Concerning Owner Trustee Section 7.01. Acceptance of Trusts and Duties.....................................17 Section 7.02. Furnishing Documents................................................18 Section 7.03.
Depositor Structured Asset Securities Corporation, a Delaware corporation having its principal place of business in New York, or its successors in interest.
Special Servicing Procedures In addition to the duties applicable to the Special Servicer under the Servicing Agreement, the following procedures shall be applicable and followed by the Special Servicer and the Sponsor prior to the Special Servicing Crossover Date: (a) Upon the occurrence of Asset Resolution with respect to any issue of Specially Serviced Bonds that relate to a Stabilized Mortgaged Property and involve a Foreclosure of the related Bond Mortgage and a shortfall of amounts available from such action to redeem in full the outstanding principal of the related outstanding Bonds, the Special Servicer shall provide written notice of such action and the amount of such principal shortfall to Freddie Mac. In accordance with its Credit Enhancement, Freddie Mac shall, contemporaneously with the application of the proceeds of the Asset Resolution to pay the redemption price of the related outstanding Bonds in part to the extent of such proceeds, declare a Release Event with respect to such Bonds in the amount of the aforementioned principal shortfall and shall fund the amount of the applicable Release Purchase Price pursuant to its Credit Enhancement, which amount shall be applied pursuant to the terms of the applicable Series Certificate Agreement to pay down a corresponding amount of the related Class B Certificates (or to the extent there are no Class B Certificates above the amount of the Minimum Sponsor Interest left to redeem in the related Series Pool, to pay down a corresponding amount of the related Class A Certificates). Such amount paid with respect to such Class B Certificates shall be used to reimburse Freddie Mac for the amount of the corresponding Credit Advance under its Credit Enhancement. Any Credit Advance arising from such a pay down of Class A Certificates shall be payable from the sources described in Section 4.03(b) of each Series Certificate Agreement and the cash flow from the Pledged Security Collateral. The Bonds purchased in connection with such Release Event shall be subsequently cancelled upon withdrawal from the related Series Certificate Agreement. (b) Upon the occurrence of Asset Resolution with respect to any issue of Specially Serviced Bonds that relate to a Non-Stabilized Mortgaged Property and involve a Foreclosure of the related Bond Mortgage and a shortfall of amounts available from such action to redeem in full the outstanding principal of the related outstanding Bonds, the Special Servicer shall provide written notice to Freddie Mac and the Sponsor of such action. Following receipt of such written notice, Freddie Mac shall declare a Release Event with respect to such Bonds in the amount of the aforementioned principal shortfall and the Release Purchase Price so payable shall be funded on behalf of the Sponsor from amounts available under the Stabilization Guaranty, Escrow and Security Agreement, and applied in accordance with the related Series Certificate Agreement as a Sponsor-funded Release Event to pay down the related Class A Certificates in a corresponding amount; provided, however, if monies are not available under the Stabilization Guaranty, Escrow and Security Agreement, Freddie Mac shall fund the amount of the applicable Release Purchase Price pursuant to its Credit Enhancement, which amount shall be applied pursuant to the terms of the applicable Series Certificate Agreement to pay down a corresponding amount of the related Class B Certificates (or to the extent there are no Class B Certificates above the amount of the Minimum Sponsor Interest left to redeem in the related Series Pool, to pay down a corresponding amount of the related Class A Certificates). Any such amount paid with respect to such Class B Certificates shall be used to reimburse Freddie Mac for the amount of the corresponding Credit Advance under its Credit Enhancement. Any Credit Advance arising from such a pay down of Class A Certificates shall be payable from the sources described in Section 4.03(b) of each Series Certificate Agreement and the cash flow from the Pledge Security Collateral. The Bonds purchased in connection with such Release Event shall be subsequently cancelled upon withdrawal from the related Series Certificate Agreement. (c) Upon the occurrence of Asset Resolution with respect to any issue of Specially Serviced Bonds that relate to a Stabilized Mortgaged Property and which Asset Resolution involves the execution of a work-out agreement pursuant to which the related Bond Mortgage Loan and Bonds are modified to write-down the outstanding principal thereof, the Special Servicer shall provide written notice to Freddie Mac of such action. In accordance with its Credit Enhancement, Freddie Mac shall, contemporaneously with the execution of such work-out agreement to effect such principal write-down, declare a Release Event with respect to such Bonds in the amount of the aforementioned principal write-down and shall fund the amount of the applicable Release Purchase Price pursuant to its Credit Enhancement, which amount shall be applied pursuant to the terms of the applicable Series Certificate Agreement to pay down a corresponding amount of the related Class B Certificates (or to the extent there are no Class B Certificates above the amount of the Minimum Sponsor Interest left to redeem in the related Series Pool, to pay down a corresponding amount of the related Class A Certificates). Such amount with respect to such Class B Certificates shall be used to reimburse Freddie Mac for the amount of the corresponding Credit Advance under its Credit Enhancement. Any Credit Advance arising from such a pay down of Class A Certificates shall be payable from the sources described in Section 4.03(b) of each Series Certificate Agreement and the cash flow from the Pledge Security Collateral. The Bonds purchased in connection with such Release Event shall be subsequently cancelled upon withdrawal from the related Series Certificate Agreement. (d) Upon the occurrence of Asset Resolution with respect to any issue of Specially Serviced Bonds that relate to a Non-Stabilized Mortgaged Property and involve the execution of a work-out agreement pursuant to which the related Bond Mortgage Loan and Bonds are modified to write-down the outstanding principal thereof in an amount necessary in order to achieve Stabilization, the Special Servicer shall provide written notice to Freddie Mac and the Sponsor of such action. Following receipt of such written notice, Freddie Mac shall declare a Release Event with respect to such Bonds in such amount necessary in order for such Mortgaged Property to achieve Stabilization and the Release Purchase Price so payable shall be funded on behalf of the Sponsor from amounts available under the Stabilization Guaranty, Escrow and Security Agreement and applied in accordance with the related Series Certificate Agreement as a Sponsor-funded Release Event to pay down the related Class A Certificates in a corresponding amount; provided, however, if monies are not available under the Stabilization Guaranty, Escrow and Security Agreement, Freddie Mac shall fund the amount of the applicable Release Purchase Price pursuant to its Credit Enhancement, which amount shall be applied pursuant to the terms of the applicable Series Certificate Agreement to pay down a corresponding amount of the related Class B Certificates (or to the extent there are no Class B Certificates above the amount of the Minimum Sponsor Interest left to redeem in the related Series Pool, to pay down a corresponding amount of the related Class A Certificates). Any such amount paid with respect to such Class B Certificates shall be used to reimburse Freddie Mac for the amount of the corresponding Credit Advance under its Credit Enhancement. Any Credit Advance arising from such a pay down of Class A Certificates shall be payable from the sources described in Section 4.03(b) of each Series Certificate Agreement and the cash flow from the Pledge Security Collateral. The Bonds purchased in connection with such Release Event shall be subsequently cancelled upon withdrawal from the related Series Certificate Agreement. (e) Upon the occurrence of Asset Resolution with respect to any issue of Specially Serviced Bonds that relate to a Stabilized Mortgaged Property and involve a sale of such Bonds and a shortfall of amounts available from such action to fund the related Release Purchase Price, the Special Servicer shall provide written notice of such action and the amount of such shortfall to Freddie Mac. Freddie Mac shall declare a Sponsor-funded Release Event with respect to a portion of such Bonds in the amount of the sale proceeds of such Bonds and a Freddie Mac-funded Release Event with respect to a portion of such Bonds in the amount of the aforementioned shortfall. The proceeds from the sale of such Bonds shall fund the applicable Release Purchase Price and be applied to pay down Class A Certificates in accordance with the related Series Certificate Agreement and Freddie Mac shall fund the amount of the applicable Release Purchase Price corresponding to the shortfall pursuant to its Credit Enhancement, which amount shall be applied pursuant to the terms of the applicable Series Certificate Agreement to pay down a corresponding amount of the related Class B Certificates (or to the extent there are no Class B Certificates above the amount of the Minimum Sponsor Interest left to redeem in the related Series Pool, to pay down a corresponding amount of the related Class A Certificates). Such amount paid with respect to such Class B Certificates shall be used to reimburse Freddie Mac for the amount of the corresponding Credit Advance under its Credit Enhancement. Any Credit Advance arising from such a pay down of Class A Certificates shall be payable from the sources described in Section 4.03(b) of each Series Certificate Agreement and the cash flow from the Pledged Security Collateral. The Bonds purchased in connection with such Release Event shall be subsequently withdrawn from the related Series Certificate Agreement and delivered to the Special Servicer to effect the sale of such Bonds. (f) Upon the occurrence of Asset Resolution with respect to any issue of Specially Serviced Bonds that relate to a Non-Stabilized Mortgaged Property and involve a sale of such Bonds and a shortfall of amounts available from such action to fund the related Release Purchase Price, the Special Servicer shall provide written notice to Freddie Mac and the Sponsor of such action. Following receipt of such written notice, Freddie Mac shall declare a Sponsor-funded Release Event with respect to a portion of such Bonds in the amount of the sale proceeds of such Bonds and a Sponsor-funded Release Event with respect to such Bonds in the amount of the aforementioned shortfall. The proceeds from the sale of such Bonds shall fund the applicable Release Purchase Price and be applied to pay down Class A Certificates in accordance with the related Series Certificate Agreement. The Release Purchase Price with respect to such shortfall shall be funded on behalf of the Sponsor from amounts available under the Stabilization Guaranty, Escrow and Security Agreement, and applied in accordance with the related Series Certificate Agreement as a Sponsor-funded Release Event also to pay down the related Class A Certificates in a corresponding amount; provided, however, if monies are not available under the Stabilization Guaranty, Escrow and Security Agreement, Freddie Mac shall fund the amount of the applicable Release Purchase Price related to the shortfall pursuant to its Credit Enhancement, which amount shall be applied pursuant to the terms of the applicable Series Certificate Agreement to pay down a corresponding amount of the related Class B Certificates (or to the extent there are no Class B Certificates above the amount of the Minimum Sponsor Interest left to redeem in the related Series Pool, to pay down a corresponding amount of the related Class A Certificates). Any such amount paid with respect to such Class B Certificates shall be used to reimburse Freddie Mac for the amount of the corresponding Credit Advance under its Credit Enhancement. Any Credit Advance arising from such a pay down of Class A Certificates shall be payable from the sources described in Section 4.03(b) of each Series Certificate Agreement and the cash flow from the Pledge Security Collateral. The Bonds purchased in connection with such Release Event shall be subsequently withdrawn from the related Series Certificate Agreement and delivered to the Special Servicer to effect the sale of such Bonds.
The Owner Trustee It is expressly understood and agreed by the parties hereto that (i) this Agreement is executed and delivered by Wilmington Trust, National Association on behalf of the Trust not individually or personally but solely as owner trustee of the Trust under the Trust Agreement of the Trust dated the date hereof in the exercise of the powers and authority conferred upon and vested in Wilmington Trust, National Association as owner trustee of the Trust under such Trust Agreement, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as the personal representation, undertaking or agreement of Wilmington Trust, National Association, but is made and intended for the purpose of binding only the Trust and (iii) nothing herein contained shall be construed as creating any liability on the part of Wilmington Trust, National Association, individually or personally, to perform any covenant or obligation of the Trust, either expressed or implied, contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto.
Owner Trustee This Agreement has been signed on behalf of the Grantor by U.S. Bank Trust National Association, not in its individual capacity, but solely in its capacity as Owner Trustee of the Grantor. In no event will U.S. Bank Trust National Association in its individual capacity or a beneficial owner of the Grantor be liable for the Grantor’s obligations under this Agreement. For all purposes under this Agreement, the Owner Trustee is subject to, and entitled to the benefits of, the Trust Agreement.
General Servicing Procedures Section 6.01
Administration and Servicing OF MORTGAGE LOANS
Purchase of Trust Student Loans; Reimbursement A. The Servicer, the Administrator, the Eligible Lender Trustee and the Indenture Trustee shall give notice to the other parties promptly, in writing, upon the discovery of any breach of the provisions of Section 3.1, 3.2, 3.3 or 3.4 which has a material adverse effect on the interest of the Issuer. In the event of such a material breach which is not curable by reinstatement of the Guarantor’s guarantee of such Trust Student Loan, the Servicer shall purchase the affected Trust Student Loan not later than 120 days following the earlier of the date of discovery of such material breach and the date of receipt of the Guarantor reject transmittal form with respect to such Trust Student Loan. In the event of a material breach with respect to such Trust Student Loan which is curable by reinstatement of the Guarantor’s guarantee of such Trust Student Loan, unless the material breach shall have been cured within 360 days following the earlier of the date of discovery of such material breach and the date of receipt of the Guarantor reject transmittal form with respect to such Trust Student Loan, the Servicer shall purchase such Trust Student Loan not later than the sixtieth day following the end of such 360-day period. The purchase price hereunder will be the unpaid principal amount of such Trust Student Loan plus accrued and unpaid interest (calculated using the applicable percentage that would have been insured pursuant to Section 428(b)(1)(G) of the Higher Education Act) plus an amount equal to all net forfeited Interest Subsidy Payments and Special Allowance Payments with respect to such Trust Student Loan (to the extent not already included in the purchase price). In consideration of the purchase of any such Trust Student Loan pursuant to this Section 3.5, the Servicer shall remit the purchase price to the Administrator in the manner and at the time specified in Section 2.6 of the Administration Agreement. Any breach that relates to compliance with the requirements of the Higher Education Act or of the applicable Guarantor but that does not affect such Guarantor’s obligation to guarantee payments of a Trust Student Loan will not be considered to have a material adverse effect for purposes of this Section 3.5A. B. In addition, if any breach of Section 3.1, 3.2, 3.3 or 3.4 by the Servicer does not trigger such purchase obligation but does result in the refusal by a Guarantor to guarantee all or a portion of the accrued interest (or any obligation of the Issuer to repay such interest to a Guarantor), or the loss (including any obligation of the Issuer to repay to the Department) of Interest Subsidy Payments and Special Allowance Payments, with respect to any Trust Student Loan affected by such breach, then the Servicer shall reimburse the Issuer in an amount equal to the sum of all such nonguaranteed interest amounts that would have been owed to the Issuer by the Guarantor but for such breach by the Servicer and such forfeited Interest Subsidy Payments or Special Allowance Payments by netting such sum against the Servicing Fee payable to the Servicer for such period and remitting any additional amounts owed in the manner specified in Section 2.6 of the Administration Agreement not later than (i) the last day of the next Collection Period ending not less than 30 days from the date of the Guarantor’s refusal to guarantee all or a portion of accrued interest or loss of Interest Subsidy Payments or Special Allowance Payments, or (ii) in the case where the Servicer reasonably believes such amounts are likely to be collected, not later than the last day of the next Collection Period ending not less than 360 days from the date of the Guarantor’s refusal to guarantee all or a portion of accrued interest or loss of Interest Subsidy Payments or Special Allowance Payments. At the time such payment is made, the Servicer shall not be required to reimburse the Issuer for interest that is then capitalized, however, such amounts shall be reimbursed if the borrower subsequently defaults and such capitalized interest is not paid by the Guarantor. C. Anything in this Section 3.5 to the contrary notwithstanding, if as of the last Business Day of any month the aggregate outstanding principal amount of Trust Student Loans with respect to which claims have been filed with and rejected by a Guarantor or with respect to which the Servicer determines that claims cannot be filed pursuant to the Higher Education Act as a result of a breach by the Servicer or the Depositor, exceeds 1% of the Pool Balance, the Servicer or the Seller, as appropriate, shall purchase, within 30 days of a written request of the Indenture Trustee, such affected Trust Student Loans in an aggregate principal amount such that after such purchase the aggregate outstanding principal amount of such affected Trust Student Loans is less than 1% of the Pool Balance. The Trust Student Loans to be purchased by the Servicer or the Depositor pursuant to the preceding sentence shall be based on the date of claim rejection (or date of notice referred to in the first sentence of this Section 3.5) with the Trust Student Loans with the earliest such date to be purchased first. D. In lieu of purchasing Trust Student Loans pursuant to this Section 3.5, the Servicer may, at its option, with the prior consent of the Administrator, arrange for the substitution of Student Loans which are substantially similar as of the date of substitution on an aggregate basis to the Trust Student Loans for which they are being substituted with respect to the following characteristics: (1) status (i.e., in-school, grace, deferment, forbearance or repayment); (2) program type (i.e., unsubsidized or subsidized Sxxxxxxx Loans (pre-1993 v. post-1993), PLUS Loans or SLS Loans); (3) guarantee percentage; (4) school type; (5) total return; (6) principal balance; and (7) remaining term to maturity. In addition, each substituted Student Loan shall comply, as of the date of substitution, with the representations and warranties made by the Depositor in the Sale Agreement. In choosing Student Loans to be substituted pursuant to this subsection D, the Servicer shall make a reasonable determination that the Student Loans to be substituted will not have a material adverse effect on the Noteholders. In the event the Servicer elects to substitute Student Loans pursuant to this Section 3.5 and the Administrator consents to such substitution, the Servicer will remit to the Administrator the amount of any shortfall between the Purchase Amount of the substituted Student Loans and the Purchase Amount of the Trust Student Loans for which they are being substituted. The Servicer shall also remit to the Administrator an amount equal to all nonguaranteed interest amounts that would have been owed to the Issuer by the Guarantor but for the breach of the Servicer and forfeited Interest Subsidy Payments and Special Allowance Payments with respect to the Trust Student Loans in the manner provided in Section 2.6 of the Administration Agreement. E. The sole remedy of the Issuer, the Eligible Lender Trustee, the Indenture Trustee and the Noteholders with respect to a breach pursuant to Section 3.1, 3.2, 3.3 or 3.4 shall be to require the Servicer to purchase Trust Student Loans, to reimburse the Issuer as provided above or to substitute Student Loans pursuant to this Section. F. The Eligible Lender Trustee shall have no duty to conduct any affirmative investigation as to the occurrence of any condition requiring the purchase of any Trust Student Loan or the reimbursement for any interest penalty pursuant to this Section 3.5. G. The Servicer shall not be deemed to have breached its obligations pursuant to Section 3.1, 3.2, 3.3 or 3.4 if it is rendered unable to perform such obligations, in whole or in part, by a force outside the control of the parties hereto (including acts of God, acts of war, fires, earthquakes, hurricanes, floods and other disasters). The Servicer shall diligently perform its duties under this Agreement as soon as practicable following the termination of such interruption of business. H. The Servicer also will have an option, but not the obligation, to purchase any Trust Student Loan on any date; provided that the Servicer may not purchase Trust Student Loans if the aggregate outstanding principal balance thereof (at the time of purchase) exceeds 2.0% of the Initial Pool Balance as of the date of determination. To exercise such option, the Servicer shall notify the Administrator, the Depositor, the Issuer and the Indenture Trustee thereof in advance in writing, and the Servicer shall deposit into the Collection Account an amount equal to the purchase price, as calculated pursuant to Section 3.5.A hereof, for the Trust Student Loans so purchased.
Administration and Servicing of the Trust Fund Section 3.01 Master Servicer to Act as Master Servicer; Special
The Master Servicer The Master Servicer shall service and administer the Mortgage Loans in a manner consistent with the terms of this Agreement and with general industry practice and shall have full power and authority, acting alone or through a subservicer, (i) to execute and deliver, on behalf of the Noteholders, the Trust, and the Indenture Trustee, customary consents or waivers and other instruments and documents, (ii) to consent to transfers of any Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages (but only in the manner provided in this Agreement), (iii) to collect any Insurance Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan. The Master Servicer shall remain responsible to the parties to this Agreement and the Credit Enhancer for its obligations under this Agreement. Any amounts received by any subservicer on a Mortgage Loan shall be considered to have been received by the Master Servicer whether or not actually received by it. Without limiting the generality of the foregoing, the Master Servicer may execute and deliver, on behalf of itself, the Noteholders, and the Indenture Trustee, or any of them, any instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Mortgage Loans and with respect to the Mortgaged Properties, in each case to the extent not inconsistent with this Agreement. At the request of a Servicing Officer, the Indenture Trustee shall furnish the Master Servicer with any powers of attorney and other documents appropriate to enable the Master Servicer to carry out its servicing and administrative duties under this Agreement. The Master Servicer in this capacity may also consent to the placing of a lien senior to that of any mortgage on the related Mortgaged Property, if (i) the new senior lien secures a mortgage loan that refinances an existing first mortgage loan and (ii) either (a) the Loan-to-Value Ratio of the new mortgage loan (without taking into account any closing costs that may be financed by the new mortgage loan) is equal to or less than the Loan-to-Value Ratio of the first mortgage loan to be replaced (for purposes of calculating the Loan-to-Value Ratio, the Valuation of the Mortgaged Property will be measured by the lesser of (A) the Valuation of the Mortgaged Property as of the Cut-off Date and (B) the Valuation of the Mortgaged Property as of the date of the refinancing referenced in clause (i)) or (b) the Combined Loan-to-Value Ratio of the new mortgage loan (without taking into account any closing costs that may be financed by the new mortgage loan) and the existing Mortgage Loan is equal to less than 70% (for purposes of calculating the Combined Loan-to-Value Ratio, the Valuation of the Mortgaged Property will be measured as the lesser of (A) the Valuation of the Mortgage Loan as of the Cut-off Date and (B) the Valuation of the Mortgage Loan as of the date of the refinancing referenced in clause (i)). The aggregate Asset Balance of all the Mortgage Loans with respect to which the senior lien may be so modified may not exceed 50% of the Original Note Principal Balance. The Master Servicer may also, without approval from the Rating Agencies or the Credit Enhancer, increase the Credit Limits on Mortgage Loans if (i) new appraisals are obtained and the weighted average Combined Loan-to-Value Ratios of the Mortgage Loans after giving effect to the increase are less than or equal to the weighted average Combined Loan-to-Value Ratios of the Mortgage Loans as of the Cut-off Date and (ii) the increases are consistent with the Master Servicer's underwriting policies. In addition, the Master Servicer may increase the Credit Limits on Mortgage Loans having aggregate Asset Balances of up to an additional 5.0% of the Original Note Principal Balance, if
