SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
MARCH 12, 1998
Bear Stearns Mortgage Securities Inc. (as Seller under a Pooling and
Servicing Agreement dated as of February 1, 1998 providing for the issuance of
the Mortgage Pass-Through Certificates, Series 1998-3)
BEAR STEARNS MORTGAGE SECURITIES INC.
(Exact name of registrant as specified in charter)
DELAWARE 333-13617 13-3633241
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
245 PARK AVENUE, NEW YORK, NEW YORK 10167
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 272-2000
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE>
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
EXHIBIT NO.
4.1 Pooling and Servicing Agreement dated as of February 1, 1998
among the Registrant, Countrywide Home Loans, Inc., The Bank of New York, and
The Bank of New York (Delaware).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEAR STEARNS MORTGAGE SECURITIES INC.
(Registrant)
Date: March 12, 1998 By: /S/ MARY HAGGERTY
Name: Mary Haggerty
Title: Vice President
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
4.1 Pooling and Servicing Agreement dated as of February 1, 1998
among the Registrant, Countrywide Home Loans, Inc., The Bank of New
York, and The Bank of New York (Delaware).
EXECUTION COPY
BEAR STEARNS MORTGAGE SECURITIES INC.,
SELLER,
COUNTRYWIDE HOME LOANS, INC.,
MASTER SERVICER,
THE BANK OF NEW YORK,
TRUSTEE,
and
THE BANK OF NEW YORK (Delaware),
CO-TRUSTEE
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 1998
--------------------------------
Bear Stearns Mortgage Securities Trust 1998-3
Mortgage Pass-Through Certificates
Series 1998-3
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions
ARTICLE IA
Organization
1A.01. Name of Trust; Statement of Intent.........................IA-1
1A.02. Office.....................................................IA-1
1A.03. Declaration of Trust.......................................IA-1
1A.04. Purpose and Powers.........................................IA-1
ARTICLE II
Conveyance of Mortgage Loans Original Issuance of Certificates
2.01. Conveyance of Mortgage Loans to the Trust..........................II-1
2.02. Acceptance of Mortgage Loans by Trustee.............................II-3
2.03. Representations, Warranties and Covenants of the Master Servicer...II-5
2.03A. Assignment of Interest in the Mortgage Loan Purchase Agreement.....II-7
2.04. Substitution of Mortgage Loans......................................II-8
2.05. Representations and Warranties of the Trustee......................II-9
2.06. Issuance of Certificates...........................................II-11
2.07. Representations and Warranties Concerning the Seller...............II-11
2.08. The Custodian......................................................II-12
ARTICLE III
Administration and Servicing of Mortgage Loans
3.01. Master Servicer to Assure Servicing................................III-1
3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers......................................................III-2
3.03. Successor Sub-Servicers............................................III-3
3.04. Liability of the Master Servicer...................................III-3
3.05. Assumption or Termination of Sub- Servicing Agreements
by Trustee.........................................................III-4
3.06. Collection of Mortgage Loan Payments...............................III-5
3.07. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.................................................III-6
3.08. Access to Certain Documentation and Information
Regarding the Mortgage Loans.......................................III-7
3.09. Maintenance of Primary Mortgage Insurance Policies;
Collection Thereunder..............................................III-8
3.10. Maintenance of Hazard Insurance and Fidelity Coverage.............III-8
3.11. Due-on-Sale Clauses; Assumption Agreements.........................III-10
3.12. Realization Upon Defaulted Mortgage Loans..........................III-11
3.13. Trustee to Cooperate; Release of Mortgage Files...................III-13
3.14. Servicing and Master Servicing Compensation........................III-14
3.15. Annual Statement of Compliance.....................................III-15
3.16. Annual Independent Public Accountants' Servicing Report............III-16
3.17. REMIC-Related Covenants............................................III-17
3.18. Additional Information.............................................III-17
3.19. Optional Purchase of Defaulted Mortgage Loans......................III-17
3.20. Optional Purchase of Converted Mortgage Loans......................III-18
ARTICLE IV
Accounts
4.01. Protected Accounts..................................................IV-1
4.02. Certificate Account.................................................IV-3
4.03. Permitted Withdrawals and Transfers from the Certificate Account....IV-4
ARTICLE V
Certificates
5.01. Certificates.........................................................V-1
5.02. Registration of Transfer and Exchange of Certificates...............V-4
5.03. Mutilated, Destroyed, Lost or Stolen Certificates.................. V-10
5.04. Persons Deemed Owners................................................V-10
5.05. Transfer Restrictions on Residual Certificate........................V-11
5.06. Restrictions on Transferability of Private Certificates..............V-13
5.07. ERISA Restrictions...................................................V-13
5.08. Rule 144A Information................................................V-13
ARTICLE VI
Payments to Certificateholders
6.01. Distributions on the Certificates...................................VI-1
6.02. Reserved............................................................VI-2
6.03. Allocation of Losses................................................VI-2
6.04. [Reserved]..........................................................VI-3
6.05. Payments............................................................VI-4
6.06. Statements to Certificateholders....................................VI-4
6.07. Reports to the Trustee and the Master Servicer.....................VI-7
6.08. Monthly Advances....................................................VI-9
6.09. Compensating Interest Payments......................................VI-10
6.10. Reports of Foreclosures and Abandonment of Mortgaged Property.......VI-10
ARTICLE VII
The Master Servicer
7.01. Liabilities of the Master Servicer.................................VII-1
7.02. Merger or Consolidation of the Master Servicer.....................VII-1
7.03. Indemnification of the Trustee.....................................VII-1
7.04. Limitation on Liability of the Master Servicer and Others..........VII-2
7.05. Master Servicer Not to Resign......................................VII-3
7.06. [Reserved].........................................................VII-3
7.07. Sale and Assignment of Master Servicing............................VII-3
ARTICLE VIII
Default
8.01. Events of Default.................................................VIII-1
8.02. Trustee to Act; Appointment of Successor..........................VIII-3
8.03. Notification to Certificateholders................................VIII-4
8.04. Waiver of Defaults................................................VIII-4
8.05. List of Certificateholders........................................VIII-4
ARTICLE IX
Concerning the Trustee
9.01. Duties of Trustee...................................................IX-1
9.02. Certain Matters Affecting the Trustee...............................IX-3
9.03. Trustee Not Liable for Certificates or Mortgage Loans...............IX-5
9.04. Trustee May Own Certificates........................................IX-6
9.05. Trustee's Fees......................................................IX-6
9.06. Eligibility Requirements for Trustee................................IX-6
9.07. Insurance...........................................................IX-7
9.08. Resignation and Removal of the Trustee..............................IX-7
9.09. Successor Trustee...................................................IX-8
9.10. Merger or Consolidation of Trustee..................................IX-8
9.11. Appointment of Co-Trustee or Separate Trustee.......................IX-9
9.12. Master Servicer Shall Provide Information as Reasonably Required....IX-10
9.13. Federal Information Returns and Reports to Certificateholders.......IX-10
9.14. Amendments to Certificate of Trust..................................IX-12
ARTICLE X
Termination
10.01. Termination Upon Repurchase by the Master Servicer or
its Designee or Liquidation of All Mortgage Loans....................X-1
10.02. Additional Termination Requirements..................................X-3
ARTICLE XI
Miscellaneous Provisions
11.01. Intent of Parties...................................................XI-1
11.02. Amendment...........................................................XI-1
11.03. Recordation of Agreement............................................XI-2
11.04. Limitation on Rights of Certificateholders..........................XI-2
11.05. Acts of Certificateholders..........................................XI-3
11.06. [Reserved]..........................................................XI-5
11.07. Governing Law.......................................................XI-5
11.08. Notices.............................................................XI-5
11.09. Severability of Provisions..........................................XI-5
11.10. Successors and Assigns..............................................XI-6
11.11. Article and Section Headings........................................XI-6
11.12. Counterparts........................................................XI-6
11.13. Notice to Rating Agency.............................................XI-6
11.14. No Legal Title to Trust Fund in Certificateholders................. XI-7
EXHIBITS
Exhibit A-1 - Form of Face of Certificates
Exhibit A-2 - Form of Reverse of Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - Representations and Warranties of BankUnited
Concerning the Mortgage Loans
Exhibit D - Form of Request for Release
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Trustee's Initial Certification
Exhibit H - Form of Trustee's Final Certification
Exhibit I - Custodial Agreement
Exhibit J - Co-Trustee Agreement
<PAGE>
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of February 1, 1998, among
Bear Stearns Mortgage Securities Inc., a Delaware corporation, as the seller
(the "Seller"), Countrywide Home Loans, Inc., a New York corporation
("Countrywide"), as master servicer (the "Master Servicer"), The Bank of New
York, a New York banking corporation, as trustee (the "Trustee")and The Bank of
New York (Delaware) as co-trustee (the "Co-Trustee").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Seller has acquired the Mortgage
Loans from BankUnited, FSB, ("BankUnited"). On the Closing Date, the Seller will
sell the Mortgage Loans and certain other property to the Trust and receive in
consideration therefor Certificates evidencing the entire beneficial ownership
interest in the Trust. Countrywide will be the Master Servicer for the Mortgage
Loans.
The Trustee shall make an election for certain assets included in the
Trust Fund to be treated for federal income tax purposes as a REMIC. On March 6,
1998 (the "Startup Day"), all the Classes of Certificates except for the Class R
Certificate will be designated "regular interests" in such REMIC. The Class R
Certificate will be designated the "residual interest" in such REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of
the Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $350,471,515.04. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the
Seller, the Master Servicer and the Trustee agree as follows:
<PAGE>
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
ACCOUNT: The Certificate Account, the Protected Accounts or the
Servicing Accounts as the context may require.
ACCRUED CERTIFICATE INTEREST: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount of such Certificate
immediately prior to such Distribution Date, calculated on the basis of a
360-day year consisting of twelve 30-day months, less (i) in the case of a
Senior Certificate, such Certificate's share of any Net Interest Shortfall and
after the Cross-Over Date, the interest portion of any Realized Losses and (ii)
in the case of a Subordinate Certificate, such Certificate's share of any Net
Interest Shortfall and the interest portion of any Realized Losses.
ACT: As defined in Section 1A.01.
ADVANCING DATE: The Business Day preceding the related Distribution
Date.
AFFILIATE: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
ALLOCABLE SHARE: With respect to any Class of Subordinate
Certificates:
(a) as to any Distribution Date and amounts
distributable pursuant to clauses (i) and (iii) of the
Subordinate Optimal Principal Amount, the fraction, expressed
as a percentage, the numerator of which is the Current
Principal Amount of such Class and the denominator of which is
the aggregate Current Principal Amount of all Classes of
Subordinate Certificates; and
(b) as to any Distribution Date and amounts
distributable pursuant to clause (ii), (iv) and (v) of
the Subordinate Optimal Principal Amount, and as to each
Class of Subordinate Certificates for which (x) the related
Prepayment Distribution Trigger has been satisfied on such
Distribution Date, the fraction, expressed as a percentage,
the numerator of which is the Current Principal Amount of such
Class and the denominator of which is the aggregate Current
Principal Amount of all such Subordinate Classes of
Certificates and (y) the related Prepayment Distribution
Trigger has not been satisfied on such Distribution Date, 0%;
provided that if on a Distribution Date, the Current Principal
Amount of any Class of Subordinate Certificates for which the
related Prepayment Distribution Trigger was satisfied on such
Distribution Date is reduced to zero, any amounts distributed
pursuant to this clause (b), to the extent of such Class's
remaining Allocable Share, shall be distributed to the
remaining Class of Subordinate Certificates which satisfies
the Class Prepayment Distribution Trigger in reduction of its
Current Principal Amount.
APPLICABLE CREDIT RATING: A rating by the Rating Agency of Aaa for any
long-term deposit or security or a rating of P-1 for any short-term deposit or
security.
APPLICABLE STATE LAW: For purposes of Section 9.13(d), the Applicable
State Law shall be the law of the State of New York and such other state law
whose applicability shall have been brought to the attention of the Trustee by
either (i) an Opinion of Counsel delivered to it, or (ii) written notice from
the appropriate taxing authority as to the applicability of such state law.
APPRAISED VALUE: For any Mortgaged Property, the amount set forth as
the appraised value of such Mortgaged Property in an appraisal made for the
mortgage originator in connection with its origination of the related Mortgage
Loan.
ASSUMED FINAL DISTRIBUTION DATE: With respect to the Certificates,
February 25, 2028.
AVAILABLE FUNDS: With respect to any Distribution Date, an amount
equal to the aggregate of the following amounts with respect to the Mortgage
Loans: (a) all previously undistributed payments on account of principal
(including the principal portion of Scheduled Payments, Principal Prepayments
and the principal portion of Net Liquidation Proceeds) and all previously
undistributed payments on account of interest received on and after the Cut-off
Date and on or prior to the related Determination Date, (b) any Monthly Advances
(including Certificate Account Advances) and Compensating Interest Payments by
the Master Servicer with respect to such Distribution Date and (c) any amount
reimbursed by the Trustee or the Master Servicer pursuant to Subsections 4.02(d)
and 4.04(d) in connection with losses on Permitted Investments, except:
(i) all payments that were due on or before the Cut-off Date;
(ii)all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or
dates subsequent to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to
the extent that, there are any unreimbursed Monthly Advances
(including Certificate Account Advances);
(v) amounts of Monthly Advances (including Certificate Account
Advances) determined to be Nonrecoverable Advances;
(vi) amounts permitted to be withdrawn from the Certificate
Account pursuant to Subsection 4.03(a); and
(vii) amounts withdrawn by the Trustee pursuant to Subsection
4.03(b) to pay the Trustee's Fee.
BANK OF NEW YORK: The Bank of New York, a New York banking
Corporation.
BANKRUPTCY CODE: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. ss.ss. 101-1330.
BANKRUPTCY LOSS: With respect to any Mortgage Loan a Deficient
Valuation.
BANKUNITED: BankUnited, FSB.
BOOK-ENTRY CERTIFICATES: Initially, all Classes of Certificates other
than the Class R and Class B-2 Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange is closed or on which banking
institutions in New York City or California are authorized or obligated by law
or executive order to be closed.
CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibit A-1 and A-2, with
the blanks therein appropriately completed.
CERTIFICATE ACCOUNT: The account or accounts created and maintained
pursuant to Section 4.02, which shall be denominated "The Bank of New York as
Trustee f/b/o holders of Bear Stearns Mortgage Securities Inc. Mortgage
Pass-Through Certificates, Series 1998-3 - Certificate Account."
CERTIFICATE ACCOUNT ADVANCE: As of any Determination Date, the amount
on deposit in a Protected Account which is not required to be transferred to the
Certificate Account for distribution during the calendar month in which such
Determination Date occurs but which is deposited in the Certificate Account and
used to make a distribution to Certificateholders during such calendar month on
account of Scheduled Payments on the Mortgage Loans due on the Due Date for such
month not being paid on or before such Determination Date except insofar as such
unpaid amounts are the result of application of the Relief Act.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
CERTIFICATE REGISTER: The register maintained pursuant to Section
5.02.
CERTIFICATEHOLDER: A Holder of a Certificate.
CERTIFICATES: The Senior Certificates and the Subordinate Certificates
CLASS: With respect to the Certificates, A, B-1, B-2 and R.
CLASS PREPAYMENT DISTRIBUTION TRIGGER: For each Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Subordinate Certificates, if any, subordinate thereto, and the denominator of
which is the Scheduled Principal Balances of all of the Mortgage Loans as of the
related Due Date, equals or exceeds such percentage calculated as of the Closing
Date.
CLOSING DATE: March 6, 1998.
CODE: The Internal Revenue Code of 1986, as amended.
COMPENSATING INTEREST PAYMENTS: As defined in Section 6.09.
CONVERTED MORTGAGE LOAN: Each Mortgage Loan which has been converted
from an adjustable rate of interest to a fixed rate of interest at the option of
the obligor thereon.
CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 101 Barclay Street,
12E, New York, New York 10286, Attention: Mortgage Backed Securities, ref: Bear
Stearns/BankUnited 1998-3.
CO-TRUSTEE: The Bank of New York (Delaware) or its successor in
interest, or any successor Co-Trustee appointed as herein provided.
COUNTRYWIDE: Countrywide Home Loans, Inc.
CREDIT SUPPORT PERCENTAGE: For any Distribution Date, the aggregate
Current Principal Amount of the Subordinate Certificates immediately prior to
such Distribution Date divided by the aggregate Scheduled Principal Balance of
the Mortgage Loans as of the Due Date in the month of the Distribution Date or
Cut-off Date, in the case of the first Distribution Date.
CROSS-OVER DATE: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero (giving effect to all distributions on such Distribution Date).
CURRENT PRINCIPAL AMOUNT: With respect to any Certificate as of any
Distribution Date, the initial principal amount of such Certificate reduced by
(A) the sum of (i) all amounts distributed on previous Distribution Dates on
such Certificate with respect to principal, (ii) the principal portion of all
Realized Losses allocated prior to such Distribution Date to such Certificate,
and (iii) in the case of a Subordinate Certificate, such Certificate's pro rata
share, if any, of the Subordinate Certificate Writedown Amount for previous
Distribution Dates. With respect to any Class of Certificates, the Current
Principal Amount thereof will equal the sum of the Current Principal Amounts of
all Certificates in such Class. Notwithstanding the foregoing, solely for
purposes of giving consents, directions, waivers, approvals, requests and
notices, the Class R Certificate after the Distribution Date on which it
receives the distribution of the last dollar of original principal amount shall
be deemed to have a Current Principal Amount equal to its Current Principal
Amount on the day immediately preceding such Distribution Date.
CUSTODIAL AGREEMENT: Custodial Agreement dated as of February 1, 1998
by and among the Trustee, BankUnited and the Custodian, in the form set forth as
Exhibit I hereto.
CUSTODIAN: The Federal Home Loan Bank of Atlanta or any successor
custodian appointed in accordance with this Agreement and the Custodial
Agreement that has accepted such appointment in accordance therewith.
CUT-OFF DATE: February 1, 1998.
CUT-OFF DATE BALANCE: $350,471,515.04.
DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments which
a Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of
any proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
DEBTOR RELIEF LAWS: Any applicable liquidation, conservatorship,
receivership, bankruptcy, insolvency, rearrangement, moratorium, reorganization,
or similar debtor relief laws affecting the rights of creditors generally from
time to time in effect.
DEFAULTED MORTGAGE LOAN: Any Mortgage Loan as to which the Mortgagor
has failed to make unexcused payment in full of three or more consecutive
Scheduled Payments.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
DEPOSITORY AGREEMENT: The meaning specified in Subsection 5.01(a)
hereof.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DESIGNATED DEPOSITORY INSTITUTION: A depository institution
(commercial bank, mutual savings bank or savings and loan association) or trust
company (which may include the Trustee), the deposits of which are fully insured
by the FDIC or Bank Insurance Fund to the extent provided by law or the Federal
Home Loan Bank of Atlanta.
DETERMINATION DATE: The 18th day of the month of the Distribution
Date, or if such day is not a Business Day, the preceding Business Day.
DISTRIBUTION DATE: The 25th day of any month, beginning in the month
immediately following the month of the initial issuance of the Certificates, or,
if such 25th day is not a Business Day, the Business Day immediately following.
DTC CUSTODIAN: The Bank of New York, or its successors in interest as
custodian for the Depository.
DUE DATE: With respect to each Distribution Date, the Due Date for a
Mortgage Loan is the first day of the month in which such Distribution Date
occurs and is the day on which the Scheduled Payment is due.
DUE PERIOD: With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which the
Distribution Date occurs and ending at the close of business on the first day of
the month in which the Distribution Date occurs.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
EVENT OF DEFAULT: An event described in Section 8.01.
EXCESS LIQUIDATION PROCEEDS: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FHLMC: Freddie Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
FNMA: Federal National Mortgage Association or any successor thereto.
FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class, the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the Current Principal Amount of such
Class. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) the Class R Certificate will be deemed to
equal 1% and (ii) a Certificate of any other Class will be deemed to equal 99%
multiplied by a fraction, the numerator of which is the Current Principal Amount
of such Certificate and the denominator of which is the Current Principal Amount
of all the Certificates.
FUNDS TRANSFER DATE: With respect to a 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 preceding Business Day.
GLOBAL CERTIFICATE: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such Depository). As of the Closing Date there will be no Global
Certificates.
GROSS MARGIN: The amount for each Mortgage Loan which is added to the
applicable Index to determine the Mortgage Interest Rate (subject to the
applicable Periodic Rate Cap and Maximum Lifetime Mortgage Rate) as of each
Interest Adjustment Date.
HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller, the Master Servicer or a
Sub-Servicer or any Affiliate thereof shall be deemed not to be outstanding and
the Fractional Undivided Interest evidenced thereby shall not be taken into
account in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.
INDEMNIFIED PERSONS: The Trustee, its officers, directors, agents and
employees and any separate or co-trustee and its officers, directors, agents and
employees.
INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Seller or the Master
Servicer and of any Affiliate of the Seller or the Master Servicer, (b) does not
have any direct financial interest or any material indirect financial interest
in the Seller or the Master Servicer, or any Affiliate of the Seller or the
Master Servicer, and (c) is not connected with the Seller or the Master
Servicer, or any Affiliate as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
INDEX: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act (or
any entity in which all the equity holders come within such paragraphs).
INSURANCE POLICY: With respect to any Mortgage Loan, any Primary
Mortgage Insurance Policy, standard hazard insurance policy, flood insurance
policy or title insurance policy.
INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse Insured Expenses.
INSURED EXPENSES: Expenses covered by any Insurance Policy.
INSURER: Any issuer of an Insurance Policy.
INTEREST ACCRUAL PERIOD: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which the
Distribution Date occurs, commencing in February 1998.
INTEREST ADJUSTMENT DATE: With respect to a Mortgage Loan, the date,
if any, specified in the related Mortgage Note on which the Mortgage Interest
Rate is subject to adjustment.
INTEREST SHORTFALL: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Voluntary Principal Prepayment, or constitutes a Relief Act Mortgage Loan, an
amount determined as follows:
(a) partial principal prepayments: The difference
between (i) one month's interest at the applicable Net Rate on
the amount of such prepayment and (ii) the amount of interest
for the calendar month of such prepayment (adjusted to the
applicable Net Rate) received at the time of such repayment;
(b) principal prepayments in full received during the
relevant Prepayment Period: The difference between (i) one
month's interest at the applicable Net Rate on the Scheduled
Principal Balance of such Mortgage Loan immediately prior to
such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable
Net Rate) received at the time of such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief
Act Mortgage Loan, the excess of (i) 30 days'
interest (or, in the case of a principal prepayment in full,
interest to the date of prepayment) on the Scheduled Principal
Balance thereof (or, in the case of a principal prepayment in
part, on the amount so prepaid) at the related Net Rate over
(ii) 30 days' interest (or, in the case of a principal
prepayment in full, interest to the date of prepayment) on
such Scheduled Principal Balance (or, in the case of a
Principal Prepayment in part, on the amount so prepaid) at the
Net Rate required to be paid by the Mortgagor as limited by
application of the Relief Act.
INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases Class B-2 Certificates in connection with
such purchase, substantially in the form set forth as Exhibit F-1 hereto.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
Master Servicer has determined that all amounts it expects to recover from or on
account of such Mortgage Loan have been recovered.
LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer has certified that such Mortgage Loan has
become a Liquidated Mortgage Loan.
LIQUIDATION EXPENSES: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer and not recovered by the Master Servicer under any Primary Mortgage
Insurance Policy for reasons other than the Master Servicer's failure to ensure
the maintenance of or compliance with a Primary Mortgage Insurance Policy, such
expenses including (a) property protection expenses, (b) property sales
expenses, (c) foreclosure and sale costs, including court costs and reasonable
attorneys' fees, and (d) similar expenses reasonably paid or incurred in
connection with liquidation.
LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.
LOAN SUMMARY AND REMITTANCE REPORT: The report to be submitted by the
Master Servicer to the Trustee pursuant to Subsection 6.07(b).
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Original Value of the related Mortgaged
Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.03(c)
hereof.
MASTER SERVICER: With respect to the Mortgage Loans, Countrywide, or
its successor in interest, or any successor master servicer with respect to the
Mortgage Loans appointed as herein provided.
MASTER SERVICING FEE: As to any Mortgage Loan and Distribution Date,
an amount equal to the product of (i) the Outstanding Principal Balance of such
Mortgage Loan as of the Due Date in the preceding calendar month and (ii) the
Master Servicing Fee Rate.
MASTER SERVICING FEE RATE: With respect to each Mortgage Loan, the per
annum rate set forth on the Mortgage Loan Schedule, which, as indicated thereon
includes an amount to cover lender paid mortgage insurance.
MAXIMUM LIFETIME MORTGAGE RATE: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MOODY'S: Moody's Investors Service, Inc., and its successors in
interest.
MONTHLY ADVANCE: The advance (including a Certificate Account Advance)
required to be made by the Master Servicer on the related Advancing Date
pursuant to Section 6.08.
MORTGAGE FILE: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
MORTGAGE INTEREST RATE: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate as of the Cut-off Date is equal to the "Mortgage Interest Rate" set forth
with respect thereto on the Mortgage Loan Schedule.
MORTGAGE LOAN: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held by the Custodian on behalf of
the Trustee as a part of the Trust Fund, as identified in the Mortgage Loan
Schedule, including a mortgage loan the property securing which has become an
REO Property.
MORTGAGE LOANS: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of March 11, 1998, between BankUnited, as seller and Bear Stearns
Mortgage Securities Inc., as purchaser, and all amendments thereof and
supplements thereto.
MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B
with respect to the Mortgage Loans and as amended from time to time to reflect
the repurchase or substitution of Mortgage Loans pursuant to this Agreement.
MORTGAGE NOTE: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
MORTGAGOR: The obligor on a Mortgage Note.
NET INTEREST SHORTFALL: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the Master Servicer in accordance with this Agreement and (ii) unreimbursed
advances by the Master Servicer or a Sub-Servicer and Monthly Advances including
Certificate Account Advances.
NET RATE: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the applicable Master Servicing Rate.
NONRECOVERABLE ADVANCE: Any advance (i) which was previously made or
is proposed to be made by the Master Servicer and (ii) which, in the good faith
judgment of the Master Servicer, as evidenced by an Officer's Certificate, will
not or, in the case of a proposed advance, would not, be ultimately recoverable
by the Master Servicer from Liquidation Proceeds, Insurance Proceeds or future
payments on the Mortgage Loan for which such advance was made.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President of the Master Servicer and delivered to the Trustee or
the Custodian, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Master
Servicer.
ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Cut-off Date.
ORIGINAL VALUE: The lesser of (i) the Appraised Value or (ii) sale
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except that in instances where either (i) or (ii) is unavailable, the other may
be used to determine Original Value, or if both (i) and (ii) are unavailable,
Original Value may be determined from other sources reasonably acceptable to the
Trustee.
OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased pursuant to Sections 2.02 or 2.03 or replaced pursuant to Section
2.04.
OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination,
the principal balance of a Mortgage Loan remaining to be paid by the Mortgagor,
or, in the case of an REO Property, the principal balance of the related
Mortgage Loan remaining to be paid by the Mortgagor at the time such property
was acquired by the Trust Fund less any Net Insurance Proceeds with respect
thereto to the extent applied to principal.
PASS-THROUGH RATE: As to each Class of Certificates, the rate of
interest determined as provided with respect thereto in Section 5.01. Any
monthly calculation of interest at a stated rate shall be based upon annual
interest at such rate divided by twelve.
PERIODIC RATE CAP: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully
guaranteed by the United States of America or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit
of the United States of America;
(ii) (a) demand or time deposits, federal funds or
bankers' acceptances issued by any depository institution or
trust company incorporated under the laws of the United States
of America or any state thereof (including the Trustee acting
in its commercial banking capacity) and subject to supervision
and examination by federal or state banking authorities,
provided that the commercial paper or the short-term deposit
rating or the long-term unsecured debt obligations or deposits
of such depository institution or trust company at the time of
such investment or contractual commitment providing for such
investment have the Applicable Credit Rating or better from
the Rating Agency and (b) any other demand or time deposit or
certificate of deposit that is fully insured by the Federal
Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any
security described in clause (i) above or (b) any other
security issued or guaranteed by an agency or instrumentality
of the United States of America, the obligations of which are
backed by the full faith and credit of the United States of
America, in either case entered into with a depository
institution or trust company (acting as principal) described
in clause (ii)(a) above where the Trustee holds the security
therefor;
(iv) securities bearing interest or sold at a discount
issued by any corporation (including the Trustee) incorporated
under the laws of the United States of America or any state
thereof that have the Applicable Credit Rating or better from
the Rating Agency at the time of such investment or
contractual commitment providing for such investment;
PROVIDED, HOWEVER, that securities issued by any particular
corporation will not be Permitted Investments to the extent
that investments therein will cause the then outstanding
principal amount of securities issued by such corporation and
held as part of the Trust to exceed 10% of the aggregate
Outstanding Principal Balances and amounts of all the Mortgage
Loans and Permitted Investments held as part of the Trust;
(v) commercial paper (including both
noninterest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof) having the
Applicable Credit Rating or better from the Rating Agency at
the time of such investment;
(vi) a Reinvestment Agreement issued by any bank,
insurance company or other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to the
Rating Agency;
(viii) any money market funds(including, without
limitation, [Bank of New York Money Market Fund]) the
collateral of which consists of obligations fully guaranteed
by the United States of America or any agency or
instrumentality of the United States of America the
obligations of which are backed by the full faith and credit
of the United States of America (which may include repurchase
obligations secured by collateral described in clause (i)) and
having a rating of Aaa from the Rating Agency; and
(ix) general obligations of or obligations guaranteed by
any state of the United States or the District of Columbia
receiving the highest long-term debt rating of the Rating
Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agency.
PROVIDED, HOWEVER, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par.
PERSON: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PHYSICAL CERTIFICATES: The Class R and Class B-2 Certificates;
provided that as set forth in Section 5.01(a), if one or more Classes of Class R
and Class B-2 Certificates have become Global Certificates, then with respect to
such Class or Classes, only to the extent provided in Section 5.02.
PLAN: As defined in Section 5.07(a).
PREPAYMENT PERIOD: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month of such Distribution
Date.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, or any replacement
policy therefor.
PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and the purchase price in connection with any purchase of a Mortgage Loan, any
cash deposit in connection with the substitution of a Mortgage Loan, and the
principal portion of Net Liquidation Proceeds.
PRIVATE CERTIFICATE: Any Class B-2 Certificate.
PROTECTED ACCOUNT: A segregated account established and maintained by
the Master Servicer or any Sub-Servicer with respect to the Mortgage Loans and
with respect to REO Property in a Designated Depository Institution for receipt
of principal and interest and other amounts as described in Section 4.01.
QIB: Qualified Institutional Buyer as defined in Rule 144A promulgated
under the Securities Act.
QUALIFIED INSURER: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agency for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agency as of the Closing Date.
RATING AGENCY: Moody's.
RATING AGENCY ELIGIBLE ACCOUNT: An account, including one maintained
with the Trustee, which either (i) is a trust account maintained with the trust
department of a depository institution or trust company (including the Trustee)
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia or (ii) is maintained with an entity
which is an institution whose deposits are insured by the FDIC or the Bank
Insurance Fund, the unsecured and uncollateralized long-term debt obligations of
which shall be rated "A2" or better by Moody's, or one of the two highest short-
term ratings by Moody's, and which is either (a) a federal savings association
duly organized, validly existing and in good standing under the federal banking
laws, (b) an institution duly organized, validly existing and in good standing
under the applicable banking laws of any state, (c) a national banking
association under the federal banking laws, (d) a principal subsidiary of a bank
holding company or (e) the Federal Home Loan Bank of Atlanta.
REALIZED LOSS: Any (i) Deficient Valuation or (ii) as to any
Liquidated Mortgage Loan, the positive amount, if any, of (x) the Outstanding
Principal Balance of such Liquidated Mortgage Loan plus accrued and unpaid
interest thereon at the Mortgage Interest Rate through the last day of the month
of such liquidation LESS (y) the related Net Liquidation Proceeds.
RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
REGULAR CERTIFICATES: Each Certificate other than a Residual
Certificate.
REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agency, from a bank, insurance company or other
corporation or entity (including the Trustee).
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC ASSETS: That group of assets contained in the Trust Fund
designated as a REMIC consisting of (i) the Mortgage Loans, (ii) the Certificate
Account, (iii) any REO Property and (iv) any proceeds of the foregoing.
REMIC OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause the REMIC Assets to fail to qualify as a REMIC while any regular interest
in such REMIC is outstanding, (ii) result in a tax on prohibited transactions or
(iii) constitute a taxable contribution after the Startup Day.
REMIC PROVISIONS: The provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.
REO PROPERTY: A Mortgaged Property acquired in the name of the
Trustee, for the benefit of Certificateholders, by foreclosure or deed-in-lieu
of foreclosure in connection with a defaulted Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased pursuant to Section
2.02 or 2.03(A) or purchased pursuant to Section 3.19 or 3.20 an amount equal to
the sum of (i) 100% of the Outstanding Principal Balance of such Mortgage Loan
as of the date of repurchase (or if the related Mortgaged Property was acquired
with respect thereto, 100% of the Outstanding Principal Balance at the date of
the acquisition) plus (ii) accrued but unpaid interest on the Outstanding
Principal Balance at the related Mortgage Interest Rate, through and including
the last day of the month of repurchase reduced by (ii) any portion of the
Master Servicing Fee or advances payable to the purchaser of the Mortgage Loan.
REQUEST FOR RELEASE: A request for release in the form attached hereto
as Exhibit D.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy (including title insurance policies) which is required to be
maintained from time to time under this Agreement with respect to such Mortgage
Loan.
RESIDUAL CERTIFICATE: The Class R Certificate.
RESPONSIBLE OFFICER: Any officer assigned to the corporate trust
department or similar department of the Trustee (or any successor division or
department thereto), and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
RULE 144A CERTIFICATE: The certificate to be furnished by each
purchaser of a Private Certificate which is a Qualified Institutional Buyer as
defined under Rule 144A promulgated under the Securities Act, substantially in
the form set forth as Exhibit F-2 hereto.
SCHEDULED PAYMENT: With respect to any Mortgage Loan and any month,
the scheduled payment or payments of principal and interest due during such
month on such Mortgage Loan which either is payable by a Mortgagor in such month
under the related Mortgage Note or, in the case of REO Property, would otherwise
have been payable under the related Mortgage Note.
SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) less (ii) any Principal Prepayments (including the principal portion of
Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES LEGEND: THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF,
BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR"
WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) (OR ANY ENTITY IN
WHICH ALL OF THE EQUITY HOLDERS COME WITHIN SUCH PARAGRAPHS) OF REGULATION D
UNDER THE SECURITIES ACT PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER
SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B)IF REQUESTED BY THE
TRUSTEE AN OPINION OF COUNSEL AS TO COMPLIANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY BY A TRANSFEREE UNLESS THE PROPOSED TRANSFEREE CERTIFIES TO THE
TRUSTEE THAT IT IS NOT ACQUIRING SUCH CERTIFICATES DIRECTLY OR INDIRECTLY FOR,
ON BEHALF OF OR WITH THE ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER OF A CERTIFICATE IN
PHYSICAL FORM.
SECURITY INSTRUMENT: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.
SELLER: Bear Stearns Mortgage Securities Inc., a Delaware corporation,
or its successors in interest.
SENIOR CERTIFICATES: The Class A and Class R Certificates.
SENIOR OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an
amount equal to the sum, without duplication, of:
(i) the Senior Percentage of the sum of Scheduled
Principal due on the related Due Date on each Outstanding
Mortgage Loan as of such Due Date as specified in the
amortization schedule at the time
applicable thereto (after adjustments for previous Principal
Prepayments and the principal portion of Debt Service
Reductions but before any adjustment to such amortization
schedule by reason of any bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period);
(ii) the Senior Prepayment Percentage of all Voluntary
Principal Prepayments in part on Mortgage Loans received
during the related Prepayment Period, together with the Senior
Prepayment Percentage of the Scheduled Principal Balance of
each Mortgage Loan which was the subject of a Voluntary
Principal Prepayment in full during the related Prepayment
Period;
(iii) the lesser of (x) the Senior Prepayment Percentage of
the sum of (A) all Net Liquidation Proceeds allocable to
principal received in respect of each Mortgage Loan that
became a Liquidated Mortgage Loan during the related
Prepayment Period (other than Mortgage Loans described in
clause (B)) and (B) the Scheduled Principal
Balance of each Mortgage Loan purchased by an Insurer from the
Trustee during the related Prepayment Period pursuant to the
related Primary Mortgage Insurance Policy as an alternative to
paying a claim thereunder; and (y) the Senior Percentage of
the sum of (A) the Scheduled Principal Balance of each
Mortgage Loan that became a Liquidated Mortgage Loan during
the related Prepayment Period (other
than Mortgage Loans described in clause (B)) and (B) the
Scheduled Principal Balance of each such Mortgage Loan that
was purchased by an Insurer from the Trustee during the
related Prepayment Period pursuant to the related Primary
Mortgage Insurance Policy as an alternative to paying a claim
thereunder;
(iv) the Senior Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan which was purchased on
such Distribution Date pursuant to Section 2.02, 2.03A(b),
3.19 or 3.20; and
(v) the Senior Prepayment Percentage of the
difference, if any, between the Scheduled Principal Balance of
a Mortgage Loan that has been replaced by the Master Servicer
with a Substitute Mortgage Loan pursuant to Section 2.04
during the month of such Distribution Date and the Scheduled
Principal Balance of such Substitute Mortgage Loan.
SENIOR PERCENTAGE: Initially 94.75%. On any Distribution Date, the
lesser of (i) 100% and (ii) the percentage (carried to six places rounded up)
obtained by dividing the aggregate Current Principal Amounts of the Class A
Certificates and the Residual Certificate immediately preceding such
Distribution Date by the aggregate Scheduled Principal Balance of all the
Mortgage Loans as of the beginning of the related Due Period.
SENIOR PREPAYMENT PERCENTAGE: With respect to the Mortgage Loans on
any Distribution Date occurring during the periods set forth below will be as
follows:
PERIOD (DATES INCLUSIVE) SENIOR PREPAYMENT PERCENTAGE
March 25, 1998 - February 25, 2008 100%
March 25, 2008 - February 25, 2009 applicable Senior Percentage
plus 70% of the applicable
Subordinate Percentage
March 25, 2009 - February 25, 2010 applicable Senior Percentage
plus 60% of the applicable
Subordinate Percentage
March 25, 2010 - February 25, 2011 applicable Senior Percentage
plus 40% of the applicable
Subordinate Percentage
March 25, 2011 - February 25, 2012 applicable Senior Percentage
plus 20% of the applicable
Subordinate Percentage
March 25, 2012 and thereafter applicable Senior Percentage
Notwithstanding the foregoing, if on any Distribution Date the Senior
Percentage exceeds the Senior Percentage as of the Cut-off Date, the Senior
Prepayment Percentage for such Distribution Date will equal 100%.
In addition, no reduction of a Senior Prepayment Percentage shall
occur on any Distribution Date unless, as of the last day of the month preceding
such Distribution Date, (i) the aggregate outstanding principal balance of the
Mortgage Loans delinquent 60 days or more (including for this purpose any
Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates averaged over the last six months, does not exceed
40%, and (ii) cumulative Realized Losses on the Mortgage Loans do not exceed 30%
of the Original Subordinate Principal Balance. Notwithstanding the above, if on
any Distribution Date (a) the Credit Support Percentage prior to giving effect
to any distributions on such Distribution Date, exceeds twice the initial Credit
Support Percentage and (b) the provisions of clauses (i) and (ii) of the
immediately preceding sentence are met, then the Senior Prepayment Percentage
for such Distribution Date will equal the sum of the Senior Percentage for such
Distribution Date and 50% of the Subordinate Percentage for such Distribution
Date, if such Distribution Date is prior to March 2001, and will equal the
Senior Percentage for such Distribution Date, if such Distribution Date occurs
on or after March 2001.
SERVICING ACCOUNT: The separate account(s) created and maintained by
the Master Servicer or each Sub-Servicer with respect to the Mortgage Loans or
with respect to REO Property in a Designated Depository Institution for
collection of taxes, assessments, insurance premiums and comparable items as
described in Section 3.07.
SERVICING ADVANCES: All reasonable and customary "out of pocket" costs
and expenses incurred in the performance by the Master Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property, including reasonable fees paid to any
independent contractor in connection therewith, (iv) compliance with the
obligations under Section 3.07 or 3.10, and (v) in connection with the
liquidation of a Mortgage Loan, expenditures relating to the purchase or
maintenance of the first lien on the Mortgaged Property pursuant to Section
3.12, all of which reasonable and customary out-of- pocket costs and expenses
are reimbursable to the Master Servicer to the extent provided in Sections
4.02(b) and 4.03(b).
SERVICING OFFICER: Any officer of the Master Servicer or of an agent
or independent contractor through which all or part of the Master Servicer's
master servicing responsibilities are carried out, involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name and
specimen signature appear on a list of servicing officers furnished to the
Trustee by the Master Servicer as such list may from time to time be amended in
accordance with the foregoing.
STARTUP DAY: March 6, 1998.
SUBORDINATE CERTIFICATES: Class B-1 and Class B-2 Certificates.
SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution Date,
the amount by which (a) the sum of the Current Principal Amounts of the
Certificates (after giving effect to the distribution of principal and the
allocation of Realized Losses in reduction of the Current Principal Amounts of
the Certificates on such Distribution Date) exceeds (b) the aggregate Scheduled
Principal Balances of the Mortgage Loans on the first day of the month of such
Distribution Date.
SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an
amount equal to the sum of the following (but in no event greater than the
aggregate Current Principal Amounts of the Subordinate Certificates immediately
prior to such Distribution Date):
(i) the Subordinate Percentage of the sum of all
Scheduled Principal due on the related Due Date on
each Outstanding Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time
applicable thereto (after adjustment for previous Principal
Prepayments, but before any adjustment to such amortization
schedule by reason of any bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period);
(ii) the Subordinate Prepayment Percentage of all
Voluntary Principal Prepayments in part on Mortgage Loans
received during the related Prepayment Period, together with
the Subordinate Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan which was the subject
of a Voluntary Principal Prepayment in full during the related
Prepayment Period;
(iii) the excess, if any, of (x) the sum of (A) all
Net Liquidation Proceeds allocable to principal on
Mortgage Loans received during the related Prepayment Period
(other than in respect of Mortgage Loans
described in clause (B)) and (B) the Scheduled Principal
Balance of each Mortgage Loan that was purchased by an Insurer
from the Trust during the related Prepayment Period pursuant
to the related Primary Mortgage Insurance Policy as an
alternative to paying a claim, over (y) the sum of the amounts
distributable pursuant to clause (iii) of the definitions of
Senior Optimal Principal Amount on such Distribution Date;
(iv) the Subordinate Prepayment Percentage of the sum
of (a) the Scheduled Principal Balance of each Mortgage Loan
which was purchased by BankUnited on such Distribution Date
pursuant to Section 2.02, 2.03A(b), 3.19 or 3.20; and (b) the
difference, if any, between the Scheduled Principal Balance of
a Mortgage Loan that has been replaced by BankUnited with a
Substitute Mortgage Loan pursuant to Section 2.04 during the
month of such Distribution Date and the Scheduled Principal
Balance of such Substitute Mortgage Loan; and
(v) on the Distribution Date on which the Current
Principal Amount of the Senior Certificates have been reduced
to zero, 100% of the Senior Optimal Principal Amount remaining
undistributed on such date.
After the aggregate Current Principal Amounts of the Subordinate Certificates
have been reduced to zero, the Subordinate Optimal Principal Amount shall be
zero.
SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus the
Senior Percentage, initially 5.25%.
SUBORDINATE PREPAYMENT PERCENTAGE: On any Distribution Date, 100%
minus the Senior Prepayment Percentage except that on any Distribution Date
after the Current Principal Amounts of the Class A and the Class R Certificates,
have been reduced to zero, the Subordinate Prepayment Percentage will equal
100%.
SUB-SERVICER: Any Person with which the Master Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
SUB-SERVICING AGREEMENT: The written contract between the Master
Servicer and a Sub-Servicer and any successor Sub- Servicer relating to
servicing and administration of certain Mortgage Loans as provided in Section
3.02.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Custodian on
behalf of the Trustee pursuant to Section 2.04, in each case, in the opinion of
the Master Servicer, (i) which has an Outstanding Principal Balance not
materially greater nor materially less than the Mortgage Loan for which it is to
be substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less
than, and not materially greater than, such Mortgage Loan; (iii) which has a
maturity date not materially earlier or later than such Mortgage Loan and not
later than the latest maturity date of any Mortgage Loan; (iv) which is of the
same property type and occupancy type as such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which is current in payment of principal and interest as of the date
of substitution; (vii) as to which the payment terms do not vary in any material
respect from the payment terms of the Mortgage Loan for which it is to be
substituted; and (viii) which has a Gross Margin, Periodic Rate Cap and Maximum
Lifetime Mortgage Rate no less than those of such Mortgage Loan and has the same
Index and interval between Interest Adjustment Dates as such Mortgage Loan. The
opinion of the Master Servicer shall be evidenced by an Officer's Certificate
delivered to the Trustee and the Custodian.
TAX MATTERS PERSON: The Holder of the Class R Certificate as more
particularly set forth in Section 9.13 hereof.
TRUST: The trust created by this Agreement.
TRUSTEE: The Bank of New York or its successor in interest, or any
successor trustee appointed as herein provided.
TRUSTEE'S FEES: With respect to each Distribution Date, all investment
earnings on amounts in the Certificate Account.
TRUST FUND: The assets of the Trust consisting of the Mortgage Loans
and the other assets described in Section 2.01(a).
UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by the hazard insurance policies required to
be maintained pursuant to Section 3.10, without regard to whether or not such
policy is maintained.
VOLUNTARY PRINCIPAL PREPAYMENT: With respect to any Distribution Date,
any Principal Prepayment received from the related Mortgagor on a Mortgage Loan.
<PAGE>
ARTICLE IA
Organization
Section 1A.01. NAME OF TRUST; STATEMENT OF INTENT. The name of the
Trust formed hereby shall be Bear Stearns Mortgage Securities Trust 1998-3, in
which name the Trustee and the CoTrustee may conduct the business and affairs of
the Trust, make and execute contracts and agreements on behalf of the Trust and
sue and be sued on behalf of the Trust. It is the intention of the parties
hereto that the Trust constitute a business trust under the Delaware Business
Trust Act (12 Del.C. ' 3801 ET seq.)(the "Act") and that this Agreement
constitute the governing instrument of the Trust under the Act. The Trustee and
the CoTrustee hereby are authorized to execute and file a Certificate of Trust
under said Act with the Secretary of State.
Section 1A.02. OFFICE. The office of the Trust in the State of
Delaware shall be in care of the Co-Trustee, and an additional office of the
Trust shall be in care of the Trustee, in each case at the respective address
set forth in Section 11.08 or at such other address as the Co-Trustee or the
Trustee may designate by notice to the Certificateholders.
Section 1A.03. DECLARATION OF TRUST. The Bank of New York is hereby
appointed to hold and agrees to hold the Trust Fund as Trustee in trust upon the
terms and conditions and for the use and benefit of the Holders of the
Certificates as herein set forth. The Co-Trustee is hereby appointed to act as
co-trustee hereunder and pursuant to the terms of the Co-Trustee Agreement
attached hereto as Exhibit J.
Section 1A.04. PURPOSE AND POWERS. The purposes of the Trust are to
issue the Certificates and to acquire and own the Trust Fund pursuant hereto,
all for the benefit of the Holders of the Certificates. The Trust shall not have
power to perform any act or engage in any business or activity whatsoever except
for the foregoing and any activity that is necessary, convenient or incidental
to the foregoing.
<PAGE>
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. CONVEYANCE OF MORTGAGE LOANS TO THE TRUST. (a) The
Seller concurrently with the execution and delivery of this Agreement, sells,
transfers and assigns to the Trustee on behalf of the Trust without recourse all
its right, title and interest in and to (i) the Mortgage Loans identified in the
Mortgage Loan Schedule, including all interest and principal due with respect to
the Mortgage Loans after the Cut-off Date, but excluding any payments of
principal and interest due on or prior to the Cut-off Date; (ii) such assets as
shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Certificate Account (excluding any income to the
Trustee from Permitted Investments under Subsection 4.02(d)), (iii) such assets
relating to the Mortgage Loans as from time to time may be held by the Master
Servicer or a Sub- Servicer in Protected Accounts (excluding any income to the
Master Servicer or any Sub-Servicer from Permitted Investments under Subsection
4.01(a)), (iv) [intentionally omitted], (v) any Servicing Accounts (to the
extent the mortgagee has a claim thereto and excluding any income to the Master
Servicer or Sub- Servicer or interest payable to Mortgagors pursuant to
applicable law), (vi) any REO Property, (vii) the Required Insurance Policies
and any amounts paid or payable by the insurer under any Insurance Policy (to
the extent the mortgagee has a claim thereto), (viii) the Mortgage Loan Purchase
Agreement to the extent provided in Subsection 2.03A(a), and (ix) any proceeds
of the foregoing. Although it is the intent of the parties to this Agreement
that the conveyance of the Seller's right, title and interest in and to the
Mortgage Loans and other assets in the Trust Fund pursuant to this Agreement
shall constitute a purchase and sale and not a loan, in the event that such
conveyance is deemed to be a loan, it is the intent of the parties to this
Agreement that the Seller shall be deemed to have granted to the Trustee a first
priority perfected security interest in all of the Seller's right, title and
interest in, to and under the Mortgage Loans and other assets in the Trust Fund,
and that this Agreement shall constitute a security agreement under applicable
law.
(b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Custodian on behalf of the Trustee, with respect to
each Mortgage Loan, (i) the original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee, (ii) the
original Security Instrument, which shall have been recorded, with evidence of
such recording indicated thereon, (iii) a certified copy of the assignment
(which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of the
Security Instrument, with evidence of recording with respect to each Mortgage
Loan in the name of the Trustee thereon (or if (x) below applies, shall be in
recordable form), (iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Seller with evidence of
recording thereon, (v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any, and the
original title insurance policy and (vi) originals of all modification
agreements, if applicable and available; PROVIDED, HOWEVER, that in lieu of the
foregoing, the Seller may deliver the following documents, under the
circumstances set forth below: (x) in lieu of the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to the
Seller in time to permit their delivery as specified above, the Seller may
deliver a true copy thereof with a certification by BankUnited or the Master
Servicer, on the face of such copy, substantially as follows: "Certified to be a
true and correct copy of the original", which has been or will be transmitted
for recording; (y) in lieu of the Security Instrument, assignment to the
Trustee, or intervening assignments thereof if the applicable jurisdiction
retains the originals of such documents (as evidenced by a certification from
BankUnited or the Master Servicer to such effect) the Seller may deliver
photocopies of such documents containing an original certification by the
judicial or other governmental authority of the jurisdiction where such
documents were recorded; and (z) in lieu of the Mortgage Notes relating to eight
Mortgage Loans, with an aggregate Scheduled Principal Balance as of the Cut-off
Date of approximately $2,316,572, each as identified in the list delivered by
the Seller to the Trustee on the Closing Date, the Seller may deliver a lost
note affidavit and indemnity from BankUnited and, if available, a copy of the
original Mortgage Note, and PROVIDED, FURTHER, HOWEVER, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and prior
to the Closing Date, the Seller, in lieu of delivering the above documents, may
deliver to the Custodian on behalf of the Trustee a certification of a Servicing
Officer to such effect and shall deposit all amounts paid in respect of such
Mortgage Loans in the Certificate Account on the Closing Date. The Seller shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) to the Custodian on behalf of
the Trustee promptly after they are received. BankUnited shall cause, at its
expense, the Security Instrument and intervening assignments, if any, and the
assignment of the Security Instrument to the Trustee to be recorded not later
than 180 days after the Closing Date.
Section 2.02. ACCEPTANCE OF MORTGAGE LOANS BY Trustee. (a) The Trustee
acknowledges receipt of, subject to further review and the exceptions which may
be noted pursuant to the procedures described below, and declares that the
Custodian holds on behalf of the Trustee the documents (or certified copies
thereof) delivered pursuant to Section 2.01 and that the Custodian on behalf of
the Trustee will continue to hold those documents and any amendments,
replacements or supplements thereto and all other assets of the Trust Fund
delivered to it as Trustee or to the Custodian on behalf of the Trustee in trust
for the use and benefit of all present and future Holders of the Certificates.
No later than 45 days after the Closing Date (or, with respect to any Substitute
Mortgage Loan, within 5 days after the receipt by the Custodian on behalf of the
Trustee thereof), the Trustee agrees, for the benefit of the Certificateholders,
to cause the Custodian to review each Mortgage File delivered to it and to
execute and deliver, or cause to be executed and delivered, to the Seller and
the Master Servicer an Initial Certification substantially in the form annexed
hereto as Exhibit G. In conducting such review, the Trustee will cause the
Custodian to ascertain whether all required documents have been executed and
received and whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans it has received, as identified in Exhibit B to this Agreement, as
supplemented (PROVIDED, HOWEVER, that with respect to those documents described
in subsections (b)(iv), (b)(v) and (b)(vi) of Section 2.01, the Custodian's
obligations shall extend only to documents actually delivered pursuant to such
subsections. In performing any such review, the Custodian may conclusively rely
on the purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. If the Custodian finds any
document constituting part of the Mortgage File not to have been executed or
received, or to be unrelated to the Mortgage Loans identified in Exhibit B, the
Custodian shall promptly notify BankUnited, the Trustee, the Master Servicer and
the Seller. BankUnited shall correct or cure any such defect within 60 days from
the date of notice from the Custodian of the defect and if BankUnited fails to
correct or cure the defect within such period, and such defect materially and
adversely affects the interests of the Trust in the related Mortgage Loan,
BankUnited, will, subject to Section 2.04, within 90 days from the Custodian's
notification purchase such Mortgage Loan at the Repurchase Price; PROVIDED,
HOWEVER, that if such defect relates solely to the unavailability of the
original Security Instrument or intervening assignments thereof, or a certified
copy because the originals of such documents, or a certified copy have not been
returned by the applicable jurisdiction, BankUnited shall not be required to
purchase such Mortgage Loan if BankUnited delivers or causes to be delivered
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date.
(b) No later than 180 days after the Closing Date, the Trustee will
cause the Custodian to review, for the benefit of the Certificateholders, the
Mortgage Files delivered to it and will execute and deliver or cause the
Custodian to execute and deliver to the Seller and the Master Servicer, a Final
Certification substantially in the form annexed hereto as Exhibit H. In
conducting such review, the Trustee will cause the Custodian to ascertain
whether an original of each document required to be recorded has been returned
from the recording office with evidence of recording thereon or a certified copy
has been obtained from the recording office. If the Custodian finds any document
constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B, the
Custodian shall promptly notify BankUnited, the Trustee, the Master Servicer and
the Seller (PROVIDED, HOWEVER, that with respect to those documents described in
subsections (b) (iv), (b) (v) and (b)(vi) of Section 2.01, the Custodian's
obligations shall extend only to documents actually delivered pursuant to such
subsections). BankUnited shall correct or cure any such defect or shall deliver
to the Trustee and the Custodian an Opinion of Counsel to the effect that such
defect does not materially or adversely affect the interests of the Trust in
such Mortgage Loan within 60 days from the date of notice from the Custodian of
the defect and if BankUnited is unable to cure such defect within such period,
and if such defect materially and adversely affects the interests of the Trust
in the related Mortgage Loan, BankUnited shall, subject to Section 2.04, within
90 days from the Custodian's notification purchase such Mortgage Loan at the
Repurchase Price; PROVIDED, HOWEVER, that if such defect relates solely to the
unavailability of the original Security Instrument or intervening assignments
thereof, or a certified copy, because the originals of such documents, or a
certified copy, have not been returned by the applicable jurisdiction,
BankUnited shall not be required to purchase such Mortgage Loan, if BankUnited
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by BankUnited in
accordance with Subsections 2.02(a) or (b) above, BankUnited shall provide the
Repurchase Price to the Trustee for deposit in the Certificate Account and shall
provide to the Trustee written notification detailing the components of the
Repurchase Price on or prior to the related Determination Date. Upon deposit of
the Repurchase Price in the Certificate Account, the Trustee shall cause the
Custodian to release to BankUnited the related Mortgage File and shall execute
and deliver or cause to be executed and delivered all instruments of transfer or
assignment, without recourse, furnished to it by BankUnited as are necessary to
vest in BankUnited title to and rights under the Mortgage Loan. Such purchase
shall be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Trustee shall amend the Mortgage
Loan Schedule to reflect such repurchase and shall promptly notify the Master
Servicer and the Rating Agency of such amendment. The obligation of BankUnited
to repurchase any Mortgage Loan as to which such a defect in a constituent
document exists shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER. (a) Countrywide hereby represents and warrants to the Trustee as of
the Closing Date that:
(i) It is a corporation duly organized, validly
existing and in good standing under the laws of the state of
its incorporation and is in good standing as a foreign
corporation in each jurisdiction where such
qualification is necessary and throughout the term of
this Agreement will remain a corporation duly
organized, validly existing and in good standing under
the laws of the state of its incorporation or any
state of reincorporation and in good standing as a foreign
corporation in each jurisdiction where such qualification is
necessary (except, in the case of foreign corporation
qualification both on the date hereof and in the future, where
the failure so to qualify would not reasonably be expected to
have a material adverse effect on the Master Servicer's
ability to enter into this Agreement or to perform its
obligations hereunder), and has the corporate power
and authority to perform its obligations under this
Agreement;
(ii) The execution and delivery of this Agreement have
been duly authorized by all requisite corporate action;
(iii) This Agreement, assuming due authorization,
execution, and delivery by the other parties hereto,
will constitute its legal, valid and binding obligation,
enforceable in accordance with its terms, except only as such
enforcement may be limited by applicable Debtor Relief Laws
and that certain equitable remedies may not be available
regardless of whether enforcement is sought in equity or at
law;
(iv) Its execution and delivery of this Agreement and
its performance and compliance with the terms of
this Agreement will not (A) violate its certificate of
incorporation or bylaws (B) to its knowledge, violate
any law or regulation, or any administrative or
judicial decree or order to which it is subject or (C)
constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement
or other instrument to which it is a party or which may be
applicable to it or any of its assets;
(v) To its best knowledge, after reasonable
investigation, it is not in default with respect to any order
or decree of any court or any order, regulation or demand of
any federal, state, municipal or governmental agency, which
default would reasonably be expected to have consequences that
would materially and adversely affect its financial condition
or operations or its performance hereunder;
(vi) It 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 to be performed by it;
(vii) The consummation of the transactions contemplated
by this Agreement are in the ordinary course of its business;
and
(viii) No litigation is pending or, to its best knowledge,
threatened against it, which could be reasonably expected to
materially and adversely affect
its entering into this Agreement or performing its
obligations under this Agreement or which would have a
material adverse effect on its financial condition.
Section 2.03A. ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Seller hereby assigns to the Trustee, on behalf of the Trust,
all of its right, title and interest in the Mortgage Loan Purchase Agreement
(but none of its obligations) insofar as such contract relates to the
representations and warranties set forth in Exhibit C hereto regarding the
Mortgage Loans (including the substitution and repurchase obligations of
BankUnited); provided that the obligations of BankUnited to substitute or
repurchase a Mortgage Loan shall be the Trustee's and the Certificateholder's
sole remedy for any breach thereof. At the request of the Trustee, the Seller
shall take such actions as may be necessary to enforce the above right, title
and interest on behalf of the Trustee and the Certificateholders or shall
execute such further documents as the Trustee may reasonably require in order to
enable the Trustee to carry out such enforcement.
(b) If the Seller, BankUnited, the Master Servicer, the Custodian or
the Trustee discovers a breach of any of the representations and warranties set
forth in Exhibit C or Section 7 of the Mortgage Loan Purchase Agreement, and
such breach existed on the date the representation and warranty was made, which
breach materially and adversely affects the value of the interests of
Certificateholders or the Trust in the related Mortgage Loan, the party
discovering the breach shall give prompt written notice of the breach to the
other parties. In determining if a breach materially and adversely affects the
value of the interests of Certificateholders or the Trust in the related
Mortgage Loan, the Trustee shall be entitled to rely upon an Officer's
Certificate of the Master Servicer or the Seller. BankUnited within 60 days of
its discovery or receipt of notice that such breach has occurred (whichever
occurs earlier), shall cure the breach in all material respects or, subject to
Section 2.04, shall purchase the Mortgage Loan or any property acquired with
respect thereto from the Trustee; PROVIDED, HOWEVER, that if there is a breach
of any representation set forth in Exhibit C and the Mortgage Loan or the
related property acquired with respect thereto has been sold, then BankUnited
shall pay, in lieu of the Repurchase Price, any excess of the Repurchase Price
over the Net Liquidation Proceeds received upon such sale. (If the Net
Liquidation Proceeds exceed the Repurchase Price, any excess shall be paid to
BankUnited to the extent not required by law to be paid to the borrower.) Any
such purchase by BankUnited shall be made by BankUnited providing to the Trustee
an amount equal to the Repurchase Price for deposit in the Certificate Account
and the Trustee, upon receipt of the Repurchase Price and of written
notification on or prior to the related Determination Date, which notification
shall detail the components of such Repurchase Price, shall cause the Custodian
to release to BankUnited the related Mortgage File and shall execute and deliver
or cause to be executed and delivered all instruments of transfer or assignment
furnished to it by BankUnited, without recourse, as are necessary to vest in
BankUnited title to and rights under the Mortgage Loan or any property acquired
with respect thereto. Such purchase shall be deemed to have occurred on the date
on which the Repurchase Price in available funds is received by the Trustee. The
Trustee shall amend the Mortgage Loan Schedule to reflect such repurchase and
shall promptly notify the Master Servicer and the Rating Agency of such
amendment. Enforcement of the obligation of BankUnited to purchase (or
substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04. SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to Sections 2.02 or 2.03A, BankUnited may, no later than the date by
which such purchase by BankUnited would otherwise be required, tender to the
Custodian on behalf of the Trustee a Substitute Mortgage Loan accompanied by a
certificate of an Officer of BankUnited that such Substitute Mortgage Loan
conforms to the requirements set forth in the definition of "Substitute Mortgage
Loan"; PROVIDED, HOWEVER, that substitution pursuant to this Section 2.04 in
lieu of purchase shall not be permitted after the termination of the two-year
period beginning on the Startup Day. The Trustee shall cause the Custodian to
examine the Mortgage File for any Substitute Mortgage Loan in the manner set
forth in Section 2.02(a) and shall notify BankUnited and the Master Servicer in
writing, within five Business Days after receipt, whether or not the documents
relating to the Substitute Mortgage Loan satisfy the requirements of the third
sentence of Subsection 2.02(a). Within two Business Days after such
notification, BankUnited shall provide to the Trustee for deposit in the
Certificate Account the amount, if any, by which the Outstanding Principal
Balance as of the next preceding Due Date of the Mortgage Loan for which
substitution is being made, after giving effect to Scheduled Principal due on
such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by BankUnited of the Repurchase Price for the purchase of a
Mortgage Loan by BankUnited. After such notification to BankUnited, and, if any
such excess exists, upon receipt of such deposit and of written notification
thereof signed by an officer of BankUnited, the Trustee shall accept such
Substitute Mortgage Loan. In the event of such a substitution, accrued interest
on the Substitute Mortgage Loan for the month in which the substitution occurs
and any Principal Prepayments made thereon during such month shall be the
property of the Trust Fund and accrued interest for such month on the Mortgage
Loan for which the substitution is made and any Principal Prepayments made
thereon during such month shall be the property of BankUnited. The Scheduled
Principal on a Substitute Mortgage Loan due on the Due Date in the month of
substitution shall be the property of BankUnited and the Scheduled Principal on
the Mortgage Loan for which the substitution is made due on such Due Date shall
be the property of the Trust Fund. Upon acceptance of the Substitute Mortgage
Loan, the Trustee shall cause the Custodian to release to BankUnited the related
Mortgage File related to any Mortgage Loan released pursuant to this Section
2.04 and shall execute and deliver or shall cause to be executed and delivered
all instruments of transfer or assignment, without recourse, in form as provided
to it as are necessary to vest in BankUnited title to and rights under any
Mortgage Loan released pursuant to this Section 2.04. BankUnited shall deliver
the documents related to the Substitute Mortgage Loan in accordance with the
provisions of Subsections 2.01(b) and 2.02(b), with the date of acceptance of
the Substitute Mortgage Loan deemed to be the Closing Date for purposes of the
time periods set forth in those Subsections. The representations and warranties
set forth in Exhibit C shall be deemed to have been made by BankUnited with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Custodian on behalf of the Trustee. The Trustee shall amend
the Mortgage Loan Schedule to reflect such substitution and shall provide a copy
of such amended Mortgage Loan Schedule to the Master Servicer, the Custodian and
the Rating Agency.
Section 2.05. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants to the Seller and the Master Servicer, as
of the Closing Date (and in the case of paragraphs (iv) and (v) below throughout
the term of the Agreement), that:
(i) The Trustee is a New York banking corporation
duly organized, validly existing and in good standing under
the laws of the State of New York with a principal place of
business in New York, New York;
(ii) Subject to the right of the Trustee to appoint a
co-trustee or separate trustee under Section 9.11
hereof in order to meet the legal requirements of a
particular jurisdiction, the Trustee has full power, authority
and legal right to execute and deliver this Agreement and to
perform its obligations under this Agreement and has taken all
necessary action to authorize the execution, delivery and
performance by it of this Agreement and the Certificates;
(iii) To the best of the Trustee's knowledge, after
reasonable investigation, the execution and delivery by the
Trustee of this Agreement and the Certificates and the
performance by the Trustee of its obligations
under this Agreement and the Certificates
will not violate any provision of the Trustee's
Certificates of Incorporation or By-Laws or any law or
regulation governing the banking or trust powers of the
Trustee or any order, writ, judgment or decree of any court,
arbitrator or governmental authority or agency applicable to
the Trustee or any of its assets. To the best of the Trustee's
knowledge, after reasonable investigation, such execution,
delivery and performance will not require the authorization,
consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action with
respect to, any governmental authority or agency regulating
the activities of a New York banking corporation. To the best
of the Trustee's knowledge, after reasonable investigation,
such execution, delivery and performance will not conflict
with, or result in a breach or violation of, any material
indenture, mortgage, deed of trust, lease or other agreement
or instrument to which the Trustee is a party or by which it
or its properties is bound;
(iv) This Agreement has been duly executed and
delivered by the Trustee. This Agreement, when executed and
delivered, will constitute the valid, legal and binding
obligation of the Trustee, enforceable against the Trustee in
accordance with its terms, except as the enforcement thereof
may be limited by applicable Debtor Relief Laws and that
certain equitable remedies may not be available regardless of
whether enforcement is sought in equity or at law; and
(v) All funds received by the Trustee and required to
be deposited in the Certificate Account pursuant to this
Agreement will be promptly so deposited.
Section 2.06. ISSUANCE OF CERTIFICATES. The Trustee acknowledges on
behalf of the Trust, the assignment to it of the Mortgage Loans and the other
assets comprising the Trust Fund which were assigned to the Trustee, on behalf
of the Trust, by the Seller and, concurrently therewith, has signed, and
countersigned and delivered to the Seller, in exchange therefor, Certificates in
such authorized denominations representing such Fractional Undivided Interests
as the Seller has requested.
Section 2.07. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER.
The Seller hereby represents and warrants to the Trustee and the Master Servicer
as follows:
(i) the Seller (a) is a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware and (b) is qualified and in
good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be
expected to have a material adverse effect on the Seller's
business as presently conducted or on the Seller's ability to
enter into this Agreement and to consummate the transactions
contemplated hereby;
(ii) the Seller has full corporate power to own its
property, to carry on its business as presently conducted and
to enter into and perform its obligations under this
Agreement;
(iii) the execution and delivery by the Seller of
this Agreement have been duly authorized by all necessary
corporate action on the part of the Seller; and 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 Seller or its
properties or the articles of incorporation or by-laws of the
Seller, except those conflicts, breaches or defaults which
would not reasonably be expected to have a material adverse
effect on the Seller's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the
Seller 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
those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(v) this Agreement has been duly executed and
delivered by the Seller and, assuming due authorization,
execution and delivery by the other parties hereto,
constitutes a valid and binding obligation of the Seller
enforceable against it in accordance with its terms (subject
to applicable bankruptcy and insolvency laws and other similar
laws affecting the enforcement of the rights of creditors
generally);
(vi) there are no actions, suits or proceedings
pending or, to the knowledge of the Seller, threatened
against the Seller, before or by any court,
administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions
contemplated by this Agreement or (ii) with respect to
any other matter which in the judgment of the Seller
will be determined adversely to the Seller and will if
determined adversely to the Seller materially and adversely
affect the Seller's ability to enter into this Agreement or
perform its obligations under this Agreement; and the Seller
is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as
to materially and adversely affect the transactions
contemplated by this Agreement; and
(vii)immediately prior to the transfer and
assignment to the Trustee, each Mortgage Note and each
Mortgage were not subject to an assignment or pledge,
and the Seller had good and marketable title to and
was the sole owner thereof and had full right to transfer and
sell such Mortgage Loan to the Trustee free and clear of any
encumbrance, equity, lien pledge, charge, claim or security
interest.
Section 2.08. THE CUSTODIAN. Notwithstanding anything to the contrary
in this Agreement, the parties hereto acknowledge that the functions of the
Trustee with respect to the acceptance, inspection, custody and release of the
Mortgage Files pursuant to Sections 2.01, 2.02, 2.03A and 2.04 shall be
performed by the Custodian pursuant to the Custodial Agreement. The fees and
expenses of the Custodian will be paid by BankUnited. The Trustee will not be
liable for any acts or omissions of the Custodian.
<PAGE>
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. MASTER SERVICER TO ASSURE SERVICING. (a) The Master
Servicer shall supervise, or take such actions as are necessary to ensure, the
servicing and administration of the Mortgage Loans and any REO Property in
accordance with this Agreement and its normal servicing practices (including
making any Servicing Advances), which generally conform to the standards of an
institution prudently servicing mortgage loans for its own account and shall
have full authority to do anything it reasonably deems appropriate or desirable
in connection with such servicing and administration. The Master Servicer may
perform its responsibilities relating to servicing through other agents or
independent contractors, but shall not thereby be released from any of its
responsibilities as hereinafter set forth. The authority of the Master Servicer,
in its capacity as master servicer, shall include, without limitation, the power
to (i) consult with and advise any Sub-Servicer regarding administration of a
related Mortgage Loan, (ii) approve any recommendation by a Sub-Servicer to
foreclose on a related Mortgage Loan, (iii) supervise the filing and collection
of insurance claims and take or cause to be taken such actions on behalf of the
insured person thereunder as shall be reasonably necessary to prevent the denial
of coverage thereunder, and (iv) effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing a related Mortgage Loan,
including the employment of attorneys, the institution of legal proceedings, the
collection of deficiency judgments, the acceptance of compromise proposals, the
filing of claims under any Primary Mortgage Insurance Policy and any other
matter pertaining to a delinquent Mortgage Loan. The authority of the Master
Servicer shall include, in addition, the power on behalf of the
Certificateholders, the Trustee or any of them to (i) execute and deliver
customary consents or waivers and other instruments and documents, (ii) consent
to transfers of any related Mortgaged Property and assumptions of the related
Mortgage Notes and Security Instruments (in the manner provided in this
Agreement) and (iii) collect any Insurance Proceeds and Liquidation Proceeds.
Without limiting the generality of the foregoing, the Master Servicer may, and
is hereby authorized, and empowered by the Trustee to, execute and deliver, on
behalf of itself, the Certificateholders, the Trustee, or any of them, any
instruments of satisfaction, cancellation, partial or full release, discharge
and all other comparable instruments, with respect to the related Mortgage
Loans, the Insurance Policies and the accounts related thereto, and the
Mortgaged Properties. The Master Servicer may exercise this power in its own
name or in the name of a Sub-Servicer.
(b) Notwithstanding the provisions of Subsection 3.01(a), the Master
Servicer shall not take any action inconsistent with the interest of the Trustee
or the Certificateholders in the Mortgage Loans or with the rights and interests
of the Trustee or the Certificateholders under this Agreement.
(c) The Trustee shall furnish the Master Servicer with any powers of
attorney and other documents in form as provided to it necessary or appropriate
to enable the Master Servicer to service and administer the related Mortgage
Loans and REO Property.
Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUB-SERVICERS. (a) The Master Servicer may enter into Sub-Servicing Agreements
with Sub-Servicers for the servicing and administration of the Mortgage Loans
and for the performance of any and all other activities of the Master Service
hereunder. Each Sub-Servicer shall be either (i) an institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall be
authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Sub-Servicer to perform its obligations
hereunder and under the Sub-Servicing Agreement, and in either case shall be a
FHLMC or FNMA approved mortgage servicer. Any Sub-Servicing Agreement entered
into by the Master Servicer shall include the provision that such Agreement may
be immediately terminated (x) with cause and without any termination fee by any
Master Servicer hereunder other than Countrywide or (y) without cause in which
case the Master Servicer shall be responsible for any termination fee or penalty
resulting therefrom. In addition, any Sub-Servicing Agreement shall provide for
servicing of the Mortgage Loans consistent with the terms of this Agreement.
With the consent of the Trustee, which consent shall not be unreasonably
withheld, the Master Servicer and the Sub-Servicers may enter into Sub-
Servicing Agreements and make amendments to the Sub-Servicing Agreements or
enter into different forms of Sub-Servicing Agreements; provided, however, that
any such amendments or different forms shall be consistent with and not violate
the provisions of this Agreement, and that no such amendment or different form
shall be made or entered into which could be reasonably expected to be
materially adverse to the interests of the Certificateholders, without the
consent of the Holders of Certificates entitled to at least 51% of the
Fractional Undivided Interests of all the Certificates in the aggregate.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each SubServicer under the related Sub-Servicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense, but
shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement only to the extent, if any, that such recovery exceeds all
amounts due in respect of the related Mortgage Loans or (ii) from a specific
recovery of costs, expenses or attorneys' fees against the party against whom
such enforcement is directed.
Section 3.03. SUCCESSOR SUB-SERVICERS. The Master Servicer shall be
entitled to terminate any Sub-Servicing Agreement that may exist in accordance
with the terms and conditions of such Sub-Servicing Agreement and without any
limitation by virtue of this Agreement; PROVIDED, HOWEVER, that upon
termination, the Master Servicer shall either act as servicer of the related
Mortgage Loan or enter into an appropriate contract with a successor
Sub-Servicer pursuant to which such successor Sub-Servicer will be bound by all
relevant terms of the related Sub-Servicing Agreement pertaining to the
servicing of such Mortgage Loan.
Section 3.04. LIABILITY OF THE MASTER SERVICER. (a) Notwithstanding
any Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer and a Sub-Servicer or
reference to actions taken through a Sub-Servicer or otherwise, the Master
Servicer shall under all circumstances remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans and any REO Property in accordance with this Agreement. The
obligations and liability of the Master Servicer shall not be diminished by
virtue of Sub-Servicing Agreements or by virtue of indemnification of the Master
Servicer by any Sub- Servicer, or any other Person. The obligations and
liability of the Master Servicer shall remain of the same nature and under the
same terms and conditions as if the Master Servicer alone were servicing and
administering the related Mortgage Loans. The Master Servicer shall, however, be
entitled to enter into indemnification agreements with any Sub-Servicer or other
Person and nothing in this Agreement shall be deemed to limit or modify such
indemnification. For the purposes of this Agreement, the Master Servicer shall
be deemed to have received any payment on a Mortgage Loan on the date the
Sub-Servicer received such payment; PROVIDED, HOWEVER, that this sentence shall
not apply to the Trustee acting as the Master Servicer; PROVIDED, FURTHER,
HOWEVER, that the foregoing provision shall not affect the obligation of the
Master Servicer if it is also the Trustee to advance amounts which are not
Nonrecoverable Advances.
(b) Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.05.
Section 3.05. ASSUMPTION OR TERMINATION OF SUB- SERVICING AGREEMENTS
BY TRUSTEE. (a) If the Trustee or its designee shall assume the master servicing
obligations of the Master Servicer in accordance with Section 8.02, the Trustee,
to the extent necessary to permit the Trustee to carry out the provisions of
Section 8.02 with respect to the Mortgage Loans, shall succeed to all of the
rights and obligations of the Master Servicer under each of the Sub-Servicing
Agreements. In such event, the Trustee or its designee as the successor master
servicer shall be deemed to have assumed all of the Master Servicer's rights and
obligations therein and to have replaced the Master Servicer as a party to such
Sub-Servicing Agreements to the same extent as if such Sub-Servicing Agreements
had been assigned to the Trustee or its designee as a successor master servicer,
except that the Trustee or its designee as a successor master servicer shall not
be deemed to have assumed any obligations or liabilities of the Master Servicer
arising prior to such assumption and the Master Servicer shall not thereby be
relieved of any liability or obligations under such Sub-Servicing Agreements.
(b) In the event that the Trustee or its designee as successor master
servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 8.02, upon the reasonable request of the Trustee or such
designee as successor master servicer, the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee,
photocopies of all documents and records, electronic or otherwise, relating to
the Sub-Servicing Agreements and the related Mortgage Loans or REO Property then
being serviced and an accounting of amounts collected and held by it, if any,
and will otherwise cooperate and use reasonable efforts in accordance with
commercially acceptable servicing practices and procedures to effect the orderly
and efficient transfer of the Sub-Servicing Agreements, or responsibilities
hereunder to the Trustee, or at its written request to such designee as
successor master servicer.
(c) Upon assuming the role of Master Servicer the Trustee may elect to
terminate any Sub-Servicing Agreements entered into by the preceding Master
Servicer, in which case any termination fee or penalty shall be paid by such
preceding Master Servicer.
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS. (a) To the extent
this Agreement provides for collections on the Mortgage Loans to be remitted to
the Trustee, the Master Servicer will make such remittances itself or will
coordinate and monitor remittances by Sub-Servicers in accordance with this
Agreement.
(b) The Master Servicer shall use reasonable efforts in accordance
with commercially acceptable servicing practices and procedures to collect or
cause to be collected all payments required under the terms and provisions of
the Mortgage Loans and shall follow, and use reasonable efforts in accordance
with commercially acceptable servicing practices and procedures to cause
Sub-Servicers to follow, collection procedures comparable to the collection
procedures of prudent mortgage lenders servicing mortgage loans for their own
account to the extent such procedures shall be consistent with this Agreement.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive or permit to be waived any late payment charge, prepayment charge,
assumption fee, or any penalty interest in connection with the prepayment of a
Mortgage Loan and (ii) suspend or reduce or permit to be suspended or reduced
regular monthly payments for a period of up to six months, or arrange or permit
an arrangement with a Mortgagor for a scheduled liquidation of delinquencies. In
the event the Master Servicer shall consent to the deferment of the due dates
for payments due on a Mortgage Note, the Master Servicer shall nonetheless make
a Monthly Advance or shall cause the related Sub-Servicer to make an advance to
the same extent as if such installment were due, owing and delinquent and had
not been deferred through liquidation of the Mortgaged Property; provided,
HOWEVER, that the obligation of the Master Servicer to make a ------- Monthly
Advance shall apply only to the extent that the Master Servicer believes, in
good faith, that such advances are not Nonrecoverable Advances.
(c) Notwithstanding anything in this Agreement to the contrary, the
Master Servicer may not make any advances of amounts coming due in the future
with respect to a Mortgage Loan and the Master Servicer shall not (unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Master Servicer, reasonably foreseeable) permit (i) any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan or (ii) any modification, waiver or amendment of any term
of any Mortgage Loan that would both (A) effect an exchange or reissuance of
such Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause the Trust
Fund to fail to qualify as a REMIC under the Code or the imposition of any tax
on "prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions. Any extension of the final maturity date of any Mortgage Loan
shall be calculated such that the Mortgage Loan will be paid in full on the
reset final maturity date if the related Mortgagor continues to make its
then-current Scheduled Payments on a timely basis.
(d) Within five Business Days after the Master Servicer has determined
that all amounts which it expects to recover from or on account of a Mortgage
Loan have been recovered and that no further Liquidation Proceeds will be
received in connection therewith, the Master Servicer shall provide to the
Trustee a certificate of a Servicing Officer that such Mortgage Loan became a
Liquidated Mortgage Loan as of the date of such determination.
Section 3.07. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS. (a) The Master Servicer shall establish and maintain or
cause the Sub-Servicers to establish and maintain, in addition to the Protected
Accounts, one or more Servicing Accounts. The Master Servicer or a Sub- Servicer
will deposit and retain therein all otherwise unapplied collections from the
Mortgagors, including amounts collected for the payment of taxes, assessments,
insurance premiums, or comparable items as agent of the Mortgagors.
(b) The deposits in the Servicing Accounts shall be held in a
Designated Depository Institution in an account designated as a "Mortgage Loan
Servicing Account," held in trust by the Master Servicer or a Sub-Servicer as
Trustee of Taxes and Insurance Custodial Account for borrowers and for
Countrywide (and its successors and assigns) acting on its own behalf and for
Countrywide as agent for holders of various pass-through securities and other
interests in mortgage loans sold by it; and agent for various mortgagors, as
their interests may appear or under such other designation as may be permitted
by a Sub- Servicing Agreement. The amount at any time credited to a Servicing
Account must be fully insured by the FDIC, or, to the extent that such deposits
exceed the limits of such insurance, such excess must be (i) transferred to
another fully insured account in another Designated Depository Institution or
(ii) if permitted by applicable law, invested in Permitted Investments held in
trust by the Master Servicer or a Sub-Servicer as described above and maturing,
or be subject to redemption or withdrawal, no later than the date on which such
funds are required to be withdrawn, and in no event later than 45 days after the
date of investment. The Master Servicer may, or may permit a Sub-Servicer to,
establish Servicing Accounts not conforming to the foregoing requirements to the
extent that such Servicing Accounts are Rating Agency Eligible Accounts.
Withdrawals of amounts from the Servicing Accounts may be made only to effect
timely payment of taxes, assessments, insurance premiums, or comparable items,
to transfer previously unapplied collections to a Protected Account, to
reimburse the Master Servicer or a Sub-Servicer for any advances made with
respect to such items, to refund to any Mortgagors any sums as may be determined
to be overages, to pay interest, if required, to Mortgagors on balances in the
Servicing Accounts, to pay earnings not required to be paid to Mortgagors to the
Master Servicer or to clear and terminate the Servicing Accounts at or any time
after the termination of this Agreement in accordance with Section 10.01.
Section 3.08. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS. The Master Servicer shall provide, and shall cause
any Sub-Servicer to provide, to the Trustee and the Seller access to the records
and documentation regarding the related Mortgage Loans and REO Property and the
servicing thereof and to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC (to which the Trustee shall also provide)
access to the documentation regarding the related Mortgage Loans required by
applicable regulations, such access being afforded without charge but only upon
reasonable prior written request and during normal business hours at the offices
of the Master Servicer, the Sub- Servicers, the Custodian or the Trustee that
are designated by these entities; PROVIDED, however, that, unless otherwise
required by law, the Trustee, the Master Servicer, the Custodian or the
Sub-Servicer shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor; and PROVIDED, FURTHER, HOWEVER, that the Trustee and the
Seller shall coordinate their requests for such access so as not to impose an
unreasonable burden on, or cause an interruption of, the business of the Master
Servicer or any Sub-Servicer. The Master Servicer, the Sub-Servicers, the
Custodian and the Trustee shall allow representatives of the above entities to
photocopy any of the records and documentation and shall provide equipment for
that purpose at a charge that covers their own actual out-of-pocket costs.
Section 3.09. MAINTENANCE OF PRIMARY MORTGAGE INSURANCE POLICIES;
COLLECTION THEREUNDER. The Master Servicer shall, or shall cause the related
Sub-Servicer to, exercise its best reasonable efforts to maintain and keep in
full force and effect each Primary Mortgage Insurance Policy by a Qualified
Insurer, or other insurer satisfactory to the Rating Agency, with respect to
each conventional Mortgage Loan as to which as of the Cut-off Date such a
Primary Mortgage Insurance Policy was in effect (or, in the case of a Substitute
Mortgage Loan, the date of substitution) and the original principal amount of
the related Mortgage Note exceeded 80% of the Original Value in an amount at
least equal to the excess of such original principal amount over 75% of such
Original Value until the principal amount of any such Mortgage Loan is reduced
below 80% of the Original Value or, based upon a new appraisal, the principal
amount of such Mortgage Loan represents less than 80% of the new appraised value
or as required by applicable law. The Master Servicer shall, or shall cause the
related Sub-Servicer to, effect the timely payment of the premium on each
Primary Mortgage Insurance Policy. The Master Servicer and the related
Sub-Servicer shall have the power to substitute for any Primary Mortgage
Insurance Policy another substantially equivalent policy issued by another
Qualified Insurer.
Section 3.10. MAINTENANCE OF HAZARD INSURANCE AND FIDELITY COVERAGE.
(a) The Master Servicer shall maintain and keep, or cause each Sub-Servicer to
maintain and keep, with respect to each Mortgage Loan and each REO Property, in
full force and effect hazard insurance (fire insurance with extended coverage)
equal to at least the lesser of the Outstanding Principal Balance of the
Mortgage Loan or the current replacement cost of the Mortgaged Property, and
containing a standard mortgagee clause; PROVIDED, HOWEVER, that the amount of
hazard insurance may not be less than the amount necessary to prevent loss due
to the application of any co-insurance provision of the related policy. Unless
applicable state law requires a higher deductible, the deductible on such hazard
insurance policy may be no more than $1000 or 1% of the applicable amount of
coverage, whichever is less.
(b) Any amounts collected by the Master Servicer or a Sub-Servicer
under any such hazard insurance policy (other than amounts to be applied to the
restoration or repair of the Mortgaged Property or amounts released to the
Mortgagor in accordance with the Master Servicer's or a Sub-Servicer's normal
servicing procedures, the terms of the Mortgage Note, the Security Instrument or
applicable law) shall be deposited initially in a Protected Account, for
transmittal to Certificate Account, subject to withdrawal pursuant to Section
4.03.
(c) Any cost incurred by a Master Servicer or a SubServicer in
maintaining any such hazard insurance policy shall not be added to the amount
owing under the Mortgage Loan for the purpose of calculating monthly
distributions to Certificateholders, notwithstanding that the terms of the
Mortgage Loan so permit. Such costs shall be recoverable by the Master Servicer
or a Sub-Servicer out of related late payments by the Mortgagor or out of
Insurance Proceeds or Liquidation Proceeds or by the Master Servicer from the
Repurchase Price, or otherwise in each case to the extent permitted by Section
4.03.
(d) No earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired with respect to a Security
Instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. Each year,
in accordance with standards and procedures required by FNMA, the Master
Servicer shall perform a review of the Mortgage Loans to determine which, if
any, of the Mortgaged Properties are located in a federally designated special
flood hazard area and for each Mortgaged Property found to be located in a
federally designated special flood hazard area, the Master Servicer shall use
its best reasonable efforts to cause with respect to the Mortgage Loans and each
REO Property, flood insurance (to the extent available and in accordance with
mortgage servicing industry practice) to be maintained. Such flood insurance
shall cover the Mortgaged Property, including all items taken into account in
arriving at the Appraised Value on which the Mortgage Loan was based, and shall
be in an amount equal to the lesser of (i) the Outstanding Principal Balance of
the related Mortgage Loan and (ii) the minimum amount required under the terms
of coverage to compensate for any damage or loss on a replacement cost basis,
but not more than the maximum amount of such insurance available for the related
Mortgaged Property under either the regular or emergency programs of the
National Flood Insurance Program (assuming that the area in which such Mortgaged
Property is located is participating in such program). Unless applicable state
law requires a higher deductible, the deductible on such flood insurance may not
exceed $1,000 or 1% of the applicable amount of coverage, whichever is less.
(e) If insurance has not been maintained complying with Subsections
3.10(a) and (d) and there shall have been a loss which would have been covered
by such insurance had it been maintained, the Master Servicer shall pay, or
cause the related Sub-Servicer to pay, the cost of any necessary repairs or to
pay to the Trust the outstanding principal amount of the related Mortgage Loan
plus any accrued interest thereon, whichever is less.
(f) The Master Servicer shall present, or cause the related
Sub-Servicer to present, if it is a permitted claimant, claims under the related
hazard insurance or flood insurance policy.
(g) The Master Servicer shall obtain and maintain at its own expense
and for the duration of this Agreement a blanket fidelity bond and an errors and
omissions insurance policy and shall cause each Sub-Servicer to obtain and
maintain an errors and omissions insurance policy covering such Sub-Servicer's
officers, employees and other persons acting on its behalf in connection with
its activities under this Agreement. The amount of coverage shall be at least
equal to the coverage maintained by the Master Servicer acceptable to FNMA or
FHLMC to service loans for it or otherwise in an amount as is commercially
available at a cost that is generally not regarded as excessive by industry
standards. The Master Servicer shall promptly notify the Trustee of any material
change in the terms of such bond or policy. The Master Servicer shall provide
annually to the Trustee a certificate of insurance that such bond and policy are
in effect. If any such bond or policy ceases to be in effect, the Master
Servicer shall, to the extent possible, give the Trustee ten days' notice prior
to any such cessation and shall use its best efforts to obtain a comparable
replacement bond or policy, as the case may be. Any amounts relating to the
Mortgage Loans collected under such bond or policy shall be remitted to the
Certificate Account to the extent that such amounts have not previously been
paid to such account.
Section 3.11. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. (a) In any
case in which the Master Servicer is notified by any Mortgagor or Sub-Servicer
that a Mortgaged Property relating to a Mortgage Loan has been or is about to be
conveyed by the Mortgagor, the Master Servicer shall enforce, or shall instruct
such Sub-Servicer to enforce, any due-on-sale clause contained in the related
Security Instrument to the extent permitted under the terms of the related
Mortgage Note and by applicable law unless the Master Servicer reasonably
believes such enforcement is likely to result in legal action by the Mortgagor.
If the Master Servicer reasonably believes that such due-on-sale clause cannot
be enforced under applicable law or if the Mortgage Loan does not contain a
due-on-sale clause, the Master Servicer is authorized, and may authorize any
Sub- Servicer, to consent to a conveyance subject to the lien of the Mortgage,
and to take or enter into an assumption agreement from or with the Person to
whom such property has been or is about to be conveyed, pursuant to which such
Person becomes liable under the related Mortgage Note and unless prohibited by
applicable state law, such Mortgagor remains liable thereon, on condition,
however, that the related Mortgage Loan shall continue to be covered (if so
covered before the Master Servicer or the related Sub-Servicer enters into such
agreement) by any applicable Primary Mortgage Insurance Policy. The Master
Servicer shall notify the Trustee, whenever possible, before the completion of
such assumption agreement, and shall forward to the Custodian on behalf of the
Trustee the original copy of such assumption agreement, which copy shall be
added by the Custodian 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. In connection with
any such assumption agreement, the interest rate on the related Mortgage Loan
shall not be changed and no other material alterations in the Mortgage Loan
shall be made unless such material alteration would not cause the REMIC to fail
to qualify as a REMIC for federal income tax purposes, as evidenced by a REMIC
Opinion. If the interest rate on an assumed Mortgage Loan is increased due to
both (i) permitted increases upon assumption under the terms of such Mortgage
Loan and (ii) all applicable restrictions hereunder being satisfied, the Master
Servicer shall, as part of the report to the Trustee and the Seller pursuant to
Section 6.07(b) hereof, provide therefor on a revised Mortgage Loan Schedule. In
any event, the Master Servicer shall advise the Trustee in writing of the entry
into of any material modification of a Mortgage Loan in connection with an
assumption and shall provide the Trustee with a copy of such REMIC Opinion. Any
fee or additional interest collected by the Master Servicer or Sub-Servicer for
consenting to any such conveyance or entering into any such assumption agreement
may be retained by the Master Servicer or the related Sub-Servicer as additional
servicing compensation.
(b) 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 conveyance by the Mortgagor of the
related Mortgaged Property or assumption of a Mortgage Loan which the Master
Servicer reasonably believes, based on prudent servicing standards, it may be
restricted by law from preventing, for any reason whatsoever or if the exercise
of such right would impair or threaten to impair any recovery under any
applicable Insurance Policy, or, in the Master Servicer's judgment, be
reasonably, likely to result in legal action by the Mortgagor or would otherwise
adversely affect the Certificateholders.
Section 3.12. REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a) The
Master Servicer shall, or shall direct the related Sub-Servicer to, foreclose
upon or otherwise comparably convert the ownership of properties securing any
Mortgage Loans that come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.06 except that the Master Servicer shall not, and shall
not direct the related SubServicer, if any, to, foreclose upon or otherwise
comparably convert a Mortgaged Property if there is evidence of environmental
hazards or toxic waste thereon and if the Master Servicer has knowledge of the
environmental hazard or toxic waste and determines it would be imprudent to do
so or not in accordance with appropriate servicing standards. The Master
Servicer can conclusively rely on results of third party inspections from
parties it reasonably believes are qualified to conduct such inspections. In
connection with such foreclosure or other conversion, the Master Servicer in
conjunction with the related Sub-Servicer, if any, shall use its best reasonable
efforts to preserve REO Property and to realize upon defaulted Mortgage Loans in
such manner as to maximize the receipt of principal and interest by the
Certificateholders, taking into account, among other things, the timing of
foreclosure and the considerations set forth in Subsection 3.12(b). The
foregoing is subject to the proviso that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it determines in good faith (i) that such
restoration or foreclosure will increase the proceeds of liquidation of the
Mortgage Loan to Certificateholders after reimbursement to itself for such
expenses and (ii) that such expenses will be recoverable to it either through
Liquidation Proceeds (respecting which it shall have priority for purposes of
reimbursements from the Certificate Account pursuant to Section 4.03) or through
Insurance Proceeds (respecting which it shall have similar priority). The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings as Servicing Advances; PROVIDED, HOWEVER, that it shall be
entitled to reimbursement thereof (as well as its normal servicing
compensation), and in respect of the Master Servicer only, to receive Excess
Liquidation Proceeds as additional servicing compensation to the extent that
transfers or withdrawals from the Certificate Account with respect thereto are
permitted under Section 4.03. Any income from or other funds (net of any income
taxes) generated by REO Property shall be deemed for purposes of this Agreement
to be Insurance Proceeds. Any REO Property acquired shall be acquired in the
name of the Trustee, as trustee for the benefit of the Certificateholders.
(b) The Trust Fund shall not acquire any real property (or any
personal property incident to such real property) except in connection with a
default or imminent default of a Mortgage Loan. In the event that the Trust Fund
acquires any real property (or personal property incident to such real property)
in connection with a default or imminent default of a Mortgage Loan, such
property shall be disposed of by the Trust Fund within 3 years after the end of
the taxable year of its acquisition by the Trust Fund unless the Trustee shall
have received a REMIC Opinion with respect to such longer retention or the
Master Servicer applies for and receives an extension of the three-year period
under Section 856(e)(3) of the Code, in which case such three year period will
be extended by the period set forth in such REMIC Opinion or approved
application, as the case may be. The Trustee shall have no obligation to pay for
such REMIC Opinion.
Section 3.13. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES. (a)
Upon payment in full of any Mortgage Loan 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 will immediately notify the Custodian and
the Trustee by a certification signed by a Servicing Officer in the Form of
Exhibit D (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Certificate Account have been or will be so
deposited therein) and shall request delivery to the Master Servicer or a
Sub-Servicer, as the case may be, of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall cause the Custodian to release
promptly the related Mortgage File to the Master Servicer or a Sub-Servicer and
shall execute and deliver or cause to be executed and delivered to the Master
Servicer, without recourse, the request for reconveyance, deed of reconveyance
or release or satisfaction of mortgage or such instrument releasing the lien of
the Security Instrument (furnished by the Master Servicer), together with the
Mortgage Note with written evidence of cancellation thereon. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan or collection under a Required Insurance
Policy, the Master Servicer shall deliver to the Trustee and the Custodian a
Request for Release signed by a Servicing Officer on behalf of the Master
Servicer in substantially the form attached as Exhibit D hereto. Upon receipt of
the Request for Release, the Trustee shall cause the Custodian to deliver the
Mortgage File or any document therein to the Master Servicer or Sub-Servicer, as
the case may be. Any such Mortgage file or Document shall be held by the Master
Servicer as agent for the Trustee and the Custodian on behalf of the Trust.
(c) The Master Servicer shall cause each Mortgage File or any document
therein released pursuant to Subsection 3.13(b) to be returned to the Custodian
when the need therefor no longer exists unless the Mortgage Loan has become a
Liquidated Mortgage Loan and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Certificate Account or such Mortgage File is
being used to pursue foreclosure or other legal proceedings. Prior to return of
a Mortgage File or any document to the Custodian, the Master Servicer, the
related Insurer or Sub-Servicer to whom such file or document was delivered
shall retain such file or document in its respective control unless the Mortgage
File or such document has been delivered to an attorney, or to a public trustee
or other public official as required by law, to initiate or pursue legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially. If a Mortgage Loan becomes a Liquidated Mortgage
Loan, the Master Servicer shall deliver the Request for Release with respect
thereto to the Trustee and the Custodian upon deposit of the related Liquidation
Proceeds in the Certificate Account.
(d) The Trustee shall execute and deliver to the Master Servicer any
court pleadings, requests for trustee's sale or other documents necessary or
desirable to (i) the foreclosure or trustee's sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or Security Instrument or otherwise available at law or
equity. Together with such documents or pleadings the Master Servicer shall
deliver to the Trustee a certificate of a Servicing Officer in which it requests
the Trustee to execute the pleadings or documents. The certificate shall certify
and explain the reasons for which the pleadings or documents are required. It
shall further certify that the Trustee's execution and delivery of the pleadings
or documents will not invalidate any insurance coverage under the Required
Insurance Policies or invalidate or otherwise affect the lien of the Security
Instrument, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale.
Section 3.14. SERVICING AND MASTER SERVICING COMPENSATION. (a) As
compensation for its activities hereunder, the Master Servicer shall be entitled
to receive the Master Servicing Fee. For each full monthly period and a Mortgage
Loan, the Master Servicing Fee shall be equal to one-twelfth of the product of
(a) the Master Servicing Fee Rate and (b) the outstanding principal balance of
such Mortgage Loan. Such fee shall be payable monthly, computed on the basis of
the same principal amount and period respecting which any related interest
payment on a Mortgage Loan is computed. The obligation of the Trust to pay the
Master Servicing Fee is limited to, and the Master Servicing Fee is payable
solely from, the interest portion (including recoveries with respect to interest
from Liquidation Proceeds, to the extent permitted by Subsection 4.03(a)) of
such Monthly Payment collected by the Master Servicer, or as otherwise provided
under Subsection 4.03(a) or Section 3.12. The Master Servicing Fee shall be
payable to the Master Servicer through REO Disposition in accordance with
Subsection 3.12 hereof which Master Servicing Fee shall be based upon the
outstanding principal balance of the related Mortgage Loan at the time of
foreclosure as reduced by any income or proceeds received by the Trust in
respect of such REO Property and applied to reduce the outstanding principal
balance of the foreclosed Mortgage Loan.
(b) The Master Servicer may retain additional servicing compensation
in the form of prepayment charges, if any, assumption fees, tax service fees,
fees for statement of account or payoff, late payment charges, interest on
amounts deposited in any Accounts (other than the Certificate Account) or
Permitted Investments of such amounts (other than those on amounts in the
Certificate Account), or otherwise. The Master Servicer is also entitled to
receive Excess Liquidation Proceeds as additional servicing compensation. The
Master Servicer shall be required to pay all expenses it incurs in connection
with servicing activities under this Agreement, including fees and expenses to
Sub-Servicers, and shall not be entitled to reimbursement except as provided in
this Agreement. Expenses to be paid by the Master Servicer under this Subsection
3.14(b) shall include payment of the expenses of the accountants retained
pursuant to Section 3.16.
Section 3.15. ANNUAL STATEMENT OF COMPLIANCE. Within 120 days after
the last day of February of each year in the case of the initial Master Servicer
or the last day of the fiscal year of any successor master servicer, commencing
in 1999, the Master Servicer at its own expense, shall deliver to the Trustee,
with a copy to the Rating Agency, an Officer's Certificate stating, as to the
signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding fiscal year or applicable portion thereof and of
performance under this Agreement has been made under such officer's supervision,
(ii) to the best of such officer's 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 any such obligation,
specifying each such default known to such officer and the nature and status
thereof including the steps being taken by the Master Servicer to remedy such
default; (iii) a review of the activities of each Sub-Servicer, if any, during
the Sub-Servicer's most recently ended fiscal year on or prior to such end of
February or other fiscal year and its performance under its Sub-Servicing
Agreement has been made under such Officer's supervision; and (iv) to the best
of the Servicing Officer's knowledge, based on his review and the certification
of an officer of the Sub-Servicer (unless the Servicing Officer has reason to
believe that reliance on such certification is not justified), either each
Sub-Servicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement and its Sub-Servicing Agreement in all material
respects throughout the year, or, if there has been a default in performance or
fulfillment of any such duties, responsibilities or obligations, specifying the
nature and status of each such default known to the Servicing Officer. Copies of
such statements shall be provided by the Master Servicer to the
Certificateholders upon request or by the Trustee at the expense of the Master
Servicer should the Master Servicer fail to provide such copies.
Section 3.16. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
(a) Within 120 days after the last day of February of each year in the case of
the initial Master Servicer or the last day of the fiscal year of any successor
master servicer, commencing in 1999, the Master Servicer, at its expense, shall
cause a firm of Independent public accountants who are members of the American
Institute of Certified Public Accountants to furnish a statement to the Master
Servicer, which will be provided to the Trustee and the Rating Agency to the
effect that, in connection with the firm's examination of the Master Servicer's
financial statements as of the end of such fiscal year, nothing came to their
attention that indicated that the Master Servicer was not in compliance with
Sections 3.07, 3.15, 4.01, 4.02, 4.03 and 4.04 except for (i) such exceptions as
such firm believes to be immaterial and (ii) such other exceptions as are set
forth in such statement. In connection with the engagement to deliver any such
report (or other accountants' report or certificate hereunder) the Trustee is
authorized and directed to enter into such agreed-upon-procedures or engagement
letter as such accountants may request and shall be indemnified hereunder in so
doing.
(b) Within 120 days after the last day of the fiscal year of each
Sub-Servicer or a Master Servicer other than Countrywide or the Trustee,
commencing in 1998, the Master Servicer, at its expense, shall furnish to the
Trustee the most recently available letter or letters from one or more firms of
Independent certified public accountants who are members of the American
Institute of Certified Public Accountants reporting the results of such firm's
examination of the servicing procedures of any Sub-Servicer and any Master
Servicer (other than Countrywide or the Trustee) in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers, or
such other program as may be certified as being comparable by such accountants.
Section 3.17. REMIC-RELATED COVENANTS. For as long as the REMIC Assets
shall exist, the Master Servicer and the Trustee shall act in accordance
herewith to assure continuing treatment of the REMIC Assets as a REMIC, and the
Trustee shall comply with any directions of the Master Servicer to assure such
continuing treatment. In particular, the Trustee shall not (a) sell or permit
the sale of all or any portion of the Mortgage Loans or of any Permitted
Investment unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to Section 2.04, accept any contribution to the REMIC
Assets after the Startup Day without receipt of a REMIC Opinion.
Section 3.18. ADDITIONAL INFORMATION. The Master Servicer agrees to
furnish the Seller from time to time upon reasonable request, such further
information, reports and financial statements as the Seller deems appropriate to
prepare and file all necessary reports with the Securities and Exchange
Commission.
Section 3.19. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS. Each of
the Master Servicer and the Holder of the Class R Certificate shall have the
right, but not the obligation, to purchase any defaulted Mortgage Loan for a
price equal to the Repurchase Price therefor; provided that if such Holder
wishes to purchase any such Defaulted Mortgage Loan, such Holder shall deliver a
written notice to the Master Servicer which identifies the Defaulted Mortgage
Loan and offers to the Master Servicer the right to purchase such Defaulted
Mortgage Loan. The Master Servicer shall have thirty (30) days from its receipt
of such notice to send a written notice to such Holder that the Master Servicer
elects to purchase such Defaulted Mortgage Loan. If the Master Servicer does not
elect to purchase such Defaulted Mortgage Loan and the Holder of the Class R
Certificate makes such purchase, the Holder of the Class R Certificate also will
be obligated to pay the Master Servicer a fee equal to 1% of the Outstanding
Principal Balance of the purchased Defaulted Mortgage Loan in addition to the
Repurchase price of such Defaulted Mortgage Loan. Any such purchase shall be
accomplished as provided in Subsection 2.02(c) hereof, but by the Holder of the
Class R Certificate or the Master Servicer in lieu of BankUnited.
Section 3.20. OPTIONAL PURCHASE OF CONVERTED MORTGAGE LOANS. In the
event a Mortgage Loan becomes a Converted Mortgage Loan, the Master Servicer
shall purchase such Converted Mortgage Loan within 30 days of the effectiveness
of such conversion for a price equal to the Repurchase Price therefor; provided,
however, no interest for the month of repurchase shall be due and payable if a
Converted Mortgage Loan is repurchased on the first day of a month. Any such
purchase shall be accomplished as provided in Subsection 2.02(c) hereof, but by
the Master Servicer in lieu of BankUnited.
<PAGE>
ARTICLE IV
Accounts
Section 4.01. PROTECTED ACCOUNTS. (a) The Master Servicer shall
establish and maintain if it is servicing the Mortgage Loans and shall require
each Sub-Servicer to establish and maintain a Protected Account complying with
the requirements set forth in this Section 4.01, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 2 Business Days of receipt all collections of
principal and interest on any Mortgage Loan and with respect to any REO Property
received by the Master Servicer, or a Sub-Servicer, including Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances made from
the Sub-Servicer's own funds (less servicing compensation as permitted by
Subsection 3.14(a)) and all other amounts to be deposited in the Protected
Accounts. The Master Servicer is hereby authorized to make withdrawals from and
deposits to the related Protected Accounts for purposes required or permitted by
this Agreement. All Protected Accounts shall be held in a Designated Depository
Institution and segregated on the books of such institution. The amount at any
time credited to a Protected Account shall be fully insured by the FDIC or, to
the extent that such balance exceeds the lesser of $100,000 or the limits of
such insurance, such excess must be transferred to the Certificate Account or
invested in Permitted Investments or may be deposited in a Rating Agency
Eligible Account including an account at the Federal Home Loan Bank of Atlanta.
Amounts on deposit in a Protected Account may be invested in Permitted
Investments, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Certificate Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the Master
Servicer or the related Sub-Servicer as additional compensation for its
obligations under this Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the Master Servicer or the related Sub- Servicer.
The Master Servicer shall itself, or shall cause the related Sub-Servicer to,
deposit the amount of any such loss in the related Protected Account within two
Business Days of receipt of notification of such loss but not later than the
second Business Day prior to the Distribution Date on which the moneys so
invested are required to be distributed to the Certificateholders. The Master
Servicer may, and the Master Servicer may permit a Sub-Servicer to, transfer
funds to other accounts (which shall for purposes hereof be deemed to be
Protected Accounts) or to establish Protected Accounts not conforming to the
foregoing requirements, to the extent that such other accounts or Protected
Accounts are Rating Agency Eligible Accounts.
(b) On or before each Funds Transfer Date, the Master Servicer shall
withdraw or shall cause to be withdrawn from the Protected Accounts and shall
immediately deposit or cause to be deposited in the Certificate Account amounts
representing the following collections and payments (other than with respect to
principal of or interest on the Mortgage Loans due on or before the Cut-off
Date):
(i) Scheduled Payments on the Mortgage Loans received or any
portion thereof advanced by the Master Servicer or Sub-Servicers which
were due on or before the related Due Date, net of the amount thereof
comprising the Master Servicing Fee due the Master Servicer;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Master Servicer or Sub- Servicers with respect to such
Mortgage Loans in the related Prepayment Period, with interest to the
date of prepayment or liquidation, net of the amount thereof
comprising the Master Servicing Fee due the Master Servicer;
(iii) Partial prepayments of principal received by the Master
Servicer or Sub-Servicers for such Mortgage Loans in the related
Prepayment Period; and
(iv) Any amount to be used as a Certificate Account Advance.
(c) Withdrawals may be made from a Protected Account only to make
remittances as provided in Subsections 4.01(b) or 4.03(c); to reimburse the
Master Servicer or a Sub-Servicer for amounts provided in Subsections
4.03(a)(ii), (iii), (iv), (v), (vii), (viii), (ix), (x) and (xii); to remove
amounts deposited in error; to remove fees, charges or other such amounts
deposited on a temporary basis; or to clear and terminate the account at the
termination of this Agreement in accordance with Section 10.01.
(d) The Master Servicer shall deliver to the Trustee on or prior to
the Determination Date in each month a statement from the institution at which
each Protected Account is maintained showing deposits and withdrawals during the
prior month.
Section 4.02. CERTIFICATE ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Certificate Account as a segregated non-interest bearing trust account or
accounts. The Trustee will deposit in the Certificate Account as received the
following amounts:
(i) Any amounts withdrawn from a Protected Account pursuant to
Subsection 4.01(b);
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Liquidation Proceeds received by
the Master Servicer which were not deposited in a Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by BankUnited pursuant to Sections 2.02 or 2.03, by Holder
of the Class R Certificate or the Master Servicer pursuant to Section
3.19 or by the Master Servicer pursuant to Section 3.20, any amounts
which are to be treated pursuant to Section 2.04 as the payment of
such a Repurchase Price, and all proceeds of any Mortgage Loans or
property acquired with respect thereto repurchased by the Master
Servicer or its designee pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to losses
on Permitted Investments pursuant to Subsection 4.02(d) below; and
(vi) Any other amounts received by the Master Servicer or the
Trustee and required to be deposited in the Certificate Account
pursuant to this Agreement.
(b) All amounts (other than income earned on Permitted Investments)
deposited to the Certificate Account shall be held by the Trustee in the name of
the Trustee in trust for the benefit of the Certificateholders and in accordance
with the terms and provisions of this Agreement, subject to the right of the
Master Servicer to require the Trustee to make withdrawals therefrom as provided
herein. The foregoing requirements for crediting the Certificate Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of (i) prepayment or late
payment charges or assumption, tax service, statement account or payoff,
substitution, satisfaction, release and other like fees and charges and (ii) the
items enumerated in Subsections 4.03(a)(ii), (iii), (iv), (v), (vii), (viii),
(ix), (x) and (xii) need not be credited by the Master Servicer or the related
Sub- Servicer to the Certificate Account and may be retained by the Master
Servicer or the related Sub-Servicer as servicing compensation. In the event
that the Master Servicer shall deposit or cause to be deposited to the
Certificate Account any amount not required to be credited thereto, the Trustee,
upon receipt of a written request therefor signed by a Servicing Officer of the
Master Servicer, shall promptly transfer such amount to the Master Servicer, any
provision herein to the contrary notwithstanding.
(c) The Certificate Account shall constitute a segregated Rating
Agency Eligible Account of the Trust Fund segregated on the books of the Trustee
and held by the Trustee in trust. The amount at any time credited to the
Certificate Account shall be (i) fully insured by the FDIC or the Bank Insurance
Fund to the maximum coverage provided thereby, (ii) invested, in the name of the
Trustee, or its nominee, for the benefit of the Trustee, in such Permitted
Investments as the Trustee shall determine, or (iii) from the maturity of any
Permitted Investment on the Business Day prior to a Distribution Date through
the distribution of such funds on such Distribution Date or at such other time
and in such amount as, in the judgment of the Master Servicer, cannot reasonably
be invested in accordance with items (i) or (ii) of this sentence, held by the
Trustee in such Certificate Account. All Permitted Investments shall mature or
be subject to redemption or withdrawal on or before, and shall be held until,
the next succeeding Distribution Date if the obligor for such Permitted
Investment is the Trustee or, if such obligor is any other Person, the Business
Day preceding such Distribution Date.
(d) The income earned from Permitted Investments made pursuant to this
Section 4.02 shall be paid to the Trustee as its fee for its obligations under
this Agreement, and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Trustee. The amount of any such loss shall be deposited by the
Trustee in the Certificate Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.
Section 4.03. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer, make or cause to be made such withdrawals or transfers from the
Certificate Account as the Master Servicer has designated for such transfer or
withdrawal as specified in a certificate signed by a Servicing Officer (upon
which the Trustee may conclusively rely) for the following purposes (limited in
the case of amounts due the Master Servicer to those not withdrawn from the
Protected Account in accordance with the terms of this Agreement):
(i) [intentionally omitted];
(ii) to reimburse the Master Servicer or any SubServicer for any
Monthly Advance or Servicing Advance of its own funds or any advance
of such Sub-Servicer's own funds, the right of the Master Servicer or
a SubServicer to reimbursement pursuant to this subclause (ii) being
limited to amounts received on a particular Mortgage Loan (including,
for this purpose, the Repurchase Price therefor, Insurance Proceeds
and Liquidation Proceeds) which represent late payments or recoveries
of the principal of or interest on such Mortgage Loan respecting which
such Monthly Advance or Servicing Advance was made;
(iii) to reimburse the Master Servicer or any SubServicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or such
SubServicer pursuant to Section 3.12 in good faith in connection with
the restoration of the related Mortgaged Property which was damaged by
an Uninsured Cause or in connection with the liquidation of such
Mortgage Loan;
(iv) to reimburse the Master Servicer or any SubServicer from
Insurance Proceeds relating to a particular Mortgage Loan for Insured
Expenses incurred with respect to such Mortgage Loan and to reimburse
the Master Servicer or such Sub-Servicer from Liquidation Proceeds
from a particular Mortgage Loan for Liquidation Expenses incurred with
respect to such Mortgage Loan; PROVIDED THAT the Master Servicer shall
not be entitled to reimbursement for Liquidation Expenses with respect
to a Mortgage Loan to the extent that (i) any amounts with respect to
such Mortgage Loan were paid as Excess Liquidation Proceeds pursuant
to clause (xii) of this Subsection 4.03(a) to the Master Servicer; and
(ii) such Liquidation Expenses were not included in the computation of
such Excess Liquidation Proceeds;
(v) to pay the Master Servicer or any SubServicer (payment to any
Sub-Servicer to be subject to prior payment to the Master Servicer of
an amount equal to the Master Servicing Fee), as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with
the liquidation of any Mortgage Loan, the amount which it or such
Sub-Servicer would have been entitled to receive under subclause (x)
of this Subsection 4.03(a) as servicing compensation on account of
each defaulted scheduled payment on such Mortgage Loan if paid in a
timely manner by the related Mortgagor, but only to the extent that
the aggregate of Liquidation Proceeds and Insurance Proceeds with
respect to such Mortgage Loan, after any reimbursement to the Master
Servicer or any Sub-Servicer, pursuant to subclauses (ii), (iii), (iv)
and (vii) of this Subsection 4.03(a), exceeds the Outstanding
Principal Balance of such Mortgage Loan plus accrued and unpaid
interest thereon at the related Mortgage Interest Rate less the Master
Servicing Fee Rate to but not including the date of payment;
(vi) to pay the Master Servicer or any SubServicer (payment to
any Sub-Servicer to be subject to prior payment to the Master Servicer
of the portion of the Master Servicing Fee which the Master Servicer
is entitled to retain as evidenced in writing to the Trustee by the
Master Servicer, as appropriate) from the Repurchase Price for any
Mortgage Loan, the amount which it or such Sub-Servicer would have
been entitled to receive under subclause (x) of this Subsection
4.03(a) as servicing compensation, but only to the extent that the
Repurchase Price with respect to such Mortgage Loan after any
reimbursement to the related Master Servicer and Sub-Servicer pursuant
to subclauses (ii) and (vii) of this Subsection 4.03(a) exceeds the
Outstanding Principal Balance of such Mortgage Loan plus accrued and
unpaid interest thereon at the related Mortgage Interest Rate less the
Master Servicing Fee Rate through the last day of the month of
repurchase;
(vii) to reimburse the Master Servicer or any SubServicer for
Servicing Advances pursuant to Sections 3.07, 3.09 and 3.10, the right
to reimbursement pursuant to this subclause being limited to amounts
received on the related Mortgage Loan (including, for this purpose,
the Repurchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of the payments for which
such advances were made;
(viii) to pay the purchaser thereof, with respect to each
Mortgage Loan that has been purchased pursuant to Section 2.02, 2.03A,
2.04 or 10.01, all amounts received thereon, representing recoveries
of principal that reduce the Outstanding Principal Balance of the
related Mortgage Loan below the Outstanding Principal Balance used in
calculating the Repurchase Price or representing interest included in
the calculation of the Repurchase Price or accrued after the end of
the month during which such repurchase occurs;
(ix) to reimburse the Master Servicer or any SubServicer for any
Monthly Advance or Servicing Advance, after a Realized Loss has been
allocated with respect to the related Mortgage Loan if the Monthly
Advance or Servicing Advance has not been reimbursed pursuant to
clauses (ii) and (vii);
(x) to pay the Master Servicer and any Sub- Servicer servicing
compensation as set forth in Section 3.14;
(xi) to reimburse the Trustee and the Master Servicer for
expenses, costs and liabilities incurred by and reimbursable to it
pursuant to Section 7.03 and 7.04(d), respectively;
(xii) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds;
(xiii) to clear and terminate the Certificate Account pursuant to
Section 10.01; and
(xiv) to remove amounts deposited in error.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Certificate Account pursuant to subclauses (i) through
(vii), inclusive, and (ix) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Certificate Account under Section
4.02(b).
(b) On each Distribution Date, the Trustee shall make the following
payments in the priority set forth from the funds in the Certificate Account:
(i) First, the Trustee's Fees shall be paid to the Trustee; and
(ii) Second, the amount distributable to the Holders of the
Certificates shall be payable in accordance with Section 6.01.
(c) Notwithstanding the provisions of this Section 4.03, the Master
Servicer may, but is not required to, allow the Sub-Servicers to deduct from
amounts received by them or from the related Protected Account, prior to deposit
in the Certificate Account, any portion to which such Sub-Servicers are entitled
as servicing compensation (including income on Permitted Investments) or
reimbursement of any reimbursable advances made by such Sub-Servicers.
<PAGE>
ARTICLE V
Certificates
Section 5.01. CERTIFICATES. (a) The Depository, the Seller and the
Trustee have entered into a Depository Agreement dated as of March 11, 1998 (the
"Depository Agreement"). Except for the Residual Certificate, the Individual
Certificates and as provided in Subsection 5.01(b), the Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of such Certificates may not be transferred by the
Trustee except to a successor to the Depository; (ii) ownership and transfers of
registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iii) the Depository
may collect its usual and customary fees, charges and expenses from its
Depository Participants; (iv) the Trustee shall deal with the Depository as
representative of such Certificate Owners of the respective Class of
Certificates for purposes of exercising the rights of Certificateholders under
this Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (v) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants.
The Class B-2 and Class R Certificates are initially Physical
Certificates. If at any time the Holders of all of the Certificates of one or
more such Classes request that the Trustee cause such Class to become Global
Certificates, the Trustee and the Seller will take such action as may be
reasonably required to cause the Depository to accept such Class or Classes for
trading.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Seller advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Trustee or the Seller is unable to
locate a qualified successor within 30 days or (ii) the Seller at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue such definitive Certificates. Neither the Seller, the
Master Servicer 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.
(c) [Reserved]
(d) The Classes of the Certificates shall have the following
designations, initial principal amounts and PassThrough Rates:
DESIGNATION INITIAL PRINCIPAL PASS-THROUGH RATE
A $332,071,600.00 (1)
B-1 $ 5,257,000.00 (1)
B-2 $ 13,142,815.00 (1)
R $ 100.00 (1)
(1) During each Interest Accrual Period the Class A, Class B-1, Class B-2 and
Class R Certificates will each bear interest at a variable Pass-Through Rate
equal to the weighted average of the Net Rates of the Mortgage Loans.
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated, on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate determined as provided above and the
Current Principal Amount of such Class applicable to such Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibit A-1 and A-2. On original issuance, the Trustee shall sign, countersign
and shall deliver them at the direction of the Seller. Pending the preparation
of definitive Certificates of any Class, the Trustee may sign and countersign
temporary Certificates that are printed, lithographed or typewritten, in
authorized denominations for Certificates of such Class, substantially of the
tenor of the definitive Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers or authorized signatories executing such Certificates may
determine, as evidenced by their execution of such Certificates. If temporary
Certificates are issued, the Seller 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 of the
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Certificates, the Trustee shall sign and countersign and
deliver in exchange therefor a like aggregate principal amount, in authorized
denominations for such Class, of definitive Certificates of the same Class.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits as definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of $25,000 and
in each case increments of $1.00 in excess thereof, except that one Certificate
of each such Class may be issued in a different amount so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Current Principal Amount of such Class on the Closing Date. On the Closing Date,
the Trustee shall execute and countersign Physical Certificates all in an
aggregate principal amount that shall equal the Current Principal Amount of such
Class on the Closing Date. The Class B-2 Certificates will be issued in
certificated fully-registered form in minimum denominations of $25,000 and
increments of $1.00 in excess thereof, except that one Certificate of each such
Class may be issued in a different amount so that the sum of the denominations
of all outstanding Certificates of such Class shall equal the Current Principal
Amount of such Class on the Closing Date. The Class R Certificate shall be
issued in certificated fully-registered form in the denomination of $100. Each
Class of Global Certificates, if any, shall be issued in fully registered form
in minimum dollar denominations of $25,000 and integral multiples of $1.00 in
excess thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign (i) in the case of each Class of Senior Certificates and the Class
B-1 Certificates, the Certificate in the entire Current Principal Amount of the
Class and (ii) in the case of the Class B-2 Certificates, Individual
Certificates all in an aggregate principal amount that shall equal the Current
Principal Amount of each such Class on the Closing Date. The Certificates
referred to in clause (i) and if at any time there are to be Global
Certificates, the Global Certificates shall be delivered by the Seller to the
Depository or pursuant to the Depository's instructions, shall be delivered by
the Seller on behalf of the Depository to and deposited with the DTC Custodian.
The Trustee shall sign the Certificates by facsimile or manual signature and
countersign them by manual signature on behalf of the Trustee by one or more
authorized signatories, each of whom shall be Responsible Officers of the
Trustee or its agent. A Certificate bearing the manual and facsimile signatures
of individuals who were the authorized signatories of the Trustee or its agent
at the time of issuance shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(i) The Closing Date is hereby designated as the "startup" day of the
REMIC Assets within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, the REMIC Assets shall have a tax
year that is a calendar year and shall report income on an accrual basis.
(k) The Trustee shall cause the REMIC Assets to elect to be treated as
a REMIC under Section 860D of the Code. Any inconsistencies or ambiguities in
this Agreement or in the administration of any Trust established hereby shall be
resolved in a manner that preserves the validity of such elections.
(l) The Assumed Final Distribution Date for the Certificates is
February 25, 2028.
Section 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain at its Corporate Trust Office a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual 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 in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee
who has provided the Trustee with a Rule 144A Certificate or
comparable evidence as to its QIB status.
(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing
that the Certificate is being transferred to an Institutional
Accredited Investor; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall
be fully protected in so doing), provided that, if based upon an
Opinion of Counsel to the effect that the delivery of (x) and (y)
above are not sufficient to confirm that the proposed transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and
other applicable laws, the Trustee shall as a condition of the
registration of any such transfer require the transferor to furnish
such other certifications, legal opinions or other information prior
to registering the transfer of an Individual Certificate as shall be
set forth in such Opinion of Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Subsection 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor,
such transferee shall be required to take delivery in the form of an
Individual Certificate or Certificates and the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in
the form of an Individual Certificate or Certificates of such Class,
except as set forth in clause (i) above, the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class being
transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Trustee
shall register such transfer if the transferee has provided the
Trustee with a Rule 144A Certificate or comparable evidence as to its
QIB status.
(iv) No restrictions shall apply with respect to the transfer or
registration of transfer of a beneficial interest in the Global
Certificate of a Class to a transferee that takes delivery in the form
of a beneficial interest in the Global Certificate of such Class;
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate
as are sufficient to establish that it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial
interest in a Global Certificate of a Class for an Individual Certificate or
Certificates of such Class, an exchange of an Individual Certificate or
Certificates of a Class for a beneficial interest in the Global Certificate of
such Class and an exchange of an Individual Certificate or Certificates of a
Class for another Individual Certificate or Certificates of such Class (in each
case, whether or not such exchange is made in anticipation of subsequent
transfer, and, in the case of the Global Certificate of such Class, so long as
such Certificate is outstanding and is held by or on behalf of the Depository)
may be made only in accordance with this Subsection 5.02(e) and in accordance
with the rules of the Depository:
(i) A holder of a beneficial interest in a Global Certificate of
a Class may at any time exchange such beneficial interest for an
Individual Certificate or Certificates of such Class.
(ii) A holder of an Individual Certificate or Certificates of a
Class may exchange such Certificate or Certificates for a beneficial
interest in the Global Certificate of such Class if such holder
furnishes to the Trustee a Rule 144A Certificate or comparable
evidence as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(f)(i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global
Certificate of such Class as provided herein, the Trustee shall cancel
such Individual Certificate and shall (or shall request the Depository
to) endorse on the schedule affixed to the applicable Global
Certificate (or on a continuation of such schedule affixed to the
Global Certificate and made a part thereof) or otherwise make in its
books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the
Global Certificate equal to the certificate balance of such Individual
Certificate exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual
Certificate of such Class as provided herein, the Trustee shall (or
shall request the Depository to) endorse on the schedule affixed to
such Global Certificate (or on a continuation of such schedule affixed
to such Global Certificate and made a part thereof) or otherwise make
in its books and records an appropriate notation evidencing the date
of such exchange or transfer and a decrease in the certificate balance
of such Global Certificate equal to the certificate balance of such
Individual Certificate issued in exchange therefor or upon transfer
thereof.
(g) The Securities Legend shall be placed on any Individual
Certificate issued in exchange for or upon transfer of another Individual
Certificate or of a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination or any integral multiple of $1.00 in
excess thereof) by surrendering such Certificate at the Corporate Trust Office,
or at the office of any transfer agent, together with an executed instrument of
assignment and transfer satisfactory in form and substance to the Trustee in the
case of transfer and a written request for exchange in the case of exchange. The
holder of a beneficial interest in a Global Certificate may, subject to the
rules and procedures of the Depository, cause the Depository (or its nominee) to
notify the Trustee in writing of a request for transfer or exchange of such
beneficial interest for an Individual Certificate or Certificates. Following a
proper request for transfer or exchange, the Trustee shall, within five Business
Days of such request made at such Corporate Trust Office, sign, countersign and
deliver at such Corporate Trust Office, to the transferee (in the case of
transfer) or holder (in the case of exchange) or send by first class mail at the
risk of the transferee (in the case of transfer) or holder (in the case of
exchange) to such address as the transferee or holder, as applicable, may
request, an Individual Certificate or Certificates, as the case may require, for
a like aggregate Fractional Undivided Interest and in such authorized
denomination or denominations as may be requested. The presentation for transfer
or exchange of any Individual Certificate shall not be valid unless made at the
Corporate Trust Office by the registered holder in person, or by a duly
authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency; PROVIDED, HOWEVER, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
$25,000 with respect to the Certificates other than the Class R Certificate,
which shall be $100, or (ii) is acceptable to the Seller as indicated to the
Trustee in writing. Whenever any Certificates are so surrendered for exchange,
the Trustee shall sign and countersign and the Trustee shall deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer
or exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
(m) The following legend shall be placed on each Class of
Certificates, whether upon original issuance or upon issuance of any other
Certificate of any such Class in exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY A
TRANSFEREE UNLESS THE PROPOSED TRANSFEREE CERTIFIES TO THE TRUSTEE
THAT IT IS NOT ACQUIRING SUCH CERTIFICATES DIRECTLY OR INDIRECTLY FOR,
ON BEHALF OF OR WITH THE ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR GLOBAL
CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION TO SUCH EFFECT
BY OR ON BEHALF OF A HOLDER OF A CERTIFICATE IN PHYSICAL FORM.
Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. (a)
If (i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Seller, the Master Servicer, the
Trustee and any agent of the Seller, the Master Servicer or the Trustee may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
6.01 and for all other purposes whatsoever. Neither the Seller, the Master
Servicer, the Trustee nor any agent of the Seller, the Master Servicer or the
Trustee shall be affected by notice to the contrary. No Certificate shall be
deemed duly presented for a transfer effective on any Record Date unless the
Certificate to be transferred is presented no later than the close of business
on the fifth Business Day preceding such Record Date.
Section 5.05. TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATE. (a) The
Residual Certificate, or interests therein, may not be transferred without the
prior express written consent of the Tax Matters Person and the Seller. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Seller and the Trustee with an affidavit that the proposed
transferee is not a Disqualified Organization (as defined in Subsection 5.05(b))
(and, unless the Tax Matters Person and the Seller consent to the transfer to a
person who is not a U.S. Person, an affidavit that it is a United States Person,
as defined in Code section 7701(a)(30)) as provided in Subsection 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchaser thereof) delivers to the Tax Matters
Person, the Seller and the Trustee an affidavit in the form attached hereto as
Exhibit E stating, among other things, that as of the date of such transfer (i)
such transferee is not any of (A) the United States, any state or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality that is a corporation all of whose activities are subject to tax
under Chapter 1 of Subtitle A of the Code and (except in the case of FHLMC) a
majority of whose board of directors is not selected by the United States, or
any state or political subdivision thereof), (B) any organization that is exempt
from any tax imposed by Chapter 1 of Subtitle A of the Code, other than (x) a
tax-exempt farmers' cooperative within the meaning of Section 521 of the Code or
(y) an organization that is subject to the tax imposed by Section 511 of the
Code on "unrelated business taxable income" or (C) a corporation operating on a
cooperative basis that is engaged in furnishing electric energy or providing
telephone service to persons in rural areas (within the meaning of Section
1381(a)(2)(C) of the Code) (any Person described in (A), (B), or (C) being
referred to herein as a "Disqualified Organization") and that (ii) such
transferee is not acquiring such Residual Certificate for the account of a
Disqualified Organization. Neither the Tax Matters Person nor the Seller shall
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to a Disqualified Organization, such transfer, sale or other
disposition shall be deemed to be of no legal force or effect whatsoever and
such Disqualified Organization shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Seller or the Tax Matters Person shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Seller or the Trustee, as
applicable, had no knowledge, that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Seller to ensure that the
Residual Certificate is not transferred to a Disqualified Organization and that
any transfer of such Residual Certificate will not cause the imposition of a tax
upon the Trust or cause the REMIC Assets to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person and the Seller shall have consented
in writing (which consent may be withheld in its sole discretion), the Residual
Certificate (including a beneficial interest therein) may not be purchased by or
transferred to any person who is not a "United States person," as such term is
defined in Section 7701(a)(30) of the Code.
(d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Trustee to act as its agent with
respect to all matters concerning the tax obligations of the Trust. In the event
that any tax is imposed on "prohibited transactions" of the Trust as defined in
Section 860F(a)(2) of the Code, on the "net income from foreclosure property" as
defined in Section 860G(c) of the Code, on any contribution to the Trust after
the Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, such tax shall be paid by (i) the Trustee, if such tax arises out of or
results from a material breach by the Trustee of any of its obligations under
this Agreement or (ii) the Master Servicer, if such tax arises out of or results
from a breach by the Master Servicer of any of its obligations under this
Agreement.
Section 5.06. RESTRICTIONS ON TRANSFERABILITY OF PRIVATE CERTIFICATES.
(a) No offer, sale, transfer or other disposition (including pledge) of a
Private Certificate shall be made by any Holder thereof unless registered under
the Securities Act, or an exemption from the registration requirements of the
Securities Act and any applicable state securities or "Blue Sky" laws is
available and the prospective transferee (other than the Seller) of such
Certificate signs and delivers to the Trustee an Investment Letter, if the
transferee is an Institutional Accredited Investor, in the form set forth as
Exhibit F-1 hereto, or a Rule 144A Certificate, if the transferee is a QIB, in
the form set forth as Exhibit F-2 hereto. In the case of a proposed transfer of
a Private Certificate to a transferee other than a QIB, the Trustee may require
an Opinion of Counsel that such transaction is exempt from the registration
requirements of the Securities Act. The cost of such opinion shall not be an
expense of the Trustee or the Trust Fund.
(b) Each Private Certificate shall bear a Securities Legend.
Section 5.07. ERISA RESTRICTIONS. (a) Except as provided in subsection
(b), no Class of Certificates may be acquired directly or indirectly by, on
behalf of or with the assets of, an employee benefit plan or other retirement
arrangement which is subject to Title I of ERISA and/or Section 4975 of the
Code, ("Plan") and the proposed transferee represents to the Trustee that it is
not acquiring such certificates directly or indirectly for, on behalf of or with
the assets of, a Plan.
(b) Any Person acquiring an interest in a Book-Entry Certificate or a
Global Certificate by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that it is not acquiring an interest in such
Certificate directly or indirectly by, on behalf of or with the assets of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of ERISA and/or Section 4975 of the Code.
Section 5.08. RULE 144A INFORMATION. For so long as any Private
Certificates are outstanding and are "restricted securities" within the meaning
of Rule 144(a)(3) of the Securities Act, (1) the Master Servicer will provide or
cause to be provided to any Holder of such Certificates and any prospective
purchaser thereof designated by such a Holder, upon the request of such Holder
or prospective purchaser, the information required to be provided to such Holder
or prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (2)
the Master Servicer shall update such information from time to time in order to
prevent such information from becoming false and misleading and will take such
other actions as are necessary to ensure that the safe harbor exemption from the
registration requirements of the Securities Act under Rule 144A is and will be
available for resales of such Certificates conducted in accordance with Rule
144A.
<PAGE>
ARTICLE VI
Payments to Certificateholders
Section 6.01. DISTRIBUTIONS ON THE CERTIFICATES. (a) Interest and
principal on the Certificates will be distributed by the Trustee monthly on each
Distribution Date from funds on deposit in the Certificate Account, commencing
in March 1998, in an aggregate amount equal to the Available Funds for such
Distribution Date in the following order of priority:
FIRST, to the Class A Certificates and the Class R Certificate,
the Accrued Certificate Interest on each such Class for such
Distribution Date, any shortfall in available amounts being allocated
between such Classes in proportion to the amount of Accrued
Certificate Interest otherwise distributable thereon;
SECOND, to the Class A Certificates and the Class R Certificate,
any Accrued Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Available
Funds, any shortfall in available amounts being allocated between such
Classes in proportion to the amount of such Accrued Certificate
Interest remaining undistributed for each such Class for such
Distribution Date;
THIRD, sequentially to the Class R Certificate and then to the
Class A Certificates, in reduction of the Current Principal Amounts
thereof, the Senior Optimal Principal Amount for such Distribution
Date to the extent of remaining Available Funds, until the Current
Principal Amounts thereof have been reduced to zero;
FOURTH, sequentially, to the Class B-1 and then to the Class B-2
Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution Dates and (c) such
Class's Allocable Share for such Distribution Date, until the Current
Principal Amount of the respective Class has been reduced to zero.
On each Distribution Date, Available Funds remaining after payment of interest
and principal to the Certificates entitled thereto, as described above, will be
distributed to the Class R Certificate. It is not anticipated that there will be
any significant amounts remaining for such distribution.
(b) No Accrued Certificate Interest will be payable with respect to
any Class of Certificates after the Distribution Date on which the outstanding
Current Principal Amount of such Certificate has been reduced to zero.
Section 6.02. Reserved
Section 6.03. ALLOCATION OF LOSSES. (a) On or prior to each
Determination Date, the Master Servicer shall determine and report to the
Trustee the amount of any Realized Loss in respect of each Mortgage Loan that
occurred during the immediately preceding calendar month.
(b)(A) With respect to any Distribution Date, the principal portion of
each Realized Loss with respect to the Mortgage Loans shall be allocated as
follows:
first, to the Class B-2 Certificates until the Current Principal
Amount thereof has been reduced to zero;
second, to the Class B-1 Certificates until the Current Principal
Amount thereof has been reduced to zero; and
third, to the Class A Certificates until the Current Principal
Amount thereof has been reduced to zero.
(c) Notwithstanding the foregoing, no such allocation of any Realized
Loss shall be made on a Distribution Date to a Class of Certificates to the
extent that such allocation would result in the reduction of the aggregate
Current Principal Amounts of all of the Certificates as of such Distribution
Date, after giving effect to all distributions and prior allocations of Realized
Losses on such date, to an amount less than the aggregate Scheduled Principal
Balance of all of the Mortgage Loans as of such Distribution Date (such
limitation, the "Loss Allocation Limitation").
(d) Any Realized Losses allocated to a Class of Certificates pursuant
to Subsection 6.03(b) shall be allocated among the Certificates of such Class in
proportion to their respective Current Principal Amounts. Any allocation of
Realized Losses pursuant to this Subsection 6.03(d) shall be accomplished by
reducing the Current Principal Amount of the related Certificates on the related
Distribution Date in accordance with Subsection 6.03(e).
(e) Realized Losses allocated in accordance with this Section 6.03
shall be allocated on the Distribution Date in the month following the month in
which such loss was incurred and, in the case of the principal portion thereof,
after giving effect to distributions made on such Distribution Date.
(f) On each Distribution Date, the Trustee shall determine the
Subordinate Certificate Writedown Amount, if any. Any such Subordinate
Certificate Writedown Amount shall effect a corresponding reduction in the
Current Principal Amount of the Subordinate Certificates in the reverse order of
their numerical Class designations which reduction shall occur on such
Distribution Date after giving effect to distributions made on such Distribution
Date.
(g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall, and the interest portion of any Realized Loss, for such
Distribution Date. The interest portion of Realized Losses with respect to all
Mortgage Loans occurring prior to the Cross-Over Date will not be allocated
among any Certificates, but will reduce the amount of Available Funds on the
related Distribution Date. As a result of the subordination of the Subordinate
Certificates, in right of distributions, such Realized Losses on the Mortgage
Loans will be borne first by the Subordinate Certificates.
(h) The principal portion of Debt Service Reductions will not be
allocated in reduction of the Current Principal Amount of any Certificate.
However, (x) after the Cross-Over Date, the amounts distributable under clause
(i) of each of the definitions of Senior Optimal Principal Amount and
Subordinate Optimal Principal Amount will be reduced by the amount of any Debt
Service Reductions applicable to the Mortgage Loans. Regardless of when they
occur, Debt Service Reductions may reduce the amount of Available Funds
otherwise available for distribution on a Distribution Date. As a result of the
subordination of the Subordinate Certificates in right of distribution, any Debt
Service Reductions relating to Mortgage Loans prior to the Cross-Over Date will
be borne by the Subordinate Certificates (to the extent then outstanding) in
inverse order of priority.
Section 6.04. [Reserved]
Section 6.05. PAYMENTS. (a) No later than the Determination Date, the
Master Servicer shall provide to the Trustee in such electronic format as the
Trustee may reasonably request any information with respect to the Mortgage
Loans required to enable the Trustee to make distributions on the Certificates
and prepare reports to Certificateholders, upon which the Trustee may
conclusively rely.
(b) On each Distribution Date, other than the final Distribution Date,
the Trustee shall distribute to each Certificateholder of record on the directly
preceding Record Date the Certificateholder's PRO RATA share of its Class (based
on the aggregate Fractional Undivided Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class. The Trustee shall calculate such amounts based upon the
information provided by the Master Servicer pursuant to Subsection 6.05(a).
(c) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder holding Certificates representing an
initial aggregate Current Principal Amount of not less than $1,000,000 by wire
transfer to a United States dollar account maintained by the payee at any United
States depository institution with appropriate facilities for receiving such a
wire transfer; PROVIDED, HOWEVER, that the final payment in respect of each
Class of Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Trustee specified in the
notice to Certificateholders of such final payment.
Section 6.06. STATEMENTS TO CERTIFICATEHOLDERS. (a) Concurrently with
each distribution to Certificateholders, the Trustee shall forward by
first-class mail to each Certificateholder, with a copy to the Seller, the
Master Servicer and the Rating Agency, a statement setting forth the following
information, expressed with respect to clauses (i), (ii), (iii), (iv), (v) and
(vii) in the aggregate and as a Fractional Undivided Interest representing an
initial Current Principal Amount of $1,000 or in the case of the Class R
Certificate, an initial Current Principal Amount of $100:
(i) the Current Principal Amount of each Class of Certificates
immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class of Certificates during
the related Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed
with respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on each
Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates with
respect to such Distribution Date;
(vii) the Current Principal Amount of each Class of Certificates
after such Distribution Date;
(viii) the amount of any Monthly Advances and Compensating
Interest Payments by the Master Servicer included in such distribution
(ix) the amount of any Realized Losses (listed separately for
Bankruptcy Losses) during the related Prepayment Period and the amount
and source (separately identified) of any distribution in respect
thereof included in such distribution;
(x) the amount of Scheduled Principal and Principal Prepayments,
(including but separately identifying the principal amount of
principal prepayments, Insurance Proceeds, the purchase price in
connection with the purchase of Mortgage Loans, cash deposits in
connection with substitutions of Mortgage Loans and Net Liquidation
Proceeds);
(xi) the number of Mortgage Loans (excluding REO Property)
remaining in the Trust Fund as of the end of the related Due Period;
(xii) information regarding any Mortgage Loan delinquencies as of
the end of the related Due Period, including the aggregate number,
aggregate Outstanding Principal Balance and aggregate Scheduled
Principal Balance of Mortgage Loans delinquent one month, two months
and three months or more;
(xiii) the number of Mortgage Loans in the foreclosure process as
of the end of the related Due Period and the aggregate Outstanding
Principal Balance of such Mortgage Loans;
(xiv) the number and aggregate Outstanding Principal Balance of
all Mortgage Loans as to which the Mortgaged Property was REO Property
as of the end of the related Due Period;
(xv) the book value (the sum of (A) the Outstanding Principal
Balance of the Mortgage Loan, (B) accrued interest through the date of
foreclosure and (C) foreclosure expenses) of any REO Property;
PROVIDED THAT, in the event that such information is not available to
the Master Servicer and the Trustee on the Distribution Date, such
information shall be furnished promptly after it becomes available;
(xvi) the amount of Realized Losses allocated to each Class of
Certificates since the prior Distribution Date and in the aggregate
for all prior Distribution Dates; and
(xvii) the then applicable Senior Percentage, Senior Prepayment
Percentage, Subordinate Percentage and Subordinate Prepayment
Percentage.
The information set forth above shall be calculated, or reported, as
the case may be, by the Trustee based on data provided by the Master Servicer
pursuant to Subsection 6.05(a) and, with respect to prior periods, Section 6.06,
upon which the Trustee may conclusively rely. The information furnished by the
Master Servicer shall be sufficient for the Trustee to calculate any statements
it is required to make.
(b) By April 30 of each year beginning in 1999, the Trustee will
furnish a report to each Holder of the Certificates of record at any time during
the prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Master Servicer determines and advises the Trustee
to be necessary and/or to be required by the Internal Revenue Service or by a
federal or state law or rules or regulations to enable such Holders to prepare
their tax returns for such calendar year. Copies of such report shall also be
furnished to the Master Servicer. Such obligations shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to the requirements of the Code.
The Master Servicer shall supply to the Trustee in a timely manner the
information required for the statements described above which, where
appropriate, shall be the information from which the Trustee can calculate the
statements it is required to make.
Section 6.07. REPORTS TO THE TRUSTEE AND THE MASTER SERVICER. (a) Not
later than 15 days after each Distribution Date, the Trustee shall forward to
the Master Servicer a statement setting forth the status of the Certificate
Account as of the close of business on the last day of the month of the
Distribution Date and showing, for the month covered by such statement, deposits
in or withdrawals from the Certificate Account.
(b) On or before the Determination Date, the Master Servicer shall
provide to the Trustee (and with respect to the information contained in
subclause (xiv) hereof, the Seller), with respect to the Mortgage Loans and the
REO Property, respectively, a Loan Summary and Remittance Report in such
electronic format as the Trustee may reasonably request and in such hardcopy
format as the Master Servicer and the Trustee shall agree which, if there are
Sub-Servicers, shall be based upon reports from Sub-Servicers, if any, received
by the Master Servicer on or before the seventh Business Day of such month with
respect to the Mortgage Loans and REO Property and containing the following
information (in respect of the REO Property, only such information which is
applicable):
(i) Aggregate deposits to and withdrawals from the Certificate
Account since the date of the prior statement, stated separately for
each category of deposit specified in Section 4.02 and each category
of withdrawal specified in Section 4.03, indicating separately the
aggregate of amounts withdrawn which are not applicable to a
particular Mortgage Loan;
(ii) Amount of Available Funds expected for the related
Distribution Date and attributable to each of the following
categories:
(A) Scheduled Principal;
(B) Principal Prepayments (stated separately for (u) partial
prepayments, (v) full prepayments, (w) Net Liquidation
Proceeds, stating Liquidation Proceeds and Liquidation
Expenses separately), (x) Insurance Proceeds, (y) the
purchase price in connection with the purchase of a Mortgage
Loan, and (z) any cash deposit in connection with the
substitution of a Mortgage Loan;
(C) regularly scheduled interest on the Mortgage Loans;
(D) Monthly Advances made by the Master Servicer;
(E) Certificate Account Advances;
(F) Compensating Interest Payments; and
(G) reimbursements in connection with losses on Permitted
Investments.
(iii) Aggregate Outstanding Principal Balances of the Mortgage
Loans as of the related Due Date, without giving effect to payments
due on such date;
(iv) Realized Losses for the prior month and in the aggregate
from the Closing Date;
(v) [intentionally omitted];
(vi) [intentionally omitted];
(vii) Aggregate Scheduled Principal Balance of the Mortgage Loans
as of the related Due Date;
(viii) Book value of any collateral acquired by means of
foreclosure, grant of deed in lieu of foreclosure or otherwise in
respect of any Mortgage Loan;
(ix) Number and aggregate principal balance of Mortgage Loans
which are 30, 60, 90 and 120 or more days delinquent as calculated by
the Master Servicer, those which are in foreclosure, those with
respect to which the related Mortgagor has had an order for relief
entered in connection with a bankruptcy proceeding, and those which
are REO Property;
(x) Interest Shortfall with respect to the related Distribution
Date and portion thereof resulting from Voluntary Principal
Prepayments in full or the provisions of the Relief Act;
(xi) [intentionally omitted]
(xii) Amount, if any, by which the aggregate of Scheduled
Payments on the Mortgage Loans that were due on the related Due Date
and delinquent, other than as a result of the Relief Act, as of the
Determination Date exceeds the sum of the Monthly Advances to be made
by the Master Servicer and Certificate Account Advances for such
Distribution Date;
(xiii) Aggregate Master Servicing Fee for the related Due Period;
and
(xiv) Such other information regarding each Mortgage Loan,
including, but not limited to, an updated schedule of the Scheduled
Principal Balances of the Mortgage Loans as of the related Due Date,
in such electronic format, as may be reasonably requested by the
Trustee and, if requested, in such hardcopy or electronic format as
the Master Servicer and the Trustee shall agree and, with respect to
information to be provided to the Seller may be in the "Salomon 500"
format and should be sent to the attention of George Chang, 245 Park
Avenue, New York, New York 10167.
Section 6.08. MONTHLY ADVANCES. If the Scheduled Payment (together
with any advances from any Sub-Servicers) on a Mortgage Loan that was due on a
related Due Date and is delinquent other than as a result of application of the
Relief Act exceeds the amount deposited in the Certificate Account which will be
used for a Certificate Account Advance with respect to such Mortgage Loan, the
Master Servicer will deposit in the Certificate Account not later than the
Advancing Date immediately preceding the related Distribution Date an amount
equal to such deficiency net of the related Master Servicing Fee for such
Mortgage Loan except to the extent the Master Servicer determines any such
advance to be nonrecoverable from Liquidation Proceeds, Insurance Proceeds or
future payments on the Mortgage Loan for which such Monthly Advance was made.
Subject to the foregoing, the Master Servicer shall continue to make such
advances through the date that the related Mortgaged Property has, in the
judgment of the Master Servicer, been completely liquidated. Any amount used as
a Certificate Account Advance shall be replaced by the Master Servicer by
deposit in the Certificate Account on or before any future date on which and to
the extent that funds in the Certificate Account on such date are less than the
amount required to be transferred by the Master Servicer to the Certificate
Account. If applicable, on the fifth Business Day preceding each Distribution
Date, the Master Servicer shall present an Officer's Certificate to the Trustee
(i) stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be
nonrecoverable; provided that with respect to each Mortgage Loan, such Officer's
Certificate shall be given only with respect to the first Distribution Date as
to which an advance will not be made.
Section 6.09. COMPENSATING INTEREST PAYMENTS. The Master Servicer
shall deposit in the Certificate Account not later than the Advancing Date
immediately preceding the related Distribution Date an amount equal to the
lesser of (i) the aggregate amounts determined pursuant to subclauses (a) and
(b) of the definition of Interest Shortfall for the related Distribution Date
and (ii) the Master Servicing Fee (other than the portion used to cover lender
paid primary mortgage insurance premiums) for such Distribution Date (such
amount, the "Compensating Interest Payment"). The Master Servicer shall not be
entitled to any reimbursement of any Compensating Interest Payment.
Section 6.10. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTY. Each year the Master Servicer shall report or cause to be reported to
the Internal Revenue Service foreclosures and abandonments of any Mortgaged
Property as required by Section 6050J of the Code.
<PAGE>
ARTICLE VII
The Master Servicer
Section 7.01. LIABILITIES OF THE MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein. Only the Master Servicer,
any successor Master Servicer or the Trustee acting as Master Servicer shall be
liable with respect to the servicing of the Mortgage Loans and the REO Property
for actions taken by any such Person in contravention of the Master Servicer's
duties hereunder.
Section 7.02. MERGER OR CONSOLIDATION OF THE MASTER SERVICER. (a) The
Master Servicer will keep in full effect its existence, rights and franchises as
a corporation under the laws of the state of its incorporation, and will obtain
and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Mortgage Loans and to perform its duties under this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03. INDEMNIFICATION OF THE TRUSTEE. Any other provisions of
this Agreement notwithstanding, the Trust shall indemnify the Indemnified
Persons for, and to hold them harmless against, any loss, liability or expense
incurred on their part, arising out of, or in connection with, this Agreement,
including the costs and expenses (including reasonable legal fees and expenses)
of defending themselves against any such claim other than any loss, liability or
expense incurred by reason of the Trustee's willful misfeasance, bad faith or
negligence in the performance of its duties hereunder. In addition, the Master
Servicer shall indemnify the Indemnified Persons for, and hold them harmless
against, any loss, liability or expense incurred on their part, arising out of,
or in connection with, this Agreement, including the costs and expenses
(including reasonable legal fees and expenses) of defending themselves against
any such claim, but only to the extent any such loss, liability or expense
results from the Master Servicer's failure to perform its duties in strict
compliance with this Agreement. This indemnity shall survive the resignation or
removal of the Trustee and the termination of this Agreement.
Section 7.04. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND
OTHERS. (a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Seller, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent
of the Master Servicer may rely in good faith on any document of any kind PRIMA
FACIE properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer and any director, officer, employee or agent
of the Master Servicer shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense incurred in connection with any
legal proceedings relating to this Agreement or the Certificates (including
reasonable legal fees and disbursements of counsel), other than (i) any loss,
liability or expense related to its failure to perform its duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and (ii) any loss, liability
or expense incurred by reason of such Person's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder.
(d) The Master Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties
under this Agreement and that in its opinion may involve it in any expense or
liability; PROVIDED, HOWEVER, the Master Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the 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 shall be
entitled to be reimbursed therefor out of the Certificate Account as provided by
Subsection 4.03(a). Nothing in this Subsection 7.04(d) shall affect the Master
Servicer's obligation to supervise, or to take such actions as are necessary to
ensure, the servicing and administration of the Mortgage Loans pursuant to
Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
Section 7.05. MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Independent Counsel to such effect delivered to the Trustee. No such
resignation by the Master Servicer shall become effective until the Trustee or a
successor to the Master Servicer reasonably satisfactory to the Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating Agency
of the resignation of the Master Servicer.
Section 7.06. [Reserved]
Section 7.07. SALE AND ASSIGNMENT OF MASTER Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in their entirety as Master Servicer under this Agreement; PROVIDED, HOWEVER,
that: (i) the purchaser or transferee accepting such assignment and delegation
(a) shall be a Person which shall be qualified to service mortgage loans for
FNMA or FHLMC; (b) shall have a net worth of not less than $10,000,000 (unless
otherwise approved by the Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee) as having a comparable servicing ability to that of the
Master Servicer on the Closing Date; (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, 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 it as master servicer under this Agreement and any custodial
agreement from and after the effective date of such agreement; (ii) the Rating
Agency shall be given prior written notice of the identity of the proposed
successor to the Master Servicer and the Rating Agency's rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of Independent Counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising prior to
the effective date thereof.
<PAGE>
ARTICLE VIII
Default
Section 8.01. EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) The Master Servicer fails to cause to be deposited in the
Certificate Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of
three Business Days after the date such deposit was required to be
made; or
(ii) The Master Servicer fails to observe or perform in any
material respect any other covenants and agreements set forth in the
Certificates or this Agreement to be performed by it, which covenants
and agreements materially affect the rights of Certificateholders, and
such failure continues unremedied for a period of 60 days after the
date on which written notice of such failure, properly requiring the
same to be remedied, shall have been given to the Master Servicer by
the Trustee or to the Master Servicer and the Trustee by the Holders
of Certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for
the winding up or liquidation of its affairs, and the continuance of
any such decree or order is unstayed and in effect for a period of 60
consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization
statute and the petition is not dismissed within 60 days after the
commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings
of or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to
pay its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute,
makes an assignment for the benefit of its creditors, or voluntarily
suspends payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement or resigns in contravention of the provisions
permitting such assignment or delegation or resignation under Sections
7.05 or 7.07.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agency, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Mortgage Loans and/or the REO Property serviced by
the Master Servicer and the proceeds thereof. Upon the receipt by the Master
Servicer of the written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates, the Mortgage
Loans, REO Property or under any other related agreements, including the
Sub-Servicing Agreements (but only to the extent that such other agreements
relate to the Mortgage Loans or REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; (ii) originals or copies of
all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder; and (iii) the
rights and obligations of the Master Servicer under the Sub-Servicing Agreements
with respect to the Mortgage Loans. In addition to any other amounts which are
then, or, notwithstanding the termination of its activities under this
Agreement, may become payable to the Master Servicer under this Agreement, the
Master Servicer shall be entitled to receive, out of any amount received on
account of a Mortgage Loan or REO Property, that portion of such payments which
it would have received as reimbursement pursuant to Section 3.14 if notice of
termination had not been given. The termination of the rights and obligations of
the Master Servicer shall not affect any obligations incurred by the Master
Servicer prior to such termination.
Section 8.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; PROVIDED, HOWEVER, that the Trustee (i) shall be
under no obligation to purchase any Mortgage Loan pursuant to Section 10.01; and
(ii) shall have no obligation whatsoever with respect to any liability incurred
by the Master Servicer at or prior to the time of receipt by the Master Servicer
of such notice or by the Trustee of such Opinion of Independent Counsel (other
than to make advances deemed recoverable and not previously made). As
compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans which the Master Servicer would have been entitled to retain
if the Master Servicer had continued to act hereunder. Notwithstanding the
above, the Trustee may, if it shall be unwilling so to act, or shall, if it is
legally unable so to act, appoint or petition a court of competent jurisdiction
to appoint, any established housing and home finance institution which is a
FNMA- or FHLMC-approved servicer, and with respect to a successor to the Master
Servicer only, having a net worth of not less than $10,000,000, as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as it and
such successor shall agree; PROVIDED, HOWEVER, that no such compensation shall
be in excess of that permitted the Trustee under this Subsection 8.02(a), and
that such successor shall undertake and assume the obligations of the Trustee to
pay compensation to any third Person acting as an agent or independent
contractor in the performance of master servicing responsibilities hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agency.
Section 8.04. WAIVER OF DEFAULTS. The Trustee shall transmit by mail
to all Certificateholders, within 60 days after the occurrence of any Event of
Default known to the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund may, on behalf of all Certificateholders,
waive any default by the Master Servicer in the performance of its obligations
hereunder and the consequences thereof, except a default in the making of or the
causing to be made any required distribution on the Certificates. Upon any such
waiver of a past default, such default shall be deemed to cease to exist, and
any Event of Default arising therefrom shall be deemed to have been timely
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. The Master Servicer shall give notice of any such
waiver to the Rating Agency.
Section 8.05. LIST OF CERTIFICATEHOLDERS. Upon written request of
three or more Certificateholders of record, for purposes of communicating with
other Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
<PAGE>
ARTICLE IX
Concerning the Trustee
Section 9.01. DUTIES OF TRUSTEE. (a) The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement as duties of the
Trustee. If an Event of Default has occurred and has not 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 under the circumstances in the conduct of his own
affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee pursuant to any provision of this
Agreement, the Trustee 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 resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Master Servicer hereunder.
(c) The Trustee shall make monthly distributions and the final
distribution to the Certificateholders as provided in Sections 6.01 and 10.01
herein.
(d) 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) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in
accordance with the directions of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than
25% of the Trust Fund, if such action or non-action relates to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or other power
conferred upon the Trustee, under this Agreement; and
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee's corporate trust
department shall have actual knowledge thereof. In the absence of such
notice, the Trustee may conclusively assume there is no such default
or Event of Default.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in 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 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.
(e) All funds received by the Trustee and required to be deposited in
the Certificate Account pursuant to this Agreement will be promptly so deposited
by the Trustee.
Section 9.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 9.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting in reliance on any resolution, Officer's
Certificate, certificate of a Servicing Officer, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection with
respect to any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement, other than its
obligation to give notices pursuant to this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby. Nothing
contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee's corporate trust department has
actual knowledge (which has not been cured), to exercise such of the
rights and powers vested in it by this Agreement, and to use the same
degree of care and skill in their exercise, as a prudent person would
exercise under the circumstances in the conduct of his own affairs;
(iv) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing to do so by Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund
and provided that 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,
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 as a condition to taking
any such action. The reasonable expense of every such examination
shall be paid by the Certificateholders requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through
agents or attorneys; PROVIDED, HOWEVER, that the Trustee may not
appoint any agent to perform its custodial or paying agent functions
under this Agreement without the express written consent of the Master
Servicer, which consent will not be unreasonably withheld and provided
further that the Master Servicer hereby consents to the appointment of
the Federal Home Loan Bank of Atlanta to perform the custodial
functions provided for herein on behalf of the Trustee. The Trustee
shall not be liable or responsible for the misconduct or negligence of
any of the Trustee's agents or attorneys or a custodian or paying
agent appointed hereunder by the Trustee with due care and, when
required, with the consent of the Master Servicer, and the appointment
of the Federal Home Loan Bank of Atlanta shall be deemed to have been
made with due care;
(vii) Should the Trustee deem the nature of any action required
on its part, other than a payment or transfer under Subsection 4.02(b)
or Section 4.03, to be unclear, the Trustee may require prior to such
action that it be provided by the Master Servicer with reasonable
further instructions upon which it may conclusively rely;
(viii) 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 accountable for other than its negligence or
willful misconduct in the performance of any such act;
(ix) The Trustee shall not be required to give any bond or surety
with respect to the execution of the trust created hereby or the
powers granted hereunder; and
(x) The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Mortgage Loan by BankUnited pursuant to the Mortgage
Loan Purchase Agreement and this Agreement or the eligibility of any
Mortgage Loan for purposes of this Agreement.
Section 9.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the signature
and countersignature of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee shall have no responsibility for their
correctness. The Trustee makes no representation as to the validity or
sufficiency of the Certificates (other than the signature and countersignature
of the Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Section 2.05 hereof; provided however, that the foregoing shall not
relieve the Trustee of the obligation to cause the Custodian to review the
Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's signature and
countersignature (or countersignature of its agent) on the Certificates shall be
solely in its capacity as Trustee and shall not constitute the Certificates an
obligation of the Trustee in any other capacity. The Trustee shall not be
accountable for the use or application by the Seller of any of the Certificates
or of the proceeds of such Certificates, or for the use or application of any
funds paid to the Seller with respect to the Mortgage Loans. Subject to the
provisions of Section 2.05, the Trustee shall not be responsible for the
legality or validity of this Agreement or any document or instrument relating to
this Agreement, the validity of the execution of this Agreement or of any
supplement hereto or instrument of further assurance, or the validity, priority,
perfection or sufficiency of the security for the Certificates issued hereunder
or intended to be issued hereunder. The Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. 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 9.04. TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual capacity or in any capacity other than as Trustee hereunder may
become the owner or pledgee of any Certificates with the same rights it would
have if it were not Trustee, and may otherwise deal with the parties hereto.
Section 9.05. TRUSTEE'S FEES. BankUnited covenants and agrees to pay
to the Trustee any amounts due to the Trustee and incurred prior to the Closing
Date. Thereafter, the Trustee shall be entitled to the Trustee's Fees which
shall be paid from the Certificate Account, pursuant to Subsection 4.03(b).
BankUnited will be responsible for payment of all reasonable out- of-pocket
expenses, disbursements and advances incurred or made by the Trustee in the
administration of the trusts hereunder as set forth in a fee letter sent by the
Trustee to BankUnited (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, disbursement or advance
as may arise from its negligence or intentional misconduct or which is the
responsibility of the Certificateholders or the Trust hereunder. Such
compensation and reimbursement obligation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust.
Section 9.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee and
any successor Trustee shall during the entire duration of this Agreement be a
state bank or trust company or a national banking association organized and
doing business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus and undivided profits of at least $40,000,000 or, in the
case of a successor Trustee, $50,000,000, subject to supervision or examination
by federal or state authority and, in the case of a successor Trustee other than
pursuant to Section 9.10, rated in one of the three highest long-term debt
categories of, or otherwise acceptable to, the Rating Agency. The Trustee shall
not be an Affiliate of the Master Servicer, unless the Trustee acts as successor
Master Servicer hereunder. If the Trustee 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 9.06
the combined capital and surplus of such corporation shall be deemed to be its
total equity capital (combined capital and surplus) as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 9.06, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.08.
Section 9.07. INSURANCE. The Trustee, at its own expense, shall at all
times maintain and keep in full force and effect: (i) fidelity insurance, (ii)
theft of documents insurance and (iii) forgery insurance (which may be
collectively satisfied by a "Financial Institution Bond" and/or a "Bankers'
Blanket Bond"). All such insurance shall be in amounts, with standard coverage
and subject to deductibles, as are customary for insurance typically maintained
by banks which act as custodians for investor-owned mortgage pools. A
certificate of an officer of the Trustee as to the Trustee's compliance with
this Section 9.07 shall be furnished to the Master Servicer or any
Certificateholder upon reasonable written request.
Section 9.08. RESIGNATION AND REMOVAL OF THE Trustee. (a) The Trustee
may at any time resign and be discharged from the Trust hereby created by giving
written notice thereof to the Master Servicer, with a copy to the Rating Agency.
Upon receiving such notice of resignation, the Master Servicer shall promptly
appoint a successor Trustee by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the resigning Trustee and the
successor Trustee. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Master Servicer or if at any time 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, then the
Master Servicer shall be entitled to remove the Trustee and appoint a successor
Trustee by written instrument, in triplicate, one copy of which instrument shall
be delivered to each of the Trustee so removed and the successor Trustee.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee and appoint a successor Trustee by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to
each of the Master Servicer, the Trustee so removed and the successor so
appointed.
(d) No resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.08 shall
become effective except upon appointment of and acceptance of such appointment
by the successor Trustee as provided in Section 9.09.
Section 9.09. SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed
as provided in Section 9.08 shall execute, acknowledge and deliver to the Master
Servicer and to its predecessor Trustee an instrument accepting such appointment
hereunder. The resignation or removal of the predecessor Trustee shall then
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 after payment of its
outstanding fees and expenses promptly deliver to the successor Trustee all
assets and records of the Trust held by it hereunder, and the Master Servicer
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Trustee all such rights, powers, duties
and obligations.
(b) No successor Trustee shall accept appointment as provided in this
Section 9.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee as provided
in this Section 9.09, the successor Trustee shall mail notice of the succession
of such Trustee hereunder to all Certificateholders at their addresses as shown
in the Certificate Register and to the Rating Agency.
Section 9.10. MERGER OR CONSOLIDATION OF TRUSTEE. Any state bank or
trust company or national banking association into which the Trustee may be
merged or converted or with which it may be consolidated or any state bank or
trust company or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any state
bank or trust company or national banking association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such state bank or trust company or
national banking association shall be eligible under the provisions of Section
9.06. Such succession shall be valid without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 9.11. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund may at the time be located, the Master Servicer and the Trustee
acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee and the
Master Servicer to act as co-trustee or co-trustees, jointly with the Trustee,
or separate trustee or separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity, such title to the Trust, or
any part thereof, and, subject to the other provisions of this Section 9.11,
such powers, duties, obligations, rights and trusts as the Master Servicer and
the Trustee may consider necessary or desirable. There shall, in any event,
always be at least one trustee that has its principal place of business in the
State of Delaware.
(b) If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a written request so to do, or in case
an Event of Default with respect to the Master Servicer shall have occurred and
be continuing, the Trustee shall have the power to make such appointment without
the Master Servicer.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. 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.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Master Servicer and the Trustee acting jointly may at any time accept the
resignation of or remove any separate trustee or co-trustee, except that
following the occurrence of any Event of Default which has not been cured, the
Trustee acting alone may accept the resignation of or remove any separate
trustee or co-trustee.
Section 9.12. MASTER SERVICER SHALL PROVIDE INFORMATION AS REASONABLY
REQUIRED. The Master Servicer shall furnish to the Trustee, during the term of
this Agreement, such periodic, special, or other reports or information (and in
such electronic format) as may reasonably be requested by the Trustee in order
to fulfill its duties and obligations under this Agreement.
Section 9.13. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS. (a) For Federal income tax purposes, the taxable year of the
REMIC Assets shall be a calendar year and the Trustee shall maintain or cause
the maintenance of the books of the REMIC Assets on the accrual method of
accounting.
(b) The Trustee shall prepare and file or cause to be filed with the
Internal Revenue Service Federal tax information returns with respect to the
REMIC Assets, the Trust Fund, if applicable, and the Certificates containing
such information and at the times and in the manner as may be required by the
Code or applicable Treasury regulations, and shall furnish to each Holder of
Certificates at any time during the calendar year for which such returns or
reports are made such statements or information at the times and in the manner
as may be required thereby. In connection with the foregoing, the Trustee shall
provide the name and address of the person who can be contacted to obtain
information required to be reported to the holders of regular interests in the
REMIC Assets (the "REMIC Reporting Agent") as required by IRS Form 8811. The
Trustee shall make the elections to treat the REMIC Assets as a REMIC (which
election shall apply to the taxable period ending December 31, 1998 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The Trustee shall sign all tax information returns
filed pursuant to this Section and any other returns as may be required by the
Code, and in doing so shall rely entirely upon, and shall have no liability for
information provided by, or calculations provided by, the Seller or the Master
Servicer. The Holder of the Class R Certificate is hereby designated as the "Tax
Matters Person" (within the meaning of Treas. Reg. ss.ss. 1.860F-4(d)) for the
REMIC Assets. The Trustee is hereby designated and appointed as the agent of
such Tax Matters Person. Any Holder of a Residual Certificate will by acceptance
thereof appoint the Trustee as agent and attorney-in- fact for the purpose of
acting as Tax Matters Person for the REMIC Assets during such time as the
Trustee does not own any such Residual Certificate. In the event that the Code
or applicable Treasury regulations prohibit the Trustee from signing tax or
information returns or other statements, or the Trustee from acting as Tax
Matters Person (as an agent or otherwise), the Trustee shall take whatever
action that in its sole good faith judgment is necessary for the proper filing
of such information returns or for the provision of a tax matters person,
including designation of the Holder of a Residual Certificate to sign such
returns or act as tax matters person. Each Holder of a Residual Certificate
shall be bound by this Section.
(c) The Trustee shall provide upon request such information (which
shall be provided by the Master Servicer) as required in Section 860D(a)(6)(B)
of the Code to the Internal Revenue Service, to any Person purporting to
transfer a Residual Certificate to a Person other than a transferee permitted by
Section 5.05(b), and to any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate, organization described in
Section 1381 of the Code, or nominee holding an interest in a pass-through
entity described in Section 860E(e)(6) of the Code, any record holder of which
is not a transferee permitted by Section 5.05(b) (or which is deemed by statute
to be an entity with a disqualified member).
(d) The Trustee shall prepare and file or cause to be filed any state
income tax returns required under Applicable State Law with respect to the REMIC
Assets or the Trust Fund.
Section 9.14 AMENDMENTS TO CERTIFICATE OF TRUST. Upon the change in
the name of the Trust or the identity of the Delaware trustee, the Trustee shall
cause an amendment to the Certificate of Trust filed under the Act to be filed
with the Secretary of State of the State of Delaware indicating the applicable
change.
<PAGE>
ARTICLE X
Termination
Section 10.01. TERMINATION UPON REPURCHASE BY THE MASTER SERVICER OR
ITS DESIGNEE OR LIQUIDATION OF ALL MORTGAGE LOANS.
(a) Subject to Section 10.02, the respective obligations and responsibilities of
the Seller, the Master Servicer, the Custodian and the Trustee created hereby,
other than the obligation of the Trustee or the Master Servicer to make payments
to Certificateholders as hereinafter set forth and to the Trustee, shall
terminate upon:
(i) the repurchase by or at the direction of the Master Servicer
or its designee of all Mortgage Loans and all property remaining in
the Trust at a price equal to (a) 100% of the Outstanding Principal
Balance of each Mortgage Loan (other than a Mortgage Loan related to
REO Property) as of the date of repurchase, net of the principal
portion of any unreimbursed Monthly Advances made by the purchaser,
together with interest at the applicable Mortgage Interest Rate
accrued but unpaid through and including the last day of the month of
repurchase, plus (b) the appraised value of any REO Property less the
good faith estimate of the Seller of liquidation expenses to be
incurred in connection with its disposal thereof, (but not more than
the Outstanding Principal Balance of the related Mortgage Loan,
together with interest at the applicable Mortgage Interest Rate
accrued on that balance but unpaid through and including the last day
of the month of repurchase), such appraisal to be calculated by an
appraiser mutually agreed upon by the Seller and the Master Servicer
at the expense of the Master Servicer; or
(ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage
Loan remaining in the Trust Fund or the disposition of all property
acquired with respect to any Mortgage Loan; PROVIDED, HOWEVER, that in
the event that an advance has been made, but not yet recovered, at the
time of such termination, the Person having made such advance shall be
entitled to receive, notwithstanding such termination, any payments
received subsequent thereto with respect to which such advance was
made.
(b) Except as otherwise provided in this Article X neither the Seller
nor any Certificateholder shall be entitled to revoke or terminate the Trust.
(c) [Intentionally omitted.]
(d) The right of the Master Servicer or its designee to repurchase all
Mortgage Loans pursuant to Subsection 10.01(a)(i) above shall be exercisable
only if (i) the aggregate unpaid principal balance of such Mortgage Loans at the
time of any such repurchase is less than 10% of the Cut-off Date Balance or (ii)
the Seller based upon an Opinion of Counsel delivered to the Trustee, has
determined that the REMIC status of the REMIC Assets has been lost or that a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year and in the case of clause (ii) the Holder of the Class R
Certificate agrees in writing to such repurchase. At any time thereafter, the
Master Servicer may elect to terminate the Trust at any time, and upon such
election, the Master Servicer or its designee shall repurchase all the Mortgage
Loans.
(e) [Intentionally omitted].
(f) Provided that the Trustee has received timely notice, the Trustee
shall give notice of any termination to the Certificateholders, with a copy to
the Rating Agency, upon which the Certificateholders shall surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation. To the extent reasonably practical, such notice shall be given by
letter, mailed not earlier than the 15th day and not later than the 25th day of
the month next preceding the month of such final distribution, and shall specify
(i) the Distribution Date upon which final payment of the Certificates will be
made upon presentation and surrender of the Certificates at the office of the
Trustee therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee therein specified.
(g) If the option of the Master Servicer to repurchase or cause the
repurchase of all Mortgage Loans under Subsection 10.01(a)(i) above is
exercised, the Master Servicer and/or its designee, as the case may be, shall
deliver to the Trustee for deposit in the Certificate Account, by the Business
Day prior to the applicable Distribution Date, an amount equal to the repurchase
price for the Mortgage Loans being purchased by it and all property acquired
with respect to such Mortgage Loans remaining in the Trust. Upon the
presentation and surrender of the Certificates, the Trustee shall distribute an
amount equal to (i) the amount otherwise distributable to the Certificateholders
on such Distribution Date but for such repurchase, (ii) the Current Principal
Amount and any accrued but unpaid interest at the Pass-Through Rate to the
Certificateholders of each Class, and (iii) the remainder to the Class R
Certificateholder. Upon deposit of the required repurchase price and following
such final Distribution Date, the Trustee shall cause the Custodian to promptly
release to the purchaser, the Mortgage Files for the remaining Mortgage Loans,
and the Accounts shall terminate, subject to the Trustee's obligation to hold
any amounts payable to Certificateholders in trust without interest pending
final distributions pursuant to Subsection 10.01(i).
(h) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the Certificate
Account all distributable amounts remaining in the Protected Accounts. Upon the
presentation and surrender of the Certificates, the Trustee shall distribute to
the Certificateholders, in accordance with their respective interests, all
distributable amounts remaining in the Certificate Account. Upon deposit by any
Sub-Servicers of such distributable amounts and delivery to the Trustee of an
Officer's Certificate from the Master Servicer certifying that such deposit has
been made, and following such final Distribution Date, the Trustee shall cause
the Custodian to promptly release to the Master Servicer the Mortgage Files for
the remaining Mortgage Loans, and the Accounts shall terminate, subject to the
Trustee's obligation to hold any amounts payable to the Certificateholders in
trust without interest pending final distributions pursuant to Subsection
10.01(i).
(i) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six 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
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option
to repurchase all the Mortgage Loans under Subsection 10.01(a)(i) above is
exercised, the Trust and the REMIC Assets shall be terminated in accordance with
the following additional requirements, unless the Trustee has been furnished
with an Opinion of Counsel by the Master Servicer to the effect that the failure
of the Trust to comply with the requirements of this Section 10.02 will not (i)
result in the imposition of taxes on "prohibited transactions" as defined in
Section 860F of the Code on the REMIC Assets or (ii) cause the REMIC Assets to
fail to qualify as a REMIC at any time that any Regular Certificates are
outstanding:
(i) within 90 days prior to the final Distribution Date, at the
written direction of the Master Servicer, the Trustee, as agent for
the Tax Matters Person, shall adopt a plan of complete liquidation of
the Trust Fund and the REMIC Assets provided to it by the Master
Servicer meeting the requirements of a "Qualified Liquidation" under
Section 860F of the Code and any regulations thereunder;
(ii) at or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the
Trustee shall sell for cash all of the assets of the Trust to or at
the direction of the Master Servicer; and
(iii) at the time of the making of the final payment on the
Certificates, the Trustee shall distribute from the Certificate
Account to the extent on deposit therein (or cause to be distributed)
(i) to the Certificateholders, the Current Principal Amount of the
Certificates plus 30 days' interest thereon at the applicable
Pass-Through Rate, and (ii) to the Class R Certificateholder, all cash
on hand from the Certificate Account (other than cash retained to meet
claims); and the Trust and the REMIC Assets shall terminate at such
time.
(b) The Trustee shall adopt such plan of liquidation by filing the
appropriate statement on the final tax return of the REMIC Assets.
(c) Upon the termination of the Trust, the Trustee shall file a
certificate of cancellation with the Delaware Secretary of State in accordance
with Section 3810(d) of the Act.
<PAGE>
ARTICLE XI
Miscellaneous Provisions
Section 11.01. INTENT OF PARTIES. The parties intend that the REMIC
Assets shall be treated as a REMIC for federal income tax purposes and that the
provisions of this Agreement should be construed in furtherance of this intent.
Section 11.02. AMENDMENT. (a) This Agreement may be amended from time
to time by the Seller, the Trustee and the Master Servicer, without notice to or
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions herein that may be defective or inconsistent with
any other provisions herein, to comply with any changes in the Code or to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Independent Counsel, adversely affect in any material respect the interests of
any Certificateholder.
(b) This Agreement may also be amended from time to time by the
Seller, the Trustee and the Master Servicer, with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund or of the applicable Class or Classes if such amendment
affects only such Class or Classes 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 Certificateholders; PROVIDED,
HOWEVER, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) reduce the aforesaid percentage of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding, or (iii) cause the REMIC Assets to
fail to qualify as a REMIC for federal income tax purposes, as evidenced by an
Opinion of Independent Counsel which shall be provided to the Trustee other than
at the Trustee's expense. Notwithstanding any other provision of this Agreement,
for purposes of the giving or withholding of consents pursuant to this Section
11.02(b), Certificates registered in the name of or held for the benefit of the
Seller, the Master Servicer or a Sub- Servicer or any Affiliate thereof shall be
entitled to vote their Fractional Undivided Interests with respect to matters
affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of such amendment or written notification of the substance
of such amendment to each Certificateholder, with a copy to the Rating Agency.
(d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to executing any amendment to this Agreement, the Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights, duties or
immunities under this Agreement or otherwise.
Section 11.03. RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Master
Servicer shall effect such recordation, at the expense of BankUnited upon the
request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Certificateholders
or is required by law.
Section 11.04. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (a) The
death or incapacity of any Certificateholder shall not terminate this Agreement
or the Trust, nor entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders 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.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Seller, the Master Servicer or any successor to any such parties unless (i) such
Certificateholder previously shall have given to the Trustee a written notice of
a continuing default, as herein provided, (ii) the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs and expenses and liabilities to be incurred therein or thereby, and (iii)
the Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding.
(d) No one or more Certificateholders shall have any right by virtue
of any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.05. ACTS OF CERTIFICATEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Seller. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Seller,
if made in the manner provided in this Section 11.05.
(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 a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her 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 (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Seller, the Master Servicer nor any successor to any such parties
shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of 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 or exchange thereof, if applicable, or in lieu
thereof with respect to anything done, omitted or suffered to be done by the
Trustee, the Seller, the Master Servicer, the Custodian or any successor to any
such party in reliance thereon, whether or not notation of such action is made
upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Seller, the Master Servicer or any Sub- Servicer or
any Affiliate thereof shall be disregarded except as otherwise provided in
Section 11.02(b) and except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates which the Trustee knows to be so
owned shall be so disregarded. Certificates which have been pledged in good
faith to the Seller, the Master Servicer or any Sub-Servicer or any Affiliate
thereof may be regarded as outstanding if the pledgor establishes to the
satisfaction of the Trustee the pledgor's right to act with respect to such
Certificates and that the pledgor is not an Affiliate of the Seller, the Master
Servicer or any Sub-Servicer, as the case may be.
Section 11.06. [Reserved]
Section 11.07. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.08. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at or mailed by registered
mail, return receipt requested, postage prepaid, or by recognized overnight
courier, to (i) in the case of the Seller, 245 Park Avenue, New York, New York
10167, Attention: Vice President-Servicing (but with respect to monthly reports
sent pursuant to Section 6.07(b), Attention: Lynn Lin), or to such other address
as may hereafter be furnished to the other parties hereto in writing; in the
case of the Master Servicer, Countrywide Home Loans, Inc., 4500 Park Granada,
Mail Stop CH20, Calabasas, California 91302, Attention: Kevin W. Bartlett. or
such other address as may hereafter be furnished to the other parties hereto in
writing; (iii) in the case of the Trustee, at its Corporate Trust Office, or
such other address as may hereafter be furnished to the other parties hereto in
writing; (iv) in the case of the Rating Agency, Moody's, 99 Church Street, New
York, New York 10007 Attention: Residential Mortgage Surveillance Group or (v)
in the case of the initial Custodian, The Federal Home Loan Bank of Atlanta,
1475 Peachtree Street, NE, Atlanta, Georgia 30309, Attention: William C. Buss.
Any notice delivered to the Seller, the Master Servicer or the Trustee under
this Agreement shall be effective only upon receipt. Any notice required or
permitted to be mailed to a Certificateholder, unless otherwise provided herein,
shall be given by first-class mail, postage prepaid, at the address of such
Certificateholder 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
when mailed.
Section 11.09. 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 severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.10. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
Section 11.11. ARTICLE AND SECTION HEADINGS. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.12. COUNTERPARTS. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 11.13 NOTICE TO RATING AGENCY. The Trustee shall use its best
efforts to promptly provide notice to each Rating Agency with respect to each of
the following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Certificate Account.
In addition, in accordance with Section 6.06 and Section 3.16, the
Trustee and the Master Servicer, respectively, shall promptly furnish to the
Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 6.06; and
2. Each annual independent public accountants' servicing report
received as described in Section 3.16.
Section 11.14. NO LEGAL TITLE TO TRUST FUND IN CERTIFICATEHOLDERS. The
Certificateholders shall not have legal title to or any right to withdraw, any
part of the Trust Fund and shall only be entitled to receive distributions with
respect to their Certificates pursuant to Section 5.01 and Article X. No (i)
transfer, by operation of law or otherwise, of any right, title and interest of
the Certificateholders in and to their Certificates or (ii) the bankruptcy,
insolvency, termination or other incapacity of any Certificateholder shall
operate to terminate this Agreement or the Trust hereunder or entitle any
successor or transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Fund.
<PAGE>
IN WITNESS WHEREOF, the Seller, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
BEAR STEARNS MORTGAGE SECURITIES INC.,
as Seller
By: /s/ MARY HAGGERTY
Name: Mary Haggerty
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
as Master Servicer
By: /s/ DAVID SPECTOR
Name: David Spector
Title: Executive Vice President
THE BANK OF NEW YORK
as Trustee
By: /s/ FRANKLIN B. AUSTIN
Name: Franklin B. Austin
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE),
as Co-Trustee
By: /s/ REYNE A. MACADAEG
Name: Reyne A. Macadaeg
Title: Assistant Vice President
Accepted and Agreed as
to Sections 2.02, 2.03A, 2.04 and 9.05
BankUnited, FSB
By: ____________________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of March, 1998 before me, a notary public in and for said
State, personally appeared Mary Haggerty, known to me to be a Vice President of
Bear Stearns Mortgage Securities Inc., 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
[Notarial Seal]
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the day of February, 1998 before me, a notary public in and for
said State, personally appeared _____________, known to me to be a
_________________ of Countrywide Home Loans, Inc., 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
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of March, 1998 before me, a notary public in and for said
State, personally appeared ______________, known to me to be the
________________ of The Bank of New York, that executed the within instrument,
and also known to me to be the person who executed it on behalf of said trust
company and acknowledged to me that such trust company 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
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of March, 1998 before me, a notary public in and for said
State, personally appeared ______________, known to me to be the
________________ of The Bank of New York (Delaware), that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said trust company and acknowledged to me that such trust company 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-1
FORM OF FACE OF CERTIFICATES
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN, BEAR
STEARNS MORTGAGE SECURITIES INC., COUNTRYWIDE HOME LOANS, INC. OR THE TRUSTEE
REFERRED TO BELOW OR ANY OF THEIR RESPECTIVE AFFILIATES AND IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" (A "REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT
FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY A TRANSFEREE
UNLESS THE TRANSFEREE CERTIFIES TO THE TRUSTEE THAT IT IS NOT ACQUIRING THIS
CERTIFICATE DIRECTLY OR INDIRECTLY FOR, ON BEHALF OF OR WITH THE ASSETS OF, AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR GLOBAL CERTIFICATE
AND WILL BE EVIDENCED BY A REPRESENTATION TO SUCH EFFECT BY OR ON BEHALF OF A
HOLDER OF A CERTIFICATE IN PHYSICAL FORM.
MORTGAGE PASS-THROUGH CERTIFICATE,
NO. A- SERIES 1998-3
EVIDENCING A BENEFICIAL INTEREST IN
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CUSIP NO. 073914 B69
CUT-OFF DATE : FEBRUARY 1, 1998 CLASS : A
FIRST DISTRIBUTION DATE : MARCH 25, 1998 INITIAL PRINCIPAL AMOUNT
ASSUMED FINAL DISTRIBUTION DATE : FEBRUARY 25, 2028 OF THIS CERTIFICATE
("DENOMINATION") : $------------
MASTER SERVICER : COUNTRYWIDE HOME LOANS, INC. APPROXIMATE ORIGINAL CLASS
PASS-THROUGH RATE : VARIABLE PRINCIPAL AMOUNT : $332,071,600
</TABLE>
THIS CERTIFIES THAT CEDE & CO.
is the registered owner of the Fractional Undivided Interest evidenced hereby in
the beneficial ownership interest of Certificates of the same Class as this
Certificate in Bear Stearns Mortgage Securities Trust 1998-3, a Delaware
business trust under the Act (the "Trust"), the assets of which consist of
conventional, first lien, fully amortizing, adjustable rate mortgage loans with
original terms of approximately 30 years, secured by one- to four- family
residences and individual condominium units located primarily in Michigan,
Illinois, Colorado and Massachusetts (collectively, the "Mortgage Loans") sold
by Bear Stearns Mortgage Securities Inc. ("BSMSI"). The Mortgage Loans were sold
by BankUnited, FSB to BSMSI. Countrywide Home Loans, Inc. ("Countrywide") will
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust was created pursuant to the Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement"), by and among BSMSI, as
seller, Countrywide, as Master Servicer, The Bank of New York, as trustee (the
"Trustee") and The Bank of New York (Delaware), as co-trustee, a summary of
certain of the pertinent provisions of which is set forth hereinafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a variable per annum rate equal to the
weighted average of the Net Rates of the Mortgage Loans. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the calendar month preceding the month of such Distribution
Date, an amount equal to the product of the Fractional Undivided interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month immediately following
the month in which the last Due Date of any Mortgage Loan occurs and is not
likely to be the date on which the Current Principal Amount of this Class of
Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests by
notifying the Trustee in writing as specified in the Agreement and if such
Person holds Certificates with an initial aggregate Current Principal Amount of
not less than $1,000,000, in immediately available funds (by wire transfer or
otherwise) to the account specified in writing by such Person to the Trustee.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.
Unless this Certificate has been countersigned by an authorized signatory
of the Trustee by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DATED: MARCH 12, 1998
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
BY: THE BANK OF NEW YORK
Countersigned: Not in its individual capacity but
solely as Trustee
By___________________________________
Authorized signatory of The Bank By_____________________________
of New York not in its individual AUTHORIZED OFFICER
capacity but solely as Trustee
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN,
BEAR STEARNS MORTGAGE SECURITIES INC., COUNTRYWIDE HOME LOANS, INC. OR THE
TRUSTEE REFERRED TO BELOW OR ANY OF THEIR RESPECTIVE AFFILIATES AND IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" (A "REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT
FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY A TRANSFEREE
UNLESS THE PROPOSED TRANSFEREE CERTIFIES TO THE TRUSTEE THAT IT IS NOT ACQUIRING
SUCH CERTIFICATES DIRECTLY OR INDIRECTLY FOR, ON BEHALF OF OR WITH THE ASSETS
OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WHICH WILL
BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR GLOBAL
CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A CERTIFICATE IN PHYSICAL FORM.
MORTGAGE PASS-THROUGH CERTIFICATE,
NO. B-1-1 SERIES 1998-3
EVIDENCING A BENEFICIAL INTEREST IN
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CUSIP NO. 073914 B77
CUT-OFF DATE : FEBRUARY 1, 1998 CLASS : B-1
FIRST DISTRIBUTION DATE : MARCH 25, 1998 INITIAL PRINCIPAL AMOUNT
ASSUMED FINAL DISTRIBUTION DATE : FEBRUARY 25, 2028 OF THIS CERTIFICATE
("DENOMINATION") : $5,257,000
MASTER SERVICER : COUNTRYWIDE HOME LOANS, INC. APPROXIMATE ORIGINAL CLASS
PASS-THROUGH RATE : VARIABLE PRINCIPAL AMOUNT : $5,257,000
</TABLE>
THIS CERTIFIES THAT CEDE & CO.
is the registered owner of the Fractional Undivided Interest evidenced hereby in
the beneficial ownership interest of Certificates of the same Class as this
Certificate in Bear Stearns Mortgage Securities Trust 1998-3, a Delaware
business trust under the Act (the "Trust"), the assets of which consist of
conventional, first lien, fully amortizing, adjustable rate mortgage loans with
original terms of approximately 30 years, secured by one- to four- family
residences and individual condominium units located primarily in Michigan,
Illinois, Colorado and Massachusetts (collectively, the "Mortgage Loans") sold
by Bear Stearns Mortgage Securities Inc. ("BSMSI"). The Mortgage Loans were sold
by BankUnited, FSB to BSMSI. Countrywide Home Loans, Inc. ("Countrywide") will
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust was created pursuant to the Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement"), by and among BSMSI, as
seller, Countrywide, as Master Servicer, The Bank of New York, as trustee (the
"Trustee") and The Bank of New York (Delaware), as co-trustee, a summary of
certain of the pertinent provisions of which is set forth hereinafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a variable per annum rate equal to the
weighted average of the Net Rates of the Mortgage Loans. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the calendar month preceding the month of such Distribution
Date, an amount equal to the product of the Fractional Undivided interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month immediately following
the month in which the last Due Date of any Mortgage Loan occurs and is not
likely to be the date on which the Current Principal Amount of this Class of
Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests by
notifying the Trustee in writing as specified in the Agreement and if such
Person holds Certificates with an initial aggregate Current Principal Amount of
not less than $1,000,000, in immediately available funds (by wire transfer or
otherwise) to the account specified in writing by such Person to the Trustee.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.
Unless this Certificate has been countersigned by an authorized signatory
of the Trustee by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DATED: MARCH 12, 1998
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
BY: THE BANK OF NEW YORK
Countersigned: Not in its individual capacity but
solely as Trustee
By___________________________________
Authorized signatory of The Bank By_____________________________
of New York not in its individual AUTHORIZED OFFICER
capacity but solely as Trustee
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN, BEAR
STEARNS MORTGAGE SECURITIES INC., COUNTRYWIDE HOME LOANS, INC. OR THE TRUSTEE
REFERRED TO BELOW OR ANY OF THEIR RESPECTIVE AFFILIATES AND IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" (A "REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT
FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR (7) (OR ANY ENTITY IN WHICH ALL
OF THE EQUITY HOLDERS COME WITHIN SUCH PARAGRAPHS) OF REGULATION D UNDER THE
SECURITIES ACT PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE
FORM PROVIDED IN THE AGREEMENT AND (B) AN OPINION OF COUNSEL AS TO COMPLIANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY A TRANSFEREE
UNLESS THE PROPOSED TRANSFEREE CERTIFIES TO THE TRUSTEE THAT IT IS NOT ACQUIRING
SUCH CERTIFICATES DIRECTLY OR INDIRECTLY FOR, ON BEHALF OF OR WITH THE ASSETS
OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WHICH WILL
BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR GLOBAL
CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A CERTIFICATE IN PHYSICAL FORM.
MORTGAGE PASS-THROUGH CERTIFICATE,
NO. B-2-1 SERIES 1998-3
EVIDENCING A BENEFICIAL INTEREST IN
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CUT-OFF DATE : FEBRUARY 1, 1998 CLASS : B-2
FIRST DISTRIBUTION DATE : MARCH 25, 1998 INITIAL PRINCIPAL AMOUNT
ASSUMED FINAL DISTRIBUTION DATE : FEBRUARY 25, 2028 OF THIS CERTIFICATE
("DENOMINATION") : $13,142,815
MASTER SERVICER : COUNTRYWIDE HOME LOANS, INC. APPROXIMATE ORIGINAL CLASS
PASS-THROUGH RATE : VARIABLE PRINCIPAL AMOUNT : $13,142,815
</TABLE>
THIS CERTIFIES THAT BANKUNITED, FSB is the registered owner of the Fractional
Undivided Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in Bear Stearns Mortgage
Securities Trust 1998-3, a Delaware business trust under the Act (the "Trust"),
the assets of which consist of conventional, first lien, fully amortizing,
adjustable rate mortgage loans with original terms of approximately 30 years,
secured by one- to four- family residences and individual condominium units
located primarily in Michigan, Illinois, Colorado and Massachusetts
(collectively, the "Mortgage Loans") sold by Bear Stearns Mortgage Securities
Inc. ("BSMSI"). The Mortgage Loans were sold by BankUnited, FSB to BSMSI.
Countrywide Home Loans, Inc. ("Countrywide") will act as master servicer of the
Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust was created pursuant
to the Pooling and Servicing Agreement dated as of the Cut-off Date specified
above (the "Agreement"), by and among BSMSI, as seller, Countrywide, as Master
Servicer, The Bank of New York, as trustee (the "Trustee") and The Bank of New
York (Delaware), as co- trustee, a summary of certain of the pertinent
provisions of which is set forth hereinafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a variable per annum rate equal to the
weighted average of the Net Rates of the Mortgage Loans. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the calendar month preceding the month of such Distribution
Date, an amount equal to the product of the Fractional Undivided interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month immediately following
the month in which the last Due Date of any Mortgage Loan occurs and is not
likely to be the date on which the Current Principal Amount of this Class of
Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests by
notifying the Trustee in writing as specified in the Agreement and if such
Person holds Certificates with an initial aggregate Current Principal Amount of
not less than $1,000,000, in immediately available funds (by wire transfer or
otherwise) to the account specified in writing by such Person to the Trustee.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.
Unless this Certificate has been countersigned by an authorized signatory
of the Trustee by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed. DATED: MARCH 12, 1998 BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
DATED: MARCH 12, 1998
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
BY: THE BANK OF NEW YORK
Countersigned: Not in its individual capacity but
solely as Trustee
By___________________________________
Authorized signatory of The Bank By_____________________________
of New York not in its individual AUTHORIZED OFFICER
capacity but solely as Trustee
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN,
BEAR STEARNS MORTGAGE SECURITIES INC., BANKUNITED, FSB OR THE TRUSTEE REFERRED
TO BELOW OR ANY OF THEIR RESPECTIVE AFFILIATES AND IS NOT GUARANTEED OR INSURED
BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND IS NOT TREATED AS
INDEBTEDNESS OF THE TRUST REFERRED TO BELOW. EACH PURCHASER OF THE INTEREST
REPRESENTED BY THIS CERTIFICATE WILL BE REQUIRED TO REPRESENT IN AN AFFIDAVIT
THAT IT IS NOT A "DISQUALIFIED ORGANIZATION" AND WILL NOT TRANSFER THIS
CERTIFICATE TO A "DISQUALIFIED ORGANIZATION." THE TERM "DISQUALIFIED
ORGANIZATION" IS DEFINED IN SECTION 860E(E)(5) OF THE CODE AND IN THE AGREEMENT.
EACH PURCHASER WILL ALSO BE REQUIRED TO REPRESENT IN SUCH AFFIDAVIT THAT (A) IT
IS NOT ACQUIRING CERTIFICATES FOR THE ACCOUNT OF A DISQUALIFIED ORGANIZATION AND
(B) IT WILL NOT TRANSFER THIS CERTIFICATE UNLESS (1) IT HAS RECEIVED A SIMILAR
AFFIDAVIT FROM THE PROPOSED TRANSFEREE AND (2) AS OF THE TIME OF THE TRANSFER,
IT DOES NOT HAVE ACTUAL KNOWLEDGE THAT THE AFFIDAVIT OF THE PROPOSED TRANSFEREE
IS FALSE. IN THE EVENT THAT LEGISLATION IS ENACTED WHICH WOULD SUBJECT THE TRUST
REFERRED TO BELOW TO TAX (OR DISQUALIFY THE TRUST REFERRED TO BELOW) ON THE
TRANSFER OF AN INTEREST REPRESENTED BY THIS CERTIFICATE TO ANY OTHER PERSON OR
PERSONS, BEAR STEARNS MORTGAGE SECURITIES INC. SHALL, WITHOUT FURTHER ACTION ON
THE PART OF THE HOLDER OF THE RESIDUAL CERTIFICATE BE EMPOWERED, TO THE FULLEST
EXTENT POSSIBLE AND AS IF IT HAD SO VOTED, TO AMEND THE AGREEMENT REFERRED TO
BELOW TO RESTRICT OR PROHIBIT PROSPECTIVELY SUCH TRANSFER. THIS CERTIFICATE MAY
NOT BE TRANSFERRED TO A NON-U.S. PERSON AS DESCRIBED IN SECTION 5.05(C) OF THE
AGREEMENT REFERRED TO BELOW WITHOUT THE PRIOR WRITTEN CONSENT OF THE BANK OF NEW
YORK, ACTING FOR THE TAX MATTERS PERSON.
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT
FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY A TRANSFEREE
UNLESS THE PROPOSED TRANSFEREE CERTIFIES TO THE TRUSTEE THAT IT IS NOT ACQUIRING
SUCH CERTIFICATES DIRECTLY OR INDIRECTLY FOR, ON BEHALF OF OR WITH THE ASSETS
OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
AND/OR SECTIONS 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WHICH
WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR GLOBAL
CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A CERTIFICATE IN PHYSICAL FORM.
MORTGAGE PASS-THROUGH CERTIFICATE,
NO. R-1 SERIES 1998-3
EVIDENCING A BENEFICIAL INTEREST IN
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CUSIP NO. 073914 B85
CUT-OFF DATE : FEBRUARY 1, 1998 CLASS : R
FIRST DISTRIBUTION DATE : MARCH 25, 1998 INITIAL PRINCIPAL AMOUNT
ASSUMED FINAL DISTRIBUTION DATE : FEBRUARY 25, 2028 OF THIS CERTIFICATE
("DENOMINATION") : $100.00
MASTER SERVICER : COUNTRYWIDE HOME LOANS, INC. APPROXIMATE ORIGINAL CLASS
PASS-THROUGH RATE : VARIABLE PRINCIPAL AMOUNT : $100.00
</TABLE>
THIS CERTIFIES THAT
is the registered owner of the Fractional Undivided Interest evidenced hereby in
the beneficial ownership interest of Certificates of the same Class as this
Certificate in Bear Stearns Mortgage Securities Trust 1998-3, a Delaware
business trust under the Act (the "Trust"), the assets of which consist of
conventional, first lien, fully amortizing, adjustable rate mortgage loans with
original terms of approximately 30 years, secured by one- to four- family
residences and individual condominium units located primarily in Michigan,
Illinois, Colorado and Massachusetts (collectively, the "Mortgage Loans") sold
by Bear Stearns Mortgage Securities Inc. ("BSMSI"). The Mortgage Loans were sold
by BankUnited, FSB to BSMSI. Countrywide Home Loans, Inc. ("Countrywide") will
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust was created pursuant to the Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement"), by and among BSMSI, as
seller, Countrywide, as Master Servicer, The Bank of New York, as trustee (the
"Trustee") and The Bank of New York (Delaware), as co- trustee, a summary of
certain of the pertinent provisions of which is set forth hereinafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a variable per annum rate equal to the
weighted average of the Net Rates of the Mortgage Loans. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the calendar month preceding the month of such Distribution
Date, an amount equal to the product of the Fractional Undivided interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month immediately following
the month in which the last Due Date of any Mortgage Loan occurs and is not
likely to be the date on which the Current Principal Amount of this Class of
Certificates will be reduced to zero. The holder of this Certificate is also
entitled to receive any remaining assets of the Trust after all other Classes of
Certificates have been paid in full.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if such Person so requests by
notifying the Trustee in writing as specified in the Agreement and if such
Person holds Certificates with an initial aggregate Current Principal Amount of
not less than $1,000,000, in immediately available funds (by wire transfer or
otherwise) to the account specified in writing by such Person to the Trustee.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.
Unless this Certificate has been countersigned by an authorized signatory
of the Trustee by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DATED: MARCH 12, 1998
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3
BY: THE BANK OF NEW YORK
Countersigned: Not in its individual capacity but
solely as Trustee
By___________________________________
Authorized signatory of The Bank By_____________________________
of New York not in its individual AUTHORIZED OFFICER
capacity but solely as Trustee
<PAGE>
FORM OF REVERSE OF CERTIFICATES
<PAGE>
BEAR STEARNS MORTGAGE SECURITIES TRUST 1998-3.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-3
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in four
Classes. The Certificates, in the aggregate, evidence the entire beneficial
ownership interest in the Trust formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust for payment hereunder and that the Trustee is
not liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Master Servicer and the rights of the Certificateholders under the Agreement
from time to time by the Seller, the Master Servicer and the Trustee with the
consent of the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% (or in certain cases, Holders of Certificates of
affected Classes evidencing such percentage of the Fractional Undivided
Interests thereof). Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable with the Trustee upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in the City of New York, State of New York,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Seller, the Master Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Master Servicer, the Trustee nor
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust created thereby
(other than the obligations to make payments to Certificateholders with respect
to the termination of the Agreement) shall terminate upon the earlier of (i) the
later of the (A) final payment or other liquidation (or Monthly Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust and (B)
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan occurs and the remittance of all funds due
under the Agreement, or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust in accordance
with the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than 10% of the aggregate Scheduled Principal Balance
of the Mortgage Loans at the Cut-off Date. The exercise of such right will
effect the early retirement of the Certificates. The Trust also may be
terminated on any Distribution Date upon the determination, based upon an
opinion of counsel, that the REMIC status of certain assets of the Trust has
been lost or that a substantial risk exists that such status will be lost for
the then current year. In no event, however, will the Trust created by the
Agreement continue beyond the expiration of 21 years after the death of certain
persons identified in the Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
===============================================================================
(Please print or typewrite name and address including postal zip code assignee)
the within Certificate and hereby authorizes the transfer of registration of
such interest to the assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
- ----------------------------
Signature by or on behalf of assignor
- ----------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
--------------------------------------------------------------------------
--------------------------------------------------------------------------
for the account of
--------------------------------------------------------------------------
-------------
account number -------------------------------------, or, if mailed by check to
- -----------------------------------------------------------------------------
Applicable statements should be mailed to -------------------------------------
This information is provided by -----------------------------------------------
the assignee named above, or --------------------------------------------------
as its agent.
<PAGE>
EXHIBIT B
MORTGAGE LOAN SCHEDULE
Omitted. See Mortgage Loan Purchase Agreement. Also Available
Upon Request.
<PAGE>
REPRESENTATIONS AND WARRANTIES OF BANKUNITED
CONCERNING THE MORTGAGE LOANS
Capitalized terms used herein shall have the meanings set forth in the
Mortgage Loan Purchase Agreement and not in the Pooling and Servicing Agreement.
(a) the Mortgage creates a first lien or a first priority ownership
interest in the estate in fee simple in real property securing the related
Mortgage Note, free and clear of all adverse claims, liens and encumbrances
having priority over the first lien of the Mortgage subject only to (1) the lien
of non-delinquent current real property taxes and assessments not yet due and
payable, (2) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording which are
acceptable to mortgage lending institutions generally and either (A) which are
referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan, or (B) which do not adversely affect the appraised value of
the Mortgaged Property as set forth in such appraisal, and (3) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property;
(b) the terms of the Mortgage Note and the Mortgage have not been impaired,
waived, altered or modified in any respect, except by written instruments which
have been recorded to the extent any such recordation is required by applicable
law, and copies of which written instruments are included in the Mortgage File;
and no other instrument of waiver, alteration or modification has been executed,
and no Mortgagor has been released, in whole or in part, from the terms thereof
in connection with an assumption agreement, which assumption agreement is part
of the Mortgage File and the terms of which are reflected in the Mortgage Loan
Schedule;
(c) a standard hazard policy is in effect with respect to the related
Mortgaged Property and on the date of origination contained a standard mortgagee
clause naming the originator or the Seller, and its respective successors in
interest as loss payee and such clause is still in effect and all premiums due
thereon have been paid; if the Mortgaged Property is located in an area
identified by the Federal Emergency Management Agency is having special flood
hazards under the Flood Disaster Protection Act of 1973, as amended, such
Mortgaged Property is covered by flood insurance in an amount not less than that
required by the Pooling and Servicing Agreement; the Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to maintain such insurance at the Mortgagor's cost and expense and to
seek reimbursement therefor from the Mortgagor;
(d) any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate settlement procedures,
consumer credit protection, equal credit opportunity or disclosure laws
applicable to the Mortgage Loan have been complied with in all material
respects;
(e) the Mortgage is a valid, subsisting and enforceable first lien on the
Mortgaged Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance; the Mortgage and the Mortgage Note
do not contain any evidence of any other security interest or other interest or
right thereto; such lien is free and clear of all adverse claims, liens and
encumbrances having priority over the first lien of the Mortgage subject only to
permitted encumbrances set forth in clause (a)(1), (2) and (3) herein; any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest on
the property described therein;
(f) the Mortgage Note and the related Mortgage are original and genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in all respects in accordance with its terms subject to bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors, and the Seller has taken all action necessary to transfer such rights
of enforceability to the Purchaser; all parties to the Mortgage Note and the
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the Mortgage; and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties; the proceeds of
the Mortgage Loan have been fully disbursed and there is no requirement for
future advances thereunder, and any and all requirements as to completion of any
on-site improvements and as to disbursements of any escrow funds therefor have
been complied with;
(g) the Mortgage Loan is covered by an ALTA lender's title insurance policy
or other generally acceptable form of policy of insurance, issued by a title
insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in (a) (1),
(2) and (3) above) the originator, its respective successors and assigns, as to
the first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan; the originator or the Seller is the sole insured of its
respective lender's title insurance policy, such lender's originator of the
title insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement
and the Pooling and Servicing Agreement and will inure to the benefit of the
Purchaser and its assigns without any further act; and no claims have been made
under such lender's title insurance policy, and no prior holder of the related
Mortgage has done, by act or omission, anything which would impair the coverage
of such lender's title insurance policy;
(h) the Mortgage Loan was originated by or for Countrywide Home Loans, Inc.
and subsequently sold directly or indirectly on a servicing retained basis to
the Seller; the Mortgage Loan complies in all material respects with all the
terms, conditions and requirements of the underwriting standards of Countrywide
Home Loans, Inc., in effect at the time of origination of such Mortgage Loan;
provided, that certain Mortgage Loan may have characteristics outside of such
underwriting guidelines where compensating factors are present acceptable to the
mortgage banking industry; the Mortgage Note and Mortgage are on uniform Fannie
Mae/Freddie Mac instruments or are on forms acceptable to Fannie Mae or Freddie
Mac; the Mortgage Loan bears interest at an interest rate which adjusts annually
based on the weekly average yield on U.S. Treasury Securities, adjusted to a
constant maturity of one year plus a fixed percentage as set forth in the
Mortgage Loan Schedule, and Monthly Payments under the Mortgage Note are due and
payable on the first day of each month; and the Mortgage Loan contains the usual
and enforceable provisions of the originator at the time of origination for the
acceleration of the payment of the unpaid principal amount if the related
Mortgaged Property is sold without the prior consent of the mortgagee
thereunder;
(i) the related Mortgage contains 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 (1) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (2) otherwise by judicial foreclosure; and there is no
homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;
(j) if the Mortgage constitutes a deed of trust, a trustee, duly qualified
if required under applicable law to act as such, has been properly designated
and currently so serves and is named in the Mortgage, and no fees or expenses
are or will become payable by the Purchaser to the trustee under the trust,
except in connection with a trustees sale or attempted sale after default by the
Mortgagor;
(k) the Mortgage File contains an appraisal of the related Mortgaged
Property made and signed prior to the final approval of the mortgage loan
application by an appraiser which meets the minimum FNMA or FHLMC requisite
qualifications for appraisers, duly appointed by the originator, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan; the appraisal is in a form acceptable to FNMA
and FHLMC, with such riders as are acceptable to FNMA or FHLMC, as the case may
be;
(l) the related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;
(m) the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such Mortgage Loan;
(n) the Mortgage Loan has an original term to maturity of not more than
thirty years, with interest payable in arrears on the first day of each month;
and the Mortgage Loan does not contain terms or provisions which would result in
negative amortization;
(o) the related Mortgaged Property consists of a single parcel of real
property with a single-family residence erected thereon, or an individual
condominium unit in a condominium project or an individual unit in a planned
unit development; and to the best of the Seller's knowledge such Mortgaged
Property is lawfully occupied under applicable law;
(p) [Reserved]
(q) the Assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located;
(r) each Mortgage Loan was originated by, a savings and loan association,
savings bank, commercial bank, credit union, insurance company or similar
institution which is supervised and examined by a federal or State authority, or
by a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Section 203 and 211 of the National Housing Act;
(s) the information set forth in the Mortgage Loan Schedule is true,
complete and correct in all material respects as of the Cut-off Date;
(t) the Mortgage Loan has not been delinquent thirty (30) days or more at
any time within 12 months prior to the Cutoff Date; and as of the Cut-off Date,
no more than 0.50% of the Cut-off Date Principal Balance of the Mortgage Loans
were delinquent in payment more than 30 days and no Mortgage Loan has not been
dishonored; there are no defaults under the terms of the Mortgage Loan; and the
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by the Mortgage Loan;
(u) there are no delinquent taxes, ground rents, assessments or other
outstanding charges affecting the related Mortgaged Property;
(v) the Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage Note or
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(w) 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 with respect to certain
releases in part that do not materially affect the value of the Mortgaged
Property, nor has any instrument been executed that would effect any such
satisfaction, release, cancellation, subordination or rescission;
(x) immediately prior to the transfer and assignment to the Purchaser, the
Mortgage Note and the Mortgage were not subject to an assignment or pledge, and
the Seller had good and marketable title to, and was the sole owner of, and had
full right to transfer and sell, the Mortgage Loan to the Purchaser free and
clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest;
(y) there is no default, breach, violation or event of acceleration
existing under the 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 default, breach, violation or event permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;
(z) there are no mechanics, or similar liens or claims which have been
filed for work, labor or material affecting the related Mortgaged Property which
are or may be liens prior to or equal to the lien of the related Mortgage;
(aa) all improvements subject to the Mortgage lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) except for de minimus
encroachments permitted by the Fannie Mae Guide (MBS Special Servicing Option)
and which has been noted on the appraisal, and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in clause (g) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances;
(bb) the Mortgaged Property at origination of the Mortgage Loan was and
currently is free of damage and waste and at origination of the Mortgage Loan
there was, and there currently is, no proceeding pending for the total or
partial condemnation thereof; and
(cc) no Mortgage Loan has a Loan-to-Value Ratio in excess of 95.00%. The
original Loan-to-Value Ratio of each Mortgage Loan either was not more than
95.00% or the excess over 80.00% is insured as to payment defaults by a Primary
Mortgage Insurance Policy issued by a primary mortgage insurer acceptable to
Fannie Mae and Freddie Mac until the Loan-to-Value Ratio of such Mortgage Loan
is reduced to 80.00%.
<PAGE>
EXHIBIT D
REQUEST FOR RELEASE
(for Trustee)
LOAN INFORMATION
Name of Mortgagor: _____________________________
Loan No.: ____________________________
TRUSTEE
Name: The Bank of New York
Address: 101 Barcley Street, 12E
New York, New York 10286
Attention: Mortgage Backed Securities
ref: Bear Stearns/BankUnited 1998-3
Mortgage
File No.: _____________________________
MASTER SERVICER
Name: Countrywide Home Loans, Inc.
Address: 4500 Park Granada
Calabasas, California 91302
CUSTODIAN
Name: Federal Home Loan Bank of Atlanta
Address: 1475 Peachtree Street, NE
Atlanta, Georgia 30309
Certificates: Mortgage Pass-Through Certificates,
Series 1998-3
The undersigned hereby acknowledges that it has received from The Federal
Home Loan Bank of Atlanta, as custodian for The Bank of New York, as Trustee for
the holders of Bear Stearns Mortgage Securities Trust 1998-3. Mortgage
Pass-Through Certificates, Series 1998-3, the documents referred to below (the
"Documents"). All capitalized terms not otherwise defined in this Request for
Release shall have the meanings given them in the Pooling and Servicing
Agreement dated as of February 1, 1998 (the "Pooling and Servicing Agreement")
among the Trustee, Countrywide Home Loans, Inc., Bear Stearns Mortgage
Securities Inc. and The Bank of New York (Delaware) as co-Trustee.
( ) Mortgage Note dated ________, 19__, in the original principal sum of
$____________, made by _____________, payable to, or endorsed to the
order of, the Trustee.
( ) Mortgage recorded on _____________ as instrument no. _____________ in
the County Recorder's Office of the County of _______________, State
of ____________ in book/reel/docket _______________ of official
records at page/image ________.
( ) Deed of Trust recorded on _______________ as instrument no. _________
in the County Recorder's Office of the County of _______________,
State of _______________ in book/reel/docket __________ of official
records at page/image ____________________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
______________ as instrument no. ______ in the County Recorder's
Office of the County of _______________, State of _______________ in
book/reel/docket __________ of official records at page/image
________________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage:
( )
( )
( )
The undersigned hereby acknowledges and agrees as follows:
(1) The Master Servicer shall, and if the Master Servicer releases the
Documents to a Sub-Servicer or related Insurer the Master Servicer shall
cause such Sub-Servicer or related Insurer to, hold and retain possession
of the Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Master Servicer shall not cause or permit the Documents to
become subject to, or encumbered by, any claim, liens, security interest,
charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or
against the Documents or any proceeds thereof.
(3) The Master Servicer shall return the Documents to the Custodian
when the need therefor no longer exists, unless the Mortgage Loan relating
to the Documents has been paid in full or liquidated and the proceeds
thereof have been remitted to the Certificate Account or the Documents are
being used to pursue foreclosure or other legal proceedings and except as
expressly provided in the Agreement.
(4) Prior to the return of the Documents to the Custodian, the Master
Servicer shall, and if the Master Servicer releases such Documents to a
Sub-Servicer or related Insurer, the Master Servicer shall cause such
Sub-Servicer or related Insurer to, retain the Documents in its control
unless the Documents have been delivered to an attorney, or to a public
trustee or other public official as required by law, to initiate or pursue
legal action or other proceedings for the foreclosure of the Mortgaged
Property either judicially or nonjudicially.
(5) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer
shall at all times be earmarked for the account of the Trustee, and the
Master Servicer shall keep the Documents and any proceeds separate and
distinct from all other property in the possession, custody or control of
the Master Servicer.
Date: ______________________, 19__
COUNTRYWIDE HOME LOANS, INC.
By: _______________________________________
Name:
Title:
<PAGE>
EXHIBIT E
Affidavit pursuant to
Section 860E(e)(4) of the
Internal Revenue Code of
1986, as amended, and for
other purposes
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of__________] [the United States], on behalf of
which he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended,
and will not be a disqualified organization as of [Closing Date] [date of
purchase]; (ii) it is not acquiring the Bear Stearns Mortgage Securities Trust
1998-3 Mortgage Pass-Through Certificates, Series 1998-3, Class R Certificate
(the "Residual Certificate") for the account of a disqualified organization;
(iii) it consents to any amendment of the Pooling and Servicing Agreement that
shall be deemed necessary by Bear Stearns Mortgage Securities Inc. (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the Residual
Certificate will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificate unless (a)
it has received from the transferee an affidavit in substantially the same form
as this affidavit containing these same four representations and (b) as of the
time of the transfer, it does not have actual knowledge that such affidavit is
false.
3. That the Investor is one of the following: (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof or (iii) an estate or trust that is a United States Person
as defined in Code section 7701(a)(30).
4. That the Investor's taxpayer identification number is ___________.
5. That no purpose of the acquisition of the Residual Certificate is
to avoid or impede the assessment or collection of tax.
6. That the Investor understands that, as the holder of the Residual
Certificate, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificate as they become due.
IN WITNESS WHEREOF, the Investor 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 , 199_.
[NAME OF INVESTOR]
By:
[Name of Officer]
[Title of Officer]
[Address of Investor for
receipt of distributions]
Address of Investor
for receipt of tax
information:
<PAGE>
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 Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this day of , 199_.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the day of , 19 .
--- ------------- --
<PAGE>
EXHIBIT F-1
FORM OF INVESTMENT LETTER
[Date]
[SELLER]
The Bank of New York
101 Barclay Street, 12 E
New York, New York 10286
Attention: Corporate Trust Department,
ref: Bear Stearns/BankUnited 1998-3
Bear Stearns Mortgage Securities Inc.
245 Park Avenue
New York, New York 10167
Re: Bear Stearns Mortgage Securities Trust 1998-3, Mortgage
Pass-Through Certificates Series 1998-3 (the
"Certificates"), including the Class B-2, Certificates
(THE "PRIVATELY OFFERED CERTIFICATES")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates are not
being registered under the Securities Act of 1933, as amended
(the "Act") or any applicable state securities or "Blue Sky"
laws, and are being sold to us in a transaction that is exempt
from the registration requirements of such laws;
(ii) any information we desired concerning the Certificates, including
the Privately Offered Certificates, Bear Stearns Mortgage
Securities Trust 1998-3, the trust in which the Certificates
represent the entire beneficial ownership interest (the "Trust")
or any other matter we deemed relevant to our decision to
purchase Privately Offered Certificates has been made available
to us;
(iii) we are able to bear the economic risk of investment in Privately
Offered Certificates; we are an institutional "accredited
investor" as defined in Section 501(a) of Regulation D
promulgated under the Act and a sophisticated institutional
investor;
(iv) we are acquiring Privately Offered Certificates for our own
account, not as nominee for any other person, and not with a
present view to any distribution or other disposition of the
Privately Offered Certificates;
(v) we agree the Privately Offered Certificates must be held
indefinitely by us (and may not be sold, pledged, hypothecated or
in any way disposed of) unless subsequently registered under the
Act and any applicable state securities or "Blue Sky" laws or an
exemption from the registration requirements of the Act and any
applicable state securities or "Blue Sky" laws is available;
(vi) we agree that in the event that at some future time we wish to
dispose of or exchange any of the Privately Offered Certificates
(such disposition or exchange not being currently foreseen or
contemplated), we will not transfer or exchange any of the
Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as either
this letter or, if the Eligible Purchaser is a Qualified
Institutional Buyer as defined under Rule 144A of the Act, the
Rule 144A and Related Matters Certificate in the form attached to
the Pooling and Servicing Agreement (as defined below) is
executed promptly by the purchaser and delivered to the
addressees hereof and (3) all offers or solicitations in
connection with the sale, whether directly or through any agent
acting on our behalf, are limited only to Eligible Purchasers and
are not made by means of any form of general solicitation or
general advertising whatsoever; and
(B) if the Privately Offered Certificate is not registered
under the Act (as to which we acknowledge you have no
obligation), the Privately Offered Certificate is sold in a
transaction that does not require registration under the Act and
any applicable state securities or "blue sky" laws and, if The
Bank of New York (the "Trustee") so requests, a satisfactory
Opinion of Counsel is furnished to such effect, which Opinion of
Counsel shall be an expense of the transferor or the transferee;
(vii) we agree to be bound by all of the terms (including those
relating to restrictions on transfer) of the Pooling and
Servicing (as defined below), pursuant to which the Trust was
formed; we have reviewed carefully and understand the terms of
the Pooling and Servicing Agreement;
(viii) we are not an employee benefit plan or other retirement
arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, and/or
Section 4975 of the Internal Revenue Code of 1986, as amended,
("Plan") nor a trustee, fiduciary or other party acting directly
or indirectly for, on behalf of or with the assets of, any such
Plan.
(ix) We understand that each of the Class B-2 Certificates bears, and
will continue to bear, a legend to substantiate the following effect: THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR BLUE
SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) (OR ANY ENTITY IN WHICH ALL OF THE EQUITY HOLDERS
COME WITHIN SUCH PARAGRAPHS) OF REGULATION D UNDER THE SECURITIES ACT PURCHASING
NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE
AGREEMENT AND (B)IF REQUESTED BY THE TRUSTEE AN OPINION OF COUNSEL AS TO
COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES. THIS
CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, A TRANSFEREE UNLESS
THE PROPOSED TRANSFEREE CERTIFIES TO THE TRUSTEE THAT IS NOT ACQUIRING SUCH
CERTIFICATES DIRECTLY OR INDIRECTLY FOR, ON BEHALF OF OR WITH THE ASSETS OF, AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR GLOBAL CERTIFICATE
AND WILL BE EVIDENCED BY A REPRESENTATION TO SUCH EFFECT BY OR ON BEHALF OF A
HOLDER OF A CERTIFICATE IN PHYSICAL FORM.
"ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement dated as of February 1, 1998 among
Bear Stearns Mortgage Securities Inc., Countrywide Home Loans, Inc., The Bank of
New York, as Trustee and The Bank of New York (Delaware), as Co-Trustee (the
"Pooling and Servicing Agreement").
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):___________________
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ____ day of ________, 19__.
Very truly yours,
[PURCHASER]
By:__________________________
(Authorized Officer)
[By:__________________________
Attorney-in-fact]
<PAGE>
- ----------------------------------------------------------------
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:__________________________
(Authorized Officer)
[By:__________________________
Attorney-in-fact]
<PAGE>
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[Date]
[SELLER]
The Bank of New York
101 Barclay Street, 12 E
New York, New York 10286
Attention: Corporate Trust Department,
ref: Bear Stearns/BankUnited 1998-3
Bear Stearns Mortgage Securities Inc.
245 Park Avenue
New York, New York 10167
Re: Bear Stearns Mortgage Securities Trust 1998-3,
Mortgage Pass-Through Certificates Series 1998-3,
Class B-2 Certificates
(THE "PRIVATELY OFFERED CERTIFICATES")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to
a repurchase agreement and swaps), as described below:
Date: _____________, 19__ (must be on or after the close of its most
recent fiscal year)
Amount: $_________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the
following entities:
(1) |_| an insurance company as defined in Section 2(13) of the
Act; or (1) A purchase by an insurance company for one
or more of its separate accounts, as defined by Section
2(a)(37) of the Investment Company Act of 1940, which
are neither registered nor required to be registered
thereunder, shall be deemed to be a purchase for the
account of such insurance company.
(2) |_| an investment company registered under the Investment
Company Act or any business development company as
defined in Section 2(a)(48) of the Investment Company
Act of 1940; or
(3) |_| a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; or
(4) |_| a plan (i) established and maintained by a state, its
political subdivisions, or any agency or
instrumentality of a state or its political
subdivisions, the laws of which permit the purchase of
securities of this type, for the benefit of its
employees and (ii) the governing investment guidelines
of which permit the purchase of securities of this
type; or
(5) |_| a business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
(6) |_| a corporation (other than a U.S. bank, savings and loan
association or equivalent foreign institution),
partnership, Massachusetts or similar business trust,
or an organization described in Section 501(c)(3) of
the Internal Revenue Code; or
(7) |_| a U.S. bank, savings and loan association or equivalent
foreign institution, which has an audited net worth of
at least $25 million as demonstrated in its latest
annual financial statements; or
(8) |_| an investment adviser registered under the Investment
Advisers Act; or
b. |_| greater than $10 million, and the undersigned is a
broker-dealer registered with the SEC; or
c. |_| less than $10 million, and the undersigned is a
broker-dealer registered with the SEC and will only purchase
Rule 144A securities in transactions in which it acts as a
riskless principal (as defined in Rule 144A); or
d. |_| less than $100 million, and the undersigned is an investment
company registered under the Investment Company Act of 1940,
which, together with one or more registered investment
companies having the same or an affiliated investment
adviser, owns at least $100 million of eligible securities;
or
e. |_| less than $100 million, and the undersigned is an entity,
all the equity owners of which are qualified institutional
buyers.
The undersigned further certifies that it is purchasing Privately
Offered Certificates for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) a person
reasonably believed to be a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501 of the Act in a transaction that otherwise does not constitute a
public offering.
The undersigned agrees that if at some future time it wishes to
dispose of or exchange any of the Privately Offered Certificates, it will not
transfer or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement dated as of February 1, 1998 among Bear Stearns Mortgage
Securities Inc., as Seller, Countrywide Home Loans, Inc. as Master Servicer, The
Bank of New York, as Trustee, and The Bank of New York (Delaware), as Co-
Trustee pursuant to which the Certificates were issued.
The undersigned certifies that it is not an employee benefit plan or
other retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, and/or Section 4975 of the
Internal Revenue Code of 1986, as amended, ("Plan") nor a trustee, fiduciary or
other party acting directly or indirectly for, on behalf of or with the assets
of, any such Plan.
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):___________________
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ____ day of ________, 19__.
Very truly yours,
[PURCHASER]
By:__________________________
(Authorized Officer)
[By:__________________________
Attorney-in-fact]
- ----------------------------------------------------------------
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:__________________________
(Authorized Officer)
[By:__________________________
Attorney-in-fact]
<PAGE>
EXHIBIT G
FORM OF INITIAL CERTIFICATION
Bear Stearns Mortgage Securities Inc.
245 Park Avenue
New York, New York 10167
Countrywide Home Loans Inc.
4500 Park Granada
Calabasas, California 91302
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Re: Pooling and Servicing Agreement dated as of
February 1, 1998, among Bear Stearns Mortgage
Securities Inc., as seller, Countrywide Home
Loans, Inc., as master servicer, The Bank of New
York, as trustee and The Bank of New York
(Delaware), as co-trustee Mortgage Pass-Through
CERTIFICATES, SERIES 1998-3
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Custodian on behalf of Trustee, hereby
certifies, except as otherwise noted on the attached exception report, that as
to each Mortgage Loan listed on the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto) it has reviewed
the Mortgage File and the Mortgage Loan Schedule and has determined that: (i)
all documents required to be included in the Mortgage File pursuant to the
Pooling and Servicing Agreement are in its possession; (ii) such documents have
been reviewed by it and appear regular on their face, have, where applicable,
been executed and relate to such Mortgage Loan; and (iii) based on examination
by it, and only as to such documents, the information set forth in the Mortgage
Loan Schedule as to Mortgagor Name, original principal balance and loan number
respecting such Mortgage Loan is correct and accurately reflects the information
in the Mortgage Loan File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in subclauses (iv), (v) and (vi) of
Section 2.01(b) should be included in any Mortgage File. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or genuineness
of any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
THE FEDERAL HOME LOAN BANK
OF ATLANTA, as Custodian
By:_______________________
Name:
Title:
<PAGE>
EXHIBIT H
FORM OF FINAL CERTIFICATION
Bear Stearns Mortgage Securities Inc.
245 Park Avenue
New York, New York 10167
Countrywide Home Loans, Inc.
4500 Park Granada
Calabasas, California 91302
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Re: Pooling and Servicing Agreement dated as of
February 1, 1998, among Bear Stearns Mortgage
Securities Inc., as seller, Countrywide Home
Loans, Inc., as master servicer, The Bank of New
York, as trustee and The Bank of New York
(Delaware) as co-trustee Mortgage Pass-Through
CERTIFICATES, SERIES 1998-3______________________
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Custodian on behalf of the Trustee,
hereby certifies, except as otherwise noted on the attached exception report,
that as to each Mortgage Loan listed on the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or listed on the attachment hereto) it has
received the documents set forth in Section 2.01 and has determined that (i) all
documents required to be included in the Mortgage File pursuant to the Pooling
and Servicing Agreement are in its possession; (ii) such documents have been
reviewed by it and appear regular on their face, have, where applicable, been
executed and relate to such Mortgage Loan; and (iii) based on examination by it,
and only as to such documents, the information set forth in the Mortgage Loan
Schedule as to Mortgagor name, original principal balance and loan number
respecting such Mortgage Loan is correct and accurately reflects the information
in the Mortgage Loan File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in subclauses (iv), (v) and (vi) of
Section 2.01(b) should be included in any Mortgage File. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or genuineness
of any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
FEDERAL HOME LOAN BANK OF ATLANTA,
as Custodian
By:_______________________
Name:
Title:
<PAGE>
EXHIBIT I
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the
"Custodial Agreement"), dated as of February 1, 1998, by and among The Bank of
New York, not individually, but solely as Trustee (the "Trustee"), BankUnited,
FSB ("BankUnited") and The Federal Home Loan Bank of Atlanta (together with any
successor in interest or any successor appointed hereunder, the "Custodian").
W I T N E S S E T H T H A T
WHEREAS, Bear Stearns Mortgage Securities Inc. (the "Seller"), Countrywide Home
Loans, Inc., as Master Servicer (the "Master Servicer"), the Trustee and the
Bank of New York (Delaware), as Co-Trustee have entered into a Pooling and
Servicing Agreement dated as of February 1, 1998, relating to the creation of
Bears Stearns Mortgage Securities Trust 1998-3 (the "Trust") and the issuance of
its Mortgage Pass-Through Certificates, Series 1998-3 (as amended and
supplemented from time to time, the "Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for the
purposes of receiving and holding certain documents and other instruments
delivered by the Seller and the Servicer under the Agreement, all upon the terms
and conditions and subject to the limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Trustee, BankUnited and the Custodian
hereby agree as follows:
ARTICLE I DEFINITIONS
Capitalized terms used in this Custodial Agreement and not defined herein
shall have the meanings assigned in the Agreement, unless otherwise required by
the context herein.
ARTICLE II CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1. CUSTODIAN TO ACT AS AGENT; ACCEPTANCE OF MORTGAGE FILES.
The Custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges receipt of the Mortgage Notes, the Security Instruments,
the assignments and other documents required to be delivered by the Seller to
the Custodian pursuant to Section 2.01(b) of the Agreement and relating to the
Mortgage Loans identified on Schedule I hereto and declares that it holds and
will hold such Mortgage Notes, Security Instruments, assignments and other
documents and any similar documents received by the Trustee subsequent to the
date hereof (the "Mortgage Files") as agent for the Trustee, in trust, for the
benefit of the Trust and all present and future Certificateholders. The
Custodian agrees to execute the Initial Certification and the Final
Certification described in Sections 2.02(a) and 2.02 (b) of the Agreement.
Section 2.2. RECORDATION OF ASSIGNMENTS.
If any Mortgage File includes one or more assignments to the Trustee of
Security Instruments that have not been recorded, within 15 days of the Closing
Date, each such assignment shall be delivered by the Custodian to BankUnited for
the purpose of recording it in the appropriate public office for real property
records, and BankUnited, at no expense to the Custodian, shall, cause to be
recorded in the appropriate public office for real property records each such
assignment and, upon receipt thereof from such public office, shall return each
such assignment to the Custodian. The Custodian also agrees to perform its other
obligations under the Agreement, including but not limited to, its obligations
under Sections 2.01, 2.02, 2.03A, 2.04, 3.08, 3.11 and 3.13 thereof.
Section 2.3. REVIEW OF MORTGAGE FILES.
The Custodian agrees, for the benefit of the Trust and the
Certificateholders, to review, in accordance with the provisions of Section 2.02
of the Agreement, each Mortgage File. If in performing the reviews required by
this Section 2.3, the Custodian finds any document or documents constituting a
part of a Mortgage File to be unexecuted or missing or, based on the criteria
set forth in Section 2.02 of the Agreement, to be unrelated to the applicable
Mortgage Loan, the Custodian shall promptly so notify BankUnited, the Seller,
the Master Servicer and the Trustee.
Section 2.4. NOTIFICATION OF BREACHES OF REPRESENTATIONS AND WARRANTIES.
Upon discovery by the Custodian of a breach of any representation or
warranty made by BankUnited as set forth in Exhibit C to the Agreement, the
Custodian shall give prompt written notice to BankUnited, the Seller, the Master
Servicer and the Trustee.
Section 2.5. CUSTODIAN TO COOPERATE; RELEASE OF MORTGAGE FILES.
Upon the payment in full of any Mortgage Loan, 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 promptly notify the
Custodian by a Request for Release (Exhibit D to the Agreement) (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Certificate Account pursuant to the Agreement have been or will
be so deposited) of a Servicing Officer of the Master Servicer and shall request
delivery to it of the Mortgage File. The Custodian agrees, upon receipt of such
certification and request, promptly to release the related Mortgage File to the
Master Servicer.
From time to time as is appropriate for the servicing or foreclosure of any
Mortgage Loan, the Master Servicer shall deliver to the Custodian a Request for
Release of a Servicing Officer of the Master Servicer requesting that possession
of all, or any document constituting part of, the Mortgage File be released to
the Master Servicer and certifying as to the reason for such release. With such
Request for Release, the Master Servicer shall deliver to the Custodian a
receipt signed by a Servicing Officer of the Master Servicer on behalf of the
Master Servicer, and upon receipt of the foregoing, the Custodian shall deliver
the Mortgage File or such document to the Master Servicer and the Master
Servicer shall hold the Mortgage File or such document in trust for the benefit
of the Trust and the Certificateholders. The Master Servicer shall cause each
Mortgage File or any document therein so released to be returned to the
Custodian when the need therefor by the Master Servicer no longer exists, unless
(i) the Mortgage Loan has been liquidated and the Liquidation Proceeds relating
to the Mortgage Loan have been deposited in the Certificate Account to the
extent required by the Agreement or (ii) the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially. In the event of the liquidation of a Mortgage Loan, the
Custodian shall deliver such receipt with respect thereto to the Master Servicer
upon deposit of the related Liquidation Proceeds in the Certificate Account to
the extent required by the Agreement.
Section 2.6. ASSUMPTION AGREEMENTS.
In the event that any assumption agreement or substitution of liability
agreement is entered into with respect to any Mortgage Loan subject to this
Custodial Agreement in accordance with the terms and provisions of the
Agreement, the Master Servicer shall notify the Custodian that such assumption
or substitution agreement has been completed by forwarding to the Custodian the
original of such assumption or substitution agreement, which copy shall be added
to the related Mortgage File and, for all purposes, shall be considered a part
of such Mortgage File to the same extent as all other documents and instruments
constituting parts thereof.
ARTICLE III CONCERNING THE CUSTODIAN
Section 3.1. CUSTODIAN A BAILEE AND AGENT OF THE TRUSTEE.
With respect to each Mortgage Note, Security Instrument and other documents
constituting each Mortgage File which are delivered to the Custodian, the
Custodian is exclusively the bailee and agent of the Trustee, holds such
documents for the benefit of the Trust and the Certificateholders and undertakes
to perform such duties and only such duties as are specifically set forth in
this Agreement. Except upon compliance with the provisions of Section 2.5 of
this Custodial Agreement, no Mortgage Note, Security Instrument or other
document constituting a part of a Mortgage File shall be delivered by the
Custodian to the Master Servicer or otherwise released from the possession of
the Custodian.
Section 3.2. INDEMNIFICATION.
BankUnited hereby agrees to indemnify and hold the Custodian harmless from
and against all claims, liabilities, losses, actions, suits or proceedings at
law or in equity, or any other expenses, fees or charges of any character or
nature, which the Custodian may incur or with which the Custodian may be
threatened by reason of its acting as custodian under this Custodial Agreement,
including indemnification of the Custodian against any and all expenses,
including attorney's fees if counsel for the Custodian has been approved by
BankUnited, which approval shall not be unreasonably withheld, and the cost of
defending any action, suit or proceedings or resisting any claim.
Notwithstanding the foregoing, it is specifically understood and agreed that in
the event any such claim, liability, loss, action, suit or proceeding or other
expense, fees, or charge shall have been caused by reason of any negligent act,
negligent failure to act, or willful misconduct on the part of the Custodian, or
which shall constitute a willful breach of its duties hereunder, the
indemnification provisions of this Custodial Agreement shall not apply.
Section 3.3. CUSTODIAN MAY OWN CERTIFICATES.
The Custodian in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights it would have if it were not
Custodian.
Section 3.4. CUSTODIAN'S FEES AND EXPENSES.
The Custodian acknowledges that it has received payment, in advance, of all
fees payable to it hereunder for all services rendered by it in the exercise and
performance of any of the powers and duties hereunder of the Custodian, as set
forth in a separate letter agreement. BankUnited will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Custodial 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.
Section 3.5. CUSTODIAN MAY RESIGN; TRUSTEE MAY REMOVE CUSTODIAN.
The Custodian may resign from the obligations and duties hereby imposed
upon it as such obligations and duties relate to its acting as Custodian of the
Mortgage Loans upon giving 60 days written notice to the Trustee. Upon receiving
such notice of resignation, the Trustee shall either take custody of the
Mortgage Files itself and give prompt notice thereof to the Master Servicer, the
Seller, BankUnited, and the Custodian or promptly appoint a successor Custodian
which is able to satisfy the requirements of Section 3.7 (i) of this Custodial
Agreement by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Custodian and one copy to the successor
Custodian. If the Trustee shall not have taken custody of the Mortgage Files and
no successor Custodian shall have been so appointed and have accepted
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian. All fees and expenses
of any successor Custodian shall be the responsibility of BankUnited.
The Trustee may remove the Custodian at any time for cause, or otherwise
the Trustee may remove the Custodian at any time upon giving 60 days written
notice. In such event, the Trustee shall appoint, or petition a court of
competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority and shall be able to satisfy the other
requirements contained in Section 3.7 (i) of this Custodial Agreement.
Any resignation or removal of the Custodian and appointment of a successor
Custodian pursuant to any of the provisions of this Section 3.5 shall become
effective only upon acceptance of appointment by the successor Custodian and
subject to the prior approval of the Seller, the Master Servicer and BankUnited.
The Trustee shall give prompt notice to the Seller, the Master Servicer,
BankUnited and the Custodian of the appointment of any successor Custodian.
Section 3.6. MERGER OR CONSOLIDATION OF CUSTODIAN.
Any Person into which the Custodian may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Custodian shall be a party, or any
Person succeeding to the business of the Custodian, shall be the successor of
the Custodian 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.
Section 3.7. REPRESENTATIONS OF THE CUSTODIAN.
The Custodian hereby represents and warrants as follows:
(i) It is a depository institution subject to supervision or
examination by a federal authority, has a combined capital and surplus of
at least $100,000,000 and is qualified to do business in the jurisdiction
in which it will hold any Mortgage File;
(ii) It has full power, authority and legal right to execute and
deliver this Custodial Agreement and to perform its obligations hereunder
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Custodial Agreement;
(iii) To the best of its knowledge, after reasonable investigation,
the execution and delivery by it of this Custodial Agreement and the
performance by it of its obligations hereunder will not violate any
provision of its Charter or By-Laws or any law or regulation governing it
or any order, writ, judgment or decree of any court, arbitrator or
governmental authority or agency applicable to it or any of its assets. To
the best of its knowledge, after reasonable investigation, such execution,
delivery and performance will not require the authorization, consent or
approval of, the giving of notice to, the filing or registration with, or
the taking of any other action with respect to, any governmental authority
or agency regulating its activities. To the best of its knowledge, after
reasonable investigation, such execution, delivery and performance will not
conflict with, or result in a breach or violation of, any material
indenture, mortgage, deed of trust, lease or other agreement or instrument
to which it is a party or by which it or its properties are bound; and
(iv) This Custodial Agreement has been duly executed and delivered by
it, and when executed and delivered by the other parties hereto, will
constitute its valid, legal and binding obligation, enforceable against it
in accordance with its terms, except as the enforcement thereof may be
limited by applicable Debtor Relief Laws and that certain equitable
remedies may not be available regardless of whether enforcement is sought
in equity or at law.
ARTICLE IV MISCELLANEOUS PROVISIONS
Section 4.1. NOTICES.
All notices, requests, consents and demands and other communications
required under this Custodial Agreement or pursuant to any other instrument or
document delivered hereunder shall be in writing and, unless otherwise
specifically provided, may be delivered personally, by telegram or telex, or by
registered or certified mail, postage prepaid, return receipt requested, at the
addresses specified below (unless changed by the particular party whose address
is stated herein by similar notice in writing), in which case the notice will be
deemed delivered when received:
The Trustee: The Bank of New York
101 Barclay Street
New York, NY 10286
Attention: Corporate Trust--MBS Administration
Telecopy No.: (212) 815-5309
Confirmation: (212) 815-2297
The Custodian: Federal Home Loan Bank of Atlanta.
1475 Peachtree Street, NE
Atlanta, Georgia 30309
Attention: William C. Buss
Telecopy No.: (404) 888-5649
Confirmation: (404) 888-8236
BankUnited: BankUnited, FSB
255 Alhambra Circle
Coral Gables, Florida 33134
Attention: Clifford A. Hope
Telecopy No.: (305) 569-2057
Confirmation: (305) 569-3539
Section 4.2. AMENDMENTS.
No modification or amendment of or supplement to this Custodial Agreement
shall be valid or effective unless the same is in writing and signed by all
parties hereto. The Trustee shall give prompt notice to the Custodian of any
amendment or supplement to the Agreement and furnish the Custodian with written
copies thereof.
Section 4.3. GOVERNING LAW.
This Custodial Agreement shall be deemed a contract made under the laws of
the State of New York and shall be construed and enforced in accordance with and
governed by the laws of the State of New York.
Section 4.4. RECORDATION OF AGREEMENT.
To the extent permitted by applicable law, this Custodial Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties subject to the Mortgage Loans are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by BankUnited and at its expense on direction by the Trustee, but
only upon direction accompanied by an opinion of counsel to the effect that such
recordation materially and beneficially affects the interests of the Trust and
the Certificateholders.
For the purpose of facilitating the recordation of this Custodial Agreement
as herein provided and for other purposes, this Custodial Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 4.5. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Custodial 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 Custodial
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Custodial Agreement or of the Certificates or the rights of
the Holders thereof.
Section 4.6. WAIVER OF TRIAL BY JURY.
Each party hereto waives the right to trial by jury in any action, suit,
proceeding, or counterclaim of any kind arising out of or related to this
Custodial Agreement. In the event of litigation, this Custodial Agreement may be
filed as a written consent to a trial by the court.
Section 4.7. THIRD PARTY BENEFICIARY.
The Master Servicer shall be a third party beneficiary of this Custodial
Agreement, entitled to enforce the provisions hereof as if a party hereto.
Section 4.8. COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
THE FEDERAL HOME LOAN BANK OF
ATLANTA, as Custodian
By: __________________________
Name:
- --------------------------
Title:
- --------------------------
THE BANK OF NEW YORK,
as Trustee
By: __________________________
Name:
- --------------------------
Title:
- --------------------------
BANKUNITED, FSB
By: __________________________
Name:
- --------------------------
Title:
- --------------------------
<PAGE>
Exhibit J
CO-TRUSTEE AGREEMENT
This Co-Trustee Agreement (this "Co-Trustee Agreement"), dated as of
February 1, 1998, is between The Bank of New York (the "Trustee"), and The Bank
of New York (Delaware) (the "Delaware Trustee").
W I T N E S S E T H
WHEREAS, Bear Stearns Mortgage Securities, Inc., Countrywide Home Loans,
Inc., the Trustee and the Delaware Trustee have entered into a Pooling and
Servicing Agreement dated as of February 1, 1998 (as the same may be further
amended or restated from time to time, the "Agreement") with the intention of
forming Bear Stearns Mortgage Securities Trust 1998-3, a Delaware business trust
(the "Trust") pursuant to the Delaware Business Trust Act, 12 Del. C. '3801, ET
SEQ. (the "DBTA"); capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Agreement; and
WHEREAS, the DBTA requires that at least one trustee of the Trust have its
principal place of business in the State of Delaware; and
WHEREAS, the Delaware Trustee has its principal place of business in the
State of Delaware.
NOW, THEREFORE, the parties hereto hereby agree as follows:
FOR VALUABLE CONSIDERATION RECEIVED it is mutually covenanted and agreed
pursuant to the terms of Section [______] of the Agreement that the Delaware
Trustee has been and by this document is, appointed to serve as the trustee of
the Trust in the State of Delaware pursuant to Section 3807 of the DBTA. It is
understood and agreed that (a) the duties and responsibilities of the Delaware
Trustee shall be limited to the execution and delivery of all documents, and the
maintenance of all records, necessary to form and maintain the existence of the
Trust under the DBTA, and (b) the Delaware Trustee shall be entitled to all of
the benefits, immunities and protections provided to the Trustee in the
Agreement and any other related documents. By the execution hereof, the Delaware
Trustee accepts the trust created hereinabove and in the Agreement; provided
however, that the Delaware Trustee shall owe no other fiduciary duties to the
holders of the Certificates other than as expressly provided for in this
Co-Trustee Agreement.
This Co-Trustee Agreement may be executed in separate counterparts, each of
which shall be an original and all of which taken together shall constitute one
and the same instrument. This Co-Trustee Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Co- Trustee Agreement as
of the day and year first above written.
THE BANK OF NEW YORK
By: __________________________
Name:
Title:
THE BANK OF NEW YORK
(DELAWARE)
By: __________________________
Name:
Title:
Acknowledged:
Bear Stearns Mortgage Securities, Inc.
By: __________________________
Name:
Title:
Countrywide Home Loans, Inc.
By: __________________________
Name:
Title:
