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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 28, 1996
(Date of earliest event reported)
CMC SECURITIES CORPORATION II
(Exact name of Registrant as specified in its charter)
Delaware 33-68930 75-2473215
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
2711 N. Haskell Avenue
Suite 1000
Dallas, Texas 75204
(Address of Principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (214) 874-2500
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Item 2. Acquisition or Disposition of Assets.
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Reference is hereby made to the Registrant's Registration Statement on Form
S-11 (File No. 33-68930) filed with the Securities and Exchange Commission (the
"Commission") on September 16, 1993, as amended by Amendment No. 1 thereto filed
with the Commission on September 21, 1993, as further amended by Post Effective
Amendment No. 1 thereto filed with the Commission on September 23, 1993 and as
further amended by Post Effective Amendment No. 2 on Form S-3 thereto, filed
with the Commission on December 7, 1995 (collectively, the "Registration
Statement"), pursuant to which the Registrant registered $2,000,000,000
aggregate principal amount of its pass-through certificates, issuable in various
series, for sale in accordance with the provisions of the Securities Act of
1933, as amended (the "Act"). Reference is also hereby made to the Prospectus
dated June 26, 1996 and the related Prospectus Supplement, dated June 26, 1996
(collectively, the "Prospectus"), which were filed with the Commission on June
27, 1996 pursuant to Rule 424(b)(5), with respect to the Registrant's REMIC
Pass-Through Certificates, Series 1996-B, consisting of Class A1, Class A2 and
Class R Certificates (collectively, the "Certificates"). The Certificates
evidence, in the aggregate, the entire beneficial ownership interest in a trust
fund (the "Trust Fund"), the assets of which consist primarily of mortgage pass-
through certificates (the "Underlying Certificates"), of which the Registrant is
the Sponsor, evidencing interests in pools of adjustable rate mortgage loans
secured by one- to four- family residential properties.
The Underlying Certificates were created pursuant to the terms of an
Amended and Restated Pooling and Administration Agreement, dated as of October
1, 1993, as amended and supplemented to the date hereof (the "Amended and
Restated Pooling and Administration Agreement") by and among the Registrant, as
successor sponsor to Capstead Capital Corporation, Capstead Mortgage
Corporation, as administrator, and Texas Commerce Bank National Association, as
trustee. A copy of the Amended and Restated Pooling and Administration
Agreement is attached hereto as Exhibit 10.1. The Certificates were created
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pursuant to the terms of a Pooling Agreement, dated as of June 1, 1996 (the
"Pooling Agreement"), by and between the Registrant and Texas Commerce Bank
National Association, as trustee. A copy of the Pooling Agreement
is attached hereto as Exhibit 10.2.
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The Registrant is filing this Current Report on Form 8-K to report the
offering and sale by the Registrant of the Certificates on June 28, 1996 for an
aggregate net proceeds amount of $213,112,994.78. The Certificates were sold to
Lehman Brothers Inc. (the "Underwriter") pursuant to the terms of an
underwriting agreement dated as of June 26, 1996, as supplemented by a terms
agreement of even date therewith (collectively, the "Underwriting Agreement")
between the Registrant, Capstead Inc. and the Underwriter. A copy of the
Underwriting Agreement is attached hereto as Exhibit 1.1. The Underlying
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Certificates were acquired for a purchase price of $213,112,994.78, funded from
the aggregate net proceeds amount of the sale of the Certificates.
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Item 7. Financial Statements and Exhibits.
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(c) Exhibits
Exhibit No. Description
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1.1 Underwriting Agreement, dated as of June 26, 1996,
between the Registrant, Capstead Inc. and the
Underwriter
10.1A Amended and Restated Pooling and Administration
Agreement, dated as of October 1, 1993, by and among
the Registrant, as successor sponsor to Capstead
Capital Corporation, Capstead Mortgage Corporation, as
administrator, and Texas Commerce Bank National
Association, as trustee
10.1B Supplement No. 1 to Amended and Restated Pooling and
Administration Agreement
10.1C Supplement No. 2 to Amended and Restated Pooling and
Administration Agreement
10.1D Supplement No. 3 to Amended and Restated Pooling and
Administration Agreement
10.1E Amendment No. 1 to Amended and Restated Pooling and
Administration Agreement
10.1F Amendment No. 2 to Amended and Restated Pooling and
Administration Agreement
10.1G Amendment No. 3 to Amended and Restated Pooling and
Administration Agreement
10.2 Pooling Agreement, dated as of June 1, 1996, by and
between the Registrant and Texas Commerce Bank National
Association, as trustee
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Signatures
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
CMC SECURITIES CORPORATION II
July 11, 1996 By: /s/ Julie Moore
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Julie Moore
Senior Vice President - Asset and Liability Management
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EXHIBIT 1.1
CMC SECURITIES CORPORATION II
PASS-THROUGH CERTIFICATES
(Issuable in Series)
UNDERWRITING AGREEMENT
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June 26, 1996
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285-1000
Ladies and Gentlemen:
CMC Securities Corporation II (the "Company"), a Delaware corporation and
wholly-owned subsidiary of Capstead Inc., also a Delaware corporation
("Capstead"), proposes to issue its Pass-Through Certificates of the series
(each, a "Series") and classes designated at the time of sale (the
"Certificates"). Each Series of Certificates shall be issued pursuant to a
pooling agreement (each a "Pooling Agreement"), between the Company and Texas
Commerce Bank National Association, as trustee (the "Trustee").
Underwritten Offerings of Certificates may be made through you or through
an underwriting syndicate managed by you. The Company proposes to sell one or
more Series of Certificates to you and to each of the other several
underwriters, if any, participating in an underwriting syndicate managed by you.
It is understood, however, that the Company may elect to retain, through the
execution of one or more underwriting agreements in addition to this Agreement,
one or more additional underwriters other than you to underwrite, or manage the
underwriting syndicate with respect to, any offering of one or more Series of
its Certificates.
Whenever the Company determines to make such an offering of Certificates
through you, it will enter into an agreement (the "Terms Agreement") providing
for the sale of such Certificates (the "Offered Certificates") to, and the
purchase and offering thereof by, you and such other underwriters, if any,
selected by you as have authorized you to enter into such Terms Agreement on
their behalf (the underwriters designated in any such Terms Agreement being
referred to herein as "Underwriters," which term shall include you whether
acting alone in the sale of any Series of Certificates or as a member of the
underwriting syndicate). The Terms Agreement relating to each offering of
Certificates shall specify the principal amount of Certificates to be issued and
the terms governing the purchase of the Certificates by the Underwriters, a
brief description of the Mortgage Assets (as defined below), the names of the
Underwriters participating in such offering (subject to substitution as provided
in Section 11 hereof) and the principal amount of the Offered Certificates which
each severally agrees to purchase, the names of such other Underwriters, if any,
acting as
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co-managers with you in connection with such offering, the price at which the
Offered Certificates are to be purchased by the Underwriters from the Company,
the initial public offering price (or the manner in which such prices shall be
determined), the time and place of delivery of and payment for the Offered
Certificates, and such other information as may be agreed upon. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between you and the Company. Each offering of Certificates through you will be
governed by this Agreement, as supplemented by the applicable Terms Agreement,
and this Agreement and such Terms Agreement shall inure to the benefit of and be
binding upon each Underwriter participating in the offering of such
Certificates.
At their date of issuance, the Offered Certificates will evidence interests
in Asset Certificates (as defined in the applicable Pooling Agreement) (also
referred to herein as the "Mortgage Assets"). The Certificates are more fully
described in the Registration Statement (as defined below). Capitalized terms
used but not defined herein shall have the meanings given to them in the
applicable Pooling Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-68930), a related
preliminary prospectus and related preliminary prospectus supplements for the
registration of the Certificates under the Securities Act of 1933 (the "1933
Act"), which registration statement as most recently amended was declared
effective on December 11, 1995. Such registration statement, as from time to
time amended through the date of the Terms Agreement, including all exhibits
thereto and all documents therein incorporated by reference from time to time
pursuant to Item 12 of Form S-3 under the 1933 Act that were filed under the
Securities Exchange Act of 1934 (the "1934 Act"), on or before the effective
date of such registration statement, is hereinafter referred to as the
"Registration Statement." The prospectus in the form in which it appears in the
Registration Statement, including all documents therein incorporated by
reference from time to time pursuant to the 1934 Act, is hereinafter referred to
as the "Basic Prospectus". The Basic Prospectus as supplemented by the
prospectus supplement or supplements relating to a particular Series of
Certificates each in the form first filed after the date of the related Terms
Agreement with the Commission pursuant to Rule 424 under the 1933 Act, including
any documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act that were filed under the 1934 Act on or before the date of
such prospectus supplement (such prospectus supplement, including such
incorporated documents, in the form first filed after the date of the related
Terms Agreement pursuant to Rule 424(b) being hereinafter termed the "Prospectus
Supplement"), is hereinafter referred to as the "Final Prospectus". Any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement, the Final Prospectus or the Prospectus Supplement
shall be deemed to refer to and include the filing of any document under the
1934 Act after the effective date of the Registration Statement or the issue
date of the Final Prospectus or Prospectus Supplement, as the case may be,
deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3
under the 1933 Act.
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SECTION 1. Representations and Warranties. The Company and Capstead,
------------------------------
jointly and severally, represent and warrant to you as of the date hereof, and
to each Underwriter named in a Terms Agreement as of the date thereof (in each
case the "Representation Date"), as follows:
(a) The Registration Statement, at the time it became effective,
complied and, as of the date hereof, does comply, in all material respects
with the requirements of the 1933 Act and the rules and regulations of the
Commission thereunder (the "1933 Act Regulations") and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the Final Prospectus at the time it is mailed to the
Commission for filing pursuant to Rule 424 under the Act and at the Closing
Time referred to in Section 2 will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from (i) the Registration Statement or Final Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing
by any Underwriter through you expressly for use in the Registration
Statement or Final Prospectus or (ii) any Current Report (as defined in
Section 3(b) below), or in any amendment thereof or supplement thereto,
incorporated by reference in such Registration Statement or such Final
Prospectus (or any amendment thereof or supplement thereto). There are no
material contracts or documents of the Company which are required to be
filed as exhibits to the Registration Statement by the 1933 Act or the 1933
Act Regulations which have not been so filed.
(b) The documents incorporated by reference in the Registration
Statement and the applicable Final Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder, and, when read together and with
the other information in the applicable Final Prospectus, at the time the
Registration Statement and any amendments thereof became effective, and at
the time such Final Prospectus is filed with the Commission, did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to any Current Report.
(c) The accountants who reported on the balance sheet included or
incorporated in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(d) The balance sheet, if any, of the Company included or
incorporated in the Registration Statement presents fairly the financial
position of the Company at the date indicated, and has been prepared in
conformity with generally accepted accounting principles.
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(e) Since the respective dates as of which information is given in
the Registration Statement or, if later, the applicable Final Prospectus,
except as otherwise stated therein, there has been no material adverse
change in the condition, financial or otherwise, earnings, business
affairs, or business prospects of the Company.
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, and, at the Closing Time, the Company will be duly qualified as
a foreign corporation to transact business and will be in good standing in
the State of Texas. The Company is not required to qualify to do business
as a foreign corporation under the laws of any other state. The Company has
no subsidiaries.
(g) The authorized, issued and outstanding capital stock of the
Company is as set forth (or incorporated) in the Registration Statement,
and the shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-
assessable, and are owned of record and beneficially by Capstead, free and
clear of any lien, charge, option, warrant, security interest, encumbrance,
voting trust or similar arrangement.
(h) Neither the Company nor Capstead is in violation of its charter
or bylaws. The Company is not in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, pooling and administration agreement, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which it or its properties may be bound, which violations or defaults
separately or in the aggregate would have a material adverse effect on the
Company.
(i) The Company owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease, own or license, as the case may be, and
to operate, its properties and to carry on its business as described in the
Registration Statement or, if later, the applicable Final Prospectus; and
the Company has conducted and is conducting its business so as to comply in
all material respects with all applicable laws, administrative regulations
and administrative and court decrees.
(j) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending against the
Company or, to the knowledge of the Company, threatened against the Company
(except as set forth in the Registration Statement or, if later, the
applicable Final Prospectus) which could reasonably be expected to result
in any material adverse change in the condition, financial or otherwise,
earnings, business affairs, or business prospects of the Company which
could reasonably be expected to interfere with or materially and adversely
affect the consummation of the transactions contemplated herein.
(k) The execution and delivery of this Agreement, each applicable
Pooling Agreement and each Terms Agreement, the incurrence of the
obligations herein set forth and
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the consummation of the transactions contemplated herein and therein have
been, duly authorized by the Company and/or Capstead, as applicable, by all
necessary action (corporate and other); this Agreement has been and each
applicable Pooling Agreement and the Terms Agreement, when executed and
delivered, will have been, duly executed and delivered by the Company,
and/or Capstead, as applicable, and will be enforceable in accordance with
their terms, subject, as to enforceability of remedies, to applicable
bankruptcy, insolvency, reorganization, or other laws affecting creditors'
rights generally, and to general principles of equity and equitable
remedies (regardless of whether the enforceability of such remedies is
considered in a proceeding in equity or at law). Neither the execution and
delivery of this Agreement, the applicable Pooling Agreement or the Terms
Agreement, the incurrence of the obligations herein or therein set forth,
nor the consummation of the transactions contemplated herein or therein
will conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any lien, mortgage, pledge, charge,
security interest or encumbrance (collectively, "Lien") upon any property
or assets of the Company or Capstead, as applicable, pursuant to any
contract, indenture, pooling and administration agreement, mortgage, loan
agreement, note, lease or other instrument to which the Company or
Capstead, as applicable, is a party or by which either of them may be
bound, or to which any of the property or assets of either of them is
subject, which separately or in the aggregate are material, nor will any
such action result in any violation of the provisions of the charter or
bylaws of either of the Company or Capstead, or, to the best of such
entity's knowledge, of any law, administrative regulation or administrative
or court decree.
(l) The issuance of the Certificates underwritten by you has been
duly authorized by the Company (or will have been so authorized prior to
each issuance of Certificates underwritten by you) and, when such
Certificates are executed and authenticated and delivered in accordance
with the applicable Pooling Agreement and sold to the Underwriters pursuant
to this Agreement, and any Terms Agreement, such Certificates will be
entitled to the benefits and security provided by the applicable Pooling
Agreement and will constitute the legal, valid and binding non-recourse
obligations of the Company enforceable in accordance with their terms, but
otherwise subject, as to enforceability of remedies, to applicable
bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally, and to general principles of equity and equitable
remedies (regardless of whether the enforceability of such remedies is
considered in a proceeding in equity or at law).
(m) The Certificates of each Series underwritten by you and the
applicable Pooling Agreement will conform in all material respects to the
respective descriptions thereof contained in the applicable Final
Prospectus, except that no representation or warranty is made that the
Certificates conform with any description thereof contained in any Current
Report.
(n) At the Closing Time with respect to a Series of Certificates, the
Company will own (i) the Mortgage Assets listed in Exhibit B to the Pooling
Agreement relating to the applicable Series of Certificates and (ii) the
money or other assets specified or referred to in the conveyance clauses of
such Pooling Agreement as being sold, transferred, assigned and delivered
to the Trustee at Closing Time (the Mortgage Assets and assets referred to
in clauses (i) and (ii) of this subparagraph (n) are referred to
collectively as the "Initial Assets"),
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free and clear of any lien; the Company has power and authority (corporate
and other) to sell, transfer, assign and deliver the Initial Assets to the
Trustee under the applicable Pooling Agreement, and will have duly
authorized such sale, transfer, assignment and delivery to the Trustee by
all necessary corporate action.
(o) As of the Closing Time with respect to a Series of Certificates,
the Company will have sold, transferred, assigned and delivered to the
Trustee under the applicable Pooling Agreement all of its right, title and
interest in and to, among other things, (i) Mortgage Assets with an
aggregate outstanding principal balance as of such Closing Time at least
equal to the aggregate original principal amount of the Certificates of the
applicable Series then being issued and (ii) cash and/or other assets, if
any, in the amount set forth in the applicable Pooling Agreement.
(p) At the Closing Time with respect to a Series of Certificates, all
of the right, title and interest of the Company in each item of Mortgage
Assets listed on Exhibit B to the applicable Pooling Agreement relating to
the applicable Series of Certificates will have been duly and validly sold,
transferred, assigned and delivered to the Trustee, or its nominee, for the
exclusive use and benefit of all of the holders of Certificates of such
Series. Together with such sale, transfer, assignment and delivery of the
Mortgage Assets to the Trustee, the Company will file a UCC-1 financing
statement with respect to the Mortgage Assets in the office of the
Secretary of State of the State of Texas and in such other jurisdictions,
if any, as the Company deems appropriate in order to additionally protect
the interests of the holders of the Certificates of such Series in the
Mortgage Assets. The information set forth with respect to the Mortgage
Assets in Exhibit B to the related Pooling Agreement will as of the Closing
Time of such Series be true and correct in all material respects.
(q) The Company is not, and will not as a result of the offer and
sale of the Certificates as contemplated in this Agreement and any
applicable Terms Agreement become, an "investment company" or under the
"control" of an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act")
which would be required to register under the Investment Company Act.
(r) The representations and warranties made by the Company in the
applicable Pooling Agreement and made in any Officers' Certificate of the
Company delivered pursuant to the applicable Pooling Agreement will be true
and correct at the time made and at the Closing Time.
(s) (i) The applicable Pooling Agreement, at the Closing Time of the
related Series, will have been duly authorized, executed and delivered by,
and will constitute the legal, valid and binding agreement of the Company,
subject, as to enforceability of remedies, to applicable bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights
generally, and to general principles of equity and equitable remedies
(regardless of whether the enforceability of such remedies is considered in
a proceeding in equity or at law); (ii) such Pooling Agreement, the
Certificates, the Mortgage Assets evidenced thereby and
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the related policies of insurance shall conform in all material respects to
the respective descriptions thereof contained in the applicable Final
Prospectus.
(t) Any certificate signed by an officer of the Company or Capstead
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company or Capstead, respectively, to
each Underwriter as to the matters covered thereby.
(u) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the
United States is required for the issue and sale of the Certificates, or
the consummation by the Company of the other transactions contemplated by
this Agreement, each Terms Agreement or the applicable Pooling Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Certificates by the
Underwriters or as have been obtained.
(v) At the Closing Time of a Series, the Offered Certificates of such
Series shall have been rated one of the four highest rating categories by
at least one nationally recognized statistical rating organization or in
such lower rating categories as are acceptable to the Underwriters.
(w) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Agreement, the related Terms
Agreement, the applicable Pooling Agreement and the Certificates have been
paid or will be paid at or prior to the Closing Time.
SECTION 2. Sale and Delivery to the Underwriters; Closing. The several
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commitments of the Underwriters to purchase Offered Certificates pursuant to any
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth. The Company agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from the Company, the respective original principal amounts
of the Offered Certificates set forth in the applicable Terms Agreement opposite
the name of such Underwriter, plus any additional original principal amount of
Offered Certificates which such Underwriter may be obligated to purchase
pursuant to Section 11 hereof.
Delivery of, and payment of the purchase price for, the Offered
Certificates shall be made at the office of Andrews & Kurth L.L.P., 4400
Thanksgiving Tower, Dallas, Texas 75201, or at such other place as shall be
agreed upon by you and the Company, at 10:00 A.M. on the date set forth in the
applicable Terms Agreement, or such other time as shall be agreed upon by you
and the Company (such time and date being referred to as the "Closing Time").
Payment shall be made in immediately available or next day funds as specified in
the Terms Agreement, payable to or upon the order of the Company, against
delivery to you for the respective accounts of the Underwriters of the Offered
Certificates to be purchased by them. Such Certificates shall be in such
denominations and registered in such names as you may request in writing at
least two business days prior to the Closing Time.
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SECTION 3. Covenants of the Company. The Company covenants with you, and
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with each Underwriter participating in the offering of the applicable Series of
Certificates, as follows:
(a) Immediately following the execution of each Terms Agreement, the
Company will prepare a Final Prospectus setting forth the principal amount
of Certificates covered thereby, the names of the Underwriters
participating in the offering and the principal amount of Certificates
which each severally has agreed to purchase, the names of any Underwriters
acting as co-managers with you in connection with the offering, the price
at which the Certificates are to be purchased by the Underwriters from the
Company, the initial public offering price of the Certificates (or method
of calculation), the selling concessions and reallowance, if any, and such
other information as you and the Company deem appropriate in connection
with the offering of the Certificates. The Company will promptly transmit
copies of the Final Prospectus to the Commission for filing pursuant to
Rule 424 of the 1933 Act Regulations and will furnish to the Underwriters
named therein as many copies of the Final Prospectus as you shall
reasonably request.
(b) The Company will cause any Computational Materials and any
Structural Term Sheets (each as defined in Section 8 below) with respect to
the Certificates that are delivered by you to the Company pursuant to
Section 8 hereof to be filed with the Commission on a Current Report on
Form 8-K (any such Current Report on Form 8-K with respect to any
Computational Materials and any Structural Term Sheets related to the
Certificates is herein referred to as a "Current Report") pursuant to Rule
13a-11 under the 1934 Act not later than 11:00 a.m. Eastern Time on the
Business Day immediately following the Business Day on which all such
Section 8 Materials (as defined below) are delivered to counsel for the
Company by you prior to 3:00 p.m. Dallas, Texas time, and will promptly
advise you when any such Current Report has been filed, provided that in
any event the Company will cause the Section 8 Materials to be so filed not
later than the date on which the related Final Prospectus is required to be
so filed pursuant to Rule 424 under the 1933 Act. Any such Current Report
shall be incorporated by reference in such Final Prospectus and the related
Registration Statement. Notwithstanding the two preceding sentences, the
Company shall have no obligation to file any materials provided by you
pursuant to Section 8 ("Section 8 Materials") which, in the reasonable
determination of the Company (a "Non-Filing Determination"), are not
required to be filed pursuant to the Kidder Letter or the PSA Letter (each
as defined in Section 8 below), or which contain erroneous information or
contain any untrue statement of a material fact or, when read in
conjunction with the Final Prospectus and Prospectus Supplement, omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading (it being understood, however, that
the Company shall have no obligation to review or pass upon the accuracy or
adequacy of, or to correct, any Section 8 Materials provided by you to the
Company; provided that, in the event of a Non-Filing Determination, the
Company shall immediately notify you in writing of the reasons for such
Non-Filing Determination; and, provided, further, that the Company shall
file those Section 8 Materials for which you have specifically confirmed in
writing that the items giving rise to the Non-Filing Determination are
complete and correct and that you are advising the Company to file such
Section 8 Materials.
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(c) The Company will notify you immediately, and in writing confirm
the notice, (i) of the receipt of any comments from the Commission, (ii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Final Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) of receipt by the
Company of any notification with respect to the suspension of the
qualification of the Certificates for sale in any jurisdiction or the
initiation or threat of any proceeding for that purpose, and (v) of the
happening of any event which makes untrue any statement of a material fact
made in, or results in the omission of material information from, the
Registration Statement or in any Final Prospectus then required to be
distributed or which requires the making of a change in the Registration
Statement or any such Final Prospectus in order to make any material
statements therein, in the light of the circumstances under which they were
made, not misleading. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(d) The Company will give you notice of its intention to file any
amendment to the Registration Statement or any amendment or supplement to
the Final Prospectus, whether pursuant to the 1934 Act, 1933 Act or
otherwise, and will not file any such amendment or supplement without
furnishing a copy thereof to you and counsel for the Underwriters and
obtaining your consent to such filing, which consent shall not be
unreasonably withheld.
(e) The Company will deliver to you, as soon as practicable, as many
signed copies of the Registration Statement as originally filed and of each
amendment thereto, with signed consents and exhibits filed therewith
(including exhibits incorporated by reference therein and documents
incorporated by reference in the Final Prospectus), and will also deliver
to you such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including consents and
exhibits) as you may reasonably request.
(f) The Company will furnish to each Underwriter, from time to time
during the period when the Final Prospectus is required to be delivered
under the 1933 Act, such number of copies of the Final Prospectus (as
amended or supplemented), other than exhibits to any related Current
Report, as it may reasonably request for the purposes contemplated by the
1933 Act or the 1934 Act.
(g) If at any time when a prospectus relating to the Certificates is
required to be delivered under the 1933 Act any event occurs as a result of
which the applicable Final Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend such Final Prospectus to comply with the
1933 Act, the Company, subject to subparagraph (d) above, promptly will
prepare and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance; provided, however, that the Company will
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not be required to file any such amendment or supplement with respect to
any Section 8 Materials incorporated by reference in the Final Prospectus
other than any amendments or supplements of such Section 8 Materials that
are furnished to the Company by the Underwriter pursuant to Section 8(a)
hereof that the Company determines to file in accordance therewith.
(h) The Company will endeavor, in cooperation with you and counsel
for the Underwriters, to qualify the Offered Certificates for offering and
sale under the applicable securities and Blue Sky laws of such
jurisdictions as you may reasonably designate, and will maintain such
qualification in effect for as long as required for the distribution of
such Offered Certificates, unless the offering and sale of the Offered
Certificates is exempt from such qualification under the Secondary Mortgage
Market Enhancement Act of 1984, and will cooperate with you and counsel for
the Underwriters, to determine the eligibility of the Offered Certificates
for investment by institutional investors in such jurisdictions. The
Company will, at your request or the request of counsel for the
Underwriters, file such statements and reports as may be required by the
laws of each jurisdiction in which the Certificates have been qualified as
above provided. Notwithstanding the foregoing, no such qualification shall
be required in any jurisdiction where, as a result thereof, the Company
would be subject to general service of process, other than by reason of the
offer and sale of the Certificates, qualification as a foreign corporation
or to taxation as a foreign corporation doing business in such
jurisdiction.
(i) The Company will make generally available to its security holders
and will deliver to you as soon as practicable an earnings statement,
conforming to the requirements of Section 11(a) of the 1933 Act, covering a
period of at least twelve months beginning after the effective date of the
Registration Statement. Compliance with Rule 158 under the 1933 Act shall
satisfy the requirements of this paragraph.
(j) So long as any Certificates are outstanding, the Company will
furnish to you as soon as practicable:
(i) copies of the annual reports and other items required to
be delivered to the Trustee or sent to Certificateholders pursuant to
the applicable Pooling Agreement;
(ii) copies of any reports and financial statements furnished
to or filed with the Commission or any national securities exchange by
the Company; and
(iii) information as to the outstanding principal balances of
the Asset Certificates and mortgage loans evidenced thereby, and, to
the extent that such information has been maintained in the ordinary
course of business by the Company, such other information as may
reasonably be requested by you which in your judgment is necessary or
appropriate to the maintenance of a secondary market in the
Certificates.
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(k) So long as any Certificates of any Series underwritten by you are
outstanding, the Company will furnish to you within five days after they
are available, copies of all reports filed by the Company under the 1934
Act.
(l) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file promptly all documents required
to be filed with the Commission pursuant to Section 13 or 14 of the 1934
Act; provided, however, that, subject to the last sentence of Section 3(b)
hereof, the Company will not be required to file any amendment or
supplement to any Current Report incorporated by reference in the
Prospectus other than any amendments or supplements thereto that are
furnished to the Company by you pursuant to Section 8(a) hereof which the
Company determines to file in accordance therewith.
(m) The Company shall prepare and file with the Commission, within
the period provided in the related Final Prospectus, its Current Report on
Form 8-K which shall include such detailed information, schedules and
reports (the "Detailed Description") regarding the Mortgage Assets relating
to the Offered Certificates as the Underwriters may reasonably request;
provided that if a Detailed Description regarding the Mortgage Assets is
included in the Final Prospectus no such information is required to be
filed on a Current Report on Form 8-K unless the actual Mortgage Assets are
different from those described in the Final Prospectus.
(n) During the period, if any, commencing on the date of the
applicable Terms Agreement and expiring on the date specified in such Terms
Agreement (the "Stand-Off Period"), neither the Company nor Capstead nor or
any subsidiary thereof will, without your prior written consent or as may
be otherwise permitted by such Terms Agreement, offer or sell, or enter
into any agreement to sell to the public, any mortgage-related or mortgage-
backed securities issued by any of them which are similar to the
Certificates. The provisions of this subparagraph (n) do not apply to
securities issued or guaranteed by GNMA, FNMA or FHLMC.
SECTION 4. Payment of Expenses. The Company will pay, and Capstead will
-------------------
cause the Company to pay, all expenses incident to the performance of the
Company's obligations under this Agreement and the applicable Terms Agreement
(other than the expenses of Ernst & Young L.L.P. under Section 8(c) hereof, the
Underwriters' due diligence expenses, the Underwriters' counsel fees and the
Underwriters' own expenses, which will be paid by you), including and without
limitation those related to: (i) the filing of the Registration Statement with
respect to the Certificates and all amendments thereto, (ii) the printing or
photocopying and delivery to the Underwriters, in such quantities as you may
reasonably request, of copies of this Agreement and the Terms Agreement, (iii)
the preparation, registration, issuance and delivery to the Underwriters of the
Certificates underwritten pursuant to this Agreement, (iv) the fees and
disbursements of the Company's counsel and accountants, and of any counsel
rendering a closing opinion with respect to matters of local law, (v) the
qualification of the Certificates underwritten pursuant to this Agreement under
securities and Blue Sky laws and the determination of the eligibility of the
Certificates for investment in accordance with the provisions of Section 3(h),
including filing fees in connection therewith, (vi) the printing and delivery to
the Underwriters, in such quantities as you may reasonably request, of copies
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of the Registration Statement with respect to the Certificates underwritten
pursuant to this Agreement and all amendments thereto, of any preliminary
prospectus and preliminary prospectus supplement and of the Final Prospectus and
all amendments and supplements thereto and all documents incorporated therein
(other than exhibits to any Current Report), and of any Blue Sky Survey and
Legal Investment Survey, (vii) the printing or photocopying and delivery to the
Underwriters, in such quantities as you may reasonably request, of copies of the
applicable Pooling Agreement, (viii) the fees charged by investment rating
agencies requested by the Company to rate the Certificates underwritten pursuant
to this Agreement, (ix) the fees and expenses, if any, incurred in connection
with the listing of the Certificates underwritten pursuant to this Agreement on
any national securities exchange, and (x) the fees and expenses of the Trustee
and its counsel.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the Underwriters to purchase the Offered Certificates pursuant to any Terms
Agreement are subject to the accuracy in all material respects of the
representations and warranties of the Company and Capstead herein contained, to
the performance by the Company and Capstead of their obligations hereunder, and
to the following further conditions:
(a) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, (ii) the rating assigned as of the date of the applicable Terms
Agreement by any nationally recognized securities rating agency to the
Offered Certificates to be underwritten at such time pursuant to this
Agreement shall not have been lowered since that date and (iii) there shall
not have come to your attention any fact that would cause you to believe
that the Final Prospectus at the time it was required to be delivered to a
purchaser of the Offered Certificates to be underwritten at such time
pursuant to this Agreement contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at such time,
not misleading.
(b) At the applicable Closing Time you shall have received:
(1) The opinion, addressed to the Underwriters and dated the
Closing Time, of Andrews & Kurth L.L.P., counsel to the Company, in
form and substance reasonably satisfactory to you and counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Delaware.
(ii) The Company has corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the applicable Final Prospectus; and the Company is
qualified as a foreign corporation to transact business in the
State of Texas and each other jurisdiction where the nature of
its assets requires such qualification.
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(iii) All the authorized, issued and outstanding capital
stock of the Company has been duly authorized and validly issued
and is fully paid and non-assessable, and is owned of record by
Capstead, to the knowledge of such counsel, free and clear of any
lien, security interest, encumbrance, option, warrant, voting
trust or similar arrangement.
(iv) The Company is not in violation of its charter or
bylaws. To the best of such counsel's knowledge, the Company is
not in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
material contract, indenture, pooling and administration
agreement, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its
properties may be bound.
(v) To the best of such counsel's knowledge, the
Company owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to lease or own, as the case may
be, and to operate, its properties and to carry on its businesses
as presently conducted; and, to the best of such counsel's
knowledge, the Company has conducted and is conducting its
businesses so as to comply in all material respects with all
applicable laws.
(vi) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign,
now pending, or, to the best of such counsel's knowledge,
threatened against the Company which could reasonably be expected
to interfere with or adversely affect the consummation of the
transactions contemplated herein.
(vii) The execution and delivery of this Agreement, the
applicable Terms Agreement and the applicable Pooling Agreement,
the incurrence of the obligations herein and therein set forth
and the consummation of the transactions contemplated herein and
therein have been duly authorized by the Company, by all
necessary action; this Agreement and the applicable Terms
Agreement have been duly authorized, executed and delivered by
the Company; and the applicable Pooling Agreement has been duly
authorized, executed and delivered by the Company and
constitutes a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, subject, as to
enforceability of remedies, to applicable bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights
generally and to general principles of equity and equitable
remedies (regardless of whether the enforceability of such
remedies is considered in a proceeding at law or in equity).
(viii) Neither the execution and delivery of this
Agreement, the applicable Terms Agreement or the applicable
Pooling Agreement, the incurrence of the obligations herein or
therein set forth, nor the
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consummation of the transactions contemplated herein or therein,
to the best of such counsel's knowledge, will conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any Lien upon any property or assets of
the Company pursuant to, any material contract, indenture,
pooling and administration agreement, mortgage, loan agreement,
note, lease or other instrument to which the Company is a party
or by which it may be bound, or to which any of its assets is
subject which separately or in the aggregate are material, nor
will any such action result in any violation of the provisions of
the charter or bylaws of the Company or, to the best of such
counsel's knowledge, of any law, administrative regulation or
administrative or court decree.
(ix) No filing or, registration with, notice to or
consent, approval, authorization or order or other action of, any
court or governmental authority or agency, is required for the
consummation by the Company of the transactions contemplated by
this Agreement or the applicable Terms Agreement, except such as
have been obtained and except such as may be required under state
securities or Blue Sky laws in connection with the distribution
of the Certificates referred to in such Terms Agreement by the
Underwriters.
(x) The issuance of the Offered Certificates to be
underwritten at such time pursuant to this Agreement has been
duly authorized by the Company and such Offered Certificates have
been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the applicable Pooling
Agreement by the Trustee, when authenticated by the Trustee in
accordance with the terms of the applicable Pooling Agreement and
delivered to and paid for by the Underwriters pursuant to the
applicable Terms Agreement, will be entitled to the benefits
provided by the applicable Pooling Agreement. The Offered
Certificates are in all material respects in the form
contemplated by the applicable Pooling Agreement.
(xi) The Offered Certificates to be underwritten at such
time pursuant to this Agreement and the applicable Pooling
Agreement conform in all material respects to the respective
descriptions thereof contained in the applicable Final Prospectus
(excluding any descriptions thereof in any Current Report, as to
which no opinion need be rendered).
(xii) At the Closing Time, the Company had corporate
power and authority to sell, transfer, assign and deliver the
Initial Assets to the Trustee under the applicable Pooling
Agreement, and had duly authorized such sale, transfer,
assignment and delivery to the Trustee by all necessary corporate
action.
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<PAGE>
(xiii) The Registration Statement is effective under the
1933 Act, and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or threatened by the Commission.
(xiv) The Registration Statement and the applicable Final
Prospectus, and each amendment or supplement thereto (other than
the financial statements, schedules, notes thereto, and the
financial and statistical data included therein and any documents
incorporated by reference in the Registration Statement and the
applicable Final Prospectus, including without limitation any
Current Report, in each case as to which no opinion need be
rendered), as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(xv) The statements in the applicable Final Prospectus
under the captions "Certain Federal Income Tax Consequences" and
"ERISA Considerations", to the extent they constitute matters of
law or legal conclusions, have been prepared or reviewed by such
counsel and correctly represent the opinion of such counsel; the
descriptions in such Final Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown.
(xvi) To the best of such counsel's knowledge, there are
no legal or governmental proceedings pending or threatened which
are required to be disclosed therein, nor any contracts or
documents of a character required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed as
exhibits thereto (other than financial statements, schedules, and
notes thereto and the financial and statistical data included
therein and the other documents, if any, incorporated by
reference therein, as to which no opinion need be rendered).
(xvii) For each Series for which an election is made to
treat the Trust Fund or portion thereof (each, a "REMIC Pool") as
a "real estate mortgage investment conduit" (REMIC) for Federal
income tax purposes, assuming (1) the making of an appropriate
election, (2) compliance with all provisions of the applicable
Pooling Agreement, and (3) continuing compliance with the
applicable provisions of the Internal Revenue Code of 1986 as it
may be amended from time to time (the "Code") and any applicable
Treasury regulations adopted thereunder, each REMIC Pool will
qualify as a REMIC for Federal income tax purposes, each of the
Certificates, other than the Residual Certificates, issued
pursuant to the applicable Pooling Agreement will be treated as a
"regular interest" in a REMIC within the meaning of
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<PAGE>
Section 860G(a)(1) of the Code and the Residual Certificates of
each REMIC Pool will be treated as a "residual interest" in a
REMIC within the meaning of Section 860G(a)(2) of the Code.
(xviii) The Company is not, and will not as a result of
the offer and sale of the Offered Certificates as contemplated in
this Agreement and any applicable Terms Agreement, become an
"investment company" or under the "control" of an "investment
company" as such terms are defined in the Investment Company Act
which would be required to register under the Investment Company
Act.
(xix) Nothing has come to the attention of such counsel
that would lead them to believe that the Registration Statement
or any amendment thereto (other than the financial statements,
schedules, notes thereto and the financial and statistical data
included therein and any documents incorporated by reference
therein, including without limitation any Current Report related
thereto, in each case as to which no opinion need be rendered),
at their respective effective dates, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Final Prospectus or any
amendment or supplement thereto (other than any Current Report
related thereto, in each case as to which no opinion need be
rendered), at their respective issue dates or, as amended or
supplemented (except as aforesaid), at Closing Time, contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(xx) The Offered Certificates to be underwritten at such
time pursuant to this Agreement will be "mortgage related
securities," as defined in Section 3(a)(41) of the 1934 Act, so
long as such Offered Certificates are rated in one of the two
highest rating categories by at least one nationally recognized
statistical rating organization.
(xxi) The execution and delivery of Amendment No. 2 and
Amendment No. 3, the incurrence of the obligations therein set
forth and the consummation of the transactions contemplated
therein have been duly authorized by the Company and by Capstead
Mortgage Corporation, as Administrator ("Capstead Mortgage"), by
all necessary action; and each of Amendment No. 2 and Amendment
No. 3 has been duly authorized, executed and delivered by the
Company and Capstead Mortgage, constitutes a legal, valid and
binding agreement of the Company and Capstead Mortgage,
enforceable in accordance with its terms, subject, as to
enforceability of remedies, to applicable bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights
generally and to general principles of equity and equitable
remedies (regardless of whether the enforceability of such
remedies is considered in a proceeding at law or in equity.)
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(xxii) The issuance of the Asset Certificates has been
duly authorized by the Company and the Asset Certificates have
been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the applicable Asset
Issuance Agreement by the Trustee and Capstead Mortgage, when
authenticated by the Trustee in accordance with the terms of the
applicable Asset Issuance Agreement, will be entitled to the
benefits provided by such Asset Issuance Agreement.
(2) The opinion, addressed to the Underwriters and dated the
Closing Time, of counsel to Capstead, in form and substance reasonably
satisfactory to you and counsel for the Underwriters, to the effect
that:
(i) Capstead has been duly organized and is validly
existing as a corporation, in good standing under the laws of the
jurisdiction of its organization with corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the applicable Final Prospectus.
(ii) Capstead is not, nor will it be, as a result of its
entering into this Agreement and consummating the transactions
contemplated hereby, in violation of its charter or bylaws, and
to the best of such counsel's knowledge, is not in default in the
performance or observance of any obligation, agreement, covenant
or condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or its properties may be
bound.
(iii) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign,
now pending, or, to the best of such counsel's knowledge,
threatened against Capstead which could reasonably be expected to
interfere with or adversely affect the consummation of the
transactions contemplated herein.
(iv) The execution and delivery of this Agreement and the
applicable Terms Agreement, the incurrence of the obligations
herein and therein set forth and the consummation of the
transactions contemplated herein and therein have been duly
authorized by Capstead by all necessary corporate action; and
this Agreement and the applicable Terms Agreement have been duly
authorized, executed and delivered by Capstead.
(v) No filing or registration with, notice to or
consent, approval, authorization or order or other action of, any
court or governmental authority or agency, is required for the
consummation by Capstead of the transactions contemplated by this
Agreement or the applicable Terms Agreement, except such as have
been obtained and except such as may be required under state
securities or Blue Sky laws in connection with the distribution
of the
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Certificates to be underwritten at such time pursuant to this
Agreement by the Underwriters.
(vi) Any applicable servicing agreement executed by
Capstead in respect of the mortgage loans evidenced by the Asset
Certificates has been duly authorized, executed and delivered by,
and constitutes the legal, valid and binding agreement of
Capstead, subject, as to enforceability of remedies, to
applicable bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally, and to general principles
of equity and equitable remedies (regardless of whether the
enforceability of such remedies is considered in a proceeding in
equity or at law).
(c) At the Closing Time you shall have received the opinion of
Andrews & Kurth L.L.P., addressed to the Underwriters and dated the Closing
Time, with respect to certain tax matters, in substantially the same form
as their opinion filed as Exhibit 8.1 of the Registration Statement.
(d) At the Closing Time you shall have received the favorable
opinion, dated the Closing Time, of Brown & Wood, counsel for the
Underwriters, with respect to the issuance and sale of the Offered
Certificates, the Registration Statement, the Final Prospectus and such
other related matters as the Underwriter may reasonably require.
(e) At the Closing Time there shall not have been, since the date of
the applicable Terms Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse
change in the condition, financial or otherwise, earnings, business
affairs, regulatory situation or business prospects of the Company or
Capstead, whether or not arising in the ordinary course of business, and
you shall have received, at the Closing Time, a certificate of the Chairman
of the Board, the President, any Senior Executive Vice President, Executive
Vice President, Senior Vice President, Vice President or Authorized Officer
of the Company and of Capstead to the effect that there has been no such
material adverse change and to the effect that the other representations
and warranties of the Company and Capstead contained in Section 1 are true
and correct with the same force and effect as though made at and as of the
Closing Time.
(f) The Company and you shall have received from Ernst & Young L.L.P.
two letters, one dated as of the date of the applicable Terms Agreement,
and delivered simultaneously with the printing of the Final Prospectus, and
the other dated as of Closing Time and delivered at such time, in form and
substance satisfactory to you, and in the case of clause (v) below, the
Company and you, to the effect that:
(i) they are independent accountants with respect to the
Company within the meaning of the 1933 Act and the 1933 Act
Regulations;
(ii) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial and other information appearing in the applicable Final
Prospectus (other than any Current
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Report) and, with respect to their letter dated as of Closing Time,
the Detailed Description, which either relate to the Mortgage Assets
(including, without limitation, such data with respect to the Mortgage
Assets as is required to be set forth on the Schedule of Mortgage
Assets to be included in the applicable Pooling Agreement) or are
derived from the general accounting records of the Company which
appear, or are incorporated, in the Final Prospectus and the Detailed
Description and which are specified by you, and have compared such
amounts, percentages and financial and other information with such
sources as are specified by them and have found them to be in
agreement;
(iii) they have carried out certain other specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial and other information appearing in any
Current Report (other than any Current Report filed with respect to
Section 8 Materials), which procedures and information have been
specified by any Company, and have compared such amounts, percentages
and financial and other information with such sources as are agreed to
by the Company and have found them to be in agreement;
(iv) if a DEC Table (as defined below) is included in the Final
Prospectus, they have compared the data used in the calculations
described in (v) and (vii) below with the appropriate sources
described in (ii) above in the manner and to the extent specified in
such letter and acceptable to you;
(v) if a DEC Table is included in the Final Prospectus, using
the assumptions and methodology requested by you and as are consistent
with the applicable Pooling Agreement, all of which shall be described
in such letter, they have recalculated the percentages and weighted
average lives set forth in the Final Prospectus in the table (the "DEC
Table") entitled "Percent of Original Class Certificate Principal
Balance Outstanding," compared the results of their recalculations to
the corresponding items in such table, and found each such percentage
and weighted average life to be in agreement with the results of such
recalculation;
(vi) if any Certificates are targeted amortization class or
planned amortization class certificates, based upon the assumptions
and methodology set forth in the Final Prospectus, all of which shall
be described by reference in such letter, they have verified the
mathematical accuracy of any Scheduled Balance Table set forth in the
Final Prospectus for each indicated Distribution Date;
(vii) if a DEC Table is included in the Final Prospectus, using
the assumptions and methodology requested by you and as are consistent
with the applicable Pooling Agreement, all of which shall be described
in such letter, they have calculated, with respect to each
Distribution Date, the amount of principal and interest payable on the
Certificates then to be underwritten pursuant to this Agreement and
the corresponding amount of funds scheduled to be available for
application to the payments on such Certificates on such Distribution
Date, and found
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that such recalculations show that the amount of funds scheduled to be so
available on each Distribution Date exceeds the distribution amount on the
Certificates on such Distribution Date; and
(viii) if a DEC Table is included in the Final Prospectus, using
the assumptions and methodology requested by you and as are consistent
with the applicable Pooling Agreement, all of which shall be described
in such letter, they have recalculated the Scheduled Final
Distribution Dates of the Offered Certificates, and found that such
recalculated Scheduled Final Distribution Dates were no later than
those shown on the cover page of the Final Prospectus.
(g) At the Closing Time, you and the Company shall have received the
favorable opinion of counsel for the Trustee, addressed to the Underwriters
and the Company and dated the Closing Time, in form and substance
satisfactory to you and counsel for the Underwriters and the Company, to
the effect that:
(i) The Trustee is duly incorporated, validly existing and in
good standing as a national banking association under the laws of the
United States of America, with full corporate and trust power and
authority to conduct its business and affairs as a trustee;
(ii) The Trustee has full power and authority to execute and
deliver the applicable Pooling Agreement and to perform its
obligations thereunder;
(iii) The Trustee has duly accepted the office of Trustee under
the applicable Pooling Agreement; and
(iv) The Trustee has duly authorized, executed and delivered
the applicable Pooling Agreement.
(h) At the Closing Time, you shall have received the opinion of
counsel for Capstead Mortgage, to the effect that the execution and
delivery of the applicable Asset Issuance Agreement, the incurrence of the
obligations therein set forth and the consummation of the transactions
contemplated therein have been duly authorized by Capstead Mortgage, by all
necessary action; and the applicable Asset Issuance Agreement has been duly
authorized, executed and delivered by Capstead Mortgage and constitutes a
legal, valid and binding agreement of Capstead Mortgage, enforceable in
accordance with its terms, subject, as to enforceability of remedies, to
applicable bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and to general principles of equity and
equitable remedies (regardless of whether the enforceability of such
remedies is considered in a proceeding at law or in equity).
(i) At the Closing Time, the Offered Certificates then to be
underwritten pursuant to this Agreement shall be rated in the highest
rating category by the rating agencies requested to rate such Offered
Certificates or such other rating category as the related Terms Agreement
shall state.
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(j) At the Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions (including copies of insurance
policies described in the applicable Final Prospectus and opinions of
counsel with respect to such policies) as they may reasonably require for
the purpose of enabling them to pass upon the Registration Statement, the
applicable Final Prospectus, the issuance and sale of the Certificates then
to be underwritten pursuant to this Agreement as contemplated in the
applicable Terms Agreement and related proceedings, or in order to evidence
the accuracy of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and Capstead in connection with the issuance and sale
of the Certificates then to be underwritten pursuant to this Agreement as
contemplated in the applicable Terms Agreement and in the applicable
Pooling Agreement shall be reasonably satisfactory in form and substance to
you and counsel for the Underwriters.
(k) At the Closing Time, you shall have received letters,
certificates and opinions from counsel for each of PMI Mortgage Insurance
Company, Aetna Casualty and Surety Company and/or Capital Reinsurance
Company in form and substance satisfactory to you.
(l) At the Closing Time, you shall have received a reliance letter
related to each opinion of counsel for the Company that is delivered to the
rating agencies requested to rate the Certificates then to be underwritten
pursuant to this Agreement.
If any condition in this Section shall not have been fulfilled when and as
required to be fulfilled, this Agreement and the applicable Terms Agreement may
be terminated by you by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4.
SECTION 6. Indemnification. (a) The Company and Capstead, jointly and
---------------
severally, agree to indemnify and hold harmless each Underwriter and/or each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, preliminary
prospectus supplement or the Final Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein in the
light of the circumstances under which they were made not misleading;
provided, however, that (A) the Company shall not be liable in any
such case if such untrue statement or omission or such alleged untrue
statement or omission was made (1) in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
through you expressly for use in the Registration Statement (or any
amendment thereto) or in any preliminary prospectus, preliminary
prospectus supplement or each Final Prospectus (or any amendment or
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<PAGE>
supplement thereto) or (2) in any Current Report or any amendment or
supplement thereof, except to the extent that any untrue statement or
alleged untrue statement therein results (or is alleged to have
resulted) directly from an error (a "Mortgage Collateral Error") in
the information concerning the characteristics of the Mortgage Loans
furnished by the Company to you in writing or by electronic
transmission that was used in the preparation of either (x) any
Section 8 Materials (or amendments or supplements thereof) included in
such Current Report (or amendment or supplement thereof) or (y) any
written or electronic materials furnished to prospective investors on
which any Computational Materials (or amendments or supplements
thereof) were based; (B) such indemnity with respect to any Corrected
Statement (as defined below) in such Final Prospectus (or supplement
thereto) shall not inure to the benefit of any Underwriter (or any
person controlling any Underwriter) from whom the person asserting any
loss, claim, damage or liability purchased the Certificates that are
the subject thereof if such person did not receive a copy of a
supplement to such Final Prospectus at or prior to the confirmation of
the sale of such Certificates and the untrue statement or admission of
a material fact contained in such Final Prospectus (or supplement
thereto) was corrected (a "Corrected Statement") in such other
supplement and such supplement was furnished by the Company to you
prior to the delivery of such confirmation; and (C) such indemnity
with respect to any Mortgage Collateral Error shall not inure to the
benefit of any Underwriter (or any person controlling the Underwriter)
from whom the person asserting any loss, claim, damage or liability
received any Section 8 Materials (or any written or electronic
materials on which any Computational Materials are based) that were
prepared on the basis of such Mortgage Collateral Error, if, prior to
the time of confirmation of the sale of the applicable Certificates to
such person, the Company notified you in writing of the Mortgage
Collateral Error or provided in written or electronic form information
superseding or correcting such Mortgage Collateral Error (in any such
case a "Corrected Mortgage Collateral Error"), and such Underwriter
failed to notify such person thereof or to deliver to such person
corrected Section 8 Materials (or underlying written or electronic
materials relating thereto);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based, in each case, upon any such untrue statement
or omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; or
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
you) reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above.
-22-
<PAGE>
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the
Registration Statement, Capstead and each person, if any, who controls the
Company or Capstead within the meaning of Section 15 of the 1933 Act and
the officers and directors of any such person against any and all loss,
liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto) or any preliminary
prospectus, preliminary prospectus supplement or the Final Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity
with (i) written information furnished to the Company by such Underwriter
expressly for use in the Registration Statement (or any amendment thereto)
or in any preliminary prospectus, preliminary prospectus supplement or each
Final Prospectus (or any amendment or supplement thereto) or (ii) any
Section 8 Materials (or amendments or supplements thereof) furnished to the
Company by such Underwriter and incorporated by reference in such
Registration Statement or the related Final Prospectus or any amendment or
supplement thereto (except that no such indemnity shall be available for
any losses, claims, damages or liabilities, or actions in respect thereof,
resulting from any Mortgage Collateral Error, other than a Corrected
Mortgage Collateral Error).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. In no event
shall the indemnifying parties be liable for the fees and expenses of more
than one counsel in connection with any one action or separate but similar
and related actions in the same jurisdiction arising out of the same
general allegations or similar circumstances; provided, however, that if
-------- -------
the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal defenses and
to otherwise participate in the defense of such action on behalf of such
indemnified party or parties.
(d) The indemnity agreement provided by this Section 6 shall be in
addition to any liability the Company and the Underwriters shall otherwise
have.
SECTION 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unavailable to or insufficient to hold
harmless the indemnified parties although applicable in accordance with its
terms, the Company and Capstead, on the one hand, and the Underwriters on the
other, shall:
(a) in the case of any losses, claims, damages and liabilities (or
actions in respect thereof) relating to a class or classes of any Series of
Certificates (a "Class" or "Classes,"as the case may be) which do not arise
out of or are not based upon any untrue statement or
-23-
<PAGE>
omission of a material fact in any Section 8 Materials (or any amendments
or supplements thereof), contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred in respect of any Class or Classes underwritten pursuant
to this Agreement by the Company or Capstead and the Underwriter of such
Class or Classes, as incurred, in such proportions that the Underwriter of
such Class or Classes is responsible for that portion represented by the
percentage that the difference between the proceeds to the Company
appearing on the cover page of the applicable Final Prospectus and the
total of all proceeds received by such Underwriter from the sale of all
Offered Certificates underwritten by it (the "Underwriting Discount") bears
to the total proceeds received by such Underwriter from such Offered
Certificates, and the Company and Capstead are responsible for the balance;
and
(b) in the case of any losses, claims, damages and liabilities (or
actions in respect thereof) which arise out of or are based upon any untrue
statement or omission of a material fact in any Section 8 Materials (or any
amendments or supplements thereof), contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred in respect of any Class or Classes
underwritten pursuant to this Agreement by the Company or Capstead, and the
Underwriter of such Class or Classes, as incurred, in such proportion as is
appropriate to reflect the relative fault of the Company and Capstead on
the one hand and such Underwriter on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages and expenses (or actions in respect thereof) as well as any other
relevant equitable considerations; provided that in no event shall such
Underwriter be responsible for an amount greater than the excess, if any,
of the total net profit received by such Underwriter in the sale of all
Offered Certificates underwritten by it;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter and each director of the Company, each officer
of the Company and Capstead who signed the Registration Statement, and each
person, if any, who controls the Company or Capstead within the meaning of
Section 15 of the 1933 Act and the officers and directors of any such person
shall have the same rights to contribution as the Company or Capstead.
SECTION 8. Computational Materials and Structural Term Sheets. (a) As
--------------------------------------------------
soon as practicable and in no event later than 3:00 p.m. Dallas, Texas time two
Business Days before the date on which the Final Prospectus relating to the
Offered Certificates of a Series is required to be filed by the Company with the
Commission pursuant to Rule 424 under the 1933 Act, you shall deliver to the
Company five complete copies of all materials provided by you to prospective
investors regarding the Class or Classes being underwritten by you which
constitute (i) "Computational Materials" within the meaning of the no-action
letter dated May 20, 1994 issued by the Division of Corporation Finance of the
Commission to Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co.
Incorporated, and Kidder Structured Asset Corporation and the no-action letter
dated May 27, 1994 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (together, the "Kidder
Letters"), the filing of which
-24-
<PAGE>
material is a condition of the relief granted in such letter (such materials
being the "Computational Materials"), and (ii) "Structural Term Sheets" within
the meaning of the no-action letter dated February 17, 1995 issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association (the "PSA Letter"), the filing of which material is a condition of
the relief granted in such letter (such materials being the "Structural Term
Sheets"). Each delivery of Computational Materials or Structural Term Sheets to
the Company pursuant to this paragraph (a) shall be effected by delivering four
copies of such materials to counsel for the Company at Andrews & Kurth L.L.P.,
4400 Thanksgiving Tower, Dallas, Texas 75201, or such other address specified by
such counsel to you in writing, and one copy of such materials to the Company.
(b) You represent and warrant to and agree with the Company, as of
the date of the related Terms Agreement and as of the Closing Date, that:
(i) the Section 8 Materials furnished to the Company
constitute (either in original, aggregated or consolidated form) all
of the materials furnished to prospective investors by the
Underwriters prior to the time of delivery thereof to the Company that
are required to be filed with the Commission with respect to the
related Offered Certificates in accordance with the Kidder Letter and
the PSA Letter, and such Section 8 Materials comply with the
requirements of the Kidder Letter and the PSA Letter;
(ii) on the date any such Section 8 Materials with respect to
such Offered Certificates (or any written or electronic materials
furnished to prospective investors on which the Computational
Materials are based) were last furnished to each prospective investor
and on the date of delivery thereof to the Company pursuant to Section
8(a) and on the related Closing Date, such Section 8 Materials (or
such other materials) did not and will not include any untrue
statement of a material fact or, when read in conjunction with the
Final Prospectus and Prospectus Supplement, omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that you make no
representation or warranty as to such Final Prospectus and Prospectus
Supplement (other than such portion thereof described in Section
6(a)(i)(A)); and
(iii) all Section 8 Materials (or underlying materials
distributed to prospective investors on which the Computational
Materials were based) furnished to prospective investors contained and
will contain a legend, prominently displayed on the first page thereof
to the effect that the Section 8 Materials are being provided
exclusively by the Underwriter and that the content and accuracy of
such materials have not been reviewed by the Company, and otherwise in
form and substance satisfactory to the Company.
Notwithstanding the foregoing, you make no representation or warranty as to
whether any Section 8 Materials (or any written or electronic materials on which
the Computational Materials are based) included or will include any untrue
statement resulting directly from any Mortgage Collateral Error (except any
Corrected Mortgage Collateral Error, with respect to materials prepared after
the receipt
-25-
<PAGE>
by you from the Company of notice of such Corrected Mortgage Collateral Error or
materials superseding or correcting such Corrected Mortgage Collateral Error).
(c) You shall cause Ernst & Young L.L.P. to furnish to the Company a
letter, dated as of the date on which you deliver any Computational
Materials to the Company pursuant to Section 8(a), in form and substance
satisfactory to the Company, stating in effect that they have verified the
mathematical accuracy of any calculations performed by you and set forth in
such Computational Materials.
(d) You acknowledge and agree that any Section 8 Materials with
respect to any Series of Certificates furnished to prospective investors
from and after the date hereof have been prepared and disseminated by you
and not by or on behalf of the Company, and that such Section 8 Materials
shall include a disclaimer in the form set forth in paragraph (b)(iii)
above. This disclaimer shall not alter the rights or obligations of the
parties hereto pursuant to Sections 6 and 7 hereof.
(e) If, at any time when a prospectus relating to the Certificates of
a Series is required to be delivered under the 1933 Act, it shall be
necessary to amend or supplement the related Final Prospectus as a result
of an untrue statement of a material fact contained in any Section 8
Materials provided by you or the omission to state therein a material fact
required, when considered in conjunction with the Final Prospectus and
Prospectus Supplement, to be stated therein or necessary to make the
statements therein, when read in conjunction with the Final Prospectus and
Prospectus Supplement, not misleading, or if it shall be necessary to amend
or supplement any Current Report to comply with the 1933 Act or the rules
thereunder, you promptly will prepare and furnish to the Company for filing
with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance.
You represent and warrant to the Company, as of the date of delivery of
such amendment or supplement to the Company, that such amendment or
supplement will not include any untrue statement of a material fact or,
when read in conjunction with the Final Prospectus and Prospectus
Supplement, omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that you make no representation or warranty (i) as to such Final Prospectus
and Prospectus Supplement (other than such portion thereof described in
Section 6(a)(i)(A)) and (ii) as to whether any such amendment or supplement
will include any untrue statement resulting directly from any Mortgage Pool
Error (except any Corrected Mortgage Pool Error, with respect to any such
amendment or supplement prepared after the receipt by you from the Company
of notice of such Corrected Mortgage Pool Error or materials superseding or
correcting such Corrected Mortgage Pool Error). The Company shall have no
obligation to file such amendment or supplement if the Company determines
that (i) such amendment or supplement contains any untrue statement of a
material fact or, when read in conjunction with the Final Prospectus and
Prospectus Supplement, omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (it
being understood, however, that the Company shall have no obligation to
review or pass upon the accuracy or adequacy of, or to correct, any such
amendment or supplement provided by the Underwriter to the Company pursuant
to this paragraph (e)) or (ii) such filing is not required under the Act;
provided that, in the event the Company makes
-26-
<PAGE>
such a determination, it shall immediately notify you in writing of the
reasons for such determination; and, provided, further, that it shall file
such amendment or supplement if you specifically confirm in writing to the
Company that (A) such amendment or supplement does not contain any untrue
statement of a material fact or, when read in conjunction with the Final
Prospectus and Prospectus Supplement, omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (B) you are advising the Company to file such amendment
or supplement.
SECTION 9. Representations, Warranties, and Agreements to Survive
------------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement, or contained in certificates of officers of the Company or Capstead
submitted pursuant hereto or as contemplated hereby, shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of the Company or Capstead or a controlling person thereof, and shall survive
delivery of any Certificates to the Underwriters.
SECTION 10. Termination of Agreement. (a) This Agreement may be
------------------------
terminated for any reason at any time by either the Company or you upon the
giving of thirty days' written notice of such termination to the other party
hereto; provided, however, that if a Terms Agreement has been entered into but
the applicable Closing Time has not occurred, this Agreement shall not be
terminated pursuant to this Section 10(a) prior to such Closing Time.
(b) You may terminate this Agreement or such Terms Agreement, by
notice to the Company, at any time at or prior to the Closing Time, (i) if
there has been, since the respective dates as of which information is given
in the Registration Statement or the applicable Final Prospectus, any
material adverse change in the condition, financial or otherwise, earnings,
business affairs, regulatory situation or business prospects of the Company
or Capstead, whether or not arising in the ordinary course of business,
(ii) if there shall have occurred any material adverse change in the
financial markets of the United States or any outbreak or escalation of
hostilities or other national or international calamity or crisis the
effect of which is such as to make it, in your judgment, impracticable to
market the Certificates or enforce contracts for the sale of the
Certificates, or (iii) if trading in any securities of the Company has been
suspended by the Commission or a national securities exchange, or if
trading generally on either the American Stock Exchange or the New York
Stock Exchange shall have been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have
been required, by either of said exchanges or by order of the Commission or
any other governmental authority, or if a banking moratorium shall have
been declared by either Federal or New York authorities, or (iv) if the
rating assigned by any nationally recognized securities rating agency
requested to rate any specific debt securities of the Company as of the
date of any applicable Terms Agreement shall have been lowered since that
date or if any such rating agency shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
requested rating of such debt securities of the Company, or (v) if there
shall have come to your attention any facts that would cause you to believe
that the applicable Final Prospectus, at the time it was required to be
delivered to a purchaser of the Certificates offered thereby, contained an
untrue statement of a material fact or omitted to state a material
-27-
<PAGE>
fact necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading.
(c) In the event of any such termination, (i) the covenants set forth
in Section 3 with respect to any offering of Certificates shall remain in
effect so long as any Underwriter owns any such Certificates purchased from
the Company pursuant to the applicable Terms Agreement and (ii) the
covenant set forth in Section 3(i), the provisions of Section 4, the
indemnity agreement set forth in Section 6, the contribution provisions set
forth in Section 7, and the provisions of Sections 8, 9 and 14 shall remain
in effect.
SECTION 11. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at the Closing Time to purchase the Certificates
which it or they are obligated to purchase hereunder and under the applicable
Terms Agreement (the "Defaulted Certificates"), you shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Certificates in such amounts as may be agreed upon and upon the
terms herein set forth and under the applicable Terms Agreement. If, however,
you have not completed such arrangements within such 24-hour period, then:
(a) if the aggregate original principal amount of Defaulted
Certificates does not exceed 10% of the aggregate original principal amount
of the Certificates to be purchased pursuant to such Terms Agreement, the
non-defaulting Underwriters named in such Terms Agreement shall be
obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations thereunder bear to the underwriting
obligations of all non-defaulting Underwriters; and
(b) if the aggregate original principal amount of Defaulted
Certificates exceeds 10% of the aggregate original principal amount of the
Certificates to be purchased pursuant to such Terms Agreement, the
applicable Terms Agreement shall terminate without any liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section 11 and nothing in this Agreement
shall relieve any defaulting Underwriter from liability in respect of its
default.
In the event of any such default which does not result in a termination of
this Agreement or such applicable Terms Agreement, either you or the Company
shall have the right to postpone the Closing Time for a period of time not
exceeding seven days in order to effect any required changes in the Registration
Statement or in any other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Company shall be directed to its agent for service set forth on the cover page
of the Registration Statement, notices to the Company shall be directed to it at
City Place Center East, 2711 N. Haskell Avenue, Suite 1000, Dallas, Texas 75204,
Attention: Ronn K. Lytle and notices to you shall be directed to you c/o Lehman
Brothers Inc., 3 World Financial Center, New York, New York 10285-1000,
Attention: Rich Uhlig or in respect of any Terms
-28-
<PAGE>
Agreement, to such other person and place agreed upon by those of you who are
parties to such Terms Agreements.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon you, the Company and Capstead, and any Terms Agreement shall inure
to the benefit of and be binding upon the Company and Capstead and any
Underwriter who becomes a party to such Terms Agreement, and their respective
successors. Nothing expressed or mentioned in this Agreement or any Terms
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and directors referred to in Sections 6 and
7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any Terms Agreement or
any provision herein or therein contained. This Agreement and any Terms
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and thereto and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Certificates from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
Section 14. This Agreement and each Terms Agreement may be executed by one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT AND EACH TERMS
----------------------
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. UNLESS OTHERWISE SPECIFIED, SPECIFIED TIMES OF DAY REFER TO
NEW YORK CITY TIME.
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<PAGE>
If the foregoing is in accordance with your understanding hereof, the form
of acceptance set forth below should be signed by you, whereupon this instrument
along with all counterparts will become a binding agreement among the Company,
Capstead, and us in accordance with its terms.
Very truly yours,
CMC SECURITIES CORPORATION II
By:________________________________
Name: Wade Walker
Title: Vice President - Asset and
Liability Management
CAPSTEAD INC.
By:________________________________
Name: Wade Walker
Title: Authorized Officer
ACCEPTED at New York, New York as
of the date first above written.
LEHMAN BROTHERS INC.
By:______________________________
Name:____________________________
Title:___________________________
<PAGE>
EXHIBIT A
CMC SECURITIES CORPORATION II
(a Delaware corporation)
Pass-Through Certificates, Series 1996-B
Terms Agreement
---------------
Dated: June __, 1996
CMC Securities Corporation II
CityPlace Center East
2711 N. Haskell Avenue
Suite 1000
Dallas, Texas 75204
Re: Underwriting Agreement dated June __, 1996
Title of Certificates:
Section 1. The Offered Certificates: The Series 1996-B Certificates (the
------------------------
"Offered Certificates") shall be as follows:
(a) Principal amount to be issued: $_____________
-----------------------------
(b) Public offering price:
---------------------
(c) Purchase price:
--------------
[plus accrued interest from _______________.]
(d) Payment Dates:
-------------
(e) Accrual Periods:
---------------
(f) Certificate Rating: It is a condition to the issuance of the
------------------
Offered Certificates that they be rated "___" by _______________.
Section 2. Closing; Stand-Off Period:
-------------------------
A - 1
<PAGE>
(a) Closing date and location:
-------------------------
(b) Type of funds to be delivered by the Underwriters at the Closing:
----------------------------------------------------------------
(c) Expiration date of Stand-Off Period:
-----------------------------------
(d) Securities excluded from Stand-Off Period restrictions:
------------------------------------------------------
Section 3. Co-managers:
-----------
Section 4. Purchase by the Underwriter(s):
------------------------------
The Underwriter agrees, subject to the terms and provisions herein and of
the above-referenced Underwriting Agreement (as modified and amended by the
terms hereof), which is incorporated herein in its entirety and made a part
hereof, to purchase [the entire aggregate principal amount of the Offered
Certificates in the Classes set forth in Section 1 hereof].
LEHMAN BROTHERS INC.
By:________________________________
Name:______________________________
Title:_____________________________
Accepted:
CMC SECURITIES CORPORATION II
By:________________________________
Name:______________________________
Title:_____________________________
CAPSTEAD INC.
By:________________________________
Name:______________________________
Title:_____________________________
A - 2
<PAGE>
EXHIBIT 10.1A
AMENDED AND RESTATED
POOLING AND ADMINISTRATION AGREEMENT
AMONG
CAPSTEAD CAPITAL CORPORATION
as Sponsor
CAPSTEAD MORTGAGE CORPORATION,
as Administrator
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Trustee
CAPSTEAD CAPITAL CORPORATION
PORTFOLIO PASS-THROUGH PROGRAM 1993PA
Mortgage Pass-Through Certificates
Series 1993PA-1 through 1993PA-20
(and such Additional Series as may
be issued pursuant to a
Supplement to this Agreement)
Dated as of
October 1, 1993
<PAGE>
THIS AMENDED AND RESTATED POOLING AND ADMINISTRATION AGREEMENT, dated as of
October 1, 1993, is executed among CAPSTEAD CAPITAL CORPORATION, a Delaware
corporation ("CCC"), CAPSTEAD MORTGAGE CORPORATION, a Maryland corporation, as
Administrator (the "Administrator"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association, as Trustee (the "Trustee").
W I T N E S S E T H T H A T
In consideration of the premises and the mutual agreements herein
contained, CCC, the Administrator and the Trustee hereby agree as follows:
ARTICLE I.
Definitions
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings indicated:
Additional Series: Each Series, if any, issued by means of a Supplement to
-----------------
this Agreement, entered into by the parties hereto and delivered after the date
of this Agreement. The issuance of Additional Series shall be contingent upon
the receipt of a letter of confirmation or a rating letter from the Rating
Agency, as required by the Rating Agency.
Administration Officer: Any officer of the Administrator involved in, or
----------------------
responsible for, the administration of the Mortgage Loans whose name appears on
a list of officers furnished to the Trustee and CCC by the Administrator, as
such list may from time to time be amended.
Administrator: Capstead Mortgage Corporation, a Maryland corporation and
-------------
the parent corporation of CCC, or any successor to its duties under this
Agreement as provided in Section 8.02. In the form of Mortgage Pool Insurance
Policy (defined herein) and related endorsements, appended hereto as Exhibit D,
---------
the Administrator shall be referred to as the "Master Servicer".
Administrator's Fee Percentage: The Administrator's Fee Percentage with
------------------------------
respect to the Outstanding Series shall be an amount equal to 1/12 of .05% or 5
basis points of the outstanding principal balance of all Mortgage Loans in the
respective Mortgage Pool.
Advance Account: The trust account and any related subaccounts created and
---------------
maintained pursuant to Section 4.04. Funds deposited in the Advance Account
shall be held for the uses and purposes set forth in Section 4.04.
Advance Claims Endorsement: The Advance Claims Endorsement to the Mortgage
--------------------------
Pool Insurance Policy, a form of which is attached as a part of Exhibit D to
---------
this Agreement, or any replacement policy or endorsement obtained by the
Administrator pursuant to Section 6.07. In the form of Mortgage Pool Insurance
Policy (defined herein) and related endorsements, appended hereto
<PAGE>
as Exhibit D, the Advance Claims Endorsement is referred to as the "Advance
---------
Claim Payment Endorsement".
Agreement: This Amended and Restated Pooling and Administration Agreement
---------
dated as of October 1, 1993, including Supplement Nos. 1 through 3 hereto.
ARM Mortgage Loan: A Mortgage Loan, the rate of interest on which is
-----------------
adjustable periodically based on an index.
Asset Certificates: With respect to the Series 1993-2I REMIC, the
------------------
Certificates representing a one hundred percent beneficial ownership interest in
the following Series: 1993PA-4, 1993PA-5, 1993PA-9 and 1993PA-10.
Bankruptcy Account: The trust account established and maintained pursuant
------------------
to Section 6.08A hereof.
Bankruptcy Loss: Losses due to Mortgagor bankruptcy as set forth in
---------------
Section 6.08A of this Agreement.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
------------
which shall be in the State of Texas a legal holiday or a day on which banking
institutions in the State of Texas are authorized or obligated by law or
executive order to be closed.
Certificate: Any one of the certificates executed by CCC and authenticated
-----------
by the Trustee, pursuant to this Agreement or any Supplement hereto, each such
Certificate being substantially in the form attached as Exhibit A hereto and
---------
evidencing a beneficial interest in the Trust Fund for such Series, including
the Mortgage Pool as described therein (the bracketed material appearing in the
form of Certificate attached hereto as Exhibit A indicating those variables
---------
which may differ among the various Series of Certificates).
Certificate Account: The trust account and any related subaccounts created
-------------------
and maintained pursuant to Section 4.01. Funds deposited in the Certificate
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in Section 4.01.
Certificateholder or holder: The person in whose name a Certificate is
---------------------------
registered in the Certificate Register except that, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of CCC, the Administrator 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, except in the event that any Certificate registered in the name of
CCC, or any affiliate, is subject to a pledge or security agreement to an
unaffiliated third party.
Certificate Principal Balance: With respect to any Certificate, and as of
-----------------------------
any Distribution Date, the initial principal balance of such Certificate, less
the sum of (i) all amounts distributed with
--
<PAGE>
respect to such Certificate on account of principal on previous Distribution
Dates and (ii) any Loan Losses allocated to such Certificate.
Certificate Register: The register maintained pursuant to Section 3.02.
--------------------
Certificate Registrar: The registrar appointed pursuant to Section 3.02.
---------------------
CCC: Capstead Capital Corporation, a Delaware corporation.
---
CMC: Capstead Mortgage Corporation, a Maryland corporation and the parent
---
corporation of CCC, in its individual capacity and not in its capacity as an
Administrator hereunder.
CMC Purchase Agreement or Purchase Agreement: With respect to a particular
--------------------------------------------
Series, the Purchase Agreement between CCC and CMC, pursuant to which CCC
purchased from CMC the Mortgage Loans pooled to form the related Series.
Commitment: With respect to any Mortgage Loan, the agreement, if any,
----------
pursuant to which CMC issued its commitment to purchase such Mortgage Loan
including, without limitation, agreements entitled "Offer to Originate, Sell and
Service Mortgage Loans" submitted to CMC by the seller of such Mortgage Loan, as
completed by a notice of acceptance submitted to such seller by CMC.
Conversion Option: With respect to an ARM Mortgage Loan, the related
-----------------
Mortgagor's right to convert the adjustable interest rate to a fixed interest
rate for the remaining term of such ARM Mortgage Loan, subject to certain
conditions being met prior to conversion, in accordance with the provisions of
the related Mortgage Note and Mortgage.
Corporate Trust Office: The principal corporate trust office of the
----------------------
Trustee at which at any particular time its corporate business shall be
administered, which office at the date of the execution of this Agreement is
located at 600 Travis, 8th Floor, Attention: Vice President, Corporate Trust
Department, Houston, Texas 77002.
Custodial Accounts: The accounts maintained by the Servicers pursuant to
------------------
their respective Servicing Agreements and into which the Servicers deposit all
revenues (as defined in the respective Servicing Agreements) and from which
funds, including but not limited to monthly payments of principal and interest
on the Mortgage Loans, are remitted by the Servicers on or before each
Remittance Date.
Cut-off Date: For each of the Outstanding Series the Cut-off Date is as
------------
follows: (A) with respect to Series 1993PA-1 through 1993PA-5, March 1, 1993;
(B) with respect to Series 1993PA-6 through 1993PA-10, June 1, 1993; and (C)
with respect to Series 1993PA-11 through 1993PA-20, September 1, 1993.
Delinquency Rate: As of the last day of a calendar month, the rate which
----------------
is equal to the ratio, expressed as a percentage, of (i) the aggregate Imputed
Principal Balance of all Mortgage Loans
--
<PAGE>
which at that time are Delinquent Mortgage Loans to (ii) the Pool Imputed
Principal Balance as of such date.
Delinquent Mortgage Loan: As of the last day of a calendar month, a
------------------------
Mortgage Loan in respect of which one or more Monthly Payments, including a
Monthly Payment due and payable in respect of an REO Property or due and payable
under a Foreclosed Mortgage Loan, is unpaid more than sixty (60) days after the
original scheduled payment date therefor.
Determination Date: With respect to a Distribution Date, the third (3rd)
------------------
Business Day preceding the eighteenth day of the calendar month in which such
Distribution Date occurs.
Directly Operate: With respect to any REO Property, the furnishing or
----------------
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale, or the
performance of any construction work thereon or any use of such REO Property in
a trade or business conducted by a REMIC Trust Fund other than through an
Independent Contractor; provided, however, that the Trustee (or the
Administrator or the related Servicer on behalf of the Trustee) shall not be
considered to Directly Operate an REO Property solely because the Trustee (or
the Administrator or the related Servicer on behalf of the Trustee) establishes
rental terms, chooses tenants, enters into or renews leases, deals with taxes
and insurance, or makes decisions as to repairs or capital expenditures with
respect to such REO Property.
Distribution Date: The second Business Day prior to the 25th day of any
-----------------
month. With respect to any Additional Series, the Distribution Date shall be as
specified in the related Supplement for such Series for all purposes of this
Agreement.
Distribution Rate: With respect to any Mortgage Loan, one-twelfth (1/12)
-----------------
of the then-applicable Remittance Rate with respect to such Mortgage Loan less
(i) the Mortgage Pool Insurer's Premium Percentage, (ii) the FSA Premium
Percentage, (iii) one-twelfth (1/12) of the Special Hazard Premium Percentage ,
(iv) the Trustee Fee Percentage, and (v) the Administrator's Fee Percentage
(with each of the fees described in (i), (ii), (iii), (iv) and (v) being
expressed as a percentage and rounded to the nearest ten-thousandth of a
percent).
Due Date: The first day of the month of the related Distribution Date.
--------
Eligible Account: An account which is either (i) maintained with a bank
----------------
(or the principal bank of a bank holding company), in either case the long-term
debt obligations of which have been rated AAA or better by S&P or whose short-
term debt obligations have been rated A-1+ by S&P or (ii) an account or accounts
the deposits in which accounts are fully insured by either the Bank Insurance
Fund or the Savings Association Insurance Fund of the FDIC, as the case may be,
or (iii) is insured by the Bank Insurance Fund or the Savings Association
Insurance Fund of the FDIC, as the case may be (to the limits established by the
FDIC, taking into account all deposits within the institution with respect to
the same beneficiaries) and, provided further, that such account is maintained
in the name of the Trustee, in its capacity as Trustee for the
Certificateholders, and all the funds deposited in such account are invested in
Permitted Instruments or remitted to Certificate holders within one (1)
Business Day of receipt.
--
<PAGE>
Evaluation Report of Servicer: The report in the form prescribed from time
-----------------------------
to time by the Administrator, to be provided by the Administrator pursuant to
Section 6.03.
Event of Default: One of the events specified in Section 8.01 or in
----------------
Section 8A.01.
Excess Master Servicing Fee Percentage: The respective percentage, if any,
--------------------------------------
for each Mortgage Loan as set forth on Exhibit K hereto.
---------
Expense Advance: An advance of funds other than a Monthly Advance,
---------------
required to be made by a Servicer pursuant to its respective Servicing
Agreement, which in the judgment of the Administrator is an appropriate
expenditure made or to be made by such Servicer in connection with the
performance of its duty to service the Mortgage Loans, including advances to pay
all reasonable expenditures related to foreclosure proceedings, all reasonable
expenditures related to the defense of any lawsuit to defend title to any
property subject to a Mortgage or to defend title to any property acquired as a
result of a foreclosure and all expenses incurred in making repairs to any
property subject to a Mortgage, all advances by such Servicer due to
deficiencies in the amount of Escrow Payments (as defined in the Servicing
Agreements) received by such Servicer, and all other advances to pay expenses
for any other purpose, but excluding Nonreimbursable Expenses.
Extraordinary Expense: Any expenses incurred by the Trustee in connection
---------------------
with the enforcement of its rights hereunder with respect to the Administrator
or in the exercise of its responsibilities as REMIC Trustee under the Series
1993-2I Pooling Agreement.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
----
Federal Tax Laws: The Internal Revenue Code of 1986, as amended, or any
----------------
successor statute.
FHA: The Federal Housing Administration of the Department of Housing and
---
Urban Development of the United States of America, or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
-----
thereto.
Financial Guaranty Insurance Policy: The financial guaranty insurance
-----------------------------------
policy, including all endorsements thereto issued by FSA with respect to the
Certificates, a photocopy of which is attached hereto as Exhibit J.
--------
FNMA: The Federal National Mortgage Association, or any successor thereto.
----
Foreclose: To liquidate the principal of a Mortgage Loan by foreclosure,
---------
deed in lieu of foreclosure or otherwise.
Foreclosed Mortgage Loan: A Mortgage Loan, the principal of which has been
------------------------
liquidated by foreclosure, deed in lieu of foreclosure or otherwise, including
but not limited to a "short payoff" with respect to such Mortgage Loan.
--
<PAGE>
Fractional Undivided Interest: The fractional undivided interest in the
-----------------------------
Trust Fund of a Series as evidenced by a Certificate of such Series.
Fraud Waiver Letter: With respect to each Series hereunder, the fraud
-------------------
waiver letter relating to the Mortgage Pool Insurance Policy and any
endorsements thereto pertaining to such Series, a form of which is attached as a
part of Exhibit D to this Agreement, or any replacement letter or endorsement
---------
obtained by the Administrator pursuant to Section 6.07. In the form of Mortgage
Pool Insurance Policy (defined herein) and related endorsements, appended hereto
as Exhibit D, the Fraud Waiver Letter is referred to as the "Special Loss Waiver
---------
Letter".
FSA: Financial Security Assurance, Inc., a New York stock insurance
---
company, its successors and assigns.
FSA Premium: The premium payable to FSA in accordance with the Premium
-----------
Letter.
FSA Premium Percentage: With respect to any month, the Base Premium (as
----------------------
defined in the Premium Letter) divided by the then outstanding principal balance
of the Mortgage Loans. The monthly FSA Premium Percentage is set forth in
Schedule 1.
Imputed Principal Balance: With respect to a Mortgage Loan which is
-------------------------
delinquent, in default or Foreclosed, as of any date on or before the related
Liquidation Date, the amount which would have been the outstanding principal
balance of the Mortgage Loan on such date (based on assumed receipt of scheduled
payments) had the related delinquency or default not occurred, after (i)
treating any Insurance Proceeds or Liquidation Proceeds or other payments
received with respect to uncollected amounts of principal due and payable on
such Mortgage Loan and transferred to the Certificate Account as Principal
Prepayments thereof; provided, however, that if any Monthly Advance or other
advance of a delinquent monthly payment (with interest adjusted to the
Remittance Rate) is not made by the related Servicer, the Administrator, the
Mortgage Pool Insurer or any other Person required to make such advance or if
such advance would be a Nonrecoverable Advance, the principal balance of such
Mortgage Loan shall not be reduced by the principal portion of such monthly
payment; (ii) with respect to a Mortgage Loan which Foreclosed, as of any date
after the related Liquidation Date, zero; and (iii) with respect to all other
Mortgage Loans, the outstanding principal balance thereof.
Indemnity Agreement: With respect to each Series hereunder, the Indemnity
-------------------
Agreement pertaining to such Series, including any amendments thereto, between
PMI, CMC, and FSA, as applicable.
Independent Contractor: Either (i) any Person (other than the
----------------------
Administrator) that would be an "independent contractor" with respect to the
affected REMIC Trust Fund within the meaning of Section 856(d)(3) of the Code if
such REMIC Trust Fund were a real estate investment trust (except that the
ownership tests set forth in that section shall be considered to be met by any
Person that owns, directly or indirectly, 35% or more of all classes of such
REMIC Certificates or 35% or more of any class of such REMIC residual interests
issued with respect to such REMIC Trust Fund), provided that such REMIC Trust
Fund does not receive or derive any income from such Person and
--
<PAGE>
such REMIC Trust Fund is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5) or (ii) any other Person (including the
Administrator and each Servicer) if the Administrator has received an Opinion of
Counsel, which shall be obtained at the expense of such REMIC Trust Fund, to the
effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code) or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
Initial Series: Each of Series 1993PA-1 through 1993PA-5, issued
--------------
concurrently with the execution and delivery of this Agreement.
Insurance Policies: The Mortgage Pool Insurance Policy (including
------------------
applicable Advance Claims Endorsement and Fraud Waiver Letter), and the
Financial Guaranty Insurance Policy. The specifications of the Insurance
Policies as of the date of the issuance of the Initial Series are set forth on
Schedule 1 hereto.
- ----------
Insurance Proceeds: Payments received with respect to the Mortgage Loans
------------------
under (i) any insurance policy required to be maintained under this Agreement or
any Servicing Agreement, and (ii) from the Bankruptcy Account or the Special
Hazard Account.
Liquidation Date: With respect to a Mortgage Loan that has been
----------------
Foreclosed, the date of the final transfer to the Certificate Account of all
Insurance Proceeds, Liquidation Proceeds or other payments with respect to such
Mortgage Loan, as determined in the sole discretion of the Administrator.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received in
--------------------
connection with the liquidation of defaulted Mortgage Loans, whether through
trustee's sale, foreclosure sale, condemnation, taking under power of eminent
domain, conveyance in lieu of foreclosure or condemnation, or otherwise.
Loan Loss: With respect to a Mortgage Loan that has been Foreclosed (the
---------
date of such occurrence being the "Foreclosure Date") and with respect to which
the Mortgaged Property no longer remains in the respective Trust Fund, the
Imputed Principal Balance of such Mortgage Loan, determined by the Administrator
as of the Liquidation Date for such Mortgage Loan, following the application of
all amounts transferred to the Certificate Account pursuant to Section 4.04(b)
with respect to Insurance Proceeds, Liquidation Proceeds and other payments with
respect to such Mortgage Loan through the Liquidation Date.
Loan Sale Agreements: The Loan Sale Agreements pursuant to which the
--------------------
Sellers sold Mortgage Loans to CMC in its individual capacity or as agent for
the Partnership. Each of CMC and the Partnership has assigned to CCC all of its
right, title and interest in and to the obligations of the Sellers pursuant to
the Loan Sale Agreements to repurchase Mortgage Loans with respect to which such
Sellers have breached representations and warranties made in such Loan Sale
Agreements. The
--
<PAGE>
rights of CCC under each such Loan Sale Agreement have been assigned by CCC to
the Trustee pursuant to Section 2.01 hereof.
Loan Summary and Remittance Report: The report in the form prescribed from
----------------------------------
time to time by the Administrator and approved by the Trustee, to be provided by
the Administrator pursuant to Section 6.02(a).
Majority Certificateholders: With respect to a Series, the holders of
---------------------------
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the respective Trust Fund.
Monthly Advance: With respect to any calendar month, the aggregate amount
---------------
of payments of principal and interest (at the applicable Remittance Rates) on
the Mortgage Loans which were due and payable on the first (1st) day of such
month and which were delinquent as of the close of business on the Business Day
next preceding the Remittance Date of such month, less any portion thereof
which, if advanced, would constitute a Nonrecoverable Advance. With respect to
a Foreclosed Mortgage Loan, the related Servicer shall make Monthly Advances,
based on the Imputed Principal Balance of such Mortgage Loan, until the
Liquidation Date for such Mortgage Loan.
Monthly Payment: During any calendar month with respect to any Mortgage
---------------
Loan, the scheduled payment of principal and interest (at the applicable
Remittance Rate) due and payable by the Mortgagor with respect to such Mortgage
Loan on the first (1st) day of such calendar month.
Moody's: Moody's Investors Service, Inc.
-------
Mortgage: The mortgage, deed of trust or other instrument creating a first
--------
lien on the property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.02 pertaining to
-------------
a particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to this Agreement or the related Servicing Agreement.
Mortgage Loans: The mortgage loans which from time to time are held by the
--------------
Trustee pursuant to this Agreement as a part of the Trust Funds securing the
respective Series of Certificates. Exhibits B-1 through B-5 hereto identify each
-----------------------
Mortgage Loan pooled to form the Initial Series, by Series, loan number and
address of the Mortgaged Property and sets forth as to each Mortgage Loan the
adjusted principal balance as of the Cut-off Date, the interest rate borne by
the Mortgage Note as of the Cut-off Date and the current scheduled monthly
payment of principal and interest in effect as of the Cut-off Date. The
Mortgage Loans pooled to form any Additional Series will be similarly identified
on an Exhibit to the applicable Supplement to this Agreement pursuant to which
such Additional Series are issued.
"5/25" Mortgage Loan: A Mortgage Loan bearing a rate of interest which
-------------------
adjusts one time at the end of approximately five years from the date of
origination to a rate calculated as described in the related Mortgage Note.
--
<PAGE>
Mortgage Note: The note or other evidence of indebtedness evidencing the
-------------
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: With respect to each Series hereunder, the pool of Mortgage
-------------
Loans assigned to and pooled to form such Series. The Mortgage Pools backing
the Initial Series are specified in the Schedule of Mortgage Loans attached
hereto as Exhibits B-1 through B-5. The Mortgage Pools backing any Additional
-----------------------
Series issued under this Agreement will be specified in an Exhibit or Exhibits
to the related Supplement to this Agreement.
Mortgage Pool Insurance Policy: The Mortgage Pool Insurance Policy No.
------------------------------
00000 93 26T insuring the Mortgage Loans and all amendments or endorsements
thereto (including those certain Schedule Endorsement Nos. 93 26T-1 and 93 26T-
2), or any replacement insurance policy obtained by the Administrator pursuant
to Section 6.07 or otherwise issued and delivered by the Mortgage Pool Insurer
and meeting the criteria of the Rating Agency for the purpose of maintaining an
"AAA" rating on the Certificates. As of the date of this Agreement, the
coverage available under the Mortgage Pool Insurance Policy is an amount equal
to $88,065,421.
Mortgage Pool Insurer: PMI Mortgage Insurance Co. ("PMI"), an Arizona
---------------------
stock insurance company, or the issuer of any replacement Mortgage Pool
Insurance Policy, as approved by the Rating Agency.
Mortgage Pool Insurer's Premium Percentage: At any time, the percentage of
------------------------------------------
the then outstanding principal balance of the Mortgage Loans charged by PMI in
order to provide the level of coverage under the Mortgage Pool Insurance Policy
then required by the Rating Agency. As of the date of this Agreement, the
Mortgage Pool Insurer's Premium Percentage is .0289% or 2.89 basis points.
Mortgaged Property: The real property, together with all improvements
------------------
thereon, securing the indebtedness of the Mortgagor under the Mortgage Loan and
on which a lien is created by the related Mortgage.
Mortgagor: The obligor(s) on a Mortgage Note.
---------
New Lease: Any lease of REO Property entered into on behalf of the Trust
---------
Fund to which such REO Property relates, including any lease renewed or extended
on behalf of such Trust Fund if the Trustee (or the Administrator or the related
Servicer on behalf of the Trustee) has the right to renegotiate the terms of
such lease.
Nonrecoverable Advance: Any advance which, in the good faith judgment of a
----------------------
Servicer with the concurrence of the Administrator pursuant to the provisions of
the respective Servicing Agreement, or in the good faith judgment of the
Administrator in the event that the Administrator is acting as a servicer, will
not ultimately be recoverable by such Servicer or the Administrator, as the case
may be, from Liquidation Proceeds, Insurance Proceeds, the Mortgagor or
otherwise.
--
<PAGE>
Nonreimbursable Expenses: (i) all costs or expenses resulting from failure
------------------------
by a Servicer to file timely claims for losses relating to Mortgage Loans
(including the failure to file claims under hazard insurance policies, mortgage
guaranty insurance policies, fidelity bonds or errors and omissions policies
required to be maintained pursuant to the respective Servicing Agreement), (ii)
all costs and expenses resulting from failure by a Servicer to Foreclose
Mortgages relating to defaulted Mortgage Loans in the manner required by the
respective Servicing Agreement and applicable servicing guidelines referred to
therein, (iii) all costs and expenses incurred by the Administrator in
investigating a Servicer's activities under the respective Servicing Agreement
when, in the opinion of the Administrator, such investigation is warranted on
the basis of adverse information concerning the Servicer, and (iv) all costs and
expenses incurred by the Administrator in connection with replacing a Servicer
as a servicer of Mortgage Loans upon an event of default of such Servicer under
the respective Servicing Agreement.
Officer's Certificate: A certificate signed by the Chairman of the Board,
---------------------
the Vice Chairman of the Board, the President or a Vice President of CCC, the
Administrator or a Servicer, as applicable, and delivered to CCC, the
Administrator or the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
------------------
CCC or the Administrator, acceptable to CCC and the Trustee.
Other Program Mortgage Loans: Mortgage Loans pooled to form Mortgage Pass-
----------------------------
Through Certificates of other Programs in addition to this Program 1993PA (each,
an "Other Program" or a "Program") which programs are permitted at any time by
the Rating Agency to participate in the Bankruptcy Account and in the Special
Hazard Account referred to in this Agreement.
Outstanding Series: CCC's Program 1993PA Portfolio Pass-Through
------------------
Certificates, Series 1993PA-1 through 1993PA-20.
Partnership: CMC Investment Partnership, a Texas general partnership of
-----------
which CMC is the managing general partner.
Partnership Purchase Agreement: With respect to certain Series, the
------------------------------
purchase agreement between the Partnership and CCC whereby CCC purchased from
the Partnership certain of the Mortgage Loans.
Pass-Through Rate: With respect to any Distribution Date and any Mortgage
-----------------
Pool and the related Series of Certificates, the weighted average Distribution
Rate of all Mortgage Loans in such Mortgage Pool at the close of business on the
last day of the month preceding the month in which such Distribution Date
occurs.
Permitted Instruments: One or more of the following:
---------------------
(i) obligations of, or guaranteed as to principal and interest by,
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
--
<PAGE>
(ii) repurchase agreements on obligations of, or guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof when such obligations are backed by the full faith
and credit of the United States, provided that the unsecured obligations of
the party agreeing to repurchase such obligations are at the time rated AAA
or better by S&P;
(iii) Federal funds, certificates of deposit, time deposits and
bankers acceptances of any United States bank or trust company incorporated
under the laws of the United States or any state, including the Trustee;
provided that the debt obligations of such bank or trust company (or, in
the case of a subsidiary in a bank holding system, debt obligations of the
bank holding company) at the date of the acquisition thereof have been
rated AAA or better by S&P;
(iv) pooled or common trust funds of the Trustee, acting as trustee
and custodian and not in its commercial capacity and representing ownership
solely of the investments listed in clauses (i) through (iii) above, any
such pooled or common trust funds which provide for demand withdrawals
being conclusively deemed to satisfy any maturity requirements for
Permitted Instruments set forth in the Certificates or this Agreement and
which have been approved by S&P;
(v) deposits, including deposits with the Trustee, which are fully
insured by the Bank Insurance Fund or the Savings Association Insurance
Fund of the FDIC, as the case may be;
(vi) FHLMC Participation Certificates and senior debt obligations;
(vii) commercial paper of any corporation incorporated under the laws
of the United States or any state thereof, including corporate affiliates
of the Trustee, rated A-1 by S&P and whose long-term rating is at least A1
and having original maturities of not more than 365 days;
(viii) debt obligations rated AAA or better by S&P (or those
investments specified in (iii) above with banks which have debt obligations
rated AAA or better by S&P);
(ix) money market funds rated AAAm or AAAm/G or better by S&P and
investing only in other Permitted Instruments, any such money market funds
which provide for demand withdrawals being conclusively deemed to satisfy
any maturity requirements for Permitted Instruments set forth in the
Certificates or this Agreement; or
(x) any other demand, money market or time deposit obligation,
security or investment as may be acceptable to the Rating Agency rating
such obligation, security or investment.
--
<PAGE>
Person: Any individual, corporation, partnership, joint venture,
------
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool Imputed Principal Balance: At any time, the aggregate Imputed
------------------------------
Principal Balance of all Mortgage Loans pooled to form Outstanding Series of
Certificates under Program 1993PA.
Premium Calculation Date: As used in Section 4.02, the first day of the
------------------------
calendar month preceding the month in which the related Distribution Date
occurs.
Premium Letter: The side letter between FSA, the Trustee, the
--------------
Administrator and PMI dated March 19, 1993 with respect to the premium payable
to FSA in consideration for the issuance of the Financial Guaranty Insurance
Policy.
Prepayment Interest Shortfall: With respect to any Principal Prepayment,
-----------------------------
the excess of (i) interest at the Distribution Rate for one month on such
Principal Prepayment over (ii) the interest paid with respect to such Principal
Prepayment amount pursuant to Section 4.02(a)(iii).
Principal Prepayment: Any Mortgagor payment or other recovery of principal
--------------------
on a Mortgage Loan which is not applied by the Servicer during the month of
receipt to a scheduled payment under the Mortgage Loan and the portion of any
Insurance Proceeds, Liquidation Proceeds, Bankruptcy Loss or other collections
representing similar payments.
Principal Prepayment Rate: As to any Mortgage Loan on which a Principal
-------------------------
Prepayment was made during any monthly period, the Distribution Rate then
applicable to such Mortgage Loan on an annualized basis on the amount of such
Principal Prepayment on such Mortgage Loan multiplied by twelve and multiplied
by a fraction the numerator of which is the number of days elapsed since the
last date on which scheduled principal payments were due to be received on the
related Mortgage Note to and including such date of prepayment and the
denominator of which is 365 or 366, depending on the number of days in the year
of such prepayment.
Program 1993PA Bankruptcy Claim Ceiling: As described in Section 6.08A.
---------------------------------------
As of the date of this Agreement, the Program 1993PA Bankruptcy Claim Ceiling is
$180,052.
Program 1993PA Special Hazard Claim Ceiling: As described in Section 6.08.
-------------------------------------------
As of the date of this Agreement, the Program 1993PA Special Hazard Claim
Ceiling is $8,219,119.
Purchase Agreement or CMC Purchase Agreement: With respect to a particular
------------------
Series, the Purchase Agreement between CCC and CMC pursuant to which CCC
purchased from CMC the Mortgage Loans pooled to form the related Series.
Qualified Insurer or Qualified Insurers: Mortgage guaranty insurance
---------------------------------------
companies, duly qualified as such under the laws of the states in which the
properties securing the Mortgage Loans are located, duly authorized and licensed
in such states to transact the applicable insurance business and to write the
insurance provided by the Mortgage Pool Insurance Policy and approved as an
--
<PAGE>
insurer by FHLMC or FNMA (or any successor agency). A Qualified Insurer, to
remain as such, must maintain the claims-paying ability rating required by the
Rating Agencies in order to maintain the original ratings assigned by the Rating
Agencies to the Certificates, if any, and the original ratings assigned by the
Rating Agencies to any bonds for which the Certificates have been pledged as
collateral. For purposes of Section 6.07(c), FSA shall, notwithstanding any
other provision of the Agreement, be deemed to be a Qualified Insurer within the
meaning of this definition. A downgrade of the claims-paying ability of a
Qualified Insurer will not result in the loss of Qualified Insurer status of
such insurance company if the original ratings assigned by the Rating Agencies
to the Certificates, if any, are not downgraded.
Rating Agency: S&P and, in the case of the Series 1993-2I REMIC
-------------
Certificates, Moody's.
Record Date: The last day of the month immediately preceding the month of
-----------
the related Distribution Date.
REMIC: A "real estate mortgage investment conduit" within the meaning of
-----
Section 860D of the Code.
REMIC Certificates: The Series 1993-2I REMIC Certificates.
-----------------
REMIC Loss: The failure of a REMIC Trust Fund or any portion thereof to
----------
qualify or to continue to qualify as a REMIC or the imposition of a tax under
the REMIC Provisions on any income of such REMIC Trust Fund.
REMIC Provisions: Provisions of the Federal Tax Laws relating to real
----------------
estate mortgage investment conduits, which appear at Section 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing are in effect
from time to time.
REMIC Trust Fund: With respect to the Series 1993-2I REMIC, the Trust Fund
----------------
as defined in the Series 1993-2I Pooling Agreement.
REMIC Trustee: With respect to the Series 1993-2I REMIC, the Trustee as
-------------
defined in the Series 1993-2I Pooling Agreement.
Remittance Date: The 18th day of any month or if such 18th day is not a
---------------
Business Day, the Business Day immediately preceding, on which date the
Servicers are required to remit monthly payments of principal and interest on
the Mortgage Loans pursuant to the Servicing Agreements.
Remittance Rate: For any Mortgage Loan, the rate of interest provided for
---------------
by a Mortgage Note, as adjusted from time to time, less applicable servicing
fees for the related Mortgage Loan.
Requisite Amount of the Bankruptcy Account: As of any Due Date, an amount
------------------------------------------
equal to the greater of: (A) if and only if the aggregate outstanding principal
balance, as of such Due Date, of all Mortgage Loans and Other Program Loans
secured by mortgaged properties which are not the
--
<PAGE>
principal residences of the respective mortgagor ("second homes and investor
properties") having a loan-to-value ratio equal to or greater than 80% equals or
exceeds 10% of the aggregate outstanding Mortgage Loans and Other Program Loans
as of such Due Date, the sum of (1) 0.25% of the outstanding principal balance,
as of such Due Date, of all Mortgage Loans and Other Program Mortgage Loans
secured by second homes and investor properties having a loan-to-value ratio
greater than 80% and less than or equal to 90%; (2) 0.50% of the outstanding
principal balance, as of such Due Date, of all Mortgage Loans and Other Program
Mortgage Loans secured by second homes and investor properties having a loan-to-
value ratio greater than 90% and less than or equal to 95%; and (3) 0.75% of the
outstanding principal balance, as of such Due Date, of all Mortgage Loans and
Other Program Mortgage Loans secured by second homes and investor properties
having a loan-to-value ratio in excess of 95%, reduced by the aggregate claims
paid in respect of Bankruptcy Losses experienced to such Due Date with respect
to all Mortgage Loans and Other Program Mortgage Loans; or (B) the greater of
(i) $100,000 or (ii) .0006 (6 basis points) multiplied by the outstanding
principal balance, as of the Due Date, of all Mortgage Loans and Other Program
Mortgage Loans having a loan-to-value ratio greater than 75%, reduced by the
aggregate claims paid in respect of Bankruptcy Losses experienced to such Due
Date with respect to all Mortgage Loans and Other Program Mortgage Loans. Based
on the formula described previously, the Requisite Amount of the Bankruptcy
Account as of the date of this Agreement is $180,052. As described in Section
6.08A, the Certificateholders of the Program 1993PA Certificates have an
undivided interest in the assets in the Bankruptcy Account up to the Program
1993PA Bankruptcy Claim Ceiling, which is $180,152 as of the date of this
Agreement. If additional Series are issued, the amount of the Program 1993PA
Bankruptcy Claim Ceiling, as well as the Requisite Amount of the Bankruptcy
Account, may be adjusted and if so, such adjusted amounts will be reflected in
the applicable Supplement for such Additional Series.
Requisite Amount of the Special Hazard Account: As of any Due Date, an
----------------------------------------------
amount equal to the greatest of: (i) one percent (1.0%) of the aggregate
outstanding principal amount of the Mortgage Loans and Other Program Mortgage
Loans as of the Due Date, (ii) an amount equal to the greatest aggregate
outstanding principal amount of the Mortgage Loans and Other Program Mortgage
Loans secured by Mortgaged Properties located in any one California postal zip
code area as of the Due Date, and (iii) two times (2 X) the outstanding
principal amount of the largest Mortgage Loan or Other Program Mortgage Loan
outstanding as of the Due Date, less aggregate claims paid in respect of Special
Hazard Losses experienced to date with respect to all Mortgage Loans and Other
Program Mortgage Loans. Based on the formula described previously, the
Requisite Amount of the Special Hazard Account as of the date of this Agreement
is $8,219,119. As described in Section 6.08, the Certificateholders of the
Program 1993PA Certificates have an undivided interest in the assets in the
Special Hazard Account up to the Program 1993PA Special Hazard Claim Ceiling,
which is $8,219,119 as of the date of this Agreement.
Reserved Amount: As of the Date of this Agreement, an amount equal to
---------------
$1,643,824, which amount is 20% of the Requisite Amount of the Special Hazard
Account. As of any subsequent date, the Reserved amount will be calculated by
taking 20% of the Requisite Amount of the Special Hazard Account as in effect on
such date prior to deduction of losses, but not less than $1,000,000, and then
decreasing such amount by all claims paid in respect of Special Hazard Losses
following the date of this Agreement until the Reserved Amount is reduced to
zero.
--
<PAGE>
Responsible Officer: Any Vice President (Executive, Senior, Regular,
-------------------
Assistant or other) or Trust Officer of the Trustee.
S&P: Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.
---
Schedules of Mortgage Loans: Exhibits B-1 through B-5 hereto and any
--------------------------- -----------------------
Schedule or Schedules of Mortgage Loans which may be delivered hereafter with
any Supplement to this Agreement.
Sellers: The organizations which have entered into Loan Sale Agreements
-------
with CMC, in its individual capacity or as agent for the Partnership, with
respect to one or more Mortgage Loans.
Series: A Series of Certificates (which may be evidenced by a single
------
Certificate) evidencing an interest in a specific Mortgage Pool. The Series is
indicated on the face of a Certificate. Unless specified otherwise, the term
"Series" as used in this Agreement shall refer to each Series of Certificates
issued under this Agreement and each Additional Series, if any.
Series 1993-2I Pooling Agreement: The Pooling Agreement, dated as of
--------------------------------
October 1, 1993, by and between CMC Securities Corporation II, as Depositor, and
Texas Commerce Bank National Association, as REMIC Trustee, pursuant to which
the Series 1993-2I REMIC Certificates were issued.
Series 1993-2I REMIC: The REMIC formed under the Series 1993-2I Pooling
--------------------
Agreement.
Series 1993-2I REMIC Certificates: The pass-through certificates issued
---------------------------------
pursuant to the Series 1993-2I Pooling Agreement.
Servicer Remittance Reconciliation: The report, designated as such, in the
----------------------------------
form prescribed from time to time by the Administrator, to be provided by each
Servicer pursuant to the Servicing Agreements.
Servicers: The servicing organizations listed in the schedule of servicers
---------
and servicing agreements attached hereto as Exhibit C, each of which has entered
---------
into a Servicing Agreement with CMC, individually, or as agent for the
Partnership, with respect to one or more Mortgage Loans. The rights of CMC
and/or the Partnership under the Servicing Agreements with respect to each
Mortgage Loan pooled to form a Series have been assigned to CCC pursuant to the
terms of a CMC Purchase Agreement or a Partnership Purchase Agreement, as
applicable.
Servicing Agreement: The Servicing Agreements, as amended from time to
-------------------
time, listed in the schedule of servicers and servicing agreements attached
hereto as Exhibit C and providing for the servicing of the Mortgage Loans by the
---------
Servicers, each such Servicing Agreement with respect to the Mortgage Loans in a
Series having been assigned by CMC to CCC, and assigned by CCC to the Trustee
pursuant to Section 2.01 hereof. Exhibit C may be amended from time to time to
---------
add or delete Servicers, either in connection with the delivery of a Supplement
to this Agreement, or otherwise.
--
<PAGE>
Servicing Officer: Any officer of any Servicer involved in, or responsible
-----------------
for, the servicing of any of the Mortgage Loans.
Single Certificate: A Certificate of a Series evidencing a 1/100th (or any
------------------
multiple thereof) Fractional Undivided Interest.
Special Hazard Account: The Special Hazard Account established pursuant to
----------------------
Section 6.08.
Special Hazard Insurer: The Aetna Casualty and Surety Company ("Aetna"), a
----------------------
Connecticut insurance company, or the issuer of any replacement Special Hazard
Policy, as approved by the Rating Agency.
Special Hazard Losses: Losses due to all special hazard-related events,
---------------------
excluding losses not covered by the Special Hazard Policy.
Special Hazard Policy: The special hazard policy, and all amendments or
---------------------
endorsements thereto, insuring the Mortgage Loans and Other Program Mortgage
Loans against Special Hazard Losses to the extent described in and pursuant to
the terms of such Special Hazard Policy and related endorsements and amendments,
or any replacement insurance policy obtained by CCC or the Administrator
pursuant to Section 6.08 or otherwise issued and delivered by the Special Hazard
Insurer, meeting the criteria of the Rating Agency for the purpose of
maintaining an "AAA" rating on the Certificates. A photocopy of such Special
Hazard Policy and all related endorsements and amendments thereto to be issued
by the Special Hazard Insurer are attached to this Agreement as Exhibit E.
---------
Special Hazard Premium Percentage: At any time, the percentage of the then
---------------------------------
outstanding principal balance of the Mortgage Loans charged by Aetna or any
replacement Special Hazard Insurer in order to provide the level of coverage
under the Special Hazard Policy then required by the Rating Agency. The Special
Hazard Premium Percentage as of the date of this Agreement is .0359% or 3.59
basis points.
State: The State of Texas.
-----
Supplement: Any supplement to this Agreement entered into by the parties
----------
hereto and delivered for the purpose of issuing Additional Series of
Certificates to be governed by the terms of this Agreement. A form of
Supplement to this Agreement is attached hereto as Exhibit I.
---------
Trustee: Texas Commerce Bank National Association, or its successor in
-------
interest, or any successor trustee appointed as herein provided.
Trustee Fee Percentage: .0150% or 1.5 basis points of the then outstanding
----------------------
principal balance of each Mortgage Loan.
Trust Fund: With respect to the separate Series of Certificates, the
----------
corpus of the trusts created by this Agreement or any Supplement hereto, each
consisting of (i) the Mortgage Loans
--
<PAGE>
assigned to such Series as specified in the related Schedule of Mortgage Loans;
(ii) such assets as shall from time to time be identified as deposited in the
Certificate Account for the benefit of Certifi cateholders of such Series;
(iii) such assets as may be held for such Series from time to time in the
Advance Account; (iv) such assets as from time to time may be held for such
Series by a Servicer in a Custodial Account; (v) all property which secured a
Mortgage Loan assigned to such Series as specified in the related Schedule of
Mortgage Loans and which has been acquired by foreclosure or deed in lieu of
foreclosure; (vi) rights to the benefits, if any, under the Mortgage Pool
Insurance Policy and all endorsements thereto, including the Advance Claims
Endorsement and the Fraud Waiver Letter; (vii) rights to the benefits, if any,
under the Financial Guaranty Insurance Policy and all endorsements thereto;
(viii) all right, title and interest of CCC in and to the obligations of the
Servicers pursuant to their Servicing Agreements with respect to the Mortgage
Loans assigned to such Series as specified in the related Schedule of Mortgage
Loans; (ix) all right, title and interest of CCC in and to the obligations of
the Sellers pursuant to the Loan Sale Agreements to repurchase Mortgage Loans
assigned to such Series as specified in the related Schedule of Mortgage Loans,
with respect to which such Sellers have breached representations and warranties
made in such Loan Sale Agreements; (x) rights to the benefits, if any, under the
Special Hazard Account, including coverage under the Special Hazard Policy and
all endorsements thereto, up to an aggregate amount (with cash and insurance
coverage added together) equal to the Program 1993PA Special Hazard Claim
Ceiling; (xi) rights to the benefits, if any, under the Bankruptcy Account up to
the Program 1993PA Bankruptcy Claim Ceiling; and (xii) all proceeds from any of
the foregoing relating to such Series. Reference to holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than a certain
percentage of the Trust Fund of a particular Series means holders of
Certificates the aggregate Fractional Undivided Interests of such Series of
which, as indicated on the face thereof, is not less than such percentage.
Trust Property: As defined in Section 9.01.
--------------
VA: The Veterans Administration of the United States of America, or any
--
successor thereto.
ARTICLE II.
Conveyance and Delivery of Mortgage Loans
2.01 Conveyance of Mortgage Loans: With respect to each Initial
----------------------------
Series of Certificates, CCC, as of March 19, 1993, does hereby transfer, assign,
set over and otherwise convey to the Trustee without recourse (except as
otherwise expressly provided herein) for the benefit of the Cer tificateholders
of the related Initial Series, all the right, title and interest of CCC in and
to such Mortgage Loans, including all interest and principal received by CCC on
or with respect to such Mortgage Loans after the Cut-off Date (other than any
payments of principal and interest due on the Mortgage Loans on or before the
Cut-off Date), and all right, title and interest of CCC in and to all other
property constituting the respective Trust Fund relating to each such Initial
Series.
2.02 Delivery of Mortgage Loans:
--------------------------
--
<PAGE>
(a) CCC, as of March 19, 1993, does hereby deliver to and deposit
with the Trustee the following documents or instruments with respect to
each Mortgage Loan so transferred and assigned with respect to each Initial
Series:
(i) the original Mortgage Note, endorsed to Texas Commerce
Bank National Association, as Trustee or Custodian without recourse;
(ii) the original Mortgage with evidence of recording indicated
thereon (except that a true copy thereof certified by an appropriate
public official may be substituted) provided, however, that if CCC
cannot deliver the Mortgage with evidence of recording thereon
concurrently with the execution and delivery of this Agreement solely
because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation, CCC shall deliver to the
Trustee an Officer's Certificate, stating that such Mortgage has been
delivered to the appropriate public recording official for recordation
and CCC shall promptly deliver to the Trustee such Mortgage with
evidence of recording indicated thereon upon its receipt thereof from
the public recording official (or a true copy thereof certified by an
appropriate public official);
(iii) the original assignment of mortgage to Texas Commerce Bank
National Association, as Trustee or Custodian, with evidence of
recording indicated thereon (or a true copy thereof certified by an
appropriate public official may be substituted) provided, however,
that if CCC cannot deliver the assignment of mortgage with evidence of
recording thereon concurrently with the execution and delivery of this
Agreement solely because of a delay caused by the public recording
office where such assignment of mortgage has been delivered for
recordation, CCC shall deliver to the Trustee an Officer's
Certificate, stating that such assignment of mortgage has been
delivered to the Trustee or to the appropriate public recording
official for recordation and CCC shall promptly deliver to the Trustee
such assignment of mortgage with evidence of recording indicated
thereon upon its receipt thereof from the public recording official
(or a true copy thereof certified by an appropriate public official
may be delivered to the Trustee). Subject to the foregoing, such
assignments may be blanket assignments, to the extent such assignments
are permissible under applicable law, for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the
assignment of mortgage is in blanket form, an assignment of mortgage
need not be included in the individual Mortgage File;
(iv) all intermediate assignments of the Mortgage, with
evidence of recording thereon (or true copies thereof certified by
appropriate public officials may be substituted) provided, however,
that if CCC cannot deliver the intermediate assignments of mortgage
with evidence of recording thereon concurrently with the execution and
delivery of this Agreement solely because of a delay caused by the
public recording office where such assignments of mortgage have been
delivered for recordation, CCC shall deliver to the Trustee an
Officer's Certificate, stating that
--
<PAGE>
such assignments of mortgage have been delivered to the Trustee or to
the appropriate public recording official for recordation and CCC
shall promptly deliver to the Trustee such assignments of mortgage
with evidence of recording indicated thereon upon its receipt thereof
from the public recording official (or true copies thereof certified
by an appropriate public official may be delivered to the Trustee);
(v) the originals of all assumption and modification
agreements;
(vi) a copy of the title insurance policy, or a commitment
therefor or other evidence thereof, to be promptly replaced with a
copy of the policy, certified to as a true and correct copy by an
officer of CCC, when obtained;
(vii) a copy of a certificate of mortgage pool insurance, for
each Mortgage Loan; and
(viii) with respect to the Mortgage Loans listed in Exhibits B-1
------------
through B-5 which are shown on such Exhibit to have a loan-to-value
-----------
ratio which exceeds eighty percent (80%), evidence of primary mortgage
insurance, which evidence may include the issuance of the Mortgage
Pool Insurance Policy or the delivery to the Trustee of an officer's
certificate of CCC regarding the existence of such insurance.
(b) In the event that the Trustee gives notice to CCC or the
Administrator, pursuant to Section 7.01(a) of this Agreement, that certain
original documents with evidence of recording, required to be delivered
pursuant to paragraphs (ii), (iii) and (iv) of Section 2.02(a) above, or a
copy of the title policy required to be delivered pursuant to paragraph
(vi) of such Section, with respect to any Mortgage Loan are missing, then
CCC will deliver an Officer's Certificate to the Trustee promptly upon
receipt of such notice and every six months thereafter, setting forth the
status of each such missing or defective document until either such
document is no longer missing or defective, or CCC is obligated to
repurchase such Mortgage Loan pursuant to Section 2.04.
(c) In connection with the delivery of the Mortgage Loans, CCC has
delivered or has caused to be delivered and deposited with the Trustee, the
Insurance Policies. In addition, CCC has caused to be delivered to and
deposited with the Trustee an Endorsement to the Special Hazard Policy
covering the Mortgage Loans.
(d) In the case of Mortgage Loans which have been prepaid after the
Cut-off Date and prior to the date of initial issuance of the Certificates,
CCC, in lieu of delivering the above documents, will deliver to the Trustee
an Officer's Certificate of the Servicer as set forth in Section 7.10.
(e) Any Certificateholder may, at its own expense, inspect the
Mortgage Files during the Trustee's regular business hours and pursuant to
the Trustee's supervision. The Trustee shall be entitled to receive
reasonable compensation for its costs and expenses, including personnel
costs for such inspections.
--
<PAGE>
2.03 Acceptance by Trustee.
---------------------
(a) The Trustee pursuant to Subsection (d) of this Section
acknowledges receipt of the Mortgage Files for the Mortgage Loans as of
March 19, 1993, and has reviewed or will review as required by Section
7.01(a), each Mortgage File to ascertain that all required documents have
been executed and received, and that such documents relate to the Mortgage
Loans identified in Exhibits B-1 through B-5 annexed to the executed
------------------------
counterparts of this Agreement, and declares that it holds and will hold
such documents and the other documents constituting a part of the Mortgage
Files delivered to it as Trustee in trust, as a part of the Trust Fund
herein set forth for the use and benefit of all present and future
Certificateholders. To the extent permitted by law, the Trustee will not
consent to a change in the interest rate borne by any Mortgage Note.
(b) The Trustee shall not be responsible for the value, form,
substance, validity, perfection, priority, effectiveness or enforceability
of any of such documents. The Trustee may accept but shall not be
responsible for examining, determining the meaning or effect of or
notifying or advising CCC or the Administrator in any way concerning any
item or document in a Mortgage File that is not one of the documents listed
in Section 2.02(a). CCC shall be solely responsible for providing each and
every document required for each Mortgage File to the Trustee in a timely
manner and for completing or correcting any missing, incomplete or
inconsistent documents, and the Trustee shall not be responsible or liable
for taking any such action or causing CCC or any other person or entity to
do so.
(c) Under no circumstances shall the Trustee be obligated to verify
the authenticity of any signature on any of the documents received or
examined by it in connection with this Agreement or the authority or
capacity of any person to execute or issue any such document.
(d) By its execution of this Agreement and in acknowledging receipt
of the Mortgage Loans pursuant to Section 2.03(a) and Section 7.01(a),
respectively, the Trustee confirms, as of March 19, 1993, that it is in
possession of a Mortgage File for each Mortgage Loan listed on the
Schedules of Mortgage Loans; all documents required to be in the Mortgage
File are in its possession; such documents have been reviewed by it and
appear regular on their face and relate to such Mortgage Loan; and based on
its examination and only as to the foregoing documents, the Schedules of
Mortgage Loans accurately reflects information set forth in the Mortgage
File. It is understood that in making the foregoing confirmation, the
Trustee shall examine the Mortgage File to confirm solely that:
(1) the Mortgage Note and Mortgage each appear to bear an
original signature or signatures purporting to be the signature or
signatures of the Person or Persons named as the Mortgagor or in the
case of copies, that such copies bear a reproduction of such signature
or signatures;
--
<PAGE>
(2) except for the endorsement to the Trustee or Custodian,
neither the Mortgage Note, the Mortgage nor the assignment of the
Mortgage contain any notations on their face which evidence any
claims, liens, security interests, encumbrances or restrictions on
transfer;
(3) the principal amount of the indebtedness secured by the
Mortgage is not less than the outstanding principal amount of the
Mortgage Note as set forth on the Schedules of Mortgage Loans;
(4) the Mortgage Note appears to bear original endorsements
which complete the chain of ownership from the named holder or payee
endorsing the Mortgage Note to "Texas Commerce Bank National
Association, as Trustee or Custodian;"
(5) each original of the assignment of Mortgage and any
intervening assignments of the Mortgage, if applicable, appear to bear
the original signature of the named mortgagee or beneficiary including
any subsequent assignors, as applicable, or in the case of copies
permitted, that such copies appear to bear a reproduction of such
signature or signatures (but as to each assignment of the Mortgage
without verification of the accuracy of the recording information of
the related Mortgage contained within the body of such assignment);
(6) the description of the real property set forth in either the
title insurance policy or the written commitment for the issuance of
the title insurance policy is substantially identical to the real
property description contained in the Mortgage; and
(7) the title insurance policy is not less than the outstanding
principal amount of the Mortgage Note as set forth on the Schedules of
Mortgage Loans (but no confirmation of the amount so insured in
comparison to the outstanding principal amount of the Mortgage Note
shall be made with respect to the written commitment to issue the
title insurance policy).
In giving each of the certifications required above, the Trustee shall be under
no duty or obligation (i) to inspect, review or examine any such documents,
instruments, securities or other papers to determine that they or the signatures
thereon are genuine, enforceable, or appropriate for the represented purpose,
(ii) to verify, other than by examination of the Mortgage File, that any such
documents, instruments, securities or other papers have actually been recorded
or that they are other than what they purport to be on their face or (iii) to
determine whether any Mortgage File should include any assumption agreement or
modification agreement. If the Trustee has determined that the Mortgage Files
so received satisfy the requirements of this Section 2.03(d), the Trustee shall
authenticate the Certificates upon the order of CCC.
Section 2.04 Repurchase of Defective Mortgage Loans. As of March 19,
--------------------------------------
1993, CCC hereby reconfirms the representations and warranties with respect to
the Mortgage Loans set forth
--
<PAGE>
in the Servicing Agreements and the Loan Sale Agreements as fully and to the
same extent as if set forth in full herein as of the Cut-off Date, except that
CCC does not confirm any representation or warranty made by any Servicer
regarding compliance with the provisions of the Consumer Credit Protection Act,
as amended, and Regulation Z promulgated thereunder, with respect to any ARM
Mortgage Loan or any "5/25" Mortgage Loan. In the event that either CCC, CMC,
the Partnership, the Administrator or the Trustee discovers a material breach of
any of the representations, warranties or covenants made (1) by any Servicer
with respect to a Mortgage Loan pursuant to any Servicing Agreement, (2) by any
Seller with respect to a Mortgage Loan pursuant to any Loan Sale Agreement, (3)
by CCC pursuant to Section 5.01 or this Section 2.04, as the case may be, or in
any other certificate relating hereto, (4) by CMC pursuant to Section 3.1 of the
CMC Purchase Agreement or (5) by the Partnership pursuant to Section 3.1 of the
Partnership Purchase Agreement, or any material defect or inaccuracy of any
Mortgage or other documents constituting a part of the Mortgage File or the
Mortgage Loan, which breach or defect is such that, unless cured as provided in
the related Servicing Agreement or Loan Sale Agreement, as applicable, the
related Servicer or Seller would be required to repurchase the related Mortgage
Loan under the terms of such Servicing Agreement or such Loan Sale Agreement, or
in the case of representations and warranties solely of CCC, CMC, the
Partnership or the Administrator, such breach or defect is such that, unless
cured, it would materially and adversely affect the interests of the
Certificateholders, the party discovering such breach or defect shall give
prompt written notice to the other parties hereto and to the applicable Servicer
or Seller, and unless the Servicer, Seller, CCC, CMC, the Partnership or the
Administrator, as the case may be, shall cure the breach or defect within the
requisite period provided in the Servicing Agreement or the Loan Sale Agreement,
CCC shall, within ninety (90) days of the written notice referred to
hereinabove, repurchase the Mortgage Loan from the Trustee, if the applicable
Servicer or Seller has not previously done so; provided, however, that CMC's and
CCC's obligations to repurchase Mortgage Loans which are defective due to
fraudulent or negligent conduct by either the Mortgagor, the originator, the
Servicer or the Seller in connection with the origination of such Mortgage Loans
shall be limited to an aggregate amount equal to the liability of PMI under the
Fraud Waiver Letter issued by PMI, whether CCC or CMC repurchases any such
Mortgage Loans directly or whether CMC reimburses PMI or FSA, as applicable, on
CCC's behalf for purchasing such Mortgage Loans pursuant to an Indemnity
Agreement; provided further, however, that if the defect or breach is one that,
had it been discovered before the date of the issuance of the related Series,
would have prevented the Mortgage Loan from being a "qualified mortgage" within
the meaning of the REMIC Provisions, such defect or breach shall be cured, or
the related Mortgage Loan shall be purchased by CCC or, within 90 days of the
date of discovery of such defect or breach. Any such repurchase of a Mortgage
Loan by CCC shall be at a price equal to (i) the then outstanding principal
balance of such Mortgage Loan, plus (ii) accrued interest, if any, on such
portion of the unpaid principal at the Remittance Rate for such Mortgage Loan
through the last day of the month in which such repurchase occurs. The purchase
price for the Mortgage Loan shall be remitted by CCC to the Certificate Account
for the benefit of the Certificateholders of the related Series and, upon
receipt by the Trustee of the items specified in Section 7.10(b) with respect
thereto, the Trustee shall deliver the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment as provided in Section
7.10(b). It is understood and agreed that the obligation of CCC or CMC to
repurchase any Mortgage Loan as to which a material breach or a material defect
exists shall constitute the sole remedy respecting such breach or defect
available to Certificateholders or the Trustee on behalf of Certificateholders.
Notwithstanding the foregoing, the repurchase of an
--
<PAGE>
ARM Mortgage Loan or a "5/25" Mortgage Loan shall be required in the event of a
breach of a representation under the related Servicing Agreement regarding
compliance with the provisions of the Consumer Credit Protection Act, as
amended, and Regulation Z promulgated thereunder, only in the event that the
----
Mortgagor under such loan contests an interest rate adjustment made in
accordance with the provisions of such ARM Mortgage Loan or such "5/25" Mortgage
Loan. In the event that CMC is required to perform under the Indemnity
Agreement, CMC may elect to repurchase the defective Mortgage Loan in lieu of
reimbursing PMI or FSA, as applicable, under the Indemnity Agreement.
ARTICLE III.
The Certificates
3.01 The Certificates. The Certificates shall be substantially in the
----------------
form set forth in Exhibit A and shall be executed and delivered by CCC to the
---------
Trustee for authentication and redelivery to or upon the order of CCC upon
receipt by the Trustee of the documents specified in Section 2.02(a). The
Certificates shall be issued in denominations of 1/100th (or any multiple
thereof) Fractional Undivided Interest and shall be executed by manual or
facsimile signature on behalf of CCC by its President or one of its Vice
Presidents, or one of its Authorized Officers and attested by the manual or
facsimile signature of its Secretary or one of its Assistant Secretaries.
Certificates bearing the manual or facsimile signature of individuals who were
at any time the proper officers of CCC shall bind CCC, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificate. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. The Trustee's signature shall be for
authentication purposes only and neither the Trustee nor any Person signing on
its behalf shall have any liability on the respective Certificate (other than
with respect to the certificate of authentication thereon). All Certificates
shall be dated the date of their authentication.
3.02 Registration of Transfer and Exchange of Certificates. The Trustee, or
-----------------------------------------------------
such other person as it shall designate in writing, shall be the Certificate
Registrar, who shall cause to be kept at the office or agency to be maintained
by the Certificate Registrar a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of each Series of Certificates and of transfers and
exchanges of all such Certificates as herein provided. The Trustee, whose
principal corporate trust office at the date of the execution of this Agreement
is located at 600 Travis, 8th Floor, Attention: Vice President, Corporate Trust
Department, Houston, Texas 77002, is hereby initially appointed Certificate
Registrar for the purpose of registering each Series of Certificates and
transfers and exchanges of all such Certificates as herein provided.
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<PAGE>
No transfer of a Certificate or Certificates shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended, (the "Act") or is exempt from the
registration requirements under the Act. In the event that a transfer is to be
made in reliance upon an exemption from the Act, the Certificate Registrar may
require, in order to assure compliance with the Act, that the Certificateholder
desiring to effect such transfer and such Certificateholder's prospective
transferee each certify to the Certificate Registrar in writing the facts
surrounding such transfer. In the event that such certification of facts does
not on its face establish the availability of an exemption under Section 4(5) or
a comparable provision of the Act, the Certificate Registrar may require an
Opinion of Counsel satisfactory to it that such transfer may be made pursuant to
an exemption from the Act, which Opinion of Counsel shall not be an expense of
the Administrator or the Trustee. Neither the Administrator nor the Trustee is
obligated to register any of the Certificates under the Act or any other federal
or state securities law.
It is a condition to the transfer of any Certificate that the transferee
certify in writing to CCC and the Certificate Registrar that such transferee (i)
is not an employee benefit plan, trust or account, including an individual
retirement account, that is subject to the Employee Retirement Income Security
Act of 1974, as amended, or that is described in Section 4975(e)(1) of the
Federal Tax Laws (any such plan, trust or account being referred to as a "Plan")
and (ii) has not acquired and will not acquire such Certificate with plan
assets, within the meaning of 29 CFR 2510.3-101, of a Plan.
A form of the letter from the purchaser of any Certificate, containing the
representations described in the preceding two paragraphs, is in the form of a
Purchaser Letter attached hereto as Exhibit F.
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Subject to the preceding three paragraphs, upon surrender for registration
of transfer of any Certificate at any office or agency of the Certificate
Registrar maintained for such purpose pursuant to this Section 3.02 and upon
satisfaction of all requirements for transfer, CCC shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of the same Series and of a like
aggregate Fractional Undivided Interest.
At the option of the Certificateholders, Certificates may, upon
satisfaction of the requirement for exchange, be exchanged for other
Certificates in such Series of authorized denominations of the same aggregate
Fractional Undivided Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange CCC shall execute, and the Trustee shall authenticate
and deliver, the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for transfer or
exchange shall (if so required by CCC or the Trustee or the Certificate
Registrar) (a) be duly endorsed by, or be accompanied by a written instrument of
transfer in form acceptable to, transfer agents registered with the Securities
and Exchange Commission and CCC, the Trustee and the Certificate Registrar, and
(b) be duly executed by the holder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any transfer or exchange of any
Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of any Certificates.
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<PAGE>
All Certificates surrendered for transfer and exchange shall be held by the
Certificate Registrar for a period of three years after termination of this
Agreement, and thereafter may be destroyed, in which event a destruction
certificate shall be delivered to the Trustee.
3.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (i) any
-------------------------------------------------
mutilated Certificate is surrendered to the Trustee or the Certificate
Registrar, or the Certificate Registrar and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate and of
the ownership thereof, and (ii) there is delivered to the Trustee and the
Certificate Registrar such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of receipt by CCC or the
Trustee of written notice that such Certificate has been acquired by a bona fide
purchaser, CCC shall execute and the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Series, tenor and Fractional Undivided
Interest. Upon the issuance of any new Certificate under this Section, the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Certificate Registrar and
of the Trustee) connected therewith. Any duplicate Certificate issued pursuant
to this Section shall constitute complete and indefeasible evidence of ownership
in the Trust Fund relating to the particular Series for which such duplicate
Certificate was issued, as if originally issued, whether or not the Certificate
believed to be lost, stolen or destroyed shall be found at any time.
Section 3.04 Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration or transfer, CCC, CMC, the Administrator, the
Trustee, FSA, the Certificate Registrar and any agent of CCC, the Trustee, FSA
or the Certificate Registrar may treat the person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.02 and for all other purposes whatsoever,
and neither CCC, FSA, the Trustee, the Certificate Registrar nor any agent of
CCC, the Trustee, FSA or the Certificate Registrar shall be affected by notice
to the contrary.
ARTICLE IV.
Accounts and Distributions
4.01 The Certificate Account.
-----------------------
(a) The Trustee shall establish and maintain a separate trust account
in its own name and designated "Certificate Account Capstead Capital
Corporation Portfolio Pass-Through Program 1993PA", which account shall be
an Eligible Account. The Trustee shall maintain detailed transaction
entries with respect to each Series (herein called "subaccounts")
reflecting the funds held for each such Series in the Certificate Account.
There shall be deposited in the Certificate Account and accounted for by
way of the subaccounts all monies deposited with respect to each Series by
the Servicers pursuant to the Servicing Agreements, all monies transferred
from the Advance Account with respect to each Series pursuant to this
Agreement, together with any Permitted Instruments in which such monies
shall be invested with respect to each Series during the term of this
Agreement, as CCC shall direct in writing
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<PAGE>
from time to time, and any income or other gain realized with respect to
each Series from any such investment; provided, however, that Permitted
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Instruments issued by and constituting the direct and unconditional fixed-
term payment obligations of the Trustee (including, but not limited to,
pooled or common trust funds of the Trustee) may mature on the Distribution
Date next following the date of investment in same. All investments in
Permitted Instruments must be held to maturity and must mature before the
Distribution Date next following the date of investment in such
instruments. If at any time CCC shall have failed to direct the investment
of such monies and the amounts in the Certificate Account shall exceed the
applicable limits of FDIC insurance, any excess not so insured shall be
invested by the Trustee in Permitted Instruments. The Certificate Account
shall be held by the Trustee for the benefit of the Certificateholders of
each Series as part of the respective Trust Funds and disbursed as provided
in Section 4.02. Subject to Section 7.01, the Trustee shall not be held
liable by reason of its inability to make any required disbursements for
any Series from the Certificate Account because of any insufficiency for
such Series in the Certificate Account, including, but not limited to, any
insufficiency resulting from any loss of investment in Permitted
Instruments, except for losses attributable to the Trustee's failure to
make payments on Permitted Instruments of the Trustee, as principal
obligor, in accordance with their terms. No monies on deposit in the
Certificate Account shall be reinvested except as specifically provided
herein.
(b) Monies shall be remitted by wire transfer to the Certificate
Account by the Servicers to the Trustee on or before each Remittance Date
from the Custodial Accounts maintained pursuant to the Servicing Agreements
as provided therein. The Trustee shall be required to reconcile, on a
monthly basis, the monies actually received from each Servicer on each
Remittance Date with the respective amount due to be received by the
Trustee from such Servicer as reflected in the Loan Summary and Remittance
Report delivered pursuant to Section 6.02 by the Administrator to the
Trustee immediately prior to such Remittance Date. Any discrepancies
between the amount due to be received from any Servicer and the amount
actually received shall be reported in writing by the Trustee to the
Administrator on such Remittance Date. The Administrator shall inform the
Trustee in writing of the resolution of any such discrepancy on or before
the related Distribution Date.
4.02 Distributions From Certificate Account. The Trustee shall on the
--------------------------------------
Distribution Date of each month, unless specified otherwise below, make
disbursements of funds in the Certificate Account in the following priority and
amounts, to the extent that immediately available funds are on deposit therein:
(a) With respect to each Series, to each Certificateholder of record
as of the immediately preceding Record Date (except as provided in Section
9.02 of this Agreement with respect to termination and final payment) by
wire transfer of federal funds to an account specified in writing by such
Certificateholder or other method agreed to between the Trustee and such
Certificateholder, the Certificateholder's pro rata share (based on the
aggregate Fractional Undivided Interest represented by the Certificates of
the respective Series held by such holder on the Record Date) of the
following amounts:
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<PAGE>
(i) an amount equal to scheduled principal installments on all
Mortgage Notes in the respective Mortgage Pool due on the Due Date,
less any amount not remitted to the Certificate Account for the Series
because such remittance would constitute a Nonrecoverable Advance;
(ii) an amount equal to interest on all Mortgage Notes in the
respective Mortgage Pool on the Due Date, at the Pass-Through Rate for
such Series, less any amount not remitted to the Certificate Account
for such Series because such remittance would constitute a
Nonrecoverable Advance;
(iii) an amount equal to all Principal Prepayments received by
the Servicers during the calendar month preceding the month in which
the Distribution Date occurs and received by the Trustee on or before
the Distribution Date, together with interest thereon at the
applicable Principal Prepayment Rates for such Mortgage Loans to the
related dates of prepayment, excluding any Principal Prepayments
distributed previously pursuant to paragraph (iv) below; and
(iv) an amount equal to any Principal Prepayments received by
the Servicers during the calendar month in which such Distribution
Date occurs and received by the Trustee on or before the twelfth day
of the month in which such Distribution Date occurs.
(b) To the Qualified Insurers, concurrently as follows:
(i) with respect to the Mortgage Pool Insurance Policy,
Advance Claims Endorsement and Fraud Waiver Letter, the applicable
premium; provided, however, that as the applicable premium to be paid
to the Mortgage Pool Insurer is to be paid on a monthly basis pursuant
to the terms of the Mortgage Pool Insurance Policy, including the
Advance Claims Insurance Endorsement and the Fraud Waiver Letter, the
Trustee shall reserve each month in the Certificate Account the
Mortgage Pool Insurer's Fee Percentage multiplied by the aggregate
outstanding principal balance of the Mortgage Loans as of the related
Premium Calculation Date and shall pay to the Mortgage Pool Insurer
the premium due on the 25th day of each month; provided further,
however, in accordance with the provisions of the Premium Letter,
under certain circumstances the applicable premiums due the Mortgage
Pool Insurer shall be paid to FSA. The Administrator shall compute and
timely instruct the Trustee as to the amounts to be reserved each
month, as well as the respective portions of each such amount due the
Mortgage Pool Insurer and FSA. In accordance with the Premium Letter,
the Administrator agrees to cease instructing the Trustee to pay
premiums to the Mortgage Pool Insurer upon the Administrator's filing
a claim under the Financial Guaranty Insurance Policy until and unless
FSA has notified the Administrator that FSA has been fully reimbursed
under the Financial Guaranty Insurance Policy. On the day such premium
is paid, the excess of any amount reserved during such month over the
premium actually paid shall be distributed to CCC or to CMC Securities
Corporation II pursuant to Section 4.02(f); and
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<PAGE>
(ii) to FSA, with respect to the Financial Guaranty Insurance
Policy, the FSA Premium; provided, however, that as the FSA Premium is
to be paid on a monthly basis pursuant to the terms of the Premium
Letter, the Trustee shall reserve each month in the Certificate
Account the FSA appropriate amount as set forth in the Premium Letter.
The Administrator shall compute and timely instruct the Trustee as to
the amounts to be reserved and paid to FSA each month. On the day such
premium is paid, the excess of any amounts reserved during such month
over the premium actually paid shall be distributed to CCC or to CMC
Securities Corporation II pursuant to Section 4.02(f).
(c) To the Special Hazard Insurer with respect to the Special Hazard
Policy and all applicable endorsements and amendments thereto, the
applicable premium; provided, however, that as the applicable premium to be
paid to the Special Hazard Insurer is to be paid on an annual basis
pursuant to the terms of the Special Hazard Policy and related
endorsements, the Trustee shall reserve each month in the Certificate
Account the lesser of (1) one-twelfth (1/12) of the Special Hazard Premium
Percentage multiplied by the aggregate outstanding principal balance of the
Mortgage Loans as of the related Premium Calculation Date or (2) the
incremental amount necessary to make the aggregate reserved amount equal to
the product of the aggregate outstanding principal balance of the Mortgage
Loans as of the related Premium Calculation Date multiplied by a fraction
the numerator of which shall be the number of months elapsed in the then
current twelve-month premium year and the denominator of which is twelve.
If the amount on reserve for payment of the Special Hazard Premium on any
Distribution Date exceeds the product calculated in accordance with clause
(2) of the preceding sentence, such excess shall be paid to CCC pursuant to
Section 4.02(f). The Trustee shall pay to the Special Hazard Insurer the
premium due on or before March 19th of each year, commencing in March,
1993, or within 30 days of receipt of a premium notice from the Special
Hazard Insurer, whichever is earlier, in either case from the aggregate
amount so reserved during the course of the year. The Administrator shall
compute and timely instruct the Trustee as to the amounts to be reserved
each month, as well as the amounts to be paid to the Special Hazard Insurer
each year.
(d) To the Administrator, its fee in an amount determined according
to Section 6.04 of this Agreement plus an amount in reimbursement of any
advances as set forth in Section 4.04(b).
(e) To the Trustee, its fee and expenses in an amount determined
according to Section 7.05 of this Agreement, plus the amount of any
Extraordinary Expenses paid by the Administrator pursuant to Sections 6.06
and 7.05.
(f) With respect to the Asset Certificates, to CMC Securities
Corporation II as a fee for REMIC Accounting, and with respect to the
Certificates, to CCC, the amount, if any, remaining for such Series in the
Certificate Account except for amounts representing Principal Prepayments
received after the third Business Day preceding such Distribution
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<PAGE>
Date, together with interest thereon, and except the amounts reserved
pursuant to subsections (b) and (c) above, after all other required
disbursements have been made.
Notwithstanding the foregoing, with respect to the Asset Certificates, on each
Distribution Date amounts distributable pursuant to Section 4.02(a) shall be
distributed after amounts distributable pursuant to Section 4.02(e) and before
amounts distributable pursuant to Section 4.02(f).
4.03 Statement to Certificateholder.
------------------------------
(a) Concurrently with each distribution to Certificateholders
pursuant to Section 4.02(a), the Trustee shall forward by overnight mail or
other method agreed to between the Trustee and such Certificateholder, to
each Certificateholder information provided by the Administrator pursuant
to the Loan Summary and Remittance Report and related Officer's Certificate
delivered pursuant to Section 6.02(a) hereof (except with respect to item
(v), which shall be supplied by the Trustee) setting forth for such
Certificateholder's Series:
(i) the amount of such distribution allocable to principal,
separately identifying the aggregate amount of any Principal
Prepayments included therein;
(ii) the amount of such distribution allocable to interest
including, in the case of the Asset Certificates, the Prepayment
Interest Shortfalls;
(iii) the amount of Loan Losses on the Mortgage Loans in the
respective Mortgage Pool since the immediately preceding Distribution
Date;
(iv) the aggregate of the outstanding principal balances of the
Mortgage Loans in the respective Mortgage Pool at the opening of
business on the first day of the month of distribution after (A)
giving effect to payments on the Mortgage Loans due on the Due Date
and distributed either as collections or advances and (B) reducing
such balances by the amount of Loan Losses attributable to the
Mortgage Loans in such Mortgage Pool since the immediately preceding
Distribution Date and with respect to the Asset Certificates the
aggregate Certificate Principal Balance of each Series, after
consideration of principal distributed and Loan Losses allocated for
such Distribution Date;
(v) the amount, if any, by which the aggregate amount remitted
from the Certificate Account exceeds the aggregate remittances
referred to in clauses (i) and (ii) above;
(vi) the aggregate cumulative amount of Loan Losses to date on
the Mortgage Loans in the Mortgage Pool;
(vii) in the event that a Certificate is registered in the name
of a federally insured savings and loan association, the book value
(within the meaning of 12
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<PAGE>
C.F.R. 571.13 or comparable provision) of any real estate acquired
through foreclosure or grant of a deed in lieu of foreclosure;
(viii) the amount of coverage under the Mortgage Pool Insurance
Policy, the Financial Guaranty Insurance Policy and the Special Hazard
Policy on the applicable Distribution Date as of the close of business
on such Distribution Date;
(ix) in the event that the reasons for a Nonrecoverable Advance
reported by a Servicer to the Administrator as required by the
respective Servicing Agreement shall relate to a general inability to
recover under the Mortgage Pool Insurance Policy (as opposed to an
inability so to recover for reasons peculiar to a particular Mortgage
Loan), notice of such determination upon receipt of notice thereof
from the Administrator;
(x) The then applicable Requisite Amount of the Special Hazard
Account and Requisite Amount of the Bankruptcy Account, the then
applicable Program 1993PA Bankruptcy Claim Ceiling and the Program
1993PA Special Hazard Claim Ceiling and the respective amounts
remaining in the Bankruptcy Account and Special Hazard Account
(including cash and insurance coverage, in the case of the Special
Hazard Account) available to pay claims to Program 1993PA
Certificateholders thereunder, taking into account the respective
total funds remaining in the Bankruptcy Account and in the Special
Hazard Account, as applicable; and
(xi) The respective amounts of Bankruptcy Losses and Special
Hazard Losses, if any, on the Mortgage Loans in the respective
Mortgage Pool since the immediately preceding Distribution Date.
In the case of information furnished pursuant to subclauses (i) and (ii) above,
the amounts shall be expressed as a dollar amount per a Single Certificate for
each Series of Certificates. The Trustee shall have no liability or
responsibility to any Certificateholder for the accuracy or completeness of the
information provided by the Administrator under this Section 4.03. The Parties
hereto acknowledge that in the event that Texas Commerce Bank National
Association in its capacity as Trustee for the holders of pass-through
certificates issued by CCC, or a qualified nominee thereof, is the sole
Certificateholder, then the Trustee may elect not to deliver a written statement
to Certificateholder pursuant to this Section 4.03. The Trustee shall forward
to the Administrator a copy of each written statement, if any, delivered to any
Certificateholder.
(b) Within sixty (60) calendar days after the end of each calendar
year, the Trustee shall furnish to each Person who at any time during the
calendar year was a Certifi cateholder a statement containing the
information set forth in subclauses (i) and (ii) above aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided
by the Trustee pursuant to any requirements of the Federal Tax Laws, as
from time to time in force. The Administrator
<PAGE>
agrees to provide information to the Trustee as necessary to meet such
requirements of the Federal Tax Laws.
4.04 Advance Account.
---------------
(a) The Trustee shall establish and maintain a separate trust account
in its own name and designated "Advance Account Capstead Capital
Corporation Portfolio Pass-Through Program, Series 1993PA", which account
shall be an Eligible Account. The Advance Account shall be comprised of
detailed transaction entries accounting for each Series (herein called
"subaccounts"), each reflecting the funds held for such Series in the
Advance Account. All amounts collected by the Administrator or the
Trustee, whether directly or received from a Servicer, from Insurance
Proceeds, from Liquidation Proceeds, from FSA or delinquent payments of
principal and interest for each Series shall be deposited for such Series
in the Advance Account, and all such deposits shall be distributed to the
related Series as provided herein. Any amounts received from Insurance
Proceeds which constitute Monthly Advances shall be transferred immediately
to the Certificate Account. Funds held in the Advance Account shall be
invested at the written direction of CCC (or, in the absence of such
direction, by the Trustee) in Permitted Instruments maturing prior to the
next succeeding Remittance Date; provided, however, that Permitted
---------- -------
Instruments issued by and constituting the direct and unconditional fixed-
term payment obligations of the Trustee (including, but not limited to,
pooled or common trust funds of the Trustee) may mature on the Remittance
Date next following the date of investment in the same.
(b) The Trustee shall, upon the recommendation by the Administrator
and to the extent monies are available for a Series in the Advance Account,
approve the written request of the Administrator or a Servicer for
reimbursement of (i) Monthly Advances relating to a particular Mortgage
Loan of such Series or (ii) Expense Advances relating to a particular
Mortgage Loan of such Series, in which case the Trustee shall, upon written
notification of such approval by the Administrator, make the appropriate
disbursements for such Series to the Administrator or such Servicer of
funds in the Advance Account representing Insurance Proceeds, Liquidation
Proceeds or delinquent payments of principal and interest with respect to
such Mortgage Loan. Any monies for a Series remaining in the Advance
Account after action has been taken on all pending Administrator and
Servicer requests shall first be remitted to the appropriate insurer
pursuant to the terms of the respective insurance policies if applicable
and if written instructions to do so from the Administrator are timely
received by the Trustee, and any remaining monies shall be remitted for
such Series to the Certificate Account on the second Remittance Date
following its deposit in the Advance Account or upon final reimbursement to
the appropriate party or parties, as certified by the Administrator,
whichever occurs earlier.
(c) Anything herein to the contrary notwithstanding, any payment
under the Financial Guaranty Insurance Policy relating to amounts due and
owing under the Mortgage Pool Insurance Policy shall not be considered
payment under the Mortgage Pool Insurance Policy (except for purposes of
reporting under Section 4.03(a)(viii)). CCC, the Administrator and the
Trustee acknowledge that, to the extent FSA makes any payment with
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<PAGE>
respect to a claim under the Financial Guaranty Insurance Policy, the
Administrator will direct the Trustee to contractually assign its rights of
subrogation on behalf of the Certificateholders to FSA and by its execution
of this Agreement, the Trustee shall give the Administrator the power of
attorney to contractually assign such rights of subrogation on behalf of
the Trustee each time a Notice of Claim and Certificate (the "Notice of
Claim and Certificate") is completed in substantially the form attached as
Exhibit "A" to the Financial Guaranty Insurance Policy, thus fully
subrogating FSA to the rights of the Trustee, as insured under the Mortgage
Pool Insurance Policy, to receive such payments subsequently (i) made by
PMI under the Mortgage Pool Insurance Policy or (ii) with respect to
Advance Claims as defined in the Financial Guaranty Insurance Policy,
recovered from any source that would have been available to PMI had PMI
paid such Advance Claim, in either case until FSA is fully repaid and to
all rights and remedies of the Trustee, as insured under the Mortgage Pool
Insurance Policy and on behalf of holders of the Certificates, against PMI
with respect to such defaulted payments or with respect to any amounts due
to the Certificateholders in respect of securities laws violations by PMI
arising from the offer and sale of the Certificates. To the extent that
FSA has made any payment under the Financial Guaranty Insurance Policy, FSA
shall be entitled to reimbursement of the amount of such payment to the
extent that PMI, the Administrator or the related Servicer would be
entitled to reimbursement had such party made such payment and the
Administrator will timely direct the Trustee to make such reimbursement.
(d) If any proceeding has been commenced by or against PMI under any
applicable United States federal or state bankruptcy, insolvency,
rehabilitation, reorganization or similar law, or a custodian, receiver,
liquidator, rehabilitator, assignee, conservator, trustee or similar
official has been appointed with respect to PMI, and FSA reasonably
believes that only if it takes action against PMI as subrogee to the rights
of the Trustee as insured under the Mortgage Pool Insurance Policy will FSA
recover on all claims, whether fixed or contingent, or owed or becoming due
to FSA by PMI, upon written request by FSA to file and to pursue such
claims as insured under the Mortgage Pool Insurance Policy in such
proceeding and to take any directly related actions which FSA may
reasonably request, the Trustee shall do so upon prior receipt by the
Trustee of a written undertaking and indemnification for all fees and
expenses of the Trustee incurred in connection with taking such actions at
FSA's direction in form and substance satisfactory to the Trustee in its
sole reasonable judgment. Any moneys received by the Trustee as a result
of such claim shall not be part of the Trust Fund and the holders of the
Certificates shall have no interest thereon or claim thereto. So long as
FSA has fully honored its undertaking and indemnity, any moneys so received
by the Trustee shall be promptly remitted to FSA. In addition to filing
any such claims as directed by FSA pursuant to this paragraph,
Administrator shall either file or cause the Trustee to file any and all
claims which the Administrator or the Trustee is entitled to file against
PMI.
If a claim is filed under the Financial Guaranty Insurance Policy, the
Administrator will provide FSA with reasonable access to mortgage and
servicing records held by the Trustee or the Administrator relating to the
Mortgage Loans that are the basis of the claim.
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<PAGE>
(e) The Trustee agrees that upon instruction from the Administrator,
the Trustee shall:
(i)(a) hold any funds received under the Financial Guaranty
Insurance Policy in trust and apply the same directly for payment as
specified in the Financial Guaranty Insurance Policy, (b) not apply
such funds for any other purpose and (c) maintain an accurate record
of each such payment and the corresponding claim on the Financial
Guaranty Insurance Policy and proceeds thereof as provided to the
Trustee by the Administrator; and
(ii)(a) acknowledge the rights of FSA as its assignee with
respect to its rights, as the insured under the Mortgage Pool
Insurance Policy and on behalf of the Certificateholders, to the
extent of any payments under the Financial Guaranty Insurance Policy
and (b) take any further action or deliver any instruments as may be
reasonably requested by FSA to effectuate the purpose or provisions of
this subparagraph (ii).
4.05 Custodial Account. Pursuant to the provisions of the Servicing
-----------------
Agreements, each Servicer must maintain an account to which all Revenues (as
defined in the Servicing Agreement) received by such Servicer shall be
deposited, which account shall be captioned: "Custodial Account of [Name of
Servicer and custodian/Trustee] for the benefit of Capstead Mortgage
Corporation, CMC Investment Partnership and their successors or assigns." Each
Servicer shall make remittances from its respective account each month as
provided in the Servicing Agreements.
ARTICLE V.
Representations and Warranties
5.01 Representations and Warranties of CCC.
-------------------------------------
(a) With respect to each Initial Series, CCC hereby represents and
warrants to the Trustee, as of March 19, 1993, that:
(i) CCC is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with full
corporate and other power and authority to execute, deliver and enter
into this Agreement and to perform all of its duties and obligations
pursuant hereto;
(ii) The execution and delivery of this Agreement has been duly
authorized by CCC and, when executed and delivered, will constitute a
valid and binding obligation of CCC, enforceable in accordance with
its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the rights of creditors generally, and that certain equitable remedies
may not be available;
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<PAGE>
(iii) The execution and delivery of this Agreement by CCC in the
manner contemplated herein and the performance and compliance with the
terms hereof by it will not violate (a) its certificate of
incorporation or bylaws, or (b) any laws which could have any material
adverse effect whatsoever upon the validity, performance or
enforceability of any of the terms of this Agreement applicable to
CCC, and will not constitute a material default (or an event which,
with notice or lapse of time, or both, would constitute a material
default) under, or result in the breach of, any material contract,
agreement or other instrument to which CCC is a party or which may be
applicable to it or any of its assets; and
(iv) The execution and delivery of this Agreement by CCC in the
manner contemplated herein and the performance and compliance with the
terms hereof by it do not require the consent or approval of any
governmental authority, or if such consent or approval is required, it
has been obtained.
(b) With respect to each Initial Series, CCC hereby represents and
warrants to the Trustee, as of March 19, 1993, unless a different time is
specified for a particular representation in any paragraph below, that:
(i) All of the Mortgage Loans having a loan-to-value ratio in
excess of eighty percent (80%) are the subject of primary mortgage
insurance which shall (A) have been issued by an insurer whose rating
is acceptable to S&P, (B) be maintained until the loan-to-value ratio
declines to eighty percent (80%), and (C) subject to certain
conditions, insure such Mortgage Loans against default as to the
principal amount exceeding seventy-five percent (75%) of the
"appraised value" of the respective Mortgaged Properties. For purposes
of this paragraph (i), "appraised value" of a Mortgaged Property shall
be equal to the lesser of the sales price of the Mortgaged Property to
the Mortgagor or the value reflected in the original appraisal made in
connection with such sale to the Mortgagor.
(ii) All of the Mortgage Loans are the subject of hazard
insurance providing for not less than the coverage of the standard
form of fire insurance policy with extended coverage customary in the
state in which the Mortgaged Property is located;
(iii) All of the Mortgaged Properties are the subject of title
insurance and that such insurance coverages contain no exceptions,
except those permitted pursuant to the guidelines heretofore
established by FNMA;
(iv) No Mortgage Loan shall be more than two (2) months
delinquent as of the Cut-off Date;
(v) With respect to each Mortgage Loan, on the date such
Mortgage Loan was purchased by CMC, the respective Servicer, or in the
case of certain Mortgage Loans being purchased by CMC from Capstead
Investment Corporation, its
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<PAGE>
wholly-owned subsidiary, Capstead Investment Corporation, had good
title to each such Mortgage Loan and no such Mortgage Loan was subject
to an offset, defense, counterclaim or right of rescission;
(vi) All of the Mortgage Loans constituted a valid first lien
on the respective Mortgaged Properties (subject only to permitted
exceptions) and each of the Mortgaged Properties was free from damage
and was in good repair;
(vii) There were no tax or assessment liens against any of the
Mortgaged Properties;
(viii) No Mortgage Loan, at the time of origination, had a loan-
to-value ratio in excess of ninety-five percent (95%);
(ix) No more than five percent (5.0%) of the aggregate number
of Mortgage Loans are secured by Mortgages on real property located
within a single postal zip code area and no more than one and one-half
percent (1.5%) of the aggregate principal balance of the Mortgage
Loans secured by Mortgages on all property located within the State of
California are within a single postal zip code area; and
(x) All Mortgage Loans, if any, having an initial payment date
which occurs after the initial Distribution Date of April 22, 1993
have been pooled into one or more separate Certificates having an
initial Distribution Date as specified herein, which is later than the
first payment date on such underlying Mortgage Loans.
(c) In the event that, following the exercise of a Conversion Option
with respect to the mortgage interest rate borne by any Mortgage Loan, the
related Servicer fails to repurchase such Mortgage Loan, CCC shall use its
best efforts to sell such Mortgage Loan on behalf of the Trustee for a
price at least equal to 100% of the outstanding principal balance of such
Mortgage Loan, plus accrued interest to the end of the month of such sale;
provided, however, that neither CCC nor CMC shall itself be required to
purchase such Mortgage Loan.
(d) With respect to each Additional Series, CCC will make the
representations and warranties in subsections (a) and (b) of this Section
5.01 as of the date of the respective Supplement pursuant to which such
Additional Series is issued, unless a different time is specified for a
particular representation in any paragraph in Section 5.01(b).
(e) With respect to each Asset Certificate, each Mortgage Loan
provides for an interest rate, which if adjustable, adjusts to an interest
rate based upon the applicable index that is the value of the index
occurring during the interval that begins three months prior to the first
day on which the adjusted interest rate is in effect under the Mortgage
Loan and ends one year following that day.
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<PAGE>
It is understood and agreed that the representations and warranties set
forth in this Section 5.01 shall survive delivery of the respective Mortgage
Files to the Trustee.
5.02 Representations and Warranties of the Administrator.
---------------------------------------------------
(a) With respect to each Initial Series, the Administrator hereby
represents and warrants to CCC and to the Trustee, as of the date of
execution and delivery hereof, that:
(i) The Administrator is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland,
with full corporate and other power and authority to execute, deliver
and enter into this Agreement and to perform all of its duties and
obligations pursuant hereto;
(ii) The execution and delivery of this Agreement has been duly
authorized by the Administrator and, when executed and delivered, will
constitute a valid and binding obligation of the Administrator,
enforceable in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally, and that
certain equitable remedies may not be available;
(iii) The execution and delivery of this Agreement by the
Administrator in the manner contemplated herein and the performance
and compliance with the terms hereof by it will not violate (a) its
certificate of incorporation or bylaws, or (b) any laws which could
have any material adverse effect whatsoever upon the validity,
performance or enforceability of any of the terms of this Agreement
applicable to the Administrator, and will not constitute a material
default (or an event which, with notice or lapse of time, or both,
would constitute a material default) under, or result in the breach
of, any material contract, agreement or other instrument to which the
Administrator is a party or which may be applicable to it or any of
its assets;
(iv) The Administrator is a FNMA and FHLMC approved
seller/servicer of conventional mortgages and meets all requirements
of applicable laws so as to be eligible to originate, purchase hold
and service conventional mortgages. So long as the Administrator shall
continue to serve in the capacity contemplated under the terms of this
Agreement, it shall maintain its good standing as a FNMA and FHLMC
approved servicer/seller of conventional mortgages; and
(v) The execution and delivery of this Agreement by the
Administrator in the manner contemplated herein and the performance
and compliance with the terms hereof by it do not require the consent
or approval of any governmental authority, or if such consent or
approval is required, it has been obtained.
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<PAGE>
(b) With respect to each Additional Series, the Administrator will
make the representations and warranties in subsection (a) of this Section
5.02 as of the date of the respective Supplement pursuant to which such
Additional Series is issued.
5.03 Restrictions on Modifications to Documents in Mortgage File. With
-----------------------------------------------------------
respect to each Mortgage Loan included in a Mortgage Pool, in no event shall
either CCC, the Administrator or the Trustee permit any modification of such
Mortgage Loan or the related documents in the Mortgage File which would have the
effect of changing (i) the interest rate on or term of such Mortgage Loan (other
than, with respect to an ARM Mortgage Loan, adjustments to such interest rate
made pursuant to the existing terms of the related Mortgage Note) or (ii) the
outstanding principal balance of such Mortgage Loan (except with respect to
actual payments of principal received with respect thereto) except with respect
to the Asset Certificates, as provided in Section 6A.03 hereof.
ARTICLE VI.
The Administrator
6.01 General. The Administrator shall have general responsibility for
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monitoring the servicing of the Mortgage Loans and performance of other duties
in accordance with the express provisions of this Agreement. The Administrator
shall have full power and authority to do and perform any and all things which
it may deem necessary or desirable to carry out its duties and responsibilities
hereunder, unless contrary to the express provisions of this Agreement. Without
limiting the generality of the foregoing, the Administrator shall be, and is
hereby, irrevocably authorized and empowered to execute and deliver, with
respect to the Mortgage Loans, the properties encumbered by the Mortgages, and
any acts to be performed by the Administrator under this Agreement, any and all
instruments, documents and writings necessary or desirable to fulfill its duties
and responsibilities hereunder as the Administrator. In addition, in the event
the index with respect to an ARM Mortgage Loan is not published or is otherwise
unavailable, the Administrator shall select an alternative index based on
comparable information which, in the case of any Mortgage Loans evidenced by an
Asset Certificate, shall be at a rate which does not cause a REMIC Loss as
evidenced by an Opinion of Counsel. The parties hereto acknowledge and agree
that, subject to Section 7.01, the Trustee shall have no liability or
responsibility to the Mortgagor, the Certificateholders or any other Person for
calculation of interest charged on any ARM Mortgage Loan or for calculation of
amounts escrowed or to be escrowed or of notifications thereof or of servicing
transfers. The Administrator will furnish to the Trustee and, as long as the
Financial Guaranty Insurance Policy is in effect, to FSA, semi-annually, on or
before 120 days after each June 30th and December 31st, commencing June 30,
1993, an Officer's Certificate stating that (i) a review of the fulfillment by
the Administrator during such six-month period of its obligations under this
Agreement has been made by an appropriate officer or officers of the
Administrator; and (ii) to the best of such officer's knowledge, based on such
review, the Administrator has fulfilled all of its obligations under this
Agreement throughout such six-month period 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. Subject to Section 7.01(e)
hereof, the Trustee may rely upon such Officer's Certificate with regard to the
Administrator's compliance with the terms of this Agreement.
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<PAGE>
6.02 Accounting For Mortgage Loan Payments.
-------------------------------------
(a) On or before three (3) Business Days before the Remittance Date,
the Administrator shall provide to the Trustee and CCC a Loan Summary and
Remittance Report for each Series of Certificates which shall be based upon
the Servicers' Remittance Reconciliations which were received by the
Administrator on or before the fifth (5th) Business Day of such month
together with a certificate signed by the Administrator to the Trustee as
to the Requisite Amount of the Bankruptcy and Special Hazard Account for
the related Distribution Date. The Administrator shall indicate in each
Loan Summary and Remittance Report the total service fees retained by
Servicers with respect to each such Series, the administrative fee to be
paid pursuant to Section 6.04 with respect to each such Series, and the
nature of the collections remitted for each such Series by Servicers and
deposited pursuant to this Agreement on or before the Remittance Date of
the current month and the other information required to be reported in
Section 4.03 with respect to each such Series. In addition, the
Administrator shall compute and timely provide in writing to the Trustee
the premiums due under the Mortgage Pool Insurance Policy, Advance Claims
Insurance Policy and Fraud Waiver Letter and the Special Hazard Insurance
Policy.
(b) The Administrator is hereby authorized to distribute, as directed
by CCC, to the Servicers uniform guidelines prepared by CMC in conjunction
with the Administrator, as amended from time to time, for the accounting
and reporting procedures to be followed by the Servicers with respect to
the Mortgage Loans.
(c) On or before three (3) business days before each Remittance Date,
the Administrator shall provide in the Loan Summary and Remittance Report,
solely with respect to the Asset Certificates and the Mortgage Loans
underlying and Trust Fund related to such Asset Certificates, the aggregate
of the outstanding principal balances of all Mortgage Loans in all Mortgage
Pools related to all Asset Certificates and the aggregate number of such
Mortgage Loans as of the related Distribution Date. In addition, the
Administrator shall provide the following information along with such Loan
Summary and Remittance Report:
(1) the aggregate principal balances and number of all Mortgage
Loans in all Mortgage Pools related to all Asset Certificates which,
as of the related Distribution Date, were (i) delinquent as to a total
of (x) 30-59 days, (y) 60-89 days and (z) 90 days or more, and (ii) in
foreclosure; and
(2) the aggregate cumulative amount of Loan Losses and any
Prepayment Interest Shortfalls as of the related Distribution Date
related to all Mortgage Loans in all Mortgage Pools related to all
Asset Certificates.
Section 6.02A. Accounting Reports to be Provided to FSA. On or prior to
----------------------------------------
the tenth day of each month, commencing May 10, 1993, the Administrator will
deliver to FSA a written report including the following information with respect
to the Mortgage Loans relating to the Certificates:
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<PAGE>
(i) the aggregate outstanding principal balance of each
Certificate at the close of business on the last day of the second
month preceding the month in which the report is due (the "Information
Date");
(ii) the number of and aggregate outstanding principal balance
of any such Mortgage Loans which were delinquent 30 days, 60 days and
90 or more days as of the Information Date; and
(iii) the number of and aggregate outstanding principal balance
of any such Mortgage Loans which were in foreclosure as of the related
Information Date.
6.03 Monitoring of Servicers' Performance. The Administrator shall be
------------------------------------
responsible for reporting to the Trustee and CCC the compliance by each Servicer
with its duties under the related Servicing Agreement. In the review of each
Servicer's activities, the Administrator may rely upon an Officer's Certificate
of the Servicer with regard to such Servicer's compliance with the terms of such
Servicing Agreement. The Administrator will furnish to the Trustee and CCC on or
before each Remittance Date during the term of this Agreement an Evaluation
Report of Servicers and will notify any Servicer whenever, according to the
Evaluation Report of Servicers, the performance of such Servicer, in the
Administrator's opinion, consistently fails to comply with such Servicing
Agreement or to meet the minimum responsibilities for dealing with delinquencies
as set forth therein, except that the Administrator shall not notify the
Servicer, if, in the Administrator's opinion, the procedures being employed by
such Servicer are adequate and efficient in dealing promptly with delinquencies.
In the event that the Administrator, in its judgment, determines that a Servicer
should be terminated in accordance with the related Servicing Agreement, or that
a notice should be sent pursuant to such Servicing Agreement with respect to the
occurrence of an event that, unless cured, would constitute grounds for such
termination, the Administrator shall notify CCC and the Trustee thereof and,
absent instructions to the contrary from CCC or the Trustee within five days of
the delivery of such notice, the Administrator shall issue such notice or take
such other action as it deems appropriate. Upon request, the Administrator shall
make available to CCC and to the Trustee all reports submitted by the Servicers
to the Administrator, concerning delivery of the Mortgage Loans and the
Servicers foreclosure recommendations. Without limitation to any other rights or
remedies available to CCC or the Trustee, either CCC or the Trustee may require
the foreclosure of any Mortgage Loan with respect to which any monthly
installment of principal and interest is more than 90 days past due.
6.04 Fees of Administrator. As compensation for its activities and
---------------------
obligations hereunder, the Administrator shall be entitled to payment from the
Trustee pursuant to Section 4.02(c) on each Distribution Date of an amount equal
to (i) 1/12 of .05% or 5 basis points of the outstanding principal balance of
all Mortgage Loans as of the related Premium Calculation Date in the respective
Mortgage Pool and (ii) 1/12 of the Excess Master Servicing Fee Percentage, if
any, of the outstanding principal balance of any Mortgage Loan included in
Exhibit K hereto, in each case only from amounts actually collected with respect
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to interest on such principal balances.
6.05 Administrator's Insurance Policies. The Administrator hereby agrees
----------------------------------
to obtain and maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy in full force and effect throughout the
term of this Agreement covering the Administrator's officers
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<PAGE>
and employees and other persons acting on behalf of the Administrator in its
capacity as the Administrator under this Agreement. With respect to the
Administrator, such coverage shall be in an amount, and issued by issuers, that
would be acceptable to FNMA, if the Administrator were servicing the Mortgage
Loans for FNMA. In the event that any such bond or policy shall cease to be in
effect, the Administrator shall exercise its best reasonable efforts to obtain
from an issuer or insurer licensed in the State and acceptable to the Trustee
and CCC a comparable replacement bond or policy, as the case may be. Any amounts
collected by the Administrator under any such bond or policy relating to the
Mortgage Loans shall be remitted to the Certificate Account and applied pursuant
to this Agreement. No provision of this Section 6.05 shall operate to diminish,
restrict or otherwise limit the Administrator's responsibilities and obligations
as set forth in this Agreement.
6.06 Liability of Administrator for Expenses. The Administrator shall be
---------------------------------------
required to pay all expenses incurred by it in connection with its
administration activities hereunder (including the cost of the insurance
policies and bonds required by Section 6.05) and shall not be entitled to
reimbursement therefor, except as specifically provided herein. If the
Administrator fails to respond to preliminary requests for information made by
CCC or the Trustee, the Administrator also agrees to pay (i) all reasonable
costs and expenses incurred by the Trustee or CCC in investigating the
Administrator's activities hereunder when, in the opinion of the Trustee or CCC,
such investigation is warranted on the basis of adverse information about the
Administrator and (ii) all reasonable costs and expenses incurred by the Trustee
or CCC in replacing the Administrator in the event of a default by the
Administrator in the performance of its duties under the terms and conditions of
this Agreement.
6.07 Maintenance of Mortgage Pool Insurance Policy and Related Coverage.
------------------------------------------------------------------
(a) Pursuant to Section 2.02(d), CCC has delivered the Insurance
Policies to the Trustee. The Trustee will use its best reasonable efforts
to maintain the Financial Guaranty Insurance Policy (subject to Section
4.02(b)), and to supervise (subject to Section 6.07(b)) the filing of
claims thereunder. The amount of coverage under the Mortgage Pool Insurance
Policy may be reduced if the conditions set forth in Section 8A.01 of this
Agreement are modified or eliminated by S&P; provided, however, that no
such reduction may be made unless each Rating Agency requested by CCC to
rate the Certificates and each Rating Agency requested by CMC Securities
Corporation II to rate the REMIC Certificates has furnished a letter to the
Trustee to the effect that such change will not result in the downgrade of
each such Rating Agency's then current rating with respect to each of the
Certificates and the REMIC Certificates. The Trustee will surrender the
Financial Guaranty Insurance Policy to FSA upon the expiration of the term
of the Financial Guaranty Insurance Policy. If Additional Series are
issued, the level of coverage under the Mortgage Pool Insurance Policy may
be adjusted and if so, such adjusted amounts will be reflected in the
applicable Supplement for such Additional Series.
(b) The Administrator will prepare and file and supervise the
processing of claims under the Insurance Policies and the Trustee shall
have no liability or responsibility therefor, except as provided in Section
6.07(a). Any amounts collected under any such policy (other than any amount
to be applied to the restoration or repair of the property encumbered by
the
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<PAGE>
related Mortgage Loan with respect to which such amount was collected) will
be deposited with the Trustee to be held in the Advance Account and applied
pursuant to this Agreement.
(c) In the event that the Insurance Policies, or any of them, cease
to be in effect, or the issuer of any such policy ceases to be a Qualified
Insurer, the Administrator will exercise its best reasonable efforts to
obtain from a Qualified Insurer a comparable replacement policy with a
total coverage which is equal to the previously existing coverage of the
appropriate insurance policy and a binding commitment pertaining to waiver
of claims arising from fraud losses comparable to the existing Fraud Waiver
Letters; provided, however, that the Financial Guaranty Insurance Policy is
not cancelable and during the term of the Financial Guaranty Insurance
Policy the FSA Premium will be paid to FSA pursuant to this Agreement and
the Premium Letter. No person shall be required to pay any premium for a
replacement policy in excess of the premium paid for the replaced policy as
provided under this agreement. Any amounts collected under any such policy
(other than any amount to be applied to the restoration or repair of the
property encumbered by the related Mortgage Loan with respect to which such
amount was collected) will be deposited with the Trustee to be held in the
Advance Account and applied pursuant to this Agreement.
6.08 Maintenance of Special Hazard Account.
-------------------------------------
(a) The Trustee has established a trust account in its own name, as
Trustee, and designated such account as the "Special Hazard
Account/Capstead Capital Corporation/1993," which account is an Eligible
Account. The Certificateholders of each Series issued under Program 1993PA
shall have an undivided interest in the benefits, if any, at any time under
the Special Hazard Account up to an aggregate amount equal to the Program
1993PA Special Hazard Claim Ceiling. This amount shall be determined by
applying the formula set forth in the definition of the Requisite Amount of
the Special Hazard Account to the aggregate outstanding principal balance,
as of the date of such determination, of the Mortgage Loans pooled to form
each Outstanding Series (including the Asset Certificates) and then
reducing the amount determined by the application of such formula by the
aggregate claims paid in respect of Special Hazard Losses experienced
through the date of such determination with respect to all Mortgage Loans
pooled to form the Outstanding Series. In the event that Additional Series
are issued under CCC's Program 1992PA, the Requisite Amount of the Special
Hazard Account and the Program 1992PA Special Hazard Claim Ceiling may be
adjusted. In this case, such adjusted amounts would be reflected in the
applicable Supplement for such Additional Series.
(b) As of March 19, 1993, CCC has caused to be on deposit in the
Special Hazard Account funds equal to the Reserved Amount. All funds, if
any, held in the Special Hazard Account will be invested at the direction
of CCC (or, in the absence of such direction, by the Trustee) in Permitted
Instruments maturing prior to the next succeeding Distribution Date
following the date of investment in such instruments and all such
investments will be held to maturity; provided, however, that Permitted
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Instruments issued by and constituting the direct and unconditional fixed-
term payment obligations of the Trustee (including, but not limited to,
pooled or common trust funds of the Trustee) may
--
<PAGE>
mature on the Distribution Date next following the date of investment in
the same. On each Distribution Date, gains (net of losses) from investments
of monies deposited in the Special Hazard Account will be paid to CCC.
Additionally, to the extent that funds on deposit in the Special Hazard
Account, after taking into account available coverage under any Special
Hazard Policy, exceed the Requisite Amount of the Special Hazard Account on
any Distribution Date, such excess shall be paid to CCC. Finally, at the
termination of this Agreement any amounts remaining in the Special Hazard
Account in excess of the Requisite Amount of the Special Hazard Account, as
calculated in respect of all Other Program Mortgage Loans remaining at the
time of the termination of this Agreement, will be paid to CCC.
(c) The Trustee will withdraw from the assets on deposit in the
Special Hazard Account, in accordance with the order described hereafter in
this paragraph (c), and will deposit in the Certificate Account any amount
necessary to make up a shortfall in the aggregate required payment to each
Certificateholder due on any Distribution Date, as described in Section
4.02(a), paragraphs (i), (ii), (iii) and (iv), to the extent that such
shortfall results from Special Hazard Losses. Additionally, the Trustee
will withdraw from funds on deposit in the Special Hazard Account and
deposit into the Advance Account any amount necessary to reimburse a
Servicer or the Administrator for Monthly Advances and Expense Advances
made by such Servicer or the Administrator, which are not subsequently
recoverable due to Special Hazard Losses. With respect to any shortfalls
due to Special Hazard Losses, the Trustee will first withdraw funds on
deposit in the Special Hazard Account and, following the exhaustion of such
funds, will notify the Administrator to make claims under the Special
Hazard Policy to cover such Special Hazard Losses up to an amount equal to
the Aggregate Loss Limit defined in such Special Hazard Policy. Any
proceeds received as a result of claims filed under the Special Hazard
Policy will constitute "Insurance Proceeds" for all purposes of this
Agreement and, therefore, will be deposited initially into the Advance
Account prior to deposit in the Certificate Account, all in accordance with
Section 4.04 of this Agreement. Any amounts so withdrawn from the Special
Hazard Account which are subsequently recovered by payment of claims under
any of the foregoing policies (other than the Special Hazard Policy) or
otherwise will be deposited to replenish the Special Hazard Account.
(d) CCC has obtained a Special Hazard Policy from Aetna covering
losses in excess of the Reserved Amount, up to an aggregate amount equal to
the Requisite Amount of the Special Hazard Account, and will maintain such
Special Hazard Policy issued by Aetna, or a replacement policy issued in a
form and issued by an insurer acceptable to the Rating Agency (in either
case, less any claims made and paid by Aetna or such other Special Hazard
Insurer) in full force and effect throughout the term of this Agreement or
until other acceptable assets are deposited into the Special Hazard Account
as provided in paragraph (e) below. The Trustee will use its best efforts
to maintain the Special Hazard Policy subject to Section 4.02(e), until
such time as a replacement Special Hazard Policy, cash or an alternative
form of credit enhancement permitted by paragraph (e) below shall be
delivered to the Trustee by CCC to fund the Special Hazard Account up to
the then applicable Requisite Amount of the Special Hazard Account. The
Administrator will prepare, file and
--
<PAGE>
supervise the processing of claims under the Special Hazard Policy, and all
related endorsements thereto. The Trustee will supervise the filing of such
claims by the Administrator. Upon receipt of payment from the Special
Hazard Insurer of any such claims, the Trustee will initially deposit such
funds into the Advance Account for application pursuant to Section 4.04. If
the claims paying rating of the Special Hazard Insurer is reduced such that
the original rating assigned by the Rating Agency to the Certificates or
the REMIC Certificates is reduced, the Administrator shall exercise its
best reasonable efforts to obtain from another insurance company a
comparable replacement policy with a total coverage which is equal to the
previously existing coverage under the Special Hazard Policy, provided that
(i) such insurance company has a claims paying rating that will result in
the Certificates and the REMIC Certificates maintaining a rating equal to
the original rating assigned by the Rating Agency and (ii) the premium
payable under such replacement policy is no greater than the then current
premium payable under the Special Hazard Policy at the time such
replacement policy is procured by the Administrator.
(e) CCC may elect to obtain additional special hazard insurance
(including, without limitation, earthquake coverage) in lieu of all or a
portion of the funds on deposit at any time in the Special Hazard Account.
Any such insurance must be, in form and amount, acceptable to the Rating
Agency, as evidenced by a letter from the Rating Agency to the effect that
such new arrangement will not result in the downgrade of the Rating
Agency's then current rating with respect to each Outstanding Series of
Certificates. In addition, CCC may elect to fund the Special Hazard Account
with a letter of credit, in form and amount acceptable to the Rating Agency
in lieu of all or a portion of the cash currently funding the Special
Hazard Account. Any change in the Special Hazard Account described in this
Section 6.08(e) and requiring a letter from the Rating Agency with respect
to the Certificates as provided herein shall not be effective unless each
Rating Agency requested by CMC Securities Corporation II to rate the REMIC
Certificates has furnished a letter to the effect that such change will not
result in the downgrade of each such Rating Agency's then current rating
with respect to each REMIC Certificate. The formula for the Requisite
Amount of the Special Hazard Account may be changed without the consent of
any holder of Certificates of the Outstanding Series provided that each
Rating Agency requested by CCC to rate the Certificates and each Rating
Agency requested by CMC Securities Corporation II to rate the REMIC
Certificates has furnished a letter from each such Rating Agency to the
effect that such change will not result in the downgrade of the then
current rating with respect to the Certificates and the REMIC Certificates.
Section 6.08A. Maintenance of Bankruptcy Account.
------------------------------------------------
(a) The Trustee has established in its own name, as Trustee, a Trust
Account designated "Bankruptcy Account/1993PA Capstead Capital Corporation
Portfolio Pass-Through Programs," which account is an Eligible Account. The
Certificateholders of each Series issued under Program 1993PA shall have an
undivided interest in the benefits, if any, at any time under the
Bankruptcy Account up to an aggregate amount equal to the Program 1993PA
Bankruptcy Claim Ceiling. This amount is determined by applying the
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<PAGE>
formula outlined in the definition of Requisite Amount of the Bankruptcy
Account to the aggregate outstanding principal balance, as of the date of
such determination, of the Mortgage Loans pooled to form the Series
(including the Asset Certificates) and then reducing the amount determined
by means of such two-prong test by the aggregate claims paid in respect of
Bankruptcy Losses experienced through the date of such determination with
respect to all Mortgage Loans underlying all of the Program 1993PA Mortgage
Pass-Through Certificates. In the event that additional Series are issued,
or if any Outstanding Series are canceled, the Requisite Amount of the
Bankruptcy Account and the Program 1993PA Bankruptcy Claim Ceiling may be
adjusted. In the case of the issuance of any Additional Series, such
adjusted amounts would be reflected in the applicable Supplement for such
Additional Series. In the case of the cancellation of any Series, such
adjusted amounts will be reflected in a report which shall be generated by
the Administrator on the last business day of the month in which such a
cancellation occurs.
(b) As of March 19, 1993, CCC has caused to be on deposit in the
Bankruptcy Account funds equal to the Requisite Amount of the Bankruptcy
Account. All funds, if any, held in the Bankruptcy Account will be invested
at the direction of CCC (or, in the absence of such direction, by the
Trustee) in Permitted Instruments maturing prior to the next succeeding
Distribution Date following the date of investment in such instruments and
all such instruments shall be held to maturity; provided, however, that
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Permitted Instruments issued by and constituting the direct and
unconditional fixed-term payment obligations of the Trustee (including, but
not limited to, pooled or common trust funds of the Trustee) may mature on
the Distribution Date next following the date of investment in the same. On
each Distribution Date, gains (net of losses) of investments of money
deposited in the Bankruptcy Account will be paid to CCC. Additionally, to
the extent that funds on deposit in the Bankruptcy Account shall exceed the
Requisite Amount of the Bankruptcy Account on any Distribution Date, such
excess will be paid to CCC. At the termination of this Agreement any
amounts remaining in the Bankruptcy Account in excess of the Requisite
Amount of the Bankruptcy Account as calculated in respect of all Other
Program Mortgage Loans remaining at the time of the termination of this
Agreement, will be paid to CCC.
(c) Upon written request from the Administrator, the Trustee will
withdraw from the assets on deposit in the Bankruptcy Account and will
deposit in the Certificate Account any amount necessary to make up a
shortfall in the aggregate required payment to each Certificateholder due
on any Distribution Date, as described in Section 4.02(a), paragraphs (i),
(ii), (iii) and (iv), to the extent that such shortfall results from
Bankruptcy Losses. The calculation of Bankruptcy Losses is more fully
described in paragraph (d) below. Additionally, upon written request from
the Administrator, the Trustee will withdraw from funds on deposit in the
Bankruptcy Account and deposit into the Advance Account any amount
necessary to reimburse a Servicer or the Administrator for advances of
principal, interest and expenses made by such Servicer or the
Administrator, which are not subsequently recoverable due to Bankruptcy
Losses. Any amounts so withdrawn from the Bankruptcy Account which are
subsequently recovered will be deposited to replenish the Bankruptcy
Account.
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<PAGE>
(d) In the event that, with respect to any Mortgage Loan, the amount
of the outstanding principal balance due under a Mortgage Note is reduced
by a bankruptcy court, upon receipt of notice from the related Servicer,
the Administrator will direct the Trustee to withdraw the amount of such
reduction (a "Bankruptcy Loss") from the Bankruptcy Account and deposit
this amount into the Certificate Account for application to the related
Certificate as a Principal Prepayment, pursuant to Section 4.02, on the
Distribution Date next following the receipt of such direction from the
Administrator. In addition, if the scheduled payments due under a Mortgage
Note are reduced by a bankruptcy court as a result of a reduction in the
interest rate on the related Mortgage Loan, the Administrator will direct
the Trustee to withdraw the Bankruptcy Loss amount from the Bankruptcy
Account and deposit this amount into the Certificate Account for
application to the related Certificate as a part of interest, pursuant to
Section 4.02.
(e) CCC may elect to obtain mortgagor bankruptcy insurance in lieu of
all or a portion of the funds on deposit at any time in the Bankruptcy
Account. Any such insurance must be, in form and amount, acceptable to the
Rating Agency, as evidenced by a letter from the Rating Agency to the
effect that such new arrangement will not result in the downgrade of the
Rating Agency's then current rating with respect to each Outstanding Series
of Certificates. In addition, CCC may elect to fund the Bankruptcy Account
with a letter of credit, in form and amount acceptable to the Rating Agency
in lieu of all or a portion of the cash currently funding the Bankruptcy
Account. Any change in the Bankruptcy Account described in this Section
6.08A(e) and requiring a letter from the Rating Agency with respect to the
Certificates as provided herein shall not be effective unless each Rating
Agency requested by CMC Securities Corporation II to rate the REMIC
Certificates has furnished a letter to the effect that such change will not
result in the downgrade of each such Rating Agency's then current rating
with respect to each REMIC Certificate. The formula for the Requisite
Amount of the Bankruptcy Account may be changed without the consent of any
holder of Certificates of the Outstanding Series provided that each Rating
Agency requested by CCC to rate the Certificates and each Rating Agency
requested by CMC Securities Corporation II to rate the REMIC Certificates
has furnished a letter to the effect that such change will not result in
the downgrade of each such Rating Agency's then current rating with respect
to the Certificates and the REMIC Certificates.
(f) Upon the occurrence of any Bankruptcy Loss the Administrator will
provide a report to the Trustee stating (i) the Mortgage Loan incurring the
Bankruptcy Loss, (ii) the Mortgagor's last name, (iii) the outstanding
principal balance on the Mortgage Loan, (iv) the net interest rate, (v)
the amount of the Bankruptcy Loss, and (vi) the date of the Bankruptcy
Loss.
6.09 Annual Independent Certified Public Accountants' Reports for
------------------------------------------------------------
Administrator.
-------------
(a) On or before 120 days after the end of each of the
Administrator's fiscal years, beginning with the fiscal year ending
December 31, 1993 and on or before 120 days after the end of each fiscal
year thereafter, the Administrator, at its expense, will furnish to CCC,
and,
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<PAGE>
as long as the Financial Guaranty Insurance Policy is in effect, to FSA and
the Trustee (i) an opinion by a firm of independent certified public
accountants on the financial position of the Administrator at the end of
its fiscal year and the results of operations and changes in financial
position of the Administrator for such year then ended on the basis of an
examination conducted in accordance with generally accepted auditing
standards, and (ii) if the Administrator is then servicing any Mortgage
Loans, a statement from such independent certified public accountants to
the effect that based on an examination of certain specified documents and
records relating to the servicing of the Administrator's mortgage loan
portfolio conducted substantially in compliance with the audit program for
mortgages serviced for FNMA or FHLMC, the United States Department of
Housing and Urban Development Mortgage Audit Standards, or the Uniform
Single Audit Program for Mortgage Bankers (the "Applicable Accounting
Standards"), such firm is of the opinion that such servicing has been
conducted in compliance with the Applicable Accounting Standards except for
(a) such exceptions as such firm shall believe to be immaterial and (b)
such other exceptions as shall be set forth in such statement.
(b) The Administrator will agree to perform, or have performed, such
other procedures as CCC may reasonably request and as the Administrator and
CCC mutually agree in writing.
6.10 Standby Servicing Obligation. The Administrator may accept the
----------------------------
assignment of any Servicer's servicing rights and obligations under its
Servicing Agreement and shall immediately assume the servicing rights and
obligations of any Servicer whose servicing obligations are terminated pursuant
to the Servicing Agreement, in which event the duties and obligations to service
the Mortgage Loans previously serviced by such Servicer shall thereafter be
applicable to and carried out by the Administrator as provided under the
Servicing Agreement, under the same terms and conditions applicable to any other
Servicer. The Administrator shall be entitled to the same servicing fee that
otherwise would have been retained by a Servicer pursuant to the Servicing
Agreement with respect to the servicing obligations of such Servicer assumed by
the Administrator and shall be entitled to the same reimbursement of Monthly
Advances or Expense Advances as such Servicer would have been entitled to
pursuant to Section 4.04.
6.11 Administrator's Obligation to Make Monthly Advances and Expense
---------------------------------------------------------------
Advances.
--------
(a) In the event that the Trustee determines, pursuant to Section
4.01(b) hereof, that any Servicer has not made any scheduled Monthly
Advance, the Administrator shall, on or before 11:00 a.m. (Dallas, Texas
time) on the Distribution Date of the month in which such Monthly Advance
was scheduled to be made, make an advance equal to such unpaid Monthly
Advance. In the event that any Servicer does not make an Expense Advance
when due pursuant to the related Servicing Agreement, the Administrator
shall, within forty-eight hours of receipt of notice (either in writing or
verbally but if verbally, as confirmed in writing) from the Trustee,
pursuant to Section 4.01(b) hereof, of its failure to receive an Expense
Advance from a Servicer, make an advance equal to such unpaid Expense
Advance; provided, however, that in no event shall the Administrator be
required to make Nonrecoverable Advances with respect to any Monthly
Advance or Expense Advance.
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<PAGE>
Advances by the Administrator pursuant to this Section 6.11 may be made
either by (i) depositing in the Certificate Account for the appropriate
Series the amount equal to such advance, or (ii) causing to be made
appropriate entries in the records of such account for the appropriate
Series (which records are those maintained by the Administrator and not the
account records of the Trustee) that funds in such account being held for
future distribution or withdrawal have been, as permitted by this Section
6.11, used by the Administrator in discharge of any such advance, or (iii)
make advances for the appropriate Series in the form of any combination of
(i) and (ii) aggregating the amount of such advance. Any funds being held
for future distribution to Certificateholders of a Series and so used shall
be replaced by the Administrator by deposit in the respective account for
such Series on any future date to the extent that funds in such account on
such date shall be less than payments to persons other than CCC required to
be made on such date.
(b) The Administrator shall be reimbursed for all advances made
pursuant to this Section 6.11 as provided in Sections 4.02(c) and 4.04(b).
Should the Administrator be required to make any advances hereunder on
behalf of a Servicer, the Administrator may immediately terminate such
Servicer's rights under the related Servicing Agreement and shall assume
such Servicer's servicing rights and obligations as standby servicer
pursuant to Section 6.10.
6.12 Resignation of Administrator. The Administrator may not resign from
----------------------------
its obligations as Administrator hereunder or as a Servicer, including any
servicing rights and obligations assumed by Administrator from another Servicer
pursuant to Section 6.10, unless a successor shall have accepted an appointment
from the Trustee and unless satisfactory evidence shall have been furnished from
the Rating Agency that such resignation and succession shall not adversely
affect the rating of the Certificates and the REMIC Certificates.
6.13 Amendment of Servicing Agreements. CCC, in conjunction with the
---------------------------------
Administrator may from time to time make such modifications and amendments to
the Servicing Agreements (including any guides incorporated by reference
therein) and approve assignments of the Servicing Agreements to any Person, in
each case as the Administrator deems necessary or appropriate to confirm or
carry out more fully the intent and purpose of the Servicing Agreements and the
duties, responsibilities and obligations of the Servicers thereunder; provided,
however, that no such amendment or modification has a materially adverse impact
on the Certificateholders. The consent of the Trustee shall not be required for
any action taken or proposed to be taken by the CCC or the Administrator
pursuant to this Section 6.13.
ARTICLE VIA
REMIC Provisions
The provisions of Article VI A shall apply only to the Asset Certificates.
The REMIC Certificates of a series shall be deemed to be outstanding as long as
any Asset Certificates included in the related REMIC are outstanding.
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<PAGE>
Section 6A.01. Realization Upon Defaulted Mortgage Loans. In connection
-----------------------------------------
with the realization upon any defaulted Mortgage Loan, the Administrator shall
ensure that the related Servicer shall not acquire for the benefit of a REMIC
Trust Fund any personal property pursuant to the related Servicing Agreement
unless either:
(a) such personal property is incident to real property (within
the meaning of Section 856(e)(1) of the Code) so acquired by such Servicer
for the benefit of such REMIC Trust Fund; or
(b) the Administrator shall have requested and received an Opinion of
Counsel (obtained at the expense of such REMIC Trust Fund) to the effect
that the holding of such personal property by such REMIC Trust Fund will
not cause the imposition of a tax on such REMIC Trust Fund under the REMIC
Provisions or cause such REMIC Trust Fund, or any portion thereof, to fail
to qualify as a REMIC at any time that any REMIC Certificate of the related
Series is outstanding.
Section 6A.02. Title and Management of REO Property.
------------------------------------
(a) The Administrator shall ensure that the applicable Servicer, on
behalf of a REMIC Trust Fund, shall dispose of any REO Property within two
years after the Trustee acquires ownership of such REO Property, unless (i)
the Administrator on behalf of such REMIC Trust Fund, and as an expense of
such REMIC Trust Fund, has applied for an extension of such two-year period
pursuant to Code Sections 856(e)(3) and 860G(a)(8)(A), in which case the
Administrator shall ensure that such Servicer sells such REO Property
within the applicable extension period or (ii) the Administrator seeks and
subsequently receives, at the expense of such REMIC Trust Fund, an Opinion
of Counsel, addressed to the REMIC Trustee, the Trustee and the
Administrator, to the effect that the holding by such REMIC Trust Fund of
such REO Property subsequent to two years after its acquisition will not
result in the imposition of taxes on "prohibited transactions" of such
REMIC Trust Fund as defined in Section 860F of the Code or cause such REMIC
Trust Fund, or any portion thereof, to fail to qualify as a REMIC at any
time that any REMIC Certificates of the related Series are outstanding. The
Administrator shall ensure that the applicable Servicer shall manage,
conserve, protect and operate such REO Property for the related
Certificateholders solely for the purpose of its prompt disposition and
sale in a manner which does not cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the
Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code) or result in the receipt by such REMIC Trust
Fund of any "income from nonpermitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property"
which is subject to taxation under the REMIC Provisions.
(b) The Administrator shall ensure that each Servicer does not:
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<PAGE>
(i) permit a REMIC Trust Fund to enter into, renew or extend
any New Lease, if the New Lease by its terms will give rise to any
income that does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under any New
Lease, other than amounts that will constitute Rents from Real
Property;
(iii) authorize or permit any construction on any REO Property,
other than the repair or maintenance thereof or the completion of a
building or other improvement thereon, and then only if more than ten
percent of the construction of such building or other improvement was
completed before default on the related Mortgage Loan became imminent,
all within the meaning of Section 856(e)(4)(B) or the Code; or
(iv) allow any Person to Directly Operate any REO Property on
any date more than 90 days after its date of acquisition by a REMIC
Trust Fund, unless such Person is an Independent Contractor;
unless, in any such case, the Administrator has requested and received an
Opinion of Counsel at the expense of the related REMIC Trust Fund to the
effect that such action will not cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the
Code (determined without regard to the exception applicable for purposes of
Section 860D of the Code) at any time that it is held by the related REMIC
Trust Fund, in which case the Administrator may allow the applicable
Servicer to take such actions as are specified in such Opinion of Counsel.
Section 6A.03. Modifications, Waivers, Amendments and Consents.
-----------------------------------------------
(a) The Administrator shall ensure that no Servicer agrees to any
modification, waiver or amendment of any term of any Mortgage Loan unless
the Administrator has first obtained an Opinion of Counsel, which shall be
obtained at the expense of the related REMIC Trust Fund and may be
applicable to more than one transaction or generally to a class or classes
of transactions described therein, to the effect that the proposed
modification, waiver or amendment will not cause a REMIC Loss, provided
however that no such Opinion of Counsel shall be required for a
modification, waiver or amendment made pursuant to subsection (b) below
except as required under clause (ii) thereof. Should a modification to any
Mortgage Loan occur without the Administrator's knowledge which may result
in a disqualification of a REMIC Trust Fund or any portion thereof as a
REMIC, CCC agrees to indemnify and hold harmless the Administrator for any
loss or liability.
(b) If a Servicer determines with respect to any Mortgage Loan
serviced by it that a material default has occurred or a payment default is
reasonably foreseeable or has occurred with respect thereto and that
modification, waiver or amendment of the terms of such Mortgage Loan is
reasonably likely to produce a greater recovery on a present value basis
than liquidation of such Mortgage Loan, the Administrator may permit such
Servicer,
--
<PAGE>
subject to the servicing standard set forth in the related Servicing
Agreement, to agree to a modification, waiver or amendment of such Mortgage
Loan, without the consent of the Trustee or any Certificateholders, in
accordance with the following:
(i) subject to the provisions in the following clause (ii) and
the paragraph following clause (ii) below, the Servicer may from time
to time reduce the monthly payments on any such Mortgage Loan
(including allowing a monthly payment to be less than that required to
pay interest at the related mortgage interest rate and adding the
difference to the unpaid principal balance of such Mortgage Loan) for
a period of up to six months but any such change shall not reduce any
required Monthly Advance at the original Mortgage Rate;
(ii) the Servicer may permit the Mortgagor to substitute
collateral for all or a portion of the Mortgaged Property, pledge
additional collateral for the Mortgage Loan or release part of the
Mortgaged Property, provided, however, that the Administrator shall
have requested and received an Opinion of Counsel addressed to the
REMIC Trustee, the Trustee and the Administrator (obtained at the
expense of the related REMIC Trust Fund) to the effect that such
substitution or addition is permitted hereby and such substitution,
additional pledge or release of collateral will not cause the
imposition of a tax on the related REMIC Trust Fund, or any portion
thereof, under the REMIC Provisions or cause such REMIC Trust Fund, or
any portion thereof, to fail to qualify as a REMIC at any time that
any REMIC Certificate of the related Series is outstanding.
Notwithstanding the foregoing, the Administrator shall not permit the
Servicer to agree to any modification which changes the interest rate or
term of such Mortgage Loan or changes the outstanding principal balance of
such Mortgage Loan (except with respect to actual payments of principal
received with respect thereto or changes set forth in clause (i) above).
Section 6A.04. Reports of Foreclosures and Abandonments of Mortgaged
-----------------------------------------------------
Property. The Trustee shall make the reports of foreclosures and abandonments
- --------
of any Mortgaged Property included within an Asset Certificate as required by
Section 6050J of the Code. In order to facilitate this reporting process, the
Administrator, on or before January 20th of each year, shall provide to the
Trustee reports relating to each instance occurring during the previous calendar
year in which the Administrator or a Servicer (i) on behalf of the Trustee
acquires an interest in a Mortgaged Property included in an Asset Certificate
through foreclosure or other comparable conversion in full or partial
satisfaction of a Mortgage Loan included in an Asset Certificate, or (ii) knows
or has reason to know that a Mortgaged Property included in an Asset Certificate
has been abandoned. Reports from the Administrator shall be in form and
substance sufficient to meet the reporting requirements imposed by Section 6050J
of the Code. The Trustee and the Administrator shall not be required to prepare
any reports under this section if the Administrator obtains and provides to the
Trustee certifications from each Servicer that such Servicers have prepared and
filed with the applicable authorities the required reports.
ARTICLE VII.
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<PAGE>
The Trustee
7.01 Duties of Trustee.
-----------------
(a) Within 45 days of the receipt of the documents required to be
delivered under Section 2.02, the Trustee shall review such documents to
determine whether the required documents have been delivered for each
Mortgage Loan, and within 120 days of such receipt the Trustee shall
determine that CCC has completed the recordation of assignments as required
by Section 2.02(a)(iii) or (iv). To the extent that the documents with
respect to a Mortgage Loan are missing or defective, the Trustee shall
promptly notify the Administrator or CCC and the Administrator shall, in
turn, promptly notify CCC and the appropriate Servicer, as applicable.
(b) Upon acceptance of its duties hereunder, and prior to termination
of this Agreement in accordance with Article IX, the Trustee shall, subject
to subsection (d) of this Section 7.01, perform such duties as are provided
in this Agreement for the benefit of all of the Certificateholders.
(c) Except as is otherwise provided in subsection (e) of this Section
7.01, the Trustee shall be under no duty or obligation to inspect, review
or examine any documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they are other than what they purport to be on
their face.
(d) The Trustee, prior to the occurrence of an Event of Default and
after the curing 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. In case an Event of Default has occurred
(which has not been cured), 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 as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
(e) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement but
shall be under no duty or obligation to determine that they are genuine,
enforceable or appropriate for the represented purpose or that they are
other than what they purport to be on their face.
(f) The Trustee will terminate any Servicer without cause pursuant to
the terms of its respective Servicing Agreement upon receipt from CCC of
(1) written notice instructing it to do so and (2) evidence that CCC will
make, or cause to be made, any
--
<PAGE>
payment required to be made upon termination without cause of any such
Servicer pursuant to the terms of its respective Servicing Agreement.
(g) 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 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; and
(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 direction of Certificateholders of a Series
holding Certificates which evidence Fractional Undivided Interests
aggregating not less than 25% of their respective Trust Fund at the
time relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement;
provided, however, that if the Trustee shall receive conflicting
directions from two or more groups of Certificateholders of a Series
holding Certificates that evidence Fractional Undivided Interests
aggregating not less than 25% of their respective Trust Fund at the
time, then the Trustee shall act pursuant to this Section 7.01(g)(iii)
only at the direction of Majority Certificate holders at the time.
(h) For all purposes of this Agreement, the Trustee shall not be
deemed to have notice of the existence of any default or Event of Default
under this Agreement, unless a trust officer assigned to and working in the
corporate trust office of the Trustee has actual knowledge thereof or
unless written notice of any such default or Event of Default is received
by the Trustee at the Corporate Trust Office and such notice references the
Certificates, the Administrator, the Trust Fund or this Agreement.
(i) The Trustee shall have no liability or responsibility to
any Person for the acts, or omissions to act by the Administrator
(excepting the Trustee's own actions as Administrator in the event the
Trustee has assumed the obligations of the
--
<PAGE>
Administrator pursuant to Section 8.02), any Servicer, or CCC. In the
event a cause of action is brought against the Trustee for acts or
omissions to act by the Administrator or any Servicer, any loss, cost
(including reasonable attorney's fees) or expense incurred by the
Trustee shall be borne by CCC pursuant to Section 7.05. Other than
those obligations assumed by the Trustee pursuant to Section 8.02, no
provision of this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
7.02 Certain Matters Affecting the Trustee. Except as otherwise provided
-------------------------------------
in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, 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;
(b) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel selected by it with due care;
(c) With respect to each Series of Certificates, the Trustee shall be
under no obligation to exercise any of the trusts or powers vested in it by
this Agreement or to institute, conduct or defend any litigation hereunder
or in relation thereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
the Certificateholders of such Series shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby;
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
(e) Prior to the occurrence of an Event of Default affecting a Series
hereunder and after the curing of all Events of Default which may have
occurred with respect to such Series, 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 of such Series evidencing
Fractional Undivided Interests aggregating not less than 25% of their
respective Trust Fund; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not
--
<PAGE>
assured to the Trustee to its reasonable satisfaction by the security
afforded to it by the terms of this Agreement, the Trustee may require from
the Certificateholders of such Series indemnity reasonably satisfactory to
it against such expense or liability as a condition to the making of such
investigation; and
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys selected by it with due care.
7.03 Trustee Not Liable for Certificates or Mortgage Loans. The Trustee
-----------------------------------------------------
assumes no responsibility for the representations and warranties of the other
parties contained herein. The Trustee shall not be accountable for the use or
application by CCC of any of the Certificates or of the proceeds of such
Certificates.
7.04 Trustee May Own Certificates. The Trustee 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 Trustee.
7.05 Trustee's Fees and Expenses. The Trustee shall be entitled to a fee
---------------------------
for its services hereunder, which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust, in an amount set
forth in Exhibit G hereto, payable pursuant to Section 4.02(d) monthly during
---------
the term of this Agreement, and to the extent there are insufficient funds to
pay such fee in the Certificate Account, then the Trustee shall receive payment
from CCC directly. The Trustee shall also receive reimbursement for all
reasonable costs and expenses related to the delivery, maintenance and release
of Mortgage Loans hereunder and for other reasonable ordinary expenses, in
amounts approved by the Administrator, for reasonable ordinary expenses incurred
in the exercise of its responsibilities as REMIC Trustee under the Series 1993-
2I Pooling Agreement, and for Extraordinary Expenses, such reimbursement to be
paid either from monies in the Certificate Account pursuant to Section 4.02(d)
or directly from CCC. CCC hereby indemnifies and holds the Trustee (including in
its capacity as REMIC Trustee under the Series 1993-2I Pooling Agreement)
harmless against any loss, claim, liability or expense, including reasonable
attorney's fees, incurred, arising out of or in connection with this Agreement,
the Series 1993-2I Pooling Agreement, the Series 1993-2I REMIC Certificates or
the Certificates, including but not limited to any such loss, claim, liability
or expense incurred in connection with any legal action against the Trust Fund
or the REMIC Trust Fund or the Trustee (including in its capacity as REMIC
Trustee under the Series 1993-2I Pooling Agreement) or any director, officer,
employee or agent thereof, or the performance of any of the Trustee's duties
(including in its capacity as REMIC Trustee under the Series 1993-2I Pooling
Agreement) hereunder or thereunder (other than any loss, claim, liability or
expense incurred by reason of willful misconduct or negligence on the part of
the Trustee). Any payment to the Trustee pursuant to the foregoing indemnity
shall be from CCC's own funds, without reimbursement therefor. The obligation to
reimburse unpaid fees and expenses and the indemnity by CCC contemplated by this
Section shall survive the termination of this Agreement.
7.06 Eligibility Requirements for Trustee. The Trustee hereunder shall at
------------------------------------
all times be a commercial bank or trust company organized and doing business
under the laws of the State or of
--
<PAGE>
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
corporation 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 7.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 7.07.
7.07 Resignation or Removal of the Trustee.
-------------------------------------
(a) The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Administrator
and the Majority Certificate holders. Upon receiving such notice of
resignation, the Majority Certificateholders may upon the recommendation of
the Administrator appoint a successor trustee by written instrument, in
duplicate, one copy of which shall be delivered to the resigning Trustee
and one copy of which shall be delivered to 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. The Trustee shall remain as Trustee
hereunder until a successor trustee is appointed in accordance herewith.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.06, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged a bankrupt
or insolvent or the subject of an order for relief entered in a bankruptcy
proceeding, 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 Majority Certificateholders may
remove the Trustee and appoint a successor trustee by written instrument
copies of which shall be delivered to the Trustee so removed, the successor
trustee, and the Administrator.
(c) The Majority Certificateholders may at any time remove the
Trustee for cause or, so long as the fees to be charged by the proposed
successor trustee do not exceed an amount equal to 100% of the fees then
charged by the Trustee being removed, remove the Trustee without cause and
either (i) appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such holders or their authorized
attorneys-in-fact, one complete set of which instruments shall be delivered
to the Administrator, one complete set to the Trustee so removed and one
complete set to the successor so appointed or (ii) petition a court of
competent jurisdiction.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.08. As long as
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<PAGE>
the Financial Guaranty Insurance Policy is in effect, the Administrator
will send a written notice to FSA of any such resignation, removal or
appointment.
7.08 Successor Trustee.
-----------------
(a) Any successor trustee appointed as provided in Section 7.07 shall
execute, acknowledge and deliver to CCC, to the Administrator and to its
predecessor trustee an instrument accepting such appointment hereunder,
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with like effect as if originally named as
trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and CCC, the Administrator and the predecessor trustee shall
execute and deliver such instruments and do such other things as may
reasonably be required to more fully and certainly vest and confirm in the
successor trustee all such rights, power, duties and obligations. The
successor trustee shall execute and deliver to the predecessor trustee
receipts and releases for the Mortgage Files and related documents and CCC
shall execute and deliver releases to the predecessor trustee, subject to
Section 7.01, as the predecessor trustee may reasonably require. Any
Trustee ceasing to act shall, nevertheless, retain its rights hereunder
with respect to any amounts due it hereunder.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 7.06.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Administrator shall mail notice of the succession of
such trustee hereunder to all Certificateholders at their addresses as
shown in the Certificate Register. If the Administrator fails to mail such
notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Administrator.
(d) As long as any REMIC Certificates remain outstanding, a successor
trustee must agree to act as the REMIC Trustee in order to serve as a
successor trustee under this Agreement.
7.09 Merger or Consolidation of Trustee. Any corporation into which the
----------------------------------
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible under the provisions of Section 7.06, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
7.10 Trustee to Cooperate; Release of Mortgage Files.
-----------------------------------------------
--
<PAGE>
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Servicer may notify the
Administrator by a certification (which certification shall include
statements to the effect that (i) all amounts constituting Liquidation
Proceeds or Insurance Proceeds received or to be received in connection
with such payment which are required to be credited to the Advance Account
pursuant to Section 4.04, have been or will be so credited and (ii) all
other amounts have been credited to the Certificate Account) of an officer
of Servicer and request delivery to it of the Mortgage File. Upon receipt
of a copy of such certification and request and upon written notice from
the Administrator, the Trustee shall promptly release the related Mortgage
File to the Servicer. Upon any such payment in full, or the receipt of such
notification, the Servicer is authorized to prepare a release of lien or
deed of reconveyance covering the property encumbered by such deed of
trust, to be executed by the Trustee, which release of lien shall after
recording thereof be delivered by the Servicer to the person or persons
entitled thereto, it being understood and agreed that no expenses incurred
in connection with such release of lien or deed of reconveyance shall be
chargeable to the Certificate Account relating to the Series to which such
Mortgage Loan was assigned. If any Mortgage File is released in reliance
upon such a certification and the related Mortgage Loan is subsequently
discovered to have in fact not been paid in full, the Trustee shall
promptly notify the Administrator and the Administrator shall demand that
the applicable Servicer return the Mortgage File to the Trustee. From time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan the Trustee shall, upon the written request of the Administrator and
delivery to the Trustee of a trust receipt, substantially in the form
attached hereto as Exhibit G, signed by an officer of the Servicer, release
---------
the related Mortgage File to the Servicer, and the Trustee shall execute
such documents as shall be necessary to the prosecution of any such
proceedings. Such trust receipt shall obligate the Servicer to return the
Mortgage File to the Trustee when the need therefor by the Servicer no
longer exists unless the Mortgage Loan shall be liquidated, in which case
upon receipt of a notice from the Administrator, accompanied by an
Officer's Certificate similar to that hereinabove specified, the trust
receipt shall be released by the Trustee to the Servicer. Additionally, in
the event of any repurchase of a Mortgage Loan pursuant to Section 2.04 or
in the event of the exercise of a Conversion Option resulting in the
repurchase of a Mortgage Loan, and upon direction by a Servicer, CCC or
CMC, as applicable, to the Administrator regarding delivery of the related
Mortgage File, the Administrator will deliver written notice of such
repurchase of such Mortgage Loan and instructions for delivery of the
related Mortgage File to the Trustee.
(b) With respect to any Series for which CCC is the sole
Certificateholder and upon written request by CCC, as Certificateholder,
the Trustee will cancel a Certificate or Certificates and deliver the
related Mortgage Files to CCC or its designee. No other Certificateholder
may cause cancellation of a Certificate without the consent of the Trustee
and the Administrator, and CMC may not request cancellation of a
Certificate under any circumstances, even with respect to a Certificate of
which it is the sole Certificateholder.
7.11 Issuance of Additional Series of Certificates; CCC's Agreement
--------------------------------------------------------------
regarding Additional Loans.
- --------------------------
--
<PAGE>
(a) Upon the written request of CCC and in accordance with the
provisions of this Agreement, including, without limitation, the written
confirmation or a rating letter of the Rating Agency, as required by the
Rating Agency, the Trustee agrees to execute and deliver one or more
Supplements, in the form attached hereto as Exhibit I, for the purpose of
---------
issuing Additional Series of Certificates hereunder, and the Trustee
further agrees, upon satisfaction of all conditions precedent specified in
the related Supplement, to authenticate and deliver Certificates evidencing
a beneficial interest in the Trust Fund for each such Additional Series,
each in the form attached hereto as Exhibit A.
---------
(b) CCC hereby agrees that it will not cause (i) any Additional Loan
(as defined in the Series 1993-2I Pooling Agreement) to become the subject
of coverage under either the Mortgage Pool Insurance Policy or the Special
Hazard Insurance Policy, or (ii) any Series of Certificates evidencing an
Additional Loan to obtain any rights to the assets from time to time on
deposit in the Bankruptcy Account or the Special Hazard Account; provided,
--------
however, that CCC may arrange for any Additional Loan (or related Series of
-------
Certificates) to have such benefits if, prior to the arrangement thereof,
CCC delivers to the REMIC Trustee a Letter from the Rating Agency to the
effect that the taking of such action will not result in the withdrawal or
reduction of the then current rating by such Rating Agency of the REMIC
Certificates.
7.12 Trustee Not Acting In Individual Capacity. Except as provided in this
-----------------------------------------
Article VII, in accepting the trusts hereby created, the Trustee acts solely as
Trustee hereunder and not in an individual capacity, and all persons having a
claim against the Trustee by reason of the transactions contemplated by this
Agreement will look only to the respective Trust Fund for payment or
satisfaction thereof.
7.13 Appointment of Co-Trustee or Separate Trustee. Notwithstanding any
---------------------------------------------
other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of any Trust Fund or property
securing the same may at the time be located, the Administrator 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 to act as co-
trustee or co-trustees, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of any Trust Fund, and to vest in such
Person or Persons, in such capacity, such title to any Trust Fund, or any part
thereof, and, subject to the other provisions of this Agreement, such powers,
duties, obligations, rights and trusts as the Administrator and the Trustee may
consider necessary or desirable. If the Administrator shall not have joined in
such appointment within 15 days after the receipt by it of a request to do so,
or, in case an Event of Default by the Administrator shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 7.08 and no notice to holders
of Certificates of the appointment of co-trustee(s) or separate trustee(s) shall
be required. All fees and expenses, if any, incurred by the Trustee and arising
out of the appointment of a co-trustee or separate trustee pursuant to this
Section 7.13 shall be considered reimbursable fees and expenses of the Trustee
for purposes of Section 7.05. All fees and expenses, if any, incurred by the
Administrator and arising out of the
--
<PAGE>
appointment of a co-trustee or separate trustee pursuant to this Section 7.13
shall be considered reimbursable fees and expenses pursuant to Section 4.04.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 7.13 all rights, powers, duties and obligations 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 servicer to the Administrator 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 any Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustees only at
the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustees may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
7.14 Insurer Rights of Subrogation. etc. If any issuer of any insurance
-----------------------------------
policy requests subrogation or conveyance by a special warranty deed, the
Trustee shall promptly notify the Administrator. Upon receipt of instruments
prepared by the Administrator together with an Officer's Certificate and request
for execution from the Administrator, the Trustee shall promptly execute such
instruments and return same to the Administrator for further handling. In any
case in which a Mortgaged Property is to be conveyed to a Person by a Mortgagor
and the Person is to enter into an assumption agreement or other equivalent
agreement or agreements which require the signature of the Trustee, the
Administrator shall obtain from the Servicer such agreement or agreements and
such other appropriate documents and deliver them to the Trustee for signature
together with an Officer's Certificate explaining the nature of such documents
and the reason or reasons why the Trustee's signature is required. Upon receipt
of such documents and an Officer's Certificate, the Trustee shall execute and
return such documents to the Administrator for further handling. In any case in
which any Mortgagor requests a partial release of the Mortgaged Property from
the lien of the Mortgage or requests a subordination of the lien of the Mortgage
for easements (whether conservation or otherwise), for environmental reasons or
for any other reason to be created subsequent to the date
--
<PAGE>
of origination of the Mortgage, the Administrator shall first determine whether
to recommend to the Trustee that consent should be given on behalf of the Trust
Fund to such request and, if so, should obtain from the Servicer such releases
or such subordination agreements and deliver them to the Trustee for signature
together with an Officer's Certificate explaining the nature of such documents
and the reason or reasons why the Trustee's signature is required. The Officer's
Certificate shall in addition contain: (i) the written consent of the
Administrator; (ii) information indicating that the loan-to-value ratio of the
Mortgage Loan following the creation of such easement or other subordination
will not exceed the loan-to-value ratio at the time of origination; (iii) a
certification that the creation of such easement or other subordination will not
materially and adversely affect the marketability of title to the Mortgaged
Property nor the effectiveness of any of the insurance policies, or if such
effectiveness would be impaired, the Officer's Certificate shall be accompanied
by the written consent of the applicable issuer of such insurance policy. In
addition, the Administrator shall furnish an endorsement to the related title
policy to the effect that, under the laws of the state in which the related
Mortgaged Property is located, the Mortgage held will continue to represent a
first lien on the Mortgaged Property, notwithstanding the execution of the
agreement subordinating such Mortgage to the easement or other subordination,
and if a REMIC election has been made with respect to the applicable Series of
Certificates, an Opinion of Counsel that such action will not result in a REMIC
Loss. Upon receipt of such documents and an Officer's Certificate, the Trustee
shall execute and return such documents to the Administrator for further
handling. The Trustee shall have no liability or responsibility to any Person
for any act or omission to act taken by the Trustee in compliance with and in
reliance upon the procedures set out in this Section. Any act or omission to act
by the Trustee pursuant to this Section shall not require the consent of any
Certificateholder. The Administrator will not be liable to any party for any
release or subordination agreement furnished pursuant to this Section 7.14,
provided that the Administrator has, in good faith, prepared and delivered the
required Officer's Certificate and delivered any required Opinion of Counsel to
the Trustee.
ARTICLE VIII.
Default
8.01 Events of Default. In case one or more of the following Events of
-----------------
Default by the Administrator shall occur and be continuing:
(a) failure on the part of the Administrator duly to observe or
perform in any material respect any of the covenants or agreements on the
part of the Administrator in the Certificates or in this Agreement herein
contained which continues unremedied for a period of 60 days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Administrator by the Trustee or CCC, or to the
Administrator and the Trustee by the holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of their
respective Trust Fund affected by such Event of Default; provided, however,
if the failure stated in the notice cannot be corrected within the
applicable period, the Trustee may consent to a reasonable extension of
time if corrective
--
<PAGE>
action is instituted by the Administrator within the applicable period and
diligently pursued until fully corrected; or
(b) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator or
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, shall have been entered against the
Administrator and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(c) the Administrator shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceedings of or
relating to the Administrator or of or relating to all or substantially all
of its property; or
(d) the Administrator shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, either the Trustee, or the holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25% of the
Trust Fund affected by such Event of Default, by notice in writing to the
Administrator (and to the Trustee if given by the Certificateholders as provided
above) may terminate all of the rights and obligations of the Administrator
under this Agreement. Such notice shall specify, to the extent possible, the
timing and the method of transition to a new administrator. On or after the
receipt by the Administrator of such written notice and upon the effective date
of the transfer to the new administrator, all authority and power of the
Administrator under this Agreement, whether with respect to the Certificates or
the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee, or
the new administrator if one shall have been appointed, pursuant to and under
this Section 8.01; and, without limitation, the Trustee, or the new
administrator if one shall have been appointed, is hereby authorized and
empowered to execute and deliver, on behalf of the Administrator, 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 Administrator agrees to cooperate with the Trustee, or the new
administrator if one shall have been appointed, in effecting the termination of
the Administrator's responsibilities and rights hereunder.
8.02 Trustee to Act; Appointment of Successor. On or after the time the
----------------------------------------
Administrator receives a notice of termination pursuant to Section 8.01 or the
Trustee receives notice of resignation of the Administrator, as permitted by
Section 6.12, CCC shall direct the Trustee to appoint any established housing
and home finance institution having a net worth of not less than $10,000,000 as
the successor to the Administrator hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Administrator
hereunder. If no such successor shall have
--
<PAGE>
been appointed within 30 days after such termination or resignation, then either
CCC or the Trustee may petition a court of competent jurisdiction for the
appointment of a successor Administrator. Pending appointment of a successor to
the Administrator hereunder, the Trustee shall act in such capacity as
hereinabove provided, except to the extent prohibited by applicable law. In
connection with such appointment and assumption, the Trustee and CCC may make
such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however, that no
such compensation shall be in excess of that permitted the Administrator
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
If the Trustee shall succeed to the Administrator's duties as administrator
of the Mortgage Loans as provided herein, it shall do so in its individual
capacity and not in its capacity as trustee and, accordingly, the provisions of
Article VII shall be inapplicable to the Trustee in its duties as the successor
to the Administrator in the servicing of the Mortgage Loans. If the Trustee
shall act as administrator hereunder, then in addition to its Trustee's fees, it
shall be entitled to the same fees as the Administrator (as provided for in
Section 6.04 above) for such period of time as it acts as administrator. In the
event that the Trustee shall not seek to appoint a successor servicer within
three months of its succession to the Administrator's duties as servicer, it
shall resign as Trustee pursuant to Section 7.07 and shall appoint, or petition
a court to appoint, a successor trustee pursuant to such Section 7.07.
8.03 Notification to Certificateholders. Upon any such termination or
----------------------------------
appointment of a successor to the Administrator, the Trustee shall give prompt
written notice thereof to (i) all of the Certificateholders at their respective
addresses as they appear in the Certificate Register and (ii) as long as the
Financial Guaranty Insurance Policy is in effect, to FSA.
8.04 Trustee May File Proofs of Claim. In case of the pendency of any
--------------------------------
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
composition or other judicial proceeding relative to the Administrator or the
property of the Administrator or its creditors, the Trustee (irrespective of
whether the Trustee shall have made any demand to terminate the rights of the
Administrator hereunder) shall be entitled and empowered, by intervention in
such proceeding or otherwise, to
(a) file and prove a claim for the whole amount due, owing and unpaid
by the Administrator hereunder and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Certificateholders allowed in such proceeding, and
(b) collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same,
and any receiver, assignee, trustees, liquidator, or sequestrator (or other
similar official) in any such proceeding is hereby authorized by each
Certificateholder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Certificate-
--
<PAGE>
holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Certificateholder
any plan of reorganization, arrangement, adjustment, or composition affecting
any of the Certificates or the rights of any holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Certificateholder in any such
proceeding.
8.05 Trustee May Enforce Claims Without Possession of Certificate. All
-------------------------------------------------------------
rights of action and claims under this Agreement or any of the Certificates may
be prosecuted to judgment or final decree, enforced and collected by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the holders of the
Certificates in respect of which such judgment has been recovered. Any surplus
shall be available for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
8.06 Rights and Remedies Cumulative. The Trustee may in its discretion
------------------------------
proceed to protect and enforce its rights and the rights of Certificateholders
by all available and appropriate proceedings, at law or in equity, whether for
the specific enforcement of any covenant or agreement in this Agreement or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy. No right or remedy herein conferred upon or reserved to the Trustee or
to the Certif icateholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
8.07 Delay or Omission Not Waiver. No delay or omission of the Trustee or
----------------------------
of any holder of any Certificate to exercise any right or remedy accruing upon
any Event of Default or otherwise shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by the law to the Trustee or to
the Certificateholders may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or by the Certificateholders, as the case
may be.
ARTICLE VIIIA
Additional Default Provisions
Section 8A.01 Additional Events of Default for CMC, as Administrator. In
------------------------------------------------------
addition, but without prejudice to the provisions of Section 8.01, and subject
always to Section 8A.03, if the Certificates are ever owned of record by a party
other than CMC or the Partnership and if either of the two following events are
prevailing as of any Determination Date (other than the first Determination
Date), then unless within thirty-one (31) days of such Determination Date CMC
shall
--
<PAGE>
have delivered to the Trustee a letter from the Rating Agency addressed to CMC
and the Trustee confirming CMC's appointment as Administrator, an Event of
Default shall have occurred in respect of CMC and the provisions of Section
8A.02 shall apply:
(i) (a) The average of the Delinquency Rates as of the end of each of the
twelve most recent calendar months preceding the calendar month
in which such Determination Date occurs and for which delinquency
information is available, exceeds 3.5%; and
(b) aggregate cumulative reductions in the coverage provided by the
Pool Policy due to Loan Losses incurred as of the end of such
calendar month exceed 20% of the initial coverage for losses
under the Mortgage Pool Insurance Policy;
or
--
(ii) (a) The average of the Delinquency Rates as of the end of each of the
twelve most recent calendar months preceding the month in which
such Determination Date occurs and for which delinquency
information is available, exceeds 4.5%; and
(b) aggregate cumulative reductions in the coverage provided by the
Pool Policy due to Loan Losses incurred as of the end of such
calendar month exceed 10% of the initial coverage for losses
under the Mortgage Pool Insurance Policy.
It shall be a condition to this Section 8A.01 that CMC will not sell the
Certificates to a third party without first obtaining a written confirmation of
the then current rating on the Certificates from the Rating Agency.
Section 8A.02 Consequence to CMC Event of Default. If the Certificates
-----------------------------------
are ever owned of record by a party other than CMC or the Partnership, the
Trustee shall determine whether either of the two events referred to in Section
8A.01 is prevailing as of a Determination Date on the basis of the reports
regarding Delinquent Mortgage Loans furnished to it on such Determination Date
pursuant to Section 6.02(c). If a letter from the Rating Agency confirming CMC
as Administrator is not received within thirty-one (31) days of the relevant
Determination Date, the Trustee shall forthwith terminate CMC as Administrator
whereupon the provisions of Article VIII shall apply to the above circumstances
mutatis mutandis.
Section 8A.03 Release of Additional Requirement. The Trustee, the
---------------------------------
Administrator and the Company may replace either or both of the two conditions
stated in Section 8A.01, without obtaining the consent of the Certificateholders
to the amendment so effected, if the Rating Agency notifies the Trustee, the
Administrator or the Company in writing of different conditions to be utilized
in substitution for the two, or either one of the two, said conditions. In
addition to the foregoing, the provisions of Section 8A.01 and 8A.02 shall be
deemed null and void and shall have no further effect
--
<PAGE>
on the date on which the Rating Agency has delivered a letter to the Trustee
stating that the conditions then specified in Section 8A.01 are no longer
required in order to maintain the then current rating of the Certificates by the
Rating Agency, and confirming the then current rating of the Certificates as
determined by the Rating Agency.
ARTICLE IX.
Termination
9.01 Termination Upon Repurchase by CCC or Liquidation of All Mortgage
------------------------------------------------------------------
Loans. The respective obligations and responsibilities of CCC, the
- -----
Administrator and the Trustee created hereby (other than the obligation of CCC
to make payments to Certificateholders as hereafter set forth) shall terminate
with respect to each Series of Certificates upon: (a) the repurchase, in
accordance with the terms hereof, by CCC of all Mortgage Loans and all other
property acquired in respect of any Mortgage Loan remaining in the related Trust
Fund (such other property being herein referred to as "Trust Property") at a
price equal, after the deduction of related Monthly Advances for such Series, to
100% of the outstanding principal amount of each Mortgage Loan in the Mortgage
Pool, plus accrued interest thereon at the Pass-Through Rate for such Series
(computed as of the last day of the month preceding the month of such repurchase
to the first day of the month following the month of repurchase), plus the
appraised value of any Trust Property of such Series, such appraisal to be
conducted by an appraiser mutually agreed upon by the Administrator and the
Trustee, provided that such repurchase shall be conditioned upon the outstanding
principal balances of such Mortgage Loans in the Mortgage Pool at the time of
any such repurchase aggregating less than ten percent (10.0%) of the aggregate
outstanding principal balances of the Mortgage Loans in the Mortgage Pool at the
Cut-off Date and provided further, that CCC shall not have such right of
repurchase in respect of any Mortgage Pool evidenced by the Asset Certificates
underlying a series of REMIC Certificates for as long as any of the REMIC
Certificates of such series remain outstanding under the related Pooling
Agreement; or (b) the later of the final payment or other liquidation (or any
Monthly Advance with respect thereto) of the last Mortgage Loan in the Mortgage
Pool remaining in the related Trust Fund or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan in
the Mortgage Pool; provided, however, that in no event shall any trust created
hereby continue beyond the expiration of 21 years from the death of the last
survivor of the following persons:
<TABLE>
<CAPTION>
Parents and
Name Date of Birth Present Address
<S> <C> <C>
Blake Alexander October 16, 1992 David and Lisa A.
Barbour Barbour
5356 Nakoma
Dallas, Texas 75209
</TABLE>
--
<PAGE>
<TABLE>
<S> <C> <C>
Mary Hester Barbour July 30, 1987 Larry G. and
Carol C. Barbour
5667 Lynbrook
Houston, Texas 77056
Peter Kingsley December 22, 1987 Peter K. and
McKee III Katherine T. McKee
6530 Barnesdale Path
Centreville, Virginia 22020
Diana Elizabeth August 23, 1985 Mark R. and Carol M.
Townsend Townsend
219 Adams Street
Eden, N.C. 27288
</TABLE>
Nothing contained herein shall be construed as providing for the accrual of
interest to Certificateholders after the final Distribution Date.
9.02 Notice of Termination. Notice of the termination of any Series of
---------------------
Certificates shall specify the Distribution Date upon which the
Certificateholders of such Series may surrender their Certificates to the
Trustee for payment and cancellation and shall be given promptly by the
Administrator to the Trustee and the Certificateholders of such Series by letter
mailed not earlier than the fifteenth day and not later than the twenty-fifth
day of the month next preceding the month of such final distribution specifying
(i) the Distribution Date upon which final payment of the Certificates of such
Series will be made upon presentation and surrender of 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. On the
Distribution Date specified in such notice, CCC shall, for the Series to be
terminated, deposit in the Certificate Account such additional amount as shall
be necessary to repurchase the affected Certificates at the price specified in
such notice, whereupon final payment thereon shall be made upon presentation and
surrender at the designated office of the Trustee. Upon such deposit and the
payment of any amounts which shall be due to the Trustee pursuant to Section
7.05 but only if the Trustee is able to apply the money to payment of the
Certificates in accordance with Section 9.01, the Trustee shall promptly release
all Mortgage Files to CCC and deliver and execute assignments of the Mortgage
Notes and Mortgages in recordable form, as prepared by CCC. If the Trustee is
unable to apply any money in accordance with Section 9.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
obligations under this Agreement and the Certificates shall be revived and
restated as though no deposit had occurred pursuant to Section 9.01 and CCC
shall use its best efforts to promptly reassign the Mortgage Notes and Mortgages
to the Trustee and redeliver the Mortgage Files to the Trustee, until such time
as the Trustee is permitted to apply all such money or obligations in accordance
with this Article IX. As long as the Financial Guaranty
--
<PAGE>
Insurance Policy is in effect, the Administrator shall notify FSA of the
termination of any Series of Certificates.
In the event that all of the Certificateholders of a Series shall not
surrender their Certificates for cancellation within six months after the time
specified in the above mentioned written notice, the Administrator shall give a
second written notice to the remaining Certificateholders of the affected Series
to surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Certificates of such Series shall not have been surrendered for
cancellation, the Administrator may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining Certificateholders of
the affected Series concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets of the related Trust
Fund which remain subject hereto.
Regardless of the date upon which the Certificateholders of a Series shall
surrender their Certificates for cancellation, no interest shall accrue to such
Certificateholders after the Distribution Date specified in the first above
mentioned written notice.
ARTICLE X.
Miscellaneous Provisions
10.01 Amendment. This Agreement may be amended, with respect to a Series,
---------
from time to time by CCC, the Administrator and the Trustee, without the consent
of any of the Certificate holders of such Series, to cure any ambiguity, to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein, or to amend any other provisions with respect to
matters or questions arising under this Agreement, which shall not be
inconsistent with the provisions of this Agreement, provided that such action
shall not, in the judgment of the Trustee, adversely affect in any material
respect the interests of any Certificateholder of such Series. Further, CCC, the
Administrator and the Trustee, may, at any time and from time to time and at all
times that any REMIC Certificates are outstanding, without the consent of the
Certificateholders of any Outstanding Series of Asset Certificates, amend this
Agreement with respect to any or all Outstanding Series of Asset Certificates to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary to maintain the qualification of the REMIC Trust Fund, or any portion
thereof, as a REMIC, or to prevent the imposition of any additional state taxes;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the REMIC Trust Fund), is necessary or helpful to
maintain such qualification or to prevent the imposition of any such taxes, and
will not adversely affect in any material respect the interest of any
Certificate holder of any Series. In addition, any provision of this Agreement
may also be amended by a Supplement executed pursuant to Section 7.11 with
respect to each Additional Series from time to time by CCC, the Administrator
and the Trustee, without the consent of any Certificateholders of any Series
issued prior to such Additional Series, provided that any such amendment shall
apply only to such Additional Series and not to such prior Series without the
consent of the required numbers of holders of such prior Series otherwise
required by the other provisions of this Section 10.01. This Agreement may also
be amended with respect to a Series from time to time by CCC, the Administrator
and the Trustee with the consent of the holders of Certificates of such Series
--
<PAGE>
evidencing Fractional Undivided Interests aggregating not less than 66% of the
applicable Trust Fund for the purpose of adding any provisions to this Agreement
or of modifying in any manner the rights of the holders of Certificates of such
Series; provided, however, that no such amendment shall, without the consent of
the holders of all Certificates of such Series then outstanding, (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 of such Series, (ii) reduce the
aforesaid percentage of Certificates of such Series, the holders of which are
required to consent to any such amendment, or (iii) adversely affect the tax
consequences to Certificateholders of such Series, as evidenced by an Opinion of
Counsel. Any such amendment or modification shall be effective only as to the
Series affected thereby. Without the written consent of FSA, no amendment of
this Agreement may be made with respect to any Certificates which are insured
under the Financial Guaranty Insurance Policy. However, this Agreement may be
amended and/or supplemented from time to time without the consent of FSA with
respect to Certificates which are not insured under the Financial Guaranty
Insurance Policy.
Notwithstanding any contrary provision of this Agreement, no amendment
shall be made to this Agreement which shall affect any Series of Asset
Certificates unless the REMIC Trustee, the Administrator or the Trustee shall
have received an Opinion of Counsel, at the expense of the REMIC Trust Fund, to
the effect that such amendment will not cause the REMIC Trust Fund, or any
portion thereof, to fail to qualify as a REMIC at any time that any REMIC
Certificates are outstanding or cause a tax to be imposed under the REMIC
Provisions.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder of such Series.
It shall not be necessary for the consent of the Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
10.02 Recordation of Agreement; Counterparts. To the extent permitted by
--------------------------------------
applicable law, a memorandum describing this Agreement is subject to recordation
in all appropriate public offices for real property records in all the counties
or other comparable jurisdictions in which any or all of the properties subject
to the Mortgages are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected by the Administrator and at
CCC's expense, if the Administrator determines that such recordation materially
and beneficially affects the interests of the Certificateholders or, if the
Trustee so directs.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
--
<PAGE>
10.03 Limitation on Rights of Certificateholders. The death or incapacity
------------------------------------------
of any Certificateholder shall not operate to terminate this Agreement or any
Trust Fund, nor shall it 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 any Trust Fund, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
Except as expressly provided herein, no Certificateholder shall have any
right to vote or in any manner otherwise control the operation and management of
any Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners; nor, to
the extent permitted by applicable law, shall any Certificateholder be under any
liability to any third person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless the
Majority Certificateholders 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 indemnity reasonably satisfactory to
it as it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee, for 30 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more holders of Certificates
shall have any right in any manner whatever by virtue or by availing of any
provisions of this Agreement to affect, disturb or prejudice the rights of the
holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 10.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
10.04 Limitation on Liability of Parties. Each party to this Agreement
----------------------------------
shall be liable under this Agreement only to the extent that obligations are
imposed upon the party against whom enforcement is sought.
10.05 Limitation on Liability of Directors, Officers, Employees and Agents
--------------------------------------------------------------------
of a Party. No director, officer, employee or agent of any party to this
- ----------
Agreement shall be liable to any other party for the taking of any action or for
refraining to take any action in good faith pursuant to this Agreement.
10.06 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
-------------
THE LAWS OF THE STATE AND THE LAWS OF THE UNITED STATES APPLICABLE TO
TRANSACTIONS IN THE STATE, AND THE OBLIGATIONS,
--
<PAGE>
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
10.07 Notices. All demands, notices and communications hereunder shall be
-------
in writing and shall be deemed to have been duly given if personally delivered
at, telecopied or mailed by registered mail, postage prepaid, to (a) in the case
of CCC, 2001 Bryan Tower, Suite 3300, Dallas, Texas 75201, Attention: Julie A.
Moore, Telecopy No. (214) 746-8031, Confirmation No. (214) 746-8000 (b) in the
case of the Administrator, 2001 Bryan Tower, Suite 3300, Dallas, Texas 75201,
Attention: Robert L. Appel, Telecopy No. (214) 746-8031, Confirmation No. (214)
746-8000 (c) in the case of the Trustee, 600 Travis, 8th Floor, Houston, Texas
77002, Attention: Corporate Trust Department, Telecopy No. (713) 216-4880,
Confirmation No. (713) 216-5884 and (d) in the case of FSA, Financial Security
Assurance Inc., 350 Park Avenue, New York, New York 10022, Attention:
Surveillance, Telecopy No. (212) 339-3518, Confirmation No. (212) 826-0100, or
such other address as may hereafter be furnished by any of the parties hereto,
in writing, to the other parties hereto. Unless otherwise specified herein, any
notice required or permitted to be mailed to a Certificateholder shall be given
by registered mail, postage prepaid, at the address of such holder as shown in
the Certificate Register. Any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
10.08 Severability of Provisions. If any one or more of the covenants,
--------------------------
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
10.09 Restrictions on Sale of Mortgage Loans. The Trustee is prohibited
--------------------------------------
from selling or otherwise disposing of any Mortgage Loans in any Mortgage Pool,
except as specifically set forth herein, without the consent of all of the
Certificateholders of the affected Series unless, with respect to the Asset
Certificates, the REMIC Trustee, the Administrator or the Trustee shall have
received an Opinion of Counsel, at the expense of the REMIC Trust Fund, to the
effect that such disposition will not cause the REMIC Trust Fund, or any portion
thereof, to fail to qualify as a REMIC at any time that any REMIC Certificates
are outstanding or cause a tax to be imposed under the REMIC Provisions.
10.10 Intention of Parties.
--------------------
(a) The execution and delivery of this Agreement shall constitute an
acknowledgment by the Administrator, CCC and the Trustee on behalf of the
Certificateholders that they intend hereby to establish (for federal
income tax purposes) a separate trust for each Series rather than an
association taxable as a corporation. The powers granted and obligations
undertaken in this Agreement shall be construed so as to further such
intent. The Trustee shall have no responsibility for the characterization
for tax purposes of the trust
--
<PAGE>
established hereby. For purposes of Texas law, the Administrator, CCC and
the Trustee on behalf of the Certificateholders intend to create an
"express trust" under the Texas Trust Act.
(b) Each of the parties hereto expressly intends and agrees that the
transfers contemplated and effected under this Agreement are absolute sales
and not pledges or assignments of only a security interest and shall be
given effect as such for all purposes. The limited rights of recourse
hereunder against CCC are intended to provide to the Trustee a remedy for
breach of representations and warranties by CCC relating to the condition
of the property sold, rather than to the collectibility of underlying
indebtedness, and therefore are consistent with warranties ordinarily given
by a seller of goods under Article 2 of the Uniform Commercial Code.
--
<PAGE>
IN WITNESS WHEREOF, CCC, the Administrator and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, in the case of CCC and the Administrator, duly attested, to be
hereunto affixed, all as of the day and year first above written.
CAPSTEAD CAPITAL CORPORATION
By:_____________________________________
Julie A. Moore,
Senior Vice President - Asset
and Liability Management
STATE OF NEW YORK (S)
(S)
COUNTY OF NEW YORK (S)
On the ____ day of October, 1993, before me, a notary public in and for
said State, personally appeared Julie A. Moore, known to me to be the Senior
Vice President - Asset and Liability Management of Capstead Capital Corporation,
a Delaware corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of New York
______________________
--
<PAGE>
CAPSTEAD MORTGAGE CORPORATION
By:_____________________________________
Julie Moore,
Senior Vice President - Asset and
Liability Management
STATE OF NEW YORK (S)
(S)
COUNTY OF NEW YORK (S)
On the ____ day of October, 1993, before me, a notary public in and for
said State, personally appeared Julie Moore, known to me to be the Senior Vice
President - Asset and Liability Management of Capstead Mortgage Corporation, a
Maryland corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of New York
______________________
--
<PAGE>
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By:__________________________________________
Richard L. Melton
Executive Vice President and
Trust Officer
STATE OF NEW YORK (S)
(S)
COUNTY OF NEW YORK (S)
On the _____day of October, 1993, before me, a notary public in and for
said State, personally appeared Richard L. Melton, known to me to be an
Executive Vice President and Trust Officer of Texas Commerce Bank National
Association, as Trustee, a national banking association, the association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
association 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.
__________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of New York
______________________
--
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I - Definitions 1
ARTICLE II - Conveyance and Delivery of Mortgage Loans 20
Section 2.01. Conveyance of Mortgage Loans 20
Section 2.02. Delivery of Mortgage Loans 21
Section 2.03. Acceptance by Trustee 23
Section 2.04 Repurchase of Defective Mortgage Loans 25
ARTICLE III - The Certificates 27
Section 3.01. The Certificates 27
Section 3.02. Registration of Transfer and Exchange of Certificates 28
Section 3.03. Mutilated, Destroyed, Lost or Stolen Certificates 30
Section 3.04 Persons Deemed Owners 30
ARTICLE IV - Accounts and Distributions 30
Section 4.01. The Certificate Account 30
Section 4.02. Distributions From Certificate Account 32
Section 4.03. Statement to Certificateholder 35
Section 4.04. Advance Account 37
Section 4.05. Custodial Account 40
ARTICLE V - Representations and Warranties 40
Section 5.01. Representations and Warranties of CCC 40
Section 5.02. Representations and Warranties of the Administrator 43
Section 5.03. Restrictions on Modifications to Documents in
Mortgage File 44
ARTICLE VI - The Administrator 45
Section 6.01. General 45
Section 6.02. Accounting For Mortgage Loan Payments 46
Section 6.02A. Accounting Reports to be Provided to FSA 47
Section 6.03. Monitoring of Servicers' Performance 47
Section 6.04. Fees of Administrator 48
Section 6.05. Administrator's Insurance Policies 48
Section 6.06. Liability of Administrator for Expenses 48
Section 6.07. Maintenance of Mortgage Pool Insurance Policy and 49
Section 6.08. Maintenance of Special Hazard Account 50
Section 6.09. Annual Independent Certified Public
Accountants' Reports for Administrator 56
</TABLE>
--
<PAGE>
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 6.10. Standby Servicing Obligation 56
Section 6.11. Administrator's Obligation to Make Monthly
Advances and Expense Advances 57
Section 6.12. Resignation of Administrator 58
Section 6.13. Amendment of Servicing Agreements 58
ARTICLE VIA - REMIC Provisions 58
Section 6A.01. Realization Upon Defaulted Mortgage Loans 58
Section 6A.02. Title and Management of REO Property. 59
Section 6A.03. Modifications, Waivers, Amendments and Consents. 60
Section 6A.04. Reports of Foreclosures and Abandonments
of Mortgaged Property 62
ARTICLE VII - The Trustee 62
Section 7.01. Duties of Trustee 62
Section 7.02. Certain Matters Affecting the Trustee 65
Section 7.03. Trustee Not Liable for Certificates or Mortgage Loans 66
Section 7.04. Trustee May Own Certificates 66
Section 7.05. Trustee's Fees and Expenses 66
Section 7.06. Eligibility Requirements for Trustee 67
Section 7.07. Resignation or Removal of the Trustee 67
Section 7.08. Successor Trustee 68
Section 7.09. Merger or Consolidation of Trustee 69
Section 7.10. Trustee to Cooperate; Release of Mortgage Files 69
Section 7.11. Issuance of Additional Series of Certificates;
CCC's Agreement regarding Additional Loans. 71
Section 7.12. Trustee Not Acting In Individual Capacity 71
Section 7.13. Appointment of Co-Trustee or Separate Trustee. 72
Section 7.14. Insurer Rights of Subrogation. etc. 73
ARTICLE VIII - Default 74
Section 8.01. Events of Default 74
Section 8.02. Trustee to Act; Appointment of Successor 76
Section 8.03. Notification to Certificateholders 76
Section 8.04. Trustee May File Proofs of Claim 77
Section 8.05. Trustee May Enforce Claims Without Possession
of Certificate 77
Section 8.06. Rights and Remedies Cumulative 78
Section 8.07. Delay or Omission Not Waiver 78
ARTICLE VIIIA - Additional Default Provisions 78
</TABLE>
--
<PAGE>
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 8A.01 Additional Events of Default for CMC, as Administrator 78
Section 8A.02 Consequence to CMC Event of Default 79
Section 8A.03 Release of Additional Requirement 79
ARTICLE IX 0 Termination 80
Section 9.01. Termination Upon Repurchase by CCC or
Liquidation of All Mortgage Loans 80
Section 9.02. Notice of Termination 81
ARTICLE X - Miscellaneous Provisions 82
Section 10.01. Amendment 82
Section 10.02. Recordation of Agreement; Counterparts 84
Section 10.03. Limitation on Rights of Certificateholders 84
Section 10.04. Limitation on Liability of Parties 85
Section 10.05. Limitation on Liability of Directors, Officers,
Employees and Agents of a Party 85
Section 10.06. GOVERNING LAW 85
Section 10.07. Notices 86
Section 10.08. Severability of Provisions 86
Section 10.09. Restrictions on Sale of Mortgage Loans 86
Section 10.10. Intention of Parties 86
</TABLE>
--
<PAGE>
SCHEDULE 1 SUMMARY OF SPECIFICATIONS OF CREDIT ENHANCEMENTS
EXHIBIT A FORM OF CERTIFICATE
EXHIBITS B-1 SCHEDULE OF MORTGAGE LOANS BY PASS-THROUGH
THROUGH B-5 CERTIFICATE NUMBER
EXHIBIT C SCHEDULE OF SERVICERS AND SERVICING AGREEMENTS
EXHIBIT D FORM OF MORTGAGE POOL INSURANCE POLICY AND APPLICABLE
ENDORSEMENTS, INCLUDING THE FORM OF ADVANCE CLAIMS INSURANCE
ENDORSEMENT AND FORM OF FRAUD WAIVER LETTER TO BE DELIVERED
BY PMI MORTGAGE INSURANCE CO.
EXHIBIT E PHOTOCOPY OF SPECIAL HAZARD INSURANCE POLICY AND APPLICABLE
ENDORSEMENTS
EXHIBIT F FORM OF LETTER TO BE ISSUED BY EACH PURCHASER OF A
CERTIFICATE
EXHIBIT G SCHEDULE OF TRUSTEE'S FEES
EXHIBIT H FORM OF TRUST RECEIPT
EXHIBIT I FORM OF SUPPLEMENT
EXHIBIT J FORM OF FINANCIAL GUARANTY INSURANCE POLICY
EXHIBIT K SCHEDULE OF EXCESS MASTER SERVICING FEES
--
<PAGE>
EXHIBIT 10.1B
SUPPLEMENT NO. 1
TO
POOLING AND ADMINISTRATION AGREEMENT
AMONG
CAPSTEAD CAPITAL CORPORATION
as Sponsor
CAPSTEAD MORTGAGE CORPORATION
as Administrator
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Trustee
CAPSTEAD CAPITAL CORPORATION
PORTFOLIO PASS-THROUGH PROGRAM
Series 1993PA-6 through 1993PA-10
Dated as of
June 1, 1993
<PAGE>
THIS SUPPLEMENT NO. 1 TO POOLING AND ADMINISTRATION AGREEMENT, dated as of
June 1, 1993 and effective as of June 15, 1993, is executed among CAPSTEAD
CAPITAL CORPORATION, a Delaware corporation ("CCC"), CAPSTEAD MORTGAGE
CORPORATION, a Maryland Corporation, as Administrator (the "Administrator"), and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association, as
Trustee (the "Trustee").
W I T N E S S E T H T H A T:
- - - - - - - - - - - - - -
In consideration of the premises and the mutual agreements herein
contained, CCC, the Administrator and the Trustee hereby agree as follows:
ARTICLE I.
Definitions
-----------
The following definitions are hereby amended, for all purposes of the
Pooling and Administration Agreement, only as such terms apply to Series 1993PA-
6 through 1993PA-10:
Additional Series: Series 1993PA-6 through 1993PA-10, issued pursuant to
-----------------
this Supplement No. 1 to the Agreement.
Agreement: The Pooling and Administration Agreement dated as of March 1,
----------
1993, as amended by Amendment No. 1 thereto, dated as of June 1, 1993 and as
supplemented through this Supplement No. 1, dated as of June 1, 1993.
Distribution Date: The second Business Day prior to the 25th day of any
-----------------
month, beginning July 22, 1993.
Distribution Rate: With respect to any Mortgage Loan, one-twelfth (1112)
-----------------
of the then-applicable Remittance Rate with respect to such Mortgage Loan less
(i) the Mortgage Pool Insurer's Premium Percentage, (ii) one-twelfth (1/12) of
the Special Hazard Premium Percentage, (iii) the Trustee Fee Percentage, and
(iv) the Administrator's Fee Percentage (with each of the fees described in (i),
(ii), (iii) and (iv) being expressed as a percentage and rounded to the nearest
ten-thousandth of a percent).
Fraud Waiver Letter: The Special Loss Waiver Letter from PMI dated as of
-------------------
June 15, 1993. The coverage under the Fraud Waiver Letter shall be part of the
coverage provided in the June 15th Schedule Endorsement initially in an amount
(the "Waiver Amount") equal to two percent (2.0%) of the aggregate principal
amount of the Mortgage Loans as of their Cut-off Date. On the first anniversary
of the effective date of the June 15th Schedule Endorsement, the Waiver amount
will be reduced to the lesser of M one percent (1.0%) of the aggregate principal
amount of such Mortgage
-2-
<PAGE>
Loans as of their Cut-off Date or (ii) the excess of two percent (2.0%) of such
aggregate Principal amount over PMI's actual fraud loss payments during the
period from the effective date of the June 15th Schedule Endorsement through the
first anniversary of such effective date.
Indemnity Agreement: The Indemnity Agreement, dated as of June 15, 1993,
-------------------
by and between PMI and CMC.
Insurance Policies: The Mortgage Pool Insurance Policy (including
------------------
applicable Advance Claims Endorsement and Fraud Waiver Letter).
June 15th Schedule Endorsement: Schedule Endorsement No. 92 26T-2 to the
------------------------------
Mortgage Pool Insurance Policy dated as of June 15, 1993.
Mortgage Loans: The Mortgage Loans listed on Schedules A-6 through A-10
--------------
hereto, which together comprise Exhibit A.
---------
Servicers: The Servicers listed on Exhibit B hereto.
--------- ---------
Servicing Agreement: The Servicing Agreements, as amended from time to
-------------------
time, listed in the Schedule of Servicers and Servicing Agreements attached
hereto as Exhibit C and providing for the servicing of the Mortgage Loans by the
---------
Servicers, each such Servicing Agreement with respect to the Mortgage Loans in a
Series having been assigned by CMC to CCC, and assigned by CCC to the Trustee
pursuant to Section 2.01 hereof, except for that Servicing Agreement between
CCC, as Owner, and CMC, as Servicer, the rights under which were assigned
directly by CCC to the Trustee. Exhibit C may be amended from time to time to
---------
add or delete Servicers, either in connection with the delivery of a Supplement
to this Agreement, or otherwise.
Trust Fund: With respect to the separate Series of Certificates, the
----------
corpus of the trusts created by this Agreement or any Supplement hereto, each
consisting of (i) the Mortgage Loans assigned to such Series as specified in the
related Schedule of Mortgage Loans; (ii) such assets as shall from time to time
be identified as deposited in the Certificate Account for the benefit of
Certificateholders of such Series; (iii) such assets as may be held for such
Series from time to time in the Advance Account; (iv) such assets as from time
to time may be held for such Series by a Servicer in a Custodial Account; (v)
all property which secured a Mortgage Loan assigned to such Series as specified
in the related Schedule of Mortgage Loans and which has been acquired by
foreclosure or deed in lieu of foreclosure; (vi) rights to the benefits, if any,
under the Mortgage Pool Insurance Policy and all endorsements thereto, including
the Advance Claims Endorsement and the Fraud Waiver Letter; (vii) all right,
title and interest of CCC in and to the obligations of the Servicers pursuant to
their Servicing Agreements with respect to the Mortgage Loans assigned to such
Series as specified in the related Schedule of Mortgage Loans; (viii) all right,
title and interest of CCC in and to the obligations of the Sellers pursuant to
the Loan Sale Agreements to repurchase Mortgage Loans assigned to such Series as
specified in the related Schedule of Mortgage Loans, with respect to which such
Sellers have breached representations and warranties made in such Loan Sale
-3-
<PAGE>
Agreements; (ix) rights to the benefits, if any, under the Special Hazard
Account, including coverage under the Special Hazard Policy and all endorsements
thereto, up to an aggregate amount (with cash and insurance coverage added
together) equal to the Program 1993PA Special Hazard Claim Ceiling; (x) rights
to the benefits, if any, under the Bankruptcy Account up to the Program 1993PA
Bankruptcy Claim Ceiling; and (xi) all proceeds from any of the foregoing
relating to such Series. Reference to holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than a certain percentage of
the Trust Fund of a particular Series means holders of Certificates the
aggregate Fractional Undivided Interests of such Series of which, as indicated
on the face thereof, is not less than such percentage.
The following definitions are hereby amended, for all purposes of the
Pooling and Administration Agreement, as such terms apply to all of CCC's
Program 1993PA Portfolio Pass-Through Certificates outstanding (Series 1993PA-1
through 1993PA-10):
Cut-off Date: For each of the Outstanding Series, the Cutoff Date will be
------------
as follows: (A) with respect to Series 1993PA-1 through 1993PA-5, March 1, 1993;
(B) with respect to Series 1993PA-6 through 1993PA-10, June 1, 1993.
Mortgage Pool Insurance Policy: Shall mean the Mortgage Pool Insurance
------------------------------
Policy (No. 0000 93 26T), together with the June 15th Schedule Endorsement
thereto, in the form attached hereto as Exhibit C. As of the issuance of the
---------
Additional Series, the coverage under the Mortgage Pool Insurance Policy shall
be an amount equal to twelve percent (12.0%) of the total initial principal
amount, as of the applicable Cut-off Dates, of the mortgage loans pooled to form
all of the Outstanding Series, less any losses due to defaults by Mortgagors
paid to date by PMI, as calculated by the Administrator, with respect to the
Outstanding Series and not subsequently recovered by PMI or reimbursed to PMI by
CMC pursuant to the terms of the Indemnity Agreement.
Mortgage Pool Insurer's Premium Percentage: The monthly Mortgage Pool
------------------------------------------
Insurer's Premium Percentage, as of the issuance of Program 1993PA, Series
1993PA-6 through 1993PA-10, is .02283% or 2.283 basis points.
Outstanding Series: CCC's Program 1993PA Portfolio Pass-Through
------------------
Certificates, Series 1993PA-1 through 1993PA-10.
Pooling and Administration Agreement or Agreement: The Pooling and
-------------------------------------------------
Administration Agreement, dated as of March 1, 1993, among CCC, the
Administrator and the Trustee, as amended by this Supplement No. 1, dated as of
June 1, 1993.
Program 1993PA Bankruptcy Claim Ceiling: $256,310.
---------------------------------------
Program 1993PA Special Hazard Claim Ceiling: $5,874,209.
-------------------------------------------
Reserved Amount: $1,468,552.
---------------
-4-
<PAGE>
Requisite Amount of the Bankruptcy Account: Based on the two-prong test
------------------------------------------
described in the Agreement, the "Requisite Amount of the Bankruptcy Account"
shall be $256,310 upon the issuance of Series 1993PA-6 through 1993PA-10.
Requisite Amount of the Special Hazard Account: The "Requisite Amount of
----------------------------------------------
the Special Hazard Account" shall be $7,342,761 upon the issuance of Series
1993PA-6 through 1993PA-10. This amount is subject to adjustment as described in
the Agreement.
Special Hazard Insurer's Fee Percentage: The Special Hazard Insurer's Fee
---------------------------------------
Percentage as of the issuance of Program 1993PA, Series 1993PA-6 through 1993PA-
10, is .0392% or 3.92 basis points.
Except as otherwise provided herein, all capitalized terms used in this
Supplement No. 1 shall have the respective meanings ascribed to them in Article
I of the Pooling and Administration Agreement.
ARTICLE II.
Conveyance and Delivery of Mortgage Loans
-----------------------------------------
Section 2.01 Conveyance of Mortgage Loans: With respect to each
----------------------------
Additional Series of Certificates, CCC, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse (except as otherwise expressly provided herein) for
the benefit of the Certificateholders of the related Additional Series, (A) all
the right, title and interest of CCC in and to such Mortgage Loans, including
all interest and principal received by CCC on or with respect to such Mortgage
Loans after the Cut-off Date (other than any scheduled payments of principal and
interest due on the Mortgage Loans on or before the Cut-off Date), (B) rights to
the benefits available under the June 15th Schedule Endorsement, and (C) all
right, title and interest of CCC in and to all other property constituting the
respective Trust Fund relating to each such Additional Series.
Section 2.02 Delivery of Mortgage Loans: For the related Additional
--------------------------
Series, CCC does hereby deliver to and deposit with the Trustee with respect to
each Mortgage Loan described on Exhibit A hereto, the documents set forth in
---------
Section 2.02 of the Pooling and Administration Agreement, together with (i)
evidence of the adjusted aggregate coverage, if applicable, under the Mortgage
Pool Insurance Policy, including the Advance Claims Endorsement, in the amount
required by the Rating Agency as evidenced by the delivery of the Rating Letter,
as of the issuance of the Additional Series; (ii) a deposit, if applicable, to
increase the Reserved Amount on deposit in the Special Hazard Account and an
endorsement to the Special Hazard Policy evidencing the new Aggregate Loss Limit
under such Policy as a result of the issuance of the Additional Series, and
(iii) a deposit, if applicable, to the funds on deposit in the Bankruptcy
Account in the amount required by the Rating Agency as evidenced by the delivery
of the Rating Letter, as of the issuance of the Additional Series.
-5-
<PAGE>
Section 2.03 Acceptance by Trustee: The Trustee acknowledges receipt of
---------------------
the Mortgage Files for each Mortgage Loan specified on Exhibit A to this
---------
Supplement No. 1, and has reviewed or will review such Mortgage Files as
required by Section 7.01(a) of the Pooling and Administration Agreement. The
Trustee declares that it holds and will hold all documents constituting a part
of the Mortgage Files delivered to it as Trustee in trust, as a part of the
Trust Fund herein set forth for the use and benefit of all present and future
Certificateholders. The acceptance by the Trustee of all Mortgage Files and
other property constituting the respective trust fund for each additional series
is governed by all of the provisions of the Pooling and Administration
Agreement, including, without limitation all of the provisions of Article II
thereof.
ARTICLE III.
Representations and Warranties
------------------------------
Section 3.01 Representations and Warranties of CCC:
--------------------------------------
(a) CCC hereby makes the representations and warranties set forth in
Section 2.04 and subsection (a) and (b) of Section 5.01 of the Agreement as
of the date of this Supplement No. 1, unless a different time is specified
for a particular representation in any paragraph under subsection (b).
(b) In addition to the foregoing representations and warranties, CCC
hereby further represents and warrants that all Mortgage Loans, if any,
having an initial payment date which occurs after the initial Distribution
Date of July 22, 1993 have been pooled into one or more separate
Certificates having an initial Distribution Date as specified herein, which
is later than the first payment date on such underlying Mortgage Loans.
(c) It is understood and agreed that the representations and
warranties set forth in Section 2.04 and Section 5.01 and made by CCC
pursuant to this Article III, shall survive delivery of the respective
Mortgage Files to the Trustee.
Section 3.02 Representations and Warranties of Administrator: The
-----------------------------------------------
Administrator hereby makes the representations and warranties set forth in
Section 5.02(a) of the Pooling and Administration Agreement as of the date of
this Supplement No. 1.
ARTICLE IV.
Pooling and Administration Agreement to Govern
----------------------------------------------
Except as described herein, the Certificates of each Additional Series
shall be governed by and subject to all of the terms and provisions of the
Pooling and Administration Agreement.
-6-
<PAGE>
ARTICLE V.
Acceptance by the Trustee
-------------------------
The Trustee accepts the additional trusts created by this Supplement on the
same terms and conditions as are set out in the Pooling and Administration
Agreement and all rights, privileges and immunities in Section VII of the
Pooling and Administration Agreement shall apply to the additional Trust Funds
created by this Supplement as completely as if set forth in full herein and
modified to apply to this Supplement and to such Additional Series.
IN WITNESS WHEREOF, CCC, the Administrator 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.
CAPSTEAD CAPITAL CORPORATION
By:________________________________________
Julie Moore,
Senior Vice President -
Asset and Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 15th day of June, 1993, before me, a notary public in and for said
State, personally appeared Julie Moore, known to me to be the Senior Vice
President - Asset and Liability Management of Capstead Capital Corporation, a
Delaware corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
____________________________________
My Commission Expires: NOTARY PUBLIC
__________________________ In and For the State of Texas
-7-
<PAGE>
SUPPLEMENT NO. 2
TO
POOLING AND ADMINISTRATION AGREEMENT
AMONG
CAPSTEAD CAPITAL CORPORATION
as Sponsor
CAPSTEAD MORTGAGE CORPORATION
as Administrator
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Trustee
CAPSTEAD CAPITAL CORPORATION
PORTFOLIO PASS-THROUGH PROGRAM
Series 1993PA-11 through 1993PA-20
Dated as of
September 1, 1993
<PAGE>
THIS SUPPLEMENT NO. 2 TO POOLING AND ADMINISTRATION AGREEMENT, dated as of
September 1, 1993 and effective as of September 21, 1993, is executed among
CAPSTEAD CAPITAL CORPORATION, a Delaware corporation ("CCC"), CAPSTEAD MORTGAGE
CORPORATION, a Maryland Corporation, as Administrator (the "Administrator"), and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association, as
Trustee (the "Trustee").
W I T N E S S E T H T H A T:
- - - - - - - - - - - - - -
In consideration of the premises and the mutual agreements herein
contained, CCC, the Administrator and the Trustee hereby agree as follows:
ARTICLE I.
Definitions
-----------
The following definitions are hereby amended, for all purposes of the
Pooling and Administration Agreement, only as such terms apply to Series 1993PA-
11 through 1993PA-20:
Additional Series: Series 1993PA-11 through 1993PA-20, issued pursuant to
-----------------
this Supplement No. 2 to the Agreement.
Agreement: The Pooling and Administration Agreement dated as of March 1,
---------
1993, as amended by Amendment No. 1 thereto, dated as of June 1, 1993 and as
supplemented through this Supplement No. 2, dated as of September 1, 1993.
Distribution Date: The second Business Day prior to the 25th day of any
-----------------
month, beginning October 21, 1993.
Distribution Rate: With respect to any Mortgage Loan, one-twelfth (1/12)
-----------------
of the then-applicable Remittance Rate with respect to such Mortgage Loan less M
the Mortgage Pool Insurer's Premium Percentage, (ii) one-twelfth (1/12) of the
Special Hazard Premium Percentage, (iii) the Trustee Fee Percentage, and (iv)
the Administrator's Fee Percentage (with each of the fees described in (i),
(ii), (iii) and (iv) being expressed as a percentage and rounded to the nearest
ten-thousandth of a percent).
Fraud Waiver Letter: The Special Loss Waiver Letter from PMI dated as of
-------------------
September 21, 1993. The coverage under the Fraud Waiver Letter shall be part of
the coverage provided in the September 21st Schedule Endorsement initially in an
amount (the "Waiver Amount") equal to three percent (3.0%) of the aggregate
principal amount of the Mortgage Loans as of their Cut-off Date.
-2-
<PAGE>
On the first anniversary of the effective date of the September 21st Schedule
Endorsement, the Waiver amount will be reduced to the lesser of (i) one percent
(1.0%) of the aggregate principal amount of such Mortgage Loans as of their Cut-
off Date, or (ii) the excess of three percent (3.0%) of such aggregate principal
amount over PMI's actual fraud loss payments during the period from the
effective date of the September 21st Schedule Endorsement through the first
anniversary of such effective date. During the period from the second
anniversary date of the effective date of the September 21st Schedule
Endorsement through the fifth anniversary of such effective date, the Waiver
Amount will be reduced to the lesser of W one percent (1.0%) of the aggregate
outstanding principal amount of the Mortgage Loans as of the Cut-off Date, or
(ii) the excess of three percent (3.0%) of such aggregate outstanding principal
amount over PMI's actual fraud loss payments during the period from the
effective date of the September 21st Schedule Endorsement through the second
anniversary of such effective date.
Indemnity Agreement: The Indemnity Agreement, dated as of September 21,
-------------------
1993, by and between PMI and CMC.
Insurance Policies: The Mortgage Pool Insurance Policy (including
------------------
applicable Advance Claims Endorsement and Fraud Waiver Letter).
September 21st Schedule Endorsement: Schedule Endorsement No. 93 26T-3 to
-----------------------------------
the Mortgage Pool Insurance Policy dated as of September 21, 1993.
Mortgage Loans: The Mortgage Loans listed on Schedules A-11 through A-20
--------------
hereto, which together comprise Exhibit A.
---------
Servicers: The Servicers listed on Exhibit B hereto.
--------- ---------
Servicing Agreement: The Servicing Agreements, as amended from time to
-------------------
time, listed in the Schedule of Servicers and Servicing Agreements attached
hereto as Exhibit C and providing for the servicing of the Mortgage Loans by the
---------
Servicers, each such Servicing Agreement with respect to the Mortgage Loans in a
Series having been assigned by CMC to CCC, and assigned by CCC to the Trustee
pursuant to Section 2.01 hereof, except for that Servicing Agreement between
CCC, as Owner, and CMC, as Servicer, the rights under which were assigned
directly by CCC to the Trustee. Exhibit C may be amended from time to time to
---------
add or delete Servicers, either in connection with the delivery of a Supplement
to this Agreement, or otherwise.
Trust Fund: With respect to the separate Series of Certificates, the
----------
corpus of the trusts created by this Agreement or any Supplement hereto, each
consisting of (i) the mortgage Loans assigned to such Series as specified in the
related Schedule of Mortgage Loans; (ii) such assets as shall from time to time
be identified as deposited in the Certificate Account for the benefit of
Certificateholders of such Series; (iii) such assets as may be held for such
Series from time to time in the Advance Account; (iv) such assets as from time
to time may be held for such Series by a Servicer in a Custodial Account; (v)
all property which secured a Mortgage Loan assigned to such
-3-
<PAGE>
Series as specified in the related Schedule of Mortgage Loans and which has been
acquired by foreclosure or deed in lieu of foreclosure; (vi) rights to the
benefits, if any, under the Mortgage Pool Insurance Policy and all endorsements
thereto, including the Advance Claims Endorsement and the Fraud Waiver Letter;
(vii) all right, title and interest of CCC in and to the obligations of the
Servicers pursuant to their Servicing Agreements with respect to the Mortgage
Loans assigned to such Series as specified in the related Schedule of Mortgage
Loans; (viii) all right, title and interest of CCC in and to the obligations of
the Sellers pursuant to the Loan Sale Agreements to repurchase Mortgage Loans
assigned to such Series as specified in the related Schedule of Mortgage Loans,
with respect to which such Sellers have breached representations and warranties
made in such Loan Sale Agreements; (ix) rights to the benefits, if any, under
the Special Hazard Account, including coverage under the Special Hazard Policy
and all endorsements thereto, up to an aggregate amount (with cash and insurance
coverage added together) equal to the Program 1993PA Special Hazard Claim
Ceiling; (x) rights to the benefits, if any, under the Bankruptcy Account up to
the Program 1993PA Bankruptcy Claim Ceiling; and (xi) all proceeds from any of
the foregoing relating to such Series. Reference to holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than a certain
percentage of the Trust Fund of a particular Series means holders of
Certificates the aggregate Fractional Undivided Interests of such Series of
which, as indicated on the face thereof, is not less than such percentage.
The following definitions are hereby amended, for all purposes of the
Pooling and Administration Agreement, as such terms apply to all of CCC's
Program 1993PA Portfolio Pass-Through Certificates outstanding (Series 1993PA-1
through 1993PA-10):
Cut-off Date: For each of the Outstanding Series, the Cutoff Date will be
------------
as follows: (A) with respect to Series 1993PA-1 through 1993PA-5, March 1, 1993;
(B) with respect to Series 1993PA-6 through 1993PA-10, June 1, 1993; and (C)
with respect to Series 1993PA-11 through 1993PA-20, September 1, 1993.
Mortgage Pool Insurance Policy: Shall mean the Mortgage Pool Insurance
------------------------------
Policy (No. 0000 93 26T), together with the September 21st Schedule Endorsement
thereto, in the form attached hereto as Exhibit C. As of the issuance of the
---------
Additional Series, the coverage under the Mortgage Pool Insurance Policy shall
be an amount equal to fourteen and one-half percent (14.5%) of the total initial
principal amount, as of the applicable Cutoff Dates, of the mortgage loans
pooled to form all of the outstanding Series, less any losses due to defaults by
Mortgagors paid to date by PMI, as calculated by the Administrator, with respect
to the Outstanding Series and not subsequently recovered by PMI or reimbursed to
PMI by CMC pursuant to the terms of the Indemnity Agreement.
Mortgage Pool Insurer's Premium Percentage: The monthly Mortgage Pool
------------------------------------------
Insurer's Premium Percentage, as of the issuance of Program 1993PA, Series
1993PA-11 through 1993PA-20, is .0289% or 2.89 basis points.
Outstanding Series: CCC's Program 1993PA Portfolio Pass Through
------------------
Certificates, Series 1993PA-1 through 1993PA-20.
-4-
<PAGE>
Pooling and Administration Agreement or Agreement: The Pooling and
-------------------------------------------------
Administration Agreement, dated as of March 1, 1993, among CCC, the
Administrator and the Trustee, as amended by this Supplement No. 1, dated as of
September 1, 1993.
Program 1993PA Bankruptcy Claim Ceiling: $182,768.
---------------------------------------
Program 1993PA Special Hazard Claim Ceiling: $8,823,034.
-------------------------------------------
Reserved Amount: $1,764,607.
---------------
Requisite Amount of the Bankruptcy Account: Based on the two-prong test
------------------------------------------
described in the Agreement, the "Requisite Amount of the Bankruptcy Account"
shall be $182,768 upon the issuance of Series 1993PA-11 through 1993PA-20.
Requisite Amount of the Special Hazard Account: The "Requisite Amount of
----------------------------------------------
the Special Hazard Account" shall be $8,823,034 upon the issuance of Series
1993PA-11 through 1993PA-20. This amount is subject to adjustment as described
in the Agreement.
Special Hazard Insurer's Fee Percentage: The Special Hazard Insurer's Fee
---------------------------------------
Percentage as of the issuance of Program 1993PA, Series 1993PA-11 through
1993PA-20, is .0359% or 3.59 basis points.
Except as otherwise provided herein, all capitalized terms used in this
Supplement No. 2 shall have the respective meanings ascribed to them in Article
I of the Pooling and Administration Agreement.
ARTICLE II.
Conveyance and Delivery of Mortgage Loans
-----------------------------------------
Section 2.01 Conveyance of Mortgage Loans: With respect to each
----------------------------
Additional Series of Certificates, CCC, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse (except as otherwise expressly provided herein) for
the benefit of the Certificateholders of the related Additional Series, (A) all
the right, title and interest of CCC in and to such Mortgage Loans, including
all interest and principal received by CCC on or with respect to such Mortgage
Loans after the Cut-off Date (other than any scheduled payments of principal and
interest due on the Mortgage Loans on or before the Cut-off Date), (B) rights to
the benefits available under the September 21st Schedule Endorsement, and (C)
all right, title and interest of CCC in and to all other property constituting
the respective Trust Fund relating to each such Additional Series.
-5-
<PAGE>
Section 2.02 Delivery of Mortgage Loans: For the related Additional
--------------------------
Series, CCC does hereby deliver to and deposit with the Trustee with respect to
each Mortgage Loan described on Exhibit A hereto, the documents set forth in
---------
Section 2.02 of the Pooling and Administration Agreement, together with (i)
evidence of the adjusted aggregate coverage, if applicable, under the Mortgage
Pool Insurance Policy, including the Advance Claims Endorsement, in the amount
required by the Rating Agency as evidenced by the delivery of the Rating Letter,
as of the issuance of the Additional Series; (ii) a deposit, if applicable, to
increase the Reserved Amount on deposit in the Special Hazard Account and an
endorsement to the Special Hazard Policy evidencing the new Aggregate Loss Limit
under such Policy as a result of the issuance of the Additional Series, and
(iii) a deposit, if applicable, to the funds on deposit in the Bankruptcy
Account in the amount required by the Rating Agency as evidenced by the delivery
of the Rating Letter, as of the issuance of the Additional Series.
Section 2.03 Acceptance by Trustee: The Trustee acknowledges receipt of
----------------------
the Mortgage Files for each Mortgage Loan specified on Exhibit A to this
---------
Supplement No. 1, and has reviewed or will review such Mortgage Files as
required by Section 7.01(a) of the Pooling and Administration Agreement. The
Trustee declares that it holds and will hold all documents constituting a part
of the Mortgage Files delivered to it as Trustee in trust, as a part of the
Trust Fund herein set forth for the use and benefit of all present and future
Certificateholders. The acceptance by the Trustee of all Mortgage Files and
other property constituting the respective trust fund for each additional series
is governed by all of the provisions of the Pooling and Administration
Agreement, including, without limitation all of the provisions of Article II
thereof.
ARTICLE III.
Representations and Warranties
------------------------------
Section 3.01 Representations and Warranties of CCC:
-------------------------------------
(a) CCC hereby makes the representations and warranties set forth in
Section 2.04 and subsection (a) and (b) of Section 5.01 of the Agreement as
of the date of this Supplement No. 2, unless a different time is specified
for a particular representation in any paragraph under subsection (b).
(b) In addition to the foregoing representations and warranties, CCC
hereby further represents and warrants that all Mortgage Loans, if any,
having an initial payment date which occurs after the initial Distribution
Date of October 21, 1993 have been pooled into one or more separate
Certificates having an initial Distribution Date as specified herein, which
is later than the first payment date on such underlying Mortgage Loans.
-6-
<PAGE>
(c) It is understood and agreed that the representations and
warranties set forth in Section 2.04 and Section 5.01 and made by CCC
pursuant to this Article III, shall survive delivery of the respective
Mortgage Files to the Trustee.
Section 3.02 Representations and warranties of Administrator: The
-----------------------------------------------
Administrator hereby makes the representations and warranties set forth in
Section 5.02(a) of the Pooling and Administration Agreement as of the date of
this Supplement No. 2.
ARTICLE IV.
Pooling and Administration Agreement to Govern
----------------------------------------------
Except as described herein, the Certificates of each Additional Series
shall be governed by and subject to all of the terms and provisions of the
Pooling and Administration Agreement.
ARTICLE V.
Acceptance by the Trustee
-------------------------
The Trustee accepts the additional trusts created by this Supplement on the
same terms and conditions as are set out in the Pooling and Administration
Agreement and all rights, privileges and immunities in Section VII of the
Pooling and Administration Agreement shall apply to the additional Trust Funds
created by this Supplement as completely as if set forth in full herein and
modified to apply to this Supplement and to such Additional Series.
IN WITNESS WHEREOF, CCC, the Administrator 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.
CAPSTEAD CAPITAL CORPORATION
By:__________________________________________
Julie Moore,
Senior Vice President -
Asset and Liability Management
-7-
<PAGE>
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 21st day of September, 1993, before me, a notary public in and for
said State, personally appeared Julie Moore, known to me to be the Senior vice
President - Asset and Liability Management of Capstead Capital Corporation, a
Delaware corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
__________________________
-8-
<PAGE>
EXHIBIT 10.1D
SUPPLEMENT NO. 3
TO
AMENDED AND RESTATED POOLING AND ADMINISTRATION AGREEMENT
AMONG
CAPSTEAD CAPITAL CORPORATION
as Sponsor
CAPSTEAD MORTGAGE CORPORATION
as Administrator
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Trustee
CAPSTEAD CAPITAL CORPORATION
PORTFOLIO PASS-THROUGH PROGRAM
Series 1993PA-21 through 1993PA-26
Dated as of
January 1, 1994
<PAGE>
THIS SUPPLEMENT NO. 3 TO AMENDED AND RESTATED POOLING AND ADMINISTRATION
AGREEMENT, dated as of January 1, 1994 and effective as of January 14, 1994, is
executed among CAPSTEAD CAPITAL CORPORATION, a Delaware corporation ("CCC"),
CAPSTEAD MORTGAGE CORPORATION, a Maryland Corporation, as Administrator (the
"Administrator"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national
banking association, as Trustee (the "Trustee").
W I T N E S S E T H T H A T:
-----------------------------
In consideration of the premises and the mutual agreements herein
contained, CCC, the Administrator and the Trustee hereby agree as follows:
ARTICLE I
Definitions
-----------
The following definitions are hereby amended, for all purposes of the
Pooling and Administration Agreement, only as such terms apply to Series 1993PA-
21 through 1993PA-26:
Additional Series: Series 1993PA-21 through 1993PA-26, issued pursuant to
-----------------
this Supplement No. 3 to the Agreement.
Agreement: The Pooling and Administration Agreement dated as of March 1,
---------
1993, as amended and restated by the Amended and Restated Pooling and
Administration Agreement dated as of October 1, 1993 and as supplemented
through this Supplement No. 3, dated as of January 1, 1994.
Distribution Date: The second Business Day prior to the 25th day of any
-----------------
month, beginning February 23, 1994.
Distribution Rate: With respect to any Mortgage Loan, one-twelfth (1/12)
-----------------
of the then-applicable Remittance Rate with respect to such Mortgage Loan less
(i) the Mortgage Pool Insurer's Premium Percentage, (ii) one-twelfth (1/12) of
the Special Hazard Premium Percentage, (iii) the Trustee Fee Percentage, and
(iv) the Administrator's Fee Percentage (with each of the fees described in (i),
(ii), (iii) and (iv) being expressed as a percentage and rounded to the nearest
ten-thousandth of a percent).
Fraud Waiver Letter: The Special Loss Waiver Letter from PMI dated as of
-------------------
January 14, 1994. The coverage under the Fraud Waiver Letter shall be part of
the coverage provided in the January 14th Schedule Endorsement initially in an
amount (the "Waiver Amount") equal to three percent (3.0%) of the aggregate
principal amount of the Mortgage Loans as of their Cut-off Date.
-2-
<PAGE>
On the first anniversary of the effective date of the January 14th Schedule
Endorsement, the Waiver amount will be reduced to the lesser of (i) two percent
(2.0%) of the aggregate principal amount of such Mortgage Loans as of their Cut-
off Date or (ii) the excess of three percent (3.0%) of such aggregate principal
amount over PMI's actual fraud loss payments during the period from the
effective date of the January 14th Schedule Endorsement through the first
anniversary of such effective date. During the period from the second
anniversary date of the effective date of the January 14th Schedule Endorsement
through the fifth anniversary of such effective date, the Waiver Amount will be
reduced to the lesser of (i) one percent (1.0%) of the aggregate outstanding
principal amount of the Mortgage Loans as of the Cut-off Date or (ii) the excess
of three percent (3.0%) of such aggregate outstanding principal amount over
PMI's actual fraud loss payments during the period from the effective date of
the January 14th Schedule Endorsement through the second anniversary of such
effective date.
Indemnity Agreement: The Indemnity Agreement, dated as of January 14,
-------------------
1994, by and between PMI and CMC.
Insurance Policies: The Mortgage Pool Insurance Policy (including
------------------
applicable Advance Claims Endorsement and Fraud Waiver Letter).
January 14th Schedule Endorsement: Schedule Endorsement No. 93 26T-4 to
----------------------------------
the Mortgage Pool Insurance Policy dated as of January 14, 1994.
Mortgage Loans: The Mortgage Loans listed on Schedules A-21 through A-26
--------------
hereto, which together comprise Exhibit A.
---------
Servicers: The Servicers listed on Exhibit B hereto.
--------- ---------
The following definitions are hereby amended, for all purposes of the
Pooling and Administration Agreement, as such terms apply to all of CCC's
Program 1993PA Portfolio Pass-Through Certificates outstanding (Series 1993PA-1
through 1993PA-26):
Cut-off Date: For each of the Outstanding Series, the Cut-off Date will be
------------
as follows: (A) with respect to Series 1993PA-1 through 1993PA-5, March 1, 1993;
(B) with respect to Series 1993PA-6 through 1993PA-10, June 1, 1993; (C) with
respect to Series 1993PA-11 through 1993PA-20, September 1, 1993 and (D) with
respect to Series 1993PA-21 through 1993PA-26, January 1, 1994.
Mortgage Pool Insurance Policy: Shall mean the Mortgage Pool Insurance
------------------------------
Policy (No. 0000 93 26T), together with theJanuary 14th Schedule Endorsement
thereto, in the form
-3-
<PAGE>
attached hereto as Exhibit C. As of the issuance of the Additional Series, the
---------
coverage under the Mortgage Pool Insurance Policy shall be an amount equal to
twelve and one-quarter percent (12.25 %) of the total initial principal amount,
as of the applicable Cut-off Dates, of the mortgage loans pooled to form all of
the Outstanding Series, less any losses due to defaults by Mortgagors paid to
date by PMI, as calculated by the Administrator, with respect to the Outstanding
Series and not subsequently recovered by PMI or reimbursed to PMI by CMC
pursuant to the terms of the Indemnity Agreement.
Mortgage Pool Insurer's Premium Percentage: The monthly Mortgage Pool
------------------------------------------
Insurer's Premium Percentage, as of the issuance of Program 1993PA, Series
1993PA-21 through 1993PA-26, is .0270% or 2.70 basis points.
Outstanding Series: CCC's Program 1993PA Portfolio Pass-Through
------------------
Certificates, Series 1993PA-1 through 1993PA-26.
Pooling and Administration Agreement or Agreement: The Pooling and
-------------------------------------------------
Administration Agreement, dated as of March 1, 1993, among CCC, the
Administrator and the Trustee, as amended by the Amended and Restated Pooling
and Administration Agreement dated as of October 1, 1993 and as supplemented by
this Supplement No. 3, dated as of January 1, 1994.
Program 1993PA Bankruptcy Claim Ceiling: $197,057.
---------------------------------------
Program 1993PA Special Hazard Claim Ceiling: $8,553,566.
-------------------------------------------
Reserved Amount: $1,710,713.
---------------
Requisite Amount of the Bankruptcy Account: Based on the two-prong test
------------------------------------------
described in the Agreement, the "Requisite Amount of the Bankruptcy Account"
shall be $197,057 upon the issuance of Series 1993PA-21 through 1993PA-26.
Requisite Amount of the Special Hazard Account: The "Requisite Amount of
----------------------------------------------
the Special Hazard Account" shall be $8,553,566 upon the issuance of Series
1993PA-21 through 1993PA-26. This amount is subject to adjustment as described
in the Agreement.
Special Hazard Insurance Policy: The Special Hazard Insurance Policy,
-------------------------------
together with all Endorsements thereto issued through the date hereof. The
Endorsement issued in connection with the issuance of the Additional Series is
attached hereto as Exhibit D.
-4-
<PAGE>
Special Hazard Insurer's Fee Percentage: The Special Hazard Insurer's Fee
---------------------------------------
Percentage as of the issuance of Program 1993PA, Series 1993PA-21 through
1993PA-26, is .0347% or 3.47 basis points.
Except as otherwise provided herein, all capitalized terms used in this
Supplement No. 3 shall have the respective meanings ascribed to them in Article
I of the Pooling and Administration Agreement.
ARTICLE II
Conveyance and Delivery of Mortgage Loans
-----------------------------------------
Section 2.1 Conveyance of Mortgage Loans: With respect to each Additional
----------------------------
Series of Certificates, CCC, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse (except as otherwise expressly provided herein) for the
benefit of the Certificateholders of the related Additional Series, (A) all the
right, title and interest of CCC in and to such Mortgage Loans, including all
interest and principal received by CCC on or with respect to such Mortgage Loans
after the Cut-off Date (other than any scheduled payments of principal and
interest due on the Mortgage Loans on or before the Cut-off Date), (B) rights to
the benefits available under the January 14th Schedule Endorsement, and (C) all
right, title and interest of CCC in and to all other property constituting the
respective Trust Fund relating to each such Additional Series.
Section 2.2 Delivery of Mortgage Loans: For the related Additional
--------------------------
Series, CCC does hereby deliver to and deposit with the Trustee with respect to
each Mortgage Loan described on Exhibit A hereto, the documents set forth in
---------
Section 2.02 of the Pooling and Administration Agreement, together with (i)
evidence of the adjusted aggregate coverage, if applicable, under the Mortgage
Pool Insurance Policy as of the issuance of the Additional Series; (ii) a
deposit, if applicable, to increase the Reserved Amount on deposit in the
Special Hazard Account and an endorsement to the Special Hazard Policy
evidencing the new Aggregate Loss Limit under such Policy as a result of the
issuance of the Additional Series, and (iii) a deposit, if applicable, to the
funds on deposit in the Bankruptcy Account as a result of the issuance of the
Additional Series.
Section 2.3 Acceptance by Trustee: The Trustee acknowledges receipt of
---------------------
the Mortgage Files for each Mortgage Loan specified on Exhibit A to this
---------
Supplement No. 3, and has reviewed or will review such Mortgage Files as
required by Section 7.01(a) of the Pooling and Administration Agreement. The
Trustee declares that it holds and will hold all documents constituting a part
of the Mortgage Files delivered to it as Trustee in trust, as a part of the
Trust Fund herein set forth for the use and benefit of all present and future
Certificateholders. The acceptance by the Trustee of all Mortgage Files and
other property constituting the respective trust fund for each additional series
is governed by all of the provisions of the Pooling and
-5-
<PAGE>
Administration Agreement, including, without limitation all of the provisions of
Article II thereof.
ARTICLE III
Representations and Warranties
------------------------------
Section 3.1 Representations and Warranties of CCC:
-------------------------------------
(a) CCC hereby makes the representations and warranties set forth
in Section 2.04 and subsection (a) and (b) of Section 5.01 of the Agreement
as of the date of this Supplement No. 3, unless a different time is
specified for a particular representation in any paragraph under subsection
(b).
(b) In addition to the foregoing representations and warranties,
CCC hereby further represents and warrants that all Mortgage Loans, if any,
having an initial payment date which occurs after the initial Distribution
Date of February 23, 1994 have been pooled into one or more separate
Certificates having an initial Distribution Date as speci fied herein,
which is later than the first payment date on such underlying Mortgage
Loans.
(c) It is understood and agreed that the representations and
warranties set forth in Section 2.04 and Section 5.01 and made by CCC
pursuant to this Article III, shall survive delivery of the respective
Mortgage Files to the Trustee.
Section 3.2 Representations and Warranties of Administrator: The
-----------------------------------------------
Administrator hereby makes the representations and warranties set forth in
Section 5.02(a) of the Pooling and Administration Agreement as of the date of
this Supplement No. 2.
ARTICLE IV
Pooling and Administration Agreement to Govern
----------------------------------------------
Except as described herein, the Certificates of each Additional Series
shall be governed by and subject to all of the terms and provisions of the
Pooling and Administration Agreement.
-6-
<PAGE>
ARTICLE V
Acceptance by the Trustee
-------------------------
The Trustee accepts the additional trusts created by this Supplement on the
same terms and conditions as are set out in the Pooling and Administration
Agreement and all rights, privileges and immunities in Section VII of the
Pooling and Administration Agreement shall apply to the additional Trust Funds
created by this Supplement as completely as if set forth in full herein and
modified to apply to this Supplement and to such Additional Series.
-7-
<PAGE>
IN WITNESS WHEREOF, CCC, the Administrator 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.
CAPSTEAD CAPITAL CORPORATION
By:
______________________________________________
Julie Moore,
Senior Vice President -
Asset and Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 14th day of January, 1994, before me, a notary public in and for
said State, personally appeared Julie Moore, known to me to be the Senior Vice
President - Asset and Liability Management of Capstead Capital Corporation, a
Delaware corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_________________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
______________________
<PAGE>
CAPSTEAD MORTGAGE CORPORATION
By:
______________________________________________
Robert L. Appel
Vice President
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 14th day of January, 1994, before me, a notary public in and for
said State, personally appeared Robert L. Appel, known to me to be a Vice
President of Capstead Mortgage Corporation, a Maryland corporation, the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_________________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
______________________
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee
By:
______________________________________________
Leah E. Foshee
Corporate Trust Officer
STATE OF TEXAS (S)
(S)
COUNTY OF HARRIS (S)
On the 14th day of January, 1994, before me, a notary public in and for
said State, personally appeared Leah E. Foshee, known to me to be a Corporate
Trust Officer of Texas Commerce Bank National Association, a national banking
association, the association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said association, and
acknowledged to me that such association 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.
_________________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
______________________
<PAGE>
EXHIBIT A
(Mortgage Loan Schedules A-21 through A-26)
<PAGE>
EXHIBIT 10.1E
AMENDMENT NO. 1,
dated as of February 1, 1995
TO
AMENDED AND RESTATED POOLING AND ADMINISTRATION AGREEMENT,
dated as of October 1, 1993
AMONG
CAPSTEAD CAPITAL CORPORATION
as Sponsor
CAPSTEAD MORTGAGE CORPORATION
as Administrator
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Trustee
CAPSTEAD CAPITAL CORPORATION
PORTFOLIO PASS-THROUGH PROGRAM 1993PA
<PAGE>
THIS AMENDMENT NO. 1 ("Amendment No. 1"), dated as of February 1, 1995 TO
AMENDED AND RESTATED POOLING AND ADMINISTRATION AGREEMENT, dated as of October
1, 1993, is executed among CAPSTEAD CAPITAL CORPORATION, a Delaware corporation
("CCC"), CAPSTEAD MORTGAGE CORPORATION, a Maryland corporation, as Administrator
(the "Administrator"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a
national banking association, as Trustee (the "Trustee").
W I T N E S S E T H T H A T
In consideration of the premises and the mutual agreements herein
contained, CCC, the Administrator and the Trustee hereby agree as follows:
ARTICLE I
Definitions
The following definitions are hereby amended and restated in their entirety
for all purposes of the Agreement, but only as they pertain to the Affected
Certificates (as defined below):
Affected Certificates: Shall mean each of the Series 1993PA-
---------------------
1,2,3,6,7,8,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25 and 26 Certificates,
for so long as such Certificates are held of record by Capstead Mortgage
Corporation, CMC Investment Partnership, or any of their respective affiliates.
Agreement: The Amended and Restated Pooling and Administration Agreement,
---------
dated as of October 1, 1993, as amended by this Amendment No. 1 thereto, dated
as of February 1, 1995, each by and between Capstead Capital Corporation, as
sponser, Capstead Mortgage Corporation, as Administrator and Texas Commerce Bank
National Association, as Trustee.
Distribution Date: Either (i) the Business Day immediately following the
-----------------
applicable Remittance Date if there are sufficient funds available for
distribution to the related Certificateholders of the amounts specified in
Section 4.02 of the Agreement on such date, or (ii) if there are insufficient
funds available for such distribution on such date, the Business Day on which
such funds are available for such distribution; provided however, that in no
event shall such date be later than the second Business Day prior to the 25th
day of each month.
<PAGE>
ARTICLE II
Amendments to Sections
Section 4.2(a)(iii) of the Agreement is hereby amended and restated in its
entirety to read as follows:
"an amount equal to Principal Prepayments received by the Servicers during
the calendar month preceding the month in which the Distribution Date occurs and
received by the Trustee on or before the Remittance Date, together with interest
thereon at the applicable Principal Prepayment Rates for such Mortgage Loans to
the related dates of prepayment, excluding any Principal Prepayments distributed
previously pursuant to paragraph (iv) below; and"
ARTICLE IIII
Miscellaneous
Section 3.1 Notice to Trustee. In the event that any Affected
-----------------
Certificates are ever held of record by a party other than Capstead Mortgage
Corporation, CMC Investment Partnership, or any of their respective affiliates,
Capstead Mortgage Corporation shall notify the Trustee prior to the applicable
Record Date that such Certificates are no longer Affected Certificates and this
Amendment No. 1 shall have no further effect with respect to such Certificates.
Section 3.2 Full Force and Effect. The Agreement shall remain in full
---------------------
force and effect until its termination as provided therein.
Section 3.3 Counterparts. This Amendment No. 1 may be executed in one or
------------
more counterparts, each of which shall for all purposes be deemed an original
and all of which shall constitute the same instrument. This Amendment No. 1
shall be considered fully executed when all parties have executed an identical
counterpart, notwithstanding that all signatures may not appear on the same
counterpart.
Section 3.4 Effective Date. This Amendment No. 1 shall be effective as of
--------------
February 1, 1995 and, except as otherwise provided herein, shall apply to all
distributions on the Affected Certificates occuring during and after February,
1995.
-2-
<PAGE>
IN WITNESS WHEREOF, CCC, the Administrator and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, in the case of CCC and the Administrator, duly attested, to be
hereunto affixed, all as of the day and year first above written.
CAPSTEAD CAPITAL CORPORATION
By:____________________________________________
Julie Moore,
Senior Vice President - Asset
and Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the ___ day of February, 1995, before me, a notary public in and for
said State, personally appeared Julie Moore, known to me to be the Senior Vice
President - Asset and Liability Management of Capstead Capital Corporation, a
Delaware corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
______________________
<PAGE>
CAPSTEAD MORTGAGE CORPORATION
By:__________________________________________
Robert L. Appel
Vice President
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the __ day of February, 1995, before me, a notary public in and for said
State, personally appeared Robert L. Appel, known to me to be a Vice President
of Capstead Mortgage Corporation, a Maryland corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
______________________
<PAGE>
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By:____________________________________________________
David R. Robinson
Assistant Vice President and Trust Officer
STATE OF TEXAS (S)
(S)
COUNTY OF HARRIS (S)
On the ____ day of February, 1995, before me, a notary public in and for
said State, personally appeared David R. Robinson, known to me to be an
Assistant Vice President and Trust Officer of Texas Commerce Bank National
Association, as Trustee, a national banking association, the association that
executed the within instrument, and also known to me to be the person who exe
cuted it on behalf of said association, and acknowledged to me that such
association 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.
_____________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
______________________
72950124.DDI
013195mwh1
Capstead:16498 59891 (1993PA)
<PAGE>
Each of the undersigned entities hereby consents to the amendments
contemplated by this Amendment No. 1, dated as of February 1, 1995, to the
Amended and Restated Pooling and Administration Agreement dated as of October 1,
1993, with respect to the Capstead Capital Corporation Portfolio Pass-Through
Program 1993PA.
CAPSTEAD MORTGAGE CORPORATION
By:________________________________________
Julie Moore, Senior Vice President
CMC INVESTMENT PARTNERSHIP
By: Capstead Mortgage Corporation,
as general partner
By:________________________________________
Julie Moore, Senior Vice President
72950124.DD1
<PAGE>
EXHIBIT 10.1F
================================================================================
CAPSTEAD CAPITAL CORPORATION
PORTFOLIO PASS-THROUGH PROGRAM 1993PA
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1993PA-1 through SERIES 1993PA-26
AMENDMENT NO. 2 TO
AMENDED AND RESTATED POOLING AND ADMINISTRATION AGREEMENT
Dated as of June 1, 1996
with respect to that certain
AMENDED AND RESTATED POOLING AND ADMINISTRATION AGREEMENT,
Dated as of October 1, 1993
Among
CMC SECURITIES CORPORATION II,
as successor Sponsor
CAPSTEAD CAPITAL CORPORATION,
as Sponsor
CAPSTEAD MORTGAGE CORPORATION,
as Administrator
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee
================================================================================
<PAGE>
THIS AMENDMENT NO. 2 TO AMENDED AND RESTATED POOLING AND ADMINISTRATION
AGREEMENT (this "Amendment No. 2") is dated June 1, 1996 and is by and between
Capstead Capital Corporation, a Delaware corporation ("CCC"), as Sponsor, CMC
Securities Corporation II, a Delaware corporation ("CMCSC II"), as successor
Sponsor to CCC, Capstead Mortgage Corporation, a Maryland corporation ("CMC"),
as Administrator, and Texas Commerce Bank National Association, as trustee under
the Amended and Restated Pooling and Administration Agreement referred to below
(the "Trustee").
R E C I T A L S :
- - - - - - - -
A. CCC, CMC and the Trustee are parties to the Amended and Restated
Pooling and Administration Agreement dated as of October 1, 1993, as amended by
Amendment No. 1 thereto dated as of February 1, 1995 (collectively, the "Amended
and Restated Pooling and Administration Agreement"), as supplemented by
Supplement Nos. 1 through 3 thereto dated as of June 1, 1993, September 1, 1993
and January 1, 1994, respectively (collectively, the "Supplements").
B. CCC desires to assign to CMCSC II, and CMCSC II desires to assume,
certain rights and obligations of CCC under the Amended and Restated Pooling and
Administration Agreement and the Supplements with respect to the portfolio pass-
through certificates listed on Schedule A attached hereto (collectively, the
----------
"Series 1996B Asset Certificates"), as provided in this Amendment No. 2.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. CCC, for valuable consideration, the receipt of which is hereby
acknowledged, hereby assigns and transfers to CMCSC II all of CCC's rights and
obligations under the Amended and Restated Pooling and Administration Agreement
and Supplements with respect to the Series 1996B Asset Certificates, and CMCSC
II hereby accepts such assignment and hereby assumes such rights and
obligations. In connection with the foregoing assumption, CMCSC II acknowledges
and agrees with the Trustee that CMCSC II assumes, from the date hereof, the due
and punctual performance of each covenant and condition to be performed or
observed by CCC as the "Sponsor" under the Amended and Restated Pooling and
Administration Agreement and Supplements with respect to the Series 1996B Asset
Certificates. The holders of 100% of the fractional undivided interests in the
Series 1996B Asset Certificates having consented to the foregoing assignment,
the Trustee hereby releases CCC from all of its obligations under the Amended
and Restated Pooling and Administration Agreement and Supplements with respect
to the Series 1996B Asset Certificates, other than the obligations arising from
events, actions or omissions by CCC as the Sponsor under the Amended and
Restated Pooling and Administration Agreement and Supplements with respect to
the Series 1996B Asset Certificates prior to the date hereof.
2. CMCSC II hereby represents and warrants to the Trustee that:
(a) CMCSC II is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with full corporate
and other power and
-2-
<PAGE>
authority to execute, deliver and enter into this Amendment No. 2 and to
perform all of its duties and obligations pursuant hereto;
(b) The execution and delivery of this Amendment No. 2 has been duly
authorized by CMCSC II and, when executed and delivered, will constitute a
valid and binding obligation of CMCSC II, enforceable in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally, and that certain equitable remedies may not be
available;
(c) The execution and delivery of this Amendment No. 2 by CMCSC II in
the manner contemplated herein and the performance and compliance with the
terms hereof by it will not violate (a) its certificate of incorporation or
bylaws, or (b) any laws which could have any material adverse effect
whatsoever upon the validity, performance or enforceability of any of the
terms of this Agreement applicable to CMCSC II, and will not constitute a
material default (or an event which, with notice or lapse of time, or both,
would constitute a material default) under, or result in the breach of, any
material contract, agreement or other instrument to which CMCSC II is a
party or which may be applicable to it or any of its assets; and
(d) The execution and delivery of this Amendment No. 2 by CMCSC II in
the manner contemplated herein and the performance and compliance with the
terms hereof by it do not require the consent or approval of any
governmental authority, or if such consent or approval is required, it has
been obtained.
3. Pursuant to Section 10.07 of the Amended and Restated Pooling and
Administration Agreement, CMCSC II, as Sponsor with respect to the Series 1996B
Asset Certificates, hereby designates its notice address as follows:
CMC Securities Corporation II
2711 North Haskell Avenue, Suite 1000
Dallas, Texas 75204
Attn: Wade Walker
Facsimile No. (214) 874-2507
4. To the best of CCC's knowledge and as of the date hereof, there are no
defaults under the Amended and Restated Pooling and Administration Agreement or
the Supplements or events which, with the passage of time or the giving of
notice or both, would be considered defaults under the Amended and Restated
Pooling and Administration Agreement or the Supplements.
5. CCC hereby agrees to indemnify and hold CMCSC II harmless against any
and all loss, liability, claim, damage and expenses whatsoever, incurred by
CMCSC II and arising out of the acts of CCC as Sponsor under the Amended and
Restated Pooling and Administration Agreement or the Supplements prior to June
1, 1996 or as a result of the breach by CCC of any representation or warranty
made by CCC under the Amended and Restated Pooling and Administration Agreement
or the Supplements prior to June 1, 1996.
-3-
<PAGE>
6. This Amendment No. 2 may be executed in any number of counterparts,
each of which shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
[The Remainder of this Page Intentionally Left Blank]
-4-
<PAGE>
IN WITNESS WHEREOF, the undersigned parties have entered into, as of the
date first set forth hereon, this AMENDMENT NO. 2 TO AMENDED AND RESTATED
POOLING AND ADMINISTRATION AGREEMENT.
CMC SECURITIES CORPORATION II
By:______________________________________________
Wade Walker, Vice President - Asset and
Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Wade Walker, known to me to be a Vice President of
CMC SECURITIES CORPORATION II, a Delaware corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________________________
Notary Public in and for the State of Texas
My Commission Expires:
-5-
<PAGE>
CAPSTEAD CAPITAL CORPORATION
By:_____________________________________________
Wade Walker, Vice President - Asset and
Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Wade Walker, known to me to be a Vice President of
CAPSTEAD CAPITAL CORPORATION, a Delaware corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________________________
Notary Public in and for the State of Texas
My Commission Expires:
-6-
<PAGE>
CAPSTEAD MORTGAGE CORPORATION
By:_____________________________________________
Wade Walker, Vice President - Asset and
Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Wade Walker, known to me to be a Vice President of
CAPSTEAD MORTGAGE CORPORATION, a Maryland corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________________________
Notary Public in and for the State of Texas
My Commission Expires:
-7-
<PAGE>
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, AS TRUSTEE
By:____________________________________
Rafael Herrera,
Vice President and
Trust Officer
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Rafael Herrera, known to me to be a Vice President
and Trust Officer of TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Trustee, a
national banking association, the association that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said association, and acknowledged to me that such association 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 in and for the State of Texas
My Commission Expires:
-8-
<PAGE>
SCHEDULE A
List of Series 1996B Asset Certificates
---------------------------------------
The following Series' of Capstead Capital Corporation's Portfolio Pass-
Through Program 1993PA Mortgage Pass-Through Certificates constitute "Series
1996B Asset Certificates" for purposes of the foregoing Amendment No. 2:
Series 1993PA-1
Series 1993PA-3
Series 1993PA-6
Series 1993PA-8
Series 1993PA-11
Series 1993PA-12
Series 1993PA-15
Series 1993PA-16
Series 1993PA-17
Series 1993PA-18
Series 1993PA-19
Series 1993PA-20
Series 1993PA-21
Series 1993PA-24
Series 1993PA-25
Series 1993PA-26
<PAGE>
EXHIBIT 10.1G
===============================================================================
CAPSTEAD CAPITAL CORPORATION
PORTFOLIO PASS-THROUGH PROGRAM 1993PA
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1993PA-1 through SERIES 1993PA-26
AMENDMENT NO.3 TO
AMENDED AND RESTATED POOLING AND ADMINISTRATION AGREEMENT
Dated as of June 1, 1996
With respect to that certain
AMENDED AND RESTATED POOLING AND ADMINISTRATION AGREEMENT,
Dated as of October 1, 1993
Among
CMC SECURITIES CORPORATION II,
as successor Sponsor
CAPSTEAD CAPITAL CORPORATION,
as Sponsor
and
CAPSTEAD MORTGAGE CORPORATION,
as Administrator
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee
===============================================================================
<PAGE>
THIS AMENDMENT NO.3 TO AMENDED AND RESTATED POOLING AND ADMINISTRATION
AGREEMENT ("Amendment No.3") dated as of June 1, 1996, executed by and between
CMC SECURITIES CORPORATION II, a Delaware corporation ("CMCSC II"), as successor
sponsor to CAPSTEAD CAPITAL CORPORATION, a Delaware corporation ("CCC"), CCC, as
sponsor, CAPSTEAD MORTGAGE CORPORATION, a Maryland corporation, as administrator
(the "Administrator") and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national
banking association, as trustee (the "Trustee").
W I T N E S S E T H T H A T
- - - - - - - - - - - - - -
ARTICLE I
Definitions
The following definitions are hereby added or amended and restated in their
entirety for all purposes of the Agreement, but only as such terms apply to the
Series 1996-B Asset Certificates (as defined herein):
Asset Certificates: With respect to the Series 1993-2I REMIC, the
------------------
Certificates representing a one hundred percent beneficial ownership interest in
the following Series: 1993PA-4, 1993PA-5, 1993PA-9 and 1993PA-10; with respect
to the Series 1996-B REMIC, the Certificates representing a one hundred percent
beneficial ownership interest in the following Series: 1993PA-1, 1993PA-3,
1993PA-6, 1993PA-8, 1993PA-11, 1993PA-12, 1993PA-15, 1993PA-16, 1993PA-17,
1993PA-18, 1993PA-19, 1993PA-20, 1993PA-21, 1993PA-24, 1993PA-25 and 1993PA-26.
Agreement: Shall mean the Amended and Restated Pooling and Administration
---------
Agreement, dated as of October 1, 1993 (i) as amended by Amendment No. 1
thereto, dated as of February 1, 1995, and as supplemented by Supplement Nos. 1
through 3 thereto, each by and among CCC, as sponsor, Capstead Mortgage
Corporation, as Administrator; (ii) as amended by Amendment No. 2 thereto, dated
as of June 1, 1996, by and among CCC, as sponsor, CMCSC II, as successor sponsor
with respect to the Series 1996-B Asset Certificates, Capstead Mortgage
Corporation, as Administrator, and the Trustee; and (iii) as amended by
Amendment No. 3 thereto, dated as of June 1, 1996, by and among CCC, a sponsor,
CMCSC II, as successor sponsor with respect to the Series 1996-B Asset
Certificates, Capstead Mortgage Corporation, as Administrator, and the Trustee.
Cut-off Date: For each of the Outstanding Series, the Cut-off Date is as
------------
follows: (A) with respect to Series 1993PA-1 through 1993PA-5, March 1, 1993;
(B) with respect to Series 1993PA-6 through Series 1993PA-10, June 1, 1993; (C)
with respect to Series 1993PA-11 through Series
<PAGE>
1993PA-20, September 1, 1993; and (D) with respect to Series 1993PA-21 through
Series 1993PA-26, January 1, 1994.
Extraordinary Expense: Any expenses incurred by the REMIC Trustee in
---------------------
connection with the enforcement of its rights hereunder with respect to the
Administrator or in the exercise of its responsibilities as REMIC Trustee under
the Series 1993-2I Pooling Agreement or the Series 1996-B Pooling Agreement.
Non-Covered Loss: Shall mean a loss with respect to a Mortgage Loan
----------------
underlying a Series 1996-B Asset Certificate which, except as otherwise provided
by this Amendment No. 2, is not the subject of coverage provided by (a) the
Mortgage Pool Insurance Policy, (b) any Primary Mortgage Insurance Policy, (c)
amounts on deposit in the Special Hazard Account (including proceeds from the
Special Hazard Insurance Policy) or (d) amounts on deposit in the Bankruptcy
Account.
Outstanding Series: CCC's Program 1993PA Portfolio Pass-Through
------------------
Certificates, Series 1993PA-1 through 1993PA-26.
Reinsurance Agreement: The Reinsurance Agreement dated as of January 1,
---------------------
1995 by and among the Reinsurer and Aetna, together with all amendments or
endorsements thereto, issued by the Reinsurer with respect to the Special Hazard
Insurance Policy, a photocopy of which is attached hereto as Exhibit J.
---------
Reinsurer: Capital Mortgage Reinsurance Company (Bermuda) Ltd., a Bermuda
---------
insurance company, as issuer of the Reinsurance Agreement, or any successor
thereto or other reinsurance provider as permitted by the Rating Agency.
REMIC Certificates: Any of the Series 1993-2I REMIC Certificates or the
------------------
Series 1996-B REMIC Certificates.
REMIC Trust Fund: With respect to the Series 1993-2I REMIC, the Trust Fund
----------------
as defined in the Series 1993-2I Pooling Agreement; with respect to the Series
1996-B REMIC, the Trust Fund as defined in the Series 1996-B Pooling Agreement.
REMIC Trustee: With respect to the Series 1993-2I REMIC, the Trustee as
-------------
defined in the Series 1993-2I Pooling Agreement; with respect to the Series
1996-B REMIC, the Trustee as defined in the Series 1996-B Pooling Agreement.
Series 1996-B Asset Certificates: With respect to the Series 1996-B REMIC,
--------------------------------
the Certificates and representing a one hundred percent beneficial ownership
interest in the following Series: 1993PA-1, 1993PA-3, 1993PA-6, 1993PA-8,
1993PA-11, 1993PA-12, 1993PA-15, 1993PA-16, 1993PA-17, 1993PA-18, 1993PA-19,
1993PA-20, 1993PA-21, 1993PA-24, 1993PA-25 and 1993PA-26.
-2-
<PAGE>
Series 1996-B Pooling Agreement: The Pooling Agreement, dated as of June
-------------------------------
1, 1996, by and between CMC Securities Corporation II, as Depositor, and Texas
Commerce Bank National Association, as REMIC Trustee, pursuant to which the
Series 1996-B REMIC Certificates were issued.
Series 1996-B REMIC: The REMIC formed under the Series 1996-B Pooling
-------------------
Agreement.
Series 1996-B REMIC Certificates: The pass-through certificates issued
--------------------------------
pursuant to the Series 1996-B Pooling Agreement.
Trust Fund: With respect to the separate Series of Certificates, the
----------
corpus of the trusts created by this Agreement or any Supplement hereto, each
consisting of (i) the Mortgage Loans assigned to such Series as specified in the
related Schedules of Mortgage Loans; (ii) such assets as shall from time to time
be identified as deposited in the Certificate Account for the benefit of
Certificateholders of such Series; (iii) such assets as may be held for such
Series from time to time in the Advance Account; (iv) all property which secured
a Mortgage Loan assigned to such Series as specified in the Schedules of
Mortgage Loans and which has been acquired by foreclosure or deed in lieu of
foreclosure; (v) rights to the benefits, if any, under the Mortgage Pool
Insurance Policy and all endorsements thereto, including the Advance Claims
Endorsement and the Fraud Waiver Letter; (vi) rights to the benefits, if any,
under the Financial Guaranty Insurance Policy and all endorsements thereto;
(vii) all right, title and interest of CCC in and to the obligations of the
Servicers pursuant to their respective Servicing Agreements with respect to the
Mortgage Loans assigned to such Series as specified in the related Schedules of
Mortgage Loans; (viii) all right, title and interest of CCC in and to the
obligations of the Sellers pursuant to the Loan Sale Agreements to repurchase
Mortgage Loans assigned to such Series as specified in the related Schedules of
Mortgage Loans, with respect to which such Sellers have breached representations
and warranties made in such Loan Sale Agreements; (ix) rights to the benefits,
if any, under the Special Hazard Account, including coverage under the Special
Hazard Policy or the Reinsurance Agreement, as applicable, up to an aggregate
amount (with cash and coverage added together) equal to the Program 1993PA
Special Hazard Claim Ceiling; (x) rights to the benefits, if any, under the
Bankruptcy Account up to the Program 1993PA Bankruptcy Claim Ceiling; and (xi)
all proceeds from the foregoing relating to such Series. Reference to holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
a certain percentage of the Trust Fund of a particular Series means holders of
Certificates evidencing the aggregate Fractional Undivided Interests of such
Series of which, as indicated on the face thereof, is not less than such
percentage.
All other initially capitalized terms used and not otherwise defined herein
shall have the meaning assigned to such terms in the Agreement.
-3-
<PAGE>
ARTICLE II
Amendments
----------
Section 2.1 Amendment of Section 2.04. Section 2.04 of the Agreement is
-------------------------
hereby amended, solely with respect to the Series 1996-B Asset Certificates, to
add the following two sentences at the end thereof:
Notwithstanding anything to the contrary set forth herein, if the defect or
breach is one that, had it been discovered before the date of the issuance
of the related Series, would have prevented the Mortgage Loan from being a
"qualified mortgage" within the meaning of the REMIC Provisions, such
defect or breach shall be cured, or the related Mortgage Loan shall be
purchased by CMCSC II within 90 days of the date of discovery of such
defect or breach.
Section 2.2 Amendment of Section 4.02. Section 4.02(f) of the Agreement
-------------------------
and the last sentence of the Agreement are hereby amended and restated in their
entirety, solely with respect to the Series 1996-B Asset Certificates, to read
as follows:
(f) To the Administrator as a fee for REMIC Accounting, the amount, if
any, remaining for such Series in the Certificate Account, except for
amounts representing Principal Payments received after the third Business
Day preceding such Distribution Date, together with interest thereon, and
except the amounts reserved pursuant to subsections (b) and (c) above,
after all other required disbursements have been made.
Notwithstanding the foregoing and subject to Section 6.14 hereof, with
respect to the Asset Certificates, on each Distribution Date, amounts
distributable pursuant to Section 4.02(a) shall be distributed after
amounts distributable pursuant to Section 4.02(e) and before amounts
distributable pursuant to Section 4.02(f).
Section 2.3 Amendment of Section 6.12. Section 6.12 of the Agreement is
-------------------------
hereby amended and restated in its entirety, solely with respect to the Series
1996-B Asset Certificates, to read as follows:
Section 6.12 Administrator to Act as REMIC Administrator; Resignation
--------------------------------------------------------
of Administrator. The Administrator hereby agrees to assume and perform
----------------
the duties and functions of the REMIC Administrator under the Series 1996-B
Pooling Agreement. The Administrator may not resign from its obligations
as Administrator hereunder or as REMIC Administrator under the Series 1996-
B Pooling Agreement or as a Servicer, including any servicing rights and
obligations assumed by Administrator from another Servicer pursuant to
Section 6.10, unless a successor shall have accepted an appointment from
the Trustee and unless satisfactory evidence shall have been furnished from
the Rating Agency that such resignation and succession shall not adversely
affect the then current rating of the Certificates and the Series 1996-B
REMIC Certificates. Any successor to the Administrator must agree
-4-
<PAGE>
to assume and perform the duties and functions of the REMIC Administrator
under the Series 1996-B Pooling Agreement.
Section 2.4 Addition of Section 6.14. A new Section 6.14 is hereby added
------------------------
to the Agreement, solely with respect to the Series 1996-B Asset Certificates,
to read as follows:
Section 6.14 Non-Covered Losses.
------------------
(a) Notwithstanding anything to the contrary set forth in Section
6.08A of this Agreement, on any Distribution Date on which there is a
shortfall in the amount distributable to holders of the Series 1996-B Asset
Certificates pursuant to subparagraphs (i), (ii), and (iii) of Section
4.02(a), to the extent such shortfall results from a Non-Covered Loss, the
Administrator will subordinate its right to receive its fee under this
Agreement by the amount necessary to make such Non-Covered Loss whole. In
the event that the Administrator's fee with respect to the Series 1996-B
Asset Certificates is insufficient to make such Non-Covered Loss whole with
respect to the Series 1996-B Asset Certificates on a Distribution Date, the
Administrator will subordinate the right to receive its future fees until
such Non-Covered Loss is made whole. Notwithstanding the foregoing, the
aggregate amount required to be applied to Non-Covered Losses with respect
to the Series 1996-B Asset Certificates from the subordination of the
Administrator's fee shall be limited to an amount that is equal to
$834,547, less an amount equal to the amount of any Non-Covered Losses
which have been made whole (i) from assets on deposit in a bankruptcy
account with respect to any series of CMCSC II's or CCC's portfolio pass-
through certificates or (ii) from the subordination of the Administrator's
fee with respect to any series of CMCSC II's or CCC's portfolio pass-
through certificates, including the Series 1996-B Asset Certificates.
(b) The Administrator will provide quarterly reports to S&P's
Residential Mortgage Surveillance Department listing, by month, (i) the
dollar amount of each actual Non-Covered Loss, (ii) the reason for denial
of coverage on such Non-Covered Loss by the Mortgage Pool Insurer or the
Special Hazard Insurer, and (iii) the Certificate affected by such Non-
Covered Loss.
(c) Notwithstanding anything to the contrary in this Section 6.14,
the subordination of the Administrator's fee hereunder shall not limit the
subordination of such fee otherwise set forth in Section 4.02(a).
Section 2.5 Amendment of Section 7.05 Section 7.05 of the Agreement is
-------------------------
hereby amended and restated to read as follows:
Section 7.05 Trustee's Fees and Expenses. The Trustee shall be
---------------------------
entitled to a fee for its services hereunder, which shall not be limited by
any provision of law in regard to the compensation of a trustee of an
express trust, in an amount set forth in Exhibit G hereto, payable pursuant
---------
to Section 4.02(d) monthly during the term of this Agreement, and to the
-5-
<PAGE>
extent there are insufficient funds to pay such fee in the Certificate
Account, then the Trustee shall receive payment from CCC or, in the case of
the Series 1996-B Asset Certificates, CMCSC II, directly. The Trustee shall
also receive reimbursement for all reasonable costs and expenses related to
the delivery, maintenance and release of Mortgage Loans hereunder and for
other reasonable ordinary expenses, in amounts approved by the
Administrator, for reasonable ordinary expenses incurred in the exercise of
its responsibilities as REMIC Trustee under the Series 1993-2I Pooling
Agreement or the Series 1996-B Pooling Agreement, and for Extraordinary
Expenses, such reimbursement to be paid either from monies in the
Certificate Account pursuant to Section 4.02(d) or directly from CCC or, in
the case of the Series 1996-B Asset Certificates, CMCSC II. CCC hereby
indemnifies and holds the Trustee (including in its capacity as REMIC
Trustee under the Series 1993-2I Pooling Agreement) harmless against any
loss, claim, liability or expense, including reasonable attorney's fees,
incurred, arising out of or in connection with this Agreement (other than
in connection with the Series 1996-B Asset Certificates), the Series 1993-
2I Pooling Agreement, the Series 1993-2I REMIC Certificates, or the
Certificates other than the Series 1996-B Asset Certificates, including but
not limited to any such loss, claim, liability or expense incurred in
connection with any legal action against the related Trust Funds (or the
applicable REMIC Trust Fund) or the Trustee (including in its capacity as
REMIC Trustee under the Series 1993-2I Pooling Agreement) or any director,
officer, employee or agent thereof, or the performance of any of the
Trustee's duties (including in its capacity as REMIC Trustee under the
Series 1993-2I Pooling Agreement) hereunder or thereunder (other than any
loss, claim, liability or expense incurred by reason of willful misconduct
or negligence on the part of the Trustee). CMCSC II hereby indemnifies and
holds the Trustee (including in its capacity as REMIC Trustee under the
Series 1996-B Pooling Agreement) harmless against any loss, claim,
liability or expense, including reasonable attorney's fees, incurred,
arising out of or in connection with this Agreement with respect to the
Series 1996-B Asset Certificates, the Series 1996-B Pooling Agreement, the
Series 1996-B Asset, or the Series 1996-B REMIC Certificates, including but
not limited to any such loss, claim, liability or expense incurred in
connection with any legal action against the related Trust Funds (or the
applicable REMIC Trust Fund) or the Trustee (including in its capacity as
REMIC Trustee under the Series 1996-B Pooling Agreement) or any director,
officer, employee or agent thereof, or the performance of any of the
Trustee's duties (including in its capacity as REMIC Trustee under the
Series 1996-B Pooling Agreement) hereunder or thereunder (other than any
loss, claim, liability or expense incurred by reason of willful misconduct
or negligence on the part of the Trustee). Any payment to the Trustee
pursuant to the foregoing indemnity shall be from such entity's own funds,
without reimbursement therefor. The obligation to reimburse unpaid fees and
expenses and the indemnity by CCC and CMCSC II contemplated by this Section
shall survive the termi nation of this Agreement.
Section 2.6 Amendment of Section 7.11. Section 7.11(b) of the Agreement
-------------------------
is hereby amended and restated in its entirety to read as follows:
-6-
<PAGE>
(b) CCC hereby agrees that it will not cause (i) any Additional Loan
(as defined in the Series 1993-2I Pooling Agreement and the Series 1996-B
Pooling Agreement) to become the subject of coverage under either the
Mortgage Pool Insurance Policy or the Special Hazard Insurance Policy, or
(ii) any Series of Certificates evidencing an Additional Loan to obtain any
rights to the assets from time to time on deposit in the Bankruptcy Account
or the Special Hazard Account; provided, however, that CCC may arrange for
-----------------
any Additional Loan (or related Series of Certificates) to have such
benefits if, prior to the arrangement thereof, CCC delivers to the REMIC
Trustee a Letter from the Rating Agency to the effect that the taking of
such action will not result in the withdrawal or reduction of the then
current rating by such Rating Agency of the REMIC Certificates.
ARTICLE III
Miscellaneous
Section 3.1 Ratification. The terms and provisions set forth in this
------------
Amendment No. 3 shall modify and supersede all inconsistent terms and provisions
set forth in the Agreement, solely with respect to the Series 1996-B Asset
Certificates and, except as expressly modified and superseded by this Amendment
No. 3, the terms and provisions of the Agreement are ratified and confirmed and
shall continue in full force and effect. The Agreement as so modified by this
Amendment No. 3 shall be read, taken and construed as one and the same
instrument.
Section 3.2 Reference to Agreement. The Agreement and all other
----------------------
agreements, documents or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Agreement as
amended hereby, are hereby amended so that any reference in such agreements,
documents, or instruments to the Agreement shall mean a reference to the
Agreement as amended hereby, solely with respect to the Series 1996-B Asset
Certificates.
Section 3.3 Successors and Assigns. This Amendment No. 3 is binding
----------------------
upon and shall inure to the benefit of CMC Securities Corporation II, CCC, the
Administrator and the Trustee and their respective successors and assigns.
Section 3.4 GOVERNING LAW. THIS AMENDMENT NO. 3 SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE AND THE LAWS OF THE UNITED STATES
APPLICABLE TO TRANSACTIONS IN THE STATE, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 3.5 Counterparts. This Amendment No. 3 may be executed in one
------------
or more counterparts, each of which when so executed shall be an original, but
such counterparts when taken together shall constitute one and the same
instrument.
-7-
<PAGE>
Section 3.6 Effective Date. This Amendment No. 3 shall be effective as
--------------
of June 28, 1996.
-8-
<PAGE>
IN WITNESS WHEREOF, the undersigned parties have entered into, as of the
date first set forth hereon, this AMENDMENT NO. 3 TO AMENDED AND RESTATED
POOLING AND ADMINISTRATION AGREEMENT.
CAPSTEAD CAPITAL CORPORATION
By:________________________________________
Wade Walker, Vice President - Asset and
Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Wade Walker, known to me to be a Vice President of
CAPSTEAD CAPITAL CORPORATION, a Delaware corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
___________________________________________
Notary Public in and for the State of Texas
My Commission Expires:
-9-
<PAGE>
CMC SECURITIES CORPORATION II
By:________________________________________
Wade Walker, Vice President - Asset and
Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Wade Walker, known to me to be a Vice President of
CMC SECURITIES CORPORATION II, a Delaware corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
___________________________________________
Notary Public in and for the State of Texas
My Commission Expires:
-10-
<PAGE>
CAPSTEAD MORTGAGE CORPORATION
By:________________________________________
Wade Walker, Vice President - Asset and
Liability Management
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Wade Walker, known to me to be a Vice President of
CAPSTEAD MORTGAGE CORPORATION, a Maryland corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
___________________________________________
Notary Public in and for the State of Texas
My Commission Expires:
-11-
<PAGE>
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, AS TRUSTEE
By:________________________________________
Rafael Herrera,
Vice President and
Trust Officer
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Rafael Herrera, known to me to be a Vice President
and Trust Officer of TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Trustee, a
national banking association, the association that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said association, and acknowledged to me that such association 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 in and for the State of Texas
My Commission Expires:
<PAGE>
EXHIBIT 10.2
________________________________________________________________________________
CMC SECURITIES CORPORATION II,
Depositor
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
Trustee
_________________________
POOLING AGREEMENT
Dated as of June 1, 1996
_________________________
REMIC Pass-Through Certificates, Series 1996-B
________________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
ARTICLE I.
DEFINITIONS
<S> <C> <C>
Section 1.1 Definitions.................................................................. 1
ARTICLE II.
CONVEYANCE AND DELIVERY OF THE ASSET CERTIFICATES
Section 2.1 Conveyance of the Asset Certificates........................................ 12
Section 2.2 Delivery of the Asset Certificates; Acceptance by Trustee................... 12
Section 2.3 Execution of Certificates................................................... 12
ARTICLE III.
THE CERTIFICATES
Section 3.1 The Certificates............................................................ 12
Section 3.2 Registration of Transfer and Exchange of Certificates....................... 13
Section 3.3 Mutilated, Destroyed, Lost or Stolen Certificates........................... 17
Section 3.4 Persons Deemed Owners....................................................... 17
Section 3.5 Access to List of Certificateholders' Names and Addresses................... 18
Section 3.6 Deemed Representation for Class A Certificates.............................. 18
ARTICLE IV.
ACCOUNTS AND DISTRIBUTIONS
Section 4.1 The Certificate Account; Collections on the Asset Certificates.............. 18
Section 4.2 Distributions from Certificate Account...................................... 19
Section 4.3 Method of Distribution...................................................... 21
Section 4.4 Statement to Certificateholders............................................. 21
Section 4.5 Allocation of Loan Losses................................................... 23
ARTICLE V.
REPRESENTATIONS AND WARRANTIES; COVENANT
Section 5.1 Representations and Warranties of the Company............................... 23
Section 5.2 Covenant Respecting Credit Enhancement...................................... 25
</TABLE>
-i-
<PAGE>
ARTICLE VI.
AMENDMENT OF ASSET ISSUANCE AGREEMENTS;
REGULATORY REPORTS
<TABLE>
<S> <C> <C>
Section 6.1 Amendment of Asset Issuance Agreements; Regulatory Reports.................. 25
Section 6.2 Preparation of Regulatory Reports........................................... 26
ARTICLE VII.
THE TRUSTEE
Section 7.1 Duties of Trustee.......................................................... 27
Section 7.2 Certain Matters Affecting the Trustee...................................... 29
Section 7.3 Trustee Not Liable for Certificates or Mortgage Loans...................... 30
Section 7.4 Trustee May Own Certificates............................................... 30
Section 7.5 Trustee's Fees and Expenses................................................ 30
Section 7.6 Eligibility Requirements for Trustee ...................................... 30
Section 7.7 Resignation or Removal of the Trustee...................................... 31
Section 7.8 Successor Trustee.......................................................... 32
Section 7.9 Merger or Consolidation of Trustee......................................... 32
Section 7.10 Trustee Not Acting in Individual Capacity.................................. 32
Section 7.11 Appointment of Co-Trustee or Separate Trustee.............................. 32
ARTICLE VIII.
CLAIMS
Section 8.1 Trustee May Enforce Claims without Possession of Certificate................ 34
Section 8.2 Rights and Remedies Cumulative.............................................. 34
Section 8.3 Trustee May File Proofs of Claim............................................ 34
Section 8.4 Delay or Omission Not Waiver................................................ 35
ARTICLE IX.
REMIC PROVISIONS
Section 9.1 REMIC Administration Provisions............................................ 35
Section 9.2 Investments................................................................ 37
Section 9.3 Designations under the REMIC Provisions.................................... 37
</TABLE>
-ii-
<PAGE>
ARTICLE X.
TERMINATION
<TABLE>
<S> <C> <C>
Section 10.1 Termination upon Repurchase by the Company or
Liquidation of All Asset Certificates...................................... 38
Section 10.2 Additional Termination Requirements........................................ 39
Section 10.3 Distributions on the Final Distribution Date............................... 40
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.1 Amendment................................................................. 40
Section 11.2 Recordation of Agreement; Counterparts.................................... 41
Section 11.3 Limitation on Rights of Certificateholders................................ 41
Section 11.4 Limitation on Liability of Parties........................................ 42
Section 11.5 Limitation on Liability of Directors, Officers, Employees
and Agents of a Party................................................... 42
Section 11.6 GOVERNING LAW............................................................. 42
Section 11.7 Notices................................................................... 42
Section 11.8 Notices to the Rating Agency.............................................. 43
Section 11.9 Severability of Provisions................................................ 43
Section 11.10 Restrictions on Sale of Assets............................................ 43
Section 11.11 Intention of Parties...................................................... 43
</TABLE>
-iii-
<PAGE>
THIS IS A POOLING AGREEMENT, dated as of June 1, 1996, between CMC
Securities Corporation II, a Delaware corporation, as depositor (the "Company")
and Texas Commerce Bank National Association, a national banking association, as
Trustee (the "Trustee").
W I T N E S S E T H T H A T :
- - - - - - - - - - - - - -
In consideration of the premises and the mutual agreements herein
contained, the Company and the Trustee hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the following
-----------
words and phrases, unless the context otherwise requires, shall have the
meanings indicated:
Accrued Certificate Interest: As to any Distribution Date and any Class of
----------------------------
Certificates, interest accrued during the related Interest Accrual Period at the
applicable Certificate Interest Rate on the Class Certificate Principal Balance
thereof immediately prior to such Distribution Date, calculated on the basis of
a 360-day year consisting of twelve 30-day months. Accrued Certificate Interest
distributable on a Class of Certificates on a Distribution Date shall be reduced
by such Class's share of Prepayment Interest Shortfalls for such Distribution
Date. Prepayment Interest Shortfalls in respect of the LIBOR Asset Certificates
shall be allocated to the Class A1 Certificates. Prepayment Interest Shortfalls
in respect of the CMT Asset Certificates shall be allocated between the Class A2
and Class R Certificates in proportion to the respective amounts of Accrued
Certificate Interest that would have resulted absent such shortfalls.
Additional Loan: Any mortgage loan other than a mortgage loan which, as of
---------------
the Closing Date, (i) was the subject of coverage under the Mortgage Pool
Insurance Policy or the Special Hazard Policy or (ii) had the benefit of the
coverage provided by the Bankruptcy Account or the Special Hazard Account.
Administrator: As defined in the Asset Issuance Agreement.
-------------
Agreement: This Pooling Agreement and all exhibits, amendments and
---------
supplements hereto.
Application for Relief: As defined in Section 6.2(a).
----------------------
Amendment No. 2: Shall mean Amendment No. 2, dated as of June 1, 1996, to
---------------
the Asset Issuance Agreement, between the Company, Capstead Capital Corporation,
Capstead Mortgage Corporation, as Administrator, and Texas Commerce Bank
National Association, as trustee.
Amendment No. 3: Shall mean Amendment No. 3, dated as of June 1, 1996, to
---------------
the Asset Issuance Agreement, between the Company, Capstead Capital Corporation,
Capstead Mortgage Corporation, as Administrator and Texas Commerce Bank National
Association, as trustee.
<PAGE>
Asset Certificates: As of any date of determination, each of the pass-
------------------
through certificates identified on the Asset Schedule and not theretofore
released from the Trust Fund by the Trustee.
Asset Certificate Trustee: The entity identified in the Asset Issuance
-------------------------
Agreement as the trustee thereunder.
Asset Distribution Statement: As defined in Section 4.1(b).
----------------------------
Asset Group: Either of the groups of Asset Certificates composed of the
-----------
LIBOR Asset Certificates or the CMT Asset Certificates. For purposes hereof,
references to the "related" Classes of Certificates in respect of the LIBOR
Asset Certificates shall be to the Class A1 Certificates, and references to the
"related" Classes of Certificates in respect of the CMT Asset Certificates shall
be to the Class A2 and Class R Certificates.
Asset Issuance Agreement: The Amended and Restated Pooling and
------------------------
Administration Agreement, dated as of October 1, 1993, as amended by Amendment
No. 1 thereto, dated as of February 1, 1995, as supplemented by Supplement Nos.
1 through 3 thereto, each among Capstead Capital Corporation, as sponsor,
Capstead Mortgage Corporation, as Administrator, and Texas Commerce Bank
National Association, as trustee, and as further amended by Amendment No. 2 and
Amendment No. 3 relating to the Portfolio Pass-Through Program 1993PA and
providing for the issuance of the Asset Certificates and the Other Certificates.
Asset Pass-Through Rate: As of any date of determination, and as to any
-----------------------
Asset Certificate, the variable rate per annum at which interest accrues
thereon, calculated as provided therein.
Asset Principal Balance: As of any date of determination, and as to an
-----------------------
Asset Certificate, the outstanding "Certificate Principal Balance" (as defined
in the Asset Issuance Agreement) thereof as of such date of determination,
calculated in accordance with the terms of such Asset Certificate.
Asset Schedule: As of any date of determination, the schedule of Asset
--------------
Certificates (identified by Asset Group) included in the Trust Fund. The
initial schedule of Asset Certificates as of the Cut-off Date is attached hereto
as Exhibit B.
Available Funds: As to any Distribution Date and each Asset Group, the sum
---------------
of (i) the aggregate of amounts distributed on the related Remittance Date in
respect of the Asset Certificates in such Asset Group and (ii) the aggregate of
all reinvestment income in respect of the Asset Certificates earned on Permitted
Investments since the preceding Distribution Date.
Bankruptcy Account: As defined in the Asset Issuance Agreement.
------------------
BIF: The Bank Insurance Fund of the FDIC, or its successor in interest.
---
Book-Entry Certificate: As of the Closing Date, any Class A1 or Class A2
----------------------
Certificate.
Book-Entry Nominee: As defined in Section 3.2(b).
------------------
-2-
<PAGE>
Business Day: A day other than (i) a Saturday or a Sunday or (ii) a day
------------
which shall be in the State of Texas or New York City a legal holiday or a day
on which banking institutions in the State of Texas or New York City are
authorized or obligated by law or executive order to be closed.
Calculation Date: With respect to each Distribution Date, the second
----------------
Business Day preceding such Distribution Date.
Certificate: Each of the certificates signed and countersigned by the
-----------
Trustee in substantially the forms attached hereto as Exhibit A. The
Certificates shall be divided into three Classes, having the designations,
initial Class Certificate Principal Balances, Certificate Interest Rates and
Minimum Denominations as follows:
<TABLE>
<CAPTION>
Initial
Class
Certificate Certificate
Principal Interest Minimum
Designation Balance Rate Denomination (2)
----------- ------- ---- ----------------
<S> <C> <C> <C>
Class A1 $ 41,914,009 (1) $25,000.00
Class A2 $165,576,246 (1) $25,000.00
Class R $ 100 (1) 50.00
</TABLE>
___________________
(1) The Certificate Interest Rate for the Class A1, Class A2 and Class R
Certificates shall be a variable rate per annum determined as provided
herein.
(2) One Certificate of each Class may be issued in a different denomination.
Certificate Account: The trust account created and maintained pursuant to
-------------------
Section 4.1, which account shall at all times constitute an Eligible Account.
Funds in respect of each Asset Group deposited in the Certificate Account shall
be held in trust for the related Certificateholders for the uses and purposes
set forth in Section 4.1. The Certificate Account shall be designated
"Certificate Account for CMC Securities Corporation II's REMIC Pass-Through
Certificates, Series 1996-B."
Certificate Interest Rate: As to any Distribution Date and the Class A1
-------------------------
Certificates, a variable rate per annum (expressed as a percentage) equal to the
weighted average, by Asset Principal Balance (carried to six decimal places,
rounded down), of the Asset Pass-Through Rates of the outstanding LIBOR Asset
Certificates as of the first day of the preceding Interest Accrual Period. As
to any Distribution Date and the Class A2 and Class R Certificates, a variable
rate per annum (expressed as a percentage) equal to the weighted average, by
Asset Principal Balance (carried to six decimal places, rounded down), of the
Asset Pass-Through Rates of the outstanding CMT Asset Certificates as of the
first day of the preceding Interest Accrual Period.
-3-
<PAGE>
Certificate Principal Balance: With respect to each Certificate and as of
-----------------------------
any Distribution Date, the Initial Certificate Principal Balance of such
Certificate less the sum of (x) all amounts distributed with respect to such
----
Certificate on account of principal on previous Distribution Dates pursuant to
Section 4.2(b)(iii) or Section 4.2(c)(iii), as applicable, and (y) any Loan Loss
allocated to such Certificate on previous Distribution Dates and on such
Distribution Date pursuant to Section 4.5.
Certificate Owner: With respect to any Book-Entry Certificate, the person
-----------------
who is the beneficial owner thereof.
Certificate Register: The register maintained pursuant to Section 3.2.
--------------------
Certificate Registrar: The registrar appointed pursuant to Section 3.2.
---------------------
Certificateholder or Holder: At any relevant time, the person in whose
---------------------------
name a Certificate is registered in the Certificate Register except that, solely
for the purposes of giving any consent pursuant to this Agreement, any
Certificate of any Class, to the extent that the Company or any affiliate
thereof is the Certificate Owner or Holder thereof (except to the extent the
Company or any affiliate thereof shall be the Certificate Owner or Holder of all
Certificates of such Class), shall be deemed not to be outstanding and the
Percentage Interest (or Certificate Principal Balance) evidenced thereby shall
not be taken into account in determining whether the requisite Percentage
Interest (or Certificate Principal Balance) necessary to effect any such consent
has been obtained; provided, however, that in determining whether the Trustee
-------- -------
shall be protected in relying on such consent, only the Certificates that the
Trustee knows to be so held shall be so disregarded.
Class: All Certificates bearing the same class designation.
-----
Class Certificate Principal Balance: As to any Class of Certificates and
-----------------------------------
as of any date of determination, the aggregate of the Certificate Principal
Balances of all Certificates of such Class. The Class Certificate Principal
Balance of each such Class of Certificates as of the Closing Date is as
specified in the definition of the term Certificate.
Class A Certificate: Any Class A1 or Class A2 Certificate.
-------------------
Closing Date: June 28, 1996.
------------
CMT Asset Certificate: An Asset Certificate identified as a CMT Asset
---------------------
Certificate in the Asset Schedule.
CMT Asset Group: The aggregate of the CMT Asset Certificates.
---------------
CMT Principal Distribution Amount: As to each Distribution Date, the
---------------------------------
Available Funds for the CMT Asset Group on such Distribution Date after
distribution of amounts pursuant to Sections 4.2(a), (c)(i) and (c)(ii) on such
Distribution Date.
-4-
<PAGE>
Code: The Internal Revenue Code of 1986, as amended from time to time, and
----
any successor statute thereto, and applicable U.S. Department of the Treasury
temporary or final regulations promulgated thereunder.
Company: CMC Securities Corporation II, a corporation organized and
-------
existing under the laws of the State of Delaware, or its successor in interest.
Corporate Trust Office: The principal corporate trust office of the
----------------------
Trustee at which at any particular time its corporate business shall be
administered, which office at the date of the execution of this Agreement is
located at 600 Travis, 8th Floor, Attention: Vice President, Corporate Trust
Department, Houston, Texas 77002.
CPR: An assumed constant rate of prepayment each month, expressed as an
---
annual rate, relative to the then outstanding principal balance of a pool of
mortgage loans for the life of such mortgage loans.
Cut-off Date: June 1, 1996.
------------
Definitive Certificates: As defined in Section 3.2(f).
-----------------------
Depository: The initial Depository shall be The Depository Trust Company,
----------
the nominee of which is CEDE & Co. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the Uniform Commercial
Code of the State of New York, as amended, or any successor provisions thereto.
Depository Participant: A broker, dealer, bank or other financial
----------------------
institution or other Person for which from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Disqualified Organization: Any of the following: (i) the United States,
-------------------------
any state or political subdivision thereof, or any agency or instrumentality of
any of the foregoing; (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing; (iii) an organization
(except certain farmers' cooperatives described in Code section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
section 511 of the Code on unrelated business taxable income); and (iv) a rural
electric and telephone cooperative described in Code section 1381(a)(2)(C). The
terms "United States,""State" and "International Organization" shall have the
meanings set forth in Code section 7701 or successor provisions. A corporation
will not be treated as an instrumentality of the United States or of any state
or political subdivision thereof for these purposes if all of its activities are
subject to tax and a majority of its board of directors is not selected by such
governmental unit.
Distribution Date: The 25th day of each calendar month after the month of
-----------------
initial issuance of the Certificates, or, if such 25th day is not a Business
Day, the next succeeding Business Day.
Distribution Date Statement: The statement referred to in Section 4.4(a)
---------------------------
hereof.
-5-
<PAGE>
Eligible Account: At any time, an account which is any of the following:
----------------
(i) an account maintained with a depository institution (A) the long-term debt
obligations of which (or, in the case of a depository institution which is a
part of a holding company structure, the debt obligations of the holding company
of which) are at such time assigned by the Rating Agency its highest long-term
rating, or (B) the short-term debt obligations of which are then rated by the
Rating Agency in its highest short-term rating category; (ii) an account or
accounts the deposits in which are fully insured by either the BIF or the SAIF;
(iii) an account maintained with and in the name of the Trustee, in trust, and
in respect of which the amounts from time to time on deposit therein are insured
by the BIF or the SAIF (to the limits established by the FDIC, taking into
account all deposits within the institution with respect to the same
beneficiaries), provided that all the funds deposited in such account are
--------
invested in Permitted Instruments within one (1) Business Day of receipt in such
account or, if not invested in Permitted Instruments, are remitted to the
Certificateholders within one (1) Business Day of receipt in such account; (iv)
a trust account maintained with the corporate trust department of a federal or
state chartered depository institution or trust company with trust powers and
acting in its fiduciary capacity for the benefit of the Trustee hereunder; or
(v) an account that will not cause the Rating Agency to downgrade or withdraw
its then-current rating assigned to the Certificates, as evidenced in writing by
the Rating Agency.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
-----
Exchange Act: As defined in Section 6.2(a).
------------
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
----
FHA: The Federal Housing Administration of the Department of Housing and
---
Urban Development of the United States of America, or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
-----
thereto.
FNMA: The Federal National Mortgage Association, or any successor thereto.
----
FORM 15: As defined in Section 6.2(b).
-------
Imputed Principal Balance: As defined in the Asset Issuance Agreement.
-------------------------
Initial Certificate Principal Balance: With respect to any Certificate,
-------------------------------------
the Certificate Principal Balance of such Certificate on the Closing Date. The
aggregate Initial Certificate Principal Balance of all the Certificates is
$207,490,355.
Interest Accrual Period: With respect to any Distribution Date and any
-----------------------
Class of Certificates, the one-month period ending on the last day of the month
preceding the month in which such Distribution Date occurs.
Latest Possible Maturity Date: The latest possible maturity date for the
-----------------------------
Certificates within the meaning of Treasury Regulation Section 1.86OG-
l(a)(4)(iii), which shall be February 25, 2026.
-6-
<PAGE>
LIBOR Asset Certificate: An Asset Certificate identified as a LIBOR Asset
-----------------------
Certificate in the Asset Schedule.
LIBOR Asset Group: The aggregate of the LIBOR Asset Certificates.
-----------------
LIBOR Principal Distribution Amount: As to each Distribution Date, the
-----------------------------------
Available Funds in respect of the LIBOR Asset Group on such Distribution Date
after distribution of amounts pursuant to Sections 4.2(a), (b)(i) and (b)(ii) on
such Distribution Date.
Loan Loss: As defined in the Asset Issuance Agreement.
---------
Mortgage Loans: Any of the mortgage loans interests in which are evidenced
--------------
by the Asset Certificates and held by the Asset Certificate Trustee pursuant to
the Asset Issuance Agreement.
Mortgage Pool Insurance Policy: As defined in the Asset Issuance
------------------------------
Agreement.
Mortgaged Property: The real property, together with all improvements
------------------
thereon, securing the indebtedness of the mortgagor under his or her Mortgage
Loan and on which a lien is created by the related mortgage.
Non-permitted Foreign Holder: As defined in Section 3.2(b).
----------------------------
Non-U.S. Person: An individual, corporation, partnership or other person
---------------
other than a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust that
is subject to U.S. federal income tax regardless of the source of its income.
Officer's Certificate: A certificate signed by the Chairman of the Board,
---------------------
the Vice Chairman of the Board, the President or a Vice President of the Company
and delivered to the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
------------------
the Company, acceptable to the Company and the Trustee.
Other Certificates: As of any date of determination, each of the pass-
------------------
through certificates issued and outstanding under the Asset Issuance Agreement
that have not been registered in the name of the Qualified Nominee of the
Trustee under this Agreement.
Pay-out Rate: With respect to any Class of Certificates and a Distribution
------------
Date, the rate at which interest is distributed on such Class on such
Distribution Date, which is equal to a fraction (expressed as an annualized
percentage) the numerator of which is the Accrued Certificate Interest for such
Class and Distribution Date, and the denominator of which is the Class
Certificate Principal Balance of such Class on the related Distribution Date.
-7-
<PAGE>
Percentage Interest: With respect to any Certificate and at any time, the
-------------------
percentage interest in the undivided beneficial ownership interest in the Trust
Fund evidenced by Certificates of the same Class as such Certificate, such
percentage interest being the amount, expressed as a percentage, that the
Initial Certificate Principal Balance of such Certificate bears to the aggregate
Initial Certificate Principal Balance of all Certificates of the same Class.
Periodic Report: As defined in Section 6.2(a).
---------------
Permitted Instruments: Each of the following:
---------------------
(i) obligations of, or guaranteed as to principal and interest by,
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations of, or guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof when such obligations are backed by the full faith
and credit of the United States, provided that the unsecured obligations of
the party agreeing to repurchase such obligations are at the time of
purchase rated by the Rating Agency in its highest long-term rating
category;
(iii) certificates of deposit, time deposits and bankers acceptances
of any United States depository institution or trust company incorporated
under the laws of the United States or any state, including the Trustee;
provided that the debt obligations of such depository institution or trust
company (or, in the case of a subsidiary in a holding company structure,
debt obligations of the holding company) at the date of the acquisition
thereof have been rated by the Rating Agency in its highest long-term
rating category;
(iv) pooled or common trust funds of the Trustee, acting as trustee
and custodian and not in its commercial capacity and representing ownership
solely of the investments listed in clauses (i) through (iii) above, any
such pooled or common trust funds which provide for demand withdrawals
being conclusively deemed to satisfy any maturity requirements for
Permitted Instruments set forth in the Certificates or this Agreement and
which have been approved by the Rating Agency at the time at which the
investment is made;
(v) deposits, including deposits with the Trustee, which are fully
insured by the BIF or the SAIF, as the case may be;
(vi) participation certificates and senior debt obligations issued
by FHLMC (excluding mortgage-backed securities issued by FHLMC);
(vii) commercial paper of any corporation incorporated under the laws
of the United States or any state thereof, including corporate affiliates
of the Trustee, which at the date of acquisition is rated by the Rating
Agency in its highest short-term rating category and which has an original
maturity of not more than 365 days;
-8-
<PAGE>
(viii) debt obligations rated by the Rating Agency at the time at
which the investment is made in its highest long-term rating category (or
those investments specified in (iii) above with depository institutions
which have debt obligations rated by the Rating Agency in its highest long-
term rating category);
(ix) money market funds investing only in other Permitted
Instruments and which are rated by the Rating Agency at the time at which
the investment is made in its highest long-term rating category, any such
money market funds which provide for demand withdrawals being conclusively
deemed to satisfy any maturity requirement Permitted Instruments set forth
in the Certificates or this Agreement; or
(x) any other demand, money market or time deposit obligation,
security or investment as may be acceptable to the Rating Agency at the
time at which the investment is made.
Notwithstanding the foregoing, Permitted Investments shall not include "stripped
securities" and investments which contractually may return less than the
purchase price therefor.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Plan: Any Person which is an employee benefit plan, trust or account
----
subject to Title I of ERISA or an individual retirement account or employee
benefit plan, trust or account subject to section 4975 of the Code or comparable
provisions of any subsequent enactment or a governmental plan defined in Section
3(32) of ERISA subject to any federal, state or local law which is, to a
material extent, similar to the foregoing provisions of ERISA or the Code.
Prepayment Interest Shortfall: As defined in the Asset Issuance Agreement.
-----------------------------
Principal Prepayment: As defined in the Asset Issuance Agreement.
--------------------
Purchase Price: As of any date of determination and as to any Asset
--------------
Certificate, the Asset Principal Balance thereof on such date.
Qualified Nominee: A Person in whose name Asset Certificates or Permitted
-----------------
Instruments held by the Trustee may be registered as nominee of the Trustee in
lieu of registration directly in the name of the Trustee, provided that the
following conditions shall be satisfied in connection with such registration:
(i) the instruments governing the creation and operation of the
nominee provide that neither the nominee nor any owner of an interest in
the nominee (other than the Trustee) shall have any interest, beneficial or
otherwise, in any Asset Certificates or Permitted Instruments at any time
held in the name of the nominee, except for the purpose of transferring and
holding legal title thereto;
-9-
<PAGE>
(ii) the nominee and the Trustee have entered into a binding
agreement:
(a) establishing that any Asset Certificates or Permitted
Instruments held in the name of the nominee are to beheld by the
nominee as agent (other than commission agent or broker) or nominee
for the account of the Trustee; and
(b) appointing the Trustee as the agent and attorney of the
nominee with full power and authority irrevocably to sell, assign,
endorse, transfer and deliver any Asset Certificates or Permitted
Instruments standing in the name of the nominee, and to execute and
deliver all such instruments as may be necessary and proper for such
purpose; and
(iii) in connection with the registration of any Asset Certificate or
Permitted Instrument in the name of the nominee all requirements under
applicable governmental regulations necessary to effect a valid
registration of transfer of such Asset Certificate or Permitted Instrument
are complied with.
Rating Agency: A statistical credit rating agency, or its successor, that
-------------
rated the Certificates or any Class of the Certificates at the request of the
Company at the time of the initial issuance of the Certificates. If such agency
or a successor is no longer in existence, "Rating Agency" shall be such
statistical credit rating agency, or other comparable Person, designated by the
Company, notice of which designation shall be given to the Trustee. References
herein to a long-term rating category of a Rating Agency shall mean such ratings
without any modifiers. As of the date hereof, the Rating Agency is S&P.
Record Date: With respect to a Distribution Date, the close of business on
-----------
the last Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
Regular Certificate: Any Class A Certificate.
-------------------
REMIC: A "real estate mortgage investment conduit" within the meaning of
-----
Section 860D of the Code.
REMIC Administrator: Shall be the Administrator under the Asset Issuance
-------------------
Agreement.
REMIC Loss: The failure of the REMIC established hereunder to qualify or
----------
to continue to qualify as a REMIC, or the imposition of a tax under the REMIC
Provisions on any income of such REMIC.
REMIC Provisions: Provisions of the federal income tax law relating to
----------------
real estate mortgage investment conduits, which appear at Section 860A through
86OG of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing are in effect
from time to time.
-10-
<PAGE>
Remittance Date: The "Distributon Date" as defined, with respect to the
---------------
Asset Certificates, in the Asset Issuance Agreement, on which date each Asset
Certificate Trustee is required to remit monthly payments of principal and
interest on the related Asset Certificates to the holders thereof.
Residual Certificate: Any Class R Certificate.
--------------------
Responsible Officer: Any Vice President (Executive, Senior, Regular,
-------------------
Assistant or other) or Trust Officer of the Trustee.
SAIF: The Savings Association Insurance Fund of the FDIC, or its successor
----
in interest.
SEC: The Securities and Exchange Commission.
---
Securities Act: As defined in Section 6.2(c).
--------------
Single Certificate: A Certificate, other than a Class R Certificate, with
------------------
an Initial Certificate Principal Balance of $1,000.
S&P: Standard & Poor's Ratings Services, a division of The McGraw Hill
---
Companies, Inc. and its successors.
Special Hazard Account: As defined in the Asset Issuance Agreement.
----------------------
Special Hazard Policy: As defined in the Asset Issuance Agreement.
---------------------
Startup Day: As defined in Section 9.3.
-----------
Trust-Fund: The corpus of the trust created by this Agreement, evidenced
----------
by the Certificates and consisting of (i) the Asset Certificates as specified in
the Asset Schedule; (ii) such assets as shall from time to time be identified as
deposited in the Certificate Account for the benefit of Certificateholders; and
(iii) all proceeds from any of the foregoing.
Trustee: The institution executing this Agreement as Trustee, or its
-------
successor in interest, or any successor trustee appointed as herein provided.
VA: The Veterans Administration of the United States of America, or any
--
successor thereto.
Voting Rights: The portion of the voting rights of all the Certificates
-------------
that is allocated to any Certificate for purposes of the voting provisions of
Sections 6.1 and 11.1. Voting Rights shall be allocated among the Classes of
Certificates (and among the Certificates within each such Class) in proportion
to the Class Certificate Principal Balances (or Certificate Principal Balances)
thereof.
-11-
<PAGE>
ARTICLE II.
CONVEYANCE AND DELIVERY OF THE ASSET CERTIFICATES
Section 2.1 Conveyance of the Asset Certificates. The Company,
------------------------------------
concurrently with the execution and delivery of this Agreement hereby transfers,
assigns, sets over and otherwise conveys to the Trustee without recourse for the
benefit of the Certificateholders, all right, title and interest of the Company
in and to the Asset Certificates, including all interest and principal received
by the Company with respect to the Asset Certificates after the Closing Date and
all right, title and interest of the Company in and to all other property
constituting the Trust Fund.
Section 2.2 Delivery of the Asset Certificates; Acceptance by Trustee.
---------------------------------------------------------
(a) The Company hereby delivers to, and deposits with, the Trustee each
Asset Certificate set forth on the Asset Schedule. Each such Asset Certificate
shall be registered in the name of a Qualified Nominee of the Trustee.
(b) By its execution of this Agreement, the Trustee acknowledges (i)
receipt of each Asset Certificate identified on the Asset Schedule and (ii) that
each such Asset Certificate has been registered and delivered in accordance with
Section 2.2(a). The Trustee declares that it holds and will hold such Asset
Certificates as Trustee hereunder in trust, upon the trusts herein set forth for
the use and benefit of all Certificateholders.
(c) The Trustee shall not be responsible for the value, form, substance,
validity, perfection, priority, effectiveness or enforceability of any of the
Asset Certificates. The Trustee may accept but shall not be responsible for
examining, determining the meaning or effect of or notifying or advising the
Company in any way concerning any item or document relating to the Asset
Certificates other than the Asset Certificates themselves. Under no
circumstances shall the Trustee be obligated to verify the authenticity of any
signature on any of the documents received or examined by it in connection with
this Agreement or the authority or capacity of any person to execute or issue
any such document.
Section 2.3 Execution of Certificates. The Trustee has caused to be
-------------------------
executed, countersigned and delivered to or upon the order of the Company, in
exchange for the Asset Certificates received by the Trustee pursuant to Section
2.2, the Certificates in authorized denominations evidencing the entire
ownership of the Trust Fund.
ARTICLE III.
THE CERTIFICATES
Section 3.1 The Certificates.
----------------
(a) The Certificates shall be substantially in the forms of the
Certificates set forth in Exhibit A hereto, as applicable, and shall, on
original issue, be executed by the Trustee, not in its
-12-
<PAGE>
individual capacity but solely as Trustee, and countersigned and delivered by
the Trustee to or upon the order of the Company as provided in Article II.
(b) The Certificates shall be issued in an aggregate Initial Certificate
Principal Balance as set forth in the definition of the term Initial Certificate
Principal Balance in Article I.
(c) The Certificates shall be issuable in registered form only and shall
be issued in minimum denominations as set forth in the definition of the term
Certificates in Article I.
(d) The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer under its seal imprinted thereon.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trustee, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the signature and delivery of
such Certificates or did not hold such offices at the date of such Certificates.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless such Certificate shall have been manually
countersigned by the Trustee, 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.
Section 3.2 Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
(a) The Trustee shall cause to be kept at an office or agency in the city
in which the Corporate Trust Office of the Trustee is located or in the City of
New York, New York a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and of transfers and exchanges of Certificates as herein
provided. The Trustee shall initially serve as Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as herein provided.
Subject to Sections 3.2(b) and 3.2(c), upon surrender for registration of
transfer of any Certificate at the Corporate Trust Office, the Trustee shall
execute, countersign and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class in authorized
denominations of a like Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of authorized denominations of a like Class and Percentage
Interest, upon surrender of the Certificates to be exchanged at any such office
or agency. Whenever any Certificates are so surrendered for exchange the
Trustee shall execute, countersign and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder thereof or his
attorney duly authorized in writing.
-13-
<PAGE>
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer and exchange
shall be canceled and subsequently destroyed by the Trustee and a certificate of
destruction shall be delivered by the Trustee to the Company.
(b) No legal or beneficial interest in all or any portion of the Residual
Certificates may be transferred directly or indirectly to (i) a Disqualified
Organization or an agent of a Disqualified Organization (including a broker,
nominee, or middleman), (ii) an entity that holds REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations (a
"Book-Entry Nominee"), or (iii) an individual, corporation, partnership or other
person unless such transferee (A) is not a Non-U.S. Person or (B) is a Non-U.S.
Person that holds a Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor and
the Trustee with an effective Internal Revenue Service Form 4224 or (C) is a No
U.S. Person that has delivered to both the transferor and the Trustee an opinion
of a nationally recognized tax counsel (which shall not be an expense of the
Trust Fund, the Trustee or the Company) to the effect that the transfer of a
Residual Certificate to it is in accordance with the requirements of the Code
and the regulations promulgated thereunder and that such transfer of a Residual
Certificate will not be disregarded for federal income tax purposes (any such
person who is not covered by clause (A), (B) or (C) above being referred to
herein as a "Non-permitted Foreign Holder"), and any such purported transfer
shall be void and have no effect.
The Trustee shall not execute, and shall not countersign and deliver, a
Residual Certificate in connection with any transfer thereof unless the
transferor shall have provided to the Trustee an affidavit, substantially in the
form attached as Exhibit C to this Agreement, signed by the transferee, to the
---------
effect that the transferee is not a Disqualified Organization, an agent
(including a broker, nominee, or middleman) for any entity as to which the
transferee has not received a substantially similar affidavit, a Book-Entry
Nominee or a Non-permitted Foreign Holder, which affidavit shall contain the
consent of the transferee to any amendments of this Agreement as may be required
to effectuate further the foregoing restrictions on transfer of the Residual
Certificates to Disqualified Organizations, Book-Entry Nominees or Non-permitted
Foreign Holders, and an agreement by the transferee that it will not transfer a
Residual Certificate without providing to the Trustee an affidavit substantially
in the form attached as Exhibit C to this Agreement and a letter substantially
---------
in the form attached as Exhibit D to this Agreement. Such affidavit shall also
---------
contain the statement of the transferee that (i) it does not have the intention
to impede the assessment or collection of any federal, state or local taxes
legally required to be paid with respect to the Residual Certificates being
transferred and (ii) it understands that it may incur tax liabilities in excess
of any cash flows generated by the Residual Certificates being transferred, that
it has historically paid its debts as they come due and that it intends to pay
taxes associated with holding the Residual Certificate as such taxes become due.
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The affidavit described in the preceding paragraph, if not executed in
connection with the initial issuance of the Residual Certificates, shall be
accompanied by a written statement in the form attached as Exhibit D to this
---------
Agreement, signed by the transferor, to the effect that as of the time of the
transfer, the transferor has (i) no actual knowledge that the transferee is a
Disqualified Organization, Book-Entry Nominee or Non-permitted Foreign Holder,
(ii) no reason to believe that the transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to a Residual Certificate, and (iii) conducted a
reasonable investigation and found that the transferee has historically paid its
debts as they fell due and found no significant evidence to indicate that the
transferee will not continue to pay its debts as they fall due. The Residual
Certificates shall bear a legend referring to the foregoing restrictions
contained in this paragraph and the preceding two paragraphs.
Upon notice to the Trustee that any legal or beneficial interest in any
portion of the Residual Certificates has been transferred, directly or
indirectly, to a Disqualified Organization or agent thereof (including a broker,
nominee, or middleman) in contravention of the foregoing restrictions, (i) such
transferee shall be deemed to hold such Residual Certificate in constructive
trust for the last transferor who was not a Disqualified Organization or agent
thereof, and such transferor shall be restored as the owner of such Residual
Certificate as completely as if such transfer had never occurred, provided that
the Trustee may, but is not required to, recover any distributions made to such
transferee with respect to such Residual Certificate and return such recovery to
the transferor, and (ii) the Trustee agrees to furnish to the Internal Revenue
Service and to any transferor of the Residual Certificate or such agent (within
60 days of the request therefor by the transferor or agent) such information
necessary to the application of section 860E(e) of the Code as may be required
by the Code, including but not limited to the present value of the total
anticipated excess inclusions with respect to the Residual Certificate (or
portion thereof) for periods after such transfer. At the election of the
Trustee, the cost to the Trustee of computing and furnishing such information
may be charged to the transferor or such agent referred to above; however, the
Trustee shall in no event be excused from furnishing such information.
The restrictions on transfers of the Residual Certificates set forth in the
preceding four paragraphs shall cease to apply to transfers (and the applicable
portions of the legend on the Residual Certificates may be deleted) after
delivery to the Trustee of an Opinion of Counsel to the effect that the
elimination of such restrictions will not cause a REMIC Loss.
(c) No transfer of a Residual Certificate shall be made to any Person
unless the Trustee has received a certificate (substantially in the form of
paragraph 14 included in Exhibit C to this Agreement) from such transferee to
---------
the effect that such transferee is not a Plan or a Person that is using the
assets of a Plan to acquire any such Certificate. The preparation and delivery
of such certificate shall not be an expense of the Trust Fund, the Trustee or
the Company.
(d) Subject to Section 7.1(e)(i) hereof, the Trustee may conclusively rely
upon any certificate, affidavit or opinion delivered pursuant to Section 3.2(b)
or (c).
(e) Except as to any additional Certificate of any Class of Book-Entry
Certificates held in physical certificated form pursuant to Section 3.2(f), the
Book-Entry Certificates shall, subject to this Section 3.2(e), at all times
remain registered in the name of the Depository or its nominee and
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at all times: (i) registration thereof may not be transferred by the Trustee
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
the Certificates issued in book-entry form on the books of the Depository shall
be governed by applicable rules established by the Depository and the rights of
Certificate Owners with respect to Book-Entry Certificates shall be governed by
applicable law and agreements between such Certificate Owners and the
Depository, Depository Participants, and indirect participating firms; (iv) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (v) the Trustee shall deal with the Depository,
Depository Participants and indirect participating firms as authorized
representatives of the Certificate Owners of the Certificates issued in book-
entry form for all purposes including the making of payments due on the Book-
Entry Certificates and exercising the rights of Holders under this Agreement,
and requests and directions for and votes of such representatives shall not be
deemed to be inconsistent if they are made with respect to different Certificate
Owners; (vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners; (vii) Certificate
Owners shall not be entitled to certificates for the Book-Entry Certificates and
(viii) the Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and give notice
to the Depository of such record date.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. 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.
(f) If (i) (x) the Company or the Depository advises the Trustee in
writing that the Depository is no longer willing, qualified or able to discharge
properly its responsibilities as Depository, and (y) the Trustee or the Company
is unable to locate a qualified successor, (ii) the Company at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository or (iii) Certificate Owners representing not less than
51% of the aggregate Certificate Principal Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Certificate
owners, the Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive, fully
registered Certificates ("Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Company nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates, and the Trustee shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder.
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(g) On or prior to the Closing Date, there shall be delivered to the
Depository one or more certificates for each Class of Book-Entry Certificates
registered in the name of the Depository's nominee, Cede & Co. The face amount
of such Certificates shall represent 100% of the Initial Class Certificate
Principal Balance of the related Class, except for such amount that does not
constitute an acceptable denomination to the Depository. An additional
Certificate of each Class of Book-Entry Certificates may be issued evidencing
such remainder and, if so issued, will be held in physical certificated form by
the Holder thereof. Each Certificate issued in book-entry form shall bear the
following legend:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
Section 3.3 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
------------------------------------ ------------
any mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate and (b) there is delivered to the Company, the
Certificate Registrar and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Certificate Registrar or the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, countersign and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor, Class and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 3.3, 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 and the
Certificate Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section 3.3 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 3.4 Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Company, the Trustee, the
Certificate Registrar and any agent of the Company, the Trustee or the
Certificate Registrar may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.2 and for all other purposes whatsoever, and
neither the Company, the Trustee, the Certificate Registrar nor any agent of the
Company, the Trustee or the Certificate Registrar shall be affected by any
notice to the contrary.
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Section 3.5 Access to List of Certificateholders' Names and Addresses.
---------------------------------------------------------
If three or more Certificateholders (hereinafter referred to as "applicants")
apply in writing to the Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and is accompanied by a copy of
the communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the most recent list of
Certificateholders held by the Trustee. If such list is as of a date more than
90 days prior to the date of receipt of such applicants' request, the Trustee
shall promptly request from the Certificate Registrar a current list as provided
above, and shall afford such applicants access to such list promptly upon
receipt. Every Certificateholder, by receiving and holding a Certificate,
agrees with the Certificate Registrar and the Trustee that neither the
Certificate Registrar nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 3.6 Deemed Representation for Class A Certificates. Any Plan
----------------------------------------------
which acquires a beneficial ownership interest in the Class A Certificates shall
be deemed, by virtue of the acceptance or acquisition of such ownership
interest, to have represented to the Company and the Trustee that such Plan is
an "accredited investor" for purposes of Rule 501(a)(1) of Regulation D under
the Securities Act.
ARTICLE IV.
ACCOUNTS AND DISTRIBUTIONS
Section 4.1 The Certificate Account; Collections on the Asset
-------------------------------------------------
Certificates.
------------
(a) The Trustee shall establish and maintain in its corporate trust
department a separate trust account in its own name and designated as set forth
in the definition of Certificate Account in Article I, which account shall be
maintained at all times as an Eligible Account. All amounts received in respect
of the Asset Certificates in each Asset Group by the Trustee shall be deposited
in the Certificate Account immediately upon receipt, together with any Permitted
Instruments in which such amounts shall be invested during the term of this
Agreement (as the Company shall direct in writing from time to time), and any
income or other gain realized from any such investment. Except as provided
below, all fixed term investments in Permitted Instruments must mature before
the Distribution Date next following the date of investment in such instruments,
provided that Permitted Instruments issued by and constituting the direct and
- -------- ----
unconditional fixed-term payment obligations of the Trustee (including, but not
limited to, pooled or common trust funds of the Trustee) may mature on the
Distribution Date next following the date of investment in the same. No
Permitted Instrument shall be sold before the maturity thereof if the sale
thereof would result in the realization of gain prior to maturity unless the
Company has obtained an Opinion of Counsel that such sale or disposition will
not cause the Trust Fund to be subject to the tax on prohibited transactions
under section 860F of the Code, or otherwise subject the Trust Fund to tax or
cause the REMIC established hereunder to fail to qualify as a REMIC. If at any
time the Company shall have failed to direct the investment of such monies, the
Trustee shall invest such monies in Permitted Instruments. The Certificate
Account shall be held by the Trustee for the benefit of the
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Certificateholders as part of the Trust Fund. Amounts in the Certificate Account
on any Distribution Date in respect of each Asset Group shall be disbursed as
provided in Section 4.2. Subject to Section 7.1, the Trustee shall not be held
liable by reason of its inability to make any required disbursements from the
Certificate Account because of any insufficiency in the Certificate Account,
including, but not limited to, any insufficiency resulting from any loss of
investment in Permitted Instruments, except for losses attributable to the
Trustee's failure to make payments on Permitted Instruments of the Trustee, as
principal obligor, in accordance with their terms. The Company shall deposit
into the Certificate Account an amount equal to any loss realized on any
Permitted Instrument as soon as such loss is realized.
(b) Monies shall be remitted by wire transfer or other method agreed to
between the Trustee and each Asset Certificate Trustee by such Asset Certificate
Trustee to the Trustee on or before each Remittance Date. The Trustee shall be
required to reconcile, on a monthly basis, the monies actually received in
respect of the Asset Certificates in each Asset Group from the related Asset
Certificate Trustee on each Remittance Date with the respective amount due to be
received by the Trustee from such Asset Certificate Trustee as reflected in the
distribution statement (the "Asset Distribution Statement") provided by such
Asset Certificate Trustee and accompanying each such distribution.
(c) All payments and other collections distributable from time to time on
the Asset Certificates in each Asset Group shall be collected by the Trustee and
deposited in the Certificate Account pursuant to Section 4.1(a). In furtherance
thereof, the Trustee shall demand payment and delivery of, and shall receive and
collect, all amounts required to be distributed in respect of the Asset
Certificates in accordance with the terms thereof. If any default occurs in the
making of any distribution, payment or performance under any Asset Certificate,
the Trustee shall take such action as may be appropriate under the circumstances
to obtain such distribution, payment or performance as promptly as practicable,
including the making of formal legal demand upon the related obligor, issuer or
guarantor.
Section 4.2 Distributions from Certificate Account.
--------------------------------------
(a) On each Distribution Date, the Trustee shall distribute to the REMIC
Administrator from the Available Funds for each Asset Group on such Distribution
Date:
(i) such Asset Group's allocable share of the REMIC Administrator's
fee, equal to any reinvestment income earned on amounts on deposit in the
Certificate Account in respect of the related Available Funds; and
(ii) such Asset Group's allocable share of any expenses of the REMIC
Administrator or any Administrator reimbursable to the REMIC Administrator
or any Administrator pursuant to Section 9.1;
provided, however that such expenses shall be allocated between the
-------- -------
Available Funds for the Asset Groups in proportion to the aggregate Asset
Principal Balances of the Asset Certificates in each Asset Group.
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<PAGE>
(b) On each Distribution Date, the Trustee shall distribute to the Class
A1 Certificates the remaining Available Funds for the LIBOR Asset Group on such
Distribution Date after application of the amounts in respect of such Available
Funds pursuant to clause (a) above, in the following order of priority:
(i) to such Class of Certificates, the Accrued Certificate Interest
thereon for such Distribution Date; provided, however, that any shortfall
-------- -------
in Available Funds for the LIBOR Asset Group shall be allocated to such
Class of Certificates;
(ii) to such Class of Certificates, any Accrued Certificate Interest
thereon remaining unpaid from previous Distribution Dates; provided,
--------
however that any shortfall in Available Funds for the LIBOR Asset Group
-------
shall be allocated to the Class A1 Certificates; and
(iii) to such Class of Certificates, the LIBOR Principal Distribution
Amount for such Distribution Date, until the Class Certificate Principal
Balance thereof has been reduced to zero.
(c) On each Distribution Date, the Trustee shall distribute to the Class
A2 and Class R Certificates the remaining Available Funds in respect of the CMT
Asset Group on such Distribution Date after application of the amounts in
respect of such Available Funds pursuant to clause (a) above, in the following
order of priority:
(i) to such Classes of Certificates, the Accrued Certificate Inter
thereon for such Distribution Date; provided, however, that any shortfall
-------- -------
in Available Funds for the CMT Asset Group shall be allocated between such
Classes of Certificates in proportion to the amount of Accrued Certificate
Interest that would have been so allocated in the absence of such
shortfall;
(ii) to such Classes of Certificates, any Accrued Certificate
Interest thereon remaining unpaid from previous Distribution Dates;
provided, however that any shortfall in Available Funds for the CMT Asset
-------- -------
Group shall be allocated between such Classes of Certificates in the manner
provided in clause (i) above; and
(iii) sequentially, to the Class R and the Class A2 Certificates, in
that order, the CMT Principal Distribution Amount for such Distribution
Date, until the Class Certificate Principal Balances thereof have each been
reduced to zero such that no distribution in respect of this clause (iii)
shall be made to any Class A2 Certificate until the Class Certificate
Principal Balance of the Class R Certificates has been reduced to zero.
In addition, on each Distribution Date the Trustee shall distribute to the
Holders of the Class R Certificates any remaining amounts in the Certificate
Account after all amounts required to be distributed pursuant to paragraphs (a),
(b) and (c) above have been so distributed, which remaining amounts shall not
reduce the Class Certificate Principal Balance of the Class R Certificates.
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<PAGE>
Section 4.3 Method of Distribution.
----------------------
(a) All distributions with respect to each Class of Certificates on each
Distribution Date shall be made pro rata among the outstanding Certificates of
such Class, based on the Percentage Interest in such Class represented by each
Certificate. Payments to the Certificateholders on each Distribution Date will
be made to the Certificateholders of record on the related Record Date (other
than as provided in Section 10.1 respecting the final distribution), and shall
be made by check or money order mailed to the address of such Certificateholder
appearing in the Certificate Register, or upon written request by the
Certificateholder to the Trustee made not later than the applicable Record Date,
by wire transfer to a U.S. depository institution acceptable to the Trustee, or
by such other means of payment as such Certificateholder and the Trustee shall
agree .
(b) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the applicable Certificates. Neither the Trustee nor the Company shall have any
responsibility therefor except as otherwise provided by applicable law.
(c) The Trustee shall withhold or cause to be withheld such amounts as may
be required by the Code (giving full effect to any exemptions from withholding
and related certifications required to be furnished by Certificateholders and
any reductions to withholding by virtue of any bilateral tax treaties and any
applicable certification required to be furnished by Certificateholders with
respect thereto) from distributions to be made to Non-U.S. Persons. If the
Trustee reasonably determines that a more accurate determination of the amount
required to be withheld from a distribution can be made within a reasonable
period after the scheduled date for distribution, it may hold such distribution
in trust for a Holder of the Residual Certificate until such determination can
be made.
Section 4.4 Statement to Certificateholders.
-------------------------------
(a) The Trustee shall mail to each Certificateholder on each Distribution
Date a statement (each, a "Distribution Date Statement") setting forth:
(i) The amount of the distribution to the Certificateholders of
each Class on such Distribution Date allocable to principal;
(ii) The amount of the distribution to the Certificateholders of
each Class on such Distribution Date allocable to interest;
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(iii) The Asset Principal Balance of the Asset Certificates in each
Asset Group and the aggregate number of the related Mortgage Loans as of
the Cut-Off Date and as of the related Remittance Date;
(iv) The Class Certificate Principal Balance of each Class of
Certificates and the Certificate Principal Balance of a Single Certificate
after giving effect to all distributions allocable to principal and the
allocation of any Loan Losses for such Distribution Date;
(v) The Certificate Interest Rates of the Class A1, Class A2 and
Class R Certificates for the related Interest Accrual Period, and the Pay-
out Rate applicable to each Class of Certificates on such Distribution
Date;
(vi) The aggregate principal balances and number of Mortgage Loans
relating to each Asset Group which, as of the related Remittance Date, (a)
were delinquent as to a total of (x) 30-59 days, (y) 60-89 days and (z) 90
days or more, (b) were in foreclosure and (c) constituted real estate
owned;
(vii) The amount of coverage under the Mortgage Pool Insurance Policy
and the Special Hazard Policy maintained under the Asset Issuance Agreement
as of the Cut-off Date and as of the close of business on the related
Remittance Date and available to pay claims to all Asset Certificates and
all Other Certificates issued under the Asset Issuance Agreement;
(viii) The amount of funds, as of the related Remittance Date, on
deposit in the Bankruptcy Account and the Special Hazard Account maintained
under the Asset Issuance Agreement and available to pay claims to all Asset
Certificates and all Other Certificates issued under the Asset Issuance
Agreement;
(ix) The aggregate cumulative amount of Loan Losses reported under
the Asset Issuance Agreement in respect of the Mortgage Loans relating to
each Asset Group, and any Prepayment Interest Shortfalls in respect of the
Mortgage Loans relating to each Asset Group, as of the related Remittance
Date; and
(x) the weighted average remaining term to maturity and the
weighted average interest rate of the Mortgage Loans as of the related
Remittance Date .
In the case of information furnished pursuant to subclauses (i) and (ii)
above in respect of the Class A Certificates, the amounts shall be expressed as
a dollar amount per a Single Certificate for each Class of Certificates. The
Trustee shall use information included in the Asset Distribution Statement to
prepare the Distribution Date Statement or to compute the amounts required to be
set forth on such statement. The Trustee shall have no liability or
responsibility to any Certificateholder for the accuracy or completeness of the
information provided in the Asset Distribution Statement.
(b) On or prior to January 30th of each year, commencing in the calendar
year following the Closing Date, the Company shall furnish to the Trustee such
information as the Trustee shall reasonably require to prepare for each Person
who at any time during the calendar year was a
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Certificateholder a statement containing information required to be provided
pursuant to the Code and the Trustee shall mail such statement as required by
law.
Section 4.5 Allocation of Loan Losses. On or prior to each Distribution
-------------------------
Date, the Trustee shall determine (by reference to the Asset Distribution
Statement) the aggregate of Loan Losses in respect of the Mortgage Loans
relating to each Asset Group that occurred during the preceding calendar month.
On each Distribution Date, all such Loan Losses in respect of the Mortgage Loans
relating to the LIBOR Asset Certificates shall be allocated to the Class A1
Certificates, and all such Loan Losses in respect of the Mortgage Loans relating
to the CMT Asset Certificates shall be allocated between the Class A2 and Class
R Certificates in proportion to the Class Certificate Principal Balances thereof
immediately prior to such Distribution Date. Any Loan Losses allocated to a
Class of Certificates shall be allocated among the Certificates of such Class in
proportion to their respective Certificate Principal Balances. Each allocation
of a Loan Loss to a Certificate shall be accomplished by reducing the
Certificate Principal Balance thereof in accordance with the definition of such
term in Article I, which reduction shall be deemed to have occurred prior to the
distribution of the LIBOR Principal Distribution Amount or CMT Principal
Distribution Amount, as applicable, on the related Distribution Date.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES; COVENANT
Section 5.1 Representations and Warranties of the Company.
---------------------------------------------
(a) The Company hereby represents and warrants to the Trustee, as of the
Closing Date, that:
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with full
corporate and other power and authority to execute, deliver and enter into
this Agreement and to perform all of its duties and obligations pursuant
hereto;
(ii) The execution and delivery of this Agreement have been duly
authorized by the Company and, when executed and delivered, this Agreement
will constitute a valid and binding obligation of the Company, enforceable
in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally, and that certain equitable
remedies may not be available;
(iii) The execution and delivery of this Agreement by the Company in
the manner contemplated herein and the performance and compliance with the
terms hereof by it will not violate (a) its certificate of incorporation or
bylaws, or (b) any laws which could have any material adverse effect
whatsoever upon the validity, performance or enforceability of any of the
terms of this Agreement applicable to the Company, and will not constitute
a material default (or an event which, with notice or lapse of time, or
both, would constitute a material
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default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Company is a party or which may
be applicable to it or any of its assets;
(iv) The execution and delivery of this Agreement by the Company in
the manner contemplated herein and the performance and compliance with the
terms hereof by it do not require the consent or approval of any
governmental authority, or if such consent or approval is required, it has
been obtained; and
(v) No failure exists on the part of the Company or Capstead
Capital Corporation ("CCC") in the observance or performance, in any
material respect, of any of the covenants or agreements contained in the
Asset Issuance Agreement, and neither the Company nor CCC was in breach of
any of its representations or warranties contained in the Asset Issuance
Agreement as of the date such representations or warranties were given.
(b) In addition, the Company hereby represents and warrants to the
Trustee, as of the Closing Date, that:
(i) The information set forth in the Asset Schedule was true and
correct in all material respects at the date or dates respecting which such
information is furnished;
(ii) Immediately prior to the transfer and assignment herein
contemplated, the Company had good title to, and was the sole owner of,
each Asset Certificate;
(iii) Each Asset Certificate has been transferred to the Trustee free
and clear of any liens, claims and encumbrances; and
(iv) As of the Cut-off Date, each Asset Certificate is an eligible
asset to be included in a REMIC under the REMIC Provisions.
It is understood and agreed that the representations and warranties set
forth in this Section 5.1 shall survive delivery of the Asset Certificates to
the Trustee.
(c) Upon discovery by the Company or the Trustee of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other. On the first Remittance Date
occurring 60 days after the Company's discovery or receipt of notice of such
breach, the Company shall cure such breach in all material respects or shall
repurchase such Asset Certificate from the Trustee at the Purchase Price
therefor. The Trust Fund shall be entitled to any distribution on such
repurchased Asset Certificate due and payable on the Remittance Date on which
such Asset Certificate is repurchased. The proceeds from any such repurchase
shall constitute Available Funds for the related Distribution Date. The
obligation of the Company to repurchase any Asset Certificate as to which a
defect exists shall constitute the sole remedy respecting such breach available
to Certificateholders or the Trustee on behalf of the Certificateholders.
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Section 5.2 Covenant Respecting Credit Enhancement. The Company hereby
--------------------------------------
covenants to the Trustee, for the benefit of Certificateholders, that it shall
take all action available to it to prevent (i) any reduction of coverage under
the Mortgage Pool Insurance Policy or the Special Hazard Policy, or any
reduction of the respective amounts required to be maintained on deposit in the
Special Hazard Account or the Bankruptcy Account; (ii) the modification of the
applicable formulae for calculating the Requisite Amount of any Bankruptcy
Account, the Program 1993PA Bankruptcy Claim Ceiling, the Requisite Amount of
any Special Hazard Account or the Program 1993PA Special Hazard Claim Ceiling
(each as defined in the Asset Issuance Agreement); (iii) any Additional Loan
from becoming the subject of coverage under the Mortgage Pool Insurance Policy
or the Special Hazard Policy; or (v) any Additional Loan (or Other Certificate
evidencing ownership thereof) from obtaining any rights to the assets from time
to time on deposit in the Special Hazard Account or the Bankruptcy Account;
provided however that, if the Trustee is provided with a letter from the Rating
- -------- -------
Agency to the effect that the occurrence of any of the events described in
clause (i), (ii), (iii) (iv), or (v) above will not result in the withdrawal or
reduction of the then-current rating of the Certificates by the Rating Agency,
the Company shall not be so obligated to prevent the occurrence of any such
event.
ARTICLE VI.
AMENDMENT OF ASSET ISSUANCE AGREEMENTS; REGULATORY REPORTS
Section 6.1 Amendment of Asset Issuance Agreements; Regulatory Reports.
----------------------------------------------------------
With the consent of Certificateholders representing not less than 66% of the
Voting Rights of all Certificates, the Trustee may take any action which by the
terms of the Asset Issuance Agreement requires the consent of the holders of the
related Asset Certificates, including but not limited to: (1) entering into any
amendments to the Asset Issuance Agreement; and (2) removing or consenting to
the removal of, and appointing or consenting to the appointment of, the Person
acting as Asset Certificate Trustee under the Asset Issuance Agreement;
provided, however, that no such action shall, without the consent of the Holder
of each Certificate affected thereby:
(a) reduce the amount, or delay the timing, of payments received on
the related trust fund which are required to be distributed on any Asset
Certificate, change the coin or currency in which any Asset Certificate or
any interest thereon is payable, impair the right to institute suit for the
enforcement of the payment of any installment of interest or principal due
on any Asset Certificate or adversely affect the tax consequences to any
holder of any Asset Certificate;
(b) change the requirement of the consent of the holders of the Asset
Certificates for any such action pursuant to the Asset Issuance Agreement;
(c) modify any of the provisions of this Section, except to increase
any percentage specified herein; or
(d) permit the creation of any lien ranking prior to, or on a parity
with, the trusts created by the Asset Issuance Agreement with respect to
the Asset Certificates or terminate the trusts created by the Asset
Issuance Agreement with respect to the Asset Certificates on
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any property at any time subject thereto or deprive the Holder of any
Certificate of the security afforded by the Asset Certificates;
provided, however, that notwithstanding the foregoing provisions of this
- -------- -------
Section, the Trustee may, without the consent of any Holder of any Certificates,
consent to the release from or termination of the trusts created by the Asset
Issuance Agreement with respect to any Mortgage Loan when such action by the
Trustee is specifically authorized by any other provision of the Asset Issuance
Agreement.
The Trustee may in its discretion determine whether or not any Certificates
would be affected by any proposed action and any such determination shall be
conclusive upon the Holders of all Certificates, whether theretofore or
thereafter authenticated and delivered hereunder. The Trustee shall not be
liable for any such determination made in good faith.
It shall not be necessary for any act of Certificateholders under this
Section to approve the particular form of any written instrument proposed to
effect such action, but it shall be sufficient if such act shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any written
instrument proposed to effect such action pursuant to this Section, the Company
shall mail to the Holders of the Certificates a notice setting forth in general
terms the substance of such action. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such action.
Nothing contained herein shall require the consent of any holder of an
Asset Certificate to any amendment or supplement to the Asset Issuance Agreement
if the consent of such holder is not otherwise required by the terms of the
Asset Issuance Agreement.
Section 6.2 Preparation of Regulatory Reports.
---------------------------------
(a) Subject to the provisions of subsections (b) and (c) below, the
Company shall prepare or cause to be prepared, on behalf of the Trust Fund, and
delivered in a timely manner to the Trustee for its review and execution, such
supplementary and periodic information, documents and reports (such information,
documents or reports are referred to hereinafter as the "Periodic Report") as
may be required pursuant to Section 12(g) or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), by the rules and
regulations of the Securities and Exchange Commission (the "SEC") thereunder or
as a condition to approval of any application for relief ("Application for
Relief") and, in connection therewith, shall prepare such applications and
requests for exemption and other relief from such provisions as it may deem
appropriate. The Company shall be deemed to certify as to each Periodic Report
delivered to the Trustee for its review and execution that it conforms in all
material respects to applicable reporting requirements imposed by the Exchange
Act or is otherwise in form and content appropriate for filing with the SEC. The
Trustee (i) shall execute all such Periodic Reports and Applications for Relief
delivered as provided above and shall return the same to the Company for filing
with the SEC and other required filing offices, if any, on behalf of the Trust
Fund or (ii) shall authorize the Company to execute any such Periodic Report or
Application for Relief on the Trustee's behalf. The Company shall be deemed to
be
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authorized by the Trustee to execute such Periodic Report or Application for
Relief on the Trustee's behalf unless otherwise notified in writing by the
Trustee.
(b) Within 30 days after the beginning of the first fiscal year of the
Trust Fund during which the obligation to file Periodic Reports pursuant to the
Exchange Act shall have been suspended, the Company shall prepare, or cause to
be prepared, a notice on SEC Form 15 ("Form 15") and shall forward such notice
to the Trustee for execution, whereupon the Trustee shall return the executed
Form 15 to the Company or shall authorize the Company to execute such Form 15 on
the Trustee's behalf; provided, however, that the Company shall be under no
obligation to prepare such notice if the number of Certificateholders exceeds
300. Upon receipt of a written request from the Company, the Trustee shall
notify the Company as to the number of Certificateholders shown on the
Certificate Register. The Company shall file any notice on Form 15 with the SEC
in accordance with the provisions of Rule 15d-6 under the Exchange Act.
(c) Notwithstanding any other provision of this Agreement, the Trustee has
not assumed, and shall not by its performance hereunder be deemed to have
assumed, any of the duties or obligations of the Company or any other Person
with respect to (1) the registration of the Certificates pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), (2) the issuance or
sale of the Certificates, or (3) compliance with the provisions of the
Securities Act, the Exchange Act, or any applicable federal or state securities
or other laws including, without limitation, any requirements to update the
registration statement or prospectus relating to the Certificates in order to
render the same not materially misleading to investors.
(d) In connection with the Company's preparation of any Form 15 or of any
Periodic Report, the Trustee shall provide it with information which it may
reasonably request concerning the number and identity of the Holders appearing
on the Certificate Register maintained by the Certificate Registrar, but, other
than in respect of Depository Participants, the Trustee shall have no duty or
obligation to provide information which does not appear on the Certificate
Register, including any information concerning the ownership of Persons for whom
a nominee is the Holder of record.
ARTICLE VII.
THE TRUSTEE
Section 7.1 Duties of Trustee.
-----------------
(a) Upon acceptance of its duties hereunder, and prior to termination of
this Agreement in accordance with Article X, the Trustee shall, subject to
subsection (c) of this Section 7.1, perform such duties as are provided in this
Agreement for the benefit of all of the Certificateholders.
(b) Except as is otherwise provided in subsection (d) of this Section 7.1
and Section 2.2, the Trustee shall be under no duty or obligation to inspect,
review or examine any documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they are other than what they purport to be on their
face.
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(c) The Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement.
(d) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement but shall be under no duty or
obligation to determine that they are genuine, enforceable or appropriate for
the represented purpose or that they are other than what they purport to be on
their face; provided, however, that the Trustee shall be under no duty to
recalculate, verify or recompute any information provided to it and previously
calculated or computed by the Company, any REMIC Administrator, any
Administrator or any Asset Certificate Trustee.
(e) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
-------- -------
(i) The 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; and
(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 direction of Certificateholders of each Class affected thereby
holding Certificates evidencing Percentage Interests aggregating not less
than 25%, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Agreement; provided,
however, that if the Trustee shall receive conflicting directions from two
or more groups of Certificateholders of a Class holding Certificates that
evidence Percentage Interests aggregating not less than 25% at the time,
then the Trustee shall act pursuant to this Section 7.1(e)(iii) only at the
direction of Certificateholders of such Class holding Certificates that
evidence Percentage Interests aggregating not less than 50%; and provided,
however, that if the Trustee shall receive conflicting directions from
Certificateholders having the requisite Percentage Interests of two or more
Classes, then the Trustee shall act pursuant to this Section 7.1(e)(iii)
only at the direction of Certificateholders affected thereby holding
Percentage Interests aggregating not less than 50% at the time, with such
Percentage Interest recomputed as though all affected Classes constituted
one Class.
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<PAGE>
(f) The Trustee shall have no liability or responsibility to any
Person for the acts or omissions to act by the Company. No provision of
this Agreement shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
Section 7.2 Certain Matters Affecting the Trustee. Except as otherwise
-------------------------------------
provided in Section 7.1,
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, 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;
(b) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such opinion of counsel selected by it with due care;
(c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation thereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless the Certificateholders shall have
offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which may be incurred therein
or thereby;
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
(e) 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 of each Class affected thereby evidencing, as to
each such Class, Percentage Interests aggregating not less than 25%;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
assured to the Trustee to its reasonable satisfaction by the security
afforded to it by the terms of this Agreement, the Trustee may require from
the Certificateholders of each Class affected thereby indemnity reasonably
satisfactory to it against such expense or liability as a condition to the
making of such investigation; and
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(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys selected by it with due care.
Section 7.3 Trustee Not Liable for Certificates or Mortgage Loans. The
-----------------------------------------------------
statements contained in this Agreement and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Company and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations or warranties as to
the validity or sufficiency of this Agreement or of the Certificates (other than
the signature and countersignature of the Trustee on the Certificates) or any
Asset Certificate. The Trustee shall not be accountable for the use or
application by the Company of any of the Certificates or of the proceeds of such
Certificates.
Section 7.4 Trustee May Own Certificates. The Trustee 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 Trustee.
Section 7.5 Trustee's Fees and Expenses. As compensation for its services
---------------------------
hereunder, the Trustee shall be entitled to its fee payable pursuant to Sections
4.02(d) and 7.05 of the Asset Issuance Agreement. The Trustee shall also receive
reimbursement for all reasonable costs and expenses incurred hereunder in the
manner, and from the sources, provided by each Asset Issuance Agreement. The
Company hereby indemnifies and holds the Trustee harmless against any loss,
claim, liability or expense, including reasonable attorneys' fees, incurred,
arising out of or in connection with this Agreement or the Certificates,
including but not limited to any such loss, claim, liability or expense incurred
in connection with any legal action against the Trust Fund or the Trustee or any
director, officer, employee or agent thereof, or the performance of any of the
Trustee's duties under this agreement (other than any loss, claim, liability or
expense incurred by reason of willful misconduct or negligence on the part of
the Trustee). Any payment to the Trustee pursuant to the foregoing indemnity
shall be from the Company's own funds, without reimbursement therefor. The
obligation to reimburse unpaid fees and expenses and the indemnity by the
Company contemplated by this Section 7.5 shall survive termination of this
Agreement.
Section 7.6 Eligibility Requirements for Trustee.
------------------------------------
(a) The Trustee hereunder shall at all times be a commercial bank or trust
company organized and doing business under the laws of a state or of the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
corporation 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 7.6, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
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(b) The Trustee hereunder shall at all times be the same entity serving as
Asset Certificate Trustee under the Asset Issuance Agreement. The Trustee
agrees that if it resigns or is removed as Asset Certificate Trustee under the
Asset Issuance Agreement, it shall concurrently resign as Trustee hereunder.
(c) In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.6, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.7.
Section 7.7 Resignation or Removal of the Trustee.
-------------------------------------
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Company, provided,
--------
however, that if the Trustee resigns hereunder it agrees that it shall
- -------
concurrently resign as Asset Certificate Trustee under the Asset Issuance
Agreement. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument copies of which shall
be delivered to 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. The Trustee shall remain as Trustee hereunder until a
successor trustee is appointed in accordance herewith.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 7.6, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent or the subject
of an order for relief entered in a bankruptcy proceeding, 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 Company may remove the
Trustee and appoint a successor trustee by written instrument copies of which
shall be delivered to the Trustee so removed and the successor trustee;
provided, however, that in such event the Company shall also take action to
- -------- -------
cause the removal of the Asset Certificate Trustee (if the same entity as the
Trustee to be removed) under the Asset Issuance Agreement.
(c) The Company may at any time remove the Trustee for cause or, so long
as the compensation to be charged by the proposed successor trustee does not
exceed an amount equal to 100% of the compensation contemplated hereunder in
respect of the Trustee being removed, remove the Trustee without cause and
either (i) appoint a successor trustee by written instrument or instruments
copies of which shall be delivered to the Company, the Trustee so removed and to
the successor trustee so appointed or (ii) petition a court of competent
jurisdiction; provided, however, that in each such event the Company shall also
-------- -------
take action to cause the removal of the Asset Certificate Trustee (if the same
entity as the Trustee to be removed) under the Asset Issuance Agreement.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 7.8.
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Section 7.8 Successor Trustee.
-----------------
(a) Any successor trustee appointed as provided in Section 7.7 shall
execute, acknowledge and deliver to the Company and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Asset Certificates and related documents and statements held by it hereunder,
and the Company and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and certainly vest and confirm in the successor trustee all such rights, powers,
duties and obligations. The successor trustee shall execute and deliver to the
predecessor trustee receipts and releases for the Asset Certificates and related
documents and the Company shall execute and deliver such releases to the
predecessor trustee, subject to Section 7.1, as the predecessor trustee may
reasonably require. Any Trustee ceasing to act shall, nevertheless, retain its
rights hereunder with respect to any amounts due it hereunder.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 7.6.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Company shall mail notice of the succession of such trustee
hereunder to all Certificateholders at their addresses as shown in the
Certificate Register. If the Company fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Company.
Section 7.9 Merger or Consolidation of Trustee. Any corporation into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be eligible under the provisions of
Section 7.6, 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 7.10 Trustee Not Acting in Individual Capacity. Except as
-----------------------------------------
provided in this Article VII, in accepting the trusts hereby created, the
Trustee acts solely as Trustee hereunder and not in an individual capacity, and
all persons having a claim against the Trustee by reason of the transactions
contemplated by this Agreement will look only to the Trust Fund for payment or
satisfaction thereof.
Section 7.11 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the Company
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
to act as co-trustee or co-
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trustees, jointly with the Trustee, or separate trustee or separate trustees, of
all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity, such title to the Trust Fund, or any part thereof, and, subject
to the other provisions of this Agreement, such powers, duties, obligations,
rights and trusts as the Company and the Trustee may consider necessary or
desirable. If the Company shall not have joined in such appointment within 15
days after the receipt by it of a request to do so, the Trustee alone shall have
the power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 7.8 and no notice to holders of Certificates of the appointment of co-
trustee(s) or separate trustee(s) shall be required. All fees and expenses, if
any, incurred by the Trustee and arising out of the appointment of a co-trustee
or separate trustee pursuant to this Section 7.11 shall be considered
reimbursable fees and expenses of the Trustee for purposes of Section 7.5. All
fees and expenses, if any, incurred by the Company and arising out of the
appointment of a co-trustee or separate trustee pursuant to this Section 7.11
shall be considered reimbursable fees and expenses pursuant to Section 4.2.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 7.11 all rights, powers, duties and obligations 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, the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustees only at
the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustees may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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ARTICLE VIII.
CLAIMS
Section 8.1 Trustee May Enforce Claims without Possession of
------------------------------------------------
Certificate. All rights of action and claims under this Agreement or any of the
Certificates may be prosecuted to judgment or final decree, enforced and
collected by the Trustee without the possession of any of the Certificates or
the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall be for the benefit of
the holders of the Certificates in respect of which such judgment has been
recovered and shall be distributed in accordance with the order of priority of
payment set out in Section 4.2. Any surplus shall be available for the payment
of the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
Section 8.2 Rights and Remedies Cumulative. The Trustee may in its
------------------------------
discretion proceed to protect and enforce its rights and the rights of
Certificateholders by all available and appropriate proceedings, at law or in
equity, whether for the specific enforcement of any covenant or agreement in
this Agreement or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy. No right or remedy herein conferred upon or
reserved to the Trustee or to the Certificateholders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 8.3 Trustee May File Proofs of Claim.
--------------------------------
(a) In cases of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or judicial proceeding
relative to any obligor on the Asset Certificates or its creditors, the Trustee
(irrespective of whether the Trustee shall have made any demand thereunder)
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to
(i) file and prove a claim for the whole amount due, owing and
unpaid on the Asset Certificates and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Certificateholders allowed in such proceeding, and
(ii) collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same,
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such proceeding is hereby authorized by each
Certificateholder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
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Certificateholders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements, and advances of the Trustee,
its agents and counsel.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Certificateholder
any plan of reorganization, arrangement, adjustment, or composition affecting
any of the Certificates or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Certificateholder in any such
proceeding.
Section 8.4 Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder of any Certificate to exercise any right or remedy
accruing hereunder or otherwise shall impair any such right or remedy or
constitute a waiver of any such right of action or claim or default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Certificateholders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the
Certificateholders, as the case may be.
ARTICLE IX.
REMIC PROVISIONS
Section 9.1 REMIC Administration Provisions. It is intended that the
-------------------------------
REMIC formed hereunder shall constitute, and that the affairs of the Trust Fund
shall be conducted so as to qualify such REMIC as, a "real estate mortgage
investment conduit" as defined in and in accordance with such REMIC Provisions.
In furtherance of such intention, the Company covenants and agrees that it shall
cause the REMIC Administrator to act as agent (and the REMIC Administrator is
hereby appointed to act as agent) on behalf of the Trust Fund and the respective
Holders of the Residual Certificates and that the Company shall:
(i) prepare and file, or cause to be prepared and filed, in a timely
manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
(Form 1066) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to the
REMIC, using the calendar year as the taxable year and the accrual method
of accounting, containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times
and in such manner as may be required thereby;
(ii) within thirty days of the Closing Date, furnish or cause to be
furnished to the Internal Revenue Service, on Form 8811 or as otherwise may
be required by the Code, the name, title, address, and telephone number of
that person that the Holders of the Certificates may contact for tax
information relating thereto (and the Company shall cause the REMIC
Administrator to act as the representative of the REMIC for this purpose),
together with such additional information as may be required by such form,
and shall update such information at the time or times in the manner
required by the Code;
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(iii) make or cause to be made an election, on behalf of the REMIC,
to be treated as a REMIC, and make the appropriate designations, if
applicable, in accordance with Section 9.3 hereof on the federal tax return
of the REMIC for its first taxable year (and, if necessary, under
applicable state law);
(iv) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if
necessary, state tax authorities, all information returns or reports, or
furnish or cause to be furnished by telephone, mail, publication or other
appropriate method such information, as and when required to be provided to
them in accordance with the REMIC Provisions, including without limitation,
the calculation of any original issue discount using a CPR of 18% per
annum;
(v) as required by Section 3.2(b), provide information necessary
for the computation of tax imposed on the transfer of a Residual
Certificate (including the information required by Treasury Regulation
Section 1.860D-1(b)(5)(ii)) to the Internal Revenue Service and to a
Disqualified Organization, or an agent (including a broker, nominee or
other middleman) of a Disqualified Organization, or a pass-through entity
in which a Disqualified organization is the record holder of an interest
and to any other Person specified in Section 860E(e)(3) and (6) of the Code
as liable for the tax imposed under Section 860E(e) of the Code (the
reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax);
(vi) use its best reasonable efforts to conduct the affairs of the
REMIC at all times that any Certificates are outstanding so as to maintain
the status thereof as a REMIC under the REMIC Provisions;
(vii) not knowingly or intentionally take any action or omit to take
any action that would cause a REMIC Loss;
(viii) exercise reasonable care not to allow the creation of any
"interests" in the REMIC within the meaning of section 860D(a)(2) of the
Code other than the interests specified in the definition of the term
Certificate in Article I;
(ix) exercise reasonable care not to allow the occurrence of any
"prohibited transactions" within the meaning of section 860F of the Code,
unless the REMIC Administrator shall have provided an Opinion of Counsel to
the Trustee that such occurrence would not cause a REMIC Loss;
(x) exercise reasonable care not to allow the REMIC to receive
income from the performance of services or from assets not permitted under
the REMIC Provisions to be held by a REMIC;
(xi) pay, except as provided below, from amounts received pursuant
to Section 4.2, the amount of any federal or state tax, including
prohibited transaction taxes, taxes on certain contributions to the REMIC
after the Startup Day, and taxes on net income from foreclosure property,
imposed on the Trust Fund when and as the same shall be due and
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<PAGE>
payable (but such obligation shall not prevent the REMIC Administrator or
any other appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the REMIC Administrator from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings);
(xii) ensure that federal, state or local income tax or information
returns shall be signed by the Trustee or such other person as may be
required to sign such returns by the Code or state or local laws,
regulations or rules;
(xiii) cause the first federal income tax return of the REMIC to
include the information required by Treasury Regulation Section 1.860D-
I(d)(2) and Treasury Regulation Section 1.860F-4(b)(2) and set forth in
said tax returns the designations of the respective interests in such REMIC
as set forth in Section 9.3; and
(xiv) maintain such records relating to the REMIC, including but not
limited to the income, expenses, individual Mortgage Loans (including
Mortgaged Property), other assets and liabilities therefor, and the fair
market value and adjusted basis of the property of each determined at such
intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information.
The REMIC Administrator shall be entitled to be reimbursed pursuant to
Section 4.2 for any federal income taxes paid or payable pursuant to clause (xi)
of the preceding sentence, except to the extent that such taxes are imposed as a
result of the bad faith, misfeasance or negligence of the Company or the REMIC
Administrator in the performance of its obligations hereunder. The Asset
Issuance Agreement provides that under certain circumstances the Administrator
thereunder shall obtain Opinions of Counsel at the expense of the Trust Fund.
Such expenses shall be submitted to the REMIC Administrator for approval and,
upon approval in writing, shall either be paid by the REMIC Administrator, to
the extent such expenses do not exceed the fees paid to the REMIC Administrator
hereunder and under the Asset Issuance Agreement, or to the extent such expenses
exceed such fees, shall be submitted by the REMIC Administrator to the Trustee
for payment pursuant to Section 4.2. Pursuant to the Asset Issuance Agreement,
the Administrator thereunder has agreed to be the REMIC Administrator hereunder.
Section 9.2 Investments. No Permitted Instrument shall be sold before
-----------
the maturity thereof if the sale thereof would result in the realization of gain
prior to maturity unless the Trustee has obtained an Opinion of Counsel that
such sale or disposition will not cause a REMIC Loss.
Section 9.3 Designations under the REMIC Provisions.
---------------------------------------
(a) The Company hereby designates the Class A1 and Class A2 Certificates
as "regular interests," and the Class R Certificates as the single class of
"residual interests,"in the REMIC for purposes of the REMIC Provisions.
(b) The Closing Date will be the "Startup Day" for the REMIC for purposes
of the REMIC Provisions.
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<PAGE>
(c) The "tax matters person" with respect to the REMIC for purposes of the
REMIC Provisions shall be (i) the Company, if the Company is the owner of a
Class R Certificate, or (ii) in any other case, the beneficial owner of the
Class R Certificate having the largest Percentage Interest of such Certificates;
provided, however, that such beneficial owner and, to the extent relevant, each
- -------- -------
other holder of a Class R Certificate, by its acceptance thereof irrevocably
appoints the Company as its agent and attorney-in-fact to act as "tax matters
person" with respect to the REMIC for purposes of the REMIC Provisions.
(d) The "latest possible maturity date" of the regular interests in the
REMIC for purposes of section 860G(a)(1) of the Code is the Latest Possible
Maturity Date.
ARTICLE X.
TERMINATION
Section 10.1 Termination upon Repurchase by the Company or Liquidation of
------------------------------------------------------------
All Asset Certificates. Subject to Section 10.2, the respective obligations and
- ----------------------
responsibilities of the Company and the Trustee created hereby (other than the
rights, privileges and immunities of the Trustee under Article VII, the
obligations of the Company under Section 7.5 and the obligation of the Trustee
to make certain payments to Certificateholders after the final Distribution Date
and the obligation of the Trustee to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the final Distribution Date pursuant to this Article X following the earlier
of (a) the repurchase by the Company of all Asset Certificates remaining in the
Trust Fund at a price equal to 100% of the Asset Principal Balance of each Asset
Certificate remaining in the Trust Fund (to be paid on the date provided below)
and (b) the later of the final payment or other liquidation of the last Asset
Certificate remaining in the Trust Fund; provided, however, that in no event
-------- -------
shall the Trust Fund created hereby continue beyond the date which is the
earlier of (i) the Latest Possible Maturity Date and (ii) the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States of America to the Court of St.
James, living on the date of this Agreement. The right of the Company to
repurchase all Asset Certificates pursuant to clause (a) above shall be
conditioned upon the Asset Principal Balance of the Asset Certificates, at the
time of any such repurchase, aggregating an amount less than or equal to ten
percent (10%) of the Asset Principal Balance of the Asset Certificates as of the
Cut-off Date.
Notice of any termination, specifying the Distribution Date upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders 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 specifying (A) the Distribution Date upon which final payment of
the Certificates will be made upon presentation and surrender of Certificates at
the office of the Trustee therein designated, (B) the estimated amount of any
such final payment and (C) 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. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to Certificateholders. If such notice is given in
connection with the exercise by the Company of its right of repurchase of the
Asset
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<PAGE>
Certificates, the Company shall deposit in the Certificate Account not later
than 11:00 a.m. on the Business Day preceding the final Distribution Date in
next day funds an amount equal to the price described above, it being understood
that the Trust Fund shall be entitled to any distribution in respect of the
Asset Certificates due and payable on the Remittance Date preceding the date of
repurchase. Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders the amounts specified in
Section 10.3, any such distribution being in lieu of the distribution otherwise
required to be made on the Distribution Date upon which the repurchase is
effected. Upon certification to the Trustee following such final deposit, the
Trustee shall promptly release to the Company the Asset Certificates.
On the final Distribution Date, the Trustee shall distribute amounts as
specified in Section 10.3. Distributions on each Certificate shall be made on
the final Distribution Date in the manner specified in Section 4.3 but only upon
presentation and surrender of the Certificates.
If all of the Certificateholders do not surrender their Certificates for
cancellation within six months after the date specified in the above-mentioned
written notice, the Trustee shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within one year after the second
notice all the Certificates have not been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain subject hereto.
Section 10.2 Additional Termination Requirements.
-----------------------------------
(a) If the Company exercises its purchase option as provided in Section
10.1, the Trust Fund and the REMIC established hereby shall be terminated upon
satisfaction of the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel to the effect that the failure to
comply with the requirements of this Section 10.2 will not (1) result in the
imposition of taxes on "prohibited transactions" of the REMIC as defined in
Section 860F of the Code, or (2) cause the REMIC established hereunder to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date set forth in
the notice given by the Trustee under Section 10.1, the Company shall
prepare and the Trustee shall execute and adopt a plan of complete
liquidation for the REMIC within the meaning of Section 860F(a)(4)(A)(i) of
the Code, which shall be evidenced by such notice; and
(ii) Within 90 days after the time of adoption of such a plan of
complete liquidation, the Trustee shall sell all of the assets of the Trust
Fund to the Company for cash in accordance with Section 10.1.
(2) By their acceptance of the Residual Certificates, the Holders thereof
hereby authorize the Company to adopt such a plan of complete liquidation which
authorization shall be binding on all successor Holders of the Residual
Certificates.
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<PAGE>
(3) On the final federal income tax return for the REMIC the Trustee will
attach a statement specifying the date of the adoption of the plan of
liquidation.
Section 10.3 Distributions on the Final Distribution Date. On the final
--------------------------------------------
Distribution Date, the Trustee shall distribute amounts available for
distribution on the Certificates as provided in Section 4.2. On the final
Distribution Date the Available Funds in respect of each Asset Group shall
include the regular distribution made on the related Asset Certificates on the
related Remittance Date and, if the final distribution is made pursuant to a
repurchase under Section 10.1, the purchase price paid by the Company pursuant
to Section 10.1.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.1 Amendment. This Agreement may be amended from time to time
---------
by the Company and the Trustee, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein or therein which may be defective or inconsistent with any
other provisions herein, or to add any other provisions with respect to matters
or questions arising under this Agreement, provided that subject to the next
-------- ----
sentence, in each case such action will not adversely affect in any material
respect the interests of any Certificateholder. Any amendment described above
shall be deemed not to adversely affect in any material respect the interests of
the Certificateholders if either (i) an Opinion of Counsel is obtained to such
effect, or (ii) the Person requesting the amendment obtains a letter from each
Rating Agency confirming that the amendment, if made, would not result in the
downgrading or withdrawal of the rating then assigned by such Rating Agency to
the Certificates. Notwithstanding the foregoing, the Trustee and the Company
may at any time and from time to time amend this Agreement, without the consent
of the Certificateholders, to modify, eliminate or add to any of its provisions
to such extent as shall be necessary or appropriate to maintain the
qualification of the REMIC as a REMIC under the Code or to avoid or minimize the
risk of the imposition of any tax on the Trust Fund pursuant to the Code that
would be a claim against the Trustee at any time prior to the final redemption
of the Certificates, provided that the Trustee has obtained an Opinion of
Counsel (which opinion also shall be addressed to the Company) to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Company and the
Trustee with the consent of the Certificateholders evidencing not less than 66%
of the Voting Rights of the Certificates, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (a) reduce in any
-------- -------
manner the amount of, or delay the timing of, collections of payments on the
Asset Certificates or distributions which are required to be made on any
Certificate without the consent of the Holder of such Certificate, (b) adversely
affect in any material respects the interests of the Holders of any Class of
Certificates in any manner other than as described in (a), without the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than 66% of such Class, or (c) reduce the aforesaid percentages of
Certificates of any Class required to consent to any such amendment, without the
consent of the Holders of all Certificates of such Class then outstanding.
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<PAGE>
Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel to the effect that such amendment will not cause
a REMIC Loss at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment or consent the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder.
It shall not be necessary for the consent of the Certificateholders under
this Section 11.1 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof of Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.
Section 11.2 Recordation of Agreement; Counterparts. To the extent
--------------------------------------
permitted by applicable law, a memorandum describing this Agreement is subject
to recordation in all appropriate public offices, such recordation to be
effected by the Company and at the Company's expense and direction, but only
upon direction of the Company accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 11.3 Limitation on Rights of Certificateholders. The death or
------------------------------------------
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor shall it entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided herein, no Certificateholder shall have any
right to vote or in any manner otherwise control the operation and management of
the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners; nor, to
the extent permitted by applicable law, shall any Certificateholder be under any
liability to any third person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates of each Class affected thereby evidencing, as to each
such Class, Percentage Interests aggregating not less than 50% 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
indemnity reasonably satisfactory to it as it may require against the costs,
expenses and
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<PAGE>
liabilities to be incurred therein or thereby, and 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; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing of any provisions of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 11.3, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Section 11.4 Limitation on Liability of Parties. Each party to this
----------------------------------
Agreement shall be liable under this Agreement only to the extent that
obligations are imposed upon the party against whom enforcement is sought.
Section 11.5 Limitation on Liability of Directors, Officers, Employees and
-------------------------------------------------------------
Agents of a Party. No director, officer, employee or agent of any party to this
- -----------------
Agreement shall be liable to any other party for the taking of any action or for
refraining to take any action in good faith pursuant to this Agreement.
SECTION 11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE LAWS
OF THE UNITED STATES APPLICABLE TO TRANSACTIONS IN SUCH STATE, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH AND GOVERNED BY SUCH LAWS.
Section 11.7 Notices. All demands, notices and communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if delivered
personally or by a recognized (overnight) courier service or by telecopy at or
mailed by registered mail, postage prepaid, to (a) in the case of the Company,
2711 North Haskell Avenue, Suite 900, Dallas, Texas 75204, Attention: Julie A.
Moore, Telecopy No. (214) 874-2599 (confirmation No. (214) 874-2501), and (b) in
the case of the Trustee, 600 Travis, 8th Floor, Houston, Texas 77002, Attention:
Corporate Trust Department (Telecopy No. (713) 216-4880 (confirmation No. (713)
216-5884), or such other address as may hereafter be furnished by any of the
parties hereto, in writing, to the other parties hereto. Unless otherwise
specified herein, any notice required or permitted to be mailed to a Certificate
holder shall be given by first class mail, postage prepaid, at the address of
such Holder as shown in the Certificate Register. Any notice so mailed within
the time prescribed in this Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder receives such notice. The
parties to this Agreement agree that when the Trustee takes an action or agrees
to take an action upon receipt of a telex, telecopy or facsimile transmission,
such telex, telecopy or facsimile transmission shall be deemed to be an original
document for all purposes (including court proceedings).
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<PAGE>
Section 11.8 Notices to the Rating Agency. The Company shall deliver
----------------------------
written notice of the following events to the Rating Agency promptly following
the occurrence thereof: material amendment to this Agreement or to the Asset
Issuance Agreement; any event of default; change in or termination of the
Trustee; and final payment to Certificateholders. In addition, the Company
shall deliver copies of the Distribution Date Statements to the Rating Agency at
the time such documents are required to be delivered pursuant to this Agreement.
Notwithstanding the foregoing, the failure to deliver such notices or copies
shall not constitute an event of default under this Agreement.
Section 11.9 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 11.10 Restrictions on Sale of Assets. The Trustee is prohibited
------------------------------
from selling or otherwise disposing of any assets of the Trust Fund, except as
specifically set forth herein, without the consent of all of the
Certificateholders unless the Trustee shall have received an Opinion of Counsel
to the effect that such disposition will not cause a REMIC Loss.
Section 11.11 Intention of Parties.
--------------------
(a) Each of the parties hereto expressly intends and agrees that the
transfers contemplated and effected under this Agreement are absolute sales and
not pledges or assignments of only a security interest and shall be given effect
as such for all purposes. The limited rights of recourse hereunder against the
Company are intended to provide to the Trustee a remedy for breach of
representations and warranties by the Company relating to the condition of the
property sold, rather than to the collectibility of underlying indebtedness, and
therefore are consistent with warranties ordinarily given by a seller of goods
under Article 2 of the Uniform Commercial Code.
(b) It is the intention of the Trustee that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the beneficial
ownership interests represented by the Certificates shall be nonassessable for
any losses or expenses of the Trust Fund or for any reason whatsoever, and that
Certificates upon execution, countersignature and delivery thereof by the
Trustee are and shall be deemed fully paid.
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<PAGE>
IN WITNESS WHEREOF, the Company and the Trustee have caused their names to
be signed hereto by their respective officers thereunto duly authorized all as
of the day and year first above written.
CMC SECURITIES CORPORATION II
By:_______________________________________________
Wade Walker
Vice President - Asset and Liability Management
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By:_______________________________________________
Rafael Herrera
Vice President and Trust Officer
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<PAGE>
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Wade Walker, known to me to be the Vice President -
Asset and Liability Management of CMC Securities Corporation II, a Delaware
corporation, the corporation that executed the within instrument, and also known
to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
____________________________
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On the 28th day of June, 1996, before me, a notary public in and for said
State, personally appeared Rafael Herrera, known to me to be a Vice President
and Trust Officer of Texas Commerce Bank National Association, a national
banking association, the association that executed the within instrument, and
also known to me to be the person who executed it on behalf of said association,
and acknowledged to me that such association 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.
________________________________________
My Commission Expires: NOTARY PUBLIC
In and For the State of Texas
____________________________
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<PAGE>
EXHIBIT A
Form of Certificates
--------------------
[begins on next page]
<PAGE>
PRINCIPAL IN RESPECT OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE
AGREEMENT (AS DEFINED BELOW). ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE AS SET FORTH HEREON. THIS CERTIFICATE DOES NOT
REPRESENT AN INTEREST IN OR OBLIGATION OF CMC SECURITIES CORPORATION II OR THE
TRUSTEE (AS DEFINED HEREIN).
THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") (AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(1) AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
REMIC PASS-THROUGH CERTIFICATE, SERIES 1996-B
evidencing a beneficial ownership interest in a
trust fund which consists primarily of pass-through certificates,
evidencing interests in pools of
conventional, adjustable rate, one- to four-family
mortgage loans, sold by
CMC SECURITIES CORPORATION II
No. 1 Initial Class A1 Certificate
Principal Balance
Class A1 $41,914,009.00
Certificate Interest Initial Certificate Principal
Rate: Variable Balance of this Certificate:
$______________
Cut-off Date: June 1, 1996 CUSIP: 125714 ___
<PAGE>
THIS CERTIFIES THAT
_______________________________________
is the registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the initial Certificate Principal Balance of this
Certificate by the aggregate initial Certificate Principal Balance of all Class
A1 Certificates, both as specified above) in certain distributions with respect
to the Trust Fund, consisting primarily of pass-through certificates (the "Asset
Certificates"), evidencing the entire beneficial ownership interest in certain
pools of conventional, adjustable rate, one- to four-family mortgage loans (the
"Mortgage Loans"), sold by CMC Securities Corporation II, a corporation
organized and existing under the laws of the State of Delaware (the "Company").
The Trust Fund was created pursuant to a Pooling Agreement dated as of June 1,
1996 (the "Agreement") between the Company and Texas Commerce Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereinbelow. To the extent not defined herein,
the terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
The Agreement requires the distribution on the 25th day of each month or,
if such 25th day is not a Business Day, the Business Day immediately following
(the "Distribution Date"), com mencing in July 1996, to the Person in whose
name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month of such Distribution
Date (the "Record Date"), of an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the aggregate amount required to be
distributed to Holders of Certificates of the same Class as this Certificate
pursuant to the Agreement.
Distributions on this Certificate will be made by the Trustee by check or
money order mailed to the Person entitled thereto at the address appearing in
the Certificate Register or, upon written request by the Certificateholder, by
such other means of payment as such Person and the Trustee shall agree. Except
as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, 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
maintained for that purpose by the Trustee specified in the final distribution
notice to the Holder hereof. Any reduction in the principal amount of this
Certificate (or any one or more predecessor Certificates) effected by
distributions made on any Distribution Date shall be binding upon all holders of
this Certificate and of any Certificate issued upon the registration of transfer
herefor or in exchange hereof or in lieu hereof, whether or not noted hereon.
This Certificate is one of a duly authorized issue of Certificates
designated as REMIC Pass-Through Certificates, Series 1996-B, issued in three
Classes (Class A1, Class A2 and Class R, herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain payments on and
collections in respect of the Asset Certificates, all as more specifically set
forth in the Agreement. The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on
-2-
<PAGE>
deposit in the Certificate Account for payment hereunder and that the Trustee in
its individual capacity is not personally 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 evi denced 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
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Holders of Certificates
evidencing not less than 66% of the Voting Rights of the Certificates. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement, and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in the City of New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class of authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee and the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement, and the
Trust Fund created thereby, shall terminate upon payment to the
Certificateholders, or provision therefor, in accordance with the Agreement
following the earlier of (a) the repurchase by the Company of all Asset
-3-
<PAGE>
Certificates remaining in the Trust Fund at a price equal to 100% of the unpaid
principal balance of each such Asset Certificate, and (b) the later of the final
payment or other liquidation of the last Asset Certificate remaining in the
Trust Fund. The right of the Company to repurchase all the Asset Certificates
is subject to the aggregate Asset Principal Balance of all of the Asset
Certificates at the time of repurchase being less than or equal to ten percent
(10%) of the Asset Principal Balance thereof as of the Cut-off Date. The
Company's exercise of such right will result in early retirement of the
Certificates.
-4-
<PAGE>
Unless this Certificate has been countersigned by 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 under its official seal.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
(SEAL) By:____________________________________________________
Authorized Signatory of
Texas Commerce Bank National Association,
not in its individual capacity but solely as Trustee
Countersigned:
By:____________________________________
Authorized Signatory of
Texas Commerce Bank National
Association, not in its individual capacity
but solely as Trustee
Dated:
-5-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert social security
or other identifying number of assignee)
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
this Certificate evidencing a Percentage Interest in certain distributions with
respect to the Trust Fund and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of said Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of like Class and Percentage Interest, to the above named assignee and deliver
such Certificate to the following address:
Dated:
__________________________________________________
Signature by or on behalf of assignor
__________________________________________________
Signature Guaranteed
-6-
<PAGE>
PRINCIPAL IN RESPECT OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE
AGREEMENT (AS DEFINED BELOW). ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE AS SET FORTH HEREON. THIS CERTIFICATE DOES NOT
REPRESENT AN INTEREST IN OR OBLIGATION OF CMC SECURITIES CORPORATION II OR THE
TRUSTEE (AS DEFINED HEREIN).
THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") (AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(1) AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
REMIC PASS-THROUGH CERTIFICATE, SERIES 1996-B
evidencing a beneficial ownership interest in a
trust fund which consists primarily of pass-through certificates,
evidencing interests in pools of
conventional, adjustable rate, one- to four-family
mortgage loans, sold by
CMC SECURITIES CORPORATION II
No. 1 Initial Class A2 Certificate
Principal Balance
Class A2 $165,576,346
Certificate Interest Initial Certificate Principal
Rate: Variable Balance of this Certificate:
$_______________
Cut-off Date: June 1, 1996 CUSIP: 125714 ____
<PAGE>
THIS CERTIFIES THAT
_______________________________
is the registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the initial Certificate Principal Balance of this
Certificate by the aggregate initial Certificate Principal Balance of all Class
A2 Certificates, both as specified above) in certain distributions with respect
to the Trust Fund, consisting primarily of pass-through certificates (the "Asset
Certificates"), evidencing the entire beneficial ownership interest in certain
pools of conventional, adjustable rate, one- to four-family mortgage loans (the
"Mortgage Loans"), sold by CMC Securities Corporation II, a corporation
organized and existing under the laws of the State of Delaware (the "Company").
The Trust Fund was created pursuant to a Pooling Agreement dated as of June 1,
1996 (the "Agreement") between the Company and Texas Commerce Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereinbelow. To the extent not defined herein,
the terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
The Agreement requires the distribution on the 25th day of each month or,
if such 25th day is not a Business Day, the Business Day immediately following
(the "Distribution Date"), com mencing in July 1996, to the Person in whose
name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month of such Distribution
Date (the "Record Date"), of an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the aggregate amount required to be
distributed to Holders of Certificates of the same Class as this Certificate
pursuant to the Agreement.
Distributions on this Certificate will be made by the Trustee by check or
money order mailed to the Person entitled thereto at the address appearing in
the Certificate Register or, upon written request by the Certificateholder, by
such other means of payment as such Person and the Trustee shall agree. Except
as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, 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
maintained for that purpose by the Trustee specified in the final distribution
notice to the Holder hereof. Any reduction in the principal amount of this
Certificate (or any one or more predecessor Certificates) effected by
distributions made on any Distribution Date shall be binding upon all holders of
this Certificate and of any Certificate issued upon the registration of transfer
herefor or in exchange hereof or in lieu hereof, whether or not noted hereon.
This Certificate is one of a duly authorized issue of Certificates
designated as REMIC Pass-Through Certificates, Series 1996-B, issued in three
Classes (Class A1, Class A2 and Class R, herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain payments on and
collections in respect of the Asset Certificates, all as more specifically set
forth in the Agreement. The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on
-2-
<PAGE>
deposit in the Certificate Account for payment hereunder and that the Trustee in
its individual capacity is not personally 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 evi denced 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
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Holders of Certificates
evidencing not less than 66% of the Voting Rights of the Certificates. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement, and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in the City of New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class of authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee and the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement, and the
Trust Fund created thereby, shall terminate upon payment to the
Certificateholders, or provision therefor, in accordance with the Agreement
following the earlier of (a) the repurchase by the Company of all Asset
-3-
<PAGE>
Certificates remaining in the Trust Fund at a price equal to 100% of the unpaid
principal balance of each such Asset Certificate, and (b) the later of the final
payment or other liquidation of the last Asset Certificate remaining in the
Trust Fund. The right of the Company to repurchase all the Asset Certificates
is subject to the aggregate Asset Principal Balance of all of the Asset
Certificates at the time of repurchase being less than or equal to ten percent
(10%) of the Asset Principal Balance thereof as of the Cut-off Date. The
Company's exercise of such right will result in early retirement of the
Certificates.
-4-
<PAGE>
Unless this Certificate has been countersigned by 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 under its official seal.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
(SEAL) By:____________________________________________________
Authorized Signatory of
Texas Commerce Bank National Association,
not in its individual capacity but solely as Trustee
Countersigned:
By:_____________________________________
Authorized Signatory of
Texas Commerce Bank National
Association, not in its individual capacity
but solely as Trustee
Dated:
-5-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfers)
unto
(Please insert social security
or other identifying number of assignee)
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
this Certificate evidencing a Percentage Interest in certain distributions with
respect to the Trust Fund and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of said Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of like Class and Percentage Interest, to the above named assignee and deliver
such Certificate to the following address:
Dated:
__________________________________________________
Signature by or on behalf of assignor
__________________________________________________
Signature Guaranteed
-6-
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF CMC
SECURITIES CORPORATION II OR THE TRUSTEE (AS DEFINED HEREIN).
THIS CERTIFICATE IS A RESIDUAL INTEREST IN A REMIC. BECAUSE THIS CERTIFICATE
CONSTITUTES A REMIC RESIDUAL INTEREST UNDER THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), THE HOLDER SHALL BE REQUIRED TO REPORT, FOR FEDERAL
INCOME TAX PURPOSES, THIS CERTIFICATE'S PERCENTAGE INTEREST OF THE TAXABLE
INCOME OF THE REMIC.
REMIC PASS-THROUGH CERTIFICATE, SERIES 1996-B
evidencing a beneficial ownership interest in a
trust fund which consists primarily of pass-through
certificates, evidencing interests in pools of
conventional, adjustable rate, one- to four-family
mortgage loans, sold by
CMC SECURITIES CORPORATION II
No. 1 Initial Class R Certificate
Principal Balance
Class R $100
Certificate Interest Initial Certificate Principal
Rate: Variable Balance of this Certificate:
$___________
Cut-off Date: June 1, 1996 CUSIP: 125714 ___
THIS CLASS R CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
UNLESS, PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE
TRUSTEE AN AFFIDAVIT STATING THAT SUCH TRANSFEREE (A) IS NOT A DISQUALIFIED
ORGANIZATION (AS DEFINED IN SECTION 860E(E)(5) OF THE CODE) AND IS NOT ACQUIRING
THIS CLASS R CERTIFICATE AS AN AGENT, TRUSTEE OR NOMINEE ACTING ON BEHALF OF A
PERSON WHO IS A DISQUALIFIED ORGANIZATION; (B) AGREES TO BE BOUND BY AND TO
ABIDE BY THE TRANSFER RESTRICTIONS APPLICABLE TO A CLASS R CERTIFICATE; (C) IS
NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE TO FACILITATE THE
CLEARANCE AND SETTLEMENT OF SUCH SECURITY THROUGH ELECTRONIC BOOK-ENTRY CHANGES
IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS; (D) UNDERSTANDS THAT IT MUST TAKE
INTO ACCOUNT ITS PERCENTAGE INTEREST OF THE TAXABLE INCOME RELATING TO THIS
CERTIFICATE; (E) HAS NO INTENTION TO IMPEDE THE ASSESSMENT OR
<PAGE>
COLLECTION OF ANY FEDERAL, STATE OR LOCAL INCOME TAXES LEGALLY REQUIRED TO BE
PAID WITH RESPECT TO THIS CERTIFICATE; (F) WILL NOT TRANSFER THIS CERTIFICATE TO
ANY PERSON OR ENTITY THAT IT HAS REASON TO BELIEVE HAS THE INTENTION TO IMPEDE
THE ASSESSMENT OR COLLECTION OF SUCH TAXES; (G) HAS HISTORICALLY PAID ITS DEBTS
AS THEY BECOME DUE; (H) INTENDS TO CONTINUE TO PAY ITS DEBTS AS THEY COME DUE IN
THE FUTURE; (I) UNDERSTANDS THAT, AS THE HOLDER OF A RESIDUAL INTEREST, IT MAY
INCUR LIABILITIES IN EXCESS OF ANY CASH FLOWS GENERATED BY THIS CERTIFICATE; AND
(J) INTENDS TO PAY ANY AND ALL TAXES ASSOCIATED WITH HOLDING THIS CERTIFICATE AS
THEY BECOME DUE.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT IS A
"NON-U.S. PERSON, UNLESS (I) SUCH PERSON HOLDS THIS CERTIFICATE IN CONNECTION
WITH THE CONDUCT OF A TRADE OR BUSINESS WITHIN THE UNITED STATES AND FURNISHES
THE TRANSFEROR AND THE TRUSTEE WITH AN EFFECTIVE INTERNAL REVENUE SERVICE FORM
4224 OR (II) THE TRANSFEREE DELIVERS TO BOTH THE TRANSFEROR AND THE TRUSTEE AN
OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN ACCORDANCE WITH THE
REQUIREMENTS OF THE CODE AND THE REGULATIONS PROMULGATED THEREUNDER AND THAT
SUCH TRANSFER OF THIS CERTIFICATE WILL NOT BE DISREGARDED FOR FEDERAL INCOME TAX
PURPOSES. THE TERM "NON-U.S. PERSON" MEANS A PERSON WHO IS NOT ONE OF THE
FOLLOWING: A CITIZEN OR RESIDENT OF THE UNITED STATES, A CORPORATION,
PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER THE LAWS OF THE
UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR AN ESTATE OR TRUST THAT
IS SUBJECT TO U.S. FEDERAL INCOME TAX REGARDLESS OF THE SOURCE OF ITS INCOME.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST THEREIN SHALL BE MADE
TO ANY PERSON UNLESS THE TRUSTEE HAS RECEIVED A CERTIFICATE FROM THE TRANSFEREE
TO THE EFFECT THAT SUCH TRANSFEREE IS NOT A PERSON WHICH IS AN EMPLOYEE BENEFIT
PLAN TRUST OR ACCOUNT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR A
GOVERNMENTAL PLAN, DEFINED IN SECTION 3(32) OF ERISA SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (ANY SUCH PERSON BEING A "PLAN") AND IS NOT AN
ENTITY, INCLUDING AN INSURANCE COMPANY SEPARATE ACCOUNT, WHOSE UNDERLYING ASSETS
INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
-2-
<PAGE>
THIS CERTIFIES THAT
___________________________
is the registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the initial Certificate Principal Balance of this
Certificate by the aggregate initial Certificate Principal Balance of all Class
R Certificates, both as specified above) in certain distributions with respect
to the Trust Fund consisting primarily of pass-through certificates (the "Asset
Certificates"), evidencing the entire beneficial ownership interest in certain
pools of conventional, adjustable rate, one- to four-family mortgage loans (the
"Mortgage Loans"), sold by CMC Securities Corporation II, a corporation
organized and existing under the laws of the State of Delaware (the "Company").
The Trust Fund was created pursuant to a Pooling Agreement dated as of June 1,
1996 (the "Agreement") between the Company and Texas Commerce Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereinbelow. To the extent not defined herein,
the terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
The Agreement requires the distribution on the 25th day of each month or,
if such 25th day is not a Business Day, the Business Day immediately following
(the "Distribution Date"), com mencing in July 1996, to the Person in whose
name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month of such Distribution
Date (the "Record Date"), of an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the aggregate amount required to be
distributed to Holders of Certificates of the same Class as this Certificate
pursuant to the Agreement.
Distributions on this Certificate will be made by the Trustee by check or
money order mailed to the Person entitled thereto at the address appearing in
the Certificate Register or, upon written request by the Certificateholder, by
such other means of payment as such Person and the Trustee shall agree. Except
as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, 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
maintained for that purpose by the Trustee specified in the final distribution
notice to the Holder hereof. Any reduction in the principal amount of this
Certificate (or any one or more predecessor Certificates) effected by
distributions made on any Distribution Date shall be binding upon all holders of
this Certificate and of any Certificate issued upon the registration of transfer
herefor or in exchange hereof or in lieu hereof, whether or not noted hereon.
This Certificate is one of a duly authorized issue of Certificates
designated as REMIC Pass-Through Certificates, Series 1996-B, issued in three
Classes (Class A1, Class A2 and Class R, herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain payments on and
collections in respect of the Asset Certificates, all as more specifically set
forth in the Agreement. The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on
-3-
<PAGE>
deposit in the Certificate Account for payment hereunder and that the Trustee in
its individual capacity is not personally 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 evi denced 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
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Holders of Certificates
evidencing not less than 66% of the Voting Rights of the Certificates. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement, and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in the City of New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class of authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class of authorized denominations
evidencing the same aggregate Percentage Interest as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee and the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement, and the
Trust Fund created thereby, shall terminate upon payment to the
Certificateholders, or provision therefor, in accordance with the Agreement
following the earlier of (a) the repurchase by the Company of all Asset
-4-
<PAGE>
Certificates remaining in the Trust Fund at a price equal to 100% of the unpaid
principal balance of each such Asset Certificate, and (b) the later of the final
payment or other liquidation of the last Asset Certificate remaining in the
Trust Fund. The right of the Company to repurchase all the Asset Certificates
is subject to the aggregate Asset Principal Balance of all of the Asset
Certificates at the time of repurchase being less than or equal to ten percent
(10%) of the Asset Principal Balance thereof as of the Cut-off Date. The
Company's exercise of such right will result in early retirement of the
Certificates.
-5-
<PAGE>
Unless this Certificate has been countersigned by 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 under its official seal.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
(SEAL) By:____________________________________________________
Authorized Signatory of
Texas Commerce Bank National Association,
not in its individual capacity but solely as Trustee
Countersigned:
By:__________________________________
Authorized Signatory of
Texas Commerce Bank National Association,
not in its individual capacity but solely as Trustee
Dated:
-6-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfers)
unto
(Please insert social security
or other identifying number of assignee)
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
this Certificate evidencing a Percentage Interest in certain distributions with
respect to the Trust Fund and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of said Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of like Class and Percentage Interest, to the above named assignee and deliver
such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:______________________
__________________________________________________
Signature by or on behalf of assignor
__________________________________________________
Signature Guaranteed
-7-
<PAGE>
EXHIBIT B
Asset Schedule
--------------
CMC Securities Corporation II
Portfolio Pass-Through Certificates
Series 1993PA-1
Series 1993PA-3
Series 1993PA-6
Series 1993PA-8
Series 1993PA-11
Series 1993PA-12
Series 1993PA-15
Series 1993PA-16
Series 1993PA-17
Series 1993PA-18
Series 1993PA-19
Series 1993PA-20
Series 1993PA-21
Series 1993PA-24
Series 1993PA-25
Series 1993PA-26
<PAGE>
EXHIBIT C
Transfer Affidavit for Residual Interest
Pursuant to Sections 860D(a)(6)(A) and 860E(e)(Y)
of the Internal Revenue Code of 1986, as Amended
------------------------------------------------
Re: CMC Securities Corporation II
REMIC Pass-Through Certificates, Series 1996-B
Class R Certificates ("Residual Certificates")
STATE OF ______________ (S)
(S)
COUNTY OF _____________ (S)
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ________________________________, the
proposed Transferee (the "Transferee") of $______________ original Certificate
Principal Balance of the Class R Certificates issued pursuant to a Pooling
Agreement (the "Agreement") dated as of June 1, 1996 between CMC Securities
Corporation II (the "Company") and Texas Commerce Bank National Association, as
Trustee. Capitalized terms used but not defined herein are defined in Schedule
I attached hereto. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee understands that the Residual Certificates represent
the "residual interest" in a "real estate mortgage investment conduit" as such
terms are defined in Sections 860G(a)(2) and 860D(a) of the Code, respectively.
For purposes of this Affidavit the term "Residual Interest" shall mean the
rights represented by the Residual Certificates.
3. The Transferee is not, as of the date hereof, and will not be, as of
the date of the Transfer, a Disqualified Organization as defined in Schedule I.
The Transferee is acquiring its Ownership Interest in the Residual Interest
either (i) for its own account or (ii) as nominee, trustee or agent for another
Person and has attached hereto a Transfer Affidavit from such Person in
substantially the same form as this Transfer Affidavit. If clause (ii) of the
preceding sentence is applicable, such Person is not a Disqualified Organization
and the Transferee has no knowledge that any such Transfer Affidavit from such
Person is false. The Transferee will endeavor to remain a Person who is not a
Disqualified Organization for so long as it retains its Ownership Interest in
the Residual Interest.
4. The Transferee (A) is not an entity that will hold a Residual
Certificate as nominee (a "Book-Entry Nominee") to facilitate the clearance and
settlement of such security through electronic book-entry changes in accounts of
participating organizations; (B) understands that it must take into account the
taxable income relating to a Residual Certificate; (C) has no intention to
impede the assessment or collection of any federal, state or local income taxes
legally required to be paid with respect to the Residual Certificate; and (D)
will not transfer a Residual Certificate to
<PAGE>
any person or entity that it has reason to believe has the intention to impede
the assessment or col lection of such taxes.
5. The Transferee (i) has historically paid its debts as they come due,
(ii) intends to continue to pay its debts as they come due in the future, (iii)
understands that, as the holder of a Residual Interest, it may incur tax
liabilities in excess of any cash flows generated by the Residual Interest, and
(iv) intends to pay any and all taxes associated with holding the Residual
Interest as they become due.
6. The Transferee either (A) is not a Non-U.S. Person, (B) is a Non-U.S.
Person that will hold the Residual Certificate in connection with the conduct of
a trade or business within the United States and has attached to this Transfer
Affidavit and delivered to the transferor and the Trustee an effective Internal
Revenue Service Form 4224 or (C) is a Non-U.S. Person that has delivered to both
the transferor and the Trustee an opinion of nationally recognized tax counsel
to the effect that such transfer is in accordance with the requirements of the
Code and the regulations promulgated thereunder and that such transfer of the
Residual Certificate will not be disregarded for federal income tax purposes.
7. The Transferee has been advised, understands and acknowledges that
under the Code (i) a substantial tax would be imposed on a Transfer of an
Ownership Interest in the Residual Interest to a Person that is a Disqualified
Organization; (ii) such tax would be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is a Disqualified Organization, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person a Transfer Affidavit (in
substantially the same form as this Transfer Affidavit) that such subsequent
Transferee is not a Disqualified Organization and, at the time of Transfer, such
Person does not have actual knowledge that the Transfer Affidavit is false.
8. The Transferee has been advised, understands and acknowledges that
under the Code, a substantial tax would be imposed on a "pass-through entity"
holding an Ownership Interest in the Residual Interest if at any time during the
taxable year of the pass-through entity a Person that is a Disqualified
Organization is the record holder of an interest in such entity. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person). A pass-through entity shall be relieved of liability for the tax if it
had received from such Person a Transfer Affidavit (in substantially the same
form as this Transfer Affidavit) that such Person is not a Disqualified
Organization and the entity had no actual knowledge that the Transfer Affidavit
was false. The Transferee will advise the Trustee if it becomes a pass-through
entity or if it is a pass-through entity, if any of the interest holders are or
become Disqualified Persons.
9. The Transferee has reviewed the provisions of Section 3.2(b) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Residual Interest including, without limitation, the
restrictions on subsequent Transfers. The Transferee expressly agrees to be
bound by and to abide by the provisions of Section 3.2(b) of the Agreement.
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<PAGE>
The Transferee agrees to such amendments of the Agreement as may be required to
further effectuate the restrictions on transfer of the Residual Certificate to
such a "disqualified organization,"an agent thereof, a Book-Entry Nominee, or a
person that does not satisfy the requirements of paragraph 4(C) and paragraph 6
hereof. The Transferee understands and agrees that any breach of any of the
representations included herein shall render the Transfer to the Transferee
contemplated hereby null and void.
10. The Transferee agrees to require a Transfer Affidavit from any Person
to whom the Transferee attempts to Transfer its Ownership Interest in the
Residual Interest including any Person with respect to which the Transferee is
then acting as nominee, trustee or agent, and in connection with any Transfer by
a Person for whom the Transferee is acting as nominee, trustee or agent, and the
Transferee will not Transfer its Ownership Interest or cause any Ownership
Interest to be Transferred to any Person in respect of whom the Transferee has
actual knowledge that the requirements set forth in paragraph 3, paragraph 4(A)
or paragraph 6 hereof are not satisfied or in respect of whom the Transferee has
reason to believe does not satisfy the requirements set forth in paragraph 4(C)
hereof.
11. The Transferee's taxpayer identification number is __________________.
12. The Transferee is knowledgeable and experienced in the investment
risks incident to the ownership of and tax consequences of REMIC residual
interests and is capable of evaluating the merits and risks of an investment in
the Residual Certificates.
13. The Transferee has read and understood the Section entitled "Certain
Federal Income Tax Consequences" in the Prospectus and related Prospectus
Supplement with respect to the Residual Certificates.
14. The Transferee is not a Plan, as defined in Schedule I, or an entity,
including an insurance company separate account, whose underlying assets include
Plan assets by reason of a Plan's investment in the entity, and has not acquired
an Ownership Interest in the Residual Interest as a nominee, trustee or agent
for a Plan.
15. The Transferee consents to the designation of the Company as its agent
to act as "tax matters person" of the Trust Fund and the related REMIC included
therein pursuant to Section 9.3(c) of the Agreement.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
_________________________, a _________________________, and duly attested this
_____ day of ______________, 19___.
TRANSFEREE:
By:_____________________________________
Name:________________________________
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<PAGE>
Title:_______________________________
STATE OF __________ (S)
(S)
COUNTY OF _________ (S)
Personally appeared before me the above-named _______________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the _________________________ of ________________________,
and acknowledged to me that he/she executed the same as his/her free act and
deed and the free act and deed of the corporation.
Subscribed and sworn before me this _____ day of _______________, 19__.
________________________________________
NOTARY PUBLIC
My Commission Expires:
_____________________________
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<PAGE>
SCHEDULE I
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"Disqualified Organization": Any of the following: (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing; (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing; (iii) an organization
(except certain farmers' cooperatives described in Code section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
section 511 of the Code on unrelated business taxable income); and (iv) a rural
electric and telephone cooperative described in Code section 1381(a)(2)(C). The
terms "United States,""State" and "International Organization" shall have the
meanings set forth in Code section 7701 or successor provisions. A corporation
will not be treated as an instrumentality of the United States or of any State
or political subdivision thereof for these purposes if all of its activities are
subject to tax and a majority of its board of directors is not selected by such
governmental unit.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"Non-U.S. Person": an individual, corporation, partnership or other person
other than a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust that
is subject to U.S. federal income tax regardless of the source of its income.
"Ownership Interest": As to the Residual Certificates and the Residual
Interests, any ownership interest therein, including an interest as the holder
or beneficial owner thereof and any other interest therein, whether direct or
indirect, legal or beneficial.
"Plan": Any Person which is an employee benefit plan, trust or account
subject to Title I of ERISA or an individual retirement account or employee
benefit plan, trust or account subject to Section 4975 of the Code or comparable
provisions of any subsequent enactment or a governmental plan defined in Section
3(32) of ERISA subject to any federal, state or local law which is, to a
material extent, similar to the foregoing provisions of ERISA or the Code.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Residual Interest": The Residual Certificates.
"Transfer": Any direct or indirect purchase, transfer, sale, assignment
or other form of disposition of any Ownership Interest in a Residual Interest.
"Transferee": Any Person (which may be the beneficial holder of a
Residual Interest who holds such Residual Interest in the nominee's name) who is
acquiring by Transfer any Ownership Interest in a Residual Interest.
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<PAGE>
EXHIBIT D
Letter from Transferor of Residual Certificate
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[Date]
[Trustee]
Re: CMC Securities Corporation II
REMIC Pass-Through Certificates,
Series 1996-B
-------------
Ladies and Gentlemen:
[Transferor] has reviewed the attached affidavit of [Transferee], and has
no actual knowledge that such affidavit is not true and has no reason to believe
that the requirements set forth in paragraph 3, paragraph 4(A) or paragraph 6
are not satisfied and has no reason to believe that the transferee has the
intention to impede the assessment or collection of any federal, state or local
taxes legally required to be paid with respect to a Residual Certificate. In
addition, [Transferor] has conducted a reasonable investigation at the time of
the transfer and found that the transferee had historically paid its debts as
they came due and found no significant evidence to indicate that the transferee
will not continue to pay its debts as they become due.
Very truly yours,
[Transferor]
_____________________________________________
