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)
June 24, 1999
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, 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 $144,957,000 in aggregate principal amount of
Class A-F, Class A-V, Class FX, Class VX and Class R Certificates of its Ocwen
Home Equity Loan Asset-Backed Certificates, Series 1999-OFS1 on June 24, 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 June 21, 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 June 1, 1999, among
Structured Asset Securities Corporation, as depositor (the "Depositor"), Ocwen
Financial Services, Inc., as master servicer, Ocwen Federal Bank FSB, as
special servicer and The Chase Manhattan Bank, as trustee. The "Certificates"
consist of the following classes: Class A-F, Class A-V, Class FX, Class VX and
Class R. The Certificates have the benefit of two irrevocable and
unconditional certificate guaranty insurance policies (the "Policies")
attached hereto as Exhibit 99.1 issued by MBIA Insurance Corporation. The
Certificates evidence all the beneficial ownership interest in a trust fund
that consists primarily of a pool of mortgage loans consisting of a group of
fixed-rate and a group of adjustable-rate, fully amortizing and balloon,
conventional, first lien residential mortgage loans (the "Mortgage Loans")
with an aggregate outstanding principal balance of $148,628,391.22 as of June
1, 1999, together with certain other assets. The Mortgage Loans were acquired
by the Depositor from LMAC, Inc. (the "Seller") pursuant to a Mortgage Loan
Sale Agreement attached hereto as Exhibit 99.2 and dated as of June 1, 1999,
between the Depositor and the Seller. 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 June 21, 1999, between Structured Asset
Securities Corporation and Lehman Brothers Inc.
4.1 Trust Agreement, dated as of June 1, 1999, among Structured Asset
Securities Corporation, as Depositor, Ocwen Financial Services, Inc.,
as Master Servicer, Ocwen Federal Bank FSB, as Special Servicer and
The Chase Manhattan Bank, as Trustee.
99.1 Mortgage Loan Sale Agreement, dated as of June 1, 1999, between LMAC,
Inc., as Seller, and Structured Asset Securities Corporation, as
Purchaser.
99.2 Certificate Guaranty Insurance Policies issued by MBIA Insurance
Corporation pursuant to the Insurance Agreement, dated as of June 1,
1999, among MBIA Insurance Corporation, as insurer, Ocwen Financial
Services, Inc, as master servicer and originator, LMAC, Inc, as
seller, Structured Asset Securities Corporation, as depositor, Ocwen
Federal Bank FSB, as special servicer and subservicer and The Chase
Manhattan Bank, as trustee.
<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: June 9, 1999
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
-------------
Exhibit No. Description Page No.
- ----------- ----------- --------
<S> <C> <C>
1.1 Terms Agreement, dated June 21, 1999, between Structured Asset
Securities Corporation and Lehman Brothers Inc.
4.1 Trust Agreement, dated as of June 1, 1999, among
Structured Asset Securities Corporation, as
Depositor, Ocwen Financial Services, Inc., as
Master Servicer, Ocwen Federal Bank FSB, as Special
Servicer and The Chase Manhattan Bank, as Trustee.
99.1 Mortgage Loan Sale Agreement, dated as of June 1, 1999, between
LMAC, Inc., as Seller, and Structured Asset Securities Corporation,
as Purchaser.
99.2 Certificate Guaranty Insurance Policies issued by
MBIA Insurance Corporation pursuant to the
Insurance Agreement, dated as of June 1, 1999,
among MBIA Insurance Corporation, as insurer, Ocwen
Financial Services, Inc, as master servicer and
originator, LMAC, Inc, as seller, Structured Asset
Securities Corporation, as depositor, Ocwen Federal
Bank FSB, as special servicer and subservicer and
The Chase Manhattan Bank, as trustee.
</TABLE>
<PAGE>
EXHIBIT 1.1
<PAGE>
EXHIBIT 4.1
<PAGE>
EXHIBIT 99.1
<PAGE>
EXHIBIT 99.2
STRUCTURED ASSET SECURITIES CORPORATION
HOME EQUITY LOAN ASSET BACKED CERTIFICATES, SERIES 1999-OFS1
TERMS AGREEMENT
---------------
Dated: June 21, 1999
To: Structured Asset Securities Corporation, as Depositor under the Trust
Agreement dated as of June 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-OFS1.
- ------------------
Terms of the Series 1999-OFS1 Certificates: Home Equity Loan Asset Backed
- --------------------------------------------
Certificates, Series 1999-OFS1, Class A-F, Class A-V, Class FX, Class VX 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 two pools of adjustable and fixed rate,
fully amortizing and balloon, conventional, first lien residential mortgage
loans (the "Mortgage Loans"). Only the Class A-F and Class A-V 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 A-F and
- -------------------
Class A-V Certificates that they be rated "AAA" by each of Moody's Investors
Service, Inc. ("Moody's") and Standard & Poor's Rating Services, a division of
The McGraw-Hill Companies, Inc. ("S&P," and together with Moody's, 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, if any, as described in the Prospectus Supplement, 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: June 1, 1999.
- ------------
Closing Date: 10:00 A.M., New York time, on or about June 24, 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:_______________________
Name:
Title:
Accepted:
STRUCTURED ASSET SECURITIES
CORPORATION
By:___________________________
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
Schedule 1
----------
Purchase
Initial Certificate Principal Certificate Price
Class Amount(1) Interest Rate Percentage
------------- ----------------------------- -------------- -----------
<S> <C> <C> <C>
Class A-F $92,537,000 7.28%(2) 99.634375%
Class A-V 52,420,000 (2)(3) 99.650000%
</TABLE>
-----------------
(1) Approximate.
(2) Subject to the Available Funds Cap as described in the Prospectus
Supplement.
(3) Interest will accrue on the Class A-V Certificates at the applicable
per annum rate described in the Prospectus Supplement.
EXECUTION
COPY
STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,
OCWEN FINANCIAL SERVICES, INC., as Master Servicer,
OCWEN FEDERAL BANK FSB, as Special Servicer,
and
THE CHASE MANHATTAN BANK, as Trustee
---------------------------
TRUST AGREEMENT
Dated as of June 1, 1999
---------------------------
OCWEN HOME EQUITY LOAN TRUST 1999-OFS1
HOME EQUITY LOAN ASSET-BACKED CERTIFICATES
SERIES 1999-OFS1
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.................................................2
Section 1.02. Calculations Respecting Mortgage Loans.....................43
ARTICLE II
DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance
of Mortgage Loans.......................................43
Section 2.02. Acceptance of Trust Fund by Trustee: Review of
Documentation for Trust .........Fund....................46
Section 2.03. Representations and Warranties of the Depositor............47
Section 2.04. Discovery of Breach........................................49
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans.....49
Section 2.06. Grant Clause...............................................50
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates...........................................51
Section 3.02. Registration...............................................51
Section 3.03. Transfer and Exchange of Certificates......................51
Section 3.04. Cancellation of Certificates...............................54
Section 3.05. Replacement of Certificates................................54
Section 3.06. Persons Deemed Owners......................................55
Section 3.07. Temporary Certificates.....................................55
Section 3.08. Appointment of Paying Agent................................55
Section 3.09. Book-Entry Certificates....................................55
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account.........................................57
Section 4.02. Application of Funds in the Collection Account.............58
Section 4.03. Reports to Certificateholders..............................58
Section 4.04. Certificate Account........................................61
Section 4.05. Determination of LIBOR.....................................62
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally....................................63
Section 5.02. Distributions from the Certificate Account.................63
Section 5.03. Reserved...................................................68
Section 5.04. Advances by Master Servicer and Trustee....................68
Section 5.05. Reserved...................................................69
Section 5.06. REMIC 1, REMIC 2 and REMIC 3 Allocations...................69
Section 5.07. Basis Risk Reserve Fund....................................72
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee..........................................72
Section 6.02. Certain Matters Affecting the Trustee......................74
Section 6.03. Trustee Not Liable for Certificates........................76
Section 6.04. Trustee May Own Certificates...............................76
Section 6.05. Eligibility Requirements for Trustee.......................76
Section 6.06. Resignation and Removal of Trustee.........................76
Section 6.07. Successor Trustee..........................................77
Section 6.08. Merger or Consolidation of Trustee.........................78
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian...78
Section 6.10. Authenticating Agents......................................80
Section 6.11. Indemnification of Trustee.................................80
Section 6.12. Fees and Expenses of Trustee...............................81
Section 6.13. Collection of Monies.......................................81
Section 6.14. Events of Default; Trustee To Act; Appointment
of Successor............................................82
Section 6.15. Additional Remedies of Trustee Upon Event of Default.......86
Section 6.16. Waiver of Defaults.........................................87
Section 6.17. Notification to Holders....................................87
Section 6.18. Directions by Certificateholders and Duties of
Trustee During Event of Default.........................87
Section 6.19. Action Upon Certain Failures of the Master Servicer
or the Special Servicer and Upon Event of Default.......87
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..........................................88
Section 7.02. Procedure Upon Termination of Trust Fund...................89
Section 7.03. Additional Trust Fund Termination Requirements.............89
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders............................90
Section 8.02. Access to List of Holders..................................91
Section 8.03. Acts of Holders of Certificates............................92
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 9.01. Duties of the Master Servicer and Sub-Servicers............92
Section 9.02. Collection of Certain Mortgage Loan Payments...............94
Section 9.03. Sub-Servicing Agreements Between Master Servicer
and Sub-Servicers.......................................95
Section 9.04. Successor Sub-Servicers....................................95
Section 9.05. Liability of Master Servicer; Indemnification..............96
Section 9.06. No Contractual Relationship Between Sub-Servicer,
Trustee, the Certificateholders or the
Certificate Insurer.....................................97
Section 9.07. Assumption or Termination of Sub-Servicing Agreement
by Trustee..............................................97
Section 9.08. Sub-Servicing Accounts.....................................97
Section 9.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts...............................98
Section 9.10. Collection Account and Certificate Account.................98
Section 9.11. Withdrawals from the Collection Account...................100
Section 9.12. Investment of Funds in the Collection Account,
the Expense Account and the Certificate Account........101
Section 9.13. Maintenance of Insurance..................................102
Section 9.14. Due-on-Sale Clauses; Assumption and Substitution
Agreements.............................................104
Section 9.15. Realization Upon Defaulted Mortgage Loans.................105
Section 9.16. Trustee to Cooperate; Release of Files....................107
Section 9.17. Servicing Compensation....................................109
Section 9.18. Annual Statement as to Compliance.........................109
Section 9.19. Annual Independent Certified Public Accountants'
Reports................................................109
Section 9.20. Access to Certain Documentation and Information
Regarding the Mortgage Loans...........................110
Section 9.21. Assignment and Delegation by Master Servicer;
Resignation of Master Servicer.........................110
Section 9.22. Inspections by the Trustee and the Certificate
Insurer; Errors and Omissions Insurance................111
Section 9.23. Title, Management and Disposition of REO Property.........112
Section 9.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.........................115
Section 9.25. Reserved..................................................115
Section 9.26. Obligations of the Master Servicer in Respect of
Mortgage Rates and Monthly Payments....................115
Section 9.27. Special Servicer..........................................115
Section 9.28. Special Servicer Compensation.............................115
Section 9.29. Reports to the Securities and Exchange Commission.........117
Section 9.30. Master Servicer's Financial Statements and
Related Information....................................117
Section 9.31. Representations and Warranties of the Master Servicer.....117
Section 9.32. Representations Regarding the Special Servicer............119
Section 9.33. Closing Certificate and Opinion...........................121
Section 9.34. Preparation of Tax Returns and Other Reports..............121
Section 9.35. Merger or Consolidation...................................121
Section 9.36. Limitation on Liability of the Master Servicer,
the Special Servicer and Others........................122
Section 9.37. Master Servicer Not to Resign.............................122
Section 9.38. Indemnification of the Trust and the Certificate
Insurer by the Master Servicer.........................123
Section 9.39. Indemnification of the Trust and the Certificate
Insurer by the Special Servicer........................123
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration.........................................124
Section 10.02. Prohibited Transactions and Activities.......................126
Section 10.03. Indemnification with Respect to Certain Taxes and
Loss of REMIC Status....................................126
Section 10.04. Reserved.....................................................127
ARTICLE XI
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 11.01. Rights of the Certificate Insurer To Exercise Rights
of Class A Certificateholders...........................127
Section 11.02. Trustee To Act Solely with Consent of the
Certificate Insurer.....................................127
Section 11.03. Trust Fund and Accounts Held for Benefit of the
Certificate Insurer.....................................128
Section 11.04. Claims Upon the Policies; Policy Payments Account............128
Section 11.05. Effect of Payments by the Certificate Insurer;
Subrogation.............................................130
Section 11.06. Notices to the Certificate Insurer...........................130
Section 11.07. Third-Party Beneficiary......................................130
Section 11.08. Trustee to Hold the Policy...................................130
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Binding Nature of Agreement; Assignment......................131
Section 12.02. Entire Agreement.............................................131
Section 12.03. Amendment....................................................131
Section 12.04. Voting Rights................................................132
Section 12.05. Provision of Information.....................................132
Section 12.06. Governing Law................................................133
Section 12.07. Notices......................................................133
Section 12.08. Severability of Provisions...................................133
Section 12.09. Indulgences; No Waivers......................................134
Section 12.10. Headings Not To Affect Interpretation........................134
Section 12.11. Benefits of Agreement........................................134
Section 12.12. Special Notices to the Rating Agencies.......................134
Section 12.13. Counterparts.................................................135
Section 12.14. No Petition..................................................135
<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 Reserved
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 Reserved
Exhibit J Reserved
Exhibit K Custodial Agreement
Schedule A Mortgage Loan Schedule
<PAGE>
This TRUST AGREEMENT, dated as of June 1, 1999 (the "Agreement"), is made
by and among STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation,
as depositor (the "Depositor"), OCWEN FINANCIAL SERVICES, INC., as master
servicer (the "Master Servicer"), OCWEN FEDERAL BANK FSB, as special servicer
(the "Special Servicer"), and THE CHASE MANHATTAN BANK, as trustee (the
"Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from LMAC, Inc. (the
"Seller"), 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, the Special 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 and the Certificate Insurer. The Depositor,
the Master Servicer and the Special 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 three separate real
estate mortgage investment conduits (each a "REMIC" or, in the alternative,
"REMIC 1," "REMIC 2," and "REMIC 3," respectively, REMIC 3 also being referred
to as the "Upper Tier REMIC"). The Class A-F, Class A-V, Class FX and Class VX
Certificates represent ownership of all of the "regular interests" in REMIC 3
(the Class T3-F1, Class T3-F2, Class T3-F3, Class T3-F4, Class T3-F5, Class
T3-V1, Class T3-V2, Class T3-V3, Class T3-V4, and Class T3-V5), and the Class
R3 Interest represents the sole class of "residual interest" in REMIC 3 for
purposes of the REMIC Provisions. Each of the Class R1 and Class R2
Certificates represents the sole class of "residual interest" in REMIC 1, and
REMIC 2, respectively, for purposes of the REMIC Provisions. There are also
six classes of uncertificated REMIC 1 Regular Interests issued under this
Agreement (the Class T1-F1, Class T1-F2, Class T1-F3, Class T1-V1, Class
T1-V2, and Class T1-V3 Interests), each of which will constitute regular
interests in REMIC 1; eight classes of uncertificated REMIC 2 Regular
Interests (the Class T2-F1, Class T2-F2, Class T2-F3, Class T2-F4, Class
T2-V1, Class T2-V2, Class T2-V3 and Class T2-V4 Interests), each of which will
constitute regular interests in REMIC 2. 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.
As used herein, (i) each Class A-F Certificate is "related" to Mortgage
Pool F, and (ii) each Class A-V Certificate is related to Mortgage Pool V.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate, initial Class Principal Amount and minimum denomination for
each Class of Certificates comprising the interests in the Trust Fund created
hereunder.
<TABLE>
<CAPTION>
Pass-Through Initial Class Minimum
Class Designation Rate Principal Amount Denominations
- --------------------------- --------------------------- --------------------------- ------------------------
<S> <C> <C> <C>
Class A-F (1) $92,537,000 $25,000
Class A-V (2) 52,420,000 25,000
Class FX (3) (3) (4)
Class VX (3) (3) (4)
Class R (3) (3) (4)
</TABLE>
______________
(1) The Pass-Through Rate with respect to any Distribution Date for the
Class A-F Certificates is the per annum rate equal to the lesser of
(i) 7.28% and (ii) the Group F Available Funds Cap Rate for such
Distribution Date; provided, that if the majority holder of the Class
X Certificates (or if such holder does not exercise such option, the
Master Servicer or Certificate Insurer) does not exercise the 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 A-F
Certificates will be 7.78%.
(2) The Pass-Through Rate with respect to any Distribution Date for the
Class A-V Certificates is the per annum rate equal to the lesser of
(i) LIBOR plus 0.35%, and (ii) the Group V Available Funds Cap Rate
for such Distribution Date; provided, that if the majority holder of
the Class X Certificate (or if such holder does not exercise such
option, the Master Servicer or Certificate Insurer) does not exercise
the 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 A-V
Certificates will be LIBOR plus 0.70%.
(3) The Class FX, Class VX and Class R Certificates will be issued without
a Certificate Principal Amount and will not bear interest.
(4) The Class FX, Class VX 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 principal
balance of $148,628,391.22, after giving effect to the scheduled payments due
on or prior to the Cut-off Date.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Special 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 Sub-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 A-V
--------------
Certificate, and the Class T3-V1, Class T3-V2, Class T3-V3, Class T3-V4 and
Class T3-V5 Regular Interests, the actual number of days (based on a 360-day
year) included in the period beginning on the immediately preceding
Distribution Date (or on June 24, 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 A-F Certificates, and the Class
T3-F1, Class T3-F2, Class T3-F3, Class T3-F4 and Class T3-F5 Regular
Interests, the calendar month immediately preceding the month in which such
Distribution Date occurs based on a 360-day year consisting of twelve 30-day
months.
Adjustable Rate Mortgage Loan: Any Mortgage Loan as to which the related
-----------------------------
Mortgage Note provides for the adjustment of the Mortgage Rate applicable
thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan, each
---------------
date on which the Mortgage Rate of an Adjustable Rate Mortgage Loan changes
pursuant to the related Mortgage Note. The first Adjustment Date following the
Cut-off Date as to each Adjustable Rate Mortgage Loan is set forth in the
Mortgage Loan Schedule.
Advance: An advance of the aggregate of payments of principal and
-------
interest (other than Balloon Payments and net of the applicable Servicing Fee)
on one or more Mortgage Loans that were due on the Due Date in the related Due
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
(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 at the date of determination.
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.
Ancillary Income: All income derived from the Specially Serviced Mortgage
----------------
Loans, other than Special Servicer Fees and the Servicing Fees in respect of
Specially Serviced Mortgage Loans, 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 excluding
Prepayment Premiums. The Special Servicer shall retain all Ancillary Income
for the Specially Serviced Mortgage Loans.
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.
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.
Available Funds: With respect to any Distribution Date, an amount equal
---------------
to the sum of the Group F Available Funds and the Group V Available Funds.
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.
Basic Principal Distribution Amount: With respect to each Certificate
-----------------------------------
Group and any Distribution Date the excess of (i) the related Principal
Remittance Amount for such Distribution Date over (ii) the related
Overcollateralization Release Amount, if any, for such Distribution Date.
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 for which the
--------------------
Pass-Through Rate for the Class A-V Certificates is based upon the Group V
Available Funds Cap Rate, the excess of (i) the amount of interest such Class
of Certificates would have been entitled to receive on such Distribution Date
had such Pass-Through Rate not been subject to the Group V Available Funds Cap
Rate, up to the Maximum Cap, over (ii) the amount of interest such Class of
Certificates received on such Distribution Date based on the Group V Available
Funds Cap Rate, together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then applicable Class
A-V Formula Rate on such Class of Certificates.
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.
Bloomberg: As defined in Section 4.03.
---------
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 A-F and Class A-V Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
------------
day on which the Certificate Insurer or banking institutions in New York, New
York are authorized or obligated by law or executive order to close.
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, which shall be entitled "The Chase
Manhattan Bank, as Trustee, in trust for (A) registered holders of Home Equity
Loan Asset Backed Certificates, Series 1999-OFS1, and (B) MBIA Insurance
Corporation" and which must be an Eligible Account. Amounts held in the
Certificate Account shall be deemed assets of REMIC 3.
Certificate Group: Either of the Class A-F or Class A-V Certificates.
-----------------
Certificate Insurer: MBIA Insurance Corporation, a stock insurance
-------------------
company incorporated under the laws of the State of New York, and any
successors thereto.
Certificate Insurer Default: The existence and continuance of any of the
---------------------------
following:
(a) The Certificate Insurer fails to make a payment required under
either of the Policies in accordance with its terms; or
(b) The Certificate Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
United States Bankruptcy Code, the New York State Insurance Law or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization, (ii) made a general
assignment for the benefit of its creditors or (iii) had an order for
relief entered against it under the United States Bankruptcy Code, the
New York State Insurance Law or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization that is final and nonappealable; or
(c) A court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered
a final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for the Certificate Insurer or for
all or any material portion of its property or (ii) authorizing the
taking of possession by a custodian, trustee, agent, or receiver of the
Certificate Insurer of all or any material portion of its property.
Certificate Insurer Premium Amount: With respect to any Distribution Date
----------------------------------
and any Mortgage Pool, the amount in respect of premiums payable to the
Certificate Insurer for such Mortgage Pool as set forth in the Insurance
Agreement.
Certificate Margin: With respect to any Distribution Date on or prior to
------------------
the Optional Termination Date, 0.35%, and with respect to any Distribution
Date after the Optional Termination Date, 0.70%.
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 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. The 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."
-----------------
Class: All Certificates bearing the same class designation.
-----
Class A Certificates: The Class A-F and Class A-V Certificates.
--------------------
Class A-V Formula Rate: With respect to any Distribution Date and the
----------------------
Class A-V Certificates, the sum of LIBOR as of the related LIBOR Determination
Date plus the applicable Certificate Margin.
Class Principal Amount: With respect to each Class of Certificates other
----------------------
than the Class X and Class R 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 and Class R3 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 T1-F1 Interest: A regular interest in REMIC 1 that is held as an
--------------------
asset of REMIC 2, that has an initial principal balance equal to 98% of the
Group F Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group F Net Mortgage Rate, and that has such other
terms as are described in Section 5.06.
Class T1-F2 Interest: A regular interest in REMIC 1 that is held as an
--------------------
asset of REMIC 2, that has an initial principal balance equal to 1% of the
Group F Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group F Net Mortgage Rate, and that has such other
terms as are described in Section 5.06.
Class T1-F3 Interest: A regular interest in REMIC 1 that is held as an
--------------------
asset of REMIC 2, that has an initial principal balance equal to 1% of the
Group F Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group F Net Mortgage Rate, and that has such other
terms as are described in Section 5.06.
Class T1-V1 Interest: A regular interest in REMIC 1 that is held as an
--------------------
asset of REMIC 2, that has an initial principal balance equal to 98% of the
Group V Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group V Net Mortgage Rate, and that has such other
terms as are described in Section 5.06.
Class T1-V2 Interest: A regular interest in REMIC 1 that is held as an
--------------------
asset of REMIC 2, that has an initial principal balance equal to 1% of the
Group V Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group V Net Mortgage Rate, and that has such other
terms as are described in Section 5.06.
Class T1-V3 Interest: A regular interest in REMIC 1 that is held as an
--------------------
asset of REMIC 2, that has an initial principal balance equal to 1% of the
Group V Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group V Net Mortgage Rate, and that has such other
terms as are described in Section 5.06.
Class T2-F1 Interest: A regular interest in REMIC 2 that is held as an
--------------------
asset of REMIC 3, that has an initial principal balance equal to 98% of the
Group F Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group F Net Mortgage Rate, and has such other terms as
are described in Section 5.06.
Class T2-F2 Interest: A regular interest in REMIC 2 that is held as an
--------------------
asset of REMIC 3, that has an initial principal balance equal to 1% of the
Group F Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal the Group F Standard Rate, and has such other terms as are
described in Section 5.06.
Class T2-F3 Interest: A regular interest in REMIC 2 that is held as an
--------------------
asset of REMIC 3, that has an initial principal balance equal to 1% of the
Group F Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group F Net Mortgage Rate, and has such other terms as
are described in Section 5.06.
Class T2-F4 Interest: A regular interest in REMIC 2 that is held as an
--------------------
asset of REMIC 3, that has a notional principal balance equal to the principal
balance of Class T2-F2 Interest, that bears interest at a per annum rate equal
to excess of (i) the Group F Net Mortgage Rate over (ii) the Group F Standard
Rate, and has such other terms as are described in Section 5.06.
Class T2-V1 Interest: A regular interest in REMIC 2 that is held as an
--------------------
asset of REMIC 3, that has an initial principal balance equal to 98% of the
Pool V Pool Balance as of the Cut-off Date, that bears interest at a per annum
rate equal to the Group V Net Mortgage Rate, and that has such other terms as
are described in Section 5.06.
Class T2-V2 Interest: A regular interest in REMIC 2 that is held as an
--------------------
asset of REMIC 3, that has an initial principal balance equal to 1% of the
Group V Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group V Standard Rate, and that has such other terms
as are described in Section 5.06.
Class T2-V3 Interest: A regular interest in REMIC 2 that is held as an
--------------------
asset of REMIC 3, that has an initial principal balance equal to 1% of the
Group V Pool Balance as of the Cut-off Date, that bears interest at a per
annum rate equal to the Group V Net Mortgage Rate, and that has such other
terms as are described in Section 5.06.
Class T2-V4 Interest: A regular interest in REMIC 2 that is held as an
--------------------
asset of REMIC 3, that has a notional principal balance equal to the principal
balance of Class T2-V2 Interest, that bears interest at a per annum rate equal
to excess of (i) the Group V Net Mortgage Rate over (ii) the Group V Standard
Rate, and has such other terms as are described in Section 5.06.
Class T3-F1 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class A-F Certificates, that has an initial principal balance of $92,537,000,
that bears interest at a rate equal to the Group F Standard Rate, and that has
such other terms as are described in Section 5.06.
Class T3-F2 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class FX Certificate that has such terms as are described in Section 5.06.
Class T3-F2 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 T3-F2 Notional Balance immediately before such
distribution date, and (iii) the Class T3-F2 Pass-Through Rate.
Class T3-F2 Notional Balance: A notional principal balance equal as of
----------------------------
any date to the sum of the principal balances of the Class T2-F1, and T2-F3
interests for such date.
Class T3-F2 Pass-Through Rate: With respect to any Distribution Date, a
-----------------------------
per annum rate equal to (i) the excess of the Group F Net Mortgage Rate for
such date over (ii) the product of two and a fraction, the numerator of which
is the product of (x) Group F Standard Rate, and (y) the principal balance of
the Class T2-F2 Interest immediately prior to such Distribution Date, and the
denominator of which is the sum of the principal balances of the Class T2-F2
and T2-F3 Interests immediately before such Distribution Date.
Class T3-F3 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class FX Certificates that has such terms as are described in Section 5.06.
Class T3-F3 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 T3-F3 Notional Balance immediately before such
Distribution Date, and (iii) the Class T3-F3 Pass-Through Rate.
Class T3-F3 Notional Balance: A notional principal balance equal as of
----------------------------
any date to the principal balance of the Class T2-F2 interest for such date.
Class T3-F3 Pass-Through Rate: With respect to any Distribution Date, a
-----------------------------
per annum rate equal to (i) the excess the Group F Standard Rate over (ii) the
product of two and a fraction, the numerator of which is the product of (x)
the Group F Standard Rate, and (y) the Class T2-F2 Interest immediately prior
to such Distribution Date, and the denominator of which is the sum of the
principal balances of the Class T2-F2 and T2-F3 Interests immediately before
such Distribution Date.
Class T3-F4 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class FX Certificates that is entitled to receive 100% of the amounts
distributable with respect to the Class T2-F4 Interest, and has such terms as
are described in Section 5.06.
Class T3-F5 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class FX Certificates that will have a principal balance to the extent of the
excess of (i) the Group F Pool Balance as of the Cut-off Date over (ii) the
aggregate Certificate Principal Balance of the Class A-F Certificates on the
Closing Date. The Class T3-F5 Interest will bear interest at the Group F
Standard Rate. Interest on the Class T3-F5 Interest will accrue and be paid
with principal on the Class T3-F5 Interest following the reduction of the
Certificate Principal Balances of the Class A-F Certificates to zero.
Class T3-V1 Interest: A regular interest in REMIC 3 that has an initial
--------------------
principal balance of $52,420,000 and bears interest at a rate equal to the
Group V Standard Rate.
Class T3-V2 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class VX Certificates that has such terms as are described in Section 5.06.
Class T3-V2 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 T3-V2 Notional Balance, and (iii) the Class T3-V2
Pass-Through Rate.
Class T3-V2 Notional Balance: A notional principal balance equal as of
----------------------------
any date to the sum of the principal balances of the Class T2-V1 and T2-V3
Interests for such date.
Class T3-V2 Pass-Through Rate: With respect to any Distribution Date, a
-----------------------------
per annum rate equal to the excess of (i) the Group V Net Mortgage Rate for
such date over (ii) the product of two and a fraction, the numerator of which
is the product of (x) the Group V Standard Rate and (y) the principal balance
of the Class T2-V2 Interest immediately prior to such Distribution Date, and
the denominator of which is the sum of the principal balances of the Class
T2-V2 and Class T2-V3 Interests immediately prior to such Distribution Date.
Class T3-V3 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class VX Certificates that has such terms as are described in Section 5.06.
Class T3-V3 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 T3-V3 Notional Balance, and (iii) the Class T3-V3
Pass-Through Rate.
Class T3-V3 Notional Balance: A notional principal balance equal as of
----------------------------
any date to the principal balance of the Class T2-V2 Interests for such date.
Class T3-V3 Pass-Through Rate: With respect to any Distribution Date, a
-----------------------------
per annum rate equal to the excess of (i) the Group V Standard Rate for such
date over (ii) the product of (x) two and (y) a fraction, the numerator of
which is the product of the Group V Standard Rate and the principal balance of
Class T2-V2, and the denominator of which is the sum of the principal balances
of the Class T2-V2 and Class T2-V3 Interests immediately prior to such
Distribution Date.
Class T3-V4 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class VX Certificates that is entitled to receive 100% of the amounts
distributable with respect to the Class T2-V4 Interest, and has such terms as
are described in Section 5.06.
Class T3-V5 Interest: A regular interest in REMIC 3 represented by the
--------------------
Class VX Certificates that will have a principal balance to the extent of the
excess of (i) the Group V Pool Balance as of the Cut-off Date over (ii) the
aggregate Certificate Principal Balance of the Class A-V Certificates on the
Closing Date. The Class T3-V5 Interest will bear interest at the Group V
Standard Rate. Interest on the Class T3-V5 Interest will accrue and be paid
with principal on the Class T3-V5 Interest following the reduction of the
Certificate Principal Balances of the Class A-V Certificates to zero.
Class X Certificates: The Class FX and Class VX Certificates.
--------------------
Class FX Certificates: Any one of the Class FX Certificates executed by
---------------------
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-2 and evidencing four
Regular Interests in REMIC 3 for purposes of the REMIC Provisions.
Class VX Certificate: Any one of the Class VX Certificates executed by
--------------------
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-2 and evidencing four
Regular Interests in REMIC 3 for purposes of the REMIC Provisions.
Class FX Distributable Amount: With respect to any Distribution Date, the
-----------------------------
aggregate of the amounts distributable on the Class T3-F2, Class T3-F3, Class
T3-F4 and Class T3-F5 Interests on such date.
Class VX Distributable Amount: With respect to any Distribution Date, the
-----------------------------
aggregate of the amounts distributable on the Class T3-V2, Class T3-V3, Class
T3-V4 and Class T3-V5 Interests on such date.
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: June 24, 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 which shall be entitled "Ocwen
Financial Services, Inc., as Master Servicer for The Chase Manhattan Bank, as
Trustee, in trust for (A) registered holders of Ocwen Home Equity Loan
Asset-Backed Certificates, Series 1999-OFS1, and (B) MBIA Insurance
Corporation" and which must be an Eligible Account.
Collection Period: With respect to any Distribution Date, the calendar
-----------------
month immediately preceding the calendar month in which such Distribution Date
occurs.
Compensating Interest Payment: As defined in Section 9.24 hereof.
-----------------------------
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.
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 450 West 33rd
Street, 14th Floor, New York, New York 10001, Attention: Capital Markets
Fiduciary Services - Ocwen Series 1999-OFS1, or at such other address that the
Trustee may designate from time to time by notice to the Certificateholders,
the Depositor, the Master Servicer and the Certificate Insurer.
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 and any successor
---------
thereto. The initial Custodian is The Chase Manhattan Bank.
Cut-off Date: June 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 after deducting Scheduled Payments due on such Cut-off Date,
whether or not received.
Cut-off Date Pool Balance: With respect to each Mortgage Pool, the Pool
-------------------------
Balance thereof as of the related Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in
----------------------
the Scheduled Payment for such Mortgage Loan (before giving effect to the Debt
Service Reduction) by a court of competent jurisdiction in a proceeding under
the Bankruptcy Code, except such a reduction resulting from a Deficient
Valuation.
Deficiency Amount: With respect to each Certificate Group as of any
-----------------
Distribution Date, the excess, if any, of (A) the sum of (i) the Interest
Distributable Amount for the applicable Class A Certificates and (ii) the
Guaranteed Principal Amount over (B) Group F Available Funds or Group V
Available Funds, as applicable (after payment of the premium payable to the
Certificate Insurer and after giving effect to the cross-collateralization
provisions of this Agreement and without regard to any Insured Payments to be
made as of such Distribution Date).
Deficiency Event: The inability of the Trustee to make the Guaranteed
----------------
Distribution on any Distribution Date due to a shortage of funds for such
purpose then held in the Certificate Account and the failure of the
Certificate Insurer to pay in full a claim made in accordance with the related
Policy with respect to such Distribution Date.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
-------------------
the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
Definitive 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 Amount: With respect to any Distribution Date and either
------------------
Mortgage Pool, the product of (x) the related Delinquency Percentage and (y)
the aggregate Scheduled Principal Balance of the Group F Loans or the Group V
Loans, as applicable, as of the end of the related Due Period.
Delinquency Percentage: For any Distribution Date and either Mortgage
----------------------
Pool, as of any date of determination, the rolling three month average of the
percentage equivalent of a fraction, the numerator of which equals (x) the
aggregate Scheduled Principal Balance of all of the Group F Loans or Group V
Loans, as applicable, which are (i) 90 or more days delinquent, (ii) in
bankruptcy and 90 or more days delinquent under the related Mortgage Note,
(iii) in foreclosure, or (iv) converted to REO Properties, and the denominator
of which is (y) the aggregate Scheduled Principal Balance of the Group F Loans
or Group V Loans, as applicable, as of the date of determination.
Deposit Date: With respect to each Distribution Date, 12:00 p.m. New York
------------
time on the second Business Day prior to 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.
Depository: The Depository Trust Company, or any successor Depository
----------
hereafter named. The nominee of the initial Depository, for purposes of
registering those Certificates that are to be Book-Entry Certificates, is Cede
& Co. The Depository shall at all times be a "clearing corporation" as defined
in Section 8-102(3) of the Uniform Commercial Code of the State of New York
and a "clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial
----------------------
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the 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 majority holder of the Class X Certificates.
----------------
Directly Operate: With respect to any REO Property, the furnishing or
----------------
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust Fund other than
through an Independent Contractor; provided, however, that the Trustee (or the
-------- -------
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into
or renews leases, deals with taxes and insurance, or makes decisions as to
repairs or capital expenditures with respect to such REO Property.
Disqualified Organization: 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 July 1999.
Due Date: With respect to any Mortgage Loan, the date on which a
--------
Scheduled Payment is due under the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period commencing
----------
on the second day of the month preceding the month in which such Distribution
Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
Eligible Account: A segregated account that is either (i) an account or
----------------
accounts maintained with a federal or state chartered depository institution
or trust company the short-term unsecured debt obligations of which (or, in
the case of a depository institution or trust company that is the principal
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated P-1 by Moody's and A-1 by S&P (or comparable
ratings if Moody's and S&P are not the Rating Agencies) and the unsecured and
uncollateralized long term debt ratings of which institution shall be rated AA
or higher by S&P and Aa2 or higher by Moody's at the time any amounts are held
on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the Federal Deposit Insurance Corporation (to the limits
established by such corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an opinion of counsel delivered
to the Trustee, the Certificate Insurer and to each Rating Agency, the
Certificateholders will have a claim with respect to the funds in such account
or a perfected first priority security interest against such collateral (which
shall be limited to Eligible Investments) securing such funds that is superior
to claims of any other depositors or creditors of the depository institution
with which such account is maintained, (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered
depository institution, national banking association or trust company having
capital and surplus of not less than $100,000,000, acting in its fiduciary
capacity or (iv) otherwise acceptable to each Rating Agency without reduction
or withdrawal of their then current ratings of the Certificates and the
Certificate Insurer as evidenced by a letter from each Rating Agency and the
Certificate Insurer to the Trustee. Eligible Investments are limited to
investments which meet the criteria of the Rating Agencies from time to time
as being consistent with their then current ratings of the Certificates and
which are acceptable to the Certificate Insurer. Eligible Accounts may bear
interest.
Eligible Investments: Any one or more of the following obligations or
--------------------
securities:
(i) Direct obligations of the United States of America (including
obligations issued or held in book-entry form on the books of the
Department of the Treasury, and CATS and TIGRS) or obligations the
principal of and interest on which are unconditionally guaranteed
by the United States of America;
(ii) Bonds, debentures, notes or other evidence of indebtedness issued
or guaranteed by any of the following federal agencies and
provided such obligations are backed by the full faith and credit
of the United States of America (stripped securities are only
permitted if they have been stripped by the agency itself and if
the principal portion of such security is not callable by the
issuer):
(A) U.S. Export-Import Bank (Eximbank): Direct obligations or
fully guaranteed certificates of beneficial ownership.
(B) Farmers Home Administration (FmHA) (now known as the United
States of America, acting through the Department of
Agriculture): Certificates of beneficial ownership.
(C) Federal Financing Bank.
(D) Federal Housing Administration Debentures (FHA).
(E) General Services Administration: Participation certificates.
(F) Government National Mortgage Association (GNMA or "Ginnie
Mae"): GNMA-guaranteed mortgage-backed bonds and
GNMA-guaranteed pass-through obligations approved by the
Certificate Insurer in writing.
(G) United States Maritime Administration: Guaranteed Title XI
financing.
(H) United States Department of Housing and Urban Development
(HUD): Project Notes, Local Authority Bonds, New Communities
Debentures, United States Government guaranteed debentures,
United States Public Housing Notes and Bonds, United States
government guaranteed public housing notes and bonds.
(I) Resolution Funding Corporation (REFCORP) interest strips.
(iii) Bonds, debentures, notes or other evidence of indebtedness issued
or guaranteed by any of the following non-full faith and credit
U.S. government agencies (stripped securities are only permitted
if they have been stripped by the agency itself and if the
principal portion of such security is not callable by the issuer):
(A) Federal Home Loan Banks (FHL Banks): Senior debt obligations.
(B) Federal Home Loan Mortgage Corporation (FHLMC or "Freddie
Mac"): Participation certificates and senior debt obligations.
(C) Federal National Mortgage Association (FNMA or "Fannie Mae"):
Mortgage-backed securities and Senior debt obligations.
(D) Student Loan Marketing Association (SLMA or "Sallie Mae"):
Senior debt obligations.
(E) Resolution Funding Corporation (REFCORP): obligations.
(F) Farm Credit System Consolidated: system-wide bonds and notes.
(iv) Money market funds registered under the Federal Investment Company
Act of 1940, whose shares are registered under the Federal
Securities Act of 1933, and having a rating by S&P of AAAm-G;
AAA-m; or AA-m and if rated by Moody's, rated Aaa, Aa1 or Aa2;
(v) Certificates of deposit secured at all times by collateral
described in (i) and/or (ii) above. Such certificates must be
issued by commercial banks, savings and loan associations or
mutual savings banks. The collateral must be held by a third party
and the bondholders must have a perfected first security interest
in the collateral;
(vi) Certificates of deposit, savings accounts, deposit accounts or
money market deposits which are fully insured by FDIC, including
BIF and SAIF;
(vii) Investment agreements, including guaranteed investment contracts,
forward purchase agreements and reserve fund put agreements
acceptable to Certificate Insurer;
(viii) Commercial paper rated, at the time of purchase, "Prime - 1" by
Moody's and "A-1" or better by S&P;
(ix) Bonds or notes issued by any state or municipality which are rated
by Moody's and S&P in one of the two highest rating categories
assigned by such agencies;
(x) Federal funds or bankers acceptances with a maximum term of one
year of any bank which has an unsecured, uninsured and
unguaranteed obligation rating of "Prime - 1" or "A3" or better;
by Moody's and "A-1" or "A" or better by S&P.
(xi) Repurchase Agreements for 30 days or less must follow the
following criteria. Repurchase Agreements which exceed 30 days
must be acceptable to Certificate Insurer.
(A) Repurchase agreements must have as a counter party a dealer
bank or securities firm that is
(1) a primary dealer on the Federal Reserve reporting dealer
list which is rated "A" or better by S&P and "A2" or
better by Moody's, or
(2) a bank rated "A" or better by S&P and "A2" or better by
Moody's.
(B) The written repurchase agreement must include the following:
(1) Securities which are acceptable for transfer are: (i)
obligations of the United States of America or (ii)
federal agencies backed by the full faith and credit of
the United States of America (and FNMA & FHLMC);
(2) The term of the repurchase agreement may be up to 30 days;
(3) The collateral must be delivered to the Trustee (if the
Trustee is not supplying the collateral) or third party
acting as agent for the Trustee (if the Trustee is
supplying the collateral) before/ simultaneous with
payment (perfection by possession of certificated
securities); and
(4) The securities must be valued weekly, marked-to- market at
current market price plus accrued interest. The value of
collateral must be equal to 104% of the amount of cash
transferred by the Trustee to the dealer bank or security
firm under the repurchase agreement plus accrued interest.
If the value of securities held as collateral falls below
104% of the value of the cash transferred by the Trustee,
then additional cash and/or acceptable securities must be
transferred. If, however, the securities used as
collateral are FNMA or FHLMC, then the value of collateral
must equal 105%.
(xii) a guaranteed investment contract (GIC) acceptable to the
Certificate Insurer.
ERISA-Restricted Certificate: Any of the Class X and Class R
----------------------------
Certificates.
Event of Default: Any one of the conditions or circumstances enumerated
----------------
in Section 6.14(a).
Expense Account: The account established and maintained pursuant to
---------------
Section 9.25.
Extra Principal Distribution Amount: With respect to any Distribution
-----------------------------------
Date and each of the Class A-F and Class A-V Certificates, the lesser of (i)
the related General Excess Available Amount for such Distribution Date and
(ii) the related Overcollateralization Deficiency for such Distribution Date.
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 Recovery Determination: With respect to any defaulted Mortgage Loan
----------------------------
or any REO Property (other than a Mortgage Loan or REO Property purchased by
the Seller, the Master Servicer or the Certificate Insurer pursuant to or as
contemplated by Section 2.05, 9.15(c) or 7.01), a determination made by the
Master Servicer that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Master Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Master Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: With respect to the Class A-F and
---------------------------------
Class A-V Certificates, June 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.
Fixed Rate Mortgage Loan: A Mortgage Loan which provides for a fixed
------------------------
Mortgage Rate payable with respect thereto.
FNMA: The Federal National Mortgage Association, a federally chartered
----
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
Foreclosed Mortgage Loan: A Specially Serviced Mortgage Loan for which
------------------------
title to the Mortgaged Property is taken back by the Special Servicer either
through a deed in lieu of foreclosure or through the completion of the
foreclosure process consistent with this Agreement and the resulting REO
Property is liquidated consistent with the terms of this Agreement.
General Excess Available Amount: With respect to a Certificate Group and
-------------------------------
each Distribution Date, the amount, if any, by which the related Available
Funds for such Distribution Date exceeds the aggregate amount distributed on
such Distribution Date pursuant to subclauses (i) through (vi) of Section
5.02(b) and 5.02(c), as applicable, of this Agreement.
GNMA: The Government National Mortgage Association, a wholly owned
----
corporate instrumentality of the United States within HUD.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
------------
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
Group F Adjusted Overcollateralization Amount: For any Distribution Date,
---------------------------------------------
the excess of (a) the Pool Balance of the Group F Loans as of the preceding
Due Date over (b) the aggregate principal balance of the Class T3-F1
Interests.
Group F Adjusted Overcollateralization Release Amount: For any
-----------------------------------------------------
Distribution Date, the lesser of (a) the Group F Principal Distribution
Amount, and (b) the amount, if any, by which the Group F Adjusted
Overcollateralization Amount exceeds the Targeted Overcollateralization Amount
for Loan Group F.
Group V Adjusted Overcollateralization Amount: For any Distribution Date,
---------------------------------------------
the excess of (c) the Pool Balance of the Group V Loans as of the preceding
Due Date over (d) the aggregate principal balance of the Class T3-V1
Interests.
Group V Adjusted Overcollateralization Release Amount: For any
-----------------------------------------------------
Distribution Date, the lesser of the (a) the Group V Principal Distribution
Amount, and (b) the amount, if any, by which the Group V Adjusted
Overcollateralization Amount exceeds the Targeted Overcollateralization Amount
for Loan Group V.
Group F Available Funds: With respect to any Distribution Date, an amount
-----------------------
equal to the sum of the following amounts with respect to the related Mortgage
Loans: (i) the aggregate amount of Scheduled Payments on the related Mortgage
Loans due during the related Due Period whether or not received by the Master
Servicer, after deduction of the Servicing Fee for such Distribution Date, any
accrued and unpaid Servicing Fees in respect of any prior Distribution Dates
and the Trustee Fee, (ii) certain unscheduled payments in respect of the
Mortgage Loans, including prepayments, insurance proceeds, Net Liquidation
Proceeds, proceeds from repurchases of and substitutions for such Mortgage
Loans occurring during the related Prepayment Period, amounts deposited into
the Certificate Account by the Master Servicer pursuant to Section 9.23(f) and
payments made by the Trustee in connection with Advances under Section
5.04(b), excluding payments made under the related Policy and (iii) payments
from the Master Servicer in connection with Advances and Prepayment Interest
Shortfalls for such Distribution Date.
Group F Available Funds Cap Rate: With respect to any Distribution Date,
--------------------------------
the amount, expressed as a per annum rate, equal to (a)(i) the aggregate
amount of interest due on all of the Group F Loans for the related Due Period
minus (ii) the aggregate of the Servicing Fee, the Trustee Fee and the
premiums payable to the Certificate Insurer, in each case relating to the
Group F Loans, with respect to such Distribution Date, divided by (b) the
aggregate Class Principal Amount of the Group F Certificates immediately prior
to such Distribution Date calculated on the basis of a 360-day year consisting
of twelve 30-day months.
Group F Loans: The Mortgage Loans designated on the Mortgage Loan
-------------
Schedule as Group F Loans.
Group F Net Mortgage Rate: The weighted average of the Mortgage Rates of
-------------------------
the Group F Loans after deducting the Servicing Fee Rate, the Trustee Fee Rate
and the amount, expressed as a per annum rate, of the related premium paid to
the Certificate Insurer, weighted on the basis of the Scheduled Principal
Balance of the Group F Loans at the beginning of the related Due Period.
Group F Pool Balance: The aggregate of the Scheduled Principal Balances
--------------------
of all Mortgage Loans in Pool F at the date of determination.
Group F Principal Distribution Amount: With respect to any Distribution
-------------------------------------
Date, an amount equal to the sum of (i) the related Basic Principal
Distribution Amount and (ii) the related Extra Principal Distribution Amount
for such Distribution Date.
Group F Principal Funds: With respect to the Group F Loans, the sum,
-----------------------
without duplication, of (i) the scheduled principal collected during the
related Due Period or Advanced on or before the related Master Servicer
Remittance Date, (ii) prepayments collected in the related Prepayment Period,
(iii) the Scheduled Principal Balance of each Mortgage Loan that was
repurchased by the Seller or the Master Servicer, (iv) the amount, if any, by
which the aggregate unpaid principal balance of any Qualifying Substitute
Mortgage Loan is less than the aggregate unpaid principal balance of the
related Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan pursuant to Section 2.05, and (v) all
Liquidation Proceeds collected during the related Prepayment Period (to the
extent such Liquidation Proceeds related to principal) less all Nonrecoverable
Advances relating to principal reimbursed during the related Due Period.
Group F Regular Interests: With respect to REMIC 1 the Class T1-F1,
-------------------------
Class T1-F2 and Class T1-F3 Interests and with respect to REMIC 2 the Class
T2-F1, Class T2-F2 and Class T2-F3 Interests.
Group F Standard Rate: With respect to any Distribution Date, a rate
---------------------
equal to the lesser of the Pass-Through Rate for the Class A-F Certificates
and the Group F Net Mortgage Rate.
Group V Available Funds: With respect to any Distribution Date, an amount
-----------------------
equal to the sum of the following amounts with respect to the related Mortgage
Loans: (i) the aggregate amount of Scheduled Payments on the related Mortgage
Loans due during the related Due Period whether or not received by the Master
Servicer, after deduction of the Servicing Fee for such Distribution Date, any
accrued and unpaid Servicing Fees in respect of any prior Distribution Dates
and the Trustee Fee, (ii) certain unscheduled payments in respect of the
Mortgage Loans, including prepayments, insurance proceeds, Net Liquidation
Proceeds, proceeds from repurchases of and substitutions for such Mortgage
Loans occurring during the related Prepayment Period, amounts deposited into
the Certificate Account by the Master Servicer pursuant to Section 9.23(f) and
payments made by the Trustee in connection with Advances, excluding payments
made under the related Policy, (iii) payments from the Master Servicer in
connection with Advances and Prepayment Interest Shortfalls for such
Distribution Date and (iv) with respect to Loan Group V, funds on deposit in
the Basis Risk Reserve Fund.
Group V Available Funds Cap Rate: With respect to any Distribution Date,
--------------------------------
the amount expressed as a per annum rate obtained by dividing (a) the amount
of interest due or advanced on the Group V Loans in respect of the related Due
Period less the sum of (i) the Servicing Fee, (ii) the Trustee Fee, (iii) the
premium payable to the Certificate Insurer, in each case relating to the Group
V Loans with respect to such Distribution Date, and (iv) commencing on the
thirteenth Distribution Date following the Closing Date, an amount equal to
0.50% per annum times the aggregate Scheduled Principal Balance of the Group V
Loans as of the beginning of such related Due Period, by (b) the aggregate
Class Principal Amount of the Class A-V Certificates immediately prior to such
Distribution Date, calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Group V Loans: The Mortgage Loans designated on the Mortgage Loan
-------------
Schedule as Group V Loans.
Group V Net Mortgage Rate: The weighted average of the Mortgage Rates of
-------------------------
the Pool V Loans after deducting the Servicing Fee Rate, the Trustee Fee rate
and the amount expressed as a per annum rate, of the related premium paid to
the Certificate Insurer, weighted on the basis of the Scheduled Principal
Balance of the Group V Loans at the beginning of the related Due Period.
Group V Pool Balance: The aggregate of the Scheduled Principal Balances
--------------------
of all Mortgage Loans in Pool V at the date of determination.
Group V Principal Distribution Amount: With respect to any Distribution
-------------------------------------
Date, an amount equal to the sum of (i) the related Basic Principal
Distribution Amount and (ii) the related Extra Principal Distribution Amount
for such Distribution Date.
Group V Principal Funds: With respect to the Group V Loans, the sum,
-----------------------
without duplication, of (i) the scheduled principal collected during the
related Due Period or Advanced on or before the related Master Servicer
Advance Date, (ii) prepayments collected in the related Prepayment Period,
(iii) the Scheduled Principal Balance of each Mortgage Loans that was
repurchased by the Seller or the Master Servicer, (iv) the amount, if any, by
which the aggregate unpaid principal balance of any Qualifying Substitute
Mortgage Loan is less than the aggregate unpaid principal balance of the
related Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan pursuant to Section 2.05, and (v) all
Liquidation Proceeds collected during the related Prepayment Period (to the
extent such Liquidation Proceeds related to principal) less all Nonrecoverable
Advances relating to principal reimbursed during the related Due Period.
Group V Regular Interests: With respect to REMIC 1 the Class T1-V1, Class
-------------------------
T1-V2 and Class T1-V3 Interests and with respect to REMIC 2 the Class T2-V1,
Class T2-V2 and Class T2-V3 Interests.
Group V Standard Rate: With respect to any Distribution Date, a rate
---------------------
equal to the lesser of the Pass-Through Rate for the Class A-V Certificates
and the Group V Net Mortgage Rate.
Guaranteed Principal Amount: With respect to any Distribution Date (a)
---------------------------
the amount, if any, by which the applicable Class Principal Amount of the
applicable Class A Certificates exceeds the related Pool Balance at the end of
the related Due Period (after giving effect to all distributions of principal
on the applicable Class A Certificates on such Distribution Date) and (b) on
the Distribution Date in June 2029 (after giving effect to all other
distribution of principal on the applicable Class A Certificates), an amount
equal to the related Class Principal Amount of the applicable Class A
Certificates.
Holder or Certificateholder: The registered owner of any Certificate as
------ -----------------
recorded on the books of the Certificate Registrar, and the Certificate
Insurer to the extent of Cumulative Insurance Payments, 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, the Special 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, the Special Servicer, and any Servicer in determining whether
any Certificates are registered to an Affiliate of the Depositor, the Master
Servicer, the Special Servicer or such Servicer.
HUD: The United States Department of Housing and Urban Development, or
---
any successor thereto.
Incentive Fee: Upon the conversion of a Severely Delinquent Mortgage Loan
-------------
to a Resolved Mortgage Loan, the product of (1)(a) the Net Resolution
Proceeds, less (b) the product of (i) the unpaid principal balance of such
Resolved Mortgage Loan prior to resolution and (ii) one minus the Target
Severity and (2) the applicable Shares of Savings. The Incentive Fees shall be
recorded on the Incentive Register as each Severely Delinquent Mortgage Loan
is converted to a Resolved Mortgage Loan.
Incentive Fee Account: An account created and maintained by the Special
---------------------
Servicer, separate and apart from any of its own funds and general assets, in
the form of time deposit or demand accounts, which shall be titled "Ocwen
Federal Bank FSB, in trust for Home Equity Loan Asset-Backed Certificates,
Series 1999-OFS1." The Incentive Fee Account shall be an Eligible Account.
Incentive Register: A ledger established to maintain a record of the
------------------
Incentive Fees, including negative balances.
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.
Independent Contractor: Either (i) any Person (other than the Master
----------------------
Servicer) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund
were a real estate investment trust (except that the ownership tests set forth
in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35 percent or more of any Class of Certificates), so
long as the Trust Fund does not receive or derive any income from such Person
and provided that the relationship between such Person and the Trust Fund is
at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Master Servicer) if the
Trustee has received an Opinion of Counsel, which Opinion of Counsel shall be
an expense of the Trust Fund, to the effect that the taking of any action in
respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor, will not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.
Index: The index specified in the related Mortgage Note for calculation
-----
of the Mortgage Rate thereof.
Initial LIBOR Rate: 5.06%.
------------------
Insurance Agreement: The Insurance and Indemnity Agreement, dated as of
-------------------
June 1, 1999, among the Depositor, the Master Servicer, the Originator (as
defined therein), the Special Servicer, the Subservicer, the Trustee, the
Certificate Insurer and the Seller, as amended or supplemented in accordance
with the provisions thereof.
Insurance Payment: Any payment made by the Certificate Insurer under the
-----------------
related Policy with respect to the Class A Certificates.
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 Master 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.
Insured Payment: As defined in the Policies.
---------------
Interest Distributable Amount: For any Distribution Date and each Class
-----------------------------
of Offered Certificates equals the sum of (i) the related Monthly Interest
Distributable Amount for such Class for such Distribution Date and (ii) the
related Unpaid Interest Shortfall Amount for such Class for such Distribution
Date.
Interest Remittance Amount: With respect to each Mortgage Pool and 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
in such Mortgage Pool during the related Due Period and (ii) all interest
in respect of Principal Payments in full or in part received during
the related Prepayment Period, less (x) the related Servicing Fee with respect
to such Mortgage Loans and (y) unreimbursed interest Advances and other
amounts due to the Master Servicer, any Sub-Servicer or the Trustee with
respect to such Mortgage Loans, to the extent allocable to interest, (iii) any
Compensating Interest Payment with respect to such Mortgage Loans with respect
to the related Prepayment Period, (iv) the portion of any Substitution Amount
paid with respect to such Mortgage Loans during the related Prepayment Period
allocable to interest, (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 interest, as reduced by
unreimbursed interest Advances.
Intervening Assignments: The original intervening assignments of the
-----------------------
Mortgage, notice of transfer or equivalent instrument.
Late Collections: With respect to any Mortgage Loan, all amounts received
----------------
subsequent to the Determination Date immediately following any Due Period,
whether as late payments of Scheduled Payments or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) but
delinquent on a contractual basis for such Due Period and not previously
recovered.
Latest Possible Maturity Date: The Distribution Date occurring in June
-----------------------------
2035.
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 A-V Certificate.
-----------------
LIBOR Component: None.
---------------
LIBOR Determination Date: The second London Banking 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 Special 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 Section 9.06 or 9.16.
Liquidation Proceeds: The amount (other than amounts received in respect
--------------------
of the rental of any REO Property prior to REO Disposition) received by the
Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's
sale, foreclosure sale or otherwise, or (iii) the repurchase, substitution or
sale of a Mortgage Loan or an REO Property pursuant to or as contemplated by
Section 2.05, Section 9.15(c), Section 9.23 or Section 7.01.
Loan-to-Value Ratio: As of any date of determination, the fraction,
-------------------
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at such date and the denominator of which is the
Value of the related Mortgaged Property.
London Banking Day: Any day on which commercial banks and foreign
------------------
exchange markets settle payments in London and New York City.
Master Servicer: Ocwen Financial Services, Inc., a Florida corporation,
---------------
or any successor master servicer appointed as herein provided, in its capacity
as Master Servicer hereunder.
Master Servicer Affiliate: A Person (i) controlling, controlled by or
-------------------------
under common control with the Master Servicer or which is 50% or more owned by
the Master Servicer and (ii) which is qualified to service residential
mortgage loans.
Master Servicer Remittance Date: With respect to any Distribution Date,
-------------------------------
noon New York time on the second Business Day prior to such Distribution Date.
Material Defect: As defined in Section 2.02(c) hereof.
---------------
Maximum Cap: With respect to any Distribution Date, as the weighted
-----------
average of the Maximum Loan Rates on the Group V Loans less the sum of the
Servicing Fee Rate, the Trustee Fee Rate and the rate at which the related
premium payable to the Certificate Insurer is calculated.
Maximum Loan Rate: With respect to each Adjustable Rate Mortgage Loan,
-----------------
the percentage set forth in the related Mortgage Note as the maximum Mortgage
Rate thereunder.
Minimum Loan Rate: With respect to each Adjustable Rate Mortgage Loan,
-----------------
the percentage set forth in the related Mortgage Note as the minimum Mortgage
Rate thereunder.
Modified Mortgage Loan: A Specially Serviced Mortgage Loan which is
----------------------
modified in a manner consistent with this Agreement and for which the
Mortgagor has made three consecutive payments consistent with the terms of
such Specially Serviced Mortgage Loan as so modified.
Monthly Interest Distributable Amount: For any Distribution Date and each
-------------------------------------
Class of Offered Certificates equals the amount of interest accrued during the
related Accrual Period at the related Pass-Through Rate on the Class Principal
Amount of such Class immediately prior to such Distribution 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 Purchase Agreement: The agreement, dated as of June 1,
--------------------------------
1999, for the sale of the Mortgage Loans by Ocwen Financial Services, Inc. to
the Seller.
Mortgage Loan Sale Agreement: The agreement, dated as of June 1, 1999,
----------------------------
for the sale of the Mortgage Loans by the Seller to the Depositor.
Mortgage Loan Schedule: As of any date, the list of Mortgage Loans
----------------------
included in the Trust Fund on such date, separately identifying the Adjustable
Rate Mortgage Loans and the Fixed Rate Mortgage Loans (and identifying the
lien priority thereof), attached hereto as Schedule A. The Mortgage Loan
Schedule shall be prepared by the Master Servicer and shall set forth the
following information with respect to each Mortgage Loan:
(i) the Seller's Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including the state
and zip code;
(iv) a code indicating whether the Mortgaged Property is owner-
occupied;
(v) the type of residential dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the stated remaining months to maturity from the Cut-off Date
based on the original amortization schedule;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the Cut-off
Date;
(x) (A) the date on which the first Scheduled Payment was due on the
Mortgage Loan and, (B) if such date is not consistent with the
Due Date currently in effect, such Due Date;
(xi) the stated maturity date;
(xii) the amount of the Scheduled Payment due on the first Due Date on
or after the Cut-off Date;
(xiii) the last Due Date on which a Scheduled Payment was actually
applied to the unpaid Principal Balance;
(xiv) the original principal amount of the Mortgage Loan;
(xv) the outstanding principal balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
(xvi) in the case of each Adjustable Rate Mortgage Loan, the Gross
Margin;
(xvii) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(xviii) in the case of each Adjustable Rate Mortgage Loan, the Maximum
Loan Rate;
(xix) in the case of each Adjustable Rate Mortgage Loan, the Minimum
Loan Rate;
(xx) the Mortgage Rate at origination;
(xxi) in the case of each Adjustable Rate Mortgage Loan, the Periodic
Rate Cap and the maximum first Adjustment Date Mortgage Rate
adjustment;
(xxii) a code indicating the documentation style program (i.e., full
documentation, lite documentation or stated income
documentation);
(xxiii) in the case of each Adjustable Rate Mortgage Loan, the Index;
(xxiv) in the case of each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(xxv) the risk grade;
(xxvi) intentionally omitted;
(xxvii) the Value of the Mortgaged Property;
(xxviii) the sale price of the Mortgaged Property, if applicable;
(xxix) the prepayment penalty term;
(xxx) intentionally omitted;
(xxxi) intentionally omitted;
(xxxii) in the case of each Adjustable Rate Mortgage Loan, the rounding
code (nearest 0.125%);
(xxxiii) whether the Mortgage Loan is assumable; and
(xxxiv) the program code.
The Mortgage Loan Schedule shall set forth the following information, as
of the Cut-off Date with respect to each Mortgage Pool in the aggregate: (1)
the number of Mortgage Loans; (2) the Scheduled Principal Balance of each
Mortgage Pool; (3) the weighted average Mortgage Rate of the Mortgage Loans;
and (4) the weighted average maturity of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time by the Seller in accordance with
the provisions of this Agreement. With respect to any Qualifying Substitute
Mortgage Loan, the Cut-off Date shall refer to the related Cut-off Date for
such Mortgage Loan, determined in accordance with the definition of Cut-off
Date herein. 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: Either of Pool F or Pool V.
-------------
Mortgage Rate: With respect to each Mortgage Loan, the annual rate at
-------------
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate (i) in the case
of each Fixed Rate Mortgage Loan shall remain constant at the rate set forth
in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately
following the Cut-off Date and (ii) in the case of each Adjustable Rate
Mortgage Loan (A) as of any date of determination until the first Adjustment
Date following the Cut-off Date shall be the rate set forth in the Mortgage
Loan Schedule as the Mortgage Rate in effect immediately following the Cut-off
Date and (B) as of any date of determination thereafter shall be the rate as
adjusted on the most recent Adjustment Date, to equal the sum, rounded to the
nearest 0.125% as provided in the Mortgage Note, of the Index, determined as
set forth in the related Mortgage Note, plus the related Gross Margin subject
to the limitations set forth in the related Mortgage Note. With respect to
each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
Mortgaged Property: 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.
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 Monthly Interest Distributable
Amount payable with respect to the Certificates 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 Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
------------------------
the related Liquidation Proceeds net of (i) unreimbursed expenses and (ii) 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 (or the related REO
-----------------
Property), the Mortgage Rate thereof reduced by the Servicing 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.
Net Resolution Proceeds: With respect to each Resolved Mortgage Loan, the
-----------------------
"gross proceeds" received with respect to the final disposition of such
Resolved Mortgage Loan, minus all customary and reasonable expenses incurred
in connection with the servicing and Resolution of such Mortgage Loan
including without limitation, any (a) legal expenses, (b) advances of interest
at the Mortgage Rate, (c) unrecovered taxes paid, (d) unrecovered hazard
insurance premiums, (e) property protection expenses, (f) maintenance expenses
and (g) property expenses. With respect to (i) a Foreclosed Mortgage Loan, the
term "gross proceeds" shall mean all proceeds from the sale of the REO
Property less any real estate brokerage fees and closing costs, (ii) a
Paid-Off Mortgage Loan, the term "gross proceeds" shall mean all the proceeds
actually received by the Special Servicer including prepayment penalties but
not including late charges and Ancillary Income, (iii) a Reinstated Mortgage
Loan, the term "gross proceeds" shall mean an amount equal to the unpaid
principal balance of the Reinstated Mortgage Loan at the time of the entering
into of the agreement with the related Mortgagor and (iv) a Modified Mortgage
Loan, the term "gross proceeds" shall mean an amount equal to the unpaid
principal balance of the Modified Mortgage Loan at the time of the entering
into of the agreement with the related Mortgagor.
New Lease: Any lease of REO Property entered into on behalf of the Trust
---------
Fund, including any lease renewed or extended on behalf of the Trust Fund if
the Trust Fund has the right to renegotiate the terms of such lease.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
--------------------------
Certificate.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
----------------------------
Nonrecoverable Advance: Any Advance previously made or proposed to be
----------------------
made in respect of a Mortgage Loan or REO Property that, in the good faith
business judgment of the Master Servicer, will not or, in the case of a
proposed Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
Non-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 persons have authority to control all substantial
decisions of the trust.
OC Stepdown Date: With respect to each Certificate Group means the later
----------------
to occur of (x) the Distribution Date in January 2002 and (y) the first
Distribution Date on which the Pool Balance of the related Mortgage Pool has
been reduced to 50% of the aggregate of the Scheduled Principal Balances of
the Mortgage Loans in the related Mortgage Pool as of the Cut-off Date.
Offered Certificates: The Class A Certificates.
--------------------
Offering Document: The Prospectus.
-----------------
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.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
------------------
in form and substance to the Trustee and the Certificate Insurer, 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.
Optional Termination Date: The first Distribution Date on which the
-------------------------
option to terminate the Trust Fund pursuant to Section 7.01(b) may be
exercised by the majority holder of the Class X Certificates.
Original Group F Targeted OC Amount: An amount equal to the product of
-----------------------------------
the Pool Balance of the Group F Loans as of the Cut-off Date and 5.80%.
Original Group V Targeted OC Amount: An amount equal to the product of
-----------------------------------
the Pool Balance of the Group V Loans as of the Cut-off Date and 7.90%.
Original Target Percentage: With respect to Pool F, 5.80%, and with
--------------------------
respect to Pool V, 7.90%.
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.
Originator: Ocwen Financial Services, Inc., or any successor thereto.
----------
Overcollateralization Amount: With respect to any Distribution Date and
----------------------------
each Certificate Group, the amount, if any, by which (x) the related Pool
Balance on the last day of the related Due Period exceeds (y) the Class
Principal Amount of the related Class as of such Distribution Date after
giving effect to distributions on such Distribution Date.
Overcollateralization Deficiency: With respect to any Distribution Date
--------------------------------
and each Certificate Group, the amount, if any, by which (x) the related
Targeted Overcollateralization Amount for such Distribution Date exceeds (y)
the related Overcollateralization Amount for such Distribution Date,
calculated for this purpose after giving effect to distributions of the
related Basic Principal Distribution Amount on such Distribution Date.
Overcollateralization Release Amount: With respect to any Distribution
------------------------------------
Date and each Certificate Group (A) prior to the related OC Stepdown Date,
zero, and (B) on or after the related OC Stepdown Date the lesser of (x) the
related Principal Remittance Amount for such Distribution Date and (y) the
excess, if any, of (i) the related Overcollateralization Amount for such
Distribution Date on the related Certificates, 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 Class Principal Amounts of
the related Certificates, over (ii) the related Targeted Overcollateralization
Amount for such Distribution Date.
Paid-Off Mortgage Loan: A Specially Serviced Mortgage Loan which is paid
----------------------
in full or for which a lesser final payment is made consistent with the terms
of this Agreement and such payment in full or lesser final payment is received
by the Special Servicer in full satisfaction of the indebtedness owed under
the applicable Mortgage Note.
Pass-Through 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.
Payahead: With respect to any Mortgage Loan and any Due Date therefor,
--------
any Scheduled Payment received by the Master 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%.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan and
-----------------
any Adjustment Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan may increase or decrease (without regard to the Maximum Loan
Rate or the Minimum Loan Rate) on such Adjustment Date from the Mortgage Rate
in effect immediately prior to such Adjustment Date.
Permitted Transferee: As defined in Section 3.03(f).
--------------------
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.
Plan Asset Regulations: The Department of Labor regulations set forth in
----------------------
29 C.F.R. 2510.3-101.
Policies: The Certificate Guaranty Insurance Policy No. 29554 and the
--------
Certificate Guaranty Insurance Policy No. 29555 issued by the Certificate
Insurer relating to the Class A Certificates, including any endorsements
thereto, attached hereto as Exhibit B.
Policy Payments Account: The account established pursuant to Section
-----------------------
11.04 hereof.
Pool F: The aggregate of the Mortgage Loans identified on the Mortgage
------
Loan Schedule as being included in Pool F.
Pool V: The aggregate of the Mortgage Loans identified on the Mortgage
------
Loan Schedule as being included in Pool V.
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.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
-----------------------------
each Mortgage Loan that was during the related Prepayment Period the subject
of a Principal Prepayment in full or in part that was applied by the Master
Servicer to reduce the outstanding principal balance of such loan on a date
preceding the related Due Date, an amount equal to interest at the applicable
Net Mortgage Rate on the amount of such Principal Prepayment for the number of
days commencing on the date on which the prepayment is applied and ending on
the last day of the related Due Period. The obligations of the Master Servicer
in respect of any Prepayment Interest Shortfall are set forth in Section 9.24.
Prepayment Period: With respect to any Distribution Date, the period
-----------------
commencing on the Determination Date in the month preceding the month in which
such Distribution Date occurs (or, in the case of the first Distribution Date,
the day following the Cut-off Date) and ending on the day preceding the
Determination Date of the month in which such Distribution Date occurs.
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: For each Mortgage Pool and any
-----------------------------
Distribution Date will equal the sum of (i) the related Basic Principal
Distribution Amount and (ii) the related Extra Principal Distribution Amount
for such Distribution Date.
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.
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 Due Period, (ii) all Principal
Prepayments in full or in part received during the related Prepayment Period,
(iii) that portion of the Purchase Price representing the principal portion of
any repurchased Mortgage Loan in such Mortgage Pool deposited to the
Collection Account, (iv) the portion of any Substitution Amount paid during
the related Prepayment Period allocable to principal, (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, or the
Trustee, to the extent allocable to principal, and (vi) on the Distribution
Date when the Trust Fund is terminated in accordance with Section 7.01 hereof,
that portion of the Termination Price in respect of principal for such
Mortgage Pool.
Proceeding: Any suit in equity, action at law or other judicial or
----------
administrative proceeding.
Prospectus: The prospectus supplement dated June 21, 1999, together with
----------
the accompanying prospectus dated January 15, 1999, relating to the Class A-F
and Class A-V Certificates.
Purchase Price: With respect to the purchase of a Mortgage Loan or
--------------
related REO Property pursuant to this Agreement, an amount equal to the sum of
(a) 100% of the unpaid principal balance of such Mortgage Loan, (b) accrued
interest thereon at the applicable Mortgage Rate, from the date as to which
interest was last paid to the Due Date in the Due Period immediately preceding
the related Distribution Date and (c) the amount of any unreimbursed Advances
or Servicing Advances. 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 to the
Trustee hereunder), together with any accrued and unpaid compensation due to
the Master Servicer and Servicer hereunder.
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, (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 Moody's, or their successors. If such
-------------
agencies or their successors are no longer in existence, "Rating Agencies"
shall be such nationally recognized statistical rating agencies, or other
comparable Persons, designated by the Depositor and the Certificate Insurer,
notice of which designation shall be given to the Trustee and Master Servicer.
Realized Loss: With respect to each Mortgage Loan as to which a Final
-------------
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid principal balance of such Mortgage Loan as of the commencement
of the calendar month in which the Final Recovery Determination was made, plus
(ii) accrued interest from the Due Date as to which interest was last paid by
the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Scheduled Principal Balance of such Mortgage Loan as of the close
of business on the Distribution Date during such calendar month, plus (iii)
any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan pursuant to Sections 9.11(x) and 9.15(b), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during the
calendar month in which such Final Recovery Determination was made, net of
amounts that are payable therefrom to the Master Servicer with respect to such
Mortgage Loan pursuant to clause (iii) of Section 9.11.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of the Trust Fund, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor in respect of the related Mortgage Loan through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest
was then accruing on the related Mortgage Loan and (B) on a principal amount
equal to the Scheduled Principal Balance of the related Mortgage Loan as of
the close of business on the Distribution Date during such calendar month,
plus (iii) REO Imputed Interest for such REO Property for each calendar month
commencing with the calendar month in which such REO Property was acquired and
ending with the calendar month in which such Final Recovery Determination was
made, plus (iv) any amounts previously withdrawn from the Collection Account
in respect of the related Mortgage Loan pursuant to Sections 9.11(x) and
9.15(b), minus (v) the aggregate of all Advances made by the Master Servicer
in respect of such REO Property or the related Mortgage Loan for which the
Master Servicer has been or, in connection with such Final Recovery
Determination, will be reimbursed pursuant to Section 9.23 out of rental
income, Insurance Proceeds and Liquidation Proceeds received in respect of
such REO Property, minus (vi) the total of all net rental income, Insurance
Proceeds and Liquidation Proceeds received in respect of such REO Property
that has been, or in connection with such Final Recovery Determination, will
be transferred to the Certificate Account pursuant to Section 9.23.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan which has become the subject of a Debt
Service Reduction, the portion, if any, of the reduction in each affected
Scheduled Payment attributable to a reduction in the Mortgage Rate imposed by
a court of competent jurisdiction. Each such Realized Loss shall be deemed to
have been incurred on the Due Date for each affected Scheduled Payment.
With respect to any Mortgage Loan as to which any principal payment or
portion thereof is forgiven pursuant to Section 9.02, the amount of any such
forgiven principal payment.
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 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.
Record Date: With respect to the Class A-V Certificates and any
-----------
Distribution Date, the close of business on the Business Day immediately
preceding such Distribution Date. With respect to the Class A-F, Class FX,
Class VX and Class R 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.
---------------
Reinstated Mortgage Loan: A Specially Serviced Mortgage Loan for which
------------------------
the Mortgagor brings the Specially Serviced Mortgage Loan back to a
contractually current status either through a lump-sum payment or otherwise
consistent with the terms of this Agreement and has made three consecutive
timely payments subsequent to bringing such Specially Serviced Mortgage Loan's
status current.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
----------
amended.
Relief Act Interest Shortfall: With respect to any Distribution Date and
-----------------------------
any Mortgage Loan, any reduction in the amount of interest collectible on such
Mortgage Loan for the most recently ended calendar month as a result of the
application of the Relief Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as set
-----
forth in the Preliminary Statement and pursuant to Section 10.01(a) hereof.
REMIC 1 Regular Interest: Any of the Class T1-F1, Class T1-F2, Class
------------------------
T1-F3, Class T1-V1, Class T1-V2 and Class T1-V3 Interests.
REMIC 2 Regular Interest: Any of the Class T2-F1, Class T2-F2, Class
------------------------
T2-F3, Class T2-F4, Class T2-V1, Class T2-V2, Class T2-V3 and Class T2-V4
Interests.
REMIC 3 Regular Interest: Any of the Class T3-F1, Class T3-F2, Class
------------------------
T3-F3, Class T3-F4, Class T3-F5, Class T3-V1, Class T3-V2, Class T3-V3, Class
T3-V4 and Class T3-V5 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.
Rents from Real Property: With respect to any REO Property, gross income
------------------------
of the character described in Section 856(d) of the Code as being included in
the term "rents from real property."
REO Account: The account or accounts maintained by the Master Servicer in
-----------
respect of an REO Property pursuant to Section 9.23.
REO Disposition: The sale or other disposition of an REO Property on
---------------
behalf of the Trust Fund.
REO Imputed Interest: As to any REO Property, for any calendar month
--------------------
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Scheduled
Principal Balance of such REO Property (or, in the case of the first such
calendar month, of the related Mortgage Loan if appropriate) as of the close
of business on the Distribution Date in such calendar month.
REO Principal Amortization: With respect to any REO Property, for any
--------------------------
calendar month, the excess, if any, of (a) the aggregate of all amounts
received in respect of such REO Property during such calendar month, whether
in the form of rental income, sale proceeds (including, without limitation,
that portion of the Termination Price paid in connection with a purchase of
all of the Mortgage Loans and REO Properties pursuant to Section 7.01 that is
allocable to such REO Property) or otherwise, net of any portion of such
amounts (i) payable pursuant to Section 9.23(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 9.23(d) for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and Advances in respect of such REO Property or the related
Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO
Property for such calendar month.
REO Property: A Mortgaged Property acquired by the 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.
Request for Release: A release signed by a Servicing Officer, in the form
-------------------
of Exhibit C attached hereto.
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)
$5,000 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.
--------------------
Resolution: Where a Specially Serviced Mortgage Loan becomes a Resolved
----------
Mortgage Loan.
Resolved Mortgage Loan: Each of a Reinstated Mortgage Loan, a Modified
----------------------
Mortgage Loan, a Paid-Off Mortgage Loan or a Foreclosed Mortgage Loan.
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, any trust officer or assistant
trust officer working in its corporate trust department and having direct
responsibility for the administration of this Agreement.
Restricted Certificate: Any Class X or Class R Certificate.
----------------------
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.
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 Due 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.
Seller: LMAC, Inc., or its successor in interest, in its capacity as
------
seller under the Mortgage Loan Sale Agreement.
Servicer: Either the Master Servicer or the Special Servicer, as
--------
applicable; provided that unless the context otherwise requires, "Servicer" as
applied to Ocwen Federal Bank FSB shall refer to that Person both as Special
Servicer and as Sub-Servicer, or any successor in interest.
Servicing Account: The account or accounts created and maintained
-----------------
pursuant to Section 9.09.
Servicing Advances: The reasonable "out-of-pocket" costs and expenses
------------------
incurred by the Master Servicer in connection with a default, delinquency or
other unanticipated event by the Master Servicer in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, in respect of a
particular Mortgage Loan, (iii) the management (including reasonable fees in
connection therewith) and liquidation of any REO Property, and (iv) the
performance of its obligations under Sections 9.01, 9.09, 9.14, 9.15 and 9.23
(in the case of Section 9.23, including but not limited to the cost of
obtaining any Opinion of Counsel of the kind described in Section 9.23(a)).
The Master Servicer shall not be required to make any Servicing Advance in
respect of a Mortgage Loan or REO Property that, in the good faith business
judgment of the Master Servicer, would not be ultimately recoverable from
related Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
Servicing Fee: With respect to each Mortgage Loan and for any calendar
-------------
month, an amount equal to one month's interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered
by such payment of interest) at the Servicing Fee Rate on the same principal
amount on which interest on such Mortgage Loan accrues for such calendar
month. A portion of such Servicing Fee may be retained by any Sub-Servicer as
its servicing compensation.
Servicing Fee Rate: 0.50% per annum.
------------------
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, the Certificate Insurer and the Depositor
on the Closing Date, as such list may from time to time be amended.
Severely Delinquent Mortgage Loan: Any Specially Serviced Mortgage Loan
---------------------------------
that does not become a Resolved Mortgage Loan prior to the 150th day of
delinquency (without giving effect to any grace period permitted by the
related Mortgage Note) in the payment of a Monthly Payment.
Special Servicer: Ocwen Federal Bank FSB, in its capacity as special
----------------
servicer hereunder, or any successor in interest.
Special Servicer Fee: With respect to any Distribution Date, an amount
--------------------
equal to the sum of (i) $166 per Specially Serviced Mortgage Loan payable
immediately upon such Mortgage Loan becoming a Specially Serviced Mortgage
Loan and (ii) upon such Specially Serviced Mortgage Loan becoming 150 days or
more delinquent as of any Distribution Date, $166 per month beginning on such
Distribution Date and continuing for the next twelve Distribution Dates
regardless of whether such Specially Serviced Mortgage Loan has been cured.
Specially Serviced Mortgage Loan: Any Mortgage Loan which is 90 or more
--------------------------------
days delinquent, the servicing of which has been transferred to the Special
Servicer.
Startup Day: The day designated as such pursuant to Section 10.01(b)
-----------
hereof.
Sub-Servicer: Any Person with which the Master Servicer has entered into
------------
a Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 9.03.
Sub-Servicing Account: An account established by a Sub-Servicer which
---------------------
meets the requirements set forth in Section 9.08 and is otherwise acceptable
to the Master Servicer.
Sub-Servicing Agreement: The written contract between the Master Servicer
-----------------------
and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 9.03.
Substitution Amount: As defined in the definition of Qualifying
-------------------
Substitute Mortgage Loan.
Target Severity: With respect to any Specially Serviced Mortgage Loan,
---------------
from the Closing Date to but not including the 25th calendar month after the
Closing Date, 20%; on and after the 25th calendar month after the Closing
Date, 25%.
Targeted Overcollateralization Amount: With respect to any Distribution
-------------------------------------
Date prior to the OC Stepdown Date:
(A) with respect to the Group F Loans the greater of (i) the Original
Group F Targeted OC Amount and (ii) 110% of the related Delinquency Amount,
and
(B) with respect to the Group V Loans the greater of (i) the Original
Group V Targeted OC Amount and (ii) 105% of the related Delinquency Amount.
With respect to any Distribution Date on or after the OC Stepdown Date:
(C) with respect to the Group F Loans the greater of
(i) two times the product of the Original Target Percentage for
Loan Group F and the related Pool Balance as of the last day of the
related Due Period;
(ii) 110% of the related Delinquency Amount;
(iii) the product of (x) 0.75% and (y) the related Pool Balance as
of the Cut-off Date; and
(iv) the aggregate Scheduled Principal Balance of the three
largest Mortgage Loans among the Group F Loans as of the end of the
related Due Period;
provided, however, that with respect to any Distribution Date occurring on or
after the OC Stepdown Date, if the related Delinquency Percentage for Pool F
exceeds 9.00%, the Targeted Overcollateralization Amount for Pool F shall not
be less than the Targeted Overcollateralization Amount as of the immediately
preceding Distribution Date; and provided further that the Certificate Insurer
may reduce the Targeted Overcollateralization Amount for Pool F as long as
such reduction will not result in a downgrade, qualification or withdrawal of
the then current ratings of the related Class A Certificates, without regard
to the related Policy, as evidenced in writing by each Rating Agency, and
(D) with respect to the Group V Loans the greatest of:
(i) two times the product of the Original Target Percentage for
Pool V and the related Pool Balance as of the last day of the related Due
Period;
(ii) 105% of the related Delinquency Amount;
(iii) the product of (x) 0.75% and (y) the related Pool Balance as
of the Cut-off Date; and
(iv) the aggregate Scheduled Principal Balance of the three
largest Mortgage Loans among the Group V Loans as of the end of the
related Due Period;
provided, however, that with respect to any Distribution Date occurring on or
after the OC Stepdown Date, if the related Delinquency Percentage for Pool V
exceeds 12.00%, the Targeted Overcollateralization Amount for Pool V shall not
be less than the Targeted Overcollateralization Amount as of the immediately
preceding Distribution Date; and provided further that the Certificate Insurer
may reduce the Targeted Overcollateralization Amount for Pool V as long as
such reduction will not result in a downgrade, qualification or withdrawal of
the then current ratings of the related Class A Certificates without regard to
the related Policy, as evidenced in writing by each Rating Agency.
Tax Matters Person: The "tax matters person" as specified in the REMIC
------------------
Provisions.
Termination Price: As defined in Section 7.01.
-----------------
Title Insurance Policy: A title insurance policy maintained with respect
----------------------
to a Mortgage Loan.
Trigger Event: As defined in the Insurance Agreement.
-------------
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 the Mortgage Loan Purchase
Agreement, such amounts as shall from time to time be held in the Collection
Account, the Certificate Account, the Expense 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). Notwithstanding the foregoing, however, the Trust Fund specifically
excludes the Policies and all payments and other collections of principal and
interest due on the Mortgage Loans on or before the Cut-off Date.
Trustee: The Chase Manhattan Bank, a New York banking corporation, or its
-------
successor in interest, or any successor trustee appointed as herein provided.
Trustee Fee: The amount payable to the Trustee on each Distribution Date
-----------
pursuant to Section 6.12 as compensation for all services rendered by it in
the execution of the trust hereby created and in the exercise and performance
of any of the powers and duties of the Trustee hereunder, which amount shall
equal the product of (i) the Trustee's Fee Rate, multiplied by (ii) the
aggregate Scheduled Principal Balance of the Mortgage Loans and any REO
Properties as of the preceding Distribution Date (or, in the case of the
initial Distribution Date, as of the Cut-off Date).
Trustee Fee Rate: 0.01125% per annum.
----------------
Uninsured Cause: Any cause of damage to a Mortgaged Property such that
---------------
the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 9.13.
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 Pass-Through Rate (calculated
without giving effect to the applicable Available Funds Cap Rate).
Unpaid Interest Shortfall Amount: With respect to each Class of Class A
--------------------------------
Certificates and any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed
on such Class in respect of interest on such preceding Distribution Date, plus
interest on the amount of interest due but not paid on the Certificates of
such Class on such preceding Distribution Date, to the extent permitted by
law, at the Pass-Through Rate for such Class for the related Accrual Period.
Upper Tier REMIC: REMIC 3.
----------------
Value: With respect to any Mortgaged Property, the lesser of (i) the
-----
lesser of (a) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of FNMA and FHLMC, and
(b) the value thereof as determined by a review appraisal conducted by the
Seller in the event any such review appraisal determines an appraised value
ten percent or more lower than the value thereof as determined by the
appraisal referred to in clause (i)(a) above and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, provided, however, (A) in the case of a refinanced Mortgage
Loan, such value of the Mortgaged Property is based solely upon the lesser of
(1) the value determined by an appraisal made for the originator of such
refinanced Mortgage Loan at the time of origination of such refinanced
Mortgage Loan by an appraiser who met the minimum requirements of FNMA and
FHLMC and (2) the value thereof as determined by a review appraisal conducted
by the Seller in the event any such review appraisal determines an appraised
value ten percent or more lower than the value thereof as determined by the
appraisal referred to in clause (ii)(A)(l) above and (B) in the case of a
Mortgage Loan originated in connection with a "lease-option purchase", such
value of the Mortgaged Property is based on the lower of the value determined
by an appraisal made for the originator of such Mortgage Loan at the time of
origination or the sale price of such Mortgaged Property if the "lease option
purchase price" was set less than 12 months prior to origination, and is based
on the value determined by an appraisal made for the originator of such
Mortgage Loan at the time of origination if the "lease option purchase price"
was set 12 months or more prior to origination.
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,
100% of all Voting Interests shall be allocated to the Class A Certificates.
Voting Interests shall be allocated among the Class A Certificates (and among
the Certificates within 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.
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 for the benefit of the
Certificateholders and the Certificate Insurer, 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 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 Servicing Account established
pursuant to Section 9.09 and all amounts from time to time credited to and the
proceeds of any such Servicing 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 the Certificate Insurer 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 and the Mortgage Loan Purchase
Agreement as well as the rights and interests of the Purchaser under the
Mortgage Loan Purchase Agreement (as described therein) and the Trustee hereby
accepts such assignment, and shall be entitled to exercise all rights of the
Depositor under the Mortgage Loan Sale Agreement and the Mortgage Loan
Purchase 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, 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 a
Certification of the Master Servicer 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), a lost note affidavit (including indemnification of the
Certificate Insurer) in form and substance acceptable to the Certificate
Insurer and a written Opinion of Counsel acceptable to the Trustee, the
Certificate Insurer 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) the original Assignment of Mortgage for each Mortgage Loan
executed in the following form: "The Chase Manhattan Bank, as Trustee";
(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 and the Certificate Insurer that such original Intervening
Assignment is not required to enforce the Trustee's interest in the
Mortgage Loans;
(vii) reserved;
(viii) with respect to any Mortgage 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) reserved; and
(xi) reserved.
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) Assignments of Mortgage 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, the Certificate
Insurer and the Rating Agencies, recording in such states is not required to
protect the Trustee's interest in the related Mortgage Loans notwithstanding
the delivery of any legal opinions, each assignment of mortgage shall be
recorded upon the earliest to occur of (i) direction by the Certificate
Insurer; (ii) the occurrence of an Event of Default under the Transaction
Documents (as defined in the Insurance Agreement); or (iii) any bankruptcy,
insolvency or foreclosure with respect to the related Mortgagor. All recording
of assignments of mortgages shall be at the expense of the Master Servicer.
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 Servicer, at the
expense of the Seller and with the cooperation of the Trustee, 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 (a)(v) above with respect to each Mortgage Loan.
(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 and the Certificate Insurer.
(f) In addition to the foregoing, the Depositor shall cause the
Certificate Insurer to deliver the Policies to the Trustee for the benefit of
the Certificateholders and the Certificate Insurer.
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 Certificate
Insurer, the Master Servicer and the Special Servicer an initial certification
in the form annexed hereto as Exhibit B-1 (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 Seller and to the
Trustee. The Trustee or the Custodian shall report to the Certificate Insurer
missing items in the Mortgage File by categorizing each exception as either
"critical" or "noncritical." Critical exceptions are (1) no original Mortgage
Note or a certified copy of the Mortgage Note, together with the lost note
affidavit in lieu of the original Mortgage Note; (2) no original Mortgage with
recording information thereon or a certified copy of the Mortgage with
recording information thereon in lieu of the original mortgage; and (3) no
assignment of the Mortgage Loan in recordable form upon the initial Trustee
and/or Custodian certification and no recorded assignment of the Mortgage Loan
upon the final Trustee and/or Custodian certification. "Noncritical
exceptions" include but are not limited to, items such as intervening
assignments of the Mortgage Loan, any modification or amendments of the
Mortgage Loan and a copy of the title insurance policy. Within 90 days of its
receipt of such notice, the Seller, shall be required to cure such Material
Defect (and, in such event, the Seller shall provide the Trustee and the
Certificate Insurer with an Officer's Certificate confirming that such cure
has been effected). If the Seller does not so cure such Material Defect, the
Seller 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 Seller to cure such Material Defect, repurchase the related Mortgage Loan
from the Trust Fund at the Purchase Price. Notwithstanding the preceding
sentence, if the Seller shall be unable to cure such Material Defect within
such 90 day period, such period shall be extended, upon the written consent of
the Certificate Insurer (which consent shall not be unreasonably withheld),
for as long as it shall require the Seller in the exercise of due diligence to
cure such Material Defect provided that such period is consented to by the
Certificate Insurer. A loss shall be deemed to be attributable to the failure
of the Seller to cure a Material Defect if, as determined by the Seller, 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 Seller 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
Seller 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 Certificate Insurer, 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.
Each of the parties hereto acknowledges that the Custodian, on behalf of
the Trustee shall perform the applicable review of the Mortgage Loans and
deliver the applicable certifications as provided in this 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 the Certificate Insurer, 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, the Master Servicer and the Special 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 sale and assignment by the Depositor
to the Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor had equitable title to each Mortgage Loan (insofar as such
title was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature.
(b) The representations and warranties of the Seller with respect to the
Mortgage Loans in the Mortgage Loan Sale Agreement, which have been assigned
to the Trustee hereunder, were made as of the date of such Mortgage Loan Sale
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 Mortgage Loan Sale Agreement, the Trustee, the Certificate Insurer or a
Certificateholder shall have the right to require that the Seller or the
Originator under the Mortgage Loan Purchase Agreement cure such breach or
effect such other remedy as is specified in subsection 3.1 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 and (ii) of the
Seller set forth in 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, the Sub-Servicer, the Certificate Insurer,
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 by the Seller and assigned to the Trustee, the Seller 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 the Seller assigned to the Trustee, the Trustee shall enforce its
rights under the Mortgage Loan Sale Agreement and the Mortgage Loan Purchase
Agreement for the benefit of Certificateholders and the Certificate Insurer.
The period within which the Seller may cure a breach of any representations
and warranties given by the Seller may not be extended beyond 90 days without
the consent of the Certificate Insurer.
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans. (a)
------------------------------------------------------
With respect to any Mortgage Loan repurchased by the Seller pursuant to this
Agreement or pursuant to the Mortgage Loan Sale 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 Seller, 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 Servicer and with
written direction executed 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 Master Servicer
shall cause the Seller to 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 Seller will be
deemed to have made, with respect to such Qualifying 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 Servicer, at the
expense of the Seller and with the cooperation of the Trustee, shall cause the
Assignment of Mortgage to be recorded by the Servicer if required pursuant to
the first sentence of Section 2.01(c)(i).
(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.
(d) The Master Servicer shall enforce the Seller's obligations under the
Mortgage Loan Sale Agreement to cure any defects or breach if the Seller does
not cure such defect or breach in all material respects during the periods
required pursuant to the Mortgage Loan Sale Agreement.
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 and
the Certificate Insurer 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 and the Certificate Insurer, 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.
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 Amounts, 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 Amounts specified in the Preliminary Statement hereto and in
integral multiples of $1,000 in excess thereof. The Class X Certificates and
the Class R Certificate shall each be issued as single Certificates 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, an affiliate
(as defined in Rule 144(a)(1) under the 1933 Act) of the Depositor 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 (not at the
expense of the Trustee), 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 and the Certificate
Insurer 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 Certificate Insurer, 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 written 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, and for the benefit of the
Certificate Insurer. 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 "Ocwen Financial Services, Inc., as
Master Servicer, in trust for the benefit of the Holders of Ocwen Home Equity
Loan Asset-Backed Certificates, Series 1999-OFS1 and MBIA Insurance
Corporation." 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 and the Certificate
Insurer 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 9.11), other than amounts not included in the Available Funds 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 Master Servicer Remittance Date
the 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) in accordance with Section 9.10.
(e) Reserved.
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 in accordance with Section 9.11.
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 provide and deliver to
the Trustee no later than five 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 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 allocable
to interest;
(iii) the amount, if any, of any distribution to the Holders of
the Class X Certificates 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 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 of each Class of Certificates, as
of such Distribution Date after giving effect to payments allocated to
principal reported under clause (i) above;
(vii) reserved;
(viii) any Realized Losses realized with respect to the Mortgage
Loans and the unpaid balance thereon (x) in the applicable Prepayment
Period and (y) in the aggregate since the Cut-off Date;
(ix) the amount of the Servicing Fees, Special Servicer 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, (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, and (f) as to
which bankruptcy 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 Unpaid Interest Shortfall Amount,
Net Prepayment Interest Shortfalls, Basis Risk Shortfalls and Unpaid
Basis Risk Shortfalls, if any, to the extent applicable, for each Class
of Certificates, as applicable after giving effect to the distribution
made on such Distribution Date;
(xv) the Pass-Through Rate applicable to such Distribution Date
with respect to each Class of Certificates;
(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);
(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;
(xviii) the Deficiency Amount with respect to each Class of Class
A Certificates;
(xix) the Scheduled Principal Balance of any Mortgage Loans
(individually and in the aggregate in each Mortgage Pool) that have been
modified, to the extent permitted under Section 9.02, and the type of
modification; and
(xx) the aggregate Scheduled Principal Balance of Mortgage Loans
that have been purchased from the Trust Fund pursuant to Section 9.15(c).
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.
The Master Servicer shall furnish to the Trustee and to the Certificate
Insurer, during the term of this Agreement, such periodic, special, or other
reports or information not specifically provided for herein, as may be
necessary, reasonable, or appropriate with respect to the Trustee or the
Certificate Insurer, as the case may be, or otherwise with respect to the
purposes of this Agreement, all such reports or information to be provided by
and in accordance with such applicable instructions and directions as the
Trustee or the Certificate Insurer may reasonably require.
Within a reasonable period of time after the end of each calendar year,
the Trustee upon written request shall furnish to each Person who at any time
during the calendar year was a Holder of a Certificate and the Certificate
Insurer a statement containing the information set forth in subclauses (i)
through (ii) above, aggregated for such calendar year or applicable portion
thereof during which such person was a Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time are in force.
On each Distribution Date, the Trustee shall forward to the Depositor, to
each Holder of a Residual Certificate, to the Certificate Insurer and to the
Master Servicer, a copy of the reports forwarded to the Certificateholders on
such Distribution Date and a statement setting forth the amounts, if any,
actually distributed with respect to the Residual Certificates, respectively,
on such Distribution Date.
Within a reasonable period of time after the end of each calendar year,
the Trustee, upon written request, shall furnish to each Person who at any
time during the calendar year was a Holder of a Residual Certificate a
statement setting forth the amount, if any, actually distributed with respect
to the Residual Certificates, as appropriate, aggregated for such calendar
year or applicable portion thereof during which such Person was a
Certificateholder.
The Trustee shall, upon written request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special
or other reports or information, whether or not provided for herein, as shall
be reasonable with respect to the Certificateholder, or otherwise with respect
to the purposes of this Agreement, all such reports or information to be
provided at the expense of the Certificateholder in accordance with such
reasonable and explicit instructions and directions as the Certificateholder
may provide. For purposes of this Section 4.03, the Trustee's duties are
limited to the extent that the Trustee receives timely reports as required
from the Master Servicer.
On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") Cusip Level Factors for each class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg. In connection with providing the information
specified in this Section 4.03 to Bloomberg, the Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified and held
harmless by the Master Servicer, to the extent and in the manner provided in
Section 6.12.
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 and the Certificate Insurer 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 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 and certain
payments to the Certificate Insurer 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, 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 Trustee 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 Trustee for deposit in the
Certificate Account out of its own funds, without any right of reimbursement
therefor, immediately as realized.
Section 4.05. Determination of LIBOR. (a) If the outstanding Certificates
----------------------
include any LIBOR Certificates, then on each LIBOR Determination Date the
Trustee 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 Trustee and the Trustee's
subsequent calculation of the Pass-Through Rate applicable to the LIBOR
Certificates 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, and National Westminster Bank and 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 $1,000,000, or, in the case of a Class X
Certificates, 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. 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.
Section 5.02. Distributions from the Certificate Account.
------------------------------------------
(a) On each Distribution Date, the Trustee shall (i) withdraw from the
Certificate Account an amount equal to the Available Funds for the related
Certificate Group (other than any amount in the Certificate Account that was
transferred from the Policy Payments Account to the Certificate Account
pursuant to Section 11.04), (ii) allocate such amounts to the interests issued
in respect of REMIC 1 and REMIC 2 in accordance with the terms hereof and
(iii) distribute the following amounts (together with amounts withdrawn from
the Basis Risk Reserve Fund pursuant to Section 5.07 of this Agreement), in
the following order of priority:
(b) With respect to the Class A-F Certificates, the Group F Available
Funds for such date in the following order of priority:
(i) to the Certificate Insurer, the amount owing to the
Certificate Insurer under the Insurance Agreement for the premium payable
in respect of the Class A-F Certificates;
(ii) to the holders of the Class A-F Certificates, the related
Interest Distributable Amount;
(iii) from the Group F Principal Distribution Amount for such
Distribution Date to the holders of the Class A-F Certificates, an amount
equal to the Group F Basic Principal Distribution Amount;
(iv) to the Certificate Insurer, the amount owing to the
Certificate Insurer under the Insurance Agreement for reimbursement for
prior draws made on the related Policy in respect of the Offered
Certificates and any other amounts owing to the Certificate Insurer under
the Insurance Agreement;
(v) to the holders of the Class A-V Certificates, an amount equal
to the excess, if any, of (x) the Interest Distributable Amount for the
Class A-V Certificates for such Distribution Date over (y) the amount of
interest actually distributed to the holders of the Class A-V
Certificates on such Distribution Date pursuant to subclause (c)(ii)
below;
(vi) to the holders of the Class A-V Certificates, an amount equal
to the excess, if any, of (x) the Class Principal Amount of the Class A-V
Certificates (after giving effect to all distributions thereon on such
Distribution Date from the Group V Available Funds up through Section
5.02(b)(v)) over (y) the Pool Balance of Pool V on the last day of the
related Due Period;
(vii) from the Group F Principal Distribution Amount for such
Distribution Date to the holders of the Class A-F Certificates, an amount
equal to the Extra Principal Distribution Amount related to the Class A-F
Certificates;
(viii) to the holders of the Class A-V Certificates, an amount
equal to the excess, if any, of (x) the Group V Principal Distribution
Amount for such Distribution Date over (y) the amount actually
distributed to holders of the Class A-V Certificates on such Distribution
Date pursuant to subclause (c)(vii) from the Group V Available Funds,
plus, any remaining Overcollateralization Deficiency for such
Distribution Date for the Class A-V Certificates;
(ix) to the Trustee, any amounts owed thereto pursuant to Section
6.11 of this Agreement, and to the Master Servicer, any amounts owed
thereto pursuant to Section 9.05 of this Agreement;
(x) to the Special Servicer, (A) any amounts owed thereto pursuant
to this Agreement, including the amount of any accrued but unpaid Special
Servicer Fees, and (B) to the Incentive Fee Account, any amounts
calculated by the Special Servicer in accordance with Section 9.28; and
(xi) to the holder of the Class FX Certificate, the Class FX
Distributable Amount.
(c) With respect to the Class A-V Certificates, the Group V Available
Funds for such date in the following order of priority:
(i) to the Certificate Insurer, the amount owing to the
Certificate Insurer under the Insurance Agreement for the premium payable
in respect of the Class A-V Certificates;
(ii) to the holders of the Class A-V Certificates, the related
Interest Distributable Amount;
(iii) from the Group V Principal Distribution Amount for such
Distribution Date to the holders of the Class A-V Certificates, an amount
equal to the Group V Basic Principal Distribution Amount;
(iv) to the Certificate Insurer, the amount owing to the
Certificate Insurer under the Insurance Agreement for reimbursement for
prior draws made on the related Policy in respect of the Offered
Certificates and any other amounts owing to the Certificate Insurer under
the Insurance Agreement;
(v) to the holders of the Class A-F Certificates, an amount equal
to the excess, if any, of (x) the Interest Distributable Amount for the
Class A-F Certificates for such Distribution Date over (y) the amount of
interest actually distributed to the holders of the Class A-F
Certificates on such Distribution Date pursuant to subclause (b)(ii)
above;
(vi) to the holders of the Class A-F Certificates, an amount equal
to the excess, if any, of (x) the Class Principal Amount of the Class A-F
Certificates (after giving effect to all distributions thereon on such
Distribution Date from the Group F Available Funds up through Section
5.02(c)(v)) over (y) the Pool Balance of Pool F on the last day of the
related Due Period;
(vii) from the Group V Principal Distribution Amount for such
Distribution Date to the holders of the Class A-V Certificates, an amount
equal to the Extra Principal Distribution Amount related to the Class A-V
Certificates;
(viii) to the holders of the Class A-F Certificates, an amount
equal to the excess, if any, of (x) the Group F Principal Distribution
Amount for such Distribution Date over (y) the amount actually
distributed to holders of the Class A-F Certificates on such Distribution
Date pursuant to subclause (b)(vii) from the Group F Available Funds,
plus, any remaining Overcollateralization Deficiency for the Class A-F
Certificates for such Distribution Date;
(ix) first, to the Basis Risk Reserve Fund, an amount up to the
Basis Risk Shortfall, and second, from the Basis Risk Reserve Fund, to
the holders of the Class A-V Certificates, an amount equal to the Basis
Risk Shortfall, if any;
(x) to the Trustee, any amounts owed thereto pursuant to Section
6.11 of this Agreement, and to the Master Servicer, any amounts owed
thereto pursuant to Section 9.05 of this Agreement;
(xi) to the Special Servicer, (A) any amounts owed thereto
pursuant to this Agreement, including the amount of any accrued but
unpaid Special Servicer Fees, and (B) to the Incentive Fee Account, any
amounts calculated by the Special Servicer in accordance with Section
9.28; and
(xii) to the holder of the Class VX Certificate, the Class VX
Distributable Amount.
(d) On each Distribution Date, any remaining amounts after giving effect
to the distributions specified in clauses (b) and (c) above will be paid to
the holders of the Class R Certificates.
(e) In addition to making the distributions required pursuant to Section
5.02 (a) and (b) on each Distribution Date for which there exists a Deficiency
Amount with respect to the Class A-F or Class A-V Certificates, the Trustee
shall withdraw from the Certificate Account any amount therein that was
transferred from the Policy Payments Account to the Certificate Account
pursuant to Section 11.04 and distribute to the Holders of the Class A-F or
Class A-V Certificates, as applicable, (i) an amount equal to any amount
required to be paid to such Class pursuant to the terms of the applicable
Policy for such Distribution Date remaining unpaid after giving effect to all
distributions made pursuant to Section 5.02(b) and Section 5.02(c) for such
Distribution Date.
(f) Each Holder of a Class A Certificate, by its acceptance of such
Certificate, hereby agrees that, in the event any distribution is made to any
Holder of a Class A Certificate from amounts paid under the related Policy the
Certificate Insurer shall be subrogated in the manner herein provided to the
rights of the Holder of such Class A Certificate to receive from amounts on
deposit in the Certificate Account the distributions allocable to principal
and interest that would have been distributable to such Holder if no such
distribution to such Holder had been made from amounts paid under the related
Policy; and (ii) in addition to the rights of the Class A Certificateholders
that the Certificate Insurer may exercise in accordance with the provisions of
Section 11.01, the Certificate Insurer may exercise any option, vote, right,
power or the like with respect to each Class A Certificate.
(g) All distributions made with respect to each Class of Certificates on
each Distribution Date shall be allocated pro rata among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Payments in respect of each Class of Certificates on each Distribution Date
will be made to the Holders of the respective Class of record on the related
Record Date (except as otherwise provided in Section 5.02(h) or Section 7.01
respecting the final distribution on such Class), based on the aggregate
Percentage Interest represented by their respective Certificates, and shall be
made by wire transfer of immediately available funds to the account of any
such Holder at a bank or other entity having appropriate facilities therefor,
if such Holder shall have so notified the Trustee in writing at least five
Business Days prior to the Record Date immediately prior to such Distribution
Date and is the registered owner of Certificates having an initial aggregate
Certificate Principal Balance that is not less than $1,000,000 (or, in the
case of the Class X Certificates or the Class R Certificates, a 100%
Percentage Interest) or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Officer
or such other location specified in the notice to Certificateholders of such
final distribution. Payments to the Certificate Insurer on any Distribution
Date will be made by wire transfer of immediately available funds to the
account designated by the Certificate Insurer.
Each distribution with respect to a Book-Entry Certificate shall be paid
to the Depository, as Holder thereof, and the Depository shall be responsible
for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution
to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible
for disbursing funds to the Certificate Owners that it represents. None of the
Trustee, the Certificate Registrar, the Depositor or the Master Servicer shall
have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.
(h) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in
such distributions, shall be as set forth in this Agreement. Neither the
Holders of any Class of Certificates nor the Trustee nor the Master Servicer
shall in any way be responsible or liable to the Holders of any other Class of
Certificates in respect of amounts properly previously distributed on the
Certificates.
(i) Except as otherwise provided in Section 7.01, whenever the Trustee
receives written notice from the Master Servicer that the final distribution
with respect to any Class of Certificates will be made on the next
Distribution Date, the Trustee shall, no later than five (5) Business Days
after the related Determination Date, mail to each Holder on such date of such
Class of Certificates and to the Certificate Insurer a notice to the effect
that:
(i) The Trustee expects that the final distribution with respect
to such Class of Certificates will be made on such Distribution Date but
only upon presentation and surrender of such Certificates at the office
of the Trustee therein specified, and
(ii) No interest shall accrue on such Certificates from and after
the end of the related Accrual Period.
Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and
held in trust and credited to the account of the appropriate non-tendering
Holder or Holders. If any Certificates as to which notice has been given
pursuant to this Section 5.02(i) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order
to receive the final distribution with respect thereto. If within one year
after the second notice all such Certificates shall not have been surrendered
for cancellation, the Trustee shall, directly or through an agent, contact the
remaining non-tendering Certificateholders concerning surrender of their
Certificates in the manner reasonably specified to the Trustee by the Master
Servicer in writing. The costs and expenses of maintaining the funds in trust
and of contacting such Certificateholders shall be paid out of the assets
remaining in the trust fund. If within one year after the second notice any
such Certificates shall not have been surrendered for cancellation, the
Trustee shall pay to the Certificate Insurer any amount of such funds that
were paid by the Certificate Insurer under the related Policy but shall
continue to hold any remaining funds for the benefit of the non-tendering
Certificateholders and such Certificateholders shall thereafter look solely to
the Master Servicer for payment thereof, and all liability of the Certificate
Insurer with respect to such trust funds shall hereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in
trust by the Master Servicer as a result of such Certificateholder's failure
to surrender its Certificate(s) for final payment thereof in accordance with
this Section 5.02(i).
Any payment of indemnification to the Master Servicer, the Special
Servicer or the Trustee under any provision of this Agreement, including, but
not limited to, Sections 6.11, 9.05 and 9.36, shall be subordinate to and
shall be paid with respect to any Distribution Date, only after payment to the
Certificateholders and the Certificate Insurer payable under Sections
5.02(b)(i)-(viii) and 5.02(c)(i)-(viii). No such indemnification or any other
similar amounts shall be paid from the Collection Account.
Section 5.03. Reserved.
--------
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 Due 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 and the Certificate Insurer 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 and the Collection Account for Advances made by it pursuant to this
Section 5.04 as if it were the Master Servicer.
Section 5.05. Reserved.
--------
Section 5.06. REMIC 1, REMIC 2 and REMIC 3 Allocations.
----------------------------------------
The initial principal balances of the Class T1-F1, Class T1-F2, and Class
T1-F3 Interests shall equal 98%, 1%, and 1%, respectively, of the Group F Pool
Balance as of the Cut-of Date. On each Distribution Date, 98% of all Group F
Principal Funds for the related Due Period shall be allocated to the Class
T1-F1 Interest. Remaining amounts of Group F Principal Funds for the related
Due Period shall be allocated first to the Class T1-F3 Interest up to an
amount equal to 2% of any amount that represents a Group F Adjusted
Overcollateralization Release Amount with respect to such Distribution Date
and then equally between the Class T1-F2 and Class T1-F3 Interests. Interest
accruing on the Class T1-F3 Interest in respect of each Distribution Date in
an amount equal to 1% of the increase in the Group F Adjusted
Overcollateralization Amount from the immediately preceding Distribution Date
shall be deferred and added to the principal balance of the Class T1-F3
Interest. In no event will interest deferred and added to the principal
balance of the Class T1-F3 Interest, and paid as principal on the Class T1-F2
Interest, exceed the product of (i) the principal balance of the Class T1-F3
Interest as of the immediately preceding Distribution Date and (ii)(a) the
Group F Net Mortgage Rate divided by (b) 12 (100 times any excess of 1% of the
increase in the Group F Adjusted Overcollateralization Amount from the
immediately preceding Distribution Date over such amount, the "Class T1-F3
Interest Shortfall Amount"). All Class T1-F3 Interest Shortfall Amounts will
be treated as an increase in the Group F Adjusted Overcollateralization Amount
from the immediately preceding Distribution Date. The amount of interest
accrued and deferred on the Class T1-F3 Interest in accordance with the
preceding sentence in respect of each Distribution Date shall be distributed
as principal on such date to the Class T1-F2 Interest.
On each Distribution Date, the Applied Loss Amount with respect to the
Group F Regular Interests for such date shall be allocated 98% to the Class
T1-F1 Interest. The remaining 2% of such Applied Loss Amount shall be
allocated to the Class T1-F3 Interest to the extent that the principal balance
of the Class T1-F3 Interest exceeds 1% of the aggregate of the Group F
Principal Balance as of such date and then equally between the Class T1-F2 and
Class T1-F3 Interests.
The initial principal balances of the Class T1-V1, Class T1-V2, and Class
T1-V3 Interests shall equal 98%, 1%, and 1%, respectively, of the Group V Pool
Balance as of the Cut-of Date. On each Distribution Date, 98% of all Group V
Principal Funds for the related Due Period shall be allocated to the Class
T1-V1 Interest. Remaining amounts of Group V Principal Funds for the related
Due Period shall be allocated first to the Class T1-V3 Interest up to an
amount equal to 2% of any amount that represents a Group V Adjusted
Overcollateralization Release Amount with respect to such Distribution Date
and then equally between the Class T1-V2 and Class T1-V3 Interests. Interest
accruing on the Class T1-V3 Interest in respect of each Distribution Date in
an amount equal to 1% of the increase in the Group V Adjusted
Overcollateralization Amount from the immediately preceding Distribution Date
shall be deferred and added to the principal balance of the Class T1-V3
Interest. In no event will interest deferred and added to the principal
balance of the Class T1-V3 Interest, and paid as principal on the Class T1-V2
Interest, exceed the product of (i) the principal balance of the Class T1-V3
Interest as of the immediately preceding Distribution Date and (ii) (a) the
Group V Net Mortgage Rate divided by (b) 12 (100 times any excess of 1% of the
increase in the Group V Adjusted Overcollateralization Amount from the
immediately preceding Distribution Date over such amount, the "Class T1-V3
Interest Shortfall Amount"). All Class T1-V3 Interest Shortfall Amounts will
be treated as an increase in the Group V Adjusted Overcollateralization Amount
from the immediately preceding Distribution Date. The amount of interest
accrued and deferred on the Class T1-V3 Interest in accordance with the
preceding sentence in respect of each Distribution Date shall be distributed
as principal on such date to the Class T1-V2 Interest.
On each Distribution Date, the Applied Loss Amount with respect to the
Group V Regular Interests for such date shall be allocated 98% to the Class
T1-V1 Interest. The remaining 2% of such Applied Loss Amount shall be
allocated to the Class T1-V3 Interest to the extent that the principal balance
of the Class T1-V3 Interest exceeds 1% of the aggregate of the Scheduled
Principal Balance of the Group V Pool Balance as of such date and then equally
between the Class T1-V2 and Class T1-V3 Interests.
The initial principal balances of the Class T2-F1, Class T2-F2, and Class
T2-F3 Interests shall equal 98%, 1%, and 1%, respectively, of the Group F Pool
Balance as of the Cut-of Date. The Class T2-F4 Interest shall not have a
principal balance. On each Distribution Date, 98% of all Group F Principal
Funds for the related Due Period shall be allocated to the Class T2-F1
Interest. Remaining amounts of Group F Principal Funds for the related Due
Period shall be allocated first to the Class T2-F3 Interest up to an amount
equal to 2% of any amount that represents a Group F Adjusted
Overcollateralization Release Amount with respect to such Distribution Date
and then equally between the Class T2-F2 and Class T2-F3 Interests. Interest
accruing on the Class T2-F3 Interest in respect of each Distribution Date in
an amount equal to 1% of the increase in the Group F Adjusted
Overcollateralization Amount from the immediately preceding Distribution Date
shall be deferred and added to the principal balance of the Class T2-F3
Interest. The amount of interest accrued and deferred on the Class T2-F3
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-F2 Interest.
On each Distribution Date, the Applied Loss Amount with respect to the
Group F Regular Interests for such date shall be allocated 98% to the Class
T2-F1 Interest. The remaining 2% of such Applied Loss Amount shall be
allocated to the Class T2-F3 Interest to the extent that the principal balance
of the Class T2-F3 Interest exceeds 1% of the aggregate of the Scheduled
Principal Balance of the Group F Mortgage Loans as of such date and then
equally between the Class T2-F2 and Class T2-F3 Interests.
The initial principal balances of the Class T2-V1, Class T2-V2, and Class
T2-V3 Interests shall equal 98%, 1%, and 1%, respectively, of the Group V Pool
Balance as of the Cut-of Date. The Class T2-V4 Interest shall not have a
principal balance. On each Distribution Date, 98% of all Group V Principal
Funds for the related Due Period shall be allocated to the Class T2-V1
Interest. Remaining amounts of Group V Principal Funds for the related Due
Period shall be allocated first to the Class T2-V3 Interest up to an amount
equal to 2% of any amount that represents a Group V Adjusted
Overcollateralization Release Amount with respect to such Distribution Date
and then equally between the Class T2-V2 and Class T2-V3 Interests. Interest
accruing on the Class T2-V3 Interest in respect of each Distribution Date in
an amount equal to 1% of the increase in the Group V Adjusted
Overcollateralization Amount from the immediately preceding Distribution Date
shall be deferred and added to the principal balance of the Class T2-V3
Interest. The amount of interest accrued and deferred on the Class T2-V3
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-V2 Interest.
On each Distribution Date, the Applied Loss Amount with respect to the
Group V Certificates for such date shall be allocated 98% to the Class T2-V1
Interest. The remaining 2% of such Applied Loss Amount shall be allocated to
the Class T2-V3 Interest to the extent that the principal balance of the Class
T2-V3 Interest exceeds 1% of the aggregate of the Scheduled Principal Balance
of the Group V Mortgage Loans as of such date and then equally between the
Class T2-V2 and Class T2-V3 Interests.
On each Distribution Date, the Class T3-F1, Class T3-V1 Interests shall
be entitled to receive principal distributions that correspond to the
principal distributions on the corresponding class of Certificates (the Class
A-F and A-V Certificates).
On each Distribution Date, interest that accrues with respect to the
Class T3-F2, Class T3-F3 and Class T3-F4 Interests shall be distributed as
principal on the Class T3-F1 Interests to achieve the related Targeted
Overcollateralization Amount for such Distribution Date, and to the extent not
needed for this purpose, shall be distributed to the Class T3-V1 Interests to
achieve the related Targeted Overcollateralization Amount and to the extent
not required for either purpose, shall be distributed with respect to the
Class T3-F2, Class T3-F3 and Class T3-F4 Interests in proportion to their
entitlements to current and accrued undistributed interest. On each
Distribution Date, interest that accrues with respect to the Class T3-V2,
Class T3-V3, and Class T3-V4 Interests shall be distributed as principal on
the Class T3-V1 Interests to achieve the related Targeted
Overcollateralization Amount for such Distribution Date, and to the extent not
needed for this purpose, shall be distributed to the Class T3-F1 Interests to
achieve the related Targeted Overcollateralization Amount, and to the extent
not required for either purpose, shall be distributed with respect to the
Class T3-V2, Class T3-V3, and Class T3-V4 Interests in proportion to their
entitlements to current and accrued undistributed interest. Interest that
accrues on the Class T3-F2, Class T3-F3 and Class T3-F4 shall not itself bear
interest.
On each Distribution Date, the Applied Loss Amount shall be allocated to
the T3-V5 Interest to the extent that for such Distribution Date, the sum of:
(a) the Certificate Principal Balance of the Class A-V Certificates and (b)
the principal balance of the T3-V5 Interest on the Closing Date, exceeds (c)
the principal balance of Loan Group V. On each Distribution Date, the Applied
Loss Amount shall be allocated to the T3-F5 Interest to the extent that for
such Distribution Date, the sum of: (a) the Certificate Principal Balance of
the Class A-F Certificates and (b) the principal balance of the T3-F5 Interest
on the Closing Date, exceeds (c) the principal balance of Loan Group F.
Section 5.07. Basis Risk Reserve Fund. On the Closing Date, the Trustee
-----------------------
shall establish and maintain in its name, in trust for the benefit of the
holders of the Class A-V 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.
(a) 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(c). The Trustee shall make withdrawals from the Basis Risk Reserve Fund
to make distributions pursuant to Section 5.02(c).
(b) Funds in the Basis Risk Reserve Fund shall be invested in Eligible
Investments. Any earnings on such amounts shall be deposited in the Basis Risk
Reserve Fund and distributed to the Class VX Certificate pursuant to Section
5.02(c). The Class VX 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 VX
Certificateholder as to investment of funds on deposit in the Basis Risk
Reserve Fund, such funds shall be invested in the Chase Vista Prime Money
Market 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 VX Certificate on the following Distribution Date. In
no event shall the Trustee be liable for any investment losses pursuant to
this Section 5.07(b).
(c) Upon termination of the Trust Fund, any amounts remaining in the
Basis Risk Reserve Fund shall be distributed to the Class VX Certificateholder
pursuant to Section 5.02(c).
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) The Trustee shall not be held liable by reason of any insufficiency
in any account (including without limitation the Collection Account) 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.
(i) The Trustee will make certain documents related to the Offered
Certificates available on the Trustee's website at www.chase.com/sfa or such
other website designated by the Trustee. Documents posted on the website will
include the Prospectus, this Agreement and the monthly remittance report
distributed to Certificateholders.
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, the Certificate Insurer and the
Master Servicer. Upon receiving such notice of resignation, the Depositor will
promptly appoint a successor trustee acceptable to the Certificate Insurer by
written instrument, one copy of which instrument shall be delivered to the
resigning Trustee, one copy to the successor trustee one copy to the Master
Servicer and one copy to the Certificate Insurer. 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 acceptable to the Certificate Insurer.
(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 with first providing notice to the Certificate Insurer shall remove
the Trustee and appoint a successor trustee acceptable to the Certificate
Insurer 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 Certificate Insurer and one copy to the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Amount (or
Percentage Interest) of all Class A Certificates with the prior written
consent of the Certificate Insurer (so long as no Insurer Default has occurred
and is continuing) 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 Certificate Insurer and one copy to the Master
Servicer; the Depositor shall thereupon use its best efforts to appoint a
mutually acceptable successor trustee who shall also be acceptable to the
Certificate Insurer 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 Certificate Insurer, 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, to the Certificate Insurer 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, bad faith, or willful
misconduct or malfeasance 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, the Certificate Insurer and the
Holders written notice thereof promptly after the Trustee shall have
knowledge thereof, provided, however, a failure by the Trustee to give
prompt written notice pursuant to this Section 6.11 shall not affect its
right to be indemnified by the Trust Fund or the Trust Fund's obligation
to indemnify the Trustee;
(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
and the Certificate Insurer, which consent shall not be unreasonably
withheld; provided that any litigation and settlement that may result in
a claim on the Trust Fund shall be controlled by the Certificate Insurer.
Amounts, if any, payable to the Trustee in accordance with this Section
6.11 shall be paid in accordance with Sections 5.02(b)(ix) and 5.02(c)(x). 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. Prior to disbursing the
----------------------------
Available Distribution Amount, the Trustee shall withdraw from the Certificate
Account on each Distribution Date and pay to itself the Trustee Fee and, to
the extent funds therein are at any time insufficient for such purpose, the
Seller or the Originator shall pay such fees as reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) for all services rendered by it in the
execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and the Master Servicer
will pay or reimburse, the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith or which
is the responsibility of Certificateholders hereunder. In addition, the Master
Servicer covenants and agrees to indemnify the Trustee and its officers,
directors, employees and agents from, and hold it harmless against, any and
all losses, liabilities, damages, claims or expenses (i) incurred in
connection with any legal action relating to this Agreement or the
Certificates or arising out of, or in connection with, the acceptance or
administration of the trusts created hereunder, including the costs and
expenses of defending against any claim in connection with the exercise or
performance of any of the Trustee's power or duties hereunder, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence of the Trustee in the performance of its duties hereunder
or by reason of the Trustee's reckless disregard of obligations and duties
hereunder or (ii) resulting from any error in any tax or information return
prepared by the Master Servicer. This section shall survive termination of
this Agreement or the resignation or removal of any Trustee hereunder.
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 Certificate Insurer or 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 or Special
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 or Special Servicer by the
Trustee, or to such Master Servicer or Special Servicer and the Trustee
by the Certificate Insurer or 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 or Special 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 Special
Servicer; or
(iv) The Master Servicer or Special 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 Special Servicer or of or relating to all or substantially all of its
property; or
(v) The Master Servicer or Special 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 or Special 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 or the Certificate Insurer, 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 Certificate Insurer or 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 Certificate
Insurer, the Trustee and Certificateholders holding more than 50% of the
Class Principal Amount (or Percentage Interest) of each Class of
Certificates; or
(ix) Any Sub-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 Sub-Servicer under the applicable Sub-Servicing
Agreement and replaced such Sub-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 or Special Servicer to
remit to the Trustee any payment required to be made to the Trustee for
the benefit of Certificateholders or the Certificate Insurer under the
terms of this Agreement, including any Advance, on any Deposit Date; or
(xi) The occurrence of a Trigger Event; or
(xii) Receipt by the Trustee from the Certificate Insurer of
notice to the effect that the Master Servicer is in default under the
Insurance Agreement; or
(xiii) Termination or resignation of Ocwen Federal Bank FSB as
Sub-Servicer or if Ocwen Federal Bank FSB for any other reason ceases to
be the Sub-Servicer or is prohibited from acting as Sub-Servicer; or
(xiv) Any failure of the Seller or the Originator to repurchase or
substitute any Mortgage Loan as required pursuant to this Agreement and
the Mortgage Loan Sale Agreement, or the Originator's failure to
repurchase or substitute any Mortgage Loans required under the Mortgage
Loan Purchase Agreement.
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 or the Special Servicer, as applicable, may,
and shall, if so directed by the Certificate Insurer or Certificateholders
evidencing more than 50% of the Class Principal Amount (or Percentage
Interest) of each Class of Certificates affected thereby with the consent of
Certificate Insurer, terminate all of the rights and obligations of the Master
Servicer or the Special Servicer, as applicable, hereunder and in and to the
Mortgage Loans and the proceeds thereof. If an Event of Default described in
clause (x), (xi), (xii) or (xiv) 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 or the Special Servicer, as applicable, may,
and shall at the direction of the Certificate Insurer or if an Event of
Default described in clause (xiii) occurs, then in each and every case,
subject to the applicable law, the Trustee shall promptly terminate all of the
rights and obligations of the Master Servicer and the Special Servicer
hereunder and in and to the Mortgage Loans and the proceeds thereof. On or
after the receipt by the Master Servicer or the Special Servicer, as
applicable, of such written notice, all authority and power of the Master
Servicer or the Special Servicer, as applicable, and only in its capacity as
Master Servicer under or Special Servicer this Agreement, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
or Sub-Servicer, as applicable, pursuant to and under the terms of this
Agreement; and the Trustee or Sub-Servicer, as applicable, is hereby
authorized and empowered to execute and deliver, on behalf of the defaulting
Master Servicer or the defaulting Special 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 or the defaulting Special Servicer
agrees to cooperate with the Trustee in effecting the termination of the
defaulting Master Servicer's or defaulting Special Servicer's responsibilities
and rights hereunder as Master Servicer or Special Servicer, as applicable,
including, without limitation, notifying Mortgagors of the assignment of the
master servicing or special 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 or defaulting Special 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 or
the defaulting Special 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 or the Special Servicer being terminated
shall bear all costs of a master servicing or special 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, of which a Responsible Officer of
the Trustee has actual knowledge, the Trustee shall promptly notify the Rating
Agencies and the Certificate Insurer of the nature and extent of such Event of
Default. The Trustee shall immediately give written notice to the Master
Servicer or the Special Servicer, as applicable, and the Certificate Insurer
upon such Master Servicer's or Special Servicer's failure to remit funds on
the Deposit Date.
(b) Except as provided in the last sentence of this paragraph, on and
after the time the Master Servicer or the Special Servicer, as applicable,
receives a notice of termination from the Trustee pursuant to Section 6.14(a)
or the Trustee and the Certificate Insurer receive the resignation of the
Master Servicer or the Special Servicer, as applicable, evidenced by notice
pursuant to Section 9.21, the Trustee, unless another master servicer or
special servicer, as applicable, shall have been appointed, shall be the
successor in all respects to the Master Servicer or the Special Servicer, as
applicable, 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 or the Special
Servicer, as applicable, hereunder, including the obligation to make Advances;
provided, however, that any failure to perform such duties or responsibilities
caused by the Master Servicer's or the Special 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 or the Special Servicer, as
applicable, 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 9.31 or the Special Servicer set forth in
Section 9.32. In the Trustee's capacity as such successor, the Trustee shall
have the same limitations on liability herein granted to the Master Servicer
or the Special Servicer, as applicable. As compensation therefor, the Trustee
shall be entitled to receive all compensation payable to the Master Servicer
or the Special Servicer, as applicable, under this Agreement, including the
Master Servicing Fee. Immediately upon the termination of the Master Servicer,
the Sub-Servicer shall become the Master Servicer.
(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 $30,000,000
acceptable to the Certificate Insurer and each Rating Agency and meeting such
other standards for a successor master servicer or special servicer as are set
forth in this Agreement, as the successor to such Master Servicer or Special
Servicer in the assumption of all of the responsibilities, duties or
liabilities of a master servicer or special servicer, like the Master Servicer
or the Special Servicer, as applicable. Any entity appointed by such court as
a successor master servicer or special servicer, as applicable, 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 or special servicer, as applicable, 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 or the Special Servicer, as
applicable, 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
or the Special Servicer, as applicable, shall cooperate with the Trustee and
any successor master servicer or special servicer in effecting the termination
of the Master Servicer's or the Special Servicer's responsibilities and rights
hereunder including, without limitation, notifying Mortgagors of the
assignment of the master servicing or special servicing functions and
providing the Trustee and successor master servicer or special 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 or Special
Servicer's functions hereunder and the transfer to the Trustee or such
successor master servicer or special 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 or
special 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 or the
Special Servicer, as applicable, to deliver, or any delay in delivering, cash,
documents or records to it, (ii) the failure of the Master Servicer or the
Service, as applicable, to cooperate as required by this Agreement, (iii) the
failure of the Master Servicer or the Special Servicer, as applicable, 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 or the Special Servicer, as applicable.
(d) Upon the occurrence of a Change of Control (as defined in the
Insurance Agreement) with respect to the Master Servicer, the Certificate
Insurer shall have the right to terminate the Master Servicer by delivering a
written notice of termination to the Master Servicer and the Trustee. In the
event that the Certificate Insurer so terminates the Master Servicer, the
Sub-Servicer 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 of the rights and powers and shall be
subject to all of the responsibilities, duties and liabilities relating
thereto and arising thereafter which are placed on the Master Servicer
hereunder, including the obligation to make Advances.
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 with the consent of and at the direction of the
Certificate Insurer, 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 and
the Certificate Insurer (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. The Certificate Insurer or with the
------------------
prior written consent of the Certificate Insurer, 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 and the
Certificate Insurer. 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 Sub-Servicer or appointment of a successor to the Master Servicer
or Sub-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 of which a
Responsible Officer of the Trustee has actual knowledge, 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, the Certificate Insurer or
with the consent of the Certificate Insurer, 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 or the
----------------------------------------------------------
Special Servicer and Upon Event of Default. In the event that a Responsible
- ------------------------------------------
Officer of 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 or the Special Servicer's failure to remedy the same after notice,
the Trustee shall give notice thereof to the Master Servicer or the Special
Servicer, as applicable, and Certificate Insurer.
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 equal to or less than 10% of the Cut-off Date
Aggregate Loan Balance, the majority holder of the Class X Certificates will
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.
Upon exercise of such option, the property of the Trust Fund shall be sold to
the majority holder of the Class X Certificates 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, (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 and (iii) any amounts owed to the Certificate Insurer
under the Policies plus the amount of any unreimbursed Advances made by the
Master Servicer or the Special Servicer plus any amounts due the Trustee. If
the majority holder of the Class X Certificates has not exercised such option
by the close of business on the third Distribution Date following the
Distribution Date specified above, the Master Servicer or the Certificate
Insurer 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 Master Servicer or the Certificate Insurer at the Termination
Price. If the Master Servicer or the Certificate Insurer elects to exercise
such right, then upon receipt of notice thereof the Trustee shall promptly
notify the majority holder of the Class X Certificates (or the Master Servicer
or Certificate Insurer, as applicable) thereof, in writing, and shall effect
the transfer of the Mortgage Loans and related property to the Master Servicer
or the Certificate Insurer, as applicable, as provided herein only if the
Trustee does not receive notification from the majority holder of the Class X
Certificates 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.
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 the Certificate Insurer
and the 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 (not including
Unpaid Basis Risk Shortfalls, if any) 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 and the Certificate
Insurer receive (at the request of the party exercising the option to purchase
all of the Mortgage Loans pursuant to Section 7.01(b)), an Opinion of Counsel
(at the expense of such requesting party), addressed to the Trustee and the
Certificate Insurer 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
Section 9.01. Duties of the Master Servicer and Sub-Servicers. (a) The
-----------------------------------------------
Certificateholders, by their purchase and acceptance of the Certificates,
appoint Ocwen Financial Services, Inc. as Master Servicer. For and on behalf
of the Depositor, the Trustee, the Certificate Insurer 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 Sub-Servicing Agreement.
(b) Acting directly or through one or more Sub-Servicers as provided in
Section 9.03, the Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and in the best interests of and for the
benefit of the Certificateholders and the Certificate Insurer (as determined
by the Master Servicer in its reasonable judgment) in accordance with the
terms of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of prudent mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer or
any Affiliate of the Master Servicer or any Sub-Servicer may have with
the related Mortgagor;
(ii) ownership of any Certificate by the Master Servicer or any
Master Servicer Affiliate;
(iii) the Master Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
The standards set forth in the immediately preceding sentence shall be
referred to herein as the "Servicing Standard".
Subject to Section 9.03 hereof, the Master Servicer may with the consent
of the Certificate Insurer, and is hereby authorized to, perform any of its
servicing responsibilities with respect to all or certain of the Mortgage
Loans through a Sub-Servicer as it may from time to time designate, but no
such designation of a Sub-Servicer shall serve to release the Master Servicer
from any of its obligations under this Agreement. Such Sub-Servicer shall have
all the rights and powers of the Master Servicer with respect to such Mortgage
Loans under this Agreement.
Without limiting the generality of the foregoing, but subject to Sections
9.15 and 9.16, the Master Servicer shall direct the Trustee in writing to
execute and deliver (i) 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, and (ii) documents to institute foreclosure
proceedings or obtain a deed in lieu of foreclosure so as to effect ownership
of any Mortgaged Property in the name of the Trustee on behalf of the Trust
Fund; provided, however, that to the extent any instrument described in clause
(i) preceding would be delivered by the Master Servicer outside of its usual
procedures for mortgage loans held in its own portfolio, the Master Servicer
shall, prior to directing the Trustee to execute and deliver such instrument,
obtain the prior written consent of the Certificate Insurer, and provided
further, however, that Section 9.16(a) shall constitute an authorization from
the Trustee to the Master Servicer to execute an instrument of satisfaction
(or assignment of mortgage without recourse) with respect to any Mortgage Loan
paid in full (or with respect to which payment in full has been escrowed). The
Trustee shall, at the written direction of the Master Servicer, execute any
documentation furnished to it by the Master Servicer for recordation by the
Master Servicer in the appropriate jurisdictions as shall by necessary to
effectuate the foregoing. Subject to Sections 9.14 and 9.15, the Trustee shall
execute any authorizations and other documents as the Master Servicer or such
Sub-Servicer shall reasonably request that are furnished to the Trustee to
enable the Master Servicer and such Sub-Servicer to carry out their respective
servicing and administrative duties hereunder. In no event shall the Trustee
be liable for executing any authorizations or other documents pursuant to this
Section 9.01.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be reimbursable in the first
instance from related collections from the Mortgagors pursuant to Section
9.09, and further as provided in Section 9.11. Any cost incurred by the Master
Servicer or by Sub-Servicers in effecting the timely payment of taxes and
assessments on a Mortgaged Property shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid principal balance
of the related Mortgage Loan, notwithstanding that the terms of such Mortgage
Loan so permit.
The Master Servicer shall give prompt notice to the Trustee and the
Certificate Insurer of any action, of which the Master Servicer has actual
knowledge, to (i) assert a claim against the Trust Fund or (ii) assert
jurisdiction over the Trust Fund.
Servicing Advances incurred by the Master Servicer or any Sub-Servicer in
connection with the servicing of the Mortgage Loans (including any penalties
in connection with the payment of any taxes and assessments or other charges)
on any Mortgaged Property shall be recoverable by the Master Servicer or such
Sub-Servicer to the extent described in Sections 9.11 and 9.23(d) hereof.
Section 9.02. Collection of Certain Mortgage Loan Payments. The Master
--------------------------------------------
Servicer shall make its best reasonable efforts to collect all payments called
for under the terms and provisions of the Mortgage Loans, and shall, to the
extent such procedures shall be consistent with this Agreement, follow such
collection procedures for all Mortgage Loans that are consistent with the
Servicing Standard. The Master Servicer with the consent of the Certificate
Insurer may waive, modify or vary terms of the Mortgage Loans provided that no
such action will (A) decrease the Mortgage Rate on the Mortgage Loan, (B)
defer the payment of principal or interest (except with respect to liquidation
of such Mortgage Loan) or (C) extend the final maturity date of such Mortgage
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 the foregoing, in the event that any Mortgage Loan is in
default or, in the judgment of the Master Servicer, such default is reasonably
foreseeable, the Master Servicer, consistent with the Servicing Standard, with
the consent of the Certificate Insurer may also waive, modify or vary any term
of such Mortgage Loan (including modifications that would change the Mortgage
Rate, defer 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 Scheduled 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 Master
Servicer's determination such waiver, modification, postponement or indulgence
is not materially adverse to the interests of the Certificateholders or the
Certificate Insurer (taking into account any estimated Realized Loss that
might result absent such action).
Section 9.03. Sub-Servicing Agreements Between Master Servicer and
----------------------------------------------------
Sub-Servicers. (a) The Master Servicer, with the consent of the Certificate
- -------------
Insurer, may enter into Sub-Servicing Agreements for any servicing and
administration of Mortgage Loans with one or more institutions that are in
compliance with the laws of each state necessary to enable each of them to
perform its obligations under such Sub-Servicing Agreements and each of which
(x) has been designated an approved seller-servicer by FHLMC or FNMA for
mortgage loans and has equity of at least $1,500,000 or (y) is a Master
Servicer Affiliate. The Master Servicer shall give notice to the Trustee, the
Certificate Insurer and the Rating Agencies of the appointment of any
Sub-Servicer. For purposes of this Agreement, the Master Servicer shall be
deemed to have received payments on Mortgage Loans when any Sub-Servicer has
received such payments. Each Sub-Servicer shall be required to service the
Mortgage Loans in accordance with this Agreement and any such Sub-Servicing
Agreement shall be consistent with and not violate the provisions of this
Agreement. Each Sub-Servicing Agreement shall provide that a successor Master
Servicer with the consent of the Certificate Insurer shall have the option to
terminate such agreement without payment of any termination fees if the
original Master Servicer is terminated or resigns, except that such
Sub-Servicing Agreement may provide that such termination fees shall be
payable by Ocwen Financial Services, Inc. out of its own funds and such
Sub-Servicing Agreement may provide that any third party costs and expenses
associated with the transfer of servicing and collateral files by any
Sub-Servicer shall not be paid by such Sub-Servicer.
(b) Ocwen Federal Bank FSB hereby agrees to act as Sub-Servicer with
respect to all of the Mortgage Loans, and to carry out on behalf of the Master
Servicer all duties as set forth herein with respect to such Mortgage Loans,
in exchange for compensation separately agreed between the Master Servicer and
Ocwen Federal Bank FSB. Ocwen Federal Bank FSB shall, unless it is the Master
Servicer, and the Certificate Insurer otherwise agrees, continue as
Sub-Servicer so long as it is Special Servicer hereunder, and shall cease to
be a Sub-Servicer when it ceases to be Special Servicer. Ocwen Federal Bank
FSB shall cease to be the Special Servicer when it ceases to be the
Sub-Servicer. The Certificate Insurer shall have the right to terminate the
Sub-Servicer upon the occurrence of a Trigger Event.
Section 9.04. Successor Sub-Servicers. The Master Servicer with the
-----------------------
consent of the Certificate Insurer or the Certificate Insurer shall be
entitled to terminate any Sub-Servicing Agreement in accordance with the terms
and conditions of such Sub-Servicing Agreement. Upon termination and with the
consent of the Certificate Insurer, the Master Servicer may itself directly
service the related Mortgage Loans or enter into a Sub-Servicing Agreement
with a successor Sub-Servicer which qualifies under Section 9.03.
Section 9.05. Liability of Master Servicer; Indemnification. (a) The
---------------------------------------------
Master Servicer shall not be relieved of its obligations under this Agreement
notwithstanding any Sub-Servicing Agreement or any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer
and a Sub-Servicer and the Master Servicer shall be obligated to the same
extent and under the same terms and conditions as if it alone were servicing
and administering the Mortgage Loans. The Master Servicer shall be entitled to
enter into any agreement with a Sub-Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in such Sub-Servicing
Agreement shall be deemed to limit or modify this Agreement.
(b) The Master Servicer (except the Trustee if it is required to succeed
the Master Servicer hereunder) indemnifies and holds the Trustee, the Seller,
the Depositor, the Certificate Insurer and each Certificateholder harmless
against any and all claims, losses, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments, and any other costs, fees and
expenses that the Trustee, the Depositor, the Certificate Insurer and any
Certificateholder may sustain in any way related to the failure of the Master
Servicer to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement. The Master Servicer shall immediately notify
the Trustee, the Depositor, the Certificate Insurer and each Certificateholder
if a claim is made that may result in such claims, losses, penalties, fines,
forfeitures, legal fees or related costs, judgments, or any other costs, fees
and expenses, and the Master Servicer shall assume (with the consent of the
Trustee and the Certificate Insurer) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be
entered against the Master Servicer, the Trustee, the Depositor, the
Certificate Insurer and/or Certificateholder in respect of such claim. The
provisions of this Section 9.05 shall survive the termination of this
Agreement and the payment of the outstanding Certificates.
(c) Neither the Depositor, the Seller, the Master Servicer, nor any of
the directors, officers, employees or agents of the Depositor, the Seller or
the Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Seller or Master Servicer or any such Person against any breach
of warranties or representations made herein, or against any specific
liability imposed on the Master Servicer for a breach of the Servicing
Standard, or against any liability which would otherwise be imposed by reason
of its respective willful misfeasance, bad faith, fraud or negligence in the
performance of its duties or by reasons of negligent disregard of its
respective obligations or duties hereunder.
The Depositor, the Master Servicer, the Seller and any director, officer,
employee or agent of the Depositor, the Seller or the Master Servicer, may
rely in good faith on any document of any kind which, prima facie, is properly
executed and submitted by any appropriate Person with respect to any matters
arising hereunder. The Depositor, the Master Servicer and any director,
officer, employee or agent of the Depositor or the Master Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense
incurred in connection with any legal action incurred by reason of its
respective misfeasance, bad faith, fraud or negligence, a breach of a
representation or warranty hereunder or (in the case of the Master Servicer) a
breach of the Servicing Standard in the performance of its respective duties
or by reason of negligent disregard of its respective obligations or duties
hereunder. Neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such
action is related to its respective duties under this Agreement and in its
opinion does not expose it to any expense or liability; provided, however,
that the Depositor or the Master Servicer may in its discretion undertake any
action related to its obligations hereunder which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder.
Section 9.06. No Contractual Relationship Between Sub-Servicer, Trustee,
----------------------------------------------------------
the Certificateholders or the Certificate Insurer. Any Sub-Servicing Agreement
- -------------------------------------------------
and any other transactions or services relating to the Mortgage Loans
involving a Sub-Servicer shall be deemed to be between the Sub-Servicer and
the Master Servicer alone and the Trustee, the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties
or liabilities with respect to any Sub-Servicer except as set forth in
Sections 9.01(b), 9.03, 9.04, and 9.07. The Certificate Insurer shall be a
third party beneficiary of each Sub-Servicing Agreement.
Section 9.07. Assumption or Termination of Sub-Servicing Agreement by
-------------------------------------------------------
Trustee. In connection with the assumption of the responsibilities, duties and
- -------
liabilities and of the authority, power and rights of the Master Servicer
hereunder by the Trustee pursuant to Section 6.14, it is understood and agreed
that the Master Servicer's rights and obligations under any Sub-Servicing
Agreement then in force between the Master Servicer and a Sub-Servicer shall
be assumed simultaneously by the Trustee without act or deed on the part of
the Trustee; provided, however, that the successor Master Servicer may
terminate the Sub-Servicer as provided in Section 9.03.
The terminated Master Servicer shall, upon the reasonable request of the
Trustee, but at the expense of the Master Servicer, deliver to the assuming
party documents and records relating to each Sub-Servicing Agreement and an
accounting of amounts collected and held by it and otherwise use its best
reasonable efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
Section 9.08. Sub-Servicing Accounts. On behalf of the Trust Fund, Ocwen
----------------------
Federal Bank FSB, as Subservicer, shall establish an account held in trust for
the Certificateholders and the Certificate Insurer. In those cases where a
Sub-Servicer is servicing a Mortgage Loan pursuant to a Sub-Servicing
Agreement, the Sub-Servicer will be required to establish and maintain one or
more accounts (collectively, the "Sub-Servicing Account"). The Sub-Servicing
Account shall be an Eligible Account and shall comply with all requirements of
this Agreement relating to the Collection Account. The Sub-Servicer will be
required to deposit into the Sub-Servicing Account no later than the first
Business Day after receipt all proceeds of Mortgage Loans received by the
Sub-Servicer, less its servicing compensation to the extent permitted by the
Sub-Servicing Agreement and to remit such proceeds to the Master Servicer for
deposit in the Collection Account not later than the first Business Day
thereafter. For purposes of this Agreement, the Master Servicer shall be
deemed to have received payments on the Mortgage Loans when the Sub-Servicer
receives such payments.
Section 9.09. Collection of Taxes, Assessments and Similar Items;
---------------------------------------------------
Servicing Accounts. The Master Servicer shall establish and maintain one or
- ------------------
more accounts (the "Servicing Accounts"), into which all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of taxes,
assessments, hazard insurance premiums, and comparable items for the account
of the Mortgagors ("Escrow Payments") shall be deposited and retained.
Servicing Accounts shall be Eligible Accounts. The Master Servicer shall
deposit in the Servicing Accounts on a daily basis, and retain therein, all
Escrow Payments collected on account of the Mortgage Loans, for the purpose of
effecting the timely payment of any such items as required under the terms of
this Agreement. Withdrawals of amounts from a Servicing Account may be made
only to (i) effect timely payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related Sub-Servicing Agreement)
out of related collections for any advances made pursuant to Section 9.01
(with respect to taxes and assessments) and Section 9.13 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; or (v) clear and terminate
the Servicing Account at the termination of the Master Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article VII. As part of its servicing duties, the Master
Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds in
Servicing Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Servicing Accounts is insufficient, to pay
such interest from its or their own funds, without any reimbursement therefor.
Section 9.10. Collection Account and Certificate Account. (a) On behalf
------------------------------------------
of the Trust Fund, the Master Servicer shall establish and maintain one or
more accounts (such account or accounts, the "Collection Account"), held in
trust for the benefit of the Trustee, the Certificateholders and the
Certificate Insurer. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the Collection Account on a daily basis,
as and when received or as otherwise required hereunder, the following
payments and collections received or made by it subsequent to the Cut-off
Date:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (other than payments due
prior to the Cut-off Date and net of the related Servicing Fee and other
servicing compensation for prior months not paid in full including,
without limitation, any such insufficiency which relates to any Servicing
Fees applied to a Prepayment Interest Shortfall) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and amounts
paid by the Master Servicer in connection with a purchase of Mortgage
Loans and REO Properties pursuant to Section 7.01);
(iv) any amounts required to be deposited pursuant to Section 9.12
in connection with any losses realized on Eligible Investments with
respect to funds held in the Collection Account; and
(v) any amounts required to be deposited by the Master Servicer
pursuant to the first paragraph of Section 9.13(b) in respect of any
blanket policy deductibles.
For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Qualifying Substitute Mortgage Loan shall be deemed to be the
date of substitution.
The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
assumption fees or additional service-related compensation described in
Section 9.17 need not be deposited by the Master Servicer in the Collection
Account. In the event the Master Servicer shall deposit in the Collection
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from the Collection Account, any provision herein to the
contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and maintain
one or more accounts (such account or accounts, the "Certificate Account"),
held in trust for the benefit of the Certificateholders and the Certificate
Insurer. On behalf of the Trust Fund, the Master Servicer shall deliver to the
Trustee in immediately available funds for deposit in the Certificate Account
on or before noon New York time on the Master Servicer Remittance Date, that
portion of the Available Funds (calculated without regard to the references in
the definition thereof to amounts that may be deposited to the Certificate
Account from a different source as provided herein) for the related
Distribution Date then on deposit in the Collection Account.
(c) Funds in the Collection Account and the Certificate Account may be
invested in Eligible Investments in accordance with the provisions set forth
in Section 9.12. The Master Servicer shall give notice to the Trustee and the
Certificate Insurer of the location of the Collection Account maintained by it
when established and prior to any change thereof. The Trustee shall give
notice to the Master Servicer, the Depositor and the Certificate Insurer of
the location of the Certificate Account when established and prior to any
change thereof.
(d) Funds held in the Collection Account at any time may be delivered by
the Master Servicer to the Trustee for deposit in an account (which may be the
Certificate Account and must satisfy the standards for the Certificate Account
as set forth in the definition thereof) and for all purposes of this Agreement
shall be deemed to be a part of the Collection Account; provided, however,
that the Trustee shall have the sole authority to withdraw any funds held
pursuant to this subsection (d). In the event the Master Servicer shall
deliver to the Trustee for deposit in the Certificate Account any amount not
required to be deposited therein, it may at any time request that the Trustee
withdraw such amount from the Certificate Account and remit to it any such
amount, any provision herein to the contrary notwithstanding. In addition, the
Master Servicer shall deliver to the Trustee from time to time for deposit,
and the Trustee shall so deposit, in the Certificate Account:
(i) any Advances, as required pursuant to Section 5.04;
(ii) any amounts required to be deposited pursuant to Section
9.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 7.01;
(iv) any amounts required to be deposited pursuant to Section 9.24
in connection with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from the Master
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trustee shall deposit such funds in the Certificate Account,
subject to withdrawal thereof as permitted hereunder. In addition, the Trustee
shall deposit in the Certificate Account any amounts required to be deposited
pursuant to Section 9.12 in connection with losses realized on Eligible
Investments with respect to funds held in the Certificate Account.
Section 9.11. Withdrawals from the Collection Account. The Master
---------------------------------------
Servicer shall, from time to time, make withdrawals from the Collection
Account for any of the following purposes or as described in Section 4.03:
(i) to remit to the Trustee for deposit in the Certificate Account
the amounts required to be so remitted pursuant to Section 9.10(b) or
permitted to be so remitted pursuant to the first sentence of Section
9.10(d);
(ii) subject to Section 9.15(d), to reimburse the Master Servicer
for Advances, but only to the extent of amounts received which represent
Late Collections, Insurance Proceeds and Liquidation Proceeds (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such Advances were made in accordance with the
provisions of Section 5.04;
(iii) subject to Section 9.15(d), to pay the Master Servicer or
any Sub-Servicer any unpaid Servicing Fees and reimburse any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the
extent of any Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan (provided, however,
that if, in the good faith business judgment of the Master Servicer, any
unreimbursed Servicing Advance will not be ultimately recoverable from
related Late Collections, Liquidation Proceeds or Insurance Proceeds on
such Mortgage Loan (which determination shall be evidenced by an
Officer's Certificate of the Master Servicer delivered to the Trustee and
the Certificate Insurer), then withdrawal from the general funds in the
Collection Account, Liquidation Proceeds and Insurance Proceeds, without
regard to the limitation set forth above, will be permitted);
(iv) to pay to the Master Servicer as servicing compensation (in
addition to the Servicing Fee) on the Master Servicer Remittance Date any
interest or investment income earned on funds deposited in the Collection
Account;
(v) to pay to the Master Servicer or the Seller, as the case may
be, with respect to each Mortgage Loan that has previously been purchased
or replaced pursuant to Section 2.05 or Section 9.15(c) all amounts
received thereon subsequent to the date of purchase or substitution, as
the case may be;
(vi) to reimburse the Master Servicer for any Advance previously
made which the Master Servicer has determined to be a Nonrecoverable
Advance in accordance with the provisions of Section 5.04;
(vii) reserved;
(viii) to reimburse the Master Servicer or the Trustee, as the
case may be, for expenses reasonably incurred in respect of the breach or
defect giving rise to the purchase obligation under Section 2.04 or
Section 2.05 of this Agreement that were included in the Purchase Price
of the Mortgage Loan, including any expenses arising out of the
enforcement of the purchase obligation;
(ix) to reimburse the Master Servicer for expenses incurred
pursuant to Section 10.01(c) of this Agreement;
(x) to pay, or to reimburse the Master Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 9.15(b);
(xi) reserved; and
(xii) to clear and terminate the Collection Account pursuant to
Section 7.02.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (v), (vi), (viii) and (x) above. The
Master Servicer shall provide written notification to the Trustee, on or prior
to the next succeeding Master Servicer Remittance Date, upon making any
withdrawals from the Collection Account pursuant to subclauses (vi) and (ix)
above.
Section 9.12. Investment of Funds in the Collection Account, the Expense
----------------------------------------------------------
Account and the Certificate Account. (a) The Master Servicer may direct any
- -----------------------------------
depository institution maintaining the Collection Account and the Expense
Account (each, for purposes of this Section 9.12, an "Investment Account"), to
invest the funds in such Investment Account in one or more Eligible
Investments bearing interest or sold at a discount, and maturing, unless
payable on demand, no later than the Business Day immediately preceding the
date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if a Person other than the Trustee is the obligor
thereon, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Trustee is
the obligor thereon. All such Eligible Investments shall be held to maturity,
unless payable on demand. Any investment of funds in an Investment Account
shall be made in the name of the Trustee (in its capacity as such) or in the
name of a nominee of the Trustee. The Trustee shall be entitled to sole
possession (except with respect to investment direction of funds held in the
Collection Account and the Expense Account) over each such investment and the
income thereon, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment
to the Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in an Eligible Investment payable
on demand, the Trustee shall at the direction of the Master Servicer:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Eligible Investment may otherwise mature hereunder in an amount
equal to the lesser of (1) all amounts then payable thereunder
and (2) the amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such
Eligible Investment would not constitute an Eligible Investment
in respect of funds thereafter on deposit in the Investment
Account.
(b) All income and gain realized from the investment of funds deposited
in the Collection Account shall be for the benefit of the Master Servicer and
shall be subject to its withdrawal in accordance with Section 9.11. The Master
Servicer shall deposit in the Collection Account the amount of any loss
incurred in respect of any such Eligible Investment made with funds in such
accounts immediately upon realization of such loss. All income and gain
realized from the investment of funds in the Certificate Account shall be for
the benefit of the Trustee. The Trustee shall deposit in the Certificate
Account the amount of any loss incurred on Eligible Investments in the
Certificate Account.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Eligible Investment,
or if a default occurs in any other performance required under any Eligible
Investment, the Trustee may with the consent of the Certificate Insurer and,
subject to Section 6.01 and Section 6.02(iv), upon the request of the
Certificate Insurer or may with the consent of the Certificate Insurer, the
Holders of Certificates representing more than 50% of the Voting Rights
allocated to any Class of Certificates, shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
Section 9.13. Maintenance of Insurance. (a) The Master Servicer on behalf
------------------------
of the Trustee, as mortgagee, shall use its reasonable efforts in accordance
with the Servicing Standard to cause the related Mortgagor to maintain for
each Mortgage Loan (other than any Mortgage Loan as to which the related
Mortgaged Property has become an REO Property), and if the Mortgagor does not
so maintain, shall itself maintain (subject to the provisions of this
Agreement concerning Nonrecoverable Advances) to the extent the Trustee as
mortgagee has an insurable interest (A) fire and hazard insurance with
extended coverage on the related Mortgaged Property in an amount which is at
least equal to the lesser of (i) 100% of the then "full replacement cost" of
the improvements and equipment (excluding foundations, footings and excavation
costs), without deduction for physical depreciation, and (ii) the outstanding
principal balance of the related Mortgage Loan or such other amount as is
necessary to prevent any reduction in such policy by reason of the application
of co-insurance and to prevent the Trustee thereunder from being deemed to be
a co-insurer, and (B) such other insurance as provided in the related Mortgage
Loan. The Master Servicer shall maintain fire and hazard insurance from an
insurer having a General Policy Rating of "A" or better in Best's Key Rating
Guide (a "Qualified Insurer") with extended coverage on each REO Property in
an amount which is at least equal to the lesser of (i) 100% of the then "full
replacement cost" of the improvements which are a part of such property or
(ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property plus accrued interest at the Mortgage Rate and
related Servicing Advances. The Master Servicer shall maintain, from a
Qualified Insurer, with respect to each REO Property such other insurance as
provided in the related Mortgage Loan. Any amounts collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration and repair of the related Mortgaged Property or amounts to be
released to the Mortgagor in accordance with the terms of the related
Mortgage) shall be deposited into the Collection Account pursuant to Section
9.10(a), subject to withdrawal pursuant to Section 9.11. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance other than flood insurance is to be
required of any Mortgagor or to be maintained by the Master Servicer other
than pursuant to the terms of the related Mortgage, Mortgage Note or other
Mortgage Loan documents and pursuant to such applicable laws and regulations
as shall at any time be in force and as shall require such additional
insurance. If the Mortgaged Property is located in a federally designated
special flood hazard area, the Master Servicer will use its reasonable efforts
in accordance with the Servicing Standard to cause the related Mortgagor to
maintain or will itself obtain (subject to the provisions of this Agreement
concerning Nonrecoverable Advances) flood insurance in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance required by the terms of the related Mortgage and as is
available for the related property under the national flood insurance program
(assuming that the area in which such property is located is participating in
such program). If an REO Property is located in a federally designated special
flood hazard area, the Master Servicer will obtain flood insurance in respect
thereof providing substantially the same coverage as described in the
preceding sentences. If at any time during the term of this Agreement a
recovery under a flood or fire and hazard insurance policy in respect of an
REO Property is not available but would have been available if such insurance
were maintained thereon in accordance with the standards applied to Mortgaged
Properties described herein, the Master Servicer shall either (i) immediately
deposit into the Collection Account from its own funds the amount that would
have been recovered or (ii) apply to the restoration and repair of the
property from its own funds the amount that would have been recovered, if such
application would be consistent with the servicing standard set forth in
Section 9.01; provided, however, that the Master Servicer shall not be
-------- -------
responsible for any shortfall in insurance proceeds resulting from an
insurer's refusal or inability to pay a claim. Costs of the Master Servicer of
maintaining insurance policies pursuant to this Section 9.13 shall be paid by
the Master Servicer as a Servicing Advance and shall be reimbursable to the
Master Servicer.
The Master Servicer agrees to prepare and present, on behalf of itself,
the Trustee, the Certificateholders and the Certificate Insurer, claims under
each related insurance policy maintained pursuant to this Section 9.13 in a
timely fashion in accordance with the terms of such policy and to take such
reasonable steps as are necessary to receive payment or to permit recovery
thereunder.
The Master Servicer shall require that all insurance policies required
hereunder shall name the Trustee or the Master Servicer, on behalf of the
Trustee as the mortgagee, as loss payee and that all such insurance policies
require that 30 days' notice be given to the Master Servicer before
termination to the extent required by the related Mortgage, Mortgage Note, or
other Mortgage Loan documents.
(b) (I) If the Master Servicer obtains and maintains a blanket insurance
policy with a Qualified Insurer at its own expense insuring against fire and
hazard losses or other required insurance on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations concerning the
maintenance of such insurance coverage set forth in Section 9.13(a), it being
understood and agreed that (i) such policy may contain a deductible clause, in
which case the Master Servicer shall, in the event that there shall not have
been maintained on one or more of the related Mortgaged Properties a policy
otherwise complying with the provisions of Section 9.13(a), and (ii) there
shall have been one or more losses which would have been covered by such a
policy had it been maintained, immediately deposit into the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as Master
Servicer hereunder, the Master Servicer agrees to prepare and present, on
behalf of itself, the Trustee, Certificateholders and the Certificate Insurer,
claims under any such blanket policy which it maintains in a timely fashion in
accordance with the terms of such policy and to take such reasonable steps as
are necessary to receive payment or permit recovery thereunder.
(II) If the Master Servicer causes any Mortgaged Property or REO
Property to be covered by a master force placed insurance policy, which policy
is issued by a Qualified Insurer and provides no less coverage in scope and
amount for such Mortgaged Property or REO Mortgaged Property than the
insurance required to be maintained pursuant to Section 9.13(a), the Master
Servicer shall conclusively be deemed to have satisfied its obligations to
maintain insurance pursuant to Section 9.13(a). Such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
(i) there shall not have been maintained on the related Mortgaged Property or
REO Property a policy otherwise complying with the provisions of Section
9.13(a), and (ii) there shall have been one or more losses which would have
been covered by such a policy had it been maintained, immediately deposit into
the Collection Account from its own funds the amount not otherwise payable
under such policy because of such deductible.
Section 9.14. Due-on-Sale Clauses; Assumption and Substitution
------------------------------------------------
Agreements. When a Mortgaged Property has been or is about to be conveyed by
- ----------
the Mortgagor, the Master Servicer shall, to the extent it has knowledge of
such conveyance or prospective conveyance, exercise its rights to accelerate
the maturity of the related Mortgage Loan under any "due-on-sale" clause
contained in the related Mortgage or Mortgage Note; provided, however, that
-------- -------
the Master Servicer shall not exercise any such right if the "due-on-sale"
clause, in the reasonable belief of the Master Servicer, is not enforceable
under applicable law. An Opinion of Counsel at the expense of the Master
Servicer delivered to the Trustee, the Depositor and the Certificate Insurer
to the foregoing effect shall conclusively establish the reasonableness of
such belief. In such event, the Master Servicer shall make reasonable efforts
to enter into an assumption and modification agreement with the Person to whom
such property has been or is about to be conveyed, pursuant to which such
Person becomes liable under the Mortgage Note and, unless prohibited by
applicable law or the Mortgage, the Mortgagor remains liable thereon. If the
foregoing is not permitted under applicable law, the Master Servicer is
authorized to enter into a substitution of liability agreement with such
Person, pursuant to which the original Mortgagor is released from liability
and such Person is substituted as Mortgagor and becomes liable under the Note;
provided, however, that to the extent any such substitution of liability
- -------- -------
agreement would be delivered by the Master Servicer outside of its usual
procedures for mortgage loans held in its own portfolio the Master Servicer
shall, prior to executing and delivering such agreement, obtain the prior
written consent of the Certificate Insurer. The Mortgage Loan, as assumed,
shall conform in all respects to the requirements, representations and
warranties of this Agreement. The Master Servicer shall notify the Trustee
that any such assumption or substitution agreement has been completed by
forwarding to the Trustee the original copy of such assumption or substitution
agreement (indicating the Mortgage File to which it relates) which copy shall
be added by the Trustee to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. The Master
Servicer shall be responsible for recording any such assumption or
substitution agreements. In connection with any such assumption or
substitution agreement, the Scheduled Payment on the related Mortgage Loan
shall not be changed but shall remain as in effect immediately prior to the
assumption or substitution, the stated maturity or outstanding principal
amount of such Mortgage Loan shall not be changed nor shall any required
monthly payments of principal or interest be deferred or forgiven. Any fee
collected by the Master Servicer or the Sub-Servicer for consenting to any
such conveyance or entering into an assumption or substitution agreement shall
be retained by or paid to the Master Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or any assumption which the Master
Servicer may be restricted by law from preventing, for any reason whatsoever.
Section 9.15. Realization Upon Defaulted Mortgage Loans. (a) The Master
-----------------------------------------
Servicer shall use its best efforts, consistent with the Servicing Standard
set forth in Section 9.01, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into
and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 9.02. The
Master Servicer shall be responsible for all costs and expenses incurred by it
in any such proceedings; provided, however, that such costs and expenses will
-------- -------
be recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 9.11 and Section 9.23. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 9.15 or any
other provision of this Agreement, with respect to any Mortgage Loan as to
which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trust
Fund, either obtain title to such Mortgaged Property as a result of or in lieu
of foreclosure or otherwise, or (ii) otherwise acquire possession of, or take
any other action with respect to, such Mortgaged Property, if, as a result of
any such action, the Trustee, the Certificateholders or the Certificate
Insurer would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to
time, or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a prudent report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of the Trust Fund to take such actions as are
necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be
required under any federal, state or local law or regulation,
or that if any such materials are present for which such action
could be required, that it would be in the best economic
interest of the Trust Fund to take such actions with respect to
the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Section
9.15 shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 9.11(x), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it is in the
best economic interest of the Trust Fund to take such actions as are necessary
to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials affecting any such Mortgaged
Property, then the Master Servicer shall take such action as it deems to be in
the best economic interest of such Trust Fund. The cost of any such
compliance, containment, cleanup or remediation shall be advanced by the
Master Servicer, subject to the Master Servicer's right to be reimbursed
therefor from the Collection Account as provided in Section 9.11(x), such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the
affected Mortgage Loan or other Mortgage Loans.
(c) The Special Servicer or, if the Special Servicer does not elect to
exercise its option, the Directing Holder, may at its option purchase from the
Trust Fund any Mortgage Loan that is 90 days or more delinquent on a
contractual basis, which the Master Servicer determines in good faith will
otherwise become subject to foreclosure proceedings (evidence of such
determination to be delivered in writing to the Trustee and the Certificate
Insurer prior to purchase), at a price equal to the greater of fair market
value of such Mortgage Loan and the Purchase Price; provided that, unless
--------
otherwise consented to by the Certificate Insurer, the Directing Holder or the
Special Servicer, as applicable, may purchase such Mortgage Loans only in the
sequence in which such Mortgage Loans first became delinquent by 90 days, and
shall give prompt notice of each such purchase to the Certificate Insurer and
each Rating Agency; and, provided further that, in the event that the
aggregate Scheduled Principal Balance of all Mortgage Loans previously
repurchased pursuant to this Section 9.15(c) exceeds 1% of the Pool Balance as
of the Cut-off Date for the applicable Mortgage Pool, the Directing Holder or
the Special Servicer, as applicable, shall not repurchase any additional such
Mortgage Loans pursuant to this Section 9.15(c) without the consent of the
Certificate Insurer. The Purchase Price for any Mortgage Loan purchased
hereunder shall be deposited in the Collection Account, and the Trustee, upon
receipt of written certification from the Master Servicer of such deposit,
shall release or cause to be released to the Directing Holder or the Special
Servicer, as applicable, the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Directing Holder or the Special Servicer, as applicable,
shall furnish and as shall be necessary to vest in the Directing Holder or the
Special Servicer, as applicable, title to any Mortgage Loan released pursuant
hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and Advances, pursuant to Section 9.11(ii) or (iii); second, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the
amount of such recovery will be allocated by the Master Servicer as follows:
first, to unpaid Servicing Fees; and second, to the balance of the interest
then due and owing. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 9.11(iii).
Section 9.16. Trustee to Cooperate; Release of Files. (a) Upon the
--------------------------------------
payment in full of any Mortgage Loan (including any liquidation of such
Mortgage Loan through foreclosure or otherwise, or the receipt by the Master
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes), the Master Servicer shall deliver to the Trustee
two (2) copies of a completed "Request for Release of Documents" in the form
of Exhibit C or a mutually agreed upon format, which may be an electronic
format. Upon receipt of such Request for Release of Documents, the Trustee
shall promptly release the related Mortgage File, in trust to the Master
Servicer, or (ii) such other party identified in the related Request for
Release. Upon any such payment in full, or the receipt of such notification
that such funds have been placed in escrow, the Master Servicer shall direct
the Trustee in writing to execute an instrument of satisfaction (or assignment
of Mortgage without recourse) regarding the Mortgaged Property relating to
such 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 payment in full, it being understood and agreed that no
expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Collection Account.
In lieu of executing any such satisfaction or assignment, as the case may be,
the Master Servicer may prepare and submit to the Trustee a satisfaction (or
assignment without recourse, if requested by the Person or Persons entitled
thereto) in form for execution by the Trustee with all requisite information
completed by the Master Servicer; in such event, the Trustee shall execute and
acknowledge such satisfaction or assignment, as the case may be, and deliver
the same with the related Mortgage File, as aforesaid.
(b) From time to time and as appropriate in the servicing of any Mortgage
Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any insurance policy
relating to a Mortgage Loan, the Trustee shall (except in the case of the
payment or liquidation pursuant to which the related Mortgage File is released
to an escrow agent or an employee, agent or attorney of the Trustee), upon
written request of the Master Servicer and delivery to the Trustee two (2)
copies of a "Request for Release" in the form of Exhibit C or a mutually
agreed upon format, which may be an electronic format, signed by a Servicing
Officer, release the related Mortgage File to the Master Servicer and shall
execute such documents as shall be necessary to the prosecution of any such
proceedings, including, without limitation, an assignment without recourse of
the related Mortgage to the Master Servicer. Such receipt shall obligate the
Master Servicer to return the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a Request for Release
evidencing such liquidation, the receipt shall be released by the Trustee to
the Master Servicer.
(c) The Master Servicer shall have the right to accept applications of
Mortgagors for consent to partial releases of Mortgages, (ii) alterations,
(iii) removal, demolition or division of properties subject to Mortgages and
(iv) second mortgage subordination agreements. No application for approval
shall be considered by the Master Servicer unless: (w) it has received an
Opinion of Counsel, addressed to the Certificate Insurer and the Trustee
(which opinion shall not be an expense of the Trust Fund or the Certificate
Insurer) that such sale, disposition, substitution, acquisition or
contribution will not affect adversely the status of the Trust Fund as a REMIC
or cause the Trust Fund to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions; (x) the provisions of the
related Note and Mortgage have been complied with; (y) the Loan-to-Value Ratio
and debt-to-income ratio after any release does not exceed the maximum
Loan-to-Value Ratio and debt-to-income ratio established in accordance with
the underwriting standards of the Mortgage Loans; and (z) the lien priority of
the related Mortgage is not affected. Upon receipt by the Trustee of a
Servicing Officer's certificate setting forth the action proposed to be taken
in respect of a particular Mortgage Loan and certifying that the criteria set
forth in the immediately preceding sentence have been satisfied, the Trustee
with the Consent of the Certificate Insurer shall execute and deliver to the
Master Servicer the consent or partial release so requested by the Master
Servicer. A proposed form of consent or partial release, as the case may be,
shall accompany any Servicing Officer's certificate delivered by the Master
Servicer pursuant to this paragraph. The Master Servicer shall only approve an
application with the consent of the Certificate Insurer. The Master Servicer
shall notify the Certificate Insurer and the Rating Agencies if an application
is approved.
Section 9.17. Servicing Compensation. As compensation for its activities
----------------------
hereunder, the Master Servicer shall be entitled to retain the amount of the
Servicing Fee with respect to each Mortgage Loan. The Master Servicer shall be
entitled to retain additional servicing compensation in the form of release
fees, bad check charges, assumption fees, modification or extension fees, late
payment charges, or any other service-related fees, Insurance Proceeds and
Liquidation Proceeds not required to be deposited in the Collection Account
pursuant to Section 9.10(a)(iii) and similar items, to the extent collected
from Mortgagors, including Prepayment Premiums, together with any interest or
other income earned on funds held in the Collection Account or any escrow
account.
Section 9.18. Annual Statement as to Compliance. The Master Servicer, at
---------------------------------
its own expense, will deliver to the Trustee, the Depositor, the Certificate
Insurer and the Rating Agencies, not later than 90 days following the end of
the fiscal year of the Master Servicer which as of the Startup Day ends on the
last day of December, commencing in 1999, a Servicing Officer's certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Master Servicer during such preceding fiscal year and of performance under
this Agreement has been made under such officers' supervision, (ii) to the
best of such officers' knowledge, based on such review, the Master 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 Master Servicer to remedy such
default, and (iii) the Master Servicer's short-term commercial paper rating.
Section 9.19. Annual Independent Certified Public Accountants' Reports.
--------------------------------------------------------
(a) Not later than 90 days following the end of each fiscal year of the Master
Servicer commencing in 1999, the Master Servicer, at its expense, shall cause
a nationally recognized firm of independent certified public accountants to
furnish to the Master Servicer a report stating that it has obtained a letter
of representation regarding certain matters from the management of the Master
Servicer which includes an assertion that the Master Servicer has complied
with certain minimum residential mortgage loan servicing standards, identified
in either the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers Association of America or the Audit
Program for Mortgages serviced by FHLMC, with respect to the servicing of
residential mortgage loans during the most recently completed fiscal year and
(ii) on the basis of an examination conducted by such firm in accordance with
standards established by the American Institute of Certified Public
Accountants, such representation is fairly stated in all material respects,
subject to such exceptions and other qualifications that may be appropriate.
In rendering its report such firm may rely, as to matters relating to the
direct servicing of residential mortgage loans by Sub-Servicers, upon
comparable reports of firms of independent certified public accountants
rendered on the basis of examinations conducted in accordance with the same
standards (rendered within one year of such report) with respect to those
Sub-Servicers. Immediately upon receipt of such report, the Master Servicer
shall furnish a copy of such report to the Trustee, the Certificate Insurer,
the Depositor and each Rating Agency. Copies of such statement shall be
provided by the Trustee to any Certificateholder upon request at the Master
Servicer's expense, provided that such statement is delivered by the Master
Servicer to the Trustee.
Section 9.20. Access to Certain Documentation and Information Regarding
---------------------------------------------------------
the Mortgage Loans. The Master Servicer shall provide to the Trustee, the
- ------------------
Certificate Insurer and the supervisory agents and examiners of each of the
foregoing (which, in the case of supervisory agents and examiners, may be
required by applicable state and federal regulations) access to the
documentation regarding the Mortgage Loans, such access being afforded without
charge but only upon reasonable request and during normal business hours at
the offices of the Master Servicer designated by it.
Section 9.21. Assignment and Delegation by Master Servicer; Resignation
---------------------------------------------------------
of Master Servicer. (a) The Master Servicer may assign its rights and delegate
- ------------------
its duties and obligations under this Agreement in connection with the sale or
transfer of a substantial portion of its mortgage servicing or asset
management portfolio with the written consent of the Certificate Insurer,
provided that: the purchaser or transferee accepting such assignment and
delegation (A) shall be satisfactory to the Trustee and the Certificate
Insurer, (B) shall be (I) an established mortgage finance institution, bank or
mortgage servicing institution, organized and doing business under the laws of
any state of the United States or the District of Columbia, authorized under
such laws to perform the duties of a servicer of mortgage loans or (II) a
Person resulting from a merger, consolidation or succession that is permitted
under Section 9.35, and (C) shall execute and deliver to the Trustee and the
Certificate Insurer an agreement, in form and substance satisfactory to the
Trustee and the Certificate Insurer, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by the Master Servicer under this
Agreement from and after the date of such agreement; (ii) as evidenced by a
letter from each Rating Agency delivered to the Trustee and the Certificate
Insurer, each Rating Agency's rating or ratings of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified,
downgraded or withdrawn as a result of such assignment and delegation; (iii)
the Master Servicer shall not be released from its obligations under this
Agreement that arose prior to the effective date of such assignment and
delegation under this Section 9.21(a); and (iv) the rate at which the
Servicing Fee (or any component thereof) is calculated shall not exceed the
rate in effect prior to such assignment and delegation. Upon acceptance of
such assignment and delegation, the purchaser or transferee shall be the
successor Master Servicer hereunder.
(b) The Trustee and any successor Master Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession, including the notification to all Mortgagors of the transfer of
servicing. The Master Servicer agrees to cooperate with the Trustee and any
successor Master Servicer in effecting the termination of the Master
Servicer's servicing responsibilities and rights hereunder and shall promptly
provide the Trustee or such successor Master Servicer, as applicable, all
documents and records reasonably requested by it to enable it to assume the
Master Servicer's functions hereunder and shall promptly also transfer to the
Trustee or such successor Master Servicer, as applicable, all amounts which
then have been or should have been deposited in the Collection Account by the
Master Servicer or which are thereafter received with respect to the Mortgage
Loans. Neither the Trustee nor any other successor Master Servicer shall be
held liable by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by the failure of the
Master Servicer to deliver, or any delay in delivering, cash, documents or
records to it, or (ii) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer. Subject to subsection (c), if the
Master Servicer is replaced hereunder, the Master Servicer agrees to reimburse
the Trust Fund, the Certificateholders and the Certificate Insurer for the
costs and expenses associated with the transfer of servicing to the
replacement Master Servicer.
(c) Any successor Master Servicer or successor Sub-Servicer (other than
the Trustee), must be acceptable to the Certificate Insurer and upon assuming
the duties of Master Servicer hereunder, shall immediately make all required
Advances and deposit them to the Collection Account which the Master Servicer
has theretofore failed to remit with respect to the Mortgage Loans; provided,
--------
however, that if the Trustee is acting as successor Master Servicer, the
- -------
Trustee shall only be required to make Advances (including the Advances
described in this clause (c)) if, in the Trustee's reasonable good faith
judgment, such Advances will ultimately be recoverable from the Mortgage
Loans.
(d) The successor Master Servicer shall give notice to the Certificate
Insurer, to the Mortgagors, to Moody's and to Standard & Poor's of the
transfer of the servicing to the successor Master Servicer.
Section 9.22. Inspections by the Trustee and the Certificate Insurer;
-------------------------------------------------------
Errors and Omissions Insurance. (a) Upon reasonable notice, the Trustee, the
- ------------------------------
Certificate Insurer or any agents thereof may inspect the Master Servicer's
servicing operations and discuss the servicing operations of the Master
Servicer during the Master Servicer's normal business hours with any of its
officers or directors; provided, however, that the costs and expenses incurred
-------- -------
by the Master Servicer or its agents or representatives in connection with any
such examinations or discussions shall be paid by the Master Servicer.
(b) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that
would meet the requirements of FNMA or FHLMC if it were the purchaser of the
Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from FNMA or FHLMC. The Master Servicer shall also maintain a
fidelity bond in the form and amount that would meet the requirements from
FNMA or FHLMC, unless the Master Servicer has obtained a waiver of such
requirements from FNMA or FHLMC. The Master Servicer shall be deemed to have
complied with this provision if a Master Servicer Affiliate has such errors
and omissions policy and fidelity bond coverage and, by the terms of such
insurance policy and fidelity bond, the coverage afforded thereunder extends
to the Master Servicer. Any such errors and omissions policy or fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee and the Certificate Insurer. The Master Servicer shall also
cause each Sub-Servicer to maintain a policy of insurance covering errors and
omissions and a fidelity bond which would meet such requirements. Upon the
request of the Trustee or the Certificate Insurer, the Master Servicer shall
cause to be delivered to such requesting Person a certified true copy of such
fidelity bond or errors and omission policy.
Section 9.23. Title, Management and Disposition of REO Property. (a) The
-------------------------------------------------
deed or certificate of sale of any REO Property shall be taken in the name of
the Master Servicer on behalf of the Trust Fund, or its nominee, on behalf of
the Certificateholders and the Certificate Insurer. The Master Servicer, on
behalf of the Trust Fund, shall either sell any REO Property not later than
the latest of (i) three years following the end of the calendar year in which
the acquisition occurred, (ii) the date to which the Internal Revenue Service
grants an extension of time to sell such property or is deemed to have granted
an such an extension under applicable Treasury regulations, and (iii) a date
later than those described in clauses (i) and (ii) if the Master Servicer
obtains an Opinion of Counsel (at the expense of the Trust Fund), addressed to
the Trustee, the Depositor and the Certificate Insurer, to the effect that the
holding by the Trust Fund of such REO Property for a period later than that
described in clauses (i) and/or (ii) will not result in the imposition on the
Trust Fund of taxes on "prohibited transactions" thereof, as defined in
Section 860F of the Code, or cause the Trust Fund to fail to qualify as a
REMIC under Federal law at any time that any Certificates are outstanding. The
Master Servicer shall manage, consent, protect and operate each REO Property
for the Certificateholders solely for the purpose of its prompt disposition
and sale in a manner which does not cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code
or result in the receipt by the Trust Fund of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.
(b) The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain
with respect to REO Properties an account held in trust for the Trustee for
the benefit of the Certificateholders and the Certificate Insurer (the "REO
Account"), which shall be an Eligible Account. The Master Servicer shall be
permitted to allow the Collection Account to serve as the REO Account, subject
to separate ledgers for each REO Property. The Master Servicer shall be
entitled to retain or withdraw any interest income paid on funds deposited in
the REO Account.
(c) The Master Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Agreement, to do any and
all things in connection with any REO Property as are consistent with the
manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and
for such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall
deposit, or cause to be deposited, on a daily basis in the REO Account all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to
an REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Master Servicer
shall advance from its own funds such amount as is necessary for such purposes
if, but only if, the Master Servicer would make such advances if the Master
Servicer owned the REO Property and if in the Master Servicer's judgment, the
payment of such amounts will be recoverable from the rental or sale of the REO
Property.
Notwithstanding the foregoing, the Master Servicer shall not:
(i) permit the Trust Fund to enter into, renew or extend any new
lease with respect to any REO Property, if the New Lease by its terms
will give rise to any income that does not constitute Rents from Real
Property;
(ii) permit any amount to be received or accrued under any new
lease other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO Property,
other than the completion of a building or other improvement thereon, and
then only if more than ten percent of the construction of such building
or other improvement was completed before default on the related Mortgage
Loan became imminent, all within the meaning of Section 856(e)(4)(B) of
the Code; or
(iv) allow any Person to Directly Operate any REO Property on any
date more than 90 days after its date of acquisition by the Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee and the Certificate Insurer, to the effect
that such action will not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code at
any time that it is held by the Trust Fund, in which case the Master Servicer
may take such actions as are specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Master Servicer as soon as
practicable, but in no event later than thirty days following the receipt
thereof by such Independent Contractor;
(iii) none of the provisions of this Section 9.23(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any of its
duties and obligations to the Trustee on behalf of the Certificateholders
and the Certificate Insurer with respect to the operation and management
of any such REO Property; and
(iv) the Master Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such REO
Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 9.17 is
sufficient to pay such fees.
(d) In addition to the withdrawals permitted under Section 9.23(c), the
Master Servicer may from time to time make withdrawals from the REO Account
for any REO Property: to pay itself or any Sub-Servicer unpaid Servicing Fees
in respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect
of such REO Property or the related Mortgage Loan. On the Master Servicer
Remittance Date, the Master Servicer shall withdraw from each REO Account
maintained by it and deposit into the Certificate Account in accordance with
Section 9.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 5.01, the income from the related REO Property
received during the prior calendar month, net of any withdrawals made pursuant
to Section 9.23(c) or this Section 9.23(d).
(e) Subject to the time constraints set forth in Section 9.23(a), each
REO Disposition shall be carried out by the Master Servicer at such price and
upon such terms and conditions as the Master Servicer shall deem necessary or
advisable, as shall be normal and usual in its general servicing activities
and as are in accordance with general FNMA guidelines.
(f) The proceeds from the REO Disposition, net of any amount required by
law to be remitted to the Mortgagor under the related Mortgage Loan and net of
any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited by the Master Servicer in the Certificate
Account in accordance with Section 9.10(d)(ii) on the Master Servicer
Remittance Date in the month following the receipt thereof for distribution on
the related Distribution Date in accordance with Section 5.02. Any REO
Disposition shall be for cash only (unless changes in the REMIC Provisions
made subsequent to the Startup Day allow a sale for other consideration and
the Certificate Insurer consents thereto).
(g) On or before February 28 of each year, the Master Servicer shall file
information returns with respect to the receipt of mortgage interest received
in a trade or business, reports of foreclosures and abandonments of any
Mortgaged Property and cancellation of indebtedness income with respect to any
Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code,
respectively. Such reports shall be in form and substance sufficient to meet
the reporting requirements imposed by such Sections 6050H, 6050J and 6050P of
the Code and a copy thereof shall be sent to the Trustee promptly after the
filing thereof.
Section 9.24. Obligations of the Master Servicer in Respect of Prepayment
-----------------------------------------------------------
Interest Shortfalls. If a Principal Prepayment of a Mortgage Loan occurs
- -------------------
during any Prepayment Period which gives rise to a Prepayment Interest
Shortfall, any difference between the interest collected from the Mortgagor
and the full month's interest at the Mortgage Rate less the Servicing Fee
("Compensating Interest") that is due shall be deposited by the Master
Servicer (but not in excess of one-half of the Servicing Fee for the related
Due Period on such Mortgage Loan) to the Collection Account on or before noon
New York time on the related Master Servicer Remittance Date and shall be
included in the Available Funds to be made available to the Trustee on such
Master Servicer Remittance Date.
Section 9.25. Reserved.
--------
Section 9.26. Obligations of the Master Servicer in Respect of Mortgage
---------------------------------------------------------
Rates and Monthly Payments. In the event that a shortfall in any collection on
- --------------------------
or liability with respect to any Mortgage Loan results from or is attributable
to adjustments to Mortgage Rates, Monthly Payments or Scheduled Principal
Balances that were made by the Master Servicer in a manner not consistent with
the terms of the related Mortgage Note and this Agreement, the Master
Servicer, upon discovery or receipt of notice thereof, immediately shall
deliver to the Trustee for deposit in the Certificate Account from its own
funds the amount of any such shortfall and shall indemnify and hold harmless
the Trust Fund, the Trustee, the Certificate Insurer, the Depositor and any
successor master servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement.
Section 9.27. Special Servicer. With respect to any Mortgage Loan that
----------------
becomes a Specially Serviced Mortgage Loan, all servicing responsibilities
shall be transferred from the Master Servicer or any Sub-Servicer to the
Special Servicer. The Special Servicer shall, consistent with the Servicing
Standard set forth in Section 9.01, perform the day-to-day servicing functions
with respect to such Mortgage Loan. In connection therewith, the Special
Servicer shall be entitled as compensation to (i) an amount payable from the
Master Servicer equal to the Servicing Fee with respect to such Mortgage Loan,
(ii) the Special Servicer Fee payable only in accordance with Sections 5.02(b)
and 5.02(c) and (iii) the Incentive Fee in accordance with the priority of
distributions set forth in Section 5.02. The Special Servicer shall perform
the duties and obligations set forth in Section 9.15 with respect to the
realization of proceeds on any such Mortgage Loans.
Section 9.28. Special Servicer Compensation. As consideration for
-----------------------------
servicing the Specially Serviced Mortgage Loans, the Special Servicer shall be
entitled to the following compensation in accordance with the priority of
distributions set forth in Section 5.02:
(a) As compensation for servicing each Specially Serviced Mortgage Loan,
the Special Servicer shall be paid the Special Servicer Fee with respect to
each Specially Serviced Mortgage Loan for any calendar month or part thereof
that such Mortgage Loan was a Specially Serviced Mortgage Loan. The Special
Servicer shall not receive a Special Servicer Fee for any Resolved Mortgage
Loan that becomes a Specially Serviced Mortgage Loan.
(b) (i) If a Severely Delinquent Mortgage Loan which has not previously
been converted to a Resolved Mortgage Loan is converted to a Paid-Off Mortgage
Loan or Foreclosed Mortgage Loan, the Special Servicer Special Servicer
Incentive Fee is calculated and the Special Servicer shall record such amount
on the Incentive Register.
(ii) (A) If a Severely Delinquent Mortgage Loan is converted to a
Modified Mortgage Loan or a Reinstated Mortgage Loan which has not
previously been converted to a Modified Mortgage Loan or a Reinstated
Mortgage Loan, the Special Servicer Incentive Fee is calculated and the
Special Servicer shall record in its records such amount relating to that
particular Modified Mortgage Loan or Reinstated Mortgage Loan but shall
not include such amount in the Incentive Register.
(B) If such Modified Mortgage Loan or Reinstated Mortgage Loan
subsequently becomes a Severely Delinquent Mortgage Loan, and is
converted to a Foreclosed Mortgage Loan or a Paid-Off Mortgage Loan:
(1) If the Net Resolution Proceeds of such Foreclosed
Mortgage Loan or Paid-Off Mortgage Loan equal 100% or more of
the unpaid principal balance of such mortgage loan, then the
Special Servicer Incentive Fee is not recalculated and the
related Special Servicer Incentive Fee, as recorded by the
Special Servicer pursuant to subheading (b)(ii)(A) of this
Section, shall be recorded on the Incentive Register.
(2) If the Net Resolution Proceeds of such Foreclosed
Mortgage Loan or Paid-Off Mortgage Loan are less than 100% of
the unpaid principal balance of such mortgage loan, then the
Special Servicer Incentive Fee is recalculated and the Special
Servicer shall record such amount on the Incentive Register.
(iii) If a Severely Delinquent Mortgage Loan is converted to a
Modified Mortgage Loan or a Reinstated Mortgage Loan which has previously
been converted to a Modified Mortgage Loan or a Reinstated Mortgage Loan,
the Special Servicer Incentive Fee is not recalculated.
(c) (i) Subject to clause (e) below, on the Determination Date in each
calendar month, if the balance of the Incentive Register is greater than zero,
the Special Servicer shall withdraw such amount from the Collection Account
(only after all required payments have been made on the Class A Certificate
and the Certificate Insurer pursuant to Section 5.02) )and deposit such amount
in the Special Servicer Incentive Fee Account, and the balances of the
Incentive Register shall be adjusted by the amount deposited in the Incentive
Fee Account.
(ii) On the first business day of each calendar month, if the
balance of the Incentive Register is less than zero, the Special Servicer
shall withdraw from the Incentive Fee Account, to the extent that funds
are available in the Incentive Fee Account, an amount equal to the
negative Special Servicer Incentive Fee amount and deposit such amounts
in the Collection Account. The balance of the Incentive Register will be
adjusted by the amount deducted from the Incentive Fee Account.
(iii) The Special Servicer shall be entitled to any amount on
deposit in the Incentive Fee Account on the first business day of the
twelfth calendar month following the Closing Date. Thereafter, the
Special Servicer shall be entitled to any amount on deposit in the
Incentive Fee Account every six calendar months on the first business day
of each such sixth calendar month.
(d) The Special 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 9.29. Reports to the Securities and Exchange Commission. (a) The
-------------------------------------------------
Trustee shall, on behalf of the Trust, cause to be filed with the Securities
and Exchange Commission any periodic reports required to be filed under the
provisions of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Securities and Exchange Commission thereunder. Upon the
request of the Trustee, each of the Seller, the Trustee and the Depositor
shall cooperate with the Trustee in the preparation of any such report and
shall provide to the Trustee in a timely manner all such information or
documentation as is in the possession of such Person and that the Trustee may
reasonably request in connection with the performance of its duties and
obligations under this Section.
(b) The Trustee shall file with the Securities Exchange Commission a Form
15 with respect to the Trust as soon as practicable following the first date
on which the conditions to filing thereof have been satisfied. Following the
filing of such Form 15, the Trustee will submit a certificate addressed to an
officer of the Depositor certifying that all filings under the Exchange Act
have been made and shall attach a copy of acceptance slips for such filings.
On the Closing Date, the Depositor shall provide the Trustee with a letter at
closing, instructing the Trustee, as filing agent, to comply with the
reporting obligations for the Trust under the Exchange Act.
Section 9.30. Master Servicer's Financial Statements and Related
--------------------------------------------------
Information. For each year this Agreement is in effect, the Master Servicer
- -----------
shall submit to the Trustee, the Certificate Insurer, 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 9.31. Representations and Warranties of the Master Servicer. The
-----------------------------------------------------
Master Servicer hereby represents, warrants and covenants to the Trustee, for
the benefit of each of the Trustee, the Certificateholders, the Certificate
Insurer and to the Depositor that as of the Closing Date or as of such date
specifically provided herein:
(i) The Master Servicer is duly organized, validly existing and in
good standing as a corporation under the laws of the State of Florida and
is and will remain in compliance with the laws of each state in which any
Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan and the servicing of the Mortgage
Loan in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full power and authority to
conduct its business as presently conducted by it and to execute, deliver
and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Master Servicer has duly authorized
the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Depositor, the Special
Servicer and the Trustee, constitutes a legal, valid and binding
obligation of the Master Servicer, enforceable against it in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity;
(iii) The execution and delivery of this Agreement by the Master
Servicer and the performance of and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or by-laws
or any law, rule, regulation, order, judgment, award, administrative
interpretation, injunction, writ, decree or the like affecting the Master
Servicer or by which the Master Servicer is bound or (B) result in a
breach of or constitute a default under any indenture or other material
agreement to which the Master Servicer is a party or by which the Master
Servicer is bound, which in the case of either clause (a) or (b) will
have a material adverse effect on the Master Servicer's ability to
perform its obligations under this Agreement;
(iv) The Master Servicer is a HUD approved mortgagee pursuant to
Section 203 of the National Housing Act; no event has occurred, including
but not limited to a change in insurance coverage, which would make the
Master Servicer unable to comply with FHLMC or HUD eligibility
requirements or which would require notification to FHLMC or HUD;
(v) The Master 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;
(vi) With respect to each Mortgage Loan, the Master Servicer is in
possession of a complete mortgage file, except for such documents as have
been delivered to the Trustee;
(vii) There are no actions or proceedings against, investigations
known to it of, the Master Servicer before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement,
(B) seeking to prevent the consummation of the transactions contemplated
by this Agreement or (C) that might prohibit or materially and adversely
affect the performance by the Master Servicer of its obligations under,
or validity or enforceability of, this Agreement; and
(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 or orders, if any, that have been obtained prior to the
Closing Date.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 9.31 shall survive delivery of the
Mortgage Files to the Trustee and shall inure to the benefit of the Trustee,
the Depositor, the Certificateholders and the Certificate Insurer. Upon
discovery by any of the Depositor, the Master Servicer, the Special Servicer
or the Trustee of a breach of any of the foregoing representations, warranties
and covenants which materially and adversely affects the value of any Mortgage
Loan or the interests therein of the Certificateholders and the Certificate
Insurer, the party discovering such breach shall give prompt written notice
(but in no event later than two Business Days following such discovery) to the
Master Servicer, the Trustee and the Certificate Insurer.
Section 9.32. Representations Regarding the Special Servicer. The Special
----------------------------------------------
Servicer represents and warrants to the Trustee, the Certificate Insurer and
the Master Servicer as of the Closing Date:
(i) The Special Servicer is a federal savings bank duly organized,
validly existing and in good standing under the laws of the United States
and has all licenses 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 Special Servicer, and in any event the Special Servicer
is in compliance with the laws of any such state to the extent necessary
to ensure enforceability of the terms of this Agreement; the Special
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 Special 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 Special Servicer and all requisite action
has been taken by the Special Servicer to make this Agreement valid and
binding upon the Special Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Special Servicer;
(iii) Neither the execution and delivery of this Agreement, the
acquisition of the servicing responsibilities by the Special 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 Special Servicer's charter or by-laws or any legal restriction or
any agreement or instrument to which the Special 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 violation of any
law, rule regulation, order, judgment or decree to which the Special
Servicer or its property is subject, or impair the ability of the Special
Servicer to service the Mortgage Loans, or impair the value of the
Mortgage Loans;
(iv) The Special 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. The Special 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. The Special
Servicer is solvent and the transfer of servicing responsibilities to the
Special Servicer hereunder is not undertaken to hinder, delay or defraud
any of the Special Servicer's creditors;
(v) There is no action, suit, proceeding or investigation pending
or threatened against the Special 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 Special Servicer, or in any material impairment of the right or
ability of the Special Servicer to carry on its business substantially as
now conducted, or in any material liability on the part of the Special
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 Special Servicer contemplated herein, or which would
be likely to impair materially the ability of the Special Servicer to
perform under the terms of this Agreement;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Special Servicer of or compliance by the Special
Servicer with this Agreement, or if required, such approval has been
obtained prior to each Transfer Date;
(vii) The Special Servicer is an approved seller/servicer of
conventional residential mortgage loans for FNMA or FHLMC, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The
Special Servicer is in good standing to service mortgage loans for either
FNMA or FHLMC, and no event has occurred, including but not limited to a
change in insurance coverage, which would make the Special Servicer
unable to comply with either FNMA or FHLMC eligibility requirements or
which would require notification to any of FNMA or FHLMC;
(viii) No representation or warranty made by the Special Servicer
pursuant to this Section 9.32 contains any untrue statement of fact or
omits to state a material fact necessary to make the statements contained
therein not misleading;
(ix) The Special 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; and
(x) The Special Servicer is an "insured depository institution" as
that term is defined in Section 1813(c)(2) of Title 12 of the United
States Code, as amended, and accordingly, the Special Servicer makes the
following additional representations and warrants:
(i) This Agreement conforms to all applicable statutory and
regulatory requirements; and
(ii) This Agreement is (1) executed contemporaneously with the
agreement reached by the parties hereto and the Special Servicer ,
(2) approved by a specific corporate or banking association
resolution by the Special Servicer's board of directors, which
approval shall be reflected in the minutes of said board, and (3)
an official record of the Special Servicer. A copy of such
resolution, certified by a vice president or higher officer of
Special Servicer has been provided to the parties hereto.
Section 9.33. Closing Certificate and Opinion. On or before the Closing
-------------------------------
Date, the Master Servicer shall cause to be delivered to the Depositor, the
Certificate Insurer, Lehman Brothers Inc. and the Trustee an Opinion of
Counsel, dated the Closing Date, in form and substance reasonably satisfactory
to the Depositor, the Certificate Insurer and Lehman Brothers Inc., as to the
due authorization, execution and delivery of this Agreement by the Master
Servicer and the enforceability thereof.
Section 9.34. Preparation of Tax Returns and Other Reports. (a) The
--------------------------------------------
Trustee 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 to the Depositor copies 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 Trustee will prepare, to the extent that it is
familiar with applicable state requirements, and the Trustee at the written
direction of the Master Servicer 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.
(b) The Trustee shall prepare and file with the Internal Revenue Service
("IRS"), on behalf of the Trust Fund, an application on IRS Form SS-4.
(c) Reserved.
Section 9.35. Merger or Consolidation. Any Person into which the Master
-----------------------
Servicer, the Special Servicer or the Depositor may be merged or consolidated,
or any Person resulting from any merger, conversion, other change in form or
consolidation to which the Master Servicer, the Special Servicer or the
Depositor shall be a party, or any Person succeeding to the business of the
Master Servicer, the Special Servicer or the Depositor shall be the successor
to the Master Servicer, the Special Servicer or the Depositor 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
$30,000,000 and shall be acceptable to the Certificate Insurer.
Section 9.36. Limitation on Liability of the Master Servicer, the Special
-----------------------------------------------------------
Servicer and Others.
- -------------------
Neither the Master Servicer or the Special Servicer nor any of the
directors or officers or employees or agents of the Master Servicer or the
Special Servicer shall be under any liability to the Trust or the
Certificateholders for any action taken or for refraining from the taking of
any action by the Master Servicer or the Special Servicer in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
-------- -------
this provision shall not protect the Master Servicer, the Special Servicer or
any such Person against any liability which would otherwise be imposed by
reason of its willful misfeasance, bad faith or negligence in the performance
of the duties of the Master Servicer or the Special Servicer or by reason of
its reckless disregard of its obligations and duties of the Master Servicer or
the Special Servicer, as applicable, hereunder; provided, further, that this
-------- -------
provision shall not be construed to entitle the Master Servicer to indemnity
in the event that amounts advanced by the Master Servicer to retire any senior
lien exceed Liquidation Proceeds (in excess of related liquidation expenses)
realized with respect to the related Mortgage Loan. The preceding sentence
shall not limit the obligations of the Master Servicer pursuant to Section
6.12. The Master Servicer, the Special Servicer and any director or officer or
employee or agent of the Master Servicer or the Special 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, the Special Servicer and any director or officer or employee or
agent of the Master Servicer or the Special Servicer shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of the Master Servicer's or the
Special Servicer's, as the case may be, willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. Each of the Master Servicer and
the Special Servicer may with the consent of the Certificate Insurer 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 and the interests
of the Certificateholders hereunder. In such event, the reasonable legal
expenses and costs of such action and any liability resulting therefrom shall
be expenses, costs and liabilities of the Trust and the Master Servicer and
the Special Servicer shall each be entitled to be reimbursed therefor only
pursuant to Section 9.11(vii). The Master Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Master Servicer pursuant to Section 9.21 or 6.14 with
respect to any losses, expenses, costs or liabilities arising prior to such
resignation or termination (or arising from events that occurred prior to such
resignation or termination). The Special Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Special Servicer pursuant to Section 6.14 with respect to
any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination). This paragraph shall apply to the Master Servicer and the
Special Servicer solely in their respective capacities as Master Servicer and
Special Servicer, respectively, hereunder and in no other capacities.
Section 9.37. Master Servicer Not to Resign.
-----------------------------
Subject to the provisions of Section 9.35, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it except (i) upon
determination that the performance of its obligations or 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 or its
subsidiaries or Affiliates, the other activities of the Master Servicer so
causing such a conflict being of a type and nature carried on by the Master
Servicer or its subsidiaries or Affiliates at the date of this Agreement or
(ii) upon satisfaction of the following conditions: (a) the Master Servicer
has proposed a successor servicer to the Trustee and the Certificate Insurer
in writing and such proposed successor servicer is reasonably acceptable to
the Trustee; (b) each Rating Agency shall have delivered a letter to the
Trustee and the Certificate Insurer prior to the appointment of the successor
servicer stating that the proposed appointment of such successor servicer as
Master Servicer hereunder will not result in the reduction or withdrawal of
the then current rating of the Class A Certificates without regard to the
Policy; and (c) such proposed successor servicer is acceptable to the
Certificate Insurer, as evidenced by a letter to the Trustee; provided,
however, that no such resignation by the Master Servicer shall become
effective until such successor servicer or, in the case of (i) above, the
Trustee shall have assumed the Master Servicer's responsibilities and
obligations hereunder or the Trustee shall have designated a successor
servicer in accordance with Section 7.02. Any such resignation shall not
relieve the Master Servicer of responsibility for any of the obligations
specified in Section 6.14 as obligations that survive the resignation or
termination of the Master Servicer. Any such determination permitting the
resignation of the Master Servicer pursuant to clause (i) above shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee and
the Certificate Insurer.
Section 9.38. Indemnification of the Trust and the Certificate Insurer by
-----------------------------------------------------------
the Master Servicer.
- -------------------
The Master Servicer shall indemnify and hold harmless the Trust, the
Trustee and the Certificate Insurer and their officers, directors, agents and
employees from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of the Master Servicer's willful misfeasance,
bad faith or negligence in the performance of its activities in servicing or
administering the Mortgage Loans pursuant to this Agreement, including, but
not limited to, any judgment, award, settlement, reasonable fees of counsel of
its selection and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim related to the
Master Servicer's misfeasance, bad faith or negligence. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this
Section 9.38 shall survive termination of the Agreement or the earlier of the
resignation or removal of the Trustee.
Section 9.39. Indemnification of the Trust and the Certificate Insurer by
-----------------------------------------------------------
the Special Servicer.
- --------------------
The Special Servicer shall indemnify and hold harmless the Trust, the
Trustee and the Certificate Insurer and their officers, directors, agents and
employees from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of the Special Servicer's willful misfeasance,
bad faith or negligence in the performance of its activities in servicing or
administering the Mortgage Loans pursuant to this Agreement, including, but
not limited to, any judgment, award, settlement, reasonable fees of counsel of
its selection and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim related to the
Special Servicer's misfeasance, bad faith or negligence. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this
Section 9.39 shall survive termination of the Agreement or the earlier of the
resignation or removal of the Trustee.
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 Trustee shall prepare, and 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 at the written direction of the Master Servicer
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) Reserved.
(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 VX Certificate and that is not an
asset of the REMIC. The Trustee shall treat the rights of the Class A-V
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 VX Certificateholder in favor of the Class A-V
Certificateholders. Thus, each Class A-V Certificate shall be treated as
representing not only ownership of regular interests in REMIC 3, but also
ownership of an interest in an interest rate cap contract that is separate
from such regular interests within the meaning of Treasury regulation Section
1.860 G-2(i). For purposes of determining the issue prices of the REMIC 3
regular interests, the Trustee shall assume that the interest rate cap
contract has only a nominal value of $5,000.
(m) The Trustee shall treat the rights of the Class A-F
Certificateholders to receive payments in excess of the Group F Net Mortgage
Rate as rights in an interest rate cap contract written by the Class VX
Certificateholder in favor of the Class A-F Certificateholder. Thus, each
Class A-F Certificate shall be treated as representing not only ownership of
regular interests in REMIC 3, but also ownership of an interest in an interest
rate cap contract that is separate from such regular interests within the
meaning of Treasury regulation Section 1.860 G-2(i). For purposes of
determining the issue prices of the REMIC 3 regular interests, the Trustee
shall assume that the interest rate cap contract has only a nominal value of
$5,000.
Section 10.02. Prohibited Transactions and Activities. Neither the
--------------------------------------
Depositor, the Master Servicer, the Special 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, addressed to the Certificate Insurer and the Trustee (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. Reserved.
--------
ARTICLE XI
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 11.01. Rights of the Certificate Insurer To Exercise Rights of
-------------------------------------------------------
Class A Certificateholders.
- --------------------------
Each of the Depositor, the Seller, the Master Servicer, the Special
Servicer and the Trustee, and by accepting its Certificate, each Class A
Certificateholder, agrees that unless a Certificate Insurer Default has
occurred and is continuing, the Certificate Insurer shall have the right to
exercise all rights of the Class A Certificateholders under this Agreement
without any further consent of the Class A Certificateholders.
In addition, each Class A Certificateholder agrees that, unless a
Certificate Insurer Default has occurred and is continuing, the rights of the
Class A Certificateholders specifically set forth herein may be exercised by
the Class A Certificateholders only with the prior written consent of the
Certificate Insurer.
Section 11.02. Trustee To Act Solely with Consent of the Certificate
-----------------------------------------------------
Insurer.
- -------
Unless a Certificate Insurer Default has occurred and is continuing, the
Trustee shall not:
(a) agree to any amendment pursuant to Section 12.03; or
(b) undertake any litigation pursuant to Section 6.02(vi) or
any litigation which could result in a claim of or a payment from
the Trust Fund;
(c) exercise any of the remedies available under Sections 6.14,
6.15, 6.16, 6.18 or 6.19;
without the prior written consents of the Certificate Insurer and the Rating
Agencies, which consents shall not be unreasonably withheld. In addition, the
Certificate Insurer shall have the right to direct the Trustee to enforce the
rights assigned to the Trustee under the Mortgage Loan Purchase Agreement, the
Mortgage Loan Sale Agreement and any Sub-Servicing Agreement and all other
rights as specified in this Agreement.
Notwithstanding anything to the contrary contained herein, during the
continuance of a Certificate Insurer Default, all of the Certificate Insurer's
rights with respect to the exercise of remedies, the granting or withholding
of consents and the undertaking of any litigation shall revert back to the
Class A Certificateholders.
Section 11.03. Trust Fund and Accounts Held for Benefit of the
-----------------------------------------------
Certificate Insurer.
- -------------------
The Trustee shall hold the Trust Fund and the Mortgage Files for the
benefit of the Certificateholders and the Certificate Insurer, and all
references in this Agreement (including, without limitation, in Sections 2.01
and 2.02) and in the Certificates to the benefit of Holders of the
Certificates shall be deemed to include the Certificate Insurer. The Trustee
shall cooperate in all reasonable respects with any reasonable request by the
Certificate Insurer for action to preserve or enforce the Certificate
Insurer's rights or interests under this Agreement and the Certificates.
The Master Servicer and the Special Servicer each hereby acknowledge and
agree that each of them to the extent of their duties hereunder shall service
and administer the Mortgage Loans and any REO Properties, and shall maintain
the Collection Account and any REO Account, for the benefit of the
Certificateholders and for the benefit of the Certificate Insurer, and all
references in this Agreement (including, without limitation, in Sections 9.01
and 9.10) to the benefit of or actions on behalf of the Certificateholders
shall be deemed to include the Certificate Insurer. Unless a Certificate
Insurer Default has occurred and is continuing, the Master Servicer shall not
terminate any Sub-Servicing Agreements without cause without the prior consent
of the Certificate Insurer. Unless a Certificate Insurer Default has occurred
and is continuing, neither the Master Servicer nor the Depositor shall
undertake any litigation pursuant to Section 9.36 (other than litigation to
enforce their respective rights hereunder) without the prior consent of the
Certificate Insurer.
Section 11.04. Claims Upon the Policies; Policy Payments Account.
-------------------------------------------------
(a) If, by the close of business on the fourth Business Day prior to a
Distribution Date, the Trustee determines that, based on the information
provided by the Servicer, a Deficiency Amount for any Distribution Date is
expected to be greater than zero, then the Trustee shall give notice to the
Certificate Insurer by telephone or telecopy of the amount of such Deficiency
Amount. Such notice of such Deficiency Amount shall be confirmed in writing in
the form set forth as Exhibit A of the Policies, to the Certificate Insurer
and the Fiscal Agent (as defined in the Policies), if any, at or before 12:00
noon, New York time, on the third Business Day prior to such Distribution
Date. Following receipt by the Certificate Insurer of such notice in such
form, the Certificate Insurer or the Fiscal Agent will pay any amount payable
under the Policy on the later to occur of (i) 12:00 noon, New York time, on
the third Business Day following such receipt and (ii) 12:00 noon, New York
time, on the Distribution Date to which such deficiency relates, as provided
in the applicable Policy.
(b) The Trustee shall establish a segregated trust account for the
benefit of Holders of the Class A Certificates and the Certificate Insurer
referred to herein as the "Policy Payments Account" over which the Trustee
shall have exclusive control and sole right of withdrawal. The Trustee shall
deposit any amount paid under the Policies in the Policy Payments Account and
distribute such amount only for purposes of payment to Holders of Class A
Certificates of the Insured Payment for which a claim was made, and such
amount may not be applied to satisfy any costs, expenses or liabilities of the
Master Servicer, the Trustee or the Trust Fund or any other Person. Amounts
paid under the Policies shall be transferred to the Certificate Account in
accordance with the next succeeding paragraph and disbursed by the Trustee to
applicable Holders of Class A Certificates in accordance with Sections 5.02(b)
and (c), as applicable, subject to the terms of the related Policy, as
applicable. It shall not be necessary for such payments to be made by checks
or wire transfers separate from the checks or wire transfers used to pay the
Insured Payment with other funds available to make such payment. However, the
amount of any payment of principal of or interest on the Class A Certificates
to be paid from funds transferred from the Policy Payments Account shall be
noted as provided in paragraph (c) below in the Certificate Register and in
the statement to be furnished to Holders of the Class A Certificates and
Residual Certificates pursuant to Section 4.03. Funds held in the Policy
Payments Account shall not be invested.
On any Distribution Date with respect to which a claim has been made
under a Policy, the amount of any funds received by the Trustee as a result of
any claim under a Policy, to the extent required to make the Insured Payment
on such Distribution Date, shall be withdrawn from the Policy Payments Account
and deposited in the Certificate Account and applied by the Trustee, together
with the other funds to be withdrawn from the Certificate Account pursuant to
Sections 5.02(b) and (c), as applicable, subject to terms of the related
Policy, directly to the payment in full of the Insured Payment due on the
Class A Certificates. Funds received by the Trustee as a result of any claim
under the Policies shall be deposited by the Trustee in the Policy Payments
Account and used solely for payment to the Holders of the Class A Certificates
and may not be applied to satisfy any costs, expenses or liabilities of the
Master Servicer, the Trustee or the Trust Fund or any other Person. Any funds
remaining in the Policy Payments Account on the first Business Day following a
Distribution Date shall be remitted to the Certificate Insurer, pursuant to
the instructions of the Certificate Insurer, by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of the amount
of interest and principal paid in respect of any Class A Certificate from
moneys received under the Policies. The Certificate Insurer shall have the
right to inspect such records at reasonable times during normal business hours
upon one Business Day's prior written notice to the Trustee.
(d) The Trustee shall promptly notify the Certificate Insurer and Fiscal
Agent of any proceeding or the institution of any action, of which a
Responsible Officer of the Trustee has actual knowledge, seeking the avoidance
as a preferential transfer under applicable bankruptcy, insolvency,
receivership or similar law (a "Preference Claim") of any distribution made
with respect to the Class A Certificates. Each Class A Certificateholder, by
its purchase of Class A Certificates, the Master Servicer and the Trustee
hereby agree that the Certificate Insurer (so long as a Certificate Insurer
Default ((a) of the definition thereof herein) has not occurred and is not
continuing) may at any time during the continuation of any proceeding relating
to a Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order
relating to such Preference Claim and (ii) the posting of any surety,
supersede as or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Certificate Insurer shall be
subrogated to the rights of the Master Servicer, the Trustee and each Class A
Certificateholder in the conduct of any such Preference Claim, including,
without limitation, all rights of any party to an adversary proceeding action
with respect to any court order issued in connection with any such Preference
Claim.
Section 11.05. Effect of Payments by the Certificate Insurer;
----------------------------------------------
Subrogation.
- -----------
Anything herein to the contrary notwithstanding, any payment with respect
to principal of or interest on any of the Class A Certificates which is made
with moneys received pursuant to the terms of the related Policy shall not be
considered payment of such Class A Certificates from the Trust Fund and shall
not result in the payment of or the provision for the payment of the principal
of or interest on such Class A Certificates within the meaning of Section
5.02. The Depositor, the Master Servicer and the Trustee acknowledge, and each
Holder by its acceptance of a Certificate agrees, that without the need for
any further action on the part of the Certificate Insurer, the Depositor, the
Master Servicer, the Trustee or the Certificate Registrar (a) to the extent
the Certificate Insurer makes payments, directly or indirectly, on account of
principal of or interest on any Class A Certificates to the Holders of such
Certificates, the Certificate Insurer will be fully subrogated to the rights
of such Holders to receive such principal and interest from the Trust Fund and
(b) the Certificate Insurer shall be paid such principal and interest but only
from the sources and in the manner provided herein for the payment of such
principal and interest.
The Trustee and the Master Servicer shall cooperate in all respects with
any reasonable request by the Certificate Insurer for action to preserve or
enforce the Certificate Insurer's rights or interests under this Agreement
without limiting the rights or affecting the interests of the Holders as
otherwise set forth herein.
Section 11.06. Notices to the Certificate Insurer.
----------------------------------
All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to any other party hereto or to any of the
Certificateholders shall also be sent to the Certificate Insurer.
Section 11.07. Third-Party Beneficiary.
-----------------------
The Certificate Insurer shall be a third-party beneficiary of this
Agreement, entitled to enforce the provisions hereof as if a party hereto.
Section 11.08. Trustee to Hold the Policy.
--------------------------
The Trustee will hold the Policies in trust as agent for the Holders of
the Class A Certificates for the purpose of making claims thereon and
distributing the proceeds thereof. Neither the Policies nor the amounts paid
on the Policies will constitute part of the Trust Fund or assets of the REMIC
created by this Agreement. Each Holder of Class A Certificates, by accepting
its Class A Certificates, appoints the Trustee as attorney-in-fact for the
purpose of making claims on the Policies.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. 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 12.02. 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 12.03. 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, but only with the consent of the
Certificate Insurer (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 the Policies 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 or the Certificate
Insurer. 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, and the Master Servicer and
the Certificate Insurer, may from time to time consent to the amendment of the
Policy 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, and in the case of an amendment to this Agreement, with the
consent of the Certificate Insurer, 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 or distributions or payments under the Policy which are
required to be made 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. In addition, promptly after
the execution of any such amendment made with the consent of the
Certificateholders, the Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder and fully executed
original counterparts of the instruments effecting such amendment to the
Certificate Insurer.
(d) It shall not be necessary for the consent of Holders under this
Section 12.03 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 Sub-Servicing
Agreement, the Trustee shall not consent to any amendment of any Sub-Servicing
Agreement except pursuant to the standards provided in this Section with
respect to amendment of this Agreement.
Section 12.04. 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 12.05. 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 9.29 and (ii) a copy of any other document incorporated by reference
in the Prospectus.
(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 12.06. 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 12.07. 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 Seller, LMAC, Inc., The Forum, 1675 Palm Beach Lakes
Boulevard, West Palm Beach, Florida 33401, Attention: Secretary, (c) in the
case of the Trustee, 450 West 33rd Street, New York, New York 10001,
Attention: Capital Markets Fiduciary Services (Ocwen 1999-OFS1), (d) in the
case of the Certificate Insurer, 113 King Street, Armonk, New York 10504,
Attention: Insured Portfolio Management, Structured Finance (IPM-SF) -- Ocwen
Home Equity Loan Trust 1999-OFS1, (e) in the case of Moody's, Home Mortgage
Loan Monitoring Group, 4th Floor, 99 Church Street, New York, New York 10007,
and (f) in the case of Standard & Poor's, 55 Water Street, New York, New York
10041, Attention: Residential Mortgage Group, or, as to each party, at such
other address as shall be designated by such party in a written notice to each
other party. In each case in which a notice or other communication to the
Certificate Insurer refers to an Event of Default or a claim under the Policy
or with respect to which failure on the part of the Certificate Insurer to
respond shall be deemed to constitute consent or acceptance, then a copy of
such notice or other communication should also be sent to the attention of the
General Counsel and the Head-Financial Guaranty Group and shall be marked
"URGENT MATERIAL ENCLOSED". Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice. Any notice or other document required to be delivered or
mailed by the Trustee to any Rating Agency shall be given on a best efforts
basis and only as a matter of courtesy and accommodation and the Trustee shall
have no liability for failure to delivery such notice or document to any
Rating Agency. 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 12.08. 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 12.09. 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 12.10. 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 12.11. Benefits of Agreement. This Agreement will inure to the
---------------------
benefit of and be binding upon the parties hereto, the Certificateholders, the
Certificate Owners, the Certificate Insurer and their respective successors
and permitted assigns. Except as otherwise provided in this Agreement, no
other person will have any right or obligation hereunder.
Section 12.12. 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 12.03;
(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 the Master
Servicer under the 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 Moody's, to:
Moody's
Home Mortgage Loan Monitoring Group
99 Church Street
4th Floor
New York, New York 10007
If to S&P, to:
Standard & Poor's Rating Services
55 Water Street
New York, New York 10041
Attention: Residential Mortgages
(c) The Trustee shall deliver to the Rating Agencies reports prepared
pursuant to Section 4.03.
Section 12.13. 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 12.14. No Petition. So long as this Agreement is in effect, and
-----------
for one year following its termination, none of the parties hereto will file
any involuntary petition or otherwise institute any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceeding under any federal or state bankruptcy or similar law against the
Depositor or the Seller.
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and
the Special 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:_______________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:_______________________________
Name:
Title:
OCWEN FINANCIAL SERVICES, INC.,
as Master Servicer
By:_______________________________
Name:
Title:
OCWEN FEDERAL BANK FSB,
as Special Servicer
By:_______________________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 24th day of June 1999 before me, a Notary Public in and for said
State, personally appeared [ ], known to me to be a Vice President of
STRUCTURED ASSET SECURITIES CORPORATION, the corporation that executed the
within instrument, and also known to me to be the person who executed in on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 24th day of June 1999 before me, a Notary Public in and for said
State, personally appeared [ ], known to me to be a Vice President of
STRUCTURED ASSET SECURITIES CORPORATION, the corporation that executed the
within instrument, and also known to me to be the person who executed in on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 24th day of June 1999 before me, a Notary Public in and for said
State, personally appeared [ ], known to me to be a Vice President of
STRUCTURED ASSET SECURITIES CORPORATION, the corporation that executed the
within instrument, and also known to me to be the person who executed in on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 24th day of June 1999 before me, a Notary Public in and for said
State, personally appeared [ ], known to me to be a Vice President of
STRUCTURED ASSET SECURITIES CORPORATION, the corporation that executed the
within instrument, and also known to me to be the person who executed in on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
<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 June 1,
1999 among Structured Asset Securities Corporation, as
Depositor, The Chase Manhattan Bank, as Trustee, Ocwen
Financial Services, Inc., as Master Servicer, and Ocwen
Federal Bank FSB, as Special Servicer, with respect to Home
Equity Loan Asset Backed Certificates, Series 1999-OFS1
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 CHASE MANHATTAN BANK,
as Trustee
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT B-2
-----------
RESERVED
<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 June 1,
1999 among Structured Asset Securities Corporation, as
Depositor, The Chase Manhattan Bank, as Trustee, Ocwen
Financial Services, Inc., as Master Servicer, and Ocwen
Federal Bank FSB, as Special Servicer, with respect to Home
Equity Loan Asset Backed Certificates, Series 1999-OFS1
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 CHASE MANHATTAN BANK,
as Trustee
By:_____________________________
Name:
Title:
<PAGE>
EXHIBIT B-4
-----------
FORM OF ENDORSEMENT
Pay to the order of The Chase Manhattan Bank, as trustee (the
"Trustee") under the Trust Agreement dated as of June 1, 1999, among
Structured Asset Securities Corporation, as Depositor, the Trustee, the Master
Servicer and the Special Servicer relating to Home Equity Loan Asset Backed
Certificates, Series 1999-OFS1, 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]
[The Chase Manhattan Bank
c/o Chase Bank of Texas, N.A.
801 West Greens Road, Suite 200
Houston, Texas 77067
Attn: Custody Manager]
In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of June 1, 1999 among
Structured Asset Securities Corporation, as Depositor, Ocwen Financial
Services, Inc., as Master Servicer, Ocwen Federal Bank FSB, as Special
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 Chase Manhattan Bank, as Trustee, Ocwen Financial
Services, Inc., as Master Servicer, and Ocwen Federal Bank FSB, as
Special Servicer, dated as of June 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: Home Equity Loan Asset Backed Certificates, Series 1999-OFS1
------------------------------------------------------------
_______________________ (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
---------
RESERVED
<PAGE>
EXHIBIT F
---------
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Home Equity Loan Asset Backed
Certificates, Series 1999-OFS1
------------------------------
Reference is hereby made to the Trust Agreement dated as of June 1, 1999
(the "Trust Agreement") among Structured Asset Securities Corporation, as
Depositor, Ocwen Financial Services, Inc., as Master Servicer, Ocwen Federal
Bank FSB, as Special Servicer, and The Chase Manhattan Bank, 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 Home Equity Loan Asset Backed Certificates, Series 1999-OFS1 (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 June 1,
1999 among the Depositor, Ocwen Financial Services, Inc., as Master
Servicer, Ocwen Federal Bank FSB, as Special Servicer, and The Chase
Manhattan Bank, 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, Ocwen Financial Services, Inc., as Master
Servicer, Ocwen Federal Bank FSB, as Special Servicer, and The Chase
Manhattan Bank, as Trustee, dated as of June 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
---------
RESERVED
<PAGE>
EXHIBIT J
---------
RESERVED
<PAGE>
EXHIBIT K
---------
CUSTODIAL AGREEMENT
<PAGE>
SCHEDULE A
----------
MORTGAGE LOAN SCHEDULE
Execution
- ------------------------------------------------------------------
STRUCTURED ASSET SECURITIES CORPORATION,
as Purchaser
and
LMAC, INC.
as Seller
MORTGAGE LOAN SALE AGREEMENT
Dated as of June 1, 1999
Fixed Rate and Adjustable Rate Mortgage Loans
Ocwen Home Equity Loan Trust 1999-OFS1
- --------------------------------------------------------------------------------
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................1
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.1 Sale of Mortgage Loans.....................................2
Section 2.2 Obligations of Seller Upon Sale............................2
Section 2.3 Payment of Purchase Price for the Mortgage Loans...........4
Section 2.4 Assignment.................................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.1 Seller Representations and Warranties Relating to the
Mortgage Loans............................................5
Section 3.2 Seller Representations and Warranties.....................15
ARTICLE IV
SELLER'S COVENANTS
Section 4.1 Covenants of the Seller...................................17
ARTICLE V
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.1 Indemnification...........................................17
Section 5.2 Obligations of Ocwen Financial Services, Inc..............20
ARTICLE VI
TERMINATION
Section 6.1 Termination...............................................20
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1 Amendment.................................................21
Section 7.2 Governing Law.............................................21
Section 7.3 Notices...................................................21
Section 7.4 Severability of Provisions................................21
Section 7.5 Counterparts..............................................21
Section 7.6 Further Agreements........................................22
Section 7.7 Intention of the Parties..................................22
Section 7.8 Successors and Assigns: Assignment of Purchase Agreement..22
Section 7.9 Survival..................................................23
Section 7.10 No Petition...............................................23
Schedule I Mortgage Loans.................................................I-1
<PAGE>
MORTGAGE LOAN SALE AGREEMENT, dated as of June 1, 1999 (the
"Agreement"), between LMAC, Inc. (the "Seller") and Structured Asset
Securities Corporation (the "Purchaser").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Seller is the owner of (i) the notes or other evidence
of indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto
referred to below, and Related Documents (as defined below) (collectively, the
"Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof owns, the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure
or deed in lieu of foreclosure or otherwise and (b) the proceeds of any
insurance policies covering the Mortgage Loans or the Mortgaged Properties or
the obligors on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Trust Agreement dated as of June
1, 1999 (the "Trust Agreement") among the Purchaser, as depositor, Ocwen
Financial Services, Inc., as master servicer, Ocwen Federal Bank FSB, as
special servicer, and The Chase Manhattan Bank, as trustee (the "Trustee"),
the Purchaser will convey the Mortgage Loans to Ocwen Home Equity Loan Trust
1999-OFS1 (the "Trust").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. All Capitalized terms used but not defined
-----------
herein and below shall have the meanings assigned thereto in the Trust
Agreement.
(a) "Seller Information": The information in the Prospectus
------------------
Supplement as follows: in the second paragraph on the cover page,
"Summary of Terms--Seller," "--Master Servicer," "--Subservicer and
Special Servicer," "--Mortgage Loans," the first, second and third
sentences under "Risk Factors--The Unique Features of the Mortgage Loans
Create Special Risks--The Borrowers Have Less Than Perfect Credit," the
first sentence under "--Certain Borrowers Have Little Equity in the
Properties," the second sentence under "--Newly Originated Mortgage Loans
May Default," the first sentence under "--Balloon Loans May Have Higher
Rates of Default," the first sentence under "--Geographic Concentration
Increases Risks," the first sentence under "--Concentration of Loans with
Rates Less than the Pass-Through Rates," the sixth and seventh sentences
under "--The Return on Your Investment Will Change Over Time-- The Rate of
Return of Principal is Uncertain," the first paragraph, the first
sentence under the fourth paragraph, the fifth paragraph, and the sixth
paragraph under "-- Underwriting Standards, Limited Operating History and
Potential Delinquencies," the third sentence under "--The Trust Assets
Are the Only Source of Payments on the Offered Certificates," the fifth
sentence under "--Computer Problems in the Year 2000 May Result in
Losses," "Description of the Mortgage Pool," "The Master Servicer,"
"Ocwen Federal Bank FSB" and the first sentence of the third paragraph
under "Yield, Prepayment and Weighted Average Life--General."
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.1 Sale of Mortgage Loans. (a) The Seller, concurrently with
----------------------
the execution and delivery of this Agreement, does hereby sell, assign, set
over, and otherwise convey to the Purchaser, without recourse, (i) all of its
right, title and interest in and to each Mortgage Loan, including the related
Cut-off Date Scheduled Principal Balance, all interest accruing thereon after
the Cut-off Date and all collections in respect of interest and principal due
and received after the Cut-off Date; (ii) property which secured such Mortgage
Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iii) its interest in any insurance policies in respect of the
Mortgage Loans; and (iv) all proceeds of any of the foregoing.
Section 2.2 Obligations of Seller Upon Sale. In connection with any
-------------------------------
transfer pursuant to Sections 2.1 hereof, the Seller further agrees, at its
own expense, on or prior to the Closing Date, (a) to indicate in its books and
records that the Mortgage Loans have been sold to the Purchaser pursuant to
this Agreement and (b) to deliver to the Purchaser and the Trustee a computer
file containing a true and complete list of all such Mortgage Loans specifying
for each such Mortgage Loan, as of the Cut-off Date, (i) its account number
and (ii) the Cut-off Date Scheduled Principal Balance. Such file, which forms
a part of Schedule A to the Trust Agreement, shall also be marked as Schedule
I to this Agreement and is hereby incorporated into and made a part of this
Agreement.
In connection with any conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Trustee, as assignee
of the Purchaser, on or before the Closing Date, the following documents or
instruments with respect to each Mortgage Loan (the "Related Documents"):
(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of The Chase Manhattan Bank, as Trustee for the registered
holders of Home Equity Loan Asset-Backed Certificates, Series 1999-OFS1,
without recourse", with all prior and intervening endorsements showing a
complete chain of endorsement from the originator to the Person so
endorsing to the Trustee;
(ii) the original of any guarantee executed in connection with the
Mortgage Loans assigned to the Purchaser;
(iii) the original Mortgage with evidence of recording thereon, and
the original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon or,
if such Mortgage or power of attorney has been submitted for recording
but has not been returned from the applicable public recording office or
is not otherwise available, a copy of such Mortgage or power of attorney,
as the case may be, certified by the Seller to be a true and complete
copy of the original submitted for recording with the recorded original
to be delivered by the Seller to the Purchaser or any assignee,
transferee or designee of the Purchaser within ninety days of the Closing
Date;
(iv) an original Assignment of the Mortgage executed in the following
form: "The Chase Manhattan Bank, as Trustee for the registered holders of
the Home Equity Loan Asset-Backed Certificates, Series 1999-OFS1;
(v) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), if any such Assignment of Mortgage has been
submitted for recording but has not been returned from the applicable
public recording office or is not otherwise available, a copy of such
Assignment of Mortgage certified by the Seller to be a true and complete
copy of the original submitted for recording with the recorded original
to be delivered by the Seller to the Purchaser or any assignee,
transferee or designee of the Purchaser within ninety days of the Closing
Date;
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any;
(vii) the original lender's title insurance policy or attorney's
opinion of title or a copy thereof certified as true and correct by the
applicable insurer, together with all endorsements or riders that were
issued with or subsequent to the issuance of such policy, insuring the
priority of the Mortgage as a first lien on the Mortgaged Property
represented therein as a fee interest vested in the Mortgagor, or an
attorney's opinion and abstract of title;
(viii) 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 and the Certificate Insurer that such original Intervening
Assignment is not required to enforce the Trustee's interest in the
Mortgage Loans;
(ix) the original Primary Mortgage Insurance Policy or certificate,
if private mortgage guaranty insurance is required; and
(x) 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 Seller 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.
The Seller hereby confirms to the Trustee that it has made the
appropriate entries in its general accounting records, to indicate that such
Mortgage Loans have been transferred to the Trustee and constitute part of the
Trust in accordance with the terms of the Trust Agreement.
In all instances where the original recorded Mortgage is not
delivered as provided in clause (iii) above and instances where intervening
assignments with evidence of recording thereon called for by (v) above are
unavailable, the Seller will deliver or cause to be delivered the original
recorded Mortgage and intervening assignments with evidence of recording
thereon, as applicable, to the Trustee, as assignee of the Purchaser, promptly
upon receipt thereof but in no event later than one year after the Closing
Date.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.1.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In
the event the transaction set forth herein is deemed not to be a sale, the
Seller hereby grants to the Purchaser a security interest in all of the
Seller's right, title and interest in, to and under the Mortgage Loans and
other property described above, whether now existing or hereafter created, to
secure all of the Seller's obligations hereunder; and this Agreement shall
constitute a security agreement under applicable law. The Seller and the
Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the Trust
Agreement.
Section 2.3 Payment of Purchase Price for the Mortgage Loans. (a) In
------------------------------------------------
consideration of the sale of the Mortgage Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date by transfer of immediately available funds, an amount equal
to the sum of $144,872,940.96 in respect of the Mortgage Loans (the "Purchase
Price"), net of an expense reimbursement amount of $65,298.05 (the "Expense
Reimbursement Amount"), and to transfer to the Seller on the Closing Date the
Class FX, the Class VX and the Class R Certificates. The Expense Reimbursement
Amount shall reimburse the Purchaser for the Purchaser's Securities and
Exchange Commission registration statement fees and the Purchaser's
registration statement administration fees allocable to the Trust. The Seller
shall pay, and be billed directly for, all expenses incurred by the Purchaser
in connection with the issuance of the Certificates, including, without
limitation, printing fees incurred in connection with the prospectus relating
to the Certificates, blue sky registration fees and expenses, fees and
expenses of the Certificate Insurer and its counsel, fees and expenses of
Purchaser's counsel, fees of the rating agencies requested to rate the
Certificates, accountant's fees and expenses and the fees and expenses of the
Trustee and other out-of-pocket costs, if any. If the Purchaser shall
determine that the Expense Reimbursement Amount is not sufficient to reimburse
the Purchaser for all expenses incurred by it that are subject to
reimbursement by the Seller hereunder as described above, the Seller shall
promptly reimburse the Purchaser for such additional amounts upon notice by
the Purchaser to the Seller.
(b) Within 30 days of the Closing Date, the Seller, at its own
expense, shall record each Assignment of Mortgage in favor of the Trustee as
transferee of the Purchaser pursuant to the Trust Agreement in the appropriate
real property or other records. With respect to any Assignment of Mortgage as
to which the related recording information is unavailable within the
applicable time period set forth above, such Assignment of Mortgage shall be
submitted for recording within 30 days after receipt of such information but
in no event later than 180 days from the date such Assignment of Mortgage is
otherwise required to be recorded pursuant to this Section 2.3(b). The Trustee
shall be required to retain a copy of each Assignment of Mortgage submitted
for recording. In the event that any such Assignment of Mortgage is lost or
returned unrecorded because of a defect therein, the Seller shall promptly
prepare a substitute Assignment of Mortgage or cure such defect, as the case
may be, and shall be required to submit each such Assignment of Mortgage for
recording. Any failure of the Seller to comply with this Section shall result
in the obligation of the Seller to repurchase or substitute a Qualifying
Substitute Mortgage Loan for the related Mortgage Loan pursuant to the
provisions of the Trust Agreement.
Section 2.4 Assignment. The Seller hereby assigns all of its right,
----------
title and interest in and to the Mortgage Loans and the Mortgage Loan Purchase
Agreement, to the Depositor. The parties hereto agree that the Depositor and
the Certificate Insurer shall be a third party beneficiary in respect of this
Agreement, and the Seller hereby incorporates and restates its
representations, warranties and covenants as set forth herein for the benefit
of the Depositor and the Certificate Insurer. The rights of the Depositor and
the Certificate Insurer as third party beneficiary shall be irrevocable and
coupled with an interest.
Pursuant to a Trust Agreement, the Depositor will assign all of its
right, title and interest in and to the Mortgage Loans, together with its
rights under this Agreement, to the Trustee. The parties hereto agree that the
Trustee and the Certificate Insurer shall be a third party beneficiary in
respect of this Agreement, and the Seller hereby incorporates and restates its
representations, warranties and covenants as set forth herein for the benefit
of the Trustee and the Certificate Insurer. The rights of the Trustee and the
Certificate Insurer as third party beneficiary shall be irrevocable and
coupled with an interest.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.1 Seller Representations and Warranties Relating to the
-----------------------------------------------------
Mortgage Loans. The Seller hereby represents and warrants with respect to each
- --------------
Mortgage Loan to the Purchaser that as of the Closing Date or as of such date
specifically provided herein:
(a) The Seller has good, indefeasible and marketable title to and is
the sole owner and holder of the Mortgage Loan.
(b) Immediately prior to the transfer and assignment to the
Purchaser, the related Mortgage Note and the Mortgage Loan were not
subject to an assignment or pledge, and the Seller has full right and
authority, subject to no interest or participation of any Person, to sell
and assign the Mortgage Loan. The rights with respect to each Mortgage
Loan are assignable by the Seller without the consent of any Person other
than consents which will have been obtained on or before the Closing
Date.
(c) The Seller is transferring such Mortgage Loan to the Purchaser
free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Mortgage Loans.
(d) The information set forth on the Mortgage Loan Schedule is true
and correct in all material respects as of the Cut-off Date or such other
date as may be indicated in such schedule.
(e) The Mortgage Loan has been acquired, serviced, collected and
otherwise dealt with by the Seller and any affiliate of the Seller in
compliance with all applicable federal, state and local laws and
regulations and the terms of the related Mortgage Note and Mortgage
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer protection, equal credit opportunity,
environmental and disclosure laws applicable to any Mortgage Loan or the
property securing such Mortgage Loan, have been met.
(f) The related Mortgage Note and Mortgage and every other agreement,
if any, executed and delivered by the applicable Mortgagor in connection
with each Mortgage Loan are genuine and each is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with
its terms except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law). All parties to each Mortgage Note and
each Mortgage Loan and any other related agreements had legal capacity to
enter into the Mortgage Loan and to execute and deliver the related
Mortgage Note and Mortgage and other related agreements, and the Mortgage
Note and the Mortgage and such other related agreements have been duly
and properly executed by such parties.
(g) The related Mortgage is a valid and enforceable first lien on the
related Mortgaged Property, which Mortgaged Property is free and clear of
all encumbrances and liens (including mechanics liens) having priority
over the first lien of the Mortgage except for: (i) liens for real estate
taxes and assessments not yet due and payable; (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected or considered in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and
referred to in the appraisal made in connection with the origination of
the related Mortgage Loan and (iii) other matters to which like
properties are commonly subject which do not materially interfere with
the benefits of the security intended to be provided by such Mortgage.
(h) Any security agreement, chattel mortgage or equivalent document
related to such Mortgage Loan establishes and creates a valid and
enforceable lien on the related mortgaged property.
(i) As of the Cut-off Date, no Mortgage Loan was more than 59 days
delinquent and no more than 2.32% of the Mortgage Loans are 30-59 days
delinquent. No Mortgage Loan has been sixty (60) or more days delinquent
more than one time in the twelve months preceding the Cut-off Date
(assuming that a "rolling" thirty day delinquency is considered to be one
time delinquent).
(j) The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required
under the Mortgage Loan.
(k) The Seller has not impaired, waived, altered or modified the
related Mortgage or Mortgage Note in any material respect, or satisfied,
canceled, rescinded or subordinated such Mortgage or Mortgage Note in
whole or in part or released all or any material portion of the Mortgaged
Property from the lien of the Mortgage, or executed any instrument of
release, cancellation, rescission or satisfaction of the Mortgage Note or
Mortgage. No action on the part of any Mortgagor which would otherwise
cause the related Mortgage Loan to be in default has been waived.
(l) As of the Cut-off Date, the Mortgage has not been satisfied,
canceled or subordinated, in whole or in part, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage,
in whole or in part (except for a release that does not materially impair
the security of the Mortgage Loan or a release the effect of which is
reflected in the Loan-to-Value Ratio for the Mortgage Loan as set forth
in the Mortgage Loan Schedule), nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
(m) No condition exists which could give rise to any right of
rescission, set off, counterclaim, or defense including, without
limitation, the defense of usury, and no such right has been asserted.
Neither the operation of any of the terms of each Mortgage Note and each
Mortgage nor the exercise of any right thereunder will render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right or rescission, set-off, claim, counterclaim or
defense, including, without limitation, the defense of usury.
(n) There is no proceeding pending for the total or partial
condemnation of any Mortgaged Property and there are no eminent domain
proceedings pending affecting any Mortgaged Property.
(o) Each Mortgage Loan is covered by either (i) a mortgage title
insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or
(ii) if generally acceptable in the jurisdiction where the Mortgaged
Property is located, an attorney's opinion of title given by an attorney
licensed to practice law in the jurisdiction where the Mortgaged Property
is located. All of the Seller's rights under such policies, opinions or
other instruments have been transferred and assigned to Purchaser upon
sale and assignment of the Mortgage Loans hereunder. The title insurance
policy has been issued by a title insurer licensed to do business in the
jurisdiction where the Mortgaged Property is located, insuring the
original lender, its successor and assigns, as to the first priority lien
of the Mortgage in an amount of at least the original principal amount of
the Mortgage Loan, subject to the exceptions contained in such policy.
The Seller is the sole insured of such mortgagee title insurance policy,
and such mortgagee title insurance policy is in full force and effect and
will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. Neither the Seller nor any affiliate of
the Seller has made, and Seller has no knowledge of, any claims under
such mortgagee title insurance policy. The Seller is not aware of any
action by a prior holder and neither the Seller nor any affiliate of the
Seller has done, by act or omission, anything which could impair the
coverage or enforceability of such mortgagee title insurance policy or
the accuracy of such attorney's opinion of title.
(p) There is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the related Mortgage
Note and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material
default, breach, violation or event of acceleration. Neither the Seller
nor any affiliate of the Seller has waived any default, breach, violation
or event of acceleration. All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or an
escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is
not yet due and payable. No one other than the applicable Mortgagor has
advanced funds, directly or indirectly, for the payment of any amount
required under any Mortgage Loan.
(q) With respect to any Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in
accordance with the terms of the related Mortgage Note or subsequent
modifications, if any.
(r) There are no delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges,
affecting the related Mortgaged Property. As of the Closing Date, there
is no lien against any Mortgaged Property for delinquent taxes.
(s) (i) No foreclosure proceedings are pending against the Mortgaged
Property, and to the Seller's best knowledge, (ii) no material litigation
or lawsuit relating to the Mortgage Loan is pending and (iii) the
Mortgage Loan is not subject to any pending bankruptcy or insolvency
proceeding. There are no proceedings pending, or to the best of the
Seller's knowledge, threatened, wherein the Mortgagor or any governmental
agency has alleged that any Mortgage Loan is illegal or unenforceable.
(t) The Mortgage Loan obligates the mortgagor thereunder to maintain
a hazard insurance policy ("Hazard Insurance") covering the Mortgaged
Property in an amount at least equal to the lesser of (i) the maximum
insurable value of such Mortgaged Property or (ii) the principal balance
of the Mortgage Loan with a standard mortgagee clause, in either case in
an amount sufficient to avoid the application of any "co-insurance
provisions", and, if it was in place at origination of the Mortgage Loan,
flood insurance, or earthquake insurance, at the mortgagor's cost and
expense. If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency ("FEMA") as
having special flood hazards, a flood insurance policy is in effect which
met the requirements of FEMA or the FNMA Seller's Guide and the FNMA
Servicer's Guide at the time such policy was issued. The Mortgage
obligates the Mortgagor to maintain the Hazard Insurance and, if required
by law, a flood insurance policy or earthquake 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 the Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. The Mortgaged Property is covered by Hazard
Insurance. All acts required to be performed to preserve the rights and
remedies of the Trustee in any such insurance policies have been
performed including, without limitation, any necessary notifications of
insurers and assignments of policies or interests therein.
(u) The Mortgage Note is not and has not been secured by any
collateral except the lien on the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage.
(v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the Mortgagee
thereunder. The Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security provided thereby, including (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale or judicial foreclosure
and (ii) otherwise by judicial foreclosure. Since the date of origination
of the Mortgage Loan, the Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no
homestead or other exemption available to the Mortgagor that would
interfere with the right to sell the Mortgaged Property at a trustee's
sale or the right to foreclose the Mortgage. In the event the Mortgage
constitutes a deed of trust, a trustee, duly qualified under applicable
law to serve as such, has been properly designated and currently so
serves and is named in the Mortgage, and no fees or expenses are or will
become payable by Purchaser to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the related
Mortgagor. The Mortgagor has not notified the Seller or any affiliate of
the Seller of any relief requested or allowed to the Mortgagor under the
Soldiers and Sailors Civil Relief Act of 1940.
(w) Except as set forth in the appraisal which forms part of the
related Mortgage File, the Mortgaged Property, normal wear and tear
excepted, is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect materially
and adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended. Each
property securing a Mortgage Loan is in good repair.
(x) There was no fraud involved in the origination of the Mortgage
Loan by the mortgagee or, to the Seller's knowledge, by the Mortgagor,
any appraiser or any other party involved in the origination of the
Mortgage Loan. The documents, instruments and agreements submitted by
each Mortgagor for loan underwriting were not falsified and contain no
untrue statement of a material fact and do not omit to state a material
fact required to be stated therein or necessary to make the information
and statements contained therein not misleading.
(y) Each Mortgage File contains an appraisal of the Mortgaged
Property indicating an appraised value equal to the appraised value
identified for such Mortgaged Property on the Mortgage Loan Schedule.
Each appraisal has been performed in accordance with the provisions of
the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
The appraisal contained in the Mortgage File shall not vary from the
re-appraisal conduct by the Certificate Insurer in connection with the
closing contemplated by this transaction by more than 10%, unless the
Certificate Insurer has otherwise given its prior written consent;
provided, however, that if the appraisal contained in the Mortgage File
shall vary from the re-appraisal conducted by the Certificate Insurer by
more than 10% (and the Certificate Insurer has not otherwise given its
prior written consent), the Seller shall be provided with the opportunity
to substantiate its appraisal to the Certificate Insurer, and if the
Certificate Insurer shall then reasonably reject the Seller's
substantiation of its appraisal, the Seller shall repurchase such
Mortgage Loan.
(z) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, including, without
limitation, the Seller, are (or, during the period in which they held and
disposed of such interest, were) in compliance with any and all
applicable "doing business" and licensing requirements of the laws of the
state wherein the Mortgage and the Mortgaged Property are located.
(aa) No improvements on the related Mortgaged Property encroach on
adjoining properties (and in the case of a condominium unit, such
improvements are within the project with respect to that unit), and no
improvements on adjoining properties encroach upon the Mortgaged Property
unless there exists in the Mortgage File a title policy with endorsements
which insure against losses sustained by the insured as a result of such
encroachments. No improvement located on or being part of such property
is in violation of any applicable zoning laws or regulations.
(bb) Each Mortgage Loan was either (1) originated by a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved by the Secretary of HUD or (2)
acquired by an entity described in clause (1) above within one month of
its origination, in substantially all cases and in no event later than
three months thereafter, and before being acquired by such entity, was
re-underwritten according to the such entity's underwriting guidelines.
(cc) Except as otherwise set forth on Schedule I attached hereto: (i)
principal payments on the Mortgage Loan commenced no more than sixty days
after the proceeds of the Mortgage Loan were disbursed and (ii) the
Mortgage Note is payable on the first day of each month.
(dd) Other than with respect to 22.46% of the Fixed Rate Mortgage
Loans, which are "balloon payment" mortgage loans, each Mortgage Loan is
fully amortizing. None of the Adjustable Rate Mortgage Loans are "balloon
loans".
(ee) The Mortgage Loan bears interest at the Mortgage Rate and the
Mortgage Note does not permit negative amortization.
(ff) With respect to escrow deposits, if any, all such payments are
in the possession of, or under the control of, the Master Servicer and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits
or escrow advances or other charges or payments due the Master Servicer
have been capitalized under any Mortgage or the related Mortgage Note.
(gg) No Mortgage Loan contains provisions pursuant to which Scheduled
Payments are: (i) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor; (ii) paid by any source other than the Mortgagor
or (iii) contains any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment
mortgage loan and the Mortgage Loan does not have a shared appreciation
or other contingent interest feature.
(hh) To the Seller's best knowledge, the Mortgaged Property is
lawfully occupied under applicable law.
(ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated
in connection with any Mortgage Loan transferred to the Purchaser
pursuant to this Agreement, including, without limitation, usury, truth
in lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws. The Mortgage
Loan has been serviced in accordance with the terms of the Mortgage Note.
(jj) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b)
facilitating the trade-in or exchange of a Mortgaged Property.
(kk) The Seller hereby covenants that neither it nor any affiliate of
the Seller will directly solicit any Mortgagor hereunder to refinance the
related Mortgage Loan. For the purposes of the foregoing, neither the
Seller nor any affiliate of the Seller shall be deemed to directly
solicit any Mortgagor if the Seller responds to a request from the
Mortgagor regarding a refinancing or if the Mortgagor receives marketing
materials which are generally disseminated.
(ll) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the
Mortgagee to advance additional funds thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage have been paid, and the Mortgagor
is not entitled to any refund of any amounts paid or due to the Mortgagee
pursuant to the Mortgage Note or Mortgage.
(mm) There are no mechanics' or similar liens or claims that have
been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien) affecting the related
Mortgaged Property that are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage.
(nn) As to each fixed rate Mortgage Loan, interest is calculated on
the Mortgage Note on the basis of twelve 30-day months and a 360-day
year, and, as to each adjustable rate Mortgage Loan, interest is
calculated on the Mortgage Note on the basis of the number of days in the
related interest accrual period.
(oo) The Mortgaged Property consists of a fee simple estate in a
parcel of land improved by detached or semi-detached one- to four-family
dwelling unit, townhouse, individual condominium unit or individual unit
in a planned unit development.
(pp) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code.
(qq) To the best of the Seller's knowledge, no Mortgaged Property
was, as of the related Cut-off Date, located within a one-mile radius of
any site listed in the National Priorities List as defined under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, or on any similar state list of hazardous waste sites
which are known to contain any hazardous substance or hazardous waste. To
the best of the Seller's knowledge, there is no violation of any local,
state or federal environmental law, rule or regulation with respect to
any Mortgaged Property.
(rr) Each Mortgage Note relating to an Adjustable Rate Mortgage Loan
accrues interest at an adjustable Mortgage Rate computed on an actuarial
basis. Each Mortgage Rate relating to substantially all of the Adjustable
Rate Mortgage Loans adjusts semi-annually (after an initial fixed period
described in the Prospectus Supplement and specified on the related
Mortgage Note) to equal the sum of the applicable Index and the Gross
Margin, subject to a Periodic Rate Cap, Maximum Loan Rate and Minimum
Loan Rate. The Scheduled Payment with respect to each Adjustable Rate
Mortgage Loan adjusts with each adjustment to the Mortgage Rate and if
timely paid is sufficient to fully amortize the principal balance of such
Mortgage Note on its maturity date.
(ss) All of the Mortgage Loans were originated in accordance with the
underwriting criteria set forth in the Prospectus Supplement.
(tt) Each Mortgage Loan conforms, and all such Mortgage Loans in the
aggregate conform, to the description thereof set forth in the Prospectus
Supplement.
(uu) The Mortgage Loans were not selected by the Seller for inclusion
in the Trust on any basis intended to adversely affect the Trust or the
Certificate Insurer. The Seller used no selection procedure that
identified the Mortgage Loans as being less desirable or valuable than
other comparable mortgage loans originated by the Seller.
(vv) The representations, warranties and covenants, set forth in this
Section shall survive the Closing.
(ww) The computer tape from which the selection of the Mortgage Loans
being acquired on the Closing Date was made available to the accountants
that are providing a comfort letter to the Certificate Insurer and the
Certificateholders in connection with any information contained in the
Prospectus Supplement, and such information was complete and accurate as
of its date and includes a description of the same Mortgage Loans that
are described on the Mortgage Loan Schedule and the payments due
thereunder as of the Closing Date or other specified date or the date of
substitution, as applicable.
(xx) All required inspections, licenses and certificates with respect
to the use and occupancy of all occupied portions of all property
securing the Mortgages have been made, obtained or issued, as applicable.
(yy) No Mortgage Loan is due from a Mortgagor who has defaulted under
a previous contract with the Seller.
(zz) Reserved.
(aaa) As of Cut-off Date, none of the Mortgage Loans are either
"consumer credit contracts" or "purchase money loans" as such terms are
defined in 16 C.F.R. Section 433.1.
(bbb) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Mortgage Loan in
the event that the property securing such Mortgage Loan is sold or
transferred with the prior written consent of the Mortgagee thereunder.
(ccc) Each Mortgage Loan has been underwritten in accordance with the
underwriting guidelines of the Originator of the Mortgage Loan in effect
at the time the Mortgage Loan was originated or purchased by the
Originator.
With respect to the representations and warranties set forth in this
Section 3.1 that are made to the best of the Seller's knowledge or as to which
the Seller has no knowledge, if it is discovered by the Depositor, the Seller,
the Master Servicer, the Certificate Insurer or the Trustee as set forth in
the Trust Agreement that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan then, notwithstanding the Seller's lack of knowledge
with respect to the substance of such representation and warranty being
inaccurate at the time the representation or warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser or the Certificate Insurer of any
materially defective document in, or that any material document is missing
from, any File or of a breach of any of the representations and warranties
contained in Article III that materially and adversely affects the value of
any Mortgage Loan or the interest therein of the Purchaser or the Purchaser's
assignee, transferee or designee, or the interests of the Certificate Insurer,
the party discovering the breach shall give prompt written notice to the
others. Within ninety (90) days of its discovery or its receipt of notice of
any such missing or materially defective documentation or any such breach of a
representation and warranty, the Seller promptly shall deliver such missing
document or cure such defect or breach in all material respects, or in the
event such defect or breach cannot be cured, the Seller shall, within ninety
(90) days of its discovery either (i) repurchase the affected Mortgage Loan at
the Purchase Price (as such term is defined in the Trust Agreement) or (ii)
subject to the approval of the Purchaser, cause the removal of such Mortgage
Loan from the Trust Fund and substitute one or more Qualifying Substitute
Mortgage Loans. Notwithstanding the preceding sentence, if a breach of
representation or warranty cannot reasonably be cured within 90 days after
discovery thereof, and the Seller shall have commenced to cure such breach
within such 90-day period and thereafter diligently and expeditiously proceeds
to cure the same without the prior written consent of the Certificate Insurer,
such 90-day period shall be extended, upon the written consent of the
Certificate Insurer (which consent shall not be unreasonably withheld), for so
long as it shall require the Seller in the exercise of due diligence to cure
such breach (provided that the length of such extension has been consented to
by the Certificate Insurer), it being agreed that no such extension shall be
for a period in excess of the period of time during which the Seller is
required to cure or repurchase an affected Mortgage Loan because of the REMIC
Provisions or pursuant to any sale and/or securitization agreement or
arrangement it may enter into. With respect to the breach of the
representation set forth in clause (qq) above, the Seller shall be obligated
either: (i) if there is a loss realized by the Purchaser or its assigns in
respect of a Mortgage Loan resulting from the breach of such representation,
deposit the amount of such loss in an account designated by the Purchaser or,
at its option, repurchase the related Mortgage Loan pursuant to the terms of
this Agreement or (ii) if the Master Servicer is unable to realize upon the
related Mortgaged Property due to the existence of environmental hazards,
repurchase the Mortgage Loan in accordance with the provisions of this
Agreement. The Seller shall amend the Mortgage Loan Schedule to reflect the
withdrawal of any such Mortgage Loan from the terms of this Agreement and the
Trust Agreement and the addition, if any, of a Qualifying Substitute Mortgage
Loan. The Seller shall deliver to the Purchaser such amended Mortgage Loan
Schedule and shall deliver such other documents as are required by this
Agreement or the Trust Agreement within five (5) days of any such amendment.
Any repurchase pursuant to this Section shall be accomplished by transfer to
an account designated by the Purchaser of the amount of the Purchase Price in
accordance with Section 2.05 of the Trust Agreement. Any repurchase or
substitution required by this Section shall be made in a manner consistent
with Section 2.05 of the Trust Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.1 shall survive delivery of the respective
Mortgage Files to the Trustee on behalf of the Purchaser.
Section 3.2 Seller Representations and Warranties. The Seller hereby
-------------------------------------
represents and warrants to the Purchaser that as of the Closing Date or as of
such date specifically provided herein:
(i) The Seller is a duly organized, validly existing and in
good standing under the laws of its state of incorporation and has the power
and authority to own its assets and to transact the business in which it is
currently engaged. The Seller is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on (a) its business, properties, assets or condition (financial
or other), (b) its performance of its obligations under this Agreement, (c)
the value or marketability of the Mortgage Loans or (d) the ability to
foreclose on the related Mortgaged Properties;
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the transactions
contemplated under this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute its legal, valid and
binding obligation enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) The Seller holds all necessary licenses, certificates and
permits from all government authorities necessary for conducting its business
as it is presently conducted. It is not required to obtain the consent of any
other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consents, licenses,
approvals or authorizations, or registrations or declarations, as shall have
been obtained or filed, as the case may be, prior to the Closing Date;
(iv) The execution, delivery and performance of this Agreement
by it will not conflict with or result in a breach of, or constitute a default
under, any provision of any existing law or regulation or any order or decree
of any court applicable to the Seller or any of its properties or any
provision of its Certificate of Incorporation or Bylaws, or constitute a
material breach of, or result in the creation or imposition of any lien,
charge or encumbrance upon any of its properties pursuant to, any mortgage,
indenture, contract or other agreement to which it is a party or by which it
may be bound;
(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to its knowledge
threatened, against the Seller or any of its properties or with respect to
this Agreement or the Certificates which in its opinion has a reasonable
likelihood of resulting in a material adverse effect on the transactions
contemplated by this Agreement;
(vi) No certificate of an officer, statement furnished in
writing or report delivered pursuant to the terms hereof by the Seller
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the certificate, statement or report not
misleading;
(vii) The transactions contemplated by this Agreement are in
the ordinary course of the Seller's business;
(viii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans, nor is the Seller aware of
any pending insolvency;
(ix) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which violation would
materially and adversely affect the Seller's condition (financial or
otherwise) or operations or any of the Seller's properties or materially and
adversely affect the performance of any of its duties hereunder;
(x) There are no actions or proceedings against, or
investigations of, it pending or, to its knowledge, threatened, before any
court, administrative agency or other tribunal (A) that, if determined
adversely, would prohibit the Seller from entering into this Agreement, (B)
seeking to prevent the consummation of any of the transactions contemplated by
this Agreement or (C) that, if determined adversely, would prohibit or
materially and adversely affect the Seller's performance of any of its
respective obligations under, or the validity or enforceability of, this
Agreement;
(xi) The Seller represents and warrants that it did not sell
the Mortgage Loans to the Depositor as Purchaser under the Agreement with any
intent to hinder, delay or defraud any of its creditors; and the Seller will
not be rendered insolvent as a result of the sale of the Mortgage Loans to the
Depositor as Purchaser under the Agreement. The sale to the Purchaser of the
Mortgage Loans and the related Mortgage and Mortgage Note does not violate the
terms or provisions of any loan or any other agreement to which the Seller is
a party or by which it is bound;
(xii) The Seller represents and warrants that it acquired title
to the Mortgage Loans in good faith, without notice of any adverse claim;
(xiii) The Seller represents and warrants that the transfer,
assignment and conveyance of the Mortgage Notes and the Mortgages by the
Seller pursuant to this Agreement are not subject to the bulk transfer laws or
any similar statutory provisions in effect in any applicable jurisdiction;
(xiv) The representations and warranties set forth in the
Section 3 survive the Closing Date.
ARTICLE IV
SELLER'S COVENANTS
Section 4.1 Covenants of the Seller. The Seller hereby covenants that
-----------------------
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to
exist any lien on any Mortgage Loan, or any interest therein; the Seller will
notify the Certificate Insurer and the Trustee, as assignee of the Purchaser,
of the existence of any lien on any Mortgage Loan immediately upon discovery
thereof; and the Seller will defend the right, title and interest of the
Trust, as assignee of the Purchaser, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Seller;
provided, however, that nothing in this Section 4.1 shall prevent or be deemed
- -------- -------
to prohibit the Seller from suffering to exist upon any of the Mortgage Loans
any liens for municipal or other local taxes and other governmental charges if
such taxes or governmental charges shall not at the time be due and payable or
if the Seller shall currently be contesting the validity thereof in good faith
by appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto.
ARTICLE V
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.1 Indemnification. (a) The Seller agrees to indemnify and
---------------
hold harmless the Purchaser, each of its directors, each of its officers and
each person or entity who controls the Purchaser or any such person, within
the meaning of Section 15 of the Securities Act, against any and all losses,
claims, damages or liabilities, joint and several, as incurred, to which the
Purchaser, or any such person or entity may become subject, under the
Securities Act or otherwise, and will reimburse the Purchaser, each such
director and officer and each such controlling person for any legal or other
expenses incurred by the Purchaser or such controlling person in connection
with investigating or defending any such loss, claims, damages or liabilities,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Prospectus Supplement
or any amendment or supplement to the Prospectus Supplement approved in
writing by the Seller or the omission or the alleged omission to state therein
a material fact necessary in order to make the statements in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement
approved in writing by the Seller, in the light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission relates
to the information contained in the Prospectus Supplement contained in the
Seller Information in the Prospectus Supplement or (ii) any untrue statement
or alleged untrue statement of any material fact contained in the information
on any computer tape furnished to the Purchaser or any affiliate by or on
behalf of the Seller containing information regarding the assets of the Trust
(such information, the "Mortgage Loan Data"). This indemnity agreement will be
in addition to any liability which the Seller may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the Seller,
each of its officers, directors and each person or entity who controls the
Seller or any such person, against any and all losses, claims, damages or
liabilities, joint and several, to which the Seller, or any such person or
entity may become subject, under the Securities Act or otherwise, and will
reimburse the Seller for any legal or other expenses incurred by the Seller,
each such officer and director and such controlling person in connection with
investigating or defending any such losses, claims, damages or liabilities
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus Supplement or any
amendment or supplement to the Prospectus Supplement or the omission or the
alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement, in the light of the circumstances under which they
were made, not misleading, but only to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission relates to
information other than the information constituting Seller Information or the
information under "The Certificate Insurer" and "Description of the
Certificates--Credit Enhancement--The Policies," except insofar as such untrue
statements or alleged untrue statements or omission or alleged omission is the
direct result of an inaccuracy in the Mortgage Loan Data. This indemnity
agreement will be in addition to any liability which the Purchaser may
otherwise have.
(c) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article V for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel it is advisable for such indemnified party to employ separate counsel;
or (iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party, it being
understood, however, the indemnifying party shall not, in connection with any
one such action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties, which firm shall be designated in writing by the
Purchaser, if the indemnified parties under this Article V consist of the
Purchaser, or by the Seller, if the indemnified parties under this Article V
consist of the Seller.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.1(a) and (b), shall use its best efforts to cooperate
with the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees
to indemnify and hold harmless any indemnified party from and against any loss
or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to consent to a settlement of any action, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if such settlement is entered
into more than 30 days after receipt by such indemnifying party of the
aforesaid request and the indemnifying party has not previously provided the
indemnified party with written notice of its objection to such settlement. No
indemnifying party shall effect any settlement of any pending or threatened
proceeding in respect of which an indemnified party is or could have been a
party and indemnity is or could have been sought hereunder, without the
written consent of such indemnified party, unless settlement includes an
unconditional release of such indemnified party from all liability and claims
that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller, on the one hand, and the Purchaser, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by said indemnity agreement incurred by the Seller
and the Purchaser in such proportions as shall be appropriate to reflect the
relative benefits received by the Seller on the one hand and the Purchaser on
the other from the sale of the Mortgage Loans such that the Purchaser is
responsible for that portion represented by the percentage that the
underwriting discount described in the Underwriting Agreement and the related
Terms Agreement (the "Underwriting Discount") bears to the sum of the Purchase
Price and the amount of the Underwriting Discount and the Seller shall be
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each officer
and director of the Purchaser and each person, if any, who controls the
Purchaser within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Purchaser and each director of the Seller, each
officer of the Seller, and each person, if any, who controls the Seller within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Seller. Notwithstanding anything in this paragraph (d) to
the contrary, the Purchaser shall not be required to contribute an amount in
excess of the amount of the Underwriting Discount.
(e) The Seller agrees to indemnify and to hold each of the Purchaser,
the Trustee, the Certificate Insurer, each of the officers and directors of
each such entity and each person or entity who controls each such entity or
person and each Certificateholder harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
any other costs, fees and expenses that the Purchaser, the Trustee, the
Certificate Insurer or any such person or entity and any Certificateholder may
sustain in any way (i) related to the failure of the Seller to perform its
duties in compliance with the terms of this Agreement or (ii) arising from a
breach by the Seller of its representations and warranties in Section 3.1 of
this Agreement. The Seller shall immediately notify the Purchaser, the
Trustee, the Certificate Insurer and each Certificateholder if a claim is made
by a third party with respect to this Agreement, the Seller shall assume the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Purchaser, the Trustee,
the Certificate Insurer or any such person or entity and/or any
Certificateholder in respect of such claim. Pursuant to the Trust Agreement,
the Trustee shall reimburse the Seller in accordance with Section 9.36 of the
Trust Agreement for all amounts advanced by the Seller pursuant to the
preceding sentence except when the claim relates directly to the failure of
the Seller to perform its duties in compliance with the terms of this
Agreement.
Section 5.2 Obligations of Ocwen Financial Services, Inc. Ocwen
--------------------------------------------
Financial Services, Inc. ("OFS"), as the parent of LMAC, Inc., agrees with the
Purchaser and any successor or assign of the Purchaser (including the Trustee
for the benefit of the Certificateholders and the Certificate Insurer) and
each person controlling the Purchaser within the meaning of either the
Securities Act or the Exchange Act, in consideration of and as an inducement
to their agreement to purchase the Mortgage Loans from the Seller, to
indemnify and hold harmless the Purchaser against any failure by the Seller to
perform its obligations to the Purchaser hereunder, including, without
limitation, any failure by the Seller to honor any obligation to the Purchaser
(including any obligation to indemnify the Purchaser) pursuant to Article V
hereof, any breach of the representations and warranties by the Seller set
forth in Article III, any failure to adhere to the covenants set forth in
Article IV hereof and any failure by the Seller to perform any of the
obligations set forth in Article II hereof.
ARTICLE VI
TERMINATION
Section 6.1 Termination. The respective obligations and
-----------
responsibilities of the Seller and the Purchaser created hereby shall
terminate, except for the Seller's indemnity obligations as provided herein,
upon the termination of the Trust as provided in Article VII of the Trust
Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1 Amendment. This Agreement may be amended from time to
---------
time by the Seller and the Purchaser, with the consent of the Certificate
Insurer, by written agreement signed by the Seller and the Purchaser.
Section 7.2 Governing Law. 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 such laws.
Section 7.3 Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid,
addressed as follows:
if to the Seller:
LMAC, Inc.
1675 Palm Beach Lakes Boulevard
West Palm Beach, Florida 33401
Attention:
or such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
if to the Purchaser:
Structured Asset Securities Corporation
Three World Financial Center
12th floor
New York, NY 10285
Attention: Mark Zusy
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
if to the Certificate Insurer: at the address designated in the
Insurance Agreement.
Section 7.4 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
of enforceability of the other provisions of this Agreement.
Section 7.5 Counterparts. This Agreement may be executed in one or
------------
more counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed to be an
original and such counterparts, together, shall constitute one and the same
agreement.
Section 7.6 Further Agreements. The Purchaser and the Seller each
------------------
agree to execute and deliver to the other such additional documents,
instruments or agreements as may be necessary or reasonable and appropriate to
effectuate the purposes of this Agreement or in connection with the issuance
of any Series of Certificates representing interests in the Mortgage Loans.
Section 7.7 Intention of the Parties. It is the intention of the
------------------------
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes and all other purposes as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
The Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which
will affect the Federal income tax consequences of owning the Mortgage Loans
and the Seller will cooperate with all reasonable requests made by the
Purchaser in the course of such review.
Section 7.8 Successors and Assigns: Assignment of Purchase Agreement.
--------------------------------------------------------
This Agreement shall bind and inure to the benefit of and be enforceable by
the Seller, the Purchaser, the Trustee and the Certificate Insurer. The
Certificate Insurer shall be a third party beneficiary hereof and may enforce
the terms hereof as if a party hereto. The obligations of the Seller under
this Agreement cannot be assigned or delegated to a third party without the
consent of the Purchaser and the Certificate Insurer, which consent shall be
at the Purchaser's and the Certificate Insurer's sole discretion,
respectively, except that the Purchaser acknowledges and agrees that the
Seller may with the consent of the Certificate Insurer assign its obligations
hereunder to any Person into which the Seller is merged or any corporation
resulting from any merger, conversion or consolidation to which the Seller is
a party or any Person succeeding to the business of the Seller. The parties
hereto acknowledge that the Purchaser is acquiring the Mortgage Loans for the
purpose of contributing them to a trust that will issue a Series of
Certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller
acknowledges and consents to the assignment by the Purchaser to the Trustee of
all of the Purchaser's rights against the Seller pursuant to this Agreement
insofar as such rights relate to Mortgage Loans transferred to such Trustee
and to the enforcement or exercise of any right or remedy against the Seller
pursuant to this Agreement by the Trustee or the Certificate Insurer under the
Trust Agreement. Such enforcement of a right or remedy by the Trustee or the
Certificate Insurer shall have the same force and effect as if the right or
remedy had been enforced or exercised by the Purchaser directly.
Section 7.9 Survival. The representations and warranties set forth in
--------
Sections 3.1 and 3.2 and the provisions of Article V shall survive the
purchase of the Mortgage Loans hereunder.
Section 7.10 No Petition. So long as the agreement is in effect, and
-----------
for one year following its termination, the Purchaser will not file any
involuntary petition or otherwise institute any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceeding under
any federal or state bankruptcy or similar law against the Seller.
<PAGE>
IN WITNESS WHEREOF, the Seller, the Purchaser and OFS have
caused their names to be signed to this Mortgage Loan Sale Agreement by their
respective officers thereunto duly authorized as of the day and year first
above written.
STRUCTURED ASSET SECURITIES
CORPORATION,
as Purchaser
By:_____________________________
Name:
Title:
LMAC, INC.,
as Seller
By:_____________________________
Name:
Title:
Acknowledged and Accepted
OCWEN FINANCIAL SERVICES, INC.
By: ____________________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 24th day of June 1999 before me, a Notary Public in and for
said State, personally appeared [ ], known to me to be a
Vice President of STRUCTURED ASSET SECURITIES CORPORATION, the corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________
Notary Public
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the 24th day of June 1999 before me, a Notary Public in and for
said State, personally appeared John R. Barnes, known to me to be a Senior
Vice President of LMAC, INC., the company that executed the within instrument,
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________
Notary Public
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the 24th day of June 1999 before me, a Notary Public in and for
said State, personally appeared [ ], known to me to be
a _________________ of OCWEN FINANCIAL SERVICES, INC., the company that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
___________________________
Notary Public
<PAGE>
SCHEDULE I
MORTGAGE LOANS
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: Ocwen Home Equity Loan Trust 1999-OFS 1 POLICY NUMBER: 29554
Home Equity Loan Asset-Backed Certificates, Series 1999-OFS 1
$92,537,000 Class A-F Certificates
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete Insured
Payment will be received from the Insurer by The Chase Manhattan Bank, or its
successors, as trustee for the Owners (the "Trustee"), on behalf of the
Owners, for distribution by the Trustee to each Owner of each Owner's
proportionate share of the Insured Payment. The Insurer's obligations
hereunder with respect to a particular Insured Payment shall be discharged to
the extent funds equal to the applicable Insured Payment are received by the
Trustee, whether or not such funds are properly applied by the Trustee.
Insured Payments shall be made only at the time set forth in this Policy, and
no accelerated Insured Payments shall be made regardless of any acceleration
of the Obligations, unless such acceleration is at the sole option of the
Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Issuer, the Trust or
the Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability) any Relief Act Shortfalls. The Policy
guarantees only Prepayment Interest Shortfalls in excess of the amount of
Compensating Interest payable by the Master Servicer.
The Insurer will pay any Insured Payment that is a Preference Amount
on the Business Day following receipt on a Business Day by the Fiscal Agent
(as described below) of (a) a certified copy of the order requiring the return
of a preference payment, (b) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (c) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment and (d) appropriate instruments to
effect the appointment of the Insurer as agent for such Owner in any legal
proceeding related to such preference payment, such instruments being in a
form satisfactory to the Insurer, provided that if such documents are received
after 12:00 noon, New York City time, on such Business Day, they will be
deemed to be received on the following Business Day. Such payments shall be
disbursed to the receiver or trustee in bankruptcy named in the final order of
the court exercising jurisdiction on behalf of the Owner and not to any Owner
directly unless such Owner has returned principal or interest paid on the
Obligations to such receiver or trustee in bankruptcy, in which case such
payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the third Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Insurer, or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent"), of a Notice (as described
below), provided that if such Notice is received after 12:00 noon, New York
City time, on such Business Day, it will be deemed to be received on the
following Business Day. If any such Notice received by the Fiscal Agent is not
in proper form or is otherwise insufficient for the purpose of making claim
hereunder, it shall be deemed not to have been received by the Fiscal Agent
for purposes of this paragraph, and the Insurer or the Fiscal Agent, as the
case may be, shall promptly so advise the Trustee and the Trustee may submit
an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will
be disbursed by the Fiscal Agent to the Trustee. on behalf of the Owners by
wire transfer of immediately available funds in the amount of the Insured
Payment less, in respect of Insured Payments related to Preference Amounts,
any amount held by the Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal
Agent shall in no event be liable to Owners for any acts of the Fiscal Agent
or any failure of the Insurer to deposit, or cause to be deposited, sufficient
funds to make payments due under this Policy.
As used herein, the following terms shall have the following
meanings:
"Agreement" means the Trust Agreement dated as of June 1, 1999 among
Structured Asset Securities Corporation, as Depositor, Ocwen Financial
Services, Inc., as Master Servicer, Ocwen Federal Bank FSB, as Special
Servicer, and the Trustee, as trustee, without regard to any amendment or
supplement thereto, unless such amendment or supplement has been approved in
writing by the Insurer.
"Business Day" means any day other than (a) a Saturday or a Sunday,
(b) a day on which the Insurer is closed or (c) a day on which banking
institutions in New York City are authorized or obligated by law or executive
order to close.
"Deficiency Amount" means, with respect to any Distribution Date, the
excess, if any, of (A) the sum of (i) the Interest Distributable Amount for
the Obligations and (ii) the Guaranteed Principal Amount over (B) Group F
Available Funds (after payment of the premium payable to the Insurer and after
giving effect to the cross-collateralization provisions of the Agreement and
without regard to any Insured Payments to be made as of such Distribution
Date).
"Guaranteed Principal Amount" means for any Distribution Date (a) the
amount, if any, by which the Class Principal Amount of the Obligations exceeds
the related Pool Balance at the end of the related Due Period (after giving
effect to all distribution of principal on the Obligations on such
Distribution Date) and (b) on the Distribution Date in June 2029 (after giving
effect to all other distribution of principal on the Obligations), an amount
equal to the Class Principal Amount of the Obligations.
"Insured Payment" means (a) as of any Distribution Date, any Deficiency
Amount and (b) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly
confirmed in writing by facsimile substantially in the form of Exhibit A
attached hereto, the original of which is subsequently delivered by registered
or certified mail, from the Trustee specifying the Insured Payment which shall
be due and owing on the applicable Distribution Date.
"Owner" means each Holder (as defined in the Agreement) who, on the
applicable Distribution Date, is entitled under the terms of the applicable
Class A Certificates to payment thereunder.
"Preference Amount" means any amount previously distributed to an
Owner on the Obligations that is recoverable and sought to be recovered as
avoidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time in accordance with a
final nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment to
or modification of the Agreement unless such amendment or modification has
been approved in writing by the Insurer.
Any notice hereunder or service of the Fiscal Agent may be made at
the address listed below for the Fiscal Agent or such other address as the
Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway,
New York, New York 10006, Attention: Municipal Registrar and Paying Agency, or
such other address as the Fiscal Agent shall specify to the Trustee in
writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE
CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason, including payment, or provision being
made for payment, prior to maturity of the Obligations.
<PAGE>
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested this 24th day of June, 1999.
MBIA INSURANCE CORPORATION
___________________________
President
___________________________
Assistant Secretary
<PAGE>
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE
POLICY NUMBER: 29555
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 29555
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
15th Floor
61 Broadway
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as trustee
(the "Trustee"), hereby certifies to State Street Bank and Trust Company, N.A.
(the "Fiscal Agent") and MBIA Insurance Corporation (the "Insurer"), with
reference to Certificate Guaranty Insurance Policy Number: 29555 (the
"Policy") issued by the Insurer in respect of the Ocwen Home Equity Loan Trust
1999-OFS1 Home Equity Loan Asset-Backed Certificates, Series 1999-OFS1
$92,537,000 Class A-F Certificates (the "Obligations"), that:
(a) the Trustee is the trustee under the Trust Agreement
dated as of June 1, 1999 among Structured Asset Securities
Corporation, as Depositor, Ocwen Financial Services, Inc., as Master
Servicer, Ocwen Federal Bank FSB, as Special Servicer, and the
Trustee, as trustee;
(b) the amount due under the definition of Deficiency Amount
for the Distribution Date occurring on [ ] (the "Applicable
Distribution Date") is $[ ] (the "Deficiency Amount");
(c) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of a
court having competent jurisdiction is $ (the "Preference Amount");
(d) the total Insured Payment due is $[ ], which amount
equals the sum of the Deficiency Amount and the Preference Amount;
(e) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured Payment set
forth in (b) above to be applied to the payment of the Deficiency
Amount for the Applicable Distribution Date in accordance with the
Agreement and for the dollar amount of the Insured Payment set forth
in (c) above to be applied to the payment of any Preference Amount;
and
(f) the Trustee directs that payment of the Insured Payment
be made to the following account by bank wire transfer of federal or
other immediately available funds in accordance with the terms of the
Policy: [TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or
Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The
Claim For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Notice under the Policy as of the [ ] day of [ ], [ ].
[NAME OF TRUSTEE], as Trustee
By___________________________
Title_________________________
<PAGE>
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: Ocwen Home Equity Loan Trust 1999-OFS1 POLICY NUMBER: 29555
Home Equity Loan Asset-Backed Certificates, Series 1999-OFS1
$52,420,000 Class A-V Certificates
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete Insured
Payment will be received from the Insurer by The Chase Manhattan Bank, or its
successors, as trustee for the Owners (the "Trustee"), on behalf of the
Owners, for distribution by the Trustee to each Owner of each Owner's
proportionate share of the Insured Payment. The Insurer's obligations
hereunder with respect to a particular Insured Payment shall be discharged to
the extent funds equal to the applicable Insured Payment are received by the
Trustee, whether or not such funds are properly applied by the Trustee.
Insured Payments shall be made only at the time set forth in this Policy, and
no accelerated Insured Payments shall be made regardless of any acceleration
of the Obligations, unless such acceleration is at the sole option of the
Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Issuer, the Trust or
the Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability) any Relief Act Shortfalls or any Basis Risk
Shortfall. The Policy guarantees only Prepayment Interest Shortfalls in excess
of the amount of Compensating Interest payable by the Master Servicer.
The Insurer will pay any Insured Payment that is a Preference Amount
on the Business Day following receipt on a Business Day by the Fiscal Agent
(as described below) of (a) a certified copy of the order requiring the return
of a preference payment, (b) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (c) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment and (d) appropriate instruments to
effect the appointment of the Insurer as agent for such Owner in any legal
proceeding related to such preference payment, such instruments being in a
form satisfactory to the Insurer, provided that if such documents are received
after 12:00 noon, New York City time, on such Business Day, they will be
deemed to be received on the following Business Day. Such payments shall be
disbursed to the receiver or trustee in bankruptcy named in the final order of
the court exercising jurisdiction on behalf of the Owner and not to any Owner
directly unless such Owner has returned principal or interest paid on the
Obligations to such receiver or trustee in bankruptcy, in which case such
payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the third Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Insurer, or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent"), of a Notice (as described
below), provided that if such Notice is received after 12:00 noon, New York
City time, on such Business Day, it will be deemed to be received on the
following Business Day. If any such Notice received by the Fiscal Agent is not
in proper form or is otherwise insufficient for the purpose of making claim
hereunder, it shall be deemed not to have been received by the Fiscal Agent
for purposes of this paragraph, and the Insurer or the Fiscal Agent, as the
case may be, shall promptly so advise the Trustee and the Trustee may submit
an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will
be disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by
wire transfer of immediately available funds in the amount of the Insured
Payment less, in respect of Insured Payments related to Preference Amounts,
any amount held by the Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal
Agent shall in no event be liable to Owners for any acts of the Fiscal Agent
or any failure of the Insurer to deposit, or cause to be deposited, sufficient
funds to make payments due under this Policy.
As used herein, the following terms shall have the following
meanings:
"Agreement" means the Trust Agreement dated as of June 1, 1999 among
Structured Asset Securities Corporation, as Depositor, Ocwen Financial
Services, Inc., as Master Servicer, Ocwen Federal Bank FSB, as Special
Servicer, and the Trustee, as trustee, without regard to any amendment or
supplement thereto, unless such amendment or supplement has been approved in
writing by the Insurer.
"Business Day" means any day other than (a) a Saturday or a Sunday,
(b) a day on which the Insurer is closed or (c) a day on which banking
institutions in New York City are authorized or obligated by law or executive
order to close.
"Deficiency Amount" means, with respect to any Distribution Date, the
excess, if any, of (A) the sum of (i) the Interest Distributable Amount for
the Obligations and (ii) the Guaranteed Principal Amount over (B) Group V
Available Funds (after payment of the premium payable to the Insurer and after
giving effect to the cross-collateralization provisions of the Agreement and
without regard to any Insured Payments to be made as of such Distribution
Date).
"Guaranteed Principal Amount" means for any Distribution Date (a) the
amount, if any, by which the Class Principal Amount of the Obligations exceeds
the related Pool Balance at the end of the related Due Period (after giving
effect to all distribution of principal on the Obligations on such
Distribution Date) and (b) on the Distribution Date in June 2029 (after giving
effect to all other distribution of principal on the Obligations), an amount
equal to the Class Principal Amount of the Obligations.
"Insured Payment" means (a) as of any Distribution Date, any
Deficiency Amount and (b) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly
confirmed in writing by facsimile substantially in the form of Exhibit A
attached hereto, the original of which is subsequently delivered by registered
or certified mail, from the Trustee specifying the Insured Payment which shall
be due and owing on the applicable Distribution Date.
"Owner" means each Holder (as defined in the Agreement) who, on the
applicable Distribution Date, is entitled under the terms of the applicable
Class A Certificates to payment thereunder.
"Preference Amount" means any amount previously distributed to an
Owner on the Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time in accordance with a
final nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment to
of modification of the Agreement unless such amendment or modification has
been approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway,
New York, New York 10006, Attention: Municipal Registrar and Paying Agency, or
such other address as the Fiscal Agent shall specify to the Trustee in
writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE
CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason, including payment, or provision being
made for payment, prior to maturity of the Obligations.
<PAGE>
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested this 24th day of June, 1999.
MBIA INSURANCE CORPORATION
_____________________________
President
_____________________________
Assistant Secretary
<PAGE>
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE
POLICY NUMBER: 29555
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 29555
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
15th Floor
61 Broadway
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
29555 (the "Policy") issued by the Insurer in respect of the Ocwen Home Equity
Loan Trust 1999-OFS1 Home Equity Loan Asset-Backed Certificates, Series
1999-OFS1 $52,420,000 Class A-V Certificates (the "Obligations"), that:
(a) the Trustee is the trustee under the Trust Agreement
dated as of June 1, 1999 among Structured Asset Securities
Corporation, as Depositor, Ocwen Financial Services, Inc., as Master
Servicer, Ocwen Federal Bank FSB, as Special Servicer, and the
Trustee, as trustee;
(b) the amount due under the definition of Deficiency Amount
for the Distribution Date occurring on [ ] (the "Applicable
Distribution Date") is $[ ] (the "Deficiency Amount");
(c) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of a
court having competent jurisdiction is $[ ] (the "Preference
Amount");
(d) the total Insured Payment due is $[ ], which amount
equals the sum of the Deficiency Amount and the Preference Amount;
(e) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured Payment set
forth in (b) above to be applied to the payment of the Deficiency
Amount for the Applicable Distribution Date in accordance with the
Agreement and for the dollar amount of the Insured Payment set forth
in (c) above to be applied to the payment of any Preference Amount;
and
(f) the Trustee directs that payment of the Insured Payment
be made to the following account by bank wire transfer of federal or
other immediately available funds in accordance with the terms of the
Policy: [TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or
Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The
Claim For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Notice under the Policy as of the [__] day of [___________], [____].
[NAME OF TRUSTEE], as Trustee
______________________________
By ____________________________
Title _________________________
