or (v) a
repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for any REMIC, nor sell or dispose of any investments in the
Certificate Account for gain, nor accept any contributions to any REMIC after
the Closing Date, unless it has received an Opinion of Counsel (at the expense
of the party causing such sale, disposition, or substitution) that such
disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of any such REMIC as a REMIC or of the interests therein
other than the Residual Certificates as the regular interests therein, (b)
affect the distribution of interest or principal on the Certificates, (c)
result in the encumbrance of the assets transferred or assigned to the Trust
Fund (except pursuant to the provisions of this Agreement) or (d) cause any
such REMIC to be subject to a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.
Section 10.03. Indemnification with Respect to Certain Taxes and Loss of
REMIC Status. (a) In the event that any REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Master Servicer of its
duties and obligations set forth herein, the Master Servicer shall indemnify
the Holder of the related Residual Certificate against any and all losses,
claims, damages, liabilities or expenses ("Losses") resulting from such
negligence; provided, however, that the Master Servicer shall not be liable for
any such Losses attributable to the action or inaction of the Trustee, the
Depositor, the Class X Certificateholder or the Holder of such Residual
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which the
Master Servicer has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of such Residual Certificate now
or hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Master Servicer have any liability (1) 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, (2) for any Losses other than arising out of a negligent performance
by the Master Servicer of its duties and obligations set forth herein, and (3)
for any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).
(b) If the Internal Revenue Service determines that one of the REMICs
established hereunder recognized income from a prohibited transaction within
the meaning of Section 860F(a)(2) of the Code as a result of the lapse of the
Class X Certificateholder's right to effect a Special Termination of the Trust
Fund by purchasing the assets of the Trust Fund, then Lehman Capital shall
indemnify the Trust Fund for any such tax and any tax imposed upon such
indemnification.
Section 10.04. REO Property. (a) Notwithstanding any other provision of
this Agreement, the Master Servicer, acting on behalf of the Trustee hereunder,
shall not, and shall, to the extent provided in the applicable Servicing
Agreement, not permit any Servicer to, rent, lease, or otherwise earn income on
behalf of any REMIC with respect to any REO Property which might 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 any REMIC of any
"income from non-permitted assets" within the meaning of section 860F(a)(2) of
the Code or any "net income from foreclosure property" which is subject to tax
under the REMIC Provisions unless the Master Servicer has advised, or has
caused the applicable Servicer to advise, the Trustee in writing to the effect
that, under the REMIC Provisions, such action would not adversely affect the
status of any REMIC as a REMIC and any income generated for any REMIC by the
REO Property would not result in the imposition of a tax upon such REMIC.
(b) The Master Servicer shall make, or shall cause the Special Servicer to
make, reasonable efforts to sell any REO Property for its fair market value. In
any event, however, the Master Servicer shall, or shall cause the Special
Servicer to, dispose of any REO Property within three years of its acquisition
by the Trust Fund unless the Trustee has received a grant of extension from the
Internal Revenue Service to the effect that, under the REMIC Provisions and any
relevant proposed legislation and under applicable state law, the REMIC may
hold REO Property for a longer period without adversely affecting the REMIC
status of such REMIC or causing the imposition of a Federal or state tax upon
such REMIC. If the Trustee has received such an extension, then the Trustee, or
the Master Servicer, acting on its behalf hereunder, shall, or shall cause the
Special Servicer to, continue to attempt to sell the REO Property for its fair
market value for such period longer than three years as such extension permits
(the "Extended Period"). If the Trustee has not received such an extension and
the Trustee, or the Master Servicer acting on behalf of the Trustee hereunder,
or the Special Servicer is unable to sell the REO Property within 33 months
after its acquisition by the Trust Fund or if the Trustee has received such an
extension, and the Trustee, or the Master Servicer acting on behalf of the
Trustee hereunder, is unable to sell the REO Property within the period ending
three months before the close of the Extended Period, the Master Servicer
shall, or shall cause the Special Servicer to, before the end of the three year
period or the Extended Period, as applicable, (i) purchase such REO Property at
a price equal to the REO Property's fair market value or (ii) auction the REO
Property to the highest bidder (which may be the Master Servicer or the Special
Servicer) in an auction reasonably designed to produce a fair price prior to
the expiration of the three-year period or the Extended Period, as the case may
be.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 11.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof.
Section 11.03. Amendment. (a) This Agreement may be amended from time to
time by the Depositor, the Master Servicer and the Trustee, without notice to
or the consent of any of the Holders, (i) to cure any ambiguity, (ii) to cause
the provisions herein to conform to or be consistent with or in furtherance of
the statements made with respect to the Certificates, the Trust Fund or this
Agreement in any Offering Document, or to correct or supplement any provision
herein which may be inconsistent with any other provisions herein, (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement or (iv) to add, delete, or amend any provisions to the extent
necessary or desirable to comply with any requirements imposed by the Code and
the REMIC Provisions. No such amendment effected pursuant to the preceding
sentence shall, as evidenced by an Opinion of Counsel, adversely affect the
status of any REMIC created pursuant to this Agreement, nor shall such
amendment effected pursuant to clause (iii) of such sentence adversely affect
in any material respect the interests of any Holder. Prior to entering into any
amendment without the consent of Holders pursuant to this paragraph, the
Trustee may require an Opinion of Counsel (at the expense of the party
requesting such amendment) to the effect that such amendment is permitted under
this paragraph. Any such amendment shall be deemed not to adversely affect in
any material respect any Holder, if the Trustee receives written confirmation
from each Rating Agency that such amendment will not cause such Rating Agency
to reduce the then current rating assigned to the Certificates.
(b) 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 not less
than 66-2/3% of the Class Principal Amount (or Percentage Interest) of each
Class of Certificates affected thereby for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders; provided,
however, that no such amendment shall be made unless the Trustee receives an
Opinion of Counsel, at the expense of the party requesting the change, that
such change will not adversely affect the status of any REMIC as a REMIC or
cause a tax to be imposed on such REMIC; and provided further, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate, without the consent of the Holder of such Certificate or (ii)
reduce the aforesaid percentages of Class Principal Amount (or Percentage
Interest) of Certificates of each Class, the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of the
Class Principal Amount (or Percentage Interest) of each Class of Certificates
affected thereby. For purposes of this paragraph, references to "Holder" or
"Holders" shall be deemed to include, in the case of any Class of Book-Entry
Certificates, the related Certificate Owners.
(c) Promptly after the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to each Holder,
the Depositor and to the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 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 Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
(e) Notwithstanding anything to the contrary in any Servicing Agreement,
the Trustee shall not consent to any amendment of any Servicing Agreement
except pursuant to the standards provided in this Section with respect to
amendment of this Agreement.
Section 11.04. Voting Rights. Except to the extent that the consent of all
affected Certificateholders is required pursuant to this Agreement, with
respect to any provision of this Agreement requiring the consent of
Certificateholders representing specified percentages of aggregate outstanding
Certificate Principal Amount (or Percentage Interest), Certificates owned by
the Depositor, the Master Servicer, the Trustee or any Servicer or Affiliates
thereof are not to be counted so long as such Certificates are owned by the
Depositor, the Master Servicer, the Trustee or any Servicer or any Affiliate
thereof.
Section 11.05. Provision of Information. (a) For so long as any of the
Certificates of any Series or Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, each of the Depositor, Master Servicer
and the Trustee agree to cooperate with each other to provide to any
Certificateholders and to any prospective purchaser of Certificates designated
by such Certificateholder, upon the request of such Certificateholder or
prospective purchaser, any information required to be provided to such holder
or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee
in providing such information shall be reimbursed by the Depositor.
(b) The Master Servicer will provide to any person to whom a Prospectus
was delivered, upon the request of such person specifying the document or
documents requested, (i) a copy (excluding exhibits) of any report on Form 8-K
or Form 10-K filed with the Securities and Exchange Commission pursuant to
Section 9.23(c) and (ii) a copy of any other document incorporated by reference
in the Prospectus. Any reasonable out-of-pocket expenses incurred by the Master
Servicer in providing copies of such documents shall be reimbursed by the
Depositor.
(c) On each Distribution Date, the Trustee shall deliver or cause to be
delivered by first class mail to the Depositor, Attention: Contract Finance, a
copy of the report delivered to Certificateholders pursuant to Section 4.03.
Section 11.06. 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 WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 11.07. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given when received
by (a) in the case of the Depositor, Structured Asset Securities Corporation,
200 Vesey Street, 12th Floor, New York, New York 10285, Attention: Mark Zusy,
(b) in the case of the Trustee, The First National Bank of Chicago, One First
National Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention: Global
Trust Services and (c) in the case of the Master Servicer, Norwest Bank
Minnesota, National Association, 11000 Broken Land Parkway, Columbia, Maryland
21044; Attention: Master Servicing, or as to each party such other address as
may hereafter be furnished by such party to the other parties in writing. Any
notice required or permitted to be mailed to a Holder 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, whether or
not the Holder receives such notice.
Section 11.08. 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 11.09. Indulgences; No Waivers. Neither the failure nor any delay
on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted
such waiver.
Section 11.10. Headings Not To Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 11.11. Benefits of Agreement. Nothing in this Agreement or in the
Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of the
Certificates, any benefit or any legal or equitable right, power, remedy or
claim under this Agreement, except to the extent specified in Section 11.14.
Section 11.12. Special Notices to the Rating Agencies. (a) The Depositor
shall give prompt notice to the Rating Agencies of the occurrence of any of the
following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 11.03;
(ii) any Assignment by the Master Servicer of its rights hereunder or
delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in Section
6.14;
(iv) any notice of termination given to the Master Servicer pursuant
to Section 6.14 and any resignation of the Master Servicer hereunder;
(v) the appointment of any successor to any Master Servicer pursuant
to Section 6.14;
(vi) the making of a final payment pursuant to Section 7.02; and
(vii) any termination of the rights and obligations of any Servicer
under the applicable Servicing Agreement.
(b) All notices to the Rating Agencies provided for this Section
shall be in writing and sent by first class mail, telecopy or overnight
courier, as follows:
If to DCR, to:
Duff & Phelps Credit Rating Co.
55 East Monroe Street
38th Floor
Chicago, Illinois 60603
If to S&P, to:
Standard & Poor's Rating Services
26 Broadway, 15th Floor
New York, New York 10004
Attention: Residential Mortgages
(c) The Trustee shall deliver to the Rating Agencies reports prepared
pursuant to Section 4.03.
Section 11.13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
Section 11.14. Transfer of Servicing. The Directing Holder agrees, by its
acceptance of the Class X Certificate, that it shall provide written notice to
the Trustee and the Master Servicer thirty days prior to any transfer or
assignment by the Directing Holder of its rights under any Servicing Agreement
or of the servicing thereunder or delegation of its rights or duties thereunder
or any portion thereof to any Person other than the initial Servicer under such
Servicing Agreement. In addition, the ability of the Directing Holder to
transfer or assign its rights and delegate its duties under any Servicing
Agreement or to transfer the servicing thereunder to a successor servicer shall
be subject to the following conditions:
(i) Such successor servicer must be qualified to service loans for
FNMA or FHLMC, and must be a member in good standing of MERS;
(ii) Such successor servicer must satisfy the seller/servicer
eligibility standards in the applicable Servicing Agreement, exclusive of
any experience in mortgage loan origination, and must be reasonably
acceptable to the Master Servicer, whose approval shall not be
unreasonably withheld;
(iii) Such successor servicer must execute and deliver to the Trustee
and the Master Servicer an agreement, in form and substance reasonably
satisfactory to the Trustee and the Master Servicer, that contains an
assumption by such successor servicer of the due and punctual performance
and observance of each covenant and condition to be performed and observed
by the Servicer under the applicable Servicing Agreement;
(iv) There must be delivered to the Trustee a letter from each Rating
Agency to the effect that such transfer of servicing will not result in a
qualification, withdrawal or downgrade of the then-current rating of any
of the Certificates;
(v) The Directing Holder shall, at its cost and expense, take such
steps, or cause the terminated Servicer to take such steps, as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the Mortgage Loans to such successor servicer, including, but
not limited to, the following: (A) to the extent required by the terms of
the Mortgage Loans and by applicable federal and state laws and
regulations, the Directing Holder shall cause the prior Servicer to timely
mail to each obligor under a Mortgage Loan any required notices or
disclosures describing the transfer of servicing of the Mortgage Loans to
the successor servicer; (B) prior to the effective date of such transfer
of servicing, the Directing Holder shall cause the prior Servicer to
transmit to any related insurer notification of such transfer of
servicing; (C) on or prior to the effective date of such transfer of
servicing, the Directing Holder shall cause the prior Servicer to deliver
to the successor servicer all Mortgage Loan Documents and any related
records or materials; (D) on or prior to the effective date of such
transfer of servicing, the Directing Holder shall cause the prior Servicer
to transfer to the successor servicer, or, if such transfer occurs after a
Remittance Date but before the next succeeding Deposit Date, to the Master
Servicer, all funds held by the Servicer in respect of the Mortgage Loans;
(E) on or prior to the effective date of such transfer of servicing, the
Directing Holder shall cause the prior Servicer to, after the effective
date of the transfer of servicing to the successor servicer, continue to
forward to such successor servicer, within one Business Day of receipt,
the amount of any payments or other recoveries received by the prior
Servicer, and to notify the successor servicer of the source and proper
application of each such payment or recovery; and (F) the Directing Holder
shall cause the prior Servicer to, after the effective date of transfer of
servicing to the successor servicer, continue to cooperate with the
successor servicer to facilitate such transfer in such manner and to such
extent as the successor servicer may reasonably request.
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Trustee and the Master Servicer
have caused their names to be signed hereto by their respective officers
hereunto duly authorized as of the day and year first above written.
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By: /s/ Stanley Labanowski
-------------------------------------------
Name: Stanley Labanowski
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ Barbara G. Grosse
-------------------------------------------
Name: Barbara G. Grosse
Title: Vice President and Assistant Secretary
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Master Servicer
By: /s/ Peter A. Gobell
-------------------------------------------
Name: Peter A. Gobell
Title: Trust Officer
<PAGE>
EXHIBIT A
FORMS OF CERTIFICATES
<PAGE>
EXHIBIT B-1
FORM OF INITIAL CERTIFICATION
___________________________
Date
Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285
Re: Trust Agreement (the "Trust Agreement"), dated as of April 1, 1999
among Structured Asset Securities Corporation, as Depositor, The
First National Bank of Chicago, as Trustee, and Norwest Bank
Minnesota, National Association, as Master Servicer, with respect to
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1999-SP1
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Trust Agreement, subject to
review of the contents thereof, the undersigned, as [Custodian on behalf of
the] Trustee, hereby certifies that it (or its custodian) has received the
documents listed in Section 2.01(b) of the Trust Agreement for each Mortgage
File pertaining to each Mortgage Loan listed on Schedule A, to the Trust
Agreement, subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined herein
shall have the respective meanings assigned to them in the Trust Agreement.
This Certificate is subject in all respects to the terms of Section 2.02 of the
Trust Agreement and the Trust Agreement sections cross-referenced therein.
[[Custodian], on behalf of]
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT B-2
FORM OF INTERIM CERTIFICATION
______________________________
Date
Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285
Re: Trust Agreement (the "Trust Agreement"), dated as of April 1, 1999
among Structured Asset Securities Corporation, as Depositor, The
First National Bank of Chicago, as Trustee, and Norwest Bank
Minnesota, National Association, as Master Servicer, with respect to
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1999-SP1
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as [Custodian on behalf of the] Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on Schedule I hereto) it (or its
custodian) has received the applicable documents listed in Section 2.01(b) of
the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule
I hereto, it has reviewed the documents identified above and has determined
that each such document appears regular on its face and appears to relate to
the Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement including, but not limited
to, Section 2.02(b).
[[Custodian], on behalf of]
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:_______________________________
Name:
Title:
<PAGE>
EXHIBIT B-3
FORM OF FINAL CERTIFICATION
____________________________
Date
Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285
Re: Trust Agreement (the "Trust Agreement"), dated as of April 1, 1999
among Structured Asset Securities Corporation, as Depositor, The
First National Bank of Chicago, as Trustee, and Norwest Bank
Minnesota, National Association, as Master Servicer, with respect to
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1999-SP1
Ladies and Gentlemen:
In accordance with Section 2.02(c) of the Trust Agreement, the
undersigned, as [Custodian on behalf of the] Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on Schedule I hereto) it (or its
custodian) has received the applicable documents listed in Section 2.01(b) of
the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule
I hereto, it has reviewed the documents listed above and has determined that
each such document appears to be complete and, based on an examination of such
documents, the information set forth in the Mortgage Loan Schedule is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement.
[[Custodian], on behalf of]
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:________________________________
Name:
Title:
<PAGE>
EXHIBIT B-4
FORM OF ENDORSEMENT
Pay to the order of The First National Bank of Chicago, as trustee (the
"Trustee") under the Trust Agreement dated as of April 1, 1999, among
Structured Asset Securities Corporation, as Depositor, the Trustee and the
Master Servicer relating to Structured Asset Securities Corporation Mortgage
Pass-Through Certificates, Series 1999-SP1, without recourse.
__________________________________
[current signatory on note]
By:_______________________________
Name:
Title:
<PAGE>
EXHIBIT C
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
_____________________________
Date
[Addressed to Trustee
or, if applicable, custodian]
In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of April 1, 1999 among
Structured Asset Securities Corporation, as Depositor, Norwest Bank Minnesota,
National Association, as Master Servicer, and you, as Trustee (the "Trust
Agreement"), the undersigned Master Servicer hereby requests a release of the
Mortgage File held by you as Trustee with respect to the following described
Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
____ 1. Mortgage Loan paid in full. (The Master Servicer hereby certifies that
all amounts received in connection with the loan have been or will be credited
to the Collection Account or the Certificate Account (whichever is applicable)
pursuant to the Trust Agreement.)
____ 2. The Mortgage Loan is being foreclosed.
____ 3. Mortgage Loan substituted. (The Master Servicer hereby certifies that a
Qualifying Substitute Mortgage Loan has been assigned and delivered to you
along with the related Mortgage File pursuant to the Trust Agreement.)
____ 4. Mortgage Loan purchased. (The Master Servicer hereby certifies that the
Purchase Price has been credited to the Collection Account or the Certificate
Account (whichever is applicable) pursuant to the Trust Agreement.)
____ 5. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be held by
the undersigned in accordance with the provisions of the Trust Agreement and
will be returned to you within ten (10) days of our receipt of the Mortgage
File, except if the Mortgage Loan has been paid in full, or repurchased or
substituted for a Qualifying Substitute Mortgage Loan (in which case the
Mortgage File will be retained by us permanently) and except if the Mortgage
Loan is being foreclosed (in which case the Mortgage File will be returned when
no longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them in
the Trust Agreement.
__________________________________
[Name of Master Servicer]
By:_______________________________
Name:
Title: Servicing Officer
<PAGE>
EXHIBIT D-1
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn, deposes and
says:
1. That he [she] is [title of officer] ________________________ of [name
of Purchaser] _________________________________________ (the
"Purchaser"), a _______________________ [description of type of
entity] duly organized and existing under the laws of the [State of
__________] [United States], on behalf of which he [she] makes this
affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986,
as amended (the "Code") and will not be a "disqualified organization"
as of [date of transfer], and that the Purchaser is not acquiring a
Residual Certificate (as defined in the Agreement) for the account
of, or as agent (including a broker, nominee, or other middleman)
for, any person or entity from which it has not received an affidavit
substantially in the form of this affidavit. For these purposes, a
"disqualified organization" means the United States, any state or
political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of
the foregoing (other than an instrumentality if all of its activities
are subject to tax and a majority of its board of directors is not
selected by such governmental entity), any cooperative organization
furnishing electric energy or providing telephone service to persons
in rural areas as described in Code Section 1381(a)(2)(C), any
"electing large partnership" within the meaning of Section 775 of the
Code, or any organization (other than a farmers' cooperative
described in Code Section 521) that is exempt from federal income tax
unless such organization is subject to the tax on unrelated business
income imposed by Code Section 511.
4. That the Purchaser is not, and on __________ [insert date of transfer
of Residual Certificate to Purchaser] will not be, and is not and on
such date will not be investing the assets of, an employee benefit
plan subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or a plan subject to Code Section 4975 or a
person or entity that is using the assets of any employee benefit
plan or other plan to acquire a Residual Certificate.
5. That the Purchaser hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") among Structured Asset Securities
Corporation, The First National Bank of Chicago, as Trustee and
Norwest Bank Minnesota, National Association, as Master Servicer,
dated as of April 1, 1999, no transfer of the Residual Certificates
shall be permitted to be made to any person unless the Trustee has
received a certificate from such transferee to the effect that such
transferee is not an employee benefit plan subject to ERISA or a plan
subject to Section 4975 of the Code and is not using the assets of
any employee benefit plan or other plan to acquire Residual
Certificates.
6. That the Purchaser does not hold REMIC residual securities as nominee
to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating
organizations (such entity, a "Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally
required to be paid with respect to such Residual Certificate.
8. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge
that the requirements set forth in paragraph 3, paragraph 6 or
paragraph 10 hereof are not satisfied or that the Purchaser has
reason to believe does not satisfy the requirements set forth in
paragraph 7 hereof, and (ii) without obtaining from the prospective
Purchaser an affidavit substantially in this form and providing to
the Trustee a written statement substantially in the form of Exhibit
D-2 to the Agreement.
9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any
cash flows generated by the interest and that it intends to pay taxes
associated with holding such Residual Certificate as they become due.
10. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a Non-U.S.
Person that holds a Residual Certificate in connection with the
conduct of a trade or business within the United States and has
furnished the transferor and the Trustee with an effective Internal
Revenue Service Form 4224 or successor form at the time and in the
manner required by the Code or (iii) is a Non-U.S. Person that has
delivered to both the transferor and the Trustee an opinion of a
nationally recognized tax counsel to the effect that the transfer of
such Residual Certificate to it is in accordance with the
requirements of the Code and the regulations promulgated thereunder
and that such transfer of a Residual Certificate will not be
disregarded for federal income tax purposes. "Non-U.S. Person" means
an individual, corporation, partnership or other person other than 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 state thereof, including for this purpose, the
District of Columbia, or an estate that is subject to U.S. federal
income tax regardless of the source of its income, or a trust if a
court within the United States is able to exercise primary
supervision over the administration of the trust and one or more
United States trustees have authority to control all substantial
decisions of the trust.
11. That the Purchaser agrees to such amendments of the Trust Agreement
as may be required to further effectuate the restrictions on transfer
of any Residual Certificate to such a "disqualified organization," an
agent thereof, a Book-Entry Nominee, or a person that does not
satisfy the requirements of paragraph 7 and paragraph 10 hereof.
12. That the Purchaser consents to the designation of the Master Servicer
as its agent to act as "tax matters person" of the Trust Fund
pursuant to the Trust Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________, 19__.
_________________________________
[name of Purchaser]
By:______________________________
Name:
Title:
Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, 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 Purchaser.
Subscribed and sworn before me this _____ day of __________, 19__.
NOTARY PUBLIC
______________________________
COUNTY OF_____________________
STATE OF______________________
My commission expires the _____ day of __________, 19__.
<PAGE>
EXHIBIT D-2
RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
____________________________
Date
Re: Structured Asset Securities Corporation
Mortgage Pass-Through Certificates, Series 1999-SP1
---------------------------------------------------
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no
actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 7 thereof is not true, and has no
reason to believe that the Transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to a Residual Certificate. In addition, the Transferor
has conducted a reasonable investigation at the time of the transfer and found
that the Transferee had historically paid its debts as they came due and found
no significant evidence to indicate that the Transferee will not continue to
pay its debts as they become due.
Very truly yours,
_______________________________
Name:
Title:
<PAGE>
EXHIBIT E
SERVICING AGREEMENTS
<PAGE>
EXHIBIT F
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Structured Asset Securities Corporation
Mortgage Pass-Through Certificates
Series 1999-SP1
---------------------------------------
Reference is hereby made to the Trust Agreement dated as of April 1, 1999
(the "Trust Agreement") among Structured Asset Securities Corporation, as
Depositor, Norwest Bank Minnesota, National Association, as Master Servicer and
The First National Bank of Chicago, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Trust Agreement.
This letter relates to $__________ initial Certificate Balance of Class
Certificates which are held in the form of Definitive Certificates registered
in the name of (the "Transferor"). The Transferor has requested a transfer of
such Definitive Certificates for Definitive Certificates of such Class
registered in the name of [insert name of transferee].
In connection with such request, and in respect of such Certificates, the
Transferor hereby certifies that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Trust Agreement
and the Certificates and (ii) Rule 144A under the Securities Act to a purchaser
that the Transferor reasonably believes is a "qualified institutional buyer"
within the meaning of Rule 144A purchasing for its own account or for the
account of a "qualified institutional buyer," which purchaser is aware that the
sale to it is being made in reliance upon Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States or any other applicable jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Placement Agent and the Depositor.
_____________________________________
[Name of Transferor]
By:__________________________________
Name:
Title:
Dated: ___________, ____
<PAGE>
EXHIBIT G
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
__________________
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Mortgage Pass-Through Certificates, Series 1999-SP1 (the "Privately
Offered Certificates") of Structured Asset Securities Corporation (the
"Depositor"), we confirm that:
(1) We understand that the Privately Offered Certificates have not been, and
will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we should
sell any Privately Offered Certificates within three years of the later of
the date of original issuance of the Privately Offered Certificates or the
last day on which such Privately Offered Certificates are owned by the
Depositor or any affiliate of the Depositor (which includes the Placement
Agent) we will do so only (A) to the Depositor, (B) to "qualified
institutional buyers" (within the meaning of Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
("QIBs"), (C) pursuant to the exemption from registration provided by Rule
144 under the Securities Act, or (D) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act that is not a QIB (an "Institutional
Accredited Investor") which, prior to such transfer, delivers to the
Trustee under the Trust Agreement dated as of April 1, 1999 among the
Depositor, Norwest Bank Minnesota, National Association, as Master
Servicer and The First National Bank of Chicago, as Trustee (the
"Trustee"), a signed letter in the form of this letter; and we further
agree, in the capacities stated above, to provide to any person purchasing
any of the Privately Offered Certificates from us a notice advising such
purchaser that resales of the Privately Offered Certificates are
restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor, we
will be required to furnish to the Trustee and the Depositor a
certification from such transferee in the form hereof to confirm that the
proposed sale is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. We further understand that the Privately Offered
Certificates purchased by us will bear a legend to the foregoing effect.
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are
acting are each able to bear the economic risk of such investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or for
one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to make
our investment decision.
Terms used in this letter which are not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement.
<PAGE>
You and the Depositor are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
____________________________________
[Purchaser]
By: ________________________________
Name:
Title:
<PAGE>
EXHIBIT H
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of (the "Investor"),
a [corporation duly organized] and existing under the laws of __________,
on behalf of which he makes this affidavit.
2. The Investor either (x) is not an employee benefit plan subject to
Section 406 or Section 407 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code"), the Trustee of any such plan or a
person acting on behalf of any such plan nor a person using the assets of
any such plan or (2) if the Investor is an insurance company, such
Investor is purchasing such Certificates with funds contained in an
"Insurance Company General Account" (as such term is defined in Section
v(e) of the Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and that the purchase and holding of such Certificates are covered under
PTCE 95-60; or (y) shall deliver to the Trustee and the Depositor an
opinion of counsel (a "Benefit Plan Opinion") satisfactory to the Trustee
and the Depositor, and upon which the Trustee and the Depositor shall be
entitled to rely, to the effect that the purchase or holding of such
Certificate by the Investor will not result in the assets of the Trust
Fund being deemed to be plan assets and subject to the prohibited
transaction provisions of ERISA or the Code and will not subject the
Trustee, the Master Servicer or the Depositor to any obligation in
addition to those undertaken by such entities in the Trust Agreement,
which opinion of counsel shall not be an expense of the Trustee, the
Master Servicer or the Depositor.
3. The Investor hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") among Structured Asset Securities Corporation,
as Depositor, Norwest Bank Minnesota, National Association, as Master
Servicer, and The First National Bank of Chicago, as Trustee, dated as of
April 1, 1999, no transfer of the ERISA-Restricted Certificates shall be
permitted to be made to any person unless the Depositor and Trustee have
received a certificate from such transferee in the form hereof.
<PAGE>
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to proper authority, by its duly authorized officer,
duly attested, this ____ day of _______________, 199 .
_________________________________
[Investor]
By:______________________________
Name:
Title:
ATTEST:
______________________________
STATE OF )
) ss:
COUNTY OF )
Personally appeared before me the above-named ________________, known
or proved to me to be the same person who executed the foregoing
instrument and to be the ____________________ of the Investor, and
acknowledged that he executed the same as his free act and deed and the
free act and deed of the Investor.
Subscribed and sworn before me this _____ day of _________ 199_.
__________________________________
NOTARY PUBLIC
My commission expires the
_____ day of __________, 19__.
<PAGE>
EXHIBIT I
MONTHLY REMITTANCE ADVICE
<PAGE>
EXHIBIT J
MONTHLY ELECTRONIC DATA TRANSMISSION
<PAGE>
EXHIBIT K
CUSTODIAL AGREEMENT
<PAGE>
EXHIBIT L
SPECIAL SERVICING COMPENSATION AGREEMENT
<PAGE>
SCHEDULE A
MORTGAGE LOAN SCHEDULE
EXECUTION
===============================================================================
LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC.,
SELLER
and
STRUCTURED ASSET SECURITIES CORPORATION,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT
Dated as of April 1, 1999
===============================================================================
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
CONVEYANCE OF MORTGAGE LOANS
1.01. Sale of Mortgage Loans................................................1
1.02. Delivery of Documents.................................................2
1.03. Review of Documentation...............................................2
1.04. Representations and Warranties of Lehman Capital......................2
1.05. Grant Clause..........................................................7
1.06 Assignment by Depositor................................................8
ARTICLE II
MISCELLANEOUS PROVISIONS
2.01. Binding Nature of Agreement; Assignment...............................8
2.02. Entire Agreement......................................................8
2.03. Amendment.............................................................8
2.04. Governing Law.........................................................9
2.05. Severability of Provisions............................................9
2.06. Indulgences; No Waivers...............................................9
2.07. Headings Not to Affect Interpretation.................................9
2.08. Benefits of Agreement.................................................9
2.09. Counterparts..........................................................9
SCHEDULES
SCHEDULE A Mortgage Loan Schedule
<PAGE>
This MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT is executed by and
between Lehman Capital, A Division of Lehman Brothers Holdings Inc. ("Lehman
Capital"), and Structured Asset Securities Corporation (the "Depositor"), dated
as of the 1st day of April, 1999.
All capitalized terms not defined herein shall have the same meanings
assigned to such terms in that certain Trust Agreement (the "Trust Agreement"),
dated as of April 1, 1999, among the Depositor, Norwest Bank Minnesota, National
Association, as Master Servicer and The First National Bank of Chicago, as
Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, pursuant to the following specified mortgage loan transfer
agreements (each a "Transfer Agreement," and together the "Transfer
Agreements"), Lehman Capital has purchased from certain transferors (each a
"Transferor," and together the "Transferors"), certain mortgage loans identified
on the Mortgage Loan Schedule attached hereto as Exhibit A:
1. Mortgage Loan Purchase and Warranty Agreement, dated as of
November 17, 1998, between Lehman Capital and Southern Pacific Funding
Corporation;
2. Letter Agreement, dated September 29, 1998, between Lehman
Commercial Paper Inc. and Southern Pacific Funding Corporation;
WHEREAS, Lehman Capital desires to sell, without recourse, all of its
right, title and interest in the Mortgage Loans to the Depositor, to assign all
of its rights and interest under the Transfer Agreements, and to delegate all of
its obligations thereunder, to the Depositor; and
WHEREAS, Lehman Capital and the Depositor acknowledge and agree that
the Depositor will assign all of its rights and delegate all of its obligations
hereunder to the Trustee, and that each reference herein to the Depositor is
intended, unless otherwise specified, to mean the Depositor or the Trustee, as
assignee, whichever is the owner of the Mortgage Loans from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Lehman Capital and the Depositor agree as
follows:
ARTICLE I.
CONVEYANCE OF MORTGAGE LOANS
Section 1.01. Sale of Mortgage Loans. Concurrently with the execution
----------------------
and delivery of this Agreement, Lehman Capital does hereby transfer, assign, set
over, deposit with and otherwise convey to the Depositor, without recourse,
subject to Sections 1.03 and 1.04, all the right, title and interest of Lehman
Capital in and to the Mortgage Loans identified on Schedule A hereto, having an
aggregate principal balance as of the Cut-off Date of $581,483,156.73. Such
conveyance includes, without limitation, the right to all distributions of
principal and interest received on or with respect to the Mortgage Loans on or
after April 1, 1999 (other than payments of principal and interest due on or
before such date), and all such payments due after such date but received prior
to such date and intended by the related Mortgagors to be applied after such
date, together with all of Lehman Capital's right, title and interest in and to
each related account and all amounts from time to time credited to and the
proceeds of such account, any REO Property and the proceeds thereof, Lehman
Capital's rights under any Insurance Policies related to the Mortgage Loans, and
Lehman Capital's security interest in any collateral pledged to secure the
Mortgage Loans, including the Mortgaged Properties and any Additional
Collateral.
Concurrently with the execution and delivery of this Agreement, Lehman
Capital hereby assigns to the Depositor all of its rights and interest under
each Transfer Agreement, and delegates to the Depositor all of its obligations
thereunder. Concurrently with the execution hereof, the Depositor tenders the
purchase price of $581,483,156.73. The Depositor hereby accepts such assignment
and delegation, and shall be entitled to exercise all such rights of Lehman
Capital under each Transfer Agreement, as if the Depositor had been a party to
each Transfer Agreement.
Section 1.02. Delivery of Documents. (a) In connection with such
---------------------
transfer and assignment of the Mortgage Loans hereunder, Lehman Capital does
hereby deliver, or cause to be delivered, to the Depositor (or its designee) the
documents or instruments with respect to each Mortgage Loan (each a "Mortgage
File") so transferred and assigned, as specified in the Transfer Agreements.
(b) For Mortgage Loans (if any) that have been prepaid in full
after the Cut-off Date and prior to the Closing Date, Lehman Capital, in lieu of
delivering the related Mortgage Files, herewith delivers to the Depositor an
Officer's Certificate which shall include a statement to the effect that all
amounts received in connection with such prepayment that are required to be
deposited in the account maintained by the Servicer for such purpose have been
so deposited.
Section 1.03. Review of Documentation. The Depositor, by execution and
-----------------------
delivery hereof, acknowledges receipt of the Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof
by Norwest Bank Minnesota, National Association, as custodian (the "Custodian")
for the Depositor. The Custodian is required to review, within 45 days following
the Closing Date, each applicable Mortgage File. If in the course of such review
Custodian identifies any Material Defect, Lehman Capital shall be obligated to
cure such defect or to repurchase the related Mortgage Loan from the Depositor
(or, at the direction of and on behalf of the Depositor, from the Trust Fund),
or to substitute a Qualifying Substitute Mortgage Loan therefor, in each case to
the same extent and in the same manner as the Depositor is obligated to the
Trustee and the Trust Fund under Section 2.02(c) of the Trust Agreement.
Section 1.04. Representations and Warranties of Lehman Capital. (a)
------------------------------------------------
Lehman Capital hereby represents and warrants to the Depositor that as of the
date hereof that:
(i) Lehman Capital is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, and to enter
into and perform its obligations under this Agreement;
(ii) the execution and delivery by Lehman Capital of this
Agreement have been duly authorized by all necessary corporate action
on the part of Lehman Capital; neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on Lehman Capital or its properties or the
certificate of incorporation or bylaws of Lehman Capital;
(iii) the execution, delivery and performance by Lehman
Capital of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental
authority or agency, except such as has been obtained, given, effected
or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered by
Lehman Capital and, assuming due authorization, execution and delivery
by the Depositor, constitutes a valid and binding obligation of Lehman
Capital enforceable against it in accordance with its terms except as
such enforceability may be subject to (A) applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of the
rights of creditors generally and (B) general principles of equity
regardless of whether such enforcement is considered in a proceeding in
equity or at law; and
(v) there are no actions, suits or proceedings pending or, to
the knowledge of Lehman Capital, threatened or likely to be asserted
against or affecting Lehman Capital, before or by any court,
administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Agreement or (B) with
respect to any other matter which in the judgment of Lehman Capital
will be determined adversely to Lehman Capital and will if determined
adversely to Lehman Capital materially and adversely affect it or its
business, assets, operations or condition, financial or otherwise, or
adversely affect its ability to perform its obligations under this
Agreement.
(b) The representations and warranties with respect to the
Mortgage Loans made to Lehman Capital in the applicable Transfer Agreement were
made as of the date of such Transfer Agreement. To the extent that any fact,
condition or event with respect to a Mortgage Loan constitutes a breach of a
representation or warranty made under the applicable Transfer Agreement, the
Depositor shall have the right to require that Lehman Capital cure such breach
or effect such other remedy as is specified in the last paragraph of this
subsection (b). Lehman Capital represents and warrants upon delivery of the
Mortgage Loans to the Depositor hereunder, as to each, that:
(i) The information set forth with respect to the Mortgage
Loans on the Mortgage Loan Schedule provides an accurate listing of the
Mortgage Loans, and the information with respect to each Mortgage Loan
on the Mortgage Loan Schedule is true and correct in all material
respects at the date or dates respecting which such information is
given;
(ii) There are no defaults (other than delinquency in
payment) in complying with the terms of any Mortgage, and Lehman
Capital has no notice as to any taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing but
which have not been paid;
(iii) Except in the case of Cooperative Loans, each Mortgage
requires all buildings or other improvements on the related Mortgaged
Property to be insured by a generally acceptable insurer against loss
by fire, hazards of extended coverage and such other hazards as are
customary in the area where the related Mortgaged Property is located
pursuant to insurance policies conforming to the requirements of the
guidelines of FNMA or FHLMC. If upon origination of the Mortgage Loan,
the Mortgaged Property was in an area identified in the Federal
Register 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 Flood Insurance Administration is in effect
which policy conforms to the requirements of the current guidelines of
the Federal Flood Insurance Administration. Each Mortgage obligates the
related Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law
or regulation, each Mortgagor has been given an opportunity to choose
the carrier of the required hazard insurance, provided the policy is
not a "master" or "blanket" hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy
is the valid and binding obligation of the insurer, is in full force
and effect, and will be in full force and effect and inure to the
benefit of the Depositor upon the consummation of the transactions
contemplated by this Agreement.
(iv) Each 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 release, cancellation, subordination or recision;
(v) Each Mortgage evidences a valid, subsisting, enforceable
and perfected first lien on the related Mortgaged Property (including
all improvements on the Mortgaged Property). The lien of the Mortgage
is subject only to: (1) liens of current real property taxes and
assessments not yet due and payable and, if the related Mortgaged
Property is a condominium unit, any lien for common charges permitted
by statute, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of
recording of such Mortgage acceptable to mortgage lending institutions
in the area in which the related Mortgaged Property is located and
specifically referred to in the lender's Title Insurance Policy or
attorney's opinion of title and abstract of title delivered to the
originator of such Mortgage Loan and (3) such other matters to which
like properties are commonly subject which do not, individually or in
the aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage. Any security agreement,
chattel mortgage or equivalent document related to, and delivered to
the Trustee in connection with, a Mortgage Loan establishes a valid,
subsisting and enforceable first lien on the property described therein
and the Depositor has full right to sell and assign the same to the
Trustee;
(vi) Immediately prior to the transfer and assignment of the
Mortgage Loans to the Depositor, Lehman Capital was the sole owner of
record and holder of each Mortgage Loan, and Lehman Capital had good
and marketable title thereto, and has full right to transfer and sell
each Mortgage Loan to the Depositor free and clear, except as described
in paragraph (v) above, of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has
full right and authority, subject to no interest or participation of,
or agreement with, any other party, to sell and assign each Mortgage
Loan pursuant to this Agreement;
(vii) Each Mortgage Loan other than any Cooperative Loan is
covered by either (i) an attorney's opinion of title and abstract of
title the form and substance of which is generally acceptable to
mortgage lending institutions originating mortgage loans in the
locality where the related Mortgaged Property is located or (ii) an
ALTA mortgagee Title Insurance Policy or other generally acceptable
form of policy of insurance, issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring the originator of the Mortgage Loan, and its successors and
assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (subject only to the exceptions
described in paragraph (v) above. If the Mortgaged Property is a
condominium unit located in a state in which a title insurer will
generally issue an endorsement, then the related Title Insurance Policy
contains an endorsement insuring the validity of the creation of the
condominium form of ownership with respect to the project in which such
unit is located. With respect to any Title Insurance Policy, the
originator is the sole insured of such mortgagee Title Insurance
Policy, such mortgagee Title Insurance Policy is in full force and
effect and will inure to the benefit of the Depositor upon the
consummation of the transactions contemplated by this Agreement, no
claims have been made under such mortgagee Title Insurance Policy and
no prior holder of the related Mortgage, including Lehman Capital, has
done, by act or omission, anything that would impair the coverage of
such mortgagee Title Insurance Policy;
(viii) To the best of Lehman Capital's knowledge, no
foreclosure action is being threatened or commenced with respect to any
Mortgage Loan. There is no proceeding pending for the total or partial
condemnation of any Mortgaged Property (or, in the case of a
Cooperative Loan, the related cooperative unit) and each such property
is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty, so as to have a material adverse
effect on the value of the related Mortgaged Property as security for
the related Mortgage Loan or the use for which the premises were
intended;
(ix) 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 the law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage;
(x) Each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union, insurance
company, or similar institution which is supervised and examined by a
Federal or State authority, or by a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act;
(xi) Any and all requirements of any federal, state or local
law, including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws applicable to each Mortgage Loan have
been complied with;
(xii) Each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Code and Treas. Reg. Section 1.860G-2;
and
(xiii) Lehman Capital has no reason to believe that any
borrower will default under the related Mortgage Loan, or that
foreclosure proceedings will be commenced with respect to any Mortgage
Loan, within the six months immediately following the Closing Date.
It is understood and agreed that the representations and warranties set
forth herein and the obligations of Lehman Capital set forth in this Section
survive delivery of the Mortgage Files and the Assignment of Mortgage of each
Mortgage Loan to the Depositor. Upon discovery by either Lehman Capital or the
Depositor of a breach of any of the foregoing representations and warranties in
this Section 1.04(b), or of any of the representations or warranties made in
either Transfer Agreement, that adversely and materially affects the value of
the related Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other party. Within 60 days of the discovery of any such
breach, Lehman Capital shall either (a) cure such breach in all material
respects, (b) repurchase such Mortgage Loan or any property acquired in respect
thereof from the Depositor at the applicable Purchase Price or (c) within the
two year period following the Closing Date, substitute a Qualifying Substitute
Mortgage Loan for the affected Mortgage Loan.
For purposes of this Section, the representation and warranty in clause
(vi) above will be deemed to have been breached as to any Mortgage Loan if (in
addition to such other facts, occurrences or conditions as will result in a
breach of such representation and warranty by its terms) a United States
Bankruptcy Court having jurisdiction in a case involving the Transferor
recharacterizes the sale of such Mortgage Loan from the Transferor to Lehman
Capital as a financing secured by such Mortgage Loan.
For purposes of this Section, the representation and warranty in clause
(xii) above shall be deemed to have been breached as to any Mortgage Loan only
if all of the following are true: (1) such Mortgage Loan had a Combined
Loan-to-Value Ratio as of the Cut-off Date in excess of 80%; (2) the related
borrower is in default under such Mortgage Loan and liquidation of such Mortgage
Loan is completed within six months after the Closing Date; (3) a Realized Loss
is incurred with respect to such Mortgage Loan and (4) within six months after
the Closing Date and prior to such liquidation, Realized Losses had been
incurred with respect to the Mortgage Loans in the aggregate in an amount
sufficient to reduce the aggregate Certificate Principal Amount of the
Subordinate Certificates to zero.
(c) In addition to the representations and warranties set forth
above, Lehman Capital also represents and warrants upon delivery of the Mortgage
Loans to the Depositor hereunder, as to each, that:
(i) The improvements on the Mortgaged Properties are insured
against loss under a hazard insurance policy with extended coverage
and, as of the Closing Date, all such insurance policies are in full
force and effect;
(ii) As of the Cut-off Date, no more than 0.13% of the
Mortgage Loans by Scheduled Principal Balance had a Scheduled Principal
Balance of more than $740,000;
(iii) As of the Cut-off Date, no more than 0.41% of the
Mortgage Loans by Scheduled Principal Balance are secured by Mortgaged
Properties located in any one postal zip code area;
(iv) As of the Cut-off Date, at least 87.04% of the Mortgage
Loans by Scheduled Principal Balance are secured by Mortgaged
Properties determined by Lehman Capital to be the primary residence of
the Mortgagor. The basis for such determination is the making of a
representation by the Mortgagor at origination that he or she intends
to occupy the underlying property;
(v) As of the Cut-off Date, at least 73.25% of the Mortgage
Loans by Scheduled Principal Balance are secured by one-family detached
residences;
(vi) The loan-to-value ratio of each Mortgage Loan was not
more than 121.72% at origination; and
(vii) The original principal balances of the Mortgage Loans
range from $9,342 to $746,560.
Section 1.05. Grant Clause. It is intended that the conveyance of
------------
Lehman Capital's right, title and interest in and to Mortgage Loans and other
property conveyed pursuant to this Agreement shall constitute, and shall be
construed as, a sale of such property and not a grant of a security interest to
secure a loan. However, if such conveyance is deemed to be in respect of a loan,
it is intended that: (1) the rights and obligations of the parties shall be
established pursuant to the terms of this Agreement; (2) Lehman Capital hereby
grants to the Depositor a first priority security interest in all of Lehman
Capital's right, title and interest in, to and under, whether now owned or
hereafter acquired, such Mortgage Loans and other property; and (3) this
Agreement shall constitute a security agreement under applicable law.
Section 1.06. Assignment by Depositor. The Depositor shall have the
-----------------------
right, upon notice to but without the consent of Lehman Capital, to assign, in
whole or in part, its interest under this Agreement with respect to the Mortgage
Loans to the Trustee, and the Trustee then shall succeed to all rights of the
Depositor under this Agreement. All references to the Depositor in this
Agreement shall be deemed to include its assignee or designee, specifically
including the Trustee.
ARTICLE II.
MISCELLANEOUS PROVISIONS
Section 2.01. Binding Nature of Agreement; Assignment. This Agreement
---------------------------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 2.02. Entire Agreement. This Agreement contains the entire
----------------
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.
Section 2.03. Amendment. (a) This Agreement may be amended from time to
---------
time by Lehman Capital and the Depositor, without notice to or the consent of
any of the Holders, (i) to cure any ambiguity, (ii) to cause the provisions
herein to conform to or be consistent with or in furtherance of the statements
made with respect to the Certificates, the Trust Fund, the Trust Agreement or
this Agreement in any Offering Document; or to correct or supplement any
provision herein which may be inconsistent with any other provisions herein,
(iii) to make any other provisions with respect to matters or questions arising
under this Agreement or (iv) to add, delete, or amend any provisions to the
extent necessary or desirable to comply with any requirements imposed by the
Code and the REMIC Provisions. No such amendment effected pursuant to clause
(iii) of the preceding sentence shall adversely affect in any material respect
the interests of any Holder. Any such amendment shall be deemed not to adversely
affect in any material respect any Holder, if the Trustee receives written
confirmation from each Rating Agency that such amendment will not cause such
Rating Agency to reduce the then current rating assigned to the Certificates
(and any Opinion of Counsel requested by the Trustee in connection with any such
amendment may rely expressly on such confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by Lehman
Capital and the Depositor with the consent of the Holders of not less than
66-2/3% of the Class Certificate Principal Amount (or Percentage Interest) of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders;
provided, however, that no such amendment may (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without, the consent of the Holder
of such Certificate or (ii) reduce the aforesaid percentages of Class
Certificate Principal Amount (or Percentage Interest) of Certificates of each
Class, the Holders of which are required to consent to any such amendment
without the consent of the Holders of 100% of the Class Certificate Principal
Amount (or Percentage Interest) of each Class of Certificates affected thereby.
For purposes of this paragraph, references to "Holder" or "Holders" shall be
deemed to include, in the case of any Class of Book-Entry Certificates, the
related Certificate Owners.
(c) It shall not be necessary for the consent of Holders under
this Section 2.03 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 Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Section 2.04. 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 WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 2.05. 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.
Section 2.06. Indulgences; No Waivers. Neither the failure nor any
-----------------------
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
Section 2.07. Headings Not to Affect Interpretation. The headings
-------------------------------------
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 2.08. Benefits of Agreement. Nothing in this Agreement, express
---------------------
or implied, shall give to any Person, other than the parties to this Agreement
and their successors hereunder, any benefit or any legal or equitable right,
power, remedy or claim under this Agreement.
Section 2.09. Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, Lehman Capital and the Depositor have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Joseph J. Kelly
----------------------------
Name: Joseph J. Kelly
Title: Authorized Signatory
STRUCTURED ASSET SECURITIES
CORPORATION
By: /s/ Stanley Labanowski
----------------------------
Name: Stanley Labanowski
Title: Vice President
<PAGE>
SCHEDULE A
----------
MORTGAGE LOAN SCHEDULE
EXHIBIT 99.2
Execution
===============================================================================
AURORA LOAN SERVICES INC.,
as Servicer
and
LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC.,
as Seller
-----------------------------
STRUCTURED ASSET SECURITIES CORPORATION
Mortgage Pass-Through Certificates, Series 1999-SP1
SERVICING AGREEMENT
Dated as of April 1, 1999
-----------------------------
==============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
ARTICLE I.
DEFINITIONS
ARTICLE II.
SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files..........................................12
Section 2.02 Books and Records..............................................................................13
ARTICLE III.
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service............................................................................13
Section 3.02 Collection of Mortgage Loan Payments...........................................................15
Section 3.03 Establishment of and Deposits to Custodial Account.............................................15
Section 3.04 Permitted Withdrawals From Custodial Account...................................................16
Section 3.05 Establishment of and Deposits to Escrow Account................................................17
Section 3.06 Permitted Withdrawals From Escrow Account......................................................18
Section 3.07 Maintenance of FHA Mortgage Insurance and VA Guaranty..........................................19
Section 3.08 Fidelity Bond and Errors and Omissions Insurance...............................................19
Section 3.09 Notification of Adjustments....................................................................19
Section 3.10 Completion and Recordation of Assignments of Mortgage and FHA
and VA Change Notices..........................................................................20
Section 3.11 Protection of Accounts.........................................................................20
Section 3.12 Title, Management and Disposition of REO Property..............................................20
Section 3.13 Real Estate Owned Reports......................................................................22
Section 3.14 MERS...........................................................................................22
Section 3.15 Transfer of Distressed Mortgage Loans..........................................................22
ARTICLE IV.
PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances....................................................................................24
Section 4.02 Statements to Master Servicer..................................................................24
Section 4.03 Monthly Advances by Servicer...................................................................25
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.........................................................................25
Section 5.02 Annual Audit Report............................................................................26
Section 5.03 Annual Officer's Certificate...................................................................26
ARTICLE VI.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer.....................................26
Section 6.02 Remedies for Breach of Representations and Warranties of the Servicer..........................28
Section 6.03 Additional Indemnification by the Servicer; Third Party Claims.................................29
ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer........................................................29
Section 7.02 Limitation on Liability of the Servicer and Others.............................................30
Section 7.03 Limitation on Resignation and Assignment by the Servicer.......................................30
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause..........................................................................31
Section 8.02 Termination Without Cause......................................................................32
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer......................................................................33
Section 9.02 Costs..........................................................................................35
Section 9.03 Notices........................................................................................35
Section 9.04 Severability Clause............................................................................36
Section 9.05 No Personal Solicitation.......................................................................36
Section 9.06 Counterparts...................................................................................37
Section 9.07 Place of Delivery and Governing Law............................................................37
Section 9.08 Further Agreements.............................................................................37
Section 9.09 Intention of the Parties.......................................................................37
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement......................................37
Section 9.11 Assignment by Lehman Capital...................................................................38
Section 9.12 Intended Third Party Beneficiaries.............................................................38
Section 9.13 Waivers........................................................................................38
Section 9.14 Exhibits.......................................................................................38
Section 9.15 General Interpretive Principles................................................................38
Section 9.16 Reproduction of Documents......................................................................39
</TABLE>
EXHIBITS & SCHEDULES
EXHIBIT A Mortgage Loan Schedule
EXHIBIT B Custodial Account Letter Agreement
EXHIBIT C Escrow Account Letter Agreement
SCHEDULE 1 Servicer Recordation Fees
<PAGE>
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of April, 1999, by and between LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., a Delaware corporation (the "Seller" or "Lehman
Capital"), and AURORA LOAN SERVICES INC., a Delaware corporation ("the
Servicer"), recites and provides as follows:
RECITALS
WHEREAS, the Seller has conveyed certain Mortgage Loans identified on
Schedule I hereto (the "Mortgage Loans") on a servicing-retained basis to
Structured Asset Securities Corporation (the "Depositor"), which in turn has
conveyed the Mortgage Loans to The First National Bank of Chicago, as trustee
(the "Trustee") under a trust agreement dated as of April 1, 1999 (the "Trust
Agreement"), among the Trustee, Norwest Bank Minnesota, National Association,
as master servicer (together with any successor Master Servicer appointed
pursuant to the provisions of the Trust Agreement, the "Master Servicer") and
the Depositor.
WHEREAS, multiple classes of Certificates, including the Class X
Certificate, will be issued on the Closing Date pursuant to the Trust
Agreement, and Lehman Brothers Inc. or a nominee thereof (together with any
successor in interest thereto and any permitted assignee or transferee
thereof, the "Directing Holder") is expected to be the initial registered
Holder of the Class X Certificate.
WHEREAS, Lehman Capital desires that the Servicer service the Mortgage
Loans pursuant to this Agreement, and the Servicer has agreed to do so,
subject to the right of the Directing Holder and of the Master Servicer to
terminate the rights and obligations of the Servicer hereunder at any time and
to the other conditions set forth herein.
WHEREAS, Lehman Capital and the Servicer agree that the provisions of the
Flow Servicing Agreement dated as of September 1, 1997, between Lehman Capital
and the Servicer shall not apply to the Mortgage Loans for so long as such
Mortgage Loans remain subject to the provisions of the Trust Agreement;
WHEREAS, the Master Servicer shall be obligated under the Trust
Agreement, among other things, to supervise the servicing of the Mortgage
Loans on behalf of the Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Servicer under
this Servicing Agreement.
WHEREAS, Lehman Capital and the Servicer intend that each of the Master
Servicer and the Directing Holder, pursuant to Section 9.12, is each an
intended third party beneficiary of this Agreement.
WHEREAS, Lehman Capital and the Servicer acknowledge and agree that
Lehman Capital will assign all of its rights and delegate all of its
obligations hereunder to the Trustee, and that each reference herein to either
Lehman Capital or the Seller is intended, unless otherwise specified, to mean
the Seller or the Trustee, as assignee, whichever is the owner of the Mortgage
Loans from time to time.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Seller and the Servicer hereby agree as
follows:
ARTICLE I.
DEFINITIONS
The following terms are defined as follows (except as otherwise agreed in
writing by the parties):
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions that
service mortgage loans of the same type as such Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: A Mortgage Loan serviced pursuant to this
Agreement under which the Mortgage Interest Rate is adjusted from time to time
in accordance with the terms and provisions of the Mortgage Note.
Agreement: This Servicing Agreement and all amendments hereof and
supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, other than
Servicing Fees, including but not limited to late charges, fees received with
respect to checks or bank drafts returned by the related bank for
non-sufficient funds, assumption fees, optional insurance administrative fees
and all other incidental fees and charges.
Applicable Agency: With respect to Conventional Loans, FNMA, and with
respect to FHA Loans or VA Loans, GNMA.
Appraised Value: The value set forth in an appraisal made in connection
with the origination or the refinance of the related Mortgage Loan as the
value of the Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
transfer of the Mortgage to the party indicated therein, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.
Best Efforts: Efforts determined to be reasonably diligent by the Seller
or Servicer, as the case may be, in its sole discretion. Such efforts do not
require the Seller or Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Seller or Servicer, as the case may be, to advance or expend fees
or sums of money in addition to those specifically set forth in this
Agreement.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions in the States of New York,
Minnesota and Maryland are authorized or obligated by law or executive order
to be closed.
Certificates: Any or all of the Certificates issued pursuant to the Trust
Agreement.
Closing Date: May 10, 1999.
Code: The Internal Revenue Code of 1986, as it may be amended from time
to time or any successor statute thereto, and applicable U.S. Department of
the Treasury regulations issued pursuant thereto.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan documents.
Conventional Loan: A conventional residential first or second lien fixed
or adjustable rate Mortgage Loan that is neither FHA insured nor VA
guaranteed.
Costs: For any Person, any claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses of such Person.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 3.03.
Custodial Agreement: The custodial agreement relating to custody of all
of the Mortgage Loans, among the Custodian, the Trustee, and the Depositor,
dated as of April 1, 1999.
Custodian: Norwest Bank Minnesota, National Association, as Custodian
pursuant to the Custodial Agreement, and any successor thereto.
Cut-off Date: April 1, 1999.
DCR: Duff & Phelps Credit Rating Co., or any successor in interest.
Determination Date: With respect to each Distribution Date, the 18th day
of the month in which such Distribution Date occurs, or, if such 18th day is
not a Business Day, the next succeeding Business Day.
Depositor: Structured Asset Securities Corporation, or any successor in
interest.
Directing Holder: As defined in the Recitals to this Agreement.
Distressed Mortgage Loan: As of any Transfer Date, any Mortgage Loan that
was delinquent in payment for a period of 91 days or more as of the first
calendar day of the month in which such Transfer Date occurs, without giving
effect to any grace period permitted by the related Mortgage Note. No Mortgage
Loan shall be considered to be delinquent for the purpose of this definition
by virtue of the related Mortgagor having made payment to a prior servicer.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the
first day of the month, such Mortgage Loans will be treated as if the Monthly
Payment is due on the first day of the immediately succeeding month.
Due Period: With respect to each Remittance Date, the period commencing
on the second day of the month immediately preceding the month of the
Remittance Date and ending on the first day of the month of the Remittance
Date.
Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than
the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America or
any agency or instrumentality of the United States of America the obligations
of which are backed by the full faith and credit of the United States of
America ("Direct Obligations");
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution or
trust company (including U.S. subsidiaries of foreign depositories and the
Trustee or any agent of the Trustee, acting in its respective commercial
capacity) incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal or state banking authorities, so long as at the time of investment or
the contractual commitment providing for such investment the commercial paper
or other short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company which is
the principal subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or deposit
institution, as the case may be) have been rated by each Rating Agency in its
highest short-term rating category or one of its two highest long-term rating
categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA, FNMA or FHLMC with any registered broker/dealer
subject to Securities Investors' Protection Corporation jurisdiction or any
commercial bank insured by the FDIC, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed obligation rated by each Rating Agency
in its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which have a credit rating from each Rating Agency, at the time
of investment or the contractual commitment providing for such investment, at
least equal to one of the two highest long-term credit rating categories of
each Rating Agency; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Trust Fund to
exceed 20% of the sum of the Aggregate Loan Balance and the aggregate
principal amount of all Eligible Investments in the Certificate Account;
provided, further, that such securities will not be Eligible Investments if
they are published as being under review with negative implications from
either Rating Agency;
(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 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States of
America) held by a custodian in safekeeping on behalf of the holders of such
receipts; and
(viii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or investment,
(A) rated in the highest rating category by each Rating Agency or (B) that
would not adversely affect the then current rating by either Rating Agency of
any of the Certificates. Such investments in this subsection (viii) may
include money market mutual funds or common trust funds, including any fund
for which The First National Bank of Chicago (the "Bank"), the Trustee, the
Master Servicer or an affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) the Bank or an affiliate thereof charges and collects
fees and expenses from such funds for services rendered, (y) the Bank or an
affiliate thereof charges and collects fees and expenses for services rendered
pursuant to this Agreement, and (z) services performed for such funds and
pursuant to this Agreement may converge at any time. The Trustee specifically
authorizes the Bank or an affiliate thereof to charge and collect from the
Trustee such fees as are collected from all investors in such funds for
services rendered to such funds (but not to exceed investment earnings
thereon);
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with the FNMA Guides.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 3.05.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Event of Default: Any event set forth in Section 8.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto
and including the Federal Housing Commissioner and the Secretary of Housing
and Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by FHA under the Act and applicable HUD regulations, and eligible to
own and service mortgage loans such as the FHA Loans.
FHA Assigned Mortgage Loan: A Mortgage Loan that has been in default for
longer than the applicable FHA grace period and respecting which written
notice of an intention to assign has been filed with the FHA, whether or not
such Mortgage Loan has in fact been assigned to the FHA.
FHA Insurance Contract: The contractual obligation of FHA respecting the
insurance of a Mortgage Loan.
FHA Loan: A residential Mortgage Loan that, as of the Cut-off Date (or,
in the case of a Qualifying Substitute Mortgage Loan, as of the date of such
substitution), is the subject of an FHA Insurance Contract as evidenced by a
mortgage insurance contract.
FHA Mortgage Insurance: Mortgage insurance authorized under the Act and
provided by the FHA.
FHA Regulations: Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD
issuances relating to FHA Loans, including the related handbooks, circulars,
notices and mortgagee letters.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer in
accordance with the FNMA Guides.
Fixed Rate Mortgage Loan: Any individual Mortgage Loan serviced pursuant
to this Agreement as to which the Mortgage Interest Rate set forth in the
Mortgage Note is fixed for the term of such Mortgage Loan.
Fitch: Fitch IBCA, Inc., or any successor in interest.
FNMA: The Federal National Mortgage Association, or any successor
thereto.
FNMA Guides: The FNMA Selling Guide and the FNMA Servicing Guide and all
amendments or additions thereto.
GNMA: The Government National Mortgage Association, or any successor
thereto.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the
functions thereof with regard to FHA Mortgage Insurance. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof
such as the FHA and GNMA.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property including FHA insurance proceeds and/or VA guaranty proceeds.
Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of
the related REO Property, if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Master Servicer: Norwest Bank Minnesota, National Association, or any
successor in interest, or if any successor master servicer shall be appointed
as provided in the Trust Agreement, then such successor master servicer.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Eligible Mortgage Loan: Any Mortgage Loan that has been designated
by the Servicer as recordable in the name of MERS.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of
MERS, as agent for the holder from time to time of the Mortgage Note.
Monthly Advance: With respect to each Remittance Date and each Mortgage
Loan, an amount equal to the Monthly Payment (with the interest portion of
such Monthly Payment adjusted to the Mortgage Loan Remittance Rate) that was
due on the Mortgage Loan, and that (i) was delinquent at the close of business
on the first day of the month in which such Remittance Date occurs and (ii)
was not the subject of a previous Monthly Advance, but only to the extent that
such amount is expected, in the reasonable judgment of the Servicer, to be
recoverable from collections or other recoveries in respect of such Mortgage
Loan. To the extent that the Servicer determines that any such amount is not
recoverable from collections or other recoveries in respect of such Mortgage
Loan, such determination shall be evidenced by a certificate of a Servicing
Officer delivered to the Master Servicer setting forth such determination and
the procedures and considerations of the Servicer forming the basis of such
determination, which shall include a copy of any broker's price opinion and
any other information or reports obtained by the Servicer which may support
such determinations.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Moody's: Moody's Investors Service, or any successor in interest.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated
estate in fee simple in real property securing the Mortgage Note.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in the FNMA Guides.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note.
Mortgage Loan: An individual Mortgage Loan that is the subject of this
Agreement, each Mortgage Loan subject to this Agreement being identified on
the Mortgage Loan Schedule, which Mortgage Loan includes without limitation
the Mortgage Loan documents, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds, and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Master Servicer, which shall be equal
to the Mortgage Interest Rate minus the applicable Servicing Fee.
Mortgage Loan Schedule: A schedule of the Mortgage Loans setting forth
information with respect to such Mortgage Loans (including any MERS
identification number (if available) with respect to each MERS Mortgage Loan
or MERS Eligible Mortgage Loan), attached hereto as Exhibit A.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Sale Proceeds: The proceeds from the sale of REO Property, net of all
expenses incurred by the Servicer in connection with such sale, including,
without limitation, legal fees and expenses, referral fees, brokerage
commissions, conveyance taxes and any other related expense.
Non-MERS Eligible Mortgage Loan: Any Mortgage Loan other than a MERS
Eligible Mortgage Loan.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
Notice Date: The fifteenth calendar day preceding each Transfer Date, or,
if such day is not a Business Day, the immediately preceding Business Day.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Servicer, reasonably acceptable to the Seller, but which must be
independent outside counsel with respect to any such opinion of counsel
concerning (i) the non-recordation of Mortgage Loans pursuant to Section 2.02
hereof and (ii) federal income tax matters.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
Prepayment Interest Shortfall Amount: With respect to any Mortgage Loan
that was subject to a Principal Prepayment in full during any Prepayment
Period, which Principal Prepayment was applied to such Mortgage Loan prior to
such Mortgage Loan's Prepayment Date in such Due Period, the amount of
interest (net the Servicing Fee) that would have accrued on the amount of such
Principal Prepayment during the period commencing on the date as of which such
Principal Prepayment was applied to such Mortgage Loan and ending on the day
immediately preceding such Due Date, inclusive.
Prepayment Period: With respect to the first Remittance Date, the period
beginning on the Cut-off Date and ending on May 1, 1999. With respect to each
subsequent Remittance Date, the period commencing on the second day of the
month immediately preceding the month in which such Remittance Date occurs and
ending on the first day of the month in which such Remittance Date occurs.
Prime Rate: The prime rate published from time to time, as published as
the average rate in The Wall Street Journal Northeast Edition.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan that is received in advance of its scheduled Due Date, including
any prepayment penalty or premium thereon, which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Qualified Depository: Any of (i) a depository the accounts of which are
insured by the FDIC and the debt obligations of which are rated AA (or its
equivalent) or better by each Rating Agency; (ii) the corporate trust
department of any bank the debt obligations of which are rated at least A-1 or
its equivalent by each Rating Agency; or (iii) the Servicer, unless the Master
Servicer is notified by any Rating Agency that the designation of the Servicer
as a Qualified Depository will result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Certificates.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by FNMA, FHLMC and GNMA.
Rating Agency: Each of S&P and DCR.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 3.12.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of
the Trustee through foreclosure or by deed in lieu of foreclosure, pursuant to
Section 3.12.
S&P: Standard & Poor's Rating Services, a division of the McGraw-Hill
Companies, Inc., or any successor in interest.
Seller: Lehman Capital, A Division of Lehman Brothers Holdings Inc., or
its successors in interest and assigns.
Servicer: Aurora Loan Services Inc. or its successor in interest or
assigns or any successor to the Servicer under this Agreement as herein
provided.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) transferring
Distressed Mortgage Loans to the Special Servicer pursuant to Section 3.15,
(c) any enforcement or administrative or judicial proceedings, including
foreclosures, (d) the management and liquidation of the Mortgaged Property if
the Mortgaged Property is acquired in satisfaction of the Mortgage, (e) taxes,
assessments, water rates, sewer rents and other charges which are or may
become a lien upon the Mortgaged Property, and PMI Policy premiums and fire
and hazard insurance coverage, (f) any losses sustained by the Servicer with
respect to the liquidation of the Mortgaged Property and (g) compliance with
the obligations pursuant to the provisions of the FNMA Guides.
Servicing Fee: An amount equal to one-twelfth the product of (a) a rate
per annum equal to 0.50% and (b) the outstanding principal balance of such
Mortgage Loan. The obligation of the Trustee to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds to
the extent permitted by Section 3.02 of this Agreement) of such Monthly
Payment collected by the Servicer, or as otherwise provided under this
Agreement.
Servicing File: The items pertaining to a particular Mortgage Loan
including, but not limited to, the computer files, data disks, books, records,
data tapes, notes, and all additional documents generated as a result of or
utilized in originating and/or servicing each Mortgage Loan, which are held in
trust for the Trustee by the Servicer.
Servicing Officer: Any officer of the Servicer involved in or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by the Servicer to the Master
Servicer or Seller upon request, as such list may from time to time be
amended.
Servicing Rights: Any and all of the following: (a) any and all rights to
service the Mortgage Loans; (b) any payments to or monies received by the
Servicer for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Servicer
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Servicer with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage
Loans.
Special Servicer: Ocwen Federal Bank FSB, or its successor in interest or
assigns or any successor to the Special Servicer under the Special Servicing
Agreement as provided therein.
Special Servicing Agreement: The Special Servicing Agreement between
Lehman Capital and the Special Servicer dated as of April 1, 1999.
Transfer Date: The fourth calendar day of each month, or, if such day is
not a Business Day, the next succeeding Business Day. Each transfer of
servicing on a Transfer Date shall be deemed to be effective immediately
following the close of business of such Transfer Date.
Transfer Notice: A certification by the Servicer listing the Distressed
Mortgage Loans expected to be the subject of a servicing transfer on the
related Transfer Date, based on information available as of the related Notice
Date.
Trust Agreement: The Trust Agreement dated as of April 1, 1999, among the
Trustee, the Master Servicer and the Depositor.
Trust Fund: The trust fund established by the Trust Agreement, the assets
of which consist of the Mortgage Loans and any related assets.
Trustee: The First National Bank of Chicago, or any successor in
interest, or if any successor trustee or co-trustee shall be appointed as
provided in the Trust Agreement, then such successor trustee or such
co-trustee, as the case may be.
VA: The Veterans Administration, an agency of the United States of
America, or any successor thereto including the Administrator of Veterans
Affairs.
VA Approved Lender: Those lenders which are approved by the VA to act as
a lender in connection with the origination of VA Loans.
VA Loan: A Mortgage Loan that, as of the Cut-off Date (or, in the case of
a Qualifying Substitute Mortgage Loan, as of the date of such substitution),
is the subject of a VA Loan Guaranty Agreement as evidenced by a Loan Guaranty
Certificate, or a Mortgage Loan which is a vendee loan sold by the VA.
VA Loan Guaranty Agreement: The obligation of the United States to pay a
specific percentage of a Mortgage Loan (subject to a maximum amount) upon
default of the Mortgagor pursuant to the Servicemen's Readjustment Act, as
amended.
VA Loan Guaranty Certificate: The certificate evidencing a VA Loan
Guaranty Agreement.
VA Regulations: Regulations promulgated by the Veteran's Administration
pursuant to the Servicemen's Readjustment Act, as amended, codified in 38 Code
of Federal Regulations, and other VA issuances relating to VA Loans, including
related Handbooks, Circulars and Notices.
Any capitalized terms used and not defined in this Agreement shall have
the meanings ascribed to such terms in the Trust Agreement.
ARTICLE II.
SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files.
The Seller, by execution and delivery of this Agreement, does hereby
contract with the Servicer, subject to the terms of this Agreement, for the
servicing of the Mortgage Loans. On or before the Closing Date, the Seller
shall cause to be delivered the Servicing Files with respect to the Mortgage
Loans listed on the Mortgage Loan Schedule to the Servicer. Each Servicing
File delivered to a Servicer shall be held in trust by such Servicer for the
benefit of the Trustee, provided, however, that the Servicer shall have no
liability for any Servicing Files (or portions thereof) not delivered by the
Seller. The Servicer's possession of any portion of the Mortgage Loan
documents shall be at the will of the Trustee for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to this
Agreement, and such retention and possession by the Servicer shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and
the contents of the Servicing File shall be vested in the Trustee and the
ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall
immediately vest in the Trustee and shall be retained and maintained, in
trust, by the Servicer at the will of the Trustee in such custodial capacity
only. The portion of each Servicing File retained by the Servicer pursuant to
this Agreement shall be segregated from the other books and records of the
Servicer and shall be appropriately marked to clearly reflect the ownership of
the related Mortgage Loan by the Trustee. The Servicer shall release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement.
Section 2.02 Books and Records.
(a) Subject to Section 3.01(a) hereof, as soon as practicable after the
Closing Date or the date on which a Qualifying Substitute Mortgage Loan is
delivered pursuant to Section 2.05 of the Trust Agreement, as applicable (but
in no event more than 90 days thereafter except to the extent delays are
caused by the applicable recording office), the Servicer, at the expense of
the Depositor, shall cause the Mortgage or Assignment of Mortgage, as
applicable, with respect to each MERS Eligible Mortgage Loan, to be properly
recorded in the name of MERS in the public recording office in the applicable
jurisdiction, or shall ascertain that such have previously been so recorded.
(b) Subject to Section 3.01(a) hereof, an Assignment of Mortgage in favor
of the Trustee shall be recorded as to each Non-MERS Mortgage Loan unless
instructions to the contrary are delivered to the Servicer, in writing, by the
Trustee. Subject to the preceding sentence, as soon as practicable after the
Closing Date (but in no event more than 90 days thereafter except to the
extent delays are caused by the applicable recording office), the Servicer, at
the expense of the Depositor, shall cause to be properly recorded in each
public recording office where such Non-MERS Eligible Mortgage Loans are
recorded each Assignment of Mortgage.
(c) Additionally, the Servicer shall prepare and execute, at the
direction of the Trustee, any note endorsements relating to any of the
Non-MERS Mortgage Loans.
(d) All rights arising out of the Mortgage Loans shall be vested in the
Trustee. All funds received on or in connection with a Mortgage Loan shall be
received and held by the Servicer in trust for the benefit of the Trustee
pursuant to the terms of this Agreement.
ARTICLE III.
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service.
The Servicer, as an independent contractor, shall service and administer
the Mortgage Loans from and after the Closing Date and shall have full power
and authority, acting alone, to do any and all things in connection with such
servicing and administration which the Servicer may deem necessary or
desirable, consistent with the terms of this Agreement and with Accepted
Servicing Practices, including taking all actions that a mortgagee is
permitted or required to take by the FHA or VA, with respect to any FHA Loans
or VA Loans, as the case may be. Except as set forth in this Agreement, the
Servicer shall service the Mortgage Loans in strict compliance with the
servicing provisions related to the FNMA MBS Program (Special Servicing
Option) of the FNMA Guides, which include, but are not limited to, provisions
regarding the liquidation of Mortgage Loans, the collection of Mortgage Loan
payments, the payment of taxes, insurance and other charges, the maintenance
of hazard insurance, the maintenance of Mortgage Impairment Insurance
Policies, the maintenance of Fidelity Bond and Errors and Omissions Insurance,
inspections, the restoration of Mortgaged Property, the maintenance of PMI
Policies, insurance claims, the title, management and disposition of REO
Property, permitted withdrawals with respect to REO Property, REO reports,
liquidation reports, and reports of foreclosures and abandonments of Mortgaged
Property, the transfer of Mortgaged Property, the release of Mortgage Loan
documents, annual statements, and examination of records and facilities. In
the event of any conflict, inconsistency or discrepancy between any of the
servicing provisions of this Agreement and any of the servicing provisions of
the FNMA Guides, the provisions of this Agreement shall control and be binding
upon the Seller, the Master Servicer and the Servicer.
The Seller and the Servicer additionally agree as follows:
(a) The Servicer shall (A) record or cause to be recorded the Mortgage or
the Assignment of Mortgage, as applicable, with respect to all MERS Eligible
Mortgage Loans, in the name of MERS, or shall ascertain that such have
previously been so recorded; (B) prepare or cause to be prepared all
Assignments of Mortgage with respect to all Non-MERS Eligible Mortgage Loans;
(C) record or cause to be recorded, subject to Section 2.02(b) hereof, all
Assignments of Mortgage with respect to Non-MERS Mortgage Loans in the name of
the Trustee; (D) pay the recording costs pursuant to Section 2.02 hereof;
and/or (E) track such Mortgages and Assignments of Mortgage to ensure they
have been recorded. The Servicer shall be entitled to be paid by the Seller
the fees set forth on Schedule 1 hereto for the preparation and recordation of
the Mortgages and Assignments of Mortgage. After the expenses of such
recording costs pursuant to Section 2.02 hereof shall have been paid by the
Servicer, the Servicer shall submit to the Depositor a reasonably detailed
invoice for reimbursement of recording costs it incurred hereunder.
(b) The Servicer shall, in accordance with the relevant provisions of the
Cranston-Gonzales National Affordable Housing Act of 1990, as the same may be
amended from time to time, and the regulations provided in accordance with the
Real Estate Settlement Procedures Act, provide notice to the Mortgagor of each
Mortgage of the transfer of the servicing thereto to the Servicer.
(c) The Servicer shall be responsible for the preparation of and costs
associated with notifications to Mortgagors of the assumption of servicing by
the Servicer.
Consistent with the terms of this Agreement, the Servicer may waive any
late payment charge, assumption fee or other fee that may be collected in the
ordinary course of servicing the Mortgage Loans. The Servicer shall not make
any future advances to any obligor under any Mortgage Loan, and (unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is,
in the judgment of the Servicer, reasonably foreseeable) the Servicer shall
not permit any modification of any material term of any Mortgage Loan,
including any modification that would change the Mortgage Interest Rate, defer
or forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal) or
change the final maturity date on such Mortgage Loan. In the event of any such
modification which permits the deferral of interest or principal payments on
any Mortgage Loan, the Servicer shall, on the Business Day immediately
preceding the Remittance Date in any month in which any such principal or
interest payment has been deferred, make a Monthly Advance in accordance with
Section 4.03, in an amount equal to the difference between (a) such month's
principal and one month's interest at the Mortgage Loan Remittance Rate on the
unpaid principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Servicer shall be entitled to reimbursement for such advances
to the same extent as for all other advances made pursuant to Section 4.03.
Without limiting the generality of the foregoing, the Servicer shall continue,
and is hereby authorized and empowered, to execute and deliver on behalf of
itself and the Trustee, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties.
Upon the request of the Servicer, the Trustee shall execute and deliver to the
Servicer any powers of attorney and other documents, furnished to it by the
Servicer and reasonably satisfactory to the Trustee, necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
under this Agreement.
Notwithstanding anything to the contrary in this Agreement, the Servicer
shall not (unless the Servicer determines, in its own discretion, that there
exists a situation of extreme hardship to the Mortgagor), waive any premium or
penalty in connection with a prepayment of principal of any Mortgage Loan, and
shall not consent to the modification of any Mortgage Note to the extent that
such modification relates to payment of a prepayment premium or penalty.
In servicing and administering any FHA Loans or VA Loans, the Servicer
shall comply strictly with the National Housing Act and the FHA Regulations,
the Servicemen's Readjustment Act, the VA Regulations and administrative
guidelines issued thereunder or pursuant thereto, and, to the extent permitted
hereunder, promptly discharge all of the obligations of the mortgagee
thereunder and under each Mortgage including the payment of any fees, premiums
and charges and the timely giving of notices.
In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, the FNMA Guides, the FHA Regulations and the VA
Regulations, and the Seller's reliance on the Servicer.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the Closing Date until the date each Mortgage Loan
ceases to be subject to this Agreement, the Servicer shall proceed diligently
to collect all payments due under each of the Mortgage Loans when the same
shall become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loans and each related Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Section 3.03 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to the Mortgage Loans separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled as directed
by the Trustee. The Custodial Account shall be established with a Qualified
Depository. Any funds deposited in the Custodial Account may be invested in
Eligible Investments subject to the provisions of Section 3.11 hereof. Funds
deposited in the Custodial Account may be drawn on by the Servicer in
accordance with Section 3.04. The creation of any Custodial Account shall be
evidenced by a letter agreement in the form of Exhibit B. A copy of such
certification or letter agreement shall be furnished to the Master Servicer
and, upon request, to any subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Custodial Account on a daily basis, and
retain therein, the following collections received by the Servicer and
payments made by the Servicer after the Closing Date:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds;
(v) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor;
(vi) any Prepayment Interest Shortfall Amount;
(vii) any amounts required to be deposited by the Servicer in
connection with the deductible clause in any blanket hazard insurance policy;
(viii) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds; and
(ix) any other amount to be required hereunder to be deposited in
the Custodial Account.
Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Additionally, any other benefit
derived from the Custodial Account associated with the receipt, disbursement
and accumulation of principal, interest, taxes, hazard insurance, mortgage
insurance, etc. shall accrue to the Servicer.
Section 3.04 Permitted Withdrawals From Custodial Account.
The Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Master Servicer in the amounts and in
the manner provided for in Section 4.01;
(ii) in the event the Servicer has elected not to retain the
Servicing Fee out of any Mortgagor payments on account of interest or other
recovery of interest with respect to a particular Mortgage Loan (including
late collections of interest on such Mortgage Loan, or interest portions of
Insurance Proceeds or Liquidation Proceeds) prior to the deposit of such
Mortgagor payment or recovery in the Custodial Account, to pay to itself the
related Servicing Fee from all such Mortgagor payments on account of interest
or other such recovery for interest with respect to that Mortgage Loan;
(iii) to pay itself investment earnings on funds deposited in the
Custodial Account;
(iv) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(v) to transfer funds to another Qualified Depository in accordance
with Section 3.11 hereof;
(vi) to invest funds in certain Eligible Investments in accordance
with Section 3.11 hereof;
(vii) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 4.03, it being understood that, in the case of
any such reimbursement, the Servicer's right thereto shall be prior to the
rights of the Trust Fund; and
(viii) to reimburse itself for unreimbursed Servicing Advances, and
for any unpaid Servicing Fees, the Servicer's right to reimburse itself
pursuant to this subclause (viii) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and other amounts received in respect of
the related REO Property, and such other amounts as may be collected by the
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Trust Fund.
Section 3.05 Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Escrow Accounts, in the form of time deposit or demand accounts,
titled as directed by the Trustee. The Escrow Accounts shall be established
with a Qualified Depository in a manner that shall provide maximum available
insurance thereunder. Funds deposited in the Escrow Account may be drawn on by
the Servicer in accordance with Section 3.06. The creation of any Escrow
Account shall be evidenced by a letter agreement in the form of Exhibit C. A
copy of such certification or letter agreement shall be furnished to the
Master Servicer and, upon request, to any subsequent owner of the Mortgage
Loans.
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds that are to be applied to the restoration or repair of any Mortgaged
Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06. The Servicer shall retain any interest paid on funds deposited
in the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. Additionally, any
other benefit derived from the Escrow Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage insurance, etc. shall accrue to the Servicer. To the extent required
by law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section 3.06 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, sewer rents, mortgage insurance premiums, condominium charges,
fire and hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage;
(ii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
(iii) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(iv) for application to restoration or repair of the Mortgaged
Property in accordance with the FNMA Guides;
(v) for transfer to the Custodial Account of fire and hazard
insurance proceeds and Escrow Payments with respect to any FHA Loan or VA
Loan, where the FHA or the VA, respectively, has directed application of funds
as a credit against the proceeds of the FHA Insurance Contract or VA Loan
Guaranty Agreement;
(vi) to pay to the Servicer, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account; and
(vii) to clear and terminate the Escrow Account on the termination
of this Agreement.
Section 3.07 Maintenance of FHA Mortgage Insurance and VA Guaranty.
With respect to any FHA Loans and VA Loans, the Servicer shall maintain
and keep the FHA Mortgage Insurance and the VA Guaranty, respectively, in full
force and effect throughout the term of this Agreement and discharge its
obligations arising out of FHA Mortgage Insurance and the VA Guaranty
Certificate. The Servicer hereby agrees that it shall be liable to the Trustee
for any loss, liability or expense incurred by the Trust Fund by reason of any
FHA Mortgage Insurance or VA Guaranty being voided, reduced, released or
adversely affected by reason of the negligence or willful misconduct of the
Servicer. The Servicer will service and administer the Mortgage Loans in
accordance with the obligations of mortgagees under the Act and the applicable
regulations thereunder and under the Servicemen's Readjustment Act and VA
Regulations and will discharge all obligations of the mortgagee under each
Mortgage Loan including, with respect to FHA Loans and VA Loans, paying all
FHA and VA insurance premiums, fees or charges, as required, and, subject to
the right to assign the Mortgage Loan to the FHA or VA, as the case may be,
will take all action reasonably necessary to preserve the lien of such
Mortgage, including the defense of actions to challenge or foreclose such
lien.
Section 3.08 Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall keep in force during the term of this Agreement a
Fidelity Bond and Errors and Omissions Insurance. Such Fidelity Bond and
Errors and Omissions Insurance shall be maintained with recognized insurers
and shall be in such form and amount as would permit the Servicer to be
qualified as a FNMA or FHLMC seller-servicer. The Servicer shall be deemed to
have complied with this provision if an affiliate of the 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 Servicer. The Servicer shall furnish to the Master Servicer a copy of each
such bond and insurance policy if (i) the Master Servicer so requests and (ii)
the Servicer is not an affiliate of Lehman Brothers Inc. at the time of such
request.
Section 3.09 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment
adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Servicer shall
execute and deliver any and all necessary notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and Monthly Payment adjustments. The Servicer shall
promptly, upon written request therefor, deliver to the Master Servicer such
notifications and any additional applicable data regarding such adjustments
and the methods used to calculate and implement such adjustments. Upon the
discovery by the Servicer or the receipt of notice from the Master Servicer
that the Servicer has failed to adjust a Mortgage Interest Rate or Monthly
Payment in accordance with the terms of the related Mortgage Note, the
Servicer shall immediately deposit in the Custodial Account from its own funds
the amount of any interest loss or deferral caused thereby.
Section 3.10 Completion and Recordation of Assignments of Mortgage and
FHA and VA Change Notices. As soon as practicable after the Closing
Date or the date on which a Qualifying Substitute Mortgage Loan is
delivered pursuant to Section 2.05 of the Trust Agreement, as applicable (but
in no event more than 90 days thereafter except to the extent delays are
caused by the applicable government agency), the Servicer shall cause the
endorsements on the Mortgage Note (if applicable), the Assignments of Mortgage
(subject to Section 3.01(a)), the assignment of security agreement and the HUD
form 92080 Mortgage Record Change with respect to all FHA Loans to be
completed in the name of the Trustee (or MERS, as applicable), and shall give
notice to the VA of a transfer of insurance credits, if applicable, with
respect to VA Loans on the form prescribed by the VA.
Section 3.11 Protection of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account to
a different Qualified Depository from time to time. Such transfer shall be
made only upon obtaining the consent of the Master Servicer, which consent
shall not be withheld unreasonably.
The Servicer shall bear any expenses, losses or damages sustained by the
Master Servicer or the Trustee if the Custodial Account and/or the Escrow
Account are not demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may at
the option of the Servicer be invested in Eligible Investments; provided that
in the event that amounts on deposit in the Custodial Account or the Escrow
Account exceed the amount fully insured by the FDIC (the "Insured Amount") the
Servicer shall be obligated to invest the excess amount over the Insured
Amount in Eligible Investments on the same Business Day as such excess amount
becomes present in the Custodial Account or the Escrow Account. Any such
Eligible Investment shall mature no later than the Business Day immediately
preceding the related Remittance Date, provided, however, that if such
Eligible Investment is an obligation of a Qualified Depository (other than the
Servicer) that maintains the Custodial Account or the Escrow Account, then
such Eligible Investment may mature on the related Remittance Date. Any such
Eligible Investment shall be made in the name of the Servicer in trust for the
benefit of the Trustee. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer and may be withdrawn at
any time by the Servicer. Any losses incurred in respect of any such
investment shall be deposited in the Custodial Account or the Escrow Account,
by the Servicer out of its own funds immediately as realized.
Section 3.12 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Trustee (or MERS, as applicable), or in the
event the Trustee is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such
Person or Persons as shall be consistent with an Opinion of Counsel obtained
by the Servicer from any attorney duly licensed to practice law in the state
where the REO Property is located. The Person or Persons holding such title
other than the Trustee shall acknowledge in writing that such title is being
held as nominee for the Trustee.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt
to sell the same (and may temporarily rent the same for a period not greater
than one year, except as otherwise provided below) on such terms and
conditions as the Servicer deems to be in the best interest of the Trustee.
The Servicer shall use its Best Efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within three
years after title has been taken to such REO Property, unless (a) a REMIC
election has not been made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, and (b) the Servicer determines,
and gives an appropriate notice to the Master Servicer to such effect, that a
longer period is necessary for the orderly liquidation of such REO Property.
If a period longer than three years is permitted under the foregoing sentence
and is necessary to sell any REO Property, (i) the Servicer shall report
monthly to the Master Servicer as to the progress being made in selling such
REO Property and (ii) if, with the written consent of the Trustee, a purchase
money mortgage is taken in connection with such sale, such purchase money
mortgage shall name the Servicer as mortgagee, and such purchase money
mortgage shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Servicer and Trustee shall be entered into
with respect to such purchase money mortgage. Notwithstanding anything herein
to the contrary, the Servicer shall not be required to provide financing for
the sale of any REO Property.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
Subject to the approval of the Master Servicer as described in this
paragraph, the disposition of REO Property shall be carried out by the
Servicer at such price, and upon such terms and conditions, as the Servicer
deems to be in the best interests of the Trust Fund. Prior to acceptance by
the Servicer of an offer to sell any REO Property, the Servicer shall notify
the Master Servicer and the Trustee of such offer in writing which
notification shall set forth all material terms of said offer (each a "Notice
of Sale"). The Master Servicer shall be deemed to have approved the sale of
any REO Property unless the Master Servicer notifies the Servicer in writing,
within 2 Business Days after its receipt of the related Notice of Sale, that
it disapproves of the related sale. With respect to any REO Property, upon a
REO Disposition, the Servicer shall be entitled to retain from REO Disposition
Proceeds a disposition fee equal to the lesser of (A) 1.5% of the Net Sale
Proceeds or (B) $1,250; provided, however, that (1) in the event that the REO
Disposition Proceeds exceed $25,000, such disposition fee shall not be less
than $500 and (2) in the event that the REO Disposition Proceeds are $25,000
or less, such disposition fee shall be equal to $250. The proceeds of sale of
the REO Property shall be promptly deposited in the Custodial Account. After
the expenses of such disposition shall have been paid, the Servicer shall
reimburse itself pursuant to Section 3.04 hereof for any Servicing Advances it
incurred with respect to such REO Property.
The Servicer shall withdraw from the Custodial Account funds necessary
for the proper operation, management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to the FNMA
Guides. The Servicer shall make monthly distributions on each Remittance Date
to the Master Servicer of the net cash flow from the REO Property (which shall
equal the revenues from such REO Property net of the expenses described in
this Section 3.12 and of any reserves reasonably required from time to time to
be maintained to satisfy anticipated liabilities for such expenses).
Section 3.13 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 4.02, the
Servicer shall furnish to the Master Servicer on or before the Remittance Date
each month a statement with respect to any REO Property covering the operation
of such REO Property for the previous month and the Servicer's efforts in
connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information as the Master Servicer shall
reasonably request.
Section 3.14 MERS.
(a) The Servicer shall take such actions as are necessary to cause the
Trustee to be clearly identified as the owner of each MERS Mortgage Loan on
the records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.
(b) The Servicer shall maintain in good standing its membership in MERS.
In addition, the Servicer shall comply with all rules, policies and procedures
of MERS, including the Rules of Membership, as amended, and the MERS
Procedures Manual, as amended.
(c) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall promptly notify MERS as to any transfer of beneficial ownership
or release of any security interest in such Mortgage Loans.
(d) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall notify MERS as to any transfer of servicing pursuant to Section
3.15 or Section 9.01 within 10 Business Days of such transfer of servicing.
The Servicer shall cooperate with the Trustee, the Master Servicer and any
successor Servicer to the extent necessary to ensure that such transfer of
servicing is appropriately reflected on the MERS system.
Section 3.15 Transfer of Distressed Mortgage Loans.
On each Notice Date, the Servicer shall send by facsimile or electronic
mail a Transfer Notice to the Special Servicer, the Master Servicer, the
Trustee and the Custodian, and shall mail to the Mortgagor of each Mortgage
Loan listed in such Transfer Notice a letter advising each such Mortgagor of
the transfer of the servicing of the related Mortgage Loan to the Special
Servicer, in accordance with the Cranston Gonzales National Affordable Housing
Act of 1990; provided, however, the content and format of such letter shall
have the prior approval of the Special Servicer. The Servicer shall promptly
provide the Special Servicer with copies of all such notices and letters.
On each Transfer Date, the Servicer shall transfer the servicing of
Distressed Mortgage Loans to the Special Servicer. Any Mortgage Loan
identified as a Distressed Mortgage Loan in the related Transfer Notice that
is no longer 91 days delinquent as of the applicable Transfer Date shall not
be considered to be a Distressed Mortgage Loan, the servicing thereof shall
not be transferred, and the Servicer shall provide to such Mortgagor any
notice required by applicable law with respect to the non-transfer of such
Mortgage Loan.
Not later than the Business Day immediately following the Transfer Date,
the Servicer shall deliver to the Special Servicer, with respect to the
Distressed Mortgage Loans that were transferred to the Special Servicer on
such Transfer Date, all related Servicing Files, and to the Special Servicer
and the Master Servicer a preliminary loan level tape or other electronic
media (a "Report") in form reasonably acceptable to the Servicer, the Master
Servicer and the Special Servicer. Within two Business Days following such
Transfer Date, the Servicer shall deliver such Report in final form reasonably
acceptable to the Master Servicer and the Special Servicer, and commensurate
with generally acceptable industry standards, detailing the amount of any
unreimbursed Monthly Advances, Servicing Advances and accrued and unpaid
Servicing Fees on a loan level basis. Should the Master Servicer or the
Special Servicer desire a loan level tape or other electronic media containing
information which is not readily extractable from the Servicer's servicing
system, the Servicer shall diligently cooperate to make such loan level data
available to the Master Servicer and Special Servicer. In addition, not later
than three Business Days following each Transfer Date, the Servicer shall
transfer to the Special Servicer any funds held in an Escrow Account or
Custodial Account relating to the Distressed Mortgage Loans as to which
servicing was transferred to the Special Servicer on such Transfer Date. Upon
the successful completion of the transfer of servicing for Distressed Mortgage
Loans, the Special Servicer will reimburse the Servicer for any unreimbursed
Monthly Advances, Servicing Advances and accrued and unpaid Servicing Fees
with respect to such Distressed Mortgage Loans which have been properly
documented.
In connection with the transfer of any Distressed Mortgage Loan, (i) the
Servicer will be responsible for servicing the Distressed Mortgage Loan until
the effective date of transfer of servicing to the Special Servicer, but shall
have no right or obligation to service such Distressed Mortgage Loan from and
after the effective date of the transfer of servicing to the Special Servicer,
(ii) notwithstanding clause (i) above, the Servicer shall include the
Distressed Mortgage Loan in its monthly remittance report pursuant to Section
4.02 for the month in which such transfer is effected and shall be obligated,
subject to Section 4.03, to make the Monthly Advance with respect to such
Distressed Mortgage Loan on the Remittance Date in the month in which such
transfer is effected, in each case, regardless of whether the Remittance Date
occurs before or after the effective date of such transfer, (iii) the amount
of Monthly Advances to be reimbursed to the Servicer by the Special Servicer
hereunder shall include the Monthly Advance described in clause (ii) above
regardless of whether the Servicer makes such Monthly Advance before or after
the effective date of such transfer, and (iv) the Servicer shall not be
entitled to the Servicing Fee with regard to any such Distressed Mortgage Loan
for the month in which such transfer occurs.
ARTICLE IV.
PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Master Servicer (a) all amounts deposited
in the Custodial Account as of the close of business on the last day of the
related Due Period (net of charges against or withdrawals from the Custodial
Account pursuant to Section 3.04), plus (b) all Monthly Advances, if any,
which the Servicer is obligated to make pursuant to Section 4.03, minus (c)
any amounts attributable to Principal Prepayments, Liquidation Proceeds,
Insurance Proceeds, Condemnation Proceeds or REO Disposition Proceeds received
after the applicable Prepayment Period, which amounts shall be remitted on the
following Remittance Date, together with any additional interest required to
be deposited in the Custodial Account in connection with such Principal
Prepayment in accordance with Section 3.03(vi), and minus (d) any amounts
attributable to Monthly Payments collected but due on a due date or dates
subsequent to the first day of the month in which such Remittance Date occurs,
which amounts shall be remitted on the Remittance Date next succeeding the Due
Period for such amounts.
With respect to any remittance received by the Master Servicer after the
Business Day on which such payment was due, the Servicer shall pay to the
Master Servicer interest on any such late payment at an annual rate equal to
the Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account by
the Servicer on the date such late payment is made and shall cover the period
commencing with the day following such Business Day and ending with the
Business Day on which such payment is made, both inclusive. Such interest
shall be remitted along with the distribution payable on the next succeeding
Remittance Date. The payment by the Servicer of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Servicer.
All remittances required to be made to the Master Servicer shall be made
to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA #: 091-000-019
Account Name: Corporate Trust Clearing
Account Number: 3970771416
For further credit to: 13529800, SASCO 1999-SP1
Section 4.02 Statements to Master Servicer.
Not later than the tenth Business Day of each month, the Servicer shall
furnish to the Master Servicer (a) a monthly remittance advice containing such
information in the form of FNMA form 2010 or such other form as shall be
required by the FNMA Guides or by the Master Servicer as to the accompanying
remittance and the period ending on the preceding Determination Date and (b)
all such information required pursuant to clause (a) above on a magnetic tape
or other similar media reasonably acceptable to the Master Servicer.
In addition, not more than 60 days after the end of each calendar year,
commencing December 31, 1999, the Servicer shall furnish to each Person who
was an owner of the Mortgage Loans at any time during such calendar year as
required by applicable law or if not required by applicable law, at the
request of such owner as to the aggregate of remittances for the applicable
portion of such year.
Such obligation of the Servicer shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Internal Revenue Code as from
time to time are in force.
Beginning with calendar year 2000, the Servicer shall prepare and file
any and all tax returns, information statements or other filings for the
portion of the tax year 1999 and the portion of subsequent tax years for which
the Servicer has serviced some or all of the Mortgage Loans hereunder as such
returns, information statements or other filings are required to be delivered
to any governmental taxing authority or to the Master Servicer pursuant to any
applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby. In addition, the Servicer shall provide the Master
Servicer with such information concerning the Mortgage Loans as is necessary
for the Master Servicer to prepare the Trust Fund's federal income tax return
as the Master Servicer may reasonably request from time to time.
Section 4.03 Monthly Advances by Servicer.
The Servicer shall make Monthly Advances through the Remittance Date
immediately preceding the distribution of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the related Mortgage Loans.
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.
As consideration for servicing the Mortgage Loans subject to this
Agreement, the Servicer shall retain the relevant Servicing Fee for each
Mortgage Loan remaining subject to this Agreement during any month. Such
Servicing Fee shall be payable monthly. The Servicing Fees shall be payable
only at the time of and with respect to those Mortgage Loans for which payment
is in fact made of the entire amount of the Monthly Payment or as otherwise
provided in Section 3.04. The obligation of the Trustee to pay the Servicing
Fees is limited as provided in Section 3.04. The aggregate of the Servicing
Fees payable to the Servicer for any month with respect to the Mortgage Loans
shall be reduced by any Prepayment Interest Shortfall Amount with respect to
such month.
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled
to reimbursement thereof except as specifically provided for herein.
Section 5.02 Annual Audit Report.
On or before April 30 of each year, beginning with April 30, 2000,
Servicer shall, at its own expense, cause a firm of independent public
accountants (who may also render other services to Servicer), which is a
member of the American Institute of Certified Public Accountants, to furnish
to the Seller and Master Servicer (i) year-end audited (if available)
financial statements of the Servicer and (ii) a statement to the effect that
such firm has examined certain documents and records for the preceding fiscal
year (or during the period from the date of commencement of such servicer's
duties hereunder until the end of such preceding fiscal year in the case of
the first such certificate) and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, such firm is of the opinion that Servicer's
overall servicing operations have been conducted in compliance with the
Uniform Single Attestation Program for Mortgage Bankers except for such
exceptions that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers requires it to report, in which case such
exceptions shall be set forth in such statement.
Section 5.03 Annual Officer's Certificate.
On or before April 30 of each year, beginning with April 30, 2000, the
Servicer, at its own expense, will deliver to the Seller and Master Servicer a
Servicing Officer's certificate stating, as to each signer thereof, that (i) a
review of the activities of the Servicer during such preceding fiscal 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 Servicer has fulfilled all its obligations under this Agreement
for such year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officers and the
nature and status thereof including the steps being taken by the Servicer to
remedy such default.
ARTICLE VI.
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer.
The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Seller as of the Closing Date:
(a) Due Organization and Authority. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the state
of Delaware and has all licenses, or is in the process of obtaining all
licenses (which in any event will be received by the Closing Date), necessary
to carry on its business as now being conducted and is licensed, qualified and
in good standing in each state where a Mortgaged Property is located if the
laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Servicer, and in any event the Servicer
is in compliance with the laws of any such state to the extent necessary to
ensure the enforceability of the terms of this Agreement; the Servicer has the
full power and authority to execute and deliver this Agreement and to perform
in accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered pursuant to
this Agreement) by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Servicer and
all requisite action has been taken by the Servicer to make this Agreement
valid and binding upon the Servicer in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer;
(c) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition of the servicing responsibilities by the Servicer or the
transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Servicer's
organizational documents or any legal restriction or any agreement or
instrument to which the Servicer is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which the Servicer or its property is subject, or impair the ability
of the Servicer to service the Mortgage Loans, or impair the value of the
Mortgage Loans;
(d) Ability to Perform. The Servicer 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;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Servicer which, either in any
one instance or in the aggregate, may result in any material adverse change in
the business, operations, financial condition, properties or assets of the
Servicer, or in any material impairment of the right or ability of the
Servicer to carry on its business substantially as now conducted, or in any
material liability on the part of the Servicer, or which would draw into
question the validity of this Agreement or of any action taken or to be taken
in connection with the obligations of the Servicer contemplated herein, or
which would be likely to impair materially the ability of the Servicer to
perform under the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of or compliance by the Servicer with
this Agreement, or if required, such consent, approval, authorization or order
will be obtained prior to the Closing Date;
(g) Ability to Service. The Servicer is or will be prior to the Closing
Date an FHA Approved Mortgagee, a VA Approved Lender and an approved
seller/servicer of conventional residential mortgage loans for FNMA, FHLMC or
GNMA, with the facilities, procedures, and experienced personnel necessary for
the sound servicing of mortgage loans of the same type as the Mortgage Loans.
The Servicer is or will be prior to the Closing Date in good standing to
service mortgage loans for the FHA and the VA and either FNMA, FHLMC or GNMA.
Aurora Loan Services Inc. is a member in good standing of the MERS system;
(h) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated hereby contains
any untrue statement of fact or omits to state a fact necessary to make the
statements contained therein not misleading; and
(i) No Commissions to Third Parties. The Servicer has not dealt with any
broker or agent or anyone else who might be entitled to a fee or commission in
connection with this transaction other than the Seller.
Section 6.02 Remedies for Breach of Representations and Warranties of the
Servicer.
It is understood and agreed that the representations and warranties set
forth in Section 6.01 shall survive the engagement of the Servicer to perform
the servicing responsibilities as of the Closing Date hereunder and the
delivery of the Servicing Files to the Servicer and shall inure to the benefit
of the Seller and the Trustee. Upon discovery by either the Servicer, the
Master Servicer or the Seller of a breach of any of the foregoing
representations and warranties which materially and adversely affects the
ability of the Servicer to perform its duties and obligations under this
Agreement or otherwise materially and adversely affects the value of the
Mortgage Loans, the Mortgaged Property or the priority of the security
interest on such Mortgaged Property or the interest of the Seller or the
Trustee, the party discovering such breach shall give prompt written notice to
the other.
Within 60 days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation or warranty set forth in Section
6.01 which materially and adversely affects the ability of the Servicer to
perform its duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Mortgage Loans, the
Mortgaged Property or the priority of the security interest on such Mortgaged
Property, the Servicer shall use its Best Efforts promptly to cure such breach
in all material respects and, if such breach cannot be cured, the Servicer
shall, at the Trustee's option, assign the Servicer's rights and obligations
under this Agreement (or respecting the affected Mortgage Loans) to a
successor Servicer selected by the Trustee. Such assignment shall be made in
accordance with Sections 9.01 and 9.02.
In addition, the Servicer shall indemnify the Seller and the Master
Servicer and hold each of them harmless against any Costs resulting from any
claim, demand, defense or assertion based on or grounded upon, or resulting
from, a breach of the Servicer representations and warranties contained in
this Agreement. It is understood and agreed that the remedies set forth in
this Section 6.02 constitute the sole remedies of the Master Servicer and the
Trustee respecting a breach of the foregoing representations and warranties.
Any cause of action against the Servicer relating to or arising out of
the breach of any representations and warranties made in Section 6.01 shall
accrue upon (i) discovery of such breach by the Servicer or notice thereof by
the Seller or Master Servicer to the Servicer, (ii) failure by the Servicer to
cure such breach within the applicable cure period, and (iii) demand upon the
Servicer by the Seller or the Master Servicer for compliance with this
Agreement.
Section 6.03 Additional Indemnification by the Servicer; Third Party
Claims.
The Servicer shall indemnify the Seller, the Master Servicer and the
Trust Fund and hold them harmless against any and all Costs that the
indemnified party may sustain in any way related to (i) the failure of the
Servicer to perform its duties and service the Mortgage Loans in material
compliance with the terms of this Agreement or (ii) the failure of the
Servicer to cause any event to occur which requires its "Best Efforts" under
this Agreement. The Servicer shall immediately notify the Seller, the Master
Servicer, the Trustee, or any other relevant party if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans, assume (with
the prior written consent of the indemnified party) the defense of any such
claim and pay all expenses in connection therewith, including counsel fees,
promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or any indemnified party in respect of such claim and
follow any written instructions received from such indemnified party in
connection with such claim. Each indemnified party, as applicable, promptly
shall reimburse the Servicer for all amounts advanced by it pursuant to the
preceding sentence except when the claim is in any way related to the
Servicer's indemnification pursuant to Section 6.02, or the failure of the
Servicer to service and administer the Mortgage Loans in material compliance
with the terms of this Agreement. In the event a dispute arises between an
indemnified party and the Servicer with respect to any of the rights and
obligations of the parties pursuant to this Agreement, and such dispute is
adjudicated in a court of law, by an arbitration panel or any other judicial
process, then the losing party shall indemnify and reimburse the winning party
for all attorney's fees and other costs and expenses related to the
adjudication of said dispute.
ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification
to do business as a foreign entity in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer 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 shall be an institution (i)
having a net worth of not less than $25,000,000, and (ii) which is a FNMA-,
FHLMC-, and GNMA-approved servicer in good standing and an FHA approved
Mortgagee and a VA Approved Lender.
Section 7.02 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Seller, the Master
Servicer or the Trustee for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment, provided, however, that this provision shall not protect the
Servicer or any such person against any breach of warranties or
representations made herein, or failure to perform its obligations in strict
compliance with any standard of care set forth in this Agreement, or any
liability which would otherwise be imposed by reason of any breach of the
terms and conditions of this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Servicer may, with the consent of the Master
Servicer, undertake any such action which it may deem necessary or desirable
in respect of this Agreement and the rights and duties of the parties hereto.
In such event, the Servicer shall be entitled to reimbursement from the Trust
Fund for the reasonable legal expenses and costs of such action.
Section 7.03 Limitation on Resignation and Assignment by the Servicer.
The Seller has entered into this Agreement with the Servicer in reliance
upon the independent status of the Servicer, and the representations as to the
adequacy of its servicing facilities, plant, personnel, records and
procedures, its integrity, reputation and financial standing, and the
continuance thereof. Therefore, the Servicer shall neither assign its rights
under this Agreement or the servicing hereunder nor delegate its duties
hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets without, in each case, the prior
written consent of the Seller and the Master Servicer, which consent, in the
case of an assignment of rights or delegation of duties, shall be granted or
withheld in the discretion of the Seller and the Master Servicer, and which
consent, in the case of a sale or disposition of all or substantially all of
the property or assets of the Servicer, shall not be unreasonably withheld;
provided, that in each case, there must be delivered to the Master Servicer
and the Trustee a letter from each Rating Agency to the effect that such
transfer of servicing or sale or disposition of assets will not result in a
qualification, withdrawal or downgrade of the then-current rating of any of
the Certificates.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Master Servicer
or upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Servicer. Any
such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Master
Servicer and the Trustee which Opinion of Counsel shall be in form and
substance acceptable to the Master Servicer and the Trustee. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided
in Section 9.01.
Without in any way limiting the generality of this Section 7.03, in the
event that the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written consent of the Seller and the
Master Servicer, then the Seller or the Master Servicer shall have the right
to terminate this Agreement upon notice given as set forth in Section 8.01,
without any payment of any penalty or damages and without any liability
whatsoever to the Servicer or any third party.
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause.
This Agreement shall be terminable at the option of the Seller or the
Master Servicer if any of the following events of default exist on the part of
the Servicer:
(i) any failure by the Servicer to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of two Business Days after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Master Servicer; or
(ii) failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement which continues unremedied for a period
of 30 days; or
(iii) failure by the Servicer to maintain its license to do business
or service residential mortgage loans in any jurisdiction, if required by such
jurisdiction, where the Mortgaged Properties are located; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
(v) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its property; or
(vi) the 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, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of
its obligations or cease its normal business operations for three Business
Days; or
(vii) the Servicer ceases to meet the qualifications of a FNMA,
FHLMC or GNMA lender/servicer or ceases to be an FHA Approved Mortgagee or
ceases to be a VA Approved Lender; or
(viii) the Servicer attempts to assign the servicing of the Mortgage
Loans or its right to servicing compensation hereunder or the Servicer
attempts to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof, in each case without complying fully with the provisions of Section
7.03.
In each and every such case, so long as an event of default shall not
have been remedied, in addition to whatever rights the Seller or the Master
Servicer may have at law or equity to damages, including injunctive relief and
specific performance, the Seller or the Master Servicer, by notice in writing
to the Servicer, may, and shall, in the case of any default described in
clause (i) above, terminate all the rights and obligations of the Servicer
under this Agreement and in and to the servicing contract established hereby
and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in a successor
Servicer appointed by the Seller and the Master Servicer. Upon written request
from the Seller, the Servicer shall prepare, execute and deliver to the
successor entity designated by the Seller any and all documents and other
instruments, place in such successor's possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including but not limited
to the transfer and endorsement or assignment of the Mortgage Loans and
related documents, at the Servicer's sole expense. The Servicer shall
cooperate with the Seller and the Master Servicer and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by the Servicer to the Custodial Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.
By a written notice, the Seller and the Master Servicer may waive any
default by the Servicer in the performance of its obligations hereunder and
its consequences. Upon any waiver of a past default, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
Section 8.02 Termination Without Cause.
(a) This Agreement shall terminate upon: (i) the later of (x) the
distribution of the final payment or liquidation proceeds on the last Mortgage
Loan to the Master Servicer (or advances by the Servicer for the same), and
(y) the disposition of all REO Property acquired upon foreclosure of the last
Mortgage Loan and the remittance of all funds due hereunder and (ii) mutual
consent of the Servicer, Seller and the Master Servicer in writing.
(b) At the sole discretion of the Directing Holder, the Directing Holder
may terminate the rights and obligations of the Servicer under this Agreement.
Any such termination shall be with 30 days' prior notice, in writing and
delivered to the Trustee, the Master Servicer and the Servicer by registered
mail to the addresses set forth in Section 9.03 of this Agreement (in the case
of the Servicer or the Master Servicer) or in Section 11.07 of the Trust
Agreement (in the case of the Trustee). The Servicer shall comply with the
termination procedures set forth in Sections 7.03, 8.01 and 9.01 hereof. The
Master Servicer or the Trustee shall have no right to terminate the Servicer
pursuant to this Section 8.02(b).
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer.
Simultaneously with the termination of the Servicer's responsibilities
and duties under this Agreement (a) pursuant to Sections 6.02, 7.03, 8.01 or
8.02(a)(ii), the Master Servicer shall (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
clauses (i) and (ii) of Section 7.01 and which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement; or (b) pursuant
to Section 8.02(b), the Directing Holder shall appoint a successor having the
characteristics set forth in clauses (i) and (ii) of Section 7.01 and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement simultaneously with the
termination of the Servicer's responsibilities, duties and liabilities under
this Agreement. Any successor to the Servicer shall be subject to the approval
of the Master Servicer, the Trustee and each Rating Agency, shall be a member
in good standing of the MERS system (if any of the Mortgage Loans are MERS
Eligible Mortgage Loans, unless such Mortgage Loans are withdrawn from MERS
and Assignments of Mortgage are recorded in favor of the Trustee at the
expense of the successor Servicer) and shall be an FHA Approved Mortgagee and
a VA Approved Lender. Each Rating Agency must deliver to the Trustee a letter
to the effect that such transfer of servicing will not result in a
qualification, withdrawal or downgrade of the then-current rating of any of
the Certificates. In addition, with respect to any FHA Loans serviced
hereunder, the Servicer shall provide notice of such change in servicers to
HUD on HUD form 92080 or such other form as prescribed by HUD, at least 10
days after such transfer of servicing. In connection with such appointment and
assumption, the Master Servicer or the Seller, as applicable, may make such
arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree, provided, however, that
no such compensation shall be in excess of that permitted the Servicer under
this Agreement. In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or removal of the
Servicer pursuant to the aforementioned sections shall not become effective
until a successor shall be appointed pursuant to this Section 9.01 and shall
in no event relieve the Servicer of the representations and warranties made
pursuant to Sections 6.01 and the remedies available to the Seller under
Section 6.02 and 6.03, it being understood and agreed that the provisions of
such Sections 6.01, 6.02 and 6.03 shall be applicable to the Servicer
notwithstanding any such resignation or termination of the Servicer, or the
termination of this Agreement.
Within a reasonable period of time, but in no event longer than 30 days
of the appointment of a successor entity, the Servicer shall prepare, execute
and deliver to the successor entity any and all documents and other
instruments, place in such successor's possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including but not limited
to the transfer and endorsement of the Mortgage Notes and related documents,
and the preparation and recordation of Assignments of Mortgage. The Servicer
shall cooperate with the Trustee, the Master Servicer or the Seller, as
applicable, and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor Servicer, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Servicer to the Custodial Account or
Escrow Account or thereafter received with respect to the Mortgage Loans. Any
successor appointed as provided herein shall execute, acknowledge and deliver
to the Trustee, the Servicer, the Master Servicer and the Seller an instrument
(i) accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 6.01 (including a
representation that the successor Servicer is a member of MERS, unless none of
the Mortgage Loans are MERS Mortgage Loans or MERS Eligible Mortgage Loans or
any such Mortgage Loans have been withdrawn from MERS and Assignments of
Mortgage are recorded in favor of the Trustee) and (ii) an assumption of the
due and punctual performance and observance of each covenant and condition to
be performed and observed by the Servicer under this Agreement, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Servicer or termination of this Agreement pursuant to
Sections 6.02, 7.03, 8.01 or 8.02 shall not affect any claims that the Master
Servicer or the Trustee may have against the Servicer arising out of the
Servicer's actions or failure to act prior to any such termination or
resignation. In addition, in the event any successor Servicer is appointed
pursuant to Section 8.02(b) of this Agreement, such successor Servicer must
satisfy the conditions relating to the transfer of servicing set forth in
Section 11.14 of the Trust Agreement.
The Servicer shall deliver promptly to the successor Servicer the funds
in the Custodial Account and Escrow Account and all Mortgage Loan documents
and related documents and statements held by it hereunder and the Servicer
shall account for all funds and shall execute and deliver such instruments and
do such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer shall
notify the Trustee, the Seller and Master Servicer of such appointment in
accordance with the procedures set forth in Section 9.03.
Neither the Master Servicer nor any successor Servicer (including the
Seller and the Master Servicer) shall be liable for any acts or omissions of
the Servicer or any predecessor servicer. In particular, neither the Master
Servicer nor any successor Servicer (including the Seller and the Master
Servicer) shall be liable for any servicing errors or interruptions resulting
from any failure of the Servicer to maintain computer and other information
systems that are year-2000 compliant.
Section 9.02 Costs.
The Seller shall pay any legal fees and expenses of its attorneys. Costs
and expenses incurred in connection with the transfer of the servicing
responsibilities, including fees for delivering Servicing Files, shall be paid
by the Seller. Subject to Sections 2.02 and 3.01(a), the Depositor shall pay
the costs associated with the preparation, delivery and recording of
Assignments of Mortgages.
Section 9.03 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if sent by facsimile or mailed by
overnight courier, addressed as follows (or such other address as may
hereafter be furnished to the other party by like notice):
(i) if to the Seller:
Lehman Capital, A Division of
Lehman Brothers Holdings Inc.
Three World Financial Center
New York, New York 10285
Attention: Manager, Contract Finance
Telephone No.: (212) 526-5837
Telecopier No.: (212) 526-6154
(ii) if to the Master Servicer:
Norwest Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044
Telephone No.: (410) 884-2000
Telecopier No.: (410) 884-2360
Attention: Master Servicing, SASCO 1999-SP1
(iii) if to the Servicer:
Aurora Loan Services Inc.
2530 South Parker Road
Aurora, Colorado 80014
Attention: Rick Skogg
Telephone No.: (303) 745-3661
Telecopier No.: (303) 338-2289
and
Aurora Loan Services Inc.
601 Fifth Avenue
P.O. Box 1706
Scottsbluff, Nebraska 69361
Attention: Leo C. Trautman, Jr.
Telephone No.: (308) 635-3500
Telecopier No.: (308) 632-4287
Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee.
Section 9.04 Severability Clause.
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
be ineffective, as to such jurisdiction, 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. If the invalidity of any part, provision, representation
or warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
Section 9.05 No Personal Solicitation.
From and after the Closing Date, the Servicer hereby agrees that it will
not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Servicer's
behalf, to personally, by telephone or mail, solicit the borrower or obligor
under any Mortgage Loan (on a targeted basis) for any purposes of prepayment,
refinancing or modification of the related Mortgage Loan, provided, however,
that this limitation shall not prohibit Servicer from soliciting such
Mortgagor for purposes of prepayment, refinance or modification of any loan
owned or serviced by Servicer other than a Mortgage Loan. It is understood and
agreed that, among other marketing activities, promotions undertaken by
Servicer which are directed of the general public at large or which are
directed generally to a segment of the then existing customers of Servicer or
any of its direct or indirect subsidiaries (including, without limitation, the
mailing of promotional materials to Servicer's deposit customers by inserting
such materials into customer account statements, mass mailings based on
commercially acquired mailing lists and newspaper, radio and television
advertisements) shall not constitute solicitation under this section. In the
event the Servicer does refinance any Mortgage Loan as a result of a violation
of the requirements set forth in this Section 9.05, Servicer hereby agrees to
pay to the Trust Fund an amount equal to the difference, if any, between the
amount that the Trust Fund would have received if it had sold the Mortgage
Loan to a third party, and the proceeds received by the Servicer as result of
such refinancing.
Section 9.06 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 9.07 Place of Delivery and Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Seller in the State of New York and
shall be deemed to have been made in the State of New York. THIS AGREEMENT
SHALL BE GOVERNED BY, AND 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 THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
Section 9.08 Further Agreements.
The Seller and the Servicer each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
Section 9.09 Intention of the Parties.
It is the intention of the parties that the Seller is conveying, and the
Servicer is receiving only a contract for servicing the Mortgage Loans.
Accordingly, the parties hereby acknowledge that the Trust Fund remains the
sole and absolute owner of the Mortgage Loans and all rights (other than the
servicing rights) related thereto.
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable
by the Servicer, the Seller, the Trustee and the Master Servicer and their
respective successors and assigns. This Agreement shall not be assigned,
pledged or hypothecated by the Servicer to a third party except in accordance
with Section 7.03.
Section 9.11 Assignment by Lehman Capital.
The Seller shall have the right, upon notice to but without the consent
of the Servicer, to assign, in whole or in part, its interest under this
Agreement to the Depositor, which in turn shall assign such rights to the
Trustee, and the Trustee then shall succeed to all rights of the Seller under
this Agreement. All references to the Seller in this Agreement shall be deemed
to include its assignee or designee and any subsequent assignee or designee,
specifically including the Trustee.
Section 9.12 Intended Third Party Beneficiaries.
Notwithstanding any provision herein to the contrary, the parties to this
Agreement agree that it is appropriate, in furtherance of the intent of such
parties as set forth herein, that the Master Servicer and the Directing Holder
receive the benefit of the provisions of this Agreement as intended third
party beneficiaries of this Agreement to the extent of such provisions. The
Servicer shall have the same obligations to the Master Servicer and the
Directing Holder as if they were parties to this Agreement, and the Master
Servicer and the Directing Holder shall have the same rights and remedies to
enforce the provisions of this Agreement as if they were parties to this
Agreement. The Servicer shall only take direction from the Master Servicer (if
direction by the Master Servicer is required under this Agreement) unless
otherwise directed by this Agreement. Notwithstanding the foregoing, all
rights and obligations of the Master Servicer hereunder (other than the right
to indemnification) shall terminate upon termination of the Trust Agreement
and of the Trust Fund pursuant to Article VII of the Trust Agreement.
Section 9.13 Waivers.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
Section 9.14 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 9.15 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) a reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
(f) the term "include" or "including" shall mean by reason of
enumeration.
Section 9.16 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
<PAGE>
IN WITNESS WHEREOF, the Servicer and the Seller have caused their names
to be signed hereto by their respective officers thereunto duly authorized as
of the date first above written.
LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., as Seller
By: /s/ Joseph J. Kelly
--------------------------------
Name: Joseph J. Kelly
Title: Authorized Signatory
AURORA LOAN SERVICES INC.,
as Servicer
By: /s/ Leo C. Trautman, Jr.
-------------------------------
Name: Leo C. Trautman, Jr.
Title: Executive Vice President
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 199_
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Servicing Agreement, dated as of April 1, 1999 (the
"Agreement"), we hereby authorize and request you to establish an account, as
a Custodial Account pursuant to Section 3.03 of the Agreement, to be
designated as "Aurora Loan Services Inc., in trust for the Master Servicer for
SASCO 1999-SP1." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. This letter is submitted to you in
duplicate. Please execute and return one original to us.
AURORA LOAN SERVICES INC.
By:___________________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such
account as provided above.
__________________________________
Depository
By:_______________________________
Name:
Title:
Date:
<PAGE>
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 199_
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Servicing Agreement, dated as of April 1, 1999 (the
"Agreement"), we hereby authorize and request you to establish an account, as
an Escrow Account pursuant to Section 3.05 of the Agreement, to be designated
as "Aurora Loan Services Inc., in trust for the Master Servicer for SASCO
1999-SP1." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. This letter is submitted to you in
duplicate. Please execute and return one original to us.
AURORA LOAN SERVICES INC.
By:___________________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such
account as provided above.
_____________________________________
Depository
By:__________________________________
Name:
Title:
Date:
EXHIBIT 99.4
Execution
SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT (this "Agreement"), entered into as of
the 1st day of April, 1999, by and between LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation ("Lehman Capital"), and
OCWEN FEDERAL BANK FSB, a federal savings bank (the "Special Servicer"):
RECITALS
WHEREAS, Lehman Capital has conveyed certain Mortgage Loans identified on
Schedule I hereto (the "Serviced Mortgage Loans") to Structured Asset
Securities Corporation ("SASCO"), which in turn has conveyed the Serviced
Mortgage Loans to The First National Bank of Chicago, as trustee (the
"Trustee") under a trust agreement dated as of April 1, 1999 (the "Trust
Agreement"), among the Trustee, Norwest Bank Minnesota, National Association,
as master servicer ("Norwest," and, together with any successor Master
Servicer appointed pursuant to the provisions of the Trust Agreement, the
"Master Servicer") and SASCO.
WHEREAS, multiple classes of Certificates, including the Class X
Certificate, will be issued on the Closing Date pursuant to the Trust
Agreement, and Lehman Brothers Inc. or a nominee thereof (together with any
successor in interest thereto and any permitted assignee or transferee
thereof, the "Directing Holder") is expected to be the initial registered
Holder of the Class X Certificate.
WHEREAS, Lehman Capital desires that the Special Servicer perform the
services with respect to the Serviced Mortgage Loans as provided in this
Agreement (including those provisions that are incorporated by reference
herein), and the Special Servicer has agreed to do so, subject to the
conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be obligated,
among other things, to supervise the servicing of the Serviced Mortgage Loans
on behalf of the Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Special Servicer
under this Special Servicing Agreement.
WHEREAS, Lehman Capital and the Special Servicer acknowledge and agree
that Lehman Capital will assign all of its rights and delegate all of its
obligations hereunder to the Trustee, and that each reference herein to Lehman
Capital is intended, unless otherwise specified, to mean Lehman Capital or the
Trustee, as assignee, whichever is the owner of the Mortgage Loans from time
to time.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Lehman Capital and the Special
Servicer hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this Agreement,
including Exhibit A hereto and any provisions of the Servicing Agreement dated
as of December 1, 1997, between Lehman Capital and the Special Servicer (the
"Servicing Agreement") incorporated by reference herein, shall have the
meanings ascribed to such terms in the Trust Agreement.
2. Special Servicing. The Special Servicer agrees, with respect to the
Serviced Mortgage Loans, to perform and observe the duties, responsibilities
and obligations that are to be performed and observed under the provisions of
the Servicing Agreement, except as otherwise provided herein and on Exhibit A
hereto, and that the provisions of the Servicing Agreement, as so modified,
are and shall be a part of this Agreement to the same extent as if set forth
herein in full.
3. Master Servicing; Termination of Special Servicer. The Special
Servicer, including any successor special servicer hereunder, shall be subject
to the supervision of the Master Servicer, which Master Servicer shall be
obligated to ensure that the Special Servicer services the Serviced Mortgage
Loans in accordance with the provisions of this Agreement. The Master
Servicer, acting on behalf of the Trustee pursuant to the Trust Agreement,
shall have the same rights as the "Owner" (as defined in the Servicing
Agreement) to enforce the obligations of the Special Servicer under the
Servicing Agreement. The Master Servicer shall be entitled to terminate the
rights and obligations of the Special Servicer under this Agreement upon the
failure of the Special Servicer to perform any of its obligations under this
Agreement, after the expiration of any notice and cure periods, if any, as
provided in Section 9.01 of the Servicing Agreement. If the Special Servicer
is in default under this Agreement, after the expiration of any notice and
cure periods, if any, the Master Servicer shall, upon the written direction of
the Directing Holder, terminate the rights and obligations of the Special
Servicer under this Agreement.
Upon prior written notice, the Directing Holder shall have the exclusive
right to terminate the rights and obligations of the Special Servicer under
this Agreement without cause and without payment of any termination fee in
connection with such termination; provided, that (i) any successor special
servicer shall be appointed in the manner provided below and pursuant to
Section 11.14 of the Trust Agreement and (ii) a letter is provided to the
Trustee from each Rating Agency to the effect that such termination and
appointment will not result in the qualification, reduction, or withdrawal of
the ratings applicable to the Certificates.
Notwithstanding anything to the contrary in Sections 9.01, 9.02 and 10.01
of the Servicing Agreement, the Directing Holder shall, within 30 days of the
receipt by the Special Servicer of a copy of any termination notice delivered
by the Master Servicer to the Special Servicer or upon delivery by the
Directing Holder of any such notice pursuant Section 9.02 or upon receipt by
the Directing Holder of any resignation notice given by the Special Servicer,
notify the Trustee and the Master Servicer in writing of the Directing
Holder's nominee as successor special servicer, which nominee shall be
appointed as special servicer by the Master Servicer unless the Master
Servicer reasonably objects to such nominee within 10 days following receipt
of such notice. If the Master Servicer objects to such nominee, then the
Master Servicer shall, within such 10-day period, appoint a successor special
servicer, which successor shall be reasonably acceptable to the Directing
Holder. In addition to any other requirements or qualifications set forth
herein, any successor special servicer shall be a member in good standing of
the MERS system.
4. No Representations. Neither the Special Servicer nor the Master
Servicer shall be obligated or required to make any representations and
warranties regarding the Serviced Mortgage Loans in connection with the
transactions contemplated by the Trust Agreement and issuance of the
certificates issued pursuant thereto.
5. Notices. All notices and communications between or among the parties
hereto shall be in writing and shall be deemed received or given when mailed
first-class mail, postage prepaid, addressed to each other party at its
address specified below. Each party may designate to the other parties in
writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
6. Governing Law. THIS SPECIAL SERVICING AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
8. Reconstitution. Lehman Capital and the Special Servicer agree that
this Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Servicing Agreement. This
Agreement amends the terms and provisions of the Servicing Agreement only with
respect to the Serviced Mortgage Loans identified on Schedule I hereto and
does not purport to amend or modify the Servicing Agreement with respect to
any other loans that are or may become subject to the Servicing Agreement.
9. Notices and Remittances to the Master Servicer. All notices required
to be delivered to the Owner or the Master Servicer under this Agreement shall
be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044
Attn: Master Servicing Department, SASCO 1999-SP1
Copies of all such notices, and all notices to be delivered to the
initial Directing Holder under this Agreement, shall be delivered to the
Directing Holder at the following address:
Lehman Brothers Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
Attn: Mortgage-Backed Securities
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 091-000-019
Account Name: Corporate Trust Clearing
Account Number: 3970771416
For further credit to: 13529800, SASCO 1999-SP1
10. Transfer of Rights of Directing Holder. All rights of the Directing
Holder hereunder and under the Trust Agreement and all obligations of the
other parties hereto with respect to the Directing Holder shall, immediately
upon the transfer of the Class X Certificate to any other Person, be
transferred to and rest in such other Person.
11. Intended Third Party Beneficiaries. Notwithstanding any provision
herein to the contrary, the parties to this Agreement agree that is
appropriate, in furtherance of the intent of such parties as set forth herein,
that the Master Servicer and the Directing Holder receive the benefit of the
provisions of this Agreement as intended third party beneficiaries of this
Agreement to the extent of such provisions. The Servicer shall have the same
obligations to the Master Servicer and the Directing Holder as if they were
parties to this Agreement, and the Master Servicer and the Directing Holder
shall have the same rights and remedies to enforce the provisions of this
Agreement as if they were parties to this Agreement. Notwithstanding the
foregoing, all rights and obligations of the Master Servicer hereunder (other
than the right to indemnification) shall terminate upon termination of the
Trust Agreement and of the Trust Fund pursuant to Article VII of the Trust
Agreement.
12. Annual Audit Report. On or before April 30 of each year, beginning
with April 30, 2000, Special Servicer shall cause a firm of independent public
accountants (who may also render other services to Special Servicer), which is
a member of the American Institute of Certified Public Accountants, to furnish
to the Owner, the Directing Holder and Master Servicer, (i) year-end audited
(if available) financial statements of the Special Servicer and (ii) a
statement to the effect that such firm has examined certain documents and
records for the preceding calendar year (or during the period from the date of
commencement of such servicer's duties hereunder until the end of such
preceding calendar year in the case of the first such certificate) and that,
on the basis of such examination conducted substantially in compliance with
the Uniform Single Attestation Program for Mortgage Bankers, such firm is of
the opinion that Special Servicer's overall servicing operations have been
conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers except for such exceptions that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers requires it to
report, in which case such exceptions shall be set forth in such statement.
13. Annual Officer's Certificate. On or before April 30 of each year,
beginning with April 30, 2000, the Special Servicer, at its own expense, will
deliver to the Owner, the Directing Holder and Master Servicer a Servicing
Officer's certificate stating, as to each signer thereof, that (i) a review of
the activities of the Special Servicer during such preceding fiscal 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 Special Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
all such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Special
Servicer to remedy such default.
<PAGE>
Executed as of the day and year first above written.
LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Joseph J. Kelly
-----------------------------------
Name: Joseph J. Kelly
Title: Authorized Signatory
OCWEN FEDERAL BANK FSB
By: /s/ Ronald M Faris
-----------------------------------
Name: Ronald M. Faris
Title: Executive Vice President
<PAGE>
EXHIBIT A
Modifications to the Servicing Agreement
1. The following is hereby added immediately following the words "incidental
fees and charges" in the definition of "Ancillary Income" in Article I:
", but not including any premium or penalty associated with a prepayment
of principal of a Mortgage Loan."
2. The definition of "Base Servicing Fee" is hereby amended by deleting the
last sentence therefrom.
3. The definition of "Business Day" is hereby deleted and replaced with the
following:
"Business Day: Any day other than (i) a Saturday or Sunday, or (ii)
a day on which banking and savings and loan institutions in the States of
Florida, Maryland, Minnesota or New York are authorized or obligated by
law or executive order to be closed."
4. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"The custodial agreement relating to custody of the Serviced
Mortgage Loans among Norwest Bank Minnesota, National Association, as
Custodian, The First National Bank of Chicago, as Trustee, and
Structured Asset Securities Corporation, dated as of April 1, 1999."
5. The definition of "Distressed Mortgage Loan" in Article I is hereby
deleted and replaced with the following:
"Any Mortgage Loan with respect to which the related Mortgagor
is 91 or more days delinquent (without giving effect to any grace period
permitted by the related Mortgage Note) in the payment of a scheduled
Monthly Payment."
6. The following is hereby added immediately following the words "Special
Servicer" in the definition of "Opinion of Counsel" in Article I:
"(except that such counsel must be Independent (as defined in the Trust
Agreement) outside counsel with respect to any such opinion relating to
the REMIC Provisions)."
7. The definition of "Primary Servicer" in Article I is hereby deleted and
replaced with the following:
"Aurora Loan Services Inc. or any of its successors."
8. The definition of "Prepayment Interest Shortfall Amount" is hereby
amended by adding the words "or in part" immediately following the words
"subject to a Principal Prepayment in full."
9. The following definitions are hereby added to Article I:
"Monthly Advance: With respect to each Remittance Date and each
Mortgage, an amount equal to the Monthly Payment (with the interest
portion of such Monthly Payment adjusted to the Mortgage Loan Remittance
Rate) which was due on the Mortgage Loan, and (i) which was delinquent at
the close of business on the immediately preceding Determination Date and
(ii) which was not the subject of a previous Monthly Advance, unless such
Advance would constitute a Nonrecoverable Advance."
"REMIC Provisions: The provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of
Subchapter M of Chapter 1, Subtitle A of the Code, and related provisions,
and regulations, rulings or pronouncements promulgated thereunder, as the
foregoing may be in effect from time to time."
10. The definition of "First Remittance Date" in Article I is hereby deleted
and replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the first
Business Day immediately following) of the month, following the month in
which the related Transfer Date occurs."
11. The definition of "Remittance Date" in Article I is hereby deleted and
replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the first
Business Day immediately following) of any month, following the First
Remittance Date."
12. Section 2.03 is hereby amended by deleting the first, second and third
paragraphs thereof in their entirety and, in the fourth paragraph
thereof, deleting the following: "(and any applicable Acknowledgement
Agreement)".
13. Section 2.05(a)(i) is deleted in its entirety and replaced with the
following:
"(a)(i) Within five business days following a Transfer Date, the
Special Servicer shall reimburse the Primary Servicer for all principal
and interest and Servicing Advances made by such Primary Servicer and all
accrued and unpaid Servicing Fees due to the Primary Servicer with
respect to any Transferred Mortgage Loan identified on such Notice of
Transfer for which the Primary Servicer has not been reimbursed.
Thereafter, such amounts paid by the Special Servicer, if any, shall be
reimbursed to the Special Servicer in accordance with Section 3.04
hereof."
14. Section 3.01 is hereby amended by deleting clause (a) of the third
paragraph of subsection (B) thereof and by adding the following at the
end of such Section:
"(C) In connection with the transfer of any Distressed Mortgage
Loan, (i) the Special Servicer will be responsible for servicing the
Distressed Mortgage Loan from and after the effective date of transfer of
servicing to the Special Servicer, but shall have no obligation to
service such Distressed Mortgage Loan on or prior to such effective date
of the transfer of servicing, (ii) notwithstanding clause (i) above, the
Special Servicer shall not include the Distressed Mortgage Loan in its
monthly remittance report pursuant to Section 4.02 for the month in which
such transfer is effected and shall not be obligated to make the Monthly
Advance with respect to such Distressed Mortgage Loan on the Remittance
Date in the month in which such transfer is effected, in each case,
regardless of whether the Remittance Date occurs before or after the
effective date of such transfer, (iii) the amount of Monthly Advances to
be reimbursed to the Servicer by the Special Servicer hereunder shall
include the Monthly Advance made by the Servicer on such Remittance Date,
regardless of whether the Servicer makes such Monthly Advance before or
after the effective date of such transfer, and (iv) the Special Servicer
shall be entitled to the Base Servicing Fee with respect to each such
Distressed Mortgage Loan for the entire month in which such transfer
occurs.
Promptly after the transfer of any Distressed Mortgage Loan, the
Special Servicer shall use its best reasonable efforts to determine
whether any seller's representation or warranty applicable to such
Mortgage Loan has been breached, and shall notify the Trustee and the
Master Servicer in writing of any possible breach so identified. The
Special Servicer may conclusively rely upon information provided by
Lehman Capital, and its successors and assigns, including copies of any
related agreements of sale, in determining which representations and
warranties are applicable to such Mortgage Loan."
15. The words "Special Servicer, in trust for Lehman Capital, A Division of
Lehman Brothers Holdings, Inc., owner of Residential Mortgage Loans,
Group No. ______, and various Mortgagors" in the first paragraph of
Section 3.03 are hereby deleted and replaced with the following: "as
directed by the Trustee."
16. Section 3.04(ii) is deleted in its entirety and replaced with the
following:
"(ii) to reimburse itself for unreimbursed advances of the Special
Servicer's funds made pursuant to Section 2.05 hereof, including advances
by the Special Servicer to reimburse the Primary Servicer for principal
and interest advances, Servicing Advances and unpaid servicing fees due
to them, if any, the Special Servicer's right to reimburse itself
pursuant to this subclause (ii) being limited to either (x) amounts
received on the related Transferred Mortgage Loan which represent late
payments of principal and/or interest respecting which any such advance
was made, and related Liquidation Proceeds, condemnation proceeds,
Insurance Proceeds, REO Disposition Proceeds and other amounts received
in respect of the related Mortgage Loan, it being understood that, in the
case of any such reimbursement, the Special Servicer's right thereto
shall be prior to the rights of the Owner, the Master Servicer, any
Primary Servicer and any Certificateholder or (y) any other amounts in
the Collection Account in the event that such advances have been deemed
to be Nonrecoverable Advances or are not recovered from recoveries in
respect of the related Transferred Mortgage Loan or REO Property after a
final determination has been made as to what amounts have been or will be
recovered, it being understood that for those Transferred Mortgage Loans
in foreclosure, the Owner shall reimburse the Special Servicer for
Servicing Advances and advances made pursuant to Section 2.05 hereof
through the completion of the sale of the defaulted Mortgage Loan, or the
foreclosure and disposition of the REO Property;"
17. Section 3.04 is hereby amended by deleting clause (iii) in its entirety
and replacing such clause with the following clauses (iii) and (iv):
"(iii) to reimburse itself for Monthly Advances of the Special
Servicer's funds made pursuant to Section 7.03, the Special Servicer's
right to reimburse itself pursuant to this subclause (iii) being limited
to amounts received on the related Mortgage Loan which represent late
payments of principal and/or interest respecting which any such advance
was made, related Liquidation Proceeds, Insurance Proceeds, condemnation
proceeds, REO Disposition Proceeds and other amounts received in respect
of the related REO Property, and such other amounts as may be collected
by the Special Servicer from the Mortgagor or otherwise relating to such
Mortgage Loan, it being understood that, in the case of any such
reimbursement, the Special Servicer's right thereto shall be prior to the
rights of the Owner, the Master Servicer, any Primary Servicer and any
Certificateholder; provided, that if the Special Servicer reasonably
determines that any unreimbursed Monthly Advance is a Nonrecoverable
Advance, the foregoing limitation shall not apply thereto;
(iv) to reimburse itself for unreimbursed Servicing Advances, and
for any unpaid Base Servicing Fees, the Special Servicer's right to
reimburse itself pursuant to this subclause (iv) with respect to any
Mortgage Loan being limited to related late collections, Liquidation
Proceeds, condemnation proceeds, Insurance Proceeds, REO Disposition
Proceeds and other amounts received in respect of the related REO
Property, and such other amounts as may be collected by the Special
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan,
it being understood that, in the case of any such reimbursement, the
Special Servicer's right thereto shall be prior to the rights of the
Owner; provided, that if the Special Servicer reasonably determines that
any unreimbursed Servicing Advance is a Nonrecoverable Advance, the
foregoing limitation shall not apply thereto;"
Clauses (iv) through (viii) in Section 3.04 are hereby redesignated
clauses (v) through (ix), as applicable.
18. The words "Special Servicer, in trust for Lehman Capital, A Division of
Lehman Brothers Holdings, Inc., owner of Residential Mortgage Loans,
Group No. ______, and various Mortgagors" in the first paragraph of
Section 3.05 are hereby deleted and replaced with the following: "as
directed by the Trustee."
19. Section 3.10(a) is deleted in its entirety and replaced with the
following:
"(a) Default Management Responsibilities: Subject only to Accepted
Servicing Practices and Section 3.11 below, the Special Servicer shall
have full power and authority 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 Special Servicer is hereby authorized and empowered by the
Owner (if, in the Special Servicer's reasonable judgment, such action
with respect to the Transferred Mortgage Loans and/or the Mortgaged
Properties is in the best interests of Owner in accordance with, or is
required by, this Agreement, and subject to Accepted Servicing Practices)
to take the following actions (without limitation): (i) prepare, execute
and deliver, on behalf of the Owner with expenses associated therewith
being Servicing Advances hereunder, any and all financing statements,
continuation statements and other documents or instruments necessary to
maintain the lien on each Mortgaged Property and related collateral; and,
subject to the remaining terms and provisions of this Section,
modifications, waivers (including, without limitation, waivers of any
late payment charge in connection with any delinquent payment on a
Transferred Mortgage Loan), consents, amendments, discounted payoff
agreements, forbearance agreements, cash management agreements or
consents to or with respect to any documents contained in the related
servicing file; and any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
instruments comparable to any of the types of instruments described in
this subsection (i), and (ii) institute and prosecute judicial and
non-judicial foreclosures, suits on promissory notes, indemnities,
guaranties or other loan documents, actions for equitable and/or
extraordinary relief (including, without limitation, actions for
temporary restraining orders, injunctions, and appointment of receivers),
suits for waste, fraud and any and all other tort, contractual and/or
other claims of whatever nature, and to appear in and file on behalf of
the Owner such pleadings or documents as may be necessary or advisable in
any bankruptcy action, state or federal suit or any other action. In the
event that any Mortgage Loan is in default or, in the judgment of the
Special Servicer, such default is reasonably foreseeable, the Special
Servicer, consistent with Accepted Servicing Practices, may waive, modify
or vary any term of such Mortgage Loan (including modifications that
would change the Mortgage Interest Rate, defer or 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 full outstanding and unpaid principal balance in final satisfaction
of such Mortgage or consent to the postponement of strict compliance with
any such term or otherwise grant indulgence to any Mortgagor if in the
Special Servicer's determination such waiver, modification, postponement
or indulgence is not materially adverse to the interests of the
Certificateholders (taking into account any estimated Realized Loss that
might result absent such action). In addition, if, with respect to a
Transferred Mortgage Loan, a default (or any condition resulting in a
default being reasonably foreseeable) is cured (such Mortgage Loan being
referred to herein as a "Performing Loan"), the Special Servicer may
thereafter waiver, modify or vary terms of such Performing Loan provided
that no such action will (A) decrease the Mortgage Rate on the Performing
Loan, (B) defer or forgive the payment of principal or interest (except
with respect to liquidation of such Performing Loan) or (C) extend the
final maturity date of such Performing Loan, provided, however, that no
such modification shall be permitted to the extent that it would (a)
affect adversely the status of the Trust Fund as a REMIC or (b) cause the
Trust Fund to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.
Notwithstanding anything to the contrary in this Agreement, the
Special Servicer shall not waive any premium or penalty in connection
with a prepayment of principal of any Mortgage Loan, and shall not
consent to the modification of any Mortgage Note to the extent that such
modification relates to payment of a prepayment premium or penalty;
provided, that the foregoing shall not (i) apply to any Severely
Delinquent Loan or (ii) prohibit the Special Servicer from entering into
any agreement for modification, waiver, forbearance, amendment or
discounted payoff of a Mortgage Loan in accordance with this Agreement
that does not have the effect of waiving any prepayment premium or
penalty or modifying any provision requiring payment thereof.
Notwithstanding the foregoing, in the event of any conflict between
the provisions of this Section 3.10 and the provisions of Section 3.11,
the provisions of Section 3.11 shall control."
20. Section 3.10(e) is hereby deleted in its entirety and replaced with the
following:
"(e) At any time, the Directing Holder may request that the Special
Servicer take a particular action with respect to a particular Mortgage
Loan, including without limitation foreclosure, waivers or modifications.
Any such request shall be in writing, a copy of which shall be delivered
to the Master Servicer. If the Special Servicer determines that such
requested action is consistent with Accepted Servicing Practices, then
the Special Servicer shall comply with such request. Within two Business
Days of receipt of such a request, the Special Servicer shall notify the
Directing Holder whether the Special Servicer intends to comply with such
request. If the Special Servicer does not comply with such request (or
fails to notify the Directing Holder of its decision within the two
Business Day period), then the Directing Holder may, at its sole option
and upon written notice to the Special Servicer and the Master Servicer,
purchase the related Mortgage Loan from the Trust Fund at the Purchase
Price (as defined in the Trust Agreement). In addition, the Directing
Holder may purchase any Severely Delinquent Mortgage Loan upon written
notice to the Master Servicer and the Special Servicer within three
Business Days of the day on which such Mortgage Loan becomes a Severely
Delinquent Loan.
The Special Servicer shall have the right to purchase any Severely
Delinquent Loan at the Purchase Price (as defined in the Trust
Agreement). The Special Servicer shall send a written notice (the
"Initial Notice") to the Directing Holder advising the Directing Holder
that the Special Servicer intends to purchase a Severely Delinquent Loan.
The Directing Holder shall have the option to (i) direct the Special
Servicer not to purchase any such Severely Delinquent Loan but to proceed
with a particular default resolution strategy consistent with Accepted
Servicing Practices, (ii) direct the Special Servicer to proceed with the
purchase of such loan on the terms proposed by the Special Servicer, or
(iii) indicate that the Directing Holder intends to purchase such
Severely Delinquent Loan, in which case such Directing Holder shall have
the sole right and option to purchase the Severely Delinquent Loan at the
Purchase Price; provided, however, that if the Directing Holder fails or
refuses to deliver a written notice of its election to the Special
Servicer within two Business Days after the Special Servicer has sent to
the Directing Holder the Initial Notice, then the Directing Holder shall
be deemed to have consented to the Special Servicer purchasing the
Severely Delinquent Loan for its own account."
21. The following Section 3.11 is hereby added immediately following Section
3.10:
"Section 3.11 REMIC Provisions.
(a) Unless the Mortgagor is in default with respect to the related
Mortgage Loan or such default is, in the judgment of the Special
Servicer, reasonably foreseeable, the Special Servicer shall not permit
any modification of any material term of any Mortgage Loan, including any
modification that would change the Mortgage Interest Rate, defer or
forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal),
change the final maturity date on such Mortgage Loan, or permit any
alteration, substitution or release of any collateral for such Mortgage
Loan.
(b) The Special Servicer shall dispose of any REO Property as soon
as possible and shall sell such REO Property in any event within three
years after title has been taken to such REO Property, unless (i) the
Owner shall have been supplied with an Opinion of Counsel to the effect
that the holding by the Trust Fund of such Mortgaged Property subsequent
to such three-year period (and specifying the period beyond such
three-year period for which the Mortgaged Property may be held) will not
result in the imposition of taxes on "prohibited transactions" of the
Trust Fund as defined in section 860F of the Code, or cause the related
REMIC to fail to qualify as a REMIC, in which case the Trust Fund may
continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel), or (ii) the Owner (at the Special
Servicer's expense) or the Special Servicer shall have applied for, not
later than 61 days prior to the expiration of such three-year period, an
extension of such three-year period in the manner contemplated by section
856(e)(3) of the Code, in which case the three-year period shall be
extended by the applicable period. If a period longer than three years is
permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Special Servicer shall report monthly to the Owner as
to the progress being made in selling such REO Property and (ii) if, with
the written consent of the Owner, a purchase money mortgage is taken in
connection with such sale, such purchase money mortgage shall name the
Special Servicer as mortgagee, and such purchase money mortgage shall not
be held pursuant to this Agreement, but instead a separate participation
agreement between the Special Servicer and the Owner shall be entered
into with respect to such purchase money mortgage.
Notwithstanding any other provision of this Agreement, no Mortgaged
Property held by a REMIC shall be rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of
the Trust Fund or sold in such a manner or pursuant to any terms that
would (i) cause such Mortgaged Property to fail to qualify at any time as
"foreclosure property" within the meaning of section 860G(a)(8) of the
Code, (ii) subject the Trust Fund to the imposition of any federal or
state income taxes on "net income from foreclosure property" with respect
to such Mortgaged Property within the meaning of section 860G(c) of the
Code, or (iii) cause the sale of such Mortgaged Property to result in the
receipt by the Trust Fund of any income from non-permitted assets as
described in section 860F(a)(2)(B) of the Code, unless the Special
Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes."
22. The first paragraph of Section 4.01 is hereby deleted and replaced with
the following:
"On each Remittance Date the Special Servicer shall remit by wire
transfer of immediately available funds to the Master Servicer (a) all
amounts deposited in the Custodial Account as of the close of business on
the last day of the related Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 3.04), plus
(b) all amounts, if any, which the Special Servicer is obligated to
advance pursuant to Section 7.03, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds or REO
Disposition Proceeds received after the applicable Prepayment Period,
which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in
accordance with Section 7.03, and minus (d) any amounts attributable to
Monthly Payments collected but due on a due date or dates subsequent to
the first day of the month in which such Remittance Date occurs, which
amounts shall be remitted on the Remittance Date next succeeding the Due
Period for such amounts."
23. Section 4.02 is hereby amended by deleting the words "Remittance Date" in
the first line of such Section, and substituting the following: "tenth
day of each month, or if such tenth day is not a Business Day, the
immediately preceding Business Day"
24. The following Section 7.03 is hereby added immediately following Section
7.02:
"Section 7.03 Monthly Advances and Compensating Interest.
(a) Notwithstanding anything to the contrary herein, the Special
Servicer shall make Monthly Advances (other than Balloon Payments as
defined in the Trust Agreement) on each Remittance Date through the
Remittance Date immediately preceding the distribution of all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds
and condemnation proceeds) with respect to the related Mortgage Loans,
unless such advances would constitute Nonrecoverable Advances.
(b) Notwithstanding anything to the contrary herein, with respect to
each Principal Prepayment of a Mortgage Loan the Special Servicer shall
deposit in the Custodial Account on a daily basis and retain therein the
Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Special Servicer's own
funds, without reimbursement therefor, up to a maximum amount per month
equal to the aggregate of the Base Servicing Fees otherwise payable to
the Special Servicer with respect to such month.
25. Section 9.02 is hereby deleted in its entirety.
26. The following paragraph is added at the end of Section 10.01:
"Neither the Master Servicer nor any successor special servicer
(including the Owner and the Master Servicer) shall be liable for any
acts or omissions of the Special Servicer or any predecessor servicer. In
particular, neither the Master Servicer nor any successor special
servicer (including the Owner and the Master Servicer) shall be liable
for any servicing errors or interruptions resulting from any failure of
the Special Servicer to maintain computer and other information systems
that are year-2000 compliant."
27. All references in the Servicing Agreement or in any schedules or exhibits
thereto, including, without limitation, Exhibit I, to the "Decision
Matrix" are hereby deleted in their entirety.
28. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date, the
period beginning on the Cut-off Date and ending on May 1, 1999. With
respect to each subsequent Remittance Date, the period commencing on the
second day of the month immediately preceding the month in which such
Remittance Date occurs and ending on the first day of the month in which
such Remittance Date occurs."
29. The definitions of "Extended Special Servicing Fee," "Incentive Fee,"
"Loss Severity Percentage" and "Special Servicing Fee" are hereby deleted
in their entirety.
30. Section 5.01 is hereby deleted in its entirety and replaced with the
following:
"Section 5.01 Servicing Compensation. As consideration for servicing
the Transferred Mortgage Loans subject to this Agreement, the Special
Servicer shall be entitled to receive such compensation as is specified
in a special servicing compensation agreement dated the Closing Date
between Lehman Capital and the Special Servicer."
May 21, 1999
VIA EDGAR
- ---------
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1999-SP1, (File No. 333-68513)
Dear Sirs:
Filed herewith on behalf of the trust fund (the "Trust") created pursuant
to a Trust Agreement dated as of April 1, 1999 (the "Agreement") among
Structured Asset Securities Corporation, as Depositor, Norwest Bank Minnesota,
National Association, as master servicer, and The First National Bank of
Chicago, as trustee (the "Trustee"), is a Current Report on Form 8-K (the
"Report").
The Trust consists primarily of three pools of adjustable and fixed rate,
fully amortizing and balloon, conventional, first and second lien residential
mortgage loans and certain other assets and has issued certificates
representing ten classes of beneficial ownership interests therein. Eight of
such classes of certificates were registered under the Securities Act of 1933,
as amended, by a Registration Statement on Form S-3 (File No. 333-68513). As a
result, the Trust is subject to the filing requirements of Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Trust intends to fulfill these filing requirements in a manner
substantially in accordance with the procedures outlined in numerous no-action
letters already issued by the Staff with respect to similar trusts (see, for
example, Nissan Motor Acceptance Corp. (August 29, 1986), Security Pacific
National Bank (July 1, 1987) and World Omni Lease Securitization L.P. (December
22, 1994)), for the same reasons as discussed in such letters. In particular:
<PAGE>
1. The Trust is filing, concurrently with the filing of this notification
letter and within 15 days of the Trust's formation, a Current Report on Form
8-K containing among other things, a copy of the Agreement.
2. The Trust will file promptly after each Distribution Date (as defined
in the Agreement) a Current Report on Form 8-K including as an exhibit thereto
the applicable servicing report. Each such Current Report will disclose under
Item 5 any matter occurring during the relevant reporting period which would be
reportable under Items 1, 2, 4 or 5 of Part II of Form 10-Q.
3. The Trust will file a Current Report on Form 8-K within 15 days after
the occurrence of any event described under Items 2, 3, 4 or 5 thereof,
responding to the requirements of the applicable Item.
4. Within 90 days after the end of each fiscal year, the Trust will file
an annual report on Form 10-K which responds to Items 2, 3 and 4 of Part I,
Items 5 and 9 of Part II, Items 12 and 13 of Part III and Item 14 of Part IV
thereof, and include as exhibits thereto certain information from the servicing
reports aggregated for such year and a copy of the independent accountants'
annual compliance statement required to be furnished by the servicer, in the
manner described in the applicable no-action letters.
The Trust will follow the above procedures except for any fiscal year as
to which its reporting obligations under Section 15(d) of the Exchange Act have
been suspended pursuant to such Section. In such event, the Trust will file a
Form 15 as required under Rule 15d-6.
We have been advised by counsel that they have been advised by
representatives of the Office of the Chief Counsel of the Division of
Corporation Finance that following the above procedures would be acceptable
notwithstanding the absence of a no-action letter specifically relating to the
Trust. We assume that the Staff will promptly inform us if our understanding is
incorrect or if its position in this area has changed. Please direct any
questions or comments concerning the foregoing to the undersigned at (212)
526-7000.
Very truly yours,
STRUCTURED ASSET SECURITIES CORPORATION
/s/ Stanley Labanowski
--------------------------------------
Name: Stanley Labanowski
Title: Vice President
