CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
DLJ MORTGAGE CAPITAL, INC.,
Seller
WILSHIRE CREDIT CORPORATION,
Servicer
and
JPMORGAN CHASE BANK,
Trustee
--------------------------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2004
--------------------------------------------------------------------------------
FIRST FRANKLIN MORTGAGE LOAN TRUST 2004-FFB
HOME EQUITY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-FFB
Table of Contents
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions..................................................7
SECTION 1.02 Interest Calculations.......................................46
SECTION 1.03 Allocation of Certain Interest Shortfalls...................46
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans................................48
SECTION 2.02 Acceptance by the Trustee...................................52
SECTION 2.03 Representations and Warranties of the Seller
and Servicer................................................54
SECTION 2.04 Representations and Warranties of the
Depositor as to the Mortgage Loans..........................56
SECTION 2.05 Delivery of Opinion of Counsel in Connection
with Substitutions..........................................56
SECTION 2.06 Execution and Delivery of Certificates......................56
SECTION 2.07 REMIC Matters...............................................57
SECTION 2.08 Covenants of the Servicer...................................57
SECTION 2.09 Conveyance of REMIC Regular Interests and
Acceptance of REMIC 1, REMIC 2 and
REMIC 3 by the Trustee; Issuance of
Certificates................................................58
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicer to Service Mortgage Loans..........................59
SECTION 3.02 Subservicing; Enforcement of the Obligations
of Subservicers.............................................61
SECTION 3.03 [Reserved]..................................................62
SECTION 3.04 Trustee to Act as Servicer..................................62
SECTION 3.05 Collection of Mortgage Loans; Collection
Accounts; Certificate Account...............................63
SECTION 3.06 Establishment of and Deposits to Escrow
Accounts; Permitted Withdrawals from
i
Escrow Accounts; Payments of Taxes,
Insurance and Other Charges.................................66
SECTION 3.07 Access to Certain Documentation and
Information Regarding the Mortgage Loans;
Inspections.................................................68
SECTION 3.08 Permitted Withdrawals from the Collection
Accounts and Certificate Account............................68
SECTION 3.09 Maintenance of Hazard Insurance and
Mortgage Impairment Insurance; Claims;
Restoration of Mortgaged Property...........................70
SECTION 3.10 Enforcement of Due-on-Sale Clauses;
Assumption Agreements.......................................71
SECTION 3.11 Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans........................72
SECTION 3.12 Trustee to Cooperate; Release of Mortgage Files.............78
SECTION 3.13 Documents, Records and Funds in Possession
of the Servicer to be Held for the Trustee..................79
SECTION 3.14 Servicing Fee...............................................79
SECTION 3.15 Access to Certain Documentation.............................80
SECTION 3.16 Annual Statement as to Compliance...........................80
SECTION 3.17 Annual Independent Public Accountants'
Servicing Statement; Financial Statements...................80
SECTION 3.18 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.........................................81
SECTION 3.19 Duties of the Credit Risk Manager...........................81
SECTION 3.20 Limitation Upon Liability of the Credit Risk
Manager.....................................................82
SECTION 3.21 Advance Facility............................................82
SECTION 3.22 Maintenance of Pool Insurance Policy........................84
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01 Advances by the Servicer....................................86
SECTION 4.02 Priorities of Distribution..................................86
SECTION 4.03 [Reserved]..................................................91
SECTION 4.04 [Reserved]..................................................91
SECTION 4.05 Allocation of Realized Losses...............................91
SECTION 4.06 Monthly Statements to Certificateholders....................92
SECTION 4.07 Distributions on the REMIC 1 Regular
Interests and REMIC 2 Regular Interests.....................93
SECTION 4.08 [Reserved]..................................................95
SECTION 4.09 Prepayment Charges..........................................95
SECTION 4.10 Servicer to Cooperate.......................................96
ii
SECTION 4.11 The Interest Rate Cap Agreement and the
Interest Rate Cap Account...................................96
SECTION 4.12 Mortgage Pool Insurance Policy..............................97
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates............................................98
SECTION 5.02 Certificate Register; Registration of Transfer
and Exchange of Certificates................................99
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..........103
SECTION 5.04 Persons Deemed Owners......................................104
SECTION 5.05 Access to List of Certificateholders' Names
and Addresses..............................................104
SECTION 5.06 Maintenance of Office or Agency............................104
ARTICLE VI
THE DEPOSITOR, THE SELLER AND THE SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the
Sellers and the Servicer...................................105
SECTION 6.02 Merger or Consolidation of the Depositor, the
Seller or the Servicer.....................................105
SECTION 6.03 Limitation on Liability of the Depositor, the
Seller, the Servicer and Others............................105
SECTION 6.04 Limitation on Resignation of the Servicer..................106
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default..........................................107
SECTION 7.02 Trustee to Act; Appointment of Successor...................109
SECTION 7.03 Notification to Certificateholders.........................111
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee......................................112
SECTION 8.02 Certain Matters Affecting the Trustee......................113
SECTION 8.03 Trustee Not Liable for Certificates or
Mortgage Loans.............................................114
SECTION 8.04 Trustee May Own Certificates...............................114
SECTION 8.05 Trustee's Fees and Expenses................................114
iii
SECTION 8.06 Eligibility Requirements for the Trustee and
Custodian..................................................115
SECTION 8.07 Resignation and Removal of the Trustee.....................115
SECTION 8.08 Successor Trustee..........................................116
SECTION 8.09 Merger or Consolidation of the Trustee.....................116
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee..............117
SECTION 8.11 Tax Matters................................................118
SECTION 8.12 Commission Reporting.......................................120
ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation, Purchase or
Auction of the Mortgage Loans..............................123
SECTION 9.02 Final Distribution on the Certificates.....................124
SECTION 9.03 Additional Termination Requirements........................125
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment..................................................127
SECTION 10.02 Recordation of Agreement; Counterparts.....................128
SECTION 10.03 Governing Law..............................................129
SECTION 10.04 [Reserved].................................................129
SECTION 10.05 Notices....................................................129
SECTION 10.06 Severability of Provisions.................................130
SECTION 10.07 Assignment.................................................130
SECTION 10.08 Limitation on Rights of Certificateholders.................130
SECTION 10.09 Certificates Nonassessable and Fully Paid..................131
EXHIBITS
EXHIBIT A. Form of Class A Certificates.......................................................A-1
EXHIBIT B. Form of Subordinate Certificate....................................................B-1
EXHIBIT C. Form of Residual Certificate.......................................................C-1
EXHIBIT D. Form of Notional Amount Certificate................................................D-1
EXHIBIT E. Form of Class P Certificate........................................................E-1
EXHIBIT F. Form of Reverse Certificates.......................................................F-1
EXHIBIT G. Form of Initial Certification of Custodian.........................................G-1
EXHIBIT H. Form of Final Certification of Custodian...........................................H-1
EXHIBIT I. Transfer Affidavit.................................................................I-1
EXHIBIT J. Form of Transferor Certificate.....................................................J-1
iv
EXHIBIT K. Form of Investment Letter (Non-Rule 144A)..........................................K-1
EXHIBIT L. Form of Rule 144A Letter...........................................................L-1
EXHIBIT M. Request for Release................................................................M-1
EXHIBIT N. [Reserved].........................................................................N-1
EXHIBIT O-1. Form of Collection Account Certification.........................................O-1-1
EXHIBIT O-2. Form of Collection Account Letter Agreement......................................O-2-1
EXHIBIT P-1. Form of Escrow Account Certification ............................................P-1-1
EXHIBIT P-2. Form of Escrow Account Letter Agreement..........................................P-2-1
EXHIBIT Q. Form of Monthly Remittance Advice..................................................Q-1
EXHIBIT R. Form of Custodial Agreement........................................................R-1
EXHIBIT S. [Reserved].........................................................................S-1
EXHIBIT T. [Reserved].........................................................................T-1
EXHIBIT U. Charged Off Loan Data Report.......................................................U-1
EXHIBIT V. Form of Monthly Statement to Certificateholders....................................V-1
EXHIBIT W. Form of Depositor Certification....................................................W-1
EXHIBIT X. Form of Trustee Certification......................................................X-1
EXHIBIT Y. Form of Servicer Certification.....................................................Y-1
EXHIBIT Z. Information to be Provided by Servicer to Trustee..................................Z-1
EXHIBIT AA Form of Limited Power of Attorney.................................................AA-1
EXHIBIT BB. Mortgage Pool Insurance Policy....................................................BB-1
EXHIBIT CC. Form of Interest Rate Cap Agreement...............................................CC-1
SCHEDULE I Mortgage Loan Schedule.............................................................I-1
SCHEDULE II Seller's Representations and Warranties...........................................II-1
SCHEDULE IIIA Wilshire Representations and Warranties........................................III-A-1
SCHEDULE IIIB [Reserved].....................................................................III-B-1
SCHEDULE IV Representations and Warranties for the Mortgage Loans.............................IV-1
v
THIS POOLING AND SERVICING AGREEMENT, dated as of July 1, 2004,
among CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., a Delaware
corporation, as depositor (the "Depositor"), DLJ MORTGAGE CAPITAL, INC., a
Delaware corporation, as Seller (the "Seller"), WILSHIRE CREDIT CORPORATION, a
Nevada corporation, as Servicer (the "Servicer") and JPMORGAN CHASE BANK, a New
York banking corporation, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of twenty
classes of certificates, designated as (i) the Class A-1 Certificates, (ii) the
Class A-2 Certificates, (iii) the Class A-3 Certificates, (iv) the Class A-4
Certificates, (v) the Class A-IO-1 Certificates, (vi) the Class A-IO-2
Certificates, (vii) the Class A-IO-3 Certificates, (viii) the Class A-IO-4
Certificates, (ix) the Class M-1 Certificates, (x) the Class M-2 Certificates,
(xi) the Class M- 3 Certificates, (xii) the Class M-4 Certificates, (xiii) the
Class M-5 Certificates, (xiv) the Class M-1- IO Certificates, (xv) the Class B
Certificates, (xvi) the Class P Certificates, (xvii) the Class X-1 Certificates,
(xviii) the Class X-2 Certificates, (xix) the Class A-RL Certificates and (xi)
the Class A-R Certificates.
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (exclusive of the Interest Rate Cap
Agreement and the Interest Rate Cap Account) as a real estate mortgage
investment conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC 1." The Class A-RL
Certificates will represent the sole class of "residual interests" in REMIC 1
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation, the
Uncertificated REMIC 1 Pass-Through Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be certificated.
The latest possible maturity date (determined solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii)) of each of the REMIC 1 Regular
Interests will be the Latest Possible Maturity Date as defined herein.
Uncertificated REMIC 1 Initial Uncertificated
Designation Pass-Through Rate Principal Balance
----------- ----------------- -----------------
LT-AA Variable(1) $410,043,194.79
LT-A-1 Variable(1) $1,000,000.00
LT-A-2 Variable(1) $1,654,000.00
LT-A-3 Variable(1) $300,000.00
LT-A-4 Variable(1) $251,200.00
LT-M-1 Variable(1) $69,000.00
LT-M-2 Variable(1) $313,900.00
LT-M-3 Variable(1) $81,500.00
LT-M-4 Variable(1) $274,000.00
LT-M-5 Variable(1) $77,400.00
LT-B Variable(1) $163,113.23
LT-ZZ Variable(1) $4,184,115.24
LT-P Variable(1) $100.00
LT-R Variable(1) $100.00
----------
(1) Calculated as provided in the definition of Uncertificated REMIC 1
Pass-Through Rate.
REMIC 2
As provided herein, an election will be made to treat the segregated
pool of assets consisting of the REMIC 1 Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as REMIC 2. The Class R-2 Interest will represent the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions under
federal income tax law (the "Class R-2 Interest"). The following table
irrevocably sets forth the designation, Uncertificated REMIC 2 Pass-Through Rate
and initial Principal Balance for each of the "regular interests" in REMIC 2
(the "REMIC 2 Regular Interests"). None of the REMIC 2 Regular Interests will be
certificated. The latest possible maturity date (determined solely for purposes
of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) of each of the
REMIC 2 Regular Interests will be the Latest Possible Maturity Date as defined
herein.
2
Uncertificated REMIC Initial Uncertificated
Designation 2 Pass-Through Rate Principal Balance
----------- ------------------- -----------------
MT-A-1 Variable(1) $100,000,000.00
MT-A-2 Variable(1) $165,400,000.00
MT-A-3 Variable(1) $30,000,000.00
MT-A-4 Variable(1) $25,120,000.00
MT-M-1 Variable(1) $6,900,000.00
MT-M-2 Variable(1) $31,390,000.00
MT-M-3 Variable(1) $8,150,000.00
MT-M-4 Variable(1) $27,400,000.00
MT-M-5 Variable(1) $7,740,000.00
MT-B Variable(1) $16,311,323.00
MT-X-1 Variable(1) $0.26(2)
MT-P Variable(1) $100.00
MT-R Variable(1) $100.00
----------
(1) Calculated as provided in the definition of Uncertificated REMIC 2
Pass-Through Rate.
(2) REMIC 2 Regular Interest MT-X-1 will not accrue interest on the related
Initial Uncertificated Principal Balance but will accrue interest on a
notional amount equal to the aggregate Initial Uncertificated Principal
Balance of the REMIC 1 Regular Interests.
REMIC 3
As provided herein, an election will be made to treat the segregated pool
of assets consisting of the REMIC 2 Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
REMIC 3. The Class R-3 Interest will represent the sole class of "residual
interests" in REMIC 3 for purposes of the REMIC Provisions under federal income
tax law (the "Class R-3 Interest"). The following table irrevocably sets forth
the designation, Pass- Through Rate, aggregate Initial Certificate Principal
Balance, certain features, Maturity Date and initial ratings for each Class of
Certificates comprising the interests representing "regular interests" in REMIC
3, and the Class A-R Certificates, Class A-RL Certificates and Class X-2
Certificates which are not "regular interests" in REMIC 3. The latest possible
maturity date (determined solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii)) of each of the Regular Certificates will be the
Latest Possible Maturity Date as defined herein.
3
Integral Multiples
Class Certificate Pass-Through Minimum in Excess of
Balance Rate Denomination Minimum
Class A-1 $100,000,000.00 4.1665%(1) $ 25,000 $1
Class A-2 $165,400,000.00 Adjustable(2) $ 25,000 $1
Class A-3 $ 30,000,000.00 4.2640%(1) $ 25,000 $1
Class A-4 $ 25,120,000.00 5.5430%(1) $ 25,000 $1
Class A-IO-1 $100,000,000.00 (3) Variable(4) $100,000 $1
Class A-IO-2 $165,400,000.00 (3) Variable(4) $100,000 $1
Class A-IO-3 $ 30,000,000.00 (3) Variable(4) $100,000 $1
Class A-IO-4 $ 25,120,000.00 (3) Variable(4) $100,000 $1
Class P $100.00 Variable(5) $ 100 N/A
Class A-R $100.00 Variable(5) $ 100 N/A
Class A-RL $100.00 Variable(5) $ 100 N/A
Class M-1 $ 6,900,000.00 5.3790%(1) $ 25,000 $1
Class M-2 $ 31,390,000.00 Variable(6) $ 25,000 $1
Class M-3 $ 8,150,000.00 Variable(6) $ 25,000 $1
Class M-4 $ 27,400,000.00 Variable(6) $ 25,000 $1
Class M-5 $ 7,740,000.00 Variable(6) $ 25,000 $1
Class M-1-IO $ 6,900,000.00 (3) Variable(4) $100,000 $1
Class B $ 16,311,323.00 Variable(6) $ 25,000 $1
Class X-1 $0.00 Variable(7)(8) $ 25,000 $1
Class X-2 $0.00 0.00% N/A N/A
----------
(1) The Class A-1, Class A-3, Class A-4 and Class M-1 Certificates have a
fixed rate subject to the Net Funds Rate. The fixed rate will increase by
0.25% per annum after the Optional Termination Date.
(2) The Class A-2 Certificates are adjustable rate and will receive interest
pursuant to a formula based on LIBOR, subject to the Net Funds Rate.
(3) These Certificates are interest only certificates, will have no principal
balance and will accrue interest on their related notional amount. For any
Distribution Date, the notional amount of the Class A-IO-1, Class A-IO-2,
Class A-IO-3, Class A-IO-4 and Class M-1-IO Certificates will be equal to
the Class Principal Balance of the Class A-1, Class A-2, Class A-3, Class
A-4 and Class M-1 Certificates, respectively, immediately prior to such
Distribution Date. The initial notional amount of the Class A-IO-1, Class
A-IO-2, Class A-IO-3, Class A-IO-4 and Class M-1-IO Certificates is
$100,000,000, $165,400,000, $30,000,000, $25,120,000 and $6,900,000,
respectively. For federal income tax purposes, however, the notional
amount of the Class A-IO-1, Class A-IO-2, Class A-IO-3, Class A-IO-4 and
Class M-1-IO Certificates will be equal to the Uncertificated Principal
Balance of the REMIC 2 Regular Interests XX-X-0, XX-X-0, XX-X-0, XX-X-0
and MT-M-1, respectively.
(4) The pass-through rate on the Class A-IO-1, Class A-IO-2, Class A-IO-3,
Class A-IO-4 and Class M-1-IO Certificates is a per annum rate equal to
the excess, if any, of the Net Funds Rate over the pass-through rate for
the Class X-0, Xxxxx X-0, Class A-3, Class A-4 and Class
4
M-1 Certificates, respectively, adjusted to a 30/360 rate in the case of
the Class A-IO-2 Certificates. For federal income tax purposes, however,
the pass-through rate on the Class A-IO-1, Class A-IO-2, Class A-IO-3,
Class A-IO-4 and Class M-1-IO Certificates is a per annum rate equal to
the excess, if any, of the Uncertificated REMIC 2 Pass-Through Rate on the
REMIC 2 Regular Interests MT-A-1, MT-A-2, MT-A-3, MT-A-4 and MT-M-1 over
the pass-through rate for the Class X-0, Xxxxx X-0, Class A-3, Class A-4
and Class M-1 Certificates, respectively, adjusted to a 30/360 rate in the
case of the Class A-IO-2 Certificates.
(5) The pass-through rates on the Class A-RL, Class A-R and Class P
Certificates will vary at a per annum rate described in the definitions of
"Class A-RL Pass-Through Rate," "Class A- R Pass-Through Rate" and "Class
P Pass-Through Rate," respectively.
(6) The pass-through rate with respect to the Class X-0, Xxxxx X-0, Class M-4,
Class M-5 and Class B Certificates will vary at a rate equal to the Net
Funds Rate.
(7) The Class X-1 Certificates will have an initial principal balance of $0.26
and will accrue interest on its notional amount. For any Distribution
Date, the notional amount of the Class X-1 Certificates will be equal to
the Aggregate Loan Balance minus the aggregate Class Certificate Balance
of the Class A-R Certificates and Class A-RL Certificates immediately
prior to such Distribution Date. The initial notional amount of the Class
X-1 Certificates is $418,411,423.26.
(8) The Class X-1 Certificates are variable rate and will accrue interest on a
notional amount.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates.......... All Classes of Certificates other than the
Physical Certificates.
ERISA-Restricted Certificates.... Class A-R, Class A-RL, Class P and Class X
Certificates.
LIBOR Certificates............... Class A-2 Certificates.
Notional Amount Certificates..... Class A-IO-1, Class A-IO-2, Class A-IO-3,
Class A-IO- 4, Class M-1-IO and Class X-1
Certificates.
Class A Certificates............. Class A-1, Class A-2, Class A-3, Class A-4,
Class A- IO-1, Class A-IO-2, Class A-IO-3,
Class A-IO-4, Class A-RL and Class A-R
Certificates.
Class M Certificates............. Class M-1, Class M-2, Class M-3, Class M-4,
Class M- 5 and Class M-1-IO Certificates.
5
Offered Certificates............. All Classes of Certificates (other than the
Class P Certificates and Class X
Certificates).
Physical Certificates............ Class A-R, Class A-RL, Class P and Class X
Certificates.
Private Certificates............. Class P Certificates and Class X
Certificates.
Rating Agencies.................. S&P and Xxxxx'x.
Regular Certificates............. All Classes of Certificates other than the
Class A-R, Class A-RL and Class X-2
Certificates.
Residual Certificates............ Class A-R Certificates and Class A-RL
Certificates.
Senior Certificates.............. Class A-1, Class A-2, Class A-3, Class A-4,
Class A- IO-1, Class A-IO-2, Class A-IO-3,
Class A-IO-4, Class P, Class A-RL and Class
A-R Certificates.
Subordinate Certificates......... Class M-1, Class M-2, Class M-3, Class M-4,
Class M- 5, Class M-1-IO, Class B and Class
X-1 Certificates.
Minimum Denominations............ Class A-1, Class X-0, Xxxxx X-0, Class A-4,
Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class B Certificates: $25,000
and multiples of $1 in excess thereof. Class
A-IO-1, Class A-IO-2, Class A-IO-3, Class
A-IO-4 and Class M-1-IO Certificates:
$100,000 and multiples of $1 in excess
thereof.
Class A-R, Class A-RL and Class P
Certificates: $100. The Class X-1
Certificates will be issued as a single
Certificate with a Certificate Principal
Balance of $0.00. The Class X-2 Certificates
will be issued as a single Certificate and
will not have a principal balance.
6
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Advance: The payment required to be made by the Servicer with
respect to any Distribution Date pursuant to Section 4.01.
Aggregate Loan Balance: As of any Distribution Date will be equal to
the aggregate of the Stated Principal Balances of the Mortgage Loans determined
as of the last day of the related Collection Period.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, other
than Servicing Fees and Prepayment Charges, including but not limited to, late
charges, fees received with respect to checks or bank drafts returned by the
related bank for non-sufficient funds, assumption fees, optional insurance
administrative fees and all other incidental fees and charges.
Applied Loss Amount: As to any Distribution Date, an amount equal to
the excess, if any of (i) the aggregate Class Principal Balance of the
Certificates, other than the Class A-IO-1, Class A-IO-2, Class A-IO-3, Class
A-IO-4 and Class M-1-IO Certificates, after giving effect to all Realized Losses
incurred with respect to the Mortgage Loans during the Due Period for such
Distribution Date and payments of principal on such Distribution Date over (ii)
the Aggregate Loan Balance for such Distribution Date.
Appraised Value: The amount set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment Agreement: An assignment agreement between DLJ Mortgage
Capital, Inc. as Seller and the Depositor, whereby the Mortgage Loans are
transferred and limited representations and warranties relating to the Mortgage
Loans are made.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the
7
related Mortgaged Property is located to reflect the transfer of the Mortgage to
the Trustee for the benefit of the Certificateholders.
Auction Purchaser: As defined in Section 9.01.
Auction Date: As defined in Section 9.01.
Available Funds: With respect to any Distribution Date the sum of
(i) all Scheduled Payments (net of the related Expense Fees) due on the Due Date
in the month in which such Distribution Date occurs and received prior to the
related Determination Date, together with any Advances in respect thereof; (ii)
all Insurance Proceeds, Liquidation Proceeds and Net Recoveries received during
the month preceding the month of such Distribution Date and any recoveries
received by the Mortgage Pool Insurer (pursuant to Section 4.12) on any Mortgage
Loan not purchased by the Mortgage Pool Insurer pursuant to Section 3.11(g) (net
of amounts reimbursable to the Mortgage Pool Insurer for claims previously paid
by the Mortgage Pool Insurer on the related Mortgage Loans); (iii) all
Curtailments and Payoffs received during the Prepayment Period applicable to
such Distribution Date (excluding Prepayment Charges); (iv) amounts received
with respect to such Distribution Date as the Substitution Adjustment Amount or
Repurchase Price; and (v) Compensating Interest Payments for such Distribution
Date; as to clauses (i) through (iv) above, reduced by amounts in reimbursement
for Advances previously made and other amounts as to which the Servicer are
entitled to be reimbursed pursuant to Section 3.08.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Basis Risk Shortfall: For the Class A-2 Certificates and any
Distribution Date, the product of (i) the excess, if any, of (x) the sum of
LIBOR plus the related Certificate Margin on the Class A-2 Certificates over (y)
the Net Funds Rate, (ii) the Class Principal Balance of the Class A-2
Certificates immediately prior to such Distribution Date and (iii) a fraction,
the numerator of which is the actual number of days in the immediately preceding
Interest Accrual Period for the Class A-2 Certificates and the denominator of
which is 30.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in the City of New York, New York, or the
city in which the Corporate Trust Office of the Trustee, or savings and loan
institutions in the States of Illinois, California, Texas, Oregon, New Jersey or
Florida is located are authorized or obligated by law or executive order to be
closed.
Carryforward Interest: For any Class of Certificates and any
Distribution Date, the sum of (1) the amount, if any, by which (x) the sum of
(A) Current Interest for such Class for the immediately preceding Distribution
Date and (B) any unpaid Carryforward Interest from previous Distribution Dates
exceeds (y) the amount paid in respect of interest on such Class on such
immediately preceding Distribution Date, and (2) interest on such amount for the
related Interest Accrual Period at the applicable Pass-Through Rate.
8
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificates: As specified in the Preliminary Statement.
Certificate Account: The separate Eligible Account created and
maintained with the Trustee, or any other bank or trust company acceptable to
the Rating Agencies which is incorporated under the laws of the United States or
any state thereof pursuant to Section 3.05, which account shall bear a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustee on behalf of the Certificateholders or any
other account serving a similar function acceptable to the Rating Agencies.
Funds in the Certificate Account may (i) be held uninvested without liability
for interest or compensation thereon or (ii) be invested at the direction of the
Trustee in Eligible Investments and reinvestment earnings thereon (net of
investment losses) shall be paid to the Trustee. Funds deposited in the
Certificate Account (exclusive of the Trustee Fee and other amounts permitted to
be withdrawn pursuant to Section 3.08) shall be held in trust for the
Certificateholders.
Certificate Balance: With respect to any Certificate at any date,
the maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof minus
the sum of (i) all distributions of principal previously made with respect
thereto and (ii) all Realized Losses allocated thereto and, in the case of any
Subordinate Certificates, all other reductions in Certificate Balance previously
allocated thereto pursuant to Section 4.05.
Certificate Margin: As to the Class A-2 Certificates, the applicable
amount set forth below:
Certificate Margin
-------------------------------
(1) (2)
0.18% 0.36%
----------
(1) On or prior to the Optional Termination Date.
(2) After the Optional Termination Date.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to
9
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Trustee is entitled to rely conclusively on a certification of
the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the Depositor.
Charged Off Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has not yet been liquidated, purchased pursuant to Section
3.11(g) and for which the Mortgage Pool Insurer has not paid a claim, giving
rise to a Realized Loss, on the date on which such Mortgage Loan becomes 210
days delinquent, due to a determination by the Servicer, pursuant to the
procedures set forth in Section 3.11, that there will be (i) no Significant Net
Recoveries with respect to such Mortgage Loan or (ii) the potential Net
Recoveries are anticipated to be an amount, determined by the Servicer in its
good faith judgment and in light of other mitigating circumstances, that is
insufficient to warrant proceeding through foreclosure or other liquidation of
the related Mortgaged Property.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A-1 Pass-Through Rate: (a) on or prior to the Optional
Termination Date, the lesser of (i) 4.1665% per annum and (ii) the Net Funds
Rate, and (b) after the Optional Termination Date, the lesser of (i) 4.4165% per
annum and (ii) the Net Funds Rate.
Class A-2 Pass-Through Rate: With respect to the initial Interest
Accrual Period, based on a LIBOR determination date of July 27, 2004, 1.6500%
per annum. With respect to any Interest Accrual Period thereafter, will be a per
annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Rate.
Class A-3 Pass-Through Rate: (a) on or prior to the Optional
Termination Date, the lesser of (i) 4.2640% per annum and (ii) the Net Funds
Rate, and (b) after the Optional Termination Date, the lesser of (i) 4.5140% per
annum and (ii) the Net Funds Rate.
Class A-4 Pass-Through Rate: (a) on or prior to the Optional
Termination Date, the lesser of (i) 5.5430% per annum and (ii) the Net Funds
Rate, and (b) after the Optional Termination Date, the lesser of (i) 5.7930% per
annum and (ii) the Net Funds Rate.
Class A-IO-1 Notional Amount: With respect to any Distribution Date
will be equal to the Class Principal Balance of the Class A-1 Certificates
immediately prior to such Distribution Date. For federal income tax purposes,
however, the Class A-IO-1 Certificates will have a notional amount equal to the
principal balance of REMIC 2 Regular Interest MT-A-1.
Class A-IO-1 Pass-Through Rate: With respect to any Interest Accrual
Period, the excess, if any, or (i) the Net Funds Rate over (ii) the Class A-1
Pass-Through Rate.
10
Class A-IO-2 Notional Amount: With respect to any Distribution Date
will be equal to the Class Principal Balance of the Class A-2 Certificates
immediately prior to such Distribution Date. For federal income tax purposes,
however, the Class A-IO-2 Certificates will have a notional amount equal to the
principal balance of REMIC 2 Regular Interest MT-A-2.
Class A-IO-2 Pass-Through Rate: With respect to any Interest Accrual
Period, the product of (x) the excess, if any, of (i) Net Funds Rate over (ii)
the Class A-2 Pass-Through Rate and (y) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the immediately
preceding Interest Accrual Period for the Class A-2 Certificates.
Class A-IO-3 Notional Amount: With respect to any Distribution Date
will be equal to the Class Principal Balance of the Class A-3 Certificates
immediately prior to such Distribution Date. For federal income tax purposes,
however, the Class A-IO-3 Certificates will have a notional amount equal to the
principal balance of REMIC 2 Regular Interest MT-A-3.
Class A-IO-3 Pass-Through Rate: With respect to any Interest Accrual
Period, the excess, if any, or (i) the Net Funds Rate over (ii) the Class A-3
Pass-Through Rate.
Class A-IO-4 Notional Amount: With respect to any Distribution Date
will be equal to the Class Principal Balance of the Class A-4 Certificates
immediately prior to such Distribution Date. For federal income tax purposes,
however, the Class A-IO-4 Certificates will have a notional amount equal to the
principal balance of REMIC 2 Regular Interest MT-A-4.
Class A-IO-4 Pass-Through Rate: With respect to any Interest Accrual
Period, the excess, if any, or (i) the Net Funds Rate over (ii) the Class A-4
Pass-Through Rate.
Class A-R Pass-Through Rate: With respect to the Distribution Date
in August 2004, a per annum rate equal to the Net WAC Rate.
Class A-RL Pass-Through Rate: With respect to the Distribution Date
in August 2004, a per annum rate equal to the Net WAC Rate.
Class B Principal Payment Amount: For any Distribution Date on or
after the Stepdown Date and as long as a Trigger Event is not in effect with
respect to such Distribution Date, will be the amount, if any, by which (x) the
sum of (i) the aggregate Class Principal Balance of the Class A-1, Class A-2,
Class A-3, Class A-4, Class P, Class A-R, Class A-RL, Class M-1, Class M-2,
Class M-3, Class M-4 and Class M-5 Certificates, in each case, after giving
effect to payments on such Distribution Date and (ii) the Class Principal
Balance of the Class B Certificates immediately prior to such Distribution Date
exceeds (y) the lesser of (A) the product of (i) 94.00% and (ii) the Aggregate
Loan Balance for such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.
Class B Pass-Through Rate: With respect to any Interest Accrual
Period, the Net Funds Rate.
11
Class M-1 Notional Amount: With respect to any Distribution Date
will be equal to the Class Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date. For federal income tax purposes,
however, the Class M-1 Certificates will have a notional amount equal to the
principal balance of REMIC 2 Regular Interest MT-M-1.
Class M-1 Pass-Through Rate: (a) on or prior to the Optional
Termination Date, the lesser of (i) 5.3790% per annum and (ii) the Net Funds
Rate, and (b) after the Optional Termination Date, the lesser of (i) 5.6290% per
annum and (ii) the Net Funds Rate.
Class M-1 Principal Payment Amount: For any Distribution Date on or
after the Stepdown Date and as long as a Trigger Event is not in effect with
respect to such Distribution Date, will be the amount, if any, by which (x) the
sum of (i) the aggregate Class Principal Balance of the Class A-1, Class A-2,
Class A-3, Class A-4, Class P, Class A-R and Class A-RL Certificates after
giving effect to payments on such Distribution Date and (ii) the Class Principal
Balance of the Class M-1 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 50.51% and (ii) the
Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by
which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii)
0.50% of the Aggregate Loan Balance as of the Cut-off Date.
Class M-2 Pass-Through Rate: With respect to any Interest Accrual
Period, the Net Funds Rate.
Class M-2 Principal Payment Amount: For any Distribution Date on or
after the Stepdown Date and as long as a Trigger Event is not in effect with
respect to such Distribution Date, will be the amount, if any, by which (x) the
sum of (i) the aggregate Class Principal Balance of the Class A-1, Class A-2,
Class A-3, Class A-4, Class P, Class A-R and Class M-1 Certificates, in each
case, after giving effect to payments on such Distribution Date and (ii) the
Class Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 65.51% and
(ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount,
if any, by which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.
Class M-3 Pass-Through Rate: With respect to any Interest Accrual
Period, the Net Funds Rate.
Class M-3 Principal Payment Amount: For any Distribution Date on or
after the Stepdown Date and as long as a Trigger Event is not in effect with
respect to such Distribution Date, will be the amount, if any, by which (x) the
sum of (i) the aggregate Class Principal Balance of the Class A-1, Class A-2,
Class A-3, Class A-4, Class P, Class A-R, Class M-1 and Class M-2 Certificates,
in each case, after giving effect to payments on such Distribution Date and (ii)
the Class Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date exceeds (y) the lesser of (A) the product of (i) 69.41%
and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Loan Balance for such Distribution
Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.
12
Class M-4 Pass-Through Rate: With respect to any Interest Accrual
Period, the Net Funds Rate.
Class M-4 Principal Payment Amount: For any Distribution Date on or
after the Stepdown Date and as long as a Trigger Event is not in effect with
respect to such Distribution Date, will be the amount, if any, by which (x) the
sum of (i) the aggregate Class Principal Balance of the Class A-1, Class A-2,
Class A-3, Class A-4, Class P, Class A-R, Class M-1, Class M-2 and Class M-3
Certificates, in each case, after giving effect to payments on such Distribution
Date and (ii) the Class Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 82.50% and (ii) the Aggregate Loan Balance for such Distribution
Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of
the Cut-off Date.
Class M-5 Pass-Through Rate: With respect to any Interest Accrual
Period, the Net Funds Rate.
Class M-5 Principal Payment Amount: For any Distribution Date on or
after the Stepdown Date and as long as a Trigger Event is not in effect with
respect to such Distribution Date, will be the amount, if any, by which (x) the
sum of (i) the aggregate Class Principal Balance of the Class A-1, Class A-2,
Class A-3, Class A-4, Class P, Class A-R, Class M-1, Class M-2, Class M-3 and
Class M-4 Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Class Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) 86.20% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan
Balance as of the Cut- off Date.
Class X-1 Distributable Amount: With respect to any Distribution
Date, the amount of interest accrued during the related Interest Accrual Period
at the related Pass-Through Rate on the Class X-1 Notional Amount for such
Distribution Date.
Class X-1 Notional Amount: Immediately prior to any Distribution
Date, with respect to the Class X-1 Certificates, an amount equal to the
aggregate of the Uncertificated Principal Balances of the REMIC 2 Regular
Interests (other than REMIC 2 Regular Interests MT-P and MT- R).
Class P Pass-Through Rate: With respect to the Class P Certificates
and any Distribution Date, a per annum rate equal to the Net Funds Rate. For
federal income tax purposes, however, with respect to any Distribution Date, the
Class P Certificates will be entitled to 100% of the interest accrued on REMIC 2
Regular Interest MT-P.
Class Principal Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date plus, in the case of any Subordinate
Certificates, any increase in the Class Principal Balance of such Class pursuant
to Section 4.02(vii) due to the receipt of Net Recoveries.
13
Class R-2 Interest: The sole class of residual interests in REMIC 2.
Class R-3 Interest: The sole class of residual interests in REMIC 3.
Closing Date: July 29, 2004.
Code: The Internal Revenue Code of 1986, as the same may be amended
from time to time (or any successor statute thereto).
Collection Accounts: The accounts established and maintained by the
Servicer in accordance with Section 3.05.
Collection Period: With respect to any Distribution Date, the period
from the second day of the month immediately preceding such Distribution Date to
and including the first day of the month of such Distribution Date.
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan and
as of any date of determination, the fraction (expressed as a percentage) the
numerator of which is the sum of (i) original principal balance of the related
Mortgage Loan at such date of determination and (ii) the unpaid principal
balance of the related First Mortgage Loan as of the date of origination of that
Mortgage Loan and the denominator of which is (a) with respect to a refinanced
Mortgage Loan, the Appraised Value of the related Mortgaged Property at
origination and (b) with respect to all other Mortgage Loans, the lesser of (i)
the Appraised Value of the related Mortgage Property at origination and (ii) the
purchase price of the related Mortgaged Property.
Compensating Interest Payment: For any Distribution Date, an amount
to be paid by the Servicer for such Distribution Date, equal to the lesser of
(i) an amount equal to one half of the monthly Servicing Fee Rate on the
Mortgage Loans otherwise payable to the Servicer on such Distribution Date
(prior to giving effect to any Scheduled Payments due on the Mortgage Loans on
such Due Date) and (ii) the sum of (a) the aggregate Prepayment Interest
Shortfall for the Mortgage Loans relating to Principal Prepayments received
during the related Prepayment Period and (b) any shortfall in interest resulting
from payments made under the Mortgage Pool Insurance Policy during the portion
of the related Prepayment Period occurring from the fifteenth day through the
last day of the calendar month preceding the month in which such Distribution
Date occurs.
Confirmation: The Confirmation dated July 29, 2004, evidencing a
transaction between the Interest Rate Cap Agreement Counterparty and the
Trustee.
Corporate Trust Office: The designated office of the Trustee in the
State of New York at which at any particular time its corporate trust business
with respect to this Agreement shall be administered, which office at the date
of the execution of this Agreement is located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Institutional Trust Services/Global
Debt: First Franklin Mortgage Loan Trust-2004-FFB.
Corresponding Certificate: With respect to each REMIC 2 Regular
Interest, the Certificate with the corresponding designation.
14
Corresponding Interest: With respect to each REMIC 1 Regular
Interest (other than REMIC 1 Regular Interests LT-AA and LT-ZZ) the REMIC 2
Regular Interest with the corresponding designation.
Credit Risk Manager: The Murrayhill Company, a Colorado corporation.
Credit Risk Management Agreement: The agreement between Wilshire and
the Credit Risk Manager dated as of July 29, 2004.
Credit Risk Manager Fee: As to each Mortgage Loan and any
Distribution Date, an amount equal to one month's interest at the Credit Risk
Manager Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the
Due Date in the month of such Distribution Date (prior to giving effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date).
Credit Risk Manager Fee Rate: 0.0175% per annum.
CSFB: Credit Suisse First Boston LLC, a Delaware limited liability
company, and its successors and assigns.
Cumulative Loss Event: For any Distribution Date, a Cumulative Loss
Event is occurring if Cumulative Net Realized Losses on the Mortgage Loans plus
the amount by which the total available coverage under the Mortgage Pool
Insurance Policy has been reduced as of such date, equal or exceed the
percentage of the Aggregate Loan Balance as of the Cut-off Date for that
Distribution Date as specified below:
Percentage of Aggregate
Distribution Date Loan Balance
----------------- ------------
August 2004 - July 2007..................... N.A.
August 2007 - July 2008..................... 3.50%
August 2008 - July 2009..................... 4.50%
August 2009 - July 2010..................... 5.00%
August 2010 and thereafter.................. 6.00%
Cumulative Net Realized Losses: As to any date of determination the
aggregate amount of Realized Losses as reduced by any Net Recoveries received on
Charged Off Loans.
Current Interest: For any Class of Certificates and Distribution
Date, the amount of interest accruing at the applicable Pass-Through Rate on the
related Class Principal Balance, or Notional Amount, as applicable, of such
Class during the related Interest Accrual Period; provided, that if and to the
extent that on any Distribution Date the Interest Remittance Amount is less than
the aggregate distributions required pursuant to Section 4.02(b)(i)A-H without
regard to this proviso, then the Current Interest on each such Class will be
reduced, on a pro rata basis in proportion to the amount of Current Interest for
each Class without regard to this proviso, by the lesser of (i) the amount of
the deficiency described above in this proviso and (ii) the related Interest
Shortfall for such Distribution Date.
15
Curtailment: Any payment of principal on a Mortgage Loan, made by or
on behalf of the related Mortgagor, other than a Scheduled Payment, a prepaid
Scheduled Payment or a Payoff, which is applied to reduce the outstanding Stated
Principal Balance of the Mortgage Loan.
Custodial Agreement: The agreement, among the Trustee, the Custodian
and the Depositor providing for the safekeeping of any documents or instruments
referred to in Section 2.01 on behalf of the Certificateholders, attached hereto
as Exhibit R.
Custodian: LaSalle Bank National Association, a national banking
association, or any successor custodian appointed pursuant to the terms of the
Custodial Agreement. Each Custodian so appointed shall act as agent on behalf of
the Trustee, and shall be compensated by the Depositor. The Trustee shall remain
at all times responsible under the terms of this Agreement, notwithstanding the
fact that certain duties have been assigned to a Custodian.
Cut-off Date: July 1, 2004.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Deductible: With respect to the Mortgage Pool Insurance Policy and
as of any Distribution Date, an amount equal to the sum of (i) Monthly Excess
Cashflow (after giving effect to distributions of interest and principal (other
than the distributions described in Section 4.02(b)(iv)C. hereof) and
distributions pursuant to Section 4.02(b)(iv)D. through I. hereof) and (ii) the
Overcollateralization Amount.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deferred Amount: For any Class of Class M or Class B Certificates
and any Distribution Date, will equal the amount by which (x) the aggregate of
the Applied Loss Amounts previously applied in reduction of the Class Principal
Balance thereof exceeds (y) the sum of (i) the aggregate of amounts previously
paid in reimbursement thereof and (ii) the amount of the increase in the related
Class Principal Balance due to the receipt of Net Recoveries as provided in
Section 4.02(vii).
Definitive Certificates: Any Certificate issued in lieu of a
Book-Entry Certificate pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Rate: For any month, a fraction, expressed as a
percentage, the numerator of which is the aggregate outstanding principal
balance of all Mortgage Loans 60 or more days delinquent (including all
foreclosures and REO Properties) as of the close of business on the last day of
such month, and the denominator of which is the Aggregate Loan Balance as of the
close of business on the last day of such month.
16
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the "Initial Notional Amount of this Certificate" or, if neither of the
foregoing, the Percentage Interest appearing on the face thereof.
Depositor: Credit Suisse First Boston Mortgage Securities Corp., a
Delaware corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. 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.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date and any Mortgage
Loan, the second Business Day immediately following the 15th day of the month of
such Distribution Date.
Distribution Date: The 25th day of each month or if such day is not
a Business Day, the first Business Day thereafter, commencing in August 2004.
DLJMC: DLJ Mortgage Capital, Inc., a Delaware corporation, and its
successors and assigns.
Due Date: With respect to any Distribution Date and any Mortgage
Loan, the day during the related Due Period on which the Scheduled Payment is
due.
Due Period: With respect to each Distribution Date, the period
commencing on the second day of the month preceding the month of the
Distribution Date and ending on the first day of the month of the Distribution
Date.
Eligible Account: Either (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company acceptable
to the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided that
any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt obligations of such holding company) have been
rated by Moody's and Fitch in its highest short-term rating category and by S&P
at least "A-1+", or (iii) a segregated trust account or accounts (which shall be
a "special deposit account") maintained with the Trustee or any other federal or
state chartered depository institution or trust company, acting in its fiduciary
capacity, in a manner acceptable to the Trustee and the Rating Agencies.
Eligible Accounts may bear interest.
17
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith
and credit of the United States of America; or obligations fully
guaranteed by, the United States of America; Xxxxxxx Mac, Xxxxxx Xxx, the
Federal Home Loan Banks or any agency or instrumentality of the United
States of America rated AA or higher by the Rating Agencies;
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, so long as at the
time of such investment or contractual commitment providing for such
investment the commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal subsidiary
of a holding company, the commercial paper or other short-term debt
obligations of such holding company) are rated in one of two of the
highest ratings by each of the Rating Agencies, and the long-term debt
obligations of such depository institution or trust company (or, in the
case of a depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated in one of two of the highest ratings, by each
of the Rating Agencies;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into
with a depository institution or trust company (acting as a principal)
rated "A" or higher by Moody's, "A-1" or higher by S&P and "F-1" or higher
by Fitch; provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (i) above
and must (A) be valued daily at current market price plus accrued
interest, (B) pursuant to such valuation, be equal, at all times, to 105%
of the cash transferred by the Trustee in exchange for such collateral,
and (C) be delivered to the Trustee or, if the Trustee is supplying the
collateral, an agent for the Trustee, in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which has a long-term unsecured debt rating in the
highest available rating category of each of the Rating Agencies at the
time of such investment;
(v) commercial paper having an original maturity of less than 365
days and issued by an institution having a short-term unsecured debt
rating in the highest available rating category of Moody's and Fitch and
rated "A-1+" by S&P at the time of such investment;
18
(vi) a guaranteed investment contract approved by each of the Rating
Agencies and issued by an insurance company or other corporation having a
long-term unsecured debt rating in the highest available rating category
of each of the Rating Agencies at the time of such investment;
(vii) which may be 12b-1 funds as contemplated under the rules
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940) having ratings in the highest available rating
category of Moody's and Fitch and or "AAAm" or "AAAm-G" by S&P at the time
of such investment (any such money market funds which provide for demand
withdrawals being conclusively deemed to satisfy any maturity requirements
for Eligible Investments set forth herein) including money market funds of
the Servicer or the Trustee and any such funds that are managed by the
Servicer or the Trustee or their respective Affiliates or for the Servicer
or the Trustee or any Affiliate of either acts as advisor, as long as such
money market funds satisfy the criteria of this subparagraph (vii); and
(viii) such other investments the investment in which will not, as
evidenced by a letter from each of the Rating Agencies, result in the
downgrading or withdrawal of the Ratings of the Certificates.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Restricted Certificates: As specified in the Preliminary
Statement.
Escrow Account: The separate account or accounts created and
maintained by the Servicer pursuant to Section 3.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, mortgage insurance premiums, fire and hazard
insurance premiums, and any other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to the Mortgage, applicable law or any
other related document.
Event of Default: As defined in Section 7.01.
Excess Cashflow Loss Payment: As defined in Section 4.02(b)(iv).
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Credit Risk Manager Fee, the Mortgage Pool Insurer Fee and the Trustee
Fee.
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Expense Fee Rate: As to each Mortgage Loan, the sum of the related
Servicing Fee Rate, the Credit Risk Manager Fee Rate, the Mortgage Pool Insurer
Fee Rate and the Trustee Fee Rate.
Fair Market Value: The fair market value of all of the property of
the Trust, as agreed upon between the Optional Termination Holder and a majority
of the Holders of the Class A-RL Certificates; provided, however, that if the
Optional Termination Holder and a majority of the Holders of the Class A-RL
Certificates do not agree upon the fair market value of all the property of the
Trust, the Trustee shall solicit, or cause the solicitation of, good faith bids
for all of the property of the Trust until it has received three bids from
institutions that are regular purchasers and/or sellers in the secondary market
of residential whole mortgage loans similar to the Mortgage Loans, and the Fair
Market Value shall be equal to the highest of such three bids.
Xxxxxx Xxx: Xxxxxx Xxx, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FIRREA: The Financial Institutions Reform, Recovery and Enforcement
Act of 1989.
First Mortgage Loan: A Mortgage Loan that is secured by a first lien
on the Mortgaged Property securing the related Mortgage Note.
Fitch: Fitch, Inc., or any successor thereto.
Xxxxxxx Mac: Xxxxxxx Mac, a corporate instrumentality of the United
States created and existing under Title III of the Emergency Home Finance Act of
1970, as amended, or any successor thereto.
Highest Priority: As of any date of determination, the Class of
Subordinate Certificates then outstanding with a Class Principal Balance greater
than zero, with the highest priority for payments pursuant to Section 4.02, in
the following order of decreasing priority: Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5 and Class B Certificates.
Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Insurance Proceeds: Proceeds due under the Mortgage Pool Insurance
Policy and proceeds paid under any Insurance Policy covering a Mortgage Loan to
the extent the proceeds are not (i) applied to the restoration of the related
Mortgaged Property, (ii) applied to the satisfaction of any related First
Mortgage Loan or (iii) released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing mortgage loans held for
its own account.
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Interest Accrual Period: With respect to each Distribution Date, (i)
with respect to the Class A-1, Class A-3, Class A-4, Class A-IO-1, Class A-IO-2,
Class A-IO-3, Class A-IO-4, Class A-R, Class A-RL, Class P, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-1-IO, Class X-1 and Class B
Certificates, the calendar month prior to the month of such Distribution Date
and (ii) with respect to the Class A-2 Certificates, the one-month period
commencing on the immediately preceding Distribution Date (or the Closing Date,
in the case of the first Distribution Date) and ending on the day immediately
preceding the related Distribution Date.
Interest Rate Cap Account: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.11 in the name of the
Trustee for the benefit of the Class A-2 Certificateholders and designated
"JPMorgan Chase Bank in trust for registered holders of First Franklin Mortgage
Loan Trust 2004-FFB, Home Equity Mortgage Pass-Through Certificates, Series
2004-FFB." Funds in the Interest Rate Cap Account shall be held in trust for the
Class A-2 Certificateholders for the uses and purposes set forth in this
Agreement. The Interest Rate Cap Account will not be an asset of any REMIC.
Ownership of the Interest Rate Cap Account is evidenced by the Class X-1
Certificates.
Interest Rate Cap Agreement: Collectively, the ISDA Master Agreement
(including the Schedule thereto and the transaction evidenced by the
Confirmation by and between the Trustee and the Interest Rate Cap Agreement
Counterparty), forms of which are attached hereto as Exhibit CC.
Interest Rate Cap Agreement Counterparty: Credit Suisse First Boston
International.
Interest Rate Cap Agreement Termination Date: The Distribution Date
in June 2008, after any required payment is made.
Interest Remittance Amount: For any Distribution Date, an amount
equal to the sum of (1) all interest collected (other than Payaheads, if
applicable) or advanced in respect of Scheduled Payments on the Mortgage Loans
during the related Due Period, the interest portion of Payaheads previously
received and intended for application in the related Due Period and the interest
portion of all Payoffs and Curtailments received on the Mortgage Loans during
the related Prepayment Period, less (x) the Expense Fee with respect to such
Mortgage Loans and (y) unreimbursed Advances and other amounts due to the
Servicer or the Trustee with respect to such Mortgage Loans, to the extent
allocable to interest, (2) all Compensating Interest Payments paid by the
Servicer with respect to the Mortgage Loans it is servicing and such
Distribution Date, (3) the portion of any Substitution Adjustment Amount or
Repurchase Price paid with respect to such Mortgage Loans during the calendar
month immediately preceding the Distribution Date allocable to interest and (4)
all Liquidation Proceeds, Net Recoveries and any Insurance Proceeds and other
recoveries (net of unreimbursed Advances, Servicing Advances and expenses, to
the extent allocable to interest, and unpaid Servicing Fees) collected with
respect to the Mortgage Loans during the prior calendar month, to the extent
allocable to interest.
Interest Shortfall: For any Distribution Date, the aggregate
shortfall, if any, in collections of interest for the previous month (adjusted
to the related Net Mortgage Rate) on
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Mortgage Loans resulting from (a) Principal Prepayments received during the
related Prepayment Period to the extent not covered by Compensating Interest and
(b) Relief Act Reductions.
ISDA: International Swaps and Derivatives Association, Inc.
ISDA Master Agreement: The Master Agreement dated as of the Closing
Date between the Trustee and the Interest Rate Cap Agreement Counterparty,
including the Schedule thereto.
Last Scheduled Distribution Date: With respect to each Class of
Certificates, the Distribution Date in June 2024.
Latest Possible Maturity Date: Solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity
date" of all interests created in REMIC 1, REMIC 2 and REMIC 3 shall be June 25,
2024.
LIBOR: For any Interest Accrual Period other than the first Interest
Accrual Period, the rate for United States dollar deposits for one month which
appears on the Dow Xxxxx Telerate Screen Page 3750 as of 11:00 A.M., London,
England time, on the second LIBOR Business Day prior to the first day of such
Interest Accrual Period. With respect to the first Interest Accrual Period, the
rate for United States dollar deposits for one month which appears on the Dow
Xxxxx Telerate Screen Page 3750 as of 11:00 A.M., London, England time, two
LIBOR Business Days prior to the Closing Date. If such rate does not appear on
such page (or such other page as may replace that page on that service, or if
such service is no longer offered, such other service for displaying LIBOR or
comparable rates as may be reasonably selected by the Trustee), the rate will be
the Reference Bank Rate. If no such quotations can be obtained and no Reference
Bank Rate is available, LIBOR will be the LIBOR applicable to the Interest
Accrual Period preceding the next applicable Distribution Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York or in the city
of London, England are required or authorized by law to be closed.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated or for
which payments under the related private mortgage insurance policy, hazard
insurance policy or any condemnation proceeds were received, in the calendar
month preceding the month of such Distribution Date and as to which the Servicer
has determined (in accordance with this Agreement) that it has received all
amounts it expects to receive in connection with the liquidation of such
Mortgage Loan, including the final disposition of the related REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or similar
disposition or amounts received in connection with any condemnation or partial
release of a Mortgaged Property and any other proceeds received in connection
with an REO Property, in each case, which, for the avoidance of doubt, is
remaining after, or not otherwise
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required to be applied to, the satisfaction of any related First Mortgage Loan,
less the sum of related unreimbursed Expense Fees, Servicing Advances, Advances
and reasonable out-of-pocket expenses.
Majority in Interest: As to any Class of Regular Certificates or the
Class X-2 Certificates, the Holders of Certificates of such Class evidencing, in
the aggregate, at least 51% of the Percentage Interests evidenced by all
Certificates of such Class.
Marker Rate: With respect to the REMIC 2 Regular Interest MT-X-1 and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular
Interests XX-X-0, XX-X-0, XX-X-0, XX-X-0, LT-M-1, LT-M-2, LT-M-3, LT-M-4,
XX-X-0, XX-X, XX-X and LT-ZZ, with the rates on the REMIC 1 Regular Interests
(other than REMIC 1 Regular Interest LT-ZZ) equal to the Net Funds Rate, for the
purpose of this calculation, and with the rate on the REMIC 1 Regular Interest
LT-ZZ subject to a cap, for the purpose of this calculation, equal to zero.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS System.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
Minimum Excess Spread Amount: For each Distribution Date, the
Minimum Excess Spread Rate multiplied by the Aggregate Loan Balance for the
immediately preceding Distribution Date (or as of the Cut-off Date with respect
to the initial Distribution Date).
Minimum Excess Spread Rate: 2.50% per annum.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Excess Cashflow: For any Distribution Date, an amount equal
to the sum of the Monthly Excess Interest and Overcollateralization Release
Amount, if any, for such date.
Monthly Excess Interest: As to any Distribution Date, the sum of (A)
the Interest Remittance Amount remaining after the application of payments
pursuant to clauses A. through G. of Section 4.02(b)(i) plus (B) the Principal
Payment Amount remaining after the application of payments pursuant to clauses
A. through G. of Section 4.02(b)(ii) or (iii).
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Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.06.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto.
For purposes of Section 10.05(b) the address for notices to Moody's shall be
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Pass-Through Monitoring, or such other address as Moody's
may hereafter furnish to the Depositor, the Servicer and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple or leasehold interest in real
property securing a Mortgage Note.
Mortgage File: The Mortgage documents listed in Section 2.01(b)
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the Trustee pursuant to the provisions hereof as from time to time are held
as a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property.
Mortgage Loan Purchase Price: The price, calculated as set forth in
Section 9.01, to be paid in connection with the purchase of the Trust Collateral
by the Auction Purchaser.
Mortgage Loan Schedule: The Mortgage Loan Schedule which will list
the Mortgage Loans (as from time to time amended by the Seller to reflect the
addition of Qualified Substitute Mortgage Loans and the purchase of Mortgage
Loans pursuant to Section 2.02 or 2.03) transferred to the Trustee as part of
the Trust Fund and from time to time subject to this Agreement, attached hereto
as Schedule I, setting forth the following information with respect to each
Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) [reserved];
(iii) the zip code of the Mortgaged Property;
(iv) a code indicating the type of Mortgaged Property and the
occupancy status.
(v) the original months to maturity or the remaining months to
maturity from the Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the
same manner but based on the actual amortization schedule;
(vi) the Combined Loan-to-Value Ratio at origination;
(vii) the Mortgage Rate as of the Cut-off Date;
(viii) the stated maturity date;
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(ix) the amount of the Scheduled Payment as of the Cut-off Date;
(x) the original principal amount of the Mortgage Loan;
(xi) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due
on or before the Cut-off Date whether or not collected;
(xii) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase, rate and term refinance, equity take-out refinance);
(xiii) the Net Mortgage Rate as of the Cut-off Date;
(xiv) the Originator of the related Mortgage Loan;
(xv) the Servicing Fee Rate;
(xvi) the related sub-servicer;
(xvii) a code indicating whether a Mortgage Loan is subject to a
Prepayment Charge;
(xviii) the amount of the Prepayment Charge with respect to each
Mortgage Loan and a code identifying whether such Prepayment Charge is
related to a Curtailment or Payoff; and
(xix) whether such Mortgage Loan is a Balloon Loan; and
(xx) a code indicating whether the Mortgage Loan is a MERS Mortgage
Loan and, if so, its corresponding MIN.
With respect to the Mortgage Loans in the aggregate, each, the
Mortgage Loan Schedule shall set forth the following information, as of the
Cut-off Date:
(i) the number of Mortgage Loans; and
(ii) the current aggregate principal balance of the Mortgage Loans
as of the close of business on the Cut-off Date, after deduction of
payments of principal due on or before the Cut-off Date whether or not
collected.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool Insurance Policy: The mortgage pool insurance policy
provided by the Mortgage Pool Insurer having an initial amount of coverage equal
to $37,657,046, and including any
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and all related endorsements, a copy of which is attached hereto as Exhibit BB,
or any replacement obtained by the Servicer pursuant to Section 3.21 hereof.
Mortgage Pool Insurer: Radian Insurance Inc., or any successor
thereto or the named insurer in any replacement policy obtained by the Servicer
pursuant to Section 3.21 hereof.
Mortgage Pool Insurer Fee: The amount payable to the Mortgage Pool
Insurer in order to obtain coverage provided under the related Mortgage Pool
Insurance Policy, such amount being, as to each Mortgage Loan and any
Distribution Date, an amount equal to one-twelfth of the related Mortgage Pool
Insurer Fee Rate on the Total Amortized Insured Loan Amount (as defined in the
related Mortgage Pool Insurance Policy) of the Mortgage Loan.
Mortgage Pool Insurer Fee Rate: With respect to any Mortgage Loan,
0.82% per annum
Mortgage Rate: The annual fixed rate of interest borne by a Mortgage
Note.
Mortgaged Property: The underlying real property securing a Mortgage
Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Funds Rate: As to any Distribution Date, will be a per annum
rate equal to (a) a fraction, expressed as a percentage, (a) the numerator of
which is (1) the amount of interest accrued on the Mortgage Loans for such date,
minus (2) the sum of (i) the Expense Fee and (ii) the Minimum Excess Spread
Amount, and (b) the denominator of which is the product of (i) the Aggregate
Loan Balance immediately preceding such Distribution Date (or as of the Cut-off
Date in the case of the first Distribution Date), multiplied by (ii)(x) in the
case of the Class A-1, Class A-3, Class A-4, Class A-IO-1, Class A-IO-2, Class
A-IO-3, Class A-IO-4, Class A-R, Class A-RL, Class P, Class M-1, Class M-1-IO,
Class M-2, Class M-3, Class M-4, Class M-5 and Class B Certificates, 1/12 and
(y) in the case of the Class A-2 Certificates, the actual number of days in the
related Interest Accrual Period divided by 360. For federal income tax purposes,
however, as to any Distribution Date will be the equivalent of the foregoing,
expressed as a per annum rate equal to the weighted average of the
Uncertificated Pass-Through Rates on the REMIC 2 Regular Interests (other than
the REMIC 2 Regular Interest MT-R) multiplied by (x) in the case of the REMIC 2
Regular Interests (other than REMIC 2 Regular Interest MT-A-2), 1/12 and (y) in
the case of the REMIC 2 Regular Interest MT- A-2, the actual of days in the
related Interest Accrual Period divided by 360.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the
per annum rate equal to the Mortgage Rate less the related Expense Fee Rate.
Net Prepayment Interest Shortfalls: As to any Distribution Date, the
amount, if any, by which the aggregate of Prepayment Interest Shortfalls during
the Prepayment Period exceeds the Compensating Interest Payment for such
Distribution Date.
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Net Recovery: Any proceeds received by the Servicer on a delinquent
or Charged Off Loan (including any Liquidation Proceeds received on a Charged
Off Loan), net of any Servicing Fee, Ancillary Income and any other related
expenses.
Net WAC Rate: A per annum rate equal to the weighted average of the
Net Mortgage Rates of the Mortgage Loans.
Nonrecoverable Advance: Any portion of an Advance or Servicing
Advance previously made or proposed to be made by the Servicer that, in the good
faith judgment of the Servicer, will not be ultimately recoverable by the
Servicer from the related Mortgagor, related Liquidation Proceeds or otherwise.
Notional Amount: The Class A-IO-1 Notional Amount, Class A-IO-2
Notional Amount, Class A-IO-3 Notional Amount, Class A-IO-4 Notional Amount,
Class M-1-IO Notional Amount or the Class X-1 Notional Amount, as the context
requires.
Notional Amount Certificates: As specified in the Preliminary
Statement.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President or
an Assistant Vice President or the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Servicer or the Depositor,
and delivered to the Depositor or the Trustee, as the case may be, as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer, including in-house counsel, reasonably
acceptable to the Trustee; provided, however, that with respect to the
interpretation or application of the REMIC Provisions, such counsel must (i) in
fact be independent of the Depositor and the Servicer, (ii) not have any
material direct financial interest in the Depositor or the Servicer or in any
affiliate of either, and (iii) not be connected with the Depositor or the
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Optional Termination: The termination of the trust created hereunder
in connection with the purchase of the Mortgage Loans pursuant to Section 9.01.
Optional Termination Date: The first date on which the Optional
Termination may be exercised.
Optional Termination Holder: Wilshire, as Servicer, or any successor
servicer appointed by the Seller, so long as the Seller is the owner of the
servicing rights.
OTS: The Office of Thrift Supervision.
Outsourcer: As defined in Section 3.02.
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Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (ii) Certificates in exchange for
which or in lieu of which other Certificates have been executed and delivered by
the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Payoff prior to such Due Date and which did not become a Liquidated Mortgage
Loan or Charged Off Loan prior to such Due Date.
Overcollateralization Amount: For any Distribution Date, an amount
equal to the amount, if any, by which (x) the Aggregate Loan Balance for such
Distribution Date exceeds (y) the aggregate Class Principal Balance of the
Certificates after giving effect to payments on such Distribution Date.
Overcollateralization Release Amount: For any Distribution Date, an
amount equal to the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the amount, if any, by which (1) the
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the aggregate of the Principal Remittance
Amount and Excess Cashflow Loss Payment for such date is applied on such date in
reduction of the aggregate of the Class Principal Balances of the Certificates
(to an amount not less than zero), exceeds (2) the Targeted
Overcollateralization Amount for such date.
Ownership Interest: As to any Residual Certificate, any ownership or
security interest in such Certificate including any interest in such Certificate
as the Holder thereof and any other interest therein, whether direct or
indirect, legal or beneficial.
Par Value: As defined in Section 9.01 hereof; provided that the "Par
Value" for any Auction Date shall also include the auction expenses of the
Trustee (which auction expenses shall not exceed $25,000).
Pass-Through Rate: With respect to the Class A-1,Class A-2, Class
A-3, Class A-4, Class A-IO-1, Class A-IO-2, Class A-IO-3, Class A-IO-4, Class
A-R, Class A-RL, Class P, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-1-IO and Class B Certificates, the Class A-1 Pass-Through Rate, Class
A-2 Pass-Through Rate, Class A-3 Pass-Through Rate, Class A-4 Pass-Through Rate,
Class A-IO-1 Pass-Through Rate, Class A-IO-2 Pass-Through Rate, Class A-IO- 3
Pass-Through Rate, Class A-IO-4 Pass-Through Rate, Class A-R Pass-Through Rate,
Class A-RL Pass-Through Rate, Class P Pass-Through Rate, Class M-1 Pass-Through
Rate, Class M-2 Pass- Through Rate, Class M-3 Pass-Through Rate, Class M-4
Pass-Through Rate, Class M-5 Pass- Through Rate, Class M-1-IO Pass-Through Rate
and Class B Pass-Through Rate.
The Class X-1 Certificates will not have a Pass-Through Rate but shall receive
100% of the amounts distributed to REMIC 2 Regular Interest MT-X-1.
Payahead: Any Scheduled Payment intended by the related Mortgagor to
be applied in a Due Period subsequent to the Due Period in which such payment
was received.
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Payoff: Any payment of principal on a Mortgage Loan equal to the
entire outstanding Stated Principal Balance of such Mortgage Loan, if received
in advance of the last scheduled Due Date for such Mortgage Loan and accompanied
by an amount of interest equal to accrued unpaid interest on the Mortgage Loan
to the date of such payment-in-full.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Transferee: Any person other than (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 section 521 of the Code)
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) on any
excess inclusions (as defined in section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a
United States Person, and (vi) a Person designated as a non-Permitted Transferee
by the Depositor based upon an Opinion of Counsel that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code 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, with
the exception of Xxxxxxx Mac, a majority of its board of directors is not
selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Prepayment Charge: With respect to any Mortgage Loan, any fee or
charge required to be paid if the Mortgagor prepays such Mortgage Loan as
provided in the related Mortgage Note or Mortgage.
Prepayment Interest Shortfall: As to any Mortgage Loan, Distribution
Date and Principal Prepayment, other than Principal Prepayments in full that
occur during the portion of the Prepayment Period that is in the same calendar
month as the Distribution Date, the difference between (i) one full month's
interest at the applicable Mortgage Rate (giving effect to any applicable Relief
Act Reduction), as reduced by the Expense Fee Rate, on the Stated Principal
Balance of such Mortgage Loan immediately prior to such Principal Prepayment and
(ii) the amount of interest actually received that accrued during the month
immediately preceding such Distribution Date or, with respect to any Mortgage
Loan with a Due Date other than the first of the month, the amount of
29
interest actually received that accrued during the one-month period immediately
preceding the Due Date following the Principal Prepayment, with respect to such
Mortgage Loan in connection with such Principal Prepayment.
Prepayment Period: With respect to each Distribution Date (other
than the August 2004 Distribution Date) and each Payoff, the related "Prepayment
Period" will be the 15th of the month preceding the month in which the related
Distribution Date occurs through the 14th of the month in which the related
Distribution Date occurs. With respect to the August 2004 Distribution Date and
each Payoff, the related "Prepayment Period" will be July 1, 2004 through August
14, 2004. With respect to each Distribution Date and each Curtailment, the
related "Prepayment Period" will be the calendar month preceding the month in
which the related Distribution Date occurs.
Principal Payment Amount: For any Distribution Date, an amount equal
to the Principal Remittance Amount plus any Excess Cashflow Loss Payment for
such date, minus the Overcollateralization Release Amount, if any, for such
date.
Principal Remittance Amount: For any Distribution Date, an amount
equal to the sum of (1) all principal collected (other than Payaheads) or
advanced in respect of Scheduled Payments on the Mortgage Loans during the
related Due Period (less unreimbursed Advances, Servicing Advances and other
amounts due to the Servicer and the Trustee with respect to the Mortgage Loans,
to the extent allocable to principal) and the principal portion of Payaheads
previously received and intended for application in the related Due Period, (2)
all Principal Prepayments on the Mortgage Loans received during the related
Prepayment Period, (3) the outstanding principal balance of each Mortgage Loan
that was repurchased by the Seller, the Optional Termination Holder, the
Mortgage Pool Insurance Company or the Majority in Interest Class X-2
Certificateholder during the calendar month immediately preceding such
Distribution Date, (4) the portion of any Substitution Adjustment Amount paid
with respect to any Deleted Mortgage Loans during the calendar month immediately
preceding such Distribution Date allocable to principal and (5) all Liquidation
Proceeds and any Insurance Proceeds and other recoveries (net of unreimbursed
Advances, Servicing Advances and other expenses, to the extent allocable to
principal) and Net Recoveries collected with respect to the Mortgage Loans
during the prior calendar month, to the extent allocable to principal.
Principal Prepayment: Any payment of principal on a Mortgage Loan
which constitutes a Payoff or Curtailment.
Prospectus Supplement: The Prospectus Supplement dated July 27, 2004
relating to the Offered Certificates.
PUD: Planned Unit Development.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
Xxxxxx Mae- or Xxxxxxx Mac-approved mortgage insurer or having a claims paying
ability rating of at least "AA" or
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equivalent rating by at least two nationally recognized statistical rating
organizations. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date. Any replacement insurer with respect to the Mortgage Pool
Insurance Policy must be acceptable to the Rating Agencies as evidenced by
written acknowledgment from each Rating Agency that such replacement will not
cause a reduction, withdrawal or cancellation of the ratings of the
Certificates.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit M (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution (or,
in the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of, and not more
than 10% less than the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) be accruing interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Combined Loan-to-
Value Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a
remaining term to maturity no greater than (and not more than one year less than
that of) the Deleted Mortgage Loan; and (v) comply with each representation and
warranty set forth in Section 2.03(f).
Radian Guidelines: The 2nd lien servicing guidelines of the Mortgage
Pool Insurer and the Service Level Agreement dated April 29, 2004 between the
Mortgage Pool Insurer and Wilshire, referred to in the Mortgage Pool Insurance
Policy.
Rating Agency: S&P and Xxxxx'x. If either such organization or a
successor is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating organization, or other comparable Person, as is
designated by the Depositor, notice of which designation shall be given to the
Trustee and the Servicer. References herein to a given rating or rating category
of a Rating Agency shall mean such rating category without giving effect to any
modifiers.
Ratings: As of any date of determination, the ratings, if any, of
the Certificates as assigned by the Rating Agencies.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or greater than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Rate from the related Due
Date as to which interest was last paid or advanced (and not reimbursed) to the
related Certificateholders up to the related Due Date in the month in which
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan from time to time, minus (iii) the
Liquidation Proceeds (including any proceeds under the Mortgage Pool Insurance
Policy), if any, received during the month in which such liquidation occurred,
to the extent applied as recoveries of interest at the Net Mortgage Rate and to
principal of the Liquidated Mortgage Loan. Any Charged Off Loan will give rise
to a Realized Loss (calculated as if clause (iii) of the previous sentence is
equal to zero) at the time it is charged off, as described in Section
3.11(a)(iii) hereof.
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If the Servicer receives Net Recoveries with respect to any Charged Off
Loan, the amount of the Realized Loss with respect to that Charged Off Loan will
be reduced to the extent such recoveries are applied to principal distributions
on any Distribution Date.
Record Date: With respect to the Certificates (other than the Class
A-2 Certificates which are Book-Entry Certificates) and any Distribution Date,
the close of business on the last Business Day of the month preceding the month
in which such applicable Distribution Date occurs. With respect to the Class A-2
Certificates which are Book-Entry Certificates and any Distribution Date, the
close of business on the Business Day preceding such Distribution Date.
Reference Bank Rate: With respect to any Interest Accrual Period, as
follows: the arithmetic mean (rounded upwards, if necessary, to the nearest one
sixteenth of a percent) of the offered rates for United States dollar deposits
for one month which are offered by the Reference Banks as of 11:00 A.M., London,
England time, on the second LIBOR Business Day prior to the first day of such
Interest Accrual Period to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Class
Principal Balance of the LIBOR Certificates; provided that at least two such
Reference Banks provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York time, on such date for loans in U.S. Dollars to leading European Banks
for a period of one month in amounts approximately equal to the aggregate Class
Principal Balance of the LIBOR Certificates. If no such quotations can be
obtained, the Reference Bank Rate shall be LIBOR applicable to the preceding
Distribution Date; provided however, that if, under the priorities indicated
above, LIBOR for a Distribution Date would be based on LIBOR for the previous
Payment Date for the third consecutive Distribution Date, the Trustee shall
select an alternative comparable index over which the Trustee has no control,
used for determining one-month Eurodollar lending rates that is calculated and
published or otherwise made available by an independent party.
Reference Banks: Barclays Bank PLC, National Westminster Bank and
Abbey National PLC.
Regular Certificates: As specified in the Preliminary Statement.
Released Loan: Any Charged Off Loan that is released by Wilshire to
the Class X-2 Certificateholders pursuant to Section 3.11(a), generally on the
date that is six months after the date on which Wilshire begins using Wilshire
Special Servicing on such Charged Off Loans. Any Released Loan will no longer be
an asset of any REMIC or the Trust Fund.
Relief Act: The Servicemembers Civil Relief Act or any similar state
law or regulation.
Relief Act Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
or principal collectible thereon (attributable to any previous month) as a
result of the application of the Relief Act or similar state law or regulation,
the amount, if any, by which (i) interest and/or principal collectible on such
32
Mortgage Loan for the most recently ended calendar month is less than (ii)
interest and/or principal accrued thereon for such month pursuant to the
Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC 1: The segregated pool of assets subject hereto, constituting
the primary trust created hereby and to be administered hereunder, with respect
to which a REMIC election is to be made consisting of: (i) such Mortgage Loans
as from time to time are subject to this Agreement (other than any Prepayment
Premiums), together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof, (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Mortgage Pool
Insurance Policy, (iv) the Trustee's rights with respect to the Mortgage Loans
under all insurance policies, including the Primary Insurance Policy, required
to be maintained pursuant to this Agreement and any proceeds thereof and (v) the
Collection Account and the Certificate Account (subject to the last sentence of
this definition) and such assets that are deposited therein from time to time
and any investments thereof. Notwithstanding the foregoing, however, a REMIC
election will not be made with respect to the Interest Rate Cap Account.
REMIC 1 Interest Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 1 Pass- Through Rate for REMIC 1
Regular Interest LT-AA minus the Marker Rate, divided by (b) 12.
REMIC 1 Overcollateralization Amount: With respect to any date of
determination, (i) 1% of the aggregate Stated Principal Balances of the Mortgage
Loans minus (ii) the aggregate Uncertificated Principal Balances of REMIC 1
Regular Interests XX-X-0, XX-X-0, XX-X-0, XX-X-0, LT-M-1, LT-M-2, LT-M-3,
XX-X-0, XX-X-0, XX-X, XX-X, XX-XX and LT-P, in each case as of such date of
determination.
REMIC 1 Principal Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate Uncertificated Principal Balance of REMIC 1 Regular Interests LT-A-1,
LT- X-0, XX-X-0, XX-X-0, XX-X-0, LT-M-2, LT-M-3, XX-X-0, XX-X-0, XX-X, xxx XX-X
and the denominator of which is the aggregate Uncertificated Principal Balance
of REMIC 1 Regular Interests XX-X-0, XX-X-0, XX-X-0, XX-X-0, LT-M-1, LT-M-2,
LT-M-3, XX-X-0, XX-X-0, XX-X, xxx XX-X and MT-ZZ.
REMIC 1 Regular Interest LT-AA: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-AA shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
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REMIC 1 Regular Interest LT-A-1: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-A-1
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-A-2: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-A-2
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-A-3: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-A-3
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-A-4: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-A-4
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-M-1: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-M-1
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-M-2: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-M-2
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-M-3: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-M-3
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
34
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-M-4: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-M-4
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-M-5: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-M-5
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 1 Regular Interest LT-B: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-B shall accrue interest
at the related Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC 1 Regular Interest LT-R: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest MT-B-2 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC 1 Regular Interest LT-P: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-P shall accrue interest
at the related Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC 1 Regular Interest LT-ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-ZZ shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
35
REMIC 1 Regular Interest LT-ZZ Maximum Interest Deferral Amount:
With respect to any Distribution Date, the excess of (i) Uncertificated Accrued
Interest calculated with the REMIC 1 Regular Interest LT-ZZ Uncertificated REMIC
1 Pass-Through Rate and an Uncertificated Principal Balance equal to the excess
of (x) the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-ZZ
over (y) the REMIC 1 Overcollateralized Amount, in each case for such
Distribution Date, over (ii) the sum of Uncertificated Accrued Interest on REMIC
1 Regular Interest LT-A-1 through REMIC 1 Regular Interest LT-B, with the rate
on each such REMIC 1 Regular Interest subject to a cap equal to the Pass-Through
Rate for the Corresponding Certificate for the purpose of this calculation.
REMIC 1 Regular Interests: REMIC 1 Regular Interests XX-X-0, XX-X-0,
XX-X-0, XX-X-0, LT-M-1, LT-M-2, LT-M-3, LT-M-4, XX-X-0, XX-X, XX-X, XX-X and
LT-ZZ.
REMIC 1 Targeted Overcollateralization Amount: 1% of the Targeted
Overcollateralization Amount.
REMIC 2: The segregated pool of assets consisting of all of the
REMIC 1 Regular Interests conveyed in the trust to the Trustee, for the benefit
of the Holders of the REMIC 2 Regular Interests and Class A-R Certificates (in
respect of the Class R-2 Interest), pursuant to Article II hereunder, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.
REMIC 2 Regular Interests: REMIC 2 Regular Interests MT-A-1, MT-A-2,
MT- X-0, XX-X-0, XX-X-0, XX-X-0, MT-M-3, MT-M-4, MT-M-5, MT-B, MT-X-1, MT-P and
MT-R.
REMIC 2 Regular Interest MT-A-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-A-1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-A-2: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-A-2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-A-3: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-A-3
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
36
REMIC 2 Regular Interest MT-A-4: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-A-4
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-M-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-M-1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-M-2: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-M-2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-M-3: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-M-3
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-M-4: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-M-4
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-M-5: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-M-5
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-B: One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-B shall accrue interest
at the related Uncertificated REMIC 2 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject
37
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC 2 Regular Interest MT-X-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-X-1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MT-P: One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-P shall accrue interest
at the related Uncertificated REMIC 2 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC 2 Regular Interest MT-R: One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. REMIC 2 Regular Interest MT-R shall accrue interest
at the related Uncertificated REMIC 2 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time.
REMIC Regular Interests: The REMIC 1 Regular Interests, REMIC 2
Regular Interests and Regular Certificates.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan and, for the avoidance of doubt, following the
satisfaction of any related First Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to this Agreement or purchased at the option of
the Mortgage Pool Insurer or the Majority in Interest Holder of the Class X-2
Certificates pursuant to this Agreement, an amount equal to the sum of (i) 100%
of the unpaid principal balance of the Mortgage Loan on the date of such
purchase, (ii) accrued unpaid interest thereon at the applicable Mortgage Rate
from the date through which interest was last paid by the Mortgagor to the Due
Date in the month in which the Repurchase Price is to be distributed to
Certificateholders, (iii) any unreimbursed Servicing Advances and (iv) with
respect to the Seller only, any costs and damages actually incurred and paid by
or on behalf of the Trust (including, but not limited to late fees) in
connection with any breach
38
of the representation and warranty set forth in clause (xx) of Schedule IV
hereto as the result of a violation of a predatory or abusive lending law
applicable to such Mortgage Loan.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit M.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Trust
Officer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of this Agreement.
Rolling Three Month Delinquency Rate: For any Distribution Date will
be the fraction, expressed as a percentage, equal to the average of the
Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates, respectively) immediately preceding months.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies,
Inc. For purposes of Section 10.05(b) the address for notices to S&P shall be
Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Mortgage Surveillance Monitoring, or such other address as S&P may hereafter
furnish to the Depositor, the Servicer and the Trustee.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
pursuant to the terms of the related Mortgage Note, as reduced by any Relief Act
Reductions.
Second Mortgage Loan: A Mortgage Loan that is secured by a second
lien on the Mortgaged Property securing the related Mortgage Note.
Securities Act: The Securities Act of 1933, as amended.
Seller: DLJ Mortgage Capital, Inc.
Senior Certificates: As specified in the Preliminary Statement.
Senior Enhancement Percentage: For any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is the sum of the
aggregate Class Principal Balance of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class B Certificates and the
39
Overcollateralization Amount (which, for purposes of this definition only, shall
not be less than zero), in each case after giving effect to payments on such
Distribution Date (assuming no Trigger Event is in effect), and the denominator
of which is the Aggregate Loan Balance for such Distribution Date.
Senior Principal Payment Amount: For any Distribution Date on or
after the Stepdown Date and as long as a Trigger Event is not in effect with
respect to such Distribution Date, will be the amount, if any, by which (x) the
aggregate Class Principal Balance of the Class A-1, Class A-2, Class A-3, Class
A-4, Class P, Class A-R and Class A-RL Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 47.21% and
(ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount,
if any, by which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.
Servicer: Wilshire or its successors in interest, or any successor
servicer appointed as provided herein.
Servicer Employee: As defined in Section 3.18.
Servicer Cash Remittance Date: With respect to each Distribution
Date, the Business Day immediately preceding such Distribution Date.
Servicer Data Remittance Date: With respect to each Distribution
Date, the second Business Day immediately following the 15th day of the month of
such Distribution Date.
Servicing Advance: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations, including, but not limited to, the cost (including
reasonable attorneys' fees and disbursements) of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) any expenses
reimbursable to the Servicer pursuant to Section 3.11 and any enforcement or
judicial proceedings, including foreclosures, and including any expenses
incurred in relation to any such proceedings that result from the Mortgage Loan
being registered on the MERS System; (iii) the management and liquidation of any
REO Property (including default management and similar services, appraisal
services and real estate broker services); (iv) any expenses incurred by the
Servicer in connection with obtaining an environmental inspection or review
pursuant to Section 3.11(a)(v) and (vi); (v) compliance with the obligations
under Section 3.01, 3.09 and 3.11(b); (vi) the cost of obtaining any broker's
price opinion in accordance with Section 3.11 hereof; (vii) the costs of
obtaining an Opinion of Counsel pursuant to Section 3.11(c) hereof; (viii)
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance as described in Section 3.12 hereof; and (ix) expenses incurred in
connection with the recordation of Assignments of Mortgage.
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan as of the Due Date in the month of such
Distribution Date (prior to giving effect to any Scheduled Payments due on such
Mortgage Loan on such Due Date), subject to reduction as provided in Section
3.05(b)(vi).
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Servicing Fee Rate: As to each Mortgage Loan, 0.50% per annum.
Servicing Officer: With respect to the Servicer, any officer of that
Servicer involved in, or responsible for, the administration and servicing of
the related Mortgage Loans whose name and specimen signature appear on a list of
servicing officers furnished to the Trustee by the Servicer on the Closing Date
pursuant to this Agreement, as such list may from time to time be amended.
Significant Net Recoveries: With respect to a defaulted Mortgage
Loan, a determination by the Servicer that either (A) the potential Net
Recoveries are anticipated to be greater than or equal to the sum of (i) the
Stated Principal Balance of the senior lien on the related Mortgaged Property
and (ii) $10,000 or (B) the related Mortgagor has shown a willingness and
ability to pay over the previous six months.
Startup Day: July 29, 2004.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as specified
in the amortization schedule at the time relating thereto (before any adjustment
to such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous Curtailments and Liquidation
Proceeds allocable to principal (other than with respect to any Liquidated
Mortgage Loan) and to the payment of principal due on such Due Date and
irrespective of any delinquency in payment by the related Mortgagor; provided,
however, for purposes of calculating the Servicing Fee and the Trustee Fee, the
Stated Principal Balance of any REO will be the unpaid principal balance
immediately prior to foreclosure.
Stepdown Date: The date occurring on the later of (x) the
Distribution Date in August 2007 and (y) the first Distribution Date on which
the Senior Enhancement Percentage (calculated for this purpose after giving
effect to payments or other recoveries in respect of the Mortgage Loans during
the related Due Period but before giving effect to payments on the Certificates
on such Distribution Date) is greater than or equal to 52.79%.
Subordinate Certificates: As specified in the Preliminary Statement.
Subservicer: Any Subservicer which is subservicing the Mortgage
Loans pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 3.02.
Subservicing Agreement: An agreement between the Servicer and a
Subservicer for the servicing of the Mortgage Loans.
Substitution Adjustment Amount: As defined in Section 2.03.
Targeted Overcollateralization Amount: For any Distribution Date
prior to the Stepdown Date, 3.00% of the Aggregate Loan Balance as of the
Cut-off Date; with respect to any Distribution Date on or after the Stepdown
Date and with respect to which a Trigger Event is not in effect, the greater of
(a) 6.00% of the Aggregate Loan Balance for such Distribution Date, or (b) 0.50%
of the Aggregate Loan Balance as of the Cut-off Date; with respect to any
Distribution Date
41
on or after the Stepdown Date with respect to which a Trigger Event is in effect
and is continuing, the Targeted Overcollateralization Amount for the
Distribution Date immediately preceding such Distribution Date. Upon (x) written
direction by the Majority in Interest Holder of the Class X-1 Certificates and
(y) the issuance by an affiliate of the Depositor of a credit enhancement
contract in favor of REMIC 1 which is satisfactory to the Rating Agencies and
(z) receipt by the Trustee of an Opinion of Counsel, which opinion shall not be
an expense of the Trustee or the Trust Fund, but shall be at the expense of the
Majority in Interest Holder of the Class X-1 Certificates, to the effect that
such credit enhancement contract will not cause the imposition of any federal
tax on the Trust Fund or the Certificateholders or cause REMIC 1, REMIC 2 or
REMIC 3to fail to qualify as a REMIC at any time that any Certificates are
outstanding, the Targeted Overcollateralization Amount shall be reduced to the
level approved by the Rating Agencies and the Mortgage Pool Insurer as a result
of such credit enhancement contract. Any credit enhancement contract referred to
in the previous sentence shall be collateralized by cash or mortgage loans,
provided that (i) the aggregate Stated Principal Balance of the mortgage loans
collateralizing any such credit enhancement contract shall not be less than the
excess, if any, of (x) the initial Targeted Overcollateralization Amount over
(y) the then-current Overcollateralization Amount and (ii) the issuance of any
credit enhancement contract supported by mortgage loans shall not result in a
downgrading of the ratings assigned by the Rating Agencies.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Trigger Event: A Trigger Event will be in effect for any
Distribution Date on or after the Stepdown Date if (a) the Rolling Three Month
Delinquency Rate as of the last day of the related Due Period equals or exceeds
16.50% of the Senior Enhancement Percentage for such Distribution Date or (ii) a
Cumulative Loss Event is occurring. The Trigger Event may be amended by the
parties hereto in the future with the consent of the Rating Agencies and the
Mortgage Pool Insurer.
Trust Collateral: As defined in Section 9.01.
Trust Fund: Collectively, the assets of REMIC 1, REMIC 2, REMIC 3,
the Interest Rate Cap Agreement and the Interest Rate Cap Account.
Trustee: JPMorgan Chase Bank and its successors and, if a successor
trustee is appointed hereunder, such successor.
Trustee Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Trustee Fee Rate on the Stated
Principal Balance of such Mortgage Loan as of the Due Date in the month of such
Distribution Date (prior to giving effect to any Scheduled Payments due on such
Mortgage Loan on such Due Date).
Trustee Fee Rate: With respect to any Distribution Date, 0.0100% per
annum.
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Uncertificated Accrued Interest: With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief
Act Reductions (allocated to such REMIC Regular Interests based on the
priorities set forth in Section 1.03).
Uncertificated Principal Balance: With respect to each REMIC Regular
Interest, the amount of such REMIC Regular Interest outstanding as of any date
of determination. As of the Closing Date, the Uncertificated Principal Balance
of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.07 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.05(b) , and the
Uncertificated Principal Balance of REMIC 2 Regular Interest MTI-ZZ shall be
increased by interest deferrals as provided in Section 4.07. The Uncertificated
Principal Balance of each REMIC Regular Interest that has an Uncertificated
Principal Balance shall never be less than zero.
Uncertificated REMIC 1 Pass-Through Rate: For any Distribution Date,
with respect to each REMIC 1 Regular Interest, the Net WAC Rate.
For any Distribution Date, with respect to each REMIC 2 Regular Interest (other
than REMIC 2 Regular Interest MT-X-1), the weighted average of the REMIC 1
Regular Interests minus, in the case of each such REMIC I Regular Interest, the
Minimum Excess Spread Amount, weighted on the basis of the respective principal
balance of each such REMIC I Regular Interest as of the beginning of the Due
Period immediately preceding the related Distribution Date.
With respect to REMIC 2 Regular Interest MT-X-1 and any Distribution Date, a per
annum rate equal to a percentage equivalent of a fraction, the numerator of
which is the sum of the amounts calculated pursuant to clauses (A) through (M)
below, and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest
LT-A-1, REMIC 1 Regular Interest LT-A-2, REMIC 1 Regular Interest LT-A-3, REMIC
1 Regular Interest LT-A-4, REMIC 1 Regular Interest LT-M-1, REMIC 1 Regular
Interest LT-M-2, REMIC 1 Regular Interest LT-M-3, REMIC 1 Regular Interest
LT-M-4, REMIC 1 Regular Interest LT-M-5, REMIC 1 Regular Interest LT-B, REMIC 1
Regular Interest LT-P and REMIC 1 Regular Interest LT-ZZ. For purposes of
calculating the Pass-Through Rate for the REMIC 2 Regular Interest LT-X-1, the
numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-A-1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-A-1;
43
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-A-2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-A-2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-A-3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-A-3;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-A-4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-A-4;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT-M-1;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-M-2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M-2;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-M-3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M-3;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-M-4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M-4;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-M-5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M-5;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-B;
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-P minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-P;
(M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-ZZ.
United States Person: A citizen or resident of the United States, a
corporation or a partnership (including an entity treated as a corporation or
partnership for United States federal
44
income tax purposes) created or organized in, or under the laws of, the United
States or any State thereof or the District of Columbia (except, in the case of
a partnership, to the extent provided in regulations) provided that, for
purposes solely of the restrictions on the transfer of Class A-R Certificates
and Class A-RL Certificates, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are required to be United States Persons or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more such United States Persons have the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, which have not yet been issued, a trust which was in existence
on August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part I of subchapter J of chapter 1 of the Code), and which was
treated as a United States person on August 20, 1996 may elect to continue to be
treated as a United States Person notwithstanding the previous sentence.
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 this Agreement. At all times during the term of this Agreement,
93% of all Voting Rights shall be allocated among the Class X-0, Xxxxx X-0,
Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class B Certificates. The portion of such 97% Voting Rights allocated to the
Class A-1, Class A-2, Class X- 0, Class A-4, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 and Class B Certificates shall be based on the fraction,
expressed as a percentage, the numerator of which is the aggregate Class
Principal Balance then outstanding and the denominator of which is the Class
Principal Balance of all such Classes then outstanding. The Class A-IO-1, Class
A-IO-2, Class A-IO-3, Class A-IO-4, Class P, Class M-1-IO and Class X-1
Certificates shall each be allocated 1% of the Voting Rights. Voting Rights
shall be allocated among the Certificates within each such Class (other than the
Class P Certificates and Class X-1 Certificates, which each have only one
certificate) in accordance with their respective Percentage Interests. The Class
X-2, Class A-R and Class A-RL Certificates shall have no Voting Rights.
Wilshire: Wilshire Credit Corporation.
Wilshire Special Servicing: With regard to any Charged Off Loans,
the servicing of such Charged Off Loans using specialized collection procedures
(including foreclosure, if appropriate) to maximize recoveries.
SECTION 1.02 Interest Calculations.
The calculation of the Trustee Fee, the Servicing Fee, the Credit
Risk Manager Fee, the Mortgage Pool Insurer Fee and interest on the Class A-1,
Class A-3, Class X-0, X-XX-0, Class A-IO-2, Class A-IO-3, Class A-IO-4, Class P,
Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-1-IO, Class B and Class X-1 Certificates and on the related
Uncertificated Interests shall be made on the basis of a 360-day year consisting
of twelve 30-day months. The calculation of interest on the A-2 Certificates and
the related Uncertificated Interests shall be made on the basis of a 360-day
year and the actual number of days elapsed in the related
45
Interest Accrual Period. All dollar amounts calculated hereunder shall be
rounded to the nearest xxxxx with one-half of one xxxxx being rounded down.
SECTION 1.03 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 1 Regular Interests for any Distribution Date, any
Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) relating to the Mortgage Loans for any Distribution Date shall be
allocated first to Uncertificated Accrued Interest payable to REMIC 1 Regular
Interest LT-AA and REMIC 1 Regular Interest LT-ZZ up to an aggregate amount
equal to the REMIC 1 Interest Loss Allocation Amount, 98% and 2%, respectively,
and thereafter any remaining Prepayment Interest Shortfalls (to the extent not
covered by Compensating Interest) relating to the Mortgage Loans for any
Distribution Date shall be allocated among REMIC 1 Regular Interests LT- AA,
XX-X-0, XX-X-0, XX-X-0, XX-X-0, LT-M-1, XX-X-0, XX-X-0, XX-X-0, XX-X-0, XX-X,
LT- ZZ, LT-P and LT-R, pro rata based on, and to the extent of, Uncertificated
Accrued Interest, as calculated without application of this sentence.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 2 Regular Interests for any Distribution Date, any
Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) relating to the Mortgage Loans for any Distribution Date shall be
allocated in the same priority, and to the same extent, as that allocated to the
Corresponding Certificates.
46
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee in trust for the benefit of the Certificateholders, without recourse,
all (i) the right, title and interest of the Depositor (which does not include
servicing rights) in and to each Mortgage Loan, including all interest and
principal received or receivable on or with respect to such Mortgage Loans after
the Cut-off Date and all interest and principal payments on the Mortgage Loans
received prior to the Cut-off Date in respect of installments of interest and
principal due thereafter, but not including payments of principal and interest
due and payable on the Mortgage Loans on or before the Cut-off Date (other than
the rights of the Servicer to service the Mortgage Loans in accordance with this
Agreement), (ii) the Depositor's rights under the Assignment Agreement and (iii)
all proceeds of any of the foregoing. In addition, on or prior to the Closing
Date, the Depositor shall cause the Mortgage Pool Insurer to deliver the
Mortgage Pool Insurance Policy to the Trustee. In addition, on or prior to the
Closing Date, the Depositor shall cause the Interest Rate Cap Agreement
Counterparty to enter into the Interest Rate Cap Agreement with the Trustee, and
the Depositor shall pay or cause to be paid on behalf of the Trust the payments
owed to the Interest Rate Cap Agreement Counterparty as of the Closing Date
under the Interest Rate Cap Agreement.
(b) In connection with the transfer and assignment set forth in
clause (a) above, the Depositor has delivered or caused to be delivered to the
Trustee or its designated agent, the Custodian, for the benefit of the
Certificateholders, the documents and instruments with respect to each Mortgage
Loan as assigned:
(i) the original Mortgage Note of the Mortgagor in the name of the
Trustee or endorsed "Pay to the order of ________________ without
recourse" and signed in the name of the last named endorsee by an
authorized officer, together with all intervening endorsements showing a
complete chain of endorsements from the originator of the related Mortgage
Loan to the last endorsee or with respect to any Lost Mortgage Note (as
such term is defined in the Pooling and Servicing Agreement), a lost note
affidavit stating that the original Mortgage Note was lost or destroyed,
together with a copy of such Mortgage Note;
(ii) for each Mortgage Loan that is not a MERS Mortgage Loan, the
original Mortgage bearing evidence that such instruments have been
recorded in the appropriate jurisdiction where the Mortgaged Property is
located as determined by DLJMC (or, in lieu of the original of the
Mortgage or the assignment thereof, a duplicate or conformed copy of the
Mortgage or the instrument of assignment, if any, together with a
certificate of receipt from the Seller or the settlement agent who handled
the closing of the Mortgage Loan, certifying that such copy or copies
represent true and correct copy(ies) of the original(s) and that such
original(s) have been or are currently submitted to be recorded in the
appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located)
47
or a certification or receipt of the recording authority evidencing the
same and in the case of each MERS Mortgage Loan, the original Mortgage,
noting the presence of the MIN of the related Mortgage Loan and either
language indicating that the Mortgage Loan is a MOM Loan if the Mortgage
Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at
origination, the original Mortgage and the assignment thereof to MERS,
with evidence of recording indicated thereon or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(iii) for each Mortgage Loan that is not a MERS Mortgage Loan, the
original Assignment of Mortgage, in blank, which assignment appears to be
in form and substance acceptable for recording and, in the event that the
related Seller acquired the Mortgage Loan in a merger, the assignment must
be by "[Seller], successor by merger to [name of predecessor]", and in the
event that the Mortgage Loan was acquired or originated by the related
Seller while doing business under another name, the assignment must be by
"[Seller], formerly known as [previous name]";
(iv) for each Mortgage Loan, at any time that such Mortgage Loan is
not a MERS Mortgage Loan, the originals of all intervening Assignments of
Mortgage not included in (iii) above showing a complete chain of
assignment from the originator of such Mortgage Loan to the Person
assigning the Mortgage to the Trustee, including any warehousing
assignment, with evidence of recording on each such Assignment of Mortgage
(or, in lieu of the original of any such intervening assignment, a
duplicate or conformed copy of such intervening assignment together with a
certificate of receipt from the related Seller or the settlement agent who
handled the closing of the Mortgage Loan, certifying that such copy or
copies represent true and correct copy(ies) of the original(s) and that
such original(s) have been or are currently submitted to be recorded in
the appropriate governmental recording office of the jurisdiction where
the Mortgaged Property is located) or a certification or receipt of the
recording authority evidencing the same;
(v) an original of any related security agreement (if such item is a
document separate from the Mortgage) and the originals of any intervening
assignments thereof showing a complete chain of assignment from the
originator of the related Mortgage Loan to the last assignee;
(vi) an original assignment of any related security agreement (if
such item is a document separate from the Mortgage) executed by the last
assignee in blank;
(vii) the originals of any assumption, modification, extension or
guaranty agreement with evidence of recording thereon, if applicable (or,
in lieu of the original of any such agreement, a duplicate or conformed
copy of such agreement together with a certificate of receipt from the
related Seller or the settlement agent who handled the closing of the
Mortgage Loan, certifying that such copy(ies) represent true and correct
copy(ies) of the original(s) and that such original(s) have been or are
currently submitted to be recorded in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is
located), or a certification or receipt of the recording authority
evidencing the same;
48
(viii) if the Mortgage Note or Mortgage or any other document or
instrument relating to the Mortgage Loan has been signed by a person on
behalf of the Mortgagor, the original power of attorney or other
instrument that authorized and empowered such person to sign bearing
evidence that such instrument has been recorded, if so required, in the
appropriate jurisdiction where the Mortgaged Property is located as
determined by DLJMC (or, in lieu thereof, a duplicate or conformed copy of
such instrument, together with a certificate of receipt from the related
Seller or the settlement agent who handled the closing of the Mortgage
Loan, certifying that such copy(ies) represent true and complete
copy(ies)of the original(s) and that such original(s) have been or are
currently submitted to be recorded in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is
located) or a certification or receipt of the recording authority
evidencing the same; and
(ix) in the case of the First Mortgage Loans, the original mortgage
title insurance policy, or if such mortgage title insurance policy has not
yet been issued, an original or copy of a marked-up written commitment or
a pro forma title insurance policy marked as binding and countersigned by
the title insurance company or its authorized agent either on its face or
by an acknowledged closing instruction or escrow letter.
In the event the Seller delivers to the Trustee certified copies of
any document or instrument set forth in 2.01(b) because of a delay caused by the
public recording office in returning any recorded document, the Seller shall
deliver to the Trustee, within 60 days of the Closing Date, an Officer's
Certificate which shall (i) identify the recorded document, (ii) state that the
recorded document has not been delivered to the Trustee due solely to a delay
caused by the public recording office, and (iii) state the amount of time
generally required by the applicable recording office to record and return a
document submitted for recordation.
In the event that in connection with any Mortgage Loan the Depositor
cannot deliver (a) the original recorded Mortgage, (b) all interim recorded
assignments or (c) the lender's title policy (together with all riders thereto)
satisfying the requirements set forth above, concurrently with the execution and
delivery hereof because such document or documents have not been returned from
the applicable public recording office in the case of clause (a) or (b) above,
or because the title policy has not been delivered to the Seller or the
Depositor by the applicable title insurer in the case of clause (c) above, the
Depositor shall promptly deliver to the Trustee, in the case of clause (a) or
(b) above, such original Mortgage or such interim assignment, as the case may
be, with evidence of recording indicated thereon upon receipt thereof from the
public recording office, or a copy thereof, certified, if appropriate, by the
relevant recording office and in the case of clause (c) above, if such lender's
title policy is received by the Depositor, upon receipt thereof.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Trustee
shall (at the Seller's expense) (i) affix the Trustee's name to each Assignment
of Mortgage, as the assignee thereof, (ii) cause such assignment to be in proper
form for recording in the appropriate public office for real property records
within thirty (30) days after receipt thereof and (iii) cause to be delivered
for recording in the appropriate public office for real property records the
assignments of the Mortgages to the Trustee, except that,
49
with respect to any assignment of a Mortgage as to which the Trustee has not
received the information required to prepare such assignment in recordable form,
the Trustee's obligation to do so and to deliver the same for such recording
shall be as soon as practicable after receipt of such information and in any
event within thirty (30) days after the receipt thereof, and the Trustee need
not cause to be recorded (a) any assignment referred to in clause (iii) above
which relates to a Mortgage Loan in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered to the Trustee (at the Depositor's
expense, provided such expense has been previously approved by the Depositor in
writing) within 180 days of the Closing Date, acceptable to the Rating Agencies,
the recordation of such assignment is not necessary to protect the Trustee's and
the Certificateholders' interest in the related Mortgage Loan or (b) if MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as the mortgagee of record solely as nominee for the Seller and its successors
and assigns.
In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Depositor further agrees that it will cause, at the
Depositor's own expense, on or prior to the Closing Date, the MERS(R) System to
indicate that such Mortgage Loans have been assigned by the Depositor to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Depositor further agrees that it will not, and will not
permit the Servicer to, and the Servicer agrees that it will not, alter the
codes referenced in this paragraph with respect to any Mortgage Loan during the
term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.
(c) The Trustee is authorized to appoint any bank or trust company
approved by the Depositor as Custodian of the documents or instruments referred
to in this Section 2.01, and to enter into a Custodial Agreement for such
purpose and any documents delivered thereunder shall be delivered to the
Custodian and any Officer's Certificates delivered with respect thereto shall be
delivered to the Trustee and the Custodian.
(d) It is the express intent of the parties to this Agreement that
the conveyance of the Mortgage Loans by the Depositor to the Trustee as provided
in this Section 2.01 be, and be construed as, a sale of the Mortgage Loans by
the Depositor to the Trustee. It is, further, not the intention of the parties
to this Agreement that such conveyance be deemed a pledge of the Mortgage Loans
by the Depositor to the Trustee to secure a debt or other obligation of the
Depositor. However, in the event that, notwithstanding the intent of the parties
to this Agreement, the Mortgage Loans are held to be the property of the
Depositor, or if for any other reason this Agreement is held or deemed to create
a security interest in the Mortgage Loans then (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code; (b) the conveyance provided for in this
Section 2.01 shall be deemed to be a grant by the Depositor to the Trustee for
the benefit of the Certificateholders of a security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and all
amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the
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conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts, other
than investment earnings, from time to time held or invested in the Certificate
Account, whether in the form of cash, instruments, securities or other property;
(c) the possession by the Trustee or any Custodian of such items of property and
such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "in possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-305 of the New York Uniform Commercial Code; and (d) notifications to persons
holding such property, and acknowledgments, receipts or confirmations from
persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the benefit of the
Certificateholders for the purpose of perfecting such security interest under
applicable law (except that nothing in this clause (e) shall cause any person to
be deemed to be an agent of the Trustee for any purpose other than for
perfection of such security interests unless, and then only to the extent,
expressly appointed and authorized by the Trustee in writing). The Depositor and
the Trustee, upon directions from the Depositor, shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement.
SECTION 2.02 Acceptance by the Trustee.
The Trustee acknowledges receipt by the Custodian of the documents
identified in the Initial Certification in the form annexed hereto as Exhibit G
and declares that the Custodian on its behalf hold and will hold the documents
delivered to the Custodian constituting the Mortgage Files, and that it or the
Custodian holds or will hold such other assets as are included in the Trust
Fund, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that it will maintain possession
through the Custodian of the Mortgage Notes in the State of Texas or the State
of Illinois, as directed by the Seller, unless otherwise permitted by the Rating
Agencies.
The Custodian is required under the Custodial Agreement to execute
and deliver on the Closing Date to the Depositor, the Seller, the Trustee and
the Servicer an Initial Certification in the form annexed hereto as Exhibit G.
Based on its review and examination, and only as to the documents identified in
such Initial Certification, pursuant to the Custodial Agreement, the Custodian
will acknowledge that such documents appear regular on their face and relate to
such Mortgage Loan. Neither the Trustee nor the Custodian shall be under any
duty or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine, enforceable
or appropriate for the represented purpose or that they have actually been
recorded in the real estate records or that they are other than what they
purport to be on their face.
Not later than 90 days after the Closing Date, the Custodian is
required to deliver to the Depositor, the Seller, the Trustee and the Servicer a
Final Certification in the form annexed hereto as Exhibit H, with any applicable
exceptions noted thereon.
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If, in the course of such review, the Custodian finds any document
constituting a part of a Mortgage File which does not meet the requirements of
Section 2.01, pursuant to the Custodial Agreement, the Custodian will list such
as an exception in the Final Certification; provided, however, that neither the
Trustee nor the Custodian shall make any determination as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or is sufficient to effect the
assignment of and transfer to the assignee thereof under the mortgage to which
the assignment relates.
The Seller shall promptly correct or cure such defect within 120
days from the date it was so notified of such defect and, if the Seller does not
correct or cure such defect within such period and such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Seller shall either (a) substitute for the related Mortgage
Loan a Qualified Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within 120 days from
the date the Seller was notified of such defect in writing at the Repurchase
Price of such Mortgage Loan; provided, however, that in no event shall such
substitution or repurchase occur more than 540 days from the Closing Date,
except that if the substitution or repurchase of a Mortgage Loan pursuant to
this provision is required by reason of a delay in delivery of any documents by
the appropriate recording office, then such substitution or repurchase shall
occur within 720 days from the Closing Date; and further provided, that the
Seller shall have no liability for recording any Assignment of Mortgage in favor
of the Trustee or for the Trustee's failure to record such Assignment of
Mortgage, and the Seller shall not be obligated to repurchase or cure any
Mortgage Loan solely as a result of the Trustee's failure to record such
Assignment of Mortgage. The Trustee shall deliver written notice to each Rating
Agency within 360 days from the Closing Date indicating each Mortgage Loan (a)
the Assignment of Mortgage which has not been returned by the appropriate
recording office or (b) as to which there is a dispute as to location or status
of such Mortgage Loan. Such notice shall be delivered every 90 days thereafter
until the Assignment of Mortgage for the related Mortgage Loan is returned to
the Trustee or the dispute as to location or status has been resolved. Any such
substitution pursuant to (a) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05 hereof, if
any, and any substitution pursuant to (a) above shall not be effected prior to
the additional delivery to the Trustee of a Request for Release substantially in
the form of Exhibit M. No substitution is permitted to be made in any calendar
month after the Determination Date for such month. The Repurchase Price for any
such Mortgage Loan shall be deposited by the Seller in the Certificate Account
on or prior to the Business Day immediately preceding such Distribution Date in
the month following the month of repurchase and, upon receipt of such deposit
and certification with respect thereto in the form of Exhibit M hereto, the
Trustee shall release the related Mortgage File to the Seller and shall execute
and deliver at such entity's request such instruments of transfer or assignment
prepared by such entity, in each case without recourse, as shall be necessary to
vest in such entity, or a designee, the Trustee's interest in any Mortgage Loan
released pursuant hereto. In furtherance of the foregoing, if the Seller is not
a member of MERS and repurchases a Mortgage Loan which is registered on the
MERS(R) System, the Seller, at its own expense and without any right of
reimbursement, shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and
shall cause such Mortgage to be removed from registration on the MERS(R) System
in accordance with MERS' rules and regulations.
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It is understood and agreed that the obligation of the Seller to
cure, substitute for or to repurchase any Mortgage Loan which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee, the Depositor and any Certificateholder against
the Seller.
The Trustee shall pay to the Custodian from time to time reasonable
compensation for all services rendered by it hereunder or under the Custodial
Agreement, and the Trustee shall pay or reimburse the Custodian upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Custodian in accordance with any of the provisions of this Agreement or the
Custodial Agreement, except any such expense, disbursement or advance as may
arise from its negligence or bad faith.
SECTION 2.03 Representations and Warranties of the Seller and
Servicer.
(a) The Seller hereby makes the representations and warranties
applicable to it set forth in Schedule II hereto, and by this reference
incorporated herein, to the Depositor and the Trustee, as of the Closing Date,
or if so specified therein, as of the Cut-off Date or such other date as may be
specified.
(b) Wilshire, in its capacity as Servicer, hereby makes the
representations and warranties applicable to it set forth in Schedule IIIA
hereto, and by this reference incorporated herein, to the Depositor and the
Trustee, as of the Closing Date, or if so specified therein, as of the Cut-off
Date or such other date as may be specified.
(c) Wilshire, in its capacity as Servicer, will use its reasonable
efforts to become a member of MERS in good standing, and will comply in all
material respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS.
(d) The Seller hereby makes the representations and warranties set
forth in Schedule IV as applicable hereto, and by this reference incorporated
herein, to the Trustee, as of the Closing Date, or if so specified therein, as
of the Cut-off Date or such other date as may be specified.
(e) Upon discovery by any of the parties hereto or by the Mortgage
Pool Insurer of a breach of a representation or warranty made pursuant to
Section 2.03(e) that materially and adversely affects the value of a Mortgage
Loan or the interests of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt notice thereof to the other parties.
The Seller hereby covenants that within 120 days of the earlier of its discovery
or its receipt of written notice from any party of a breach of any
representation or warranty made by it pursuant to Section 2.03(e) which
materially and adversely affects the value of the Mortgage Loan or the interests
of the Certificateholders in any Mortgage Loan sold by the Seller to the
Depositor, it shall cure such breach in all material respects, and if such
breach is not so cured, shall, (i) if such 120-day period expires prior to the
second anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted
Mortgage Loan") from the Trust Fund and substitute in its place a Qualified
Substitute Mortgage Loan, in the manner and subject to the conditions set forth
in this Section; or (ii)
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repurchase the affected Mortgage Loan from the Trustee at the Repurchase Price
in the manner set forth below; provided, however, that any such substitution
pursuant to (i) above shall not be effected prior to the delivery to the Trustee
of the Opinion of Counsel required by Section 2.05 hereof, if any, and any such
substitution pursuant to (i) above shall not be effected prior to the additional
delivery to the Trustee of a Request for Release substantially in the form of
Exhibit M and the Mortgage File for any such Qualified Substitute Mortgage Loan.
The Seller shall promptly reimburse the Trustee for any actual out-of-pocket
expenses reasonably incurred by the Trustee in respect of enforcing the remedies
for such breach. With respect to any representation and warranties described in
this Section which are made to the best of a Seller's knowledge if it is
discovered by the Depositor, the Seller or the Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan or the interests of
the Certificateholders therein, notwithstanding the Seller's lack of knowledge
with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
With respect to any Qualified Substitute Mortgage Loan or Loans, the
Seller shall deliver to the Trustee for the benefit of the Certificateholders
the Mortgage Note, the Mortgage, the related assignment of the Mortgage, and
such other documents and agreements as are required by Section 2.01(b), with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution shall not be
part of the Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Seller shall
amend the Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
Qualified Substitute Mortgage Loan or Loans and the Seller shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of
this Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(e) with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the Certificate Account of the amount required to be deposited
therein in connection with such substitution as described in the following
paragraph, the Trustee shall release the Mortgage File held for the benefit of
the Certificateholders relating to such Deleted Mortgage Loan to the Seller and
shall execute and deliver at the Seller's direction such instruments of transfer
or assignment prepared by the Seller, in each case without recourse, as shall be
necessary to vest title in the Seller, or its designee, the Trustee's interest
in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Trustee
shall determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of the scheduled principal portion of the monthly
payments due in the month of substitution). The amount of such shortage (the
"Substitution Adjustment Amount")
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plus an amount equal to the sum of (i) the aggregate of any unreimbursed
Advances with respect to such Deleted Mortgage Loans and (ii) any costs and
damages actually incurred and paid by or on behalf of the Trust in connection
with any breach of the representation and warranty set forth in Schedule III
(xx) as the result of a violation of a predatory or abusive lending law
applicable to such Mortgage Loan shall be deposited in the Certificate Account
by the Seller on or before the Business Day immediately preceding the
Distribution Date in the month succeeding the calendar month during which the
related Mortgage Loan became required to be repurchased or replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan,
the Repurchase Price therefor shall be deposited in the Certificate Account on
or before the Business Day immediately preceding the Distribution Date in the
month following the month during which the Seller became obligated hereunder to
repurchase or replace such Mortgage Loan and upon such deposit of the Repurchase
Price, the delivery of the Opinion of Counsel if required by Section 2.05 and
receipt of a Request for Release in the form of Exhibit M hereto, the Trustee
shall release the related Mortgage File held for the benefit of the
Certificateholders to such Person, and the Trustee shall execute and deliver at
such Person's direction such instruments of transfer or assignment prepared by
such Person, in each case without recourse, as shall be necessary to transfer
title from the Trustee. It is understood and agreed that the obligation under
this Agreement of any Person to cure, repurchase or substitute any Mortgage Loan
as to which a breach has occurred and is continuing shall constitute the sole
remedy against such Persons respecting such breach available to
Certificateholders, the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Mortgage Files to the Trustee for
the benefit of the Certificateholders.
SECTION 2.04 Representations and Warranties of the Depositor as to
the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect to the Mortgage Loans that, as of the Closing Date, assuming good title
has been conveyed to the Depositor, the Depositor had good title to the Mortgage
Loans and Mortgage Notes, and did not encumber the Mortgage Loans during its
period of ownership thereof, other than as contemplated by the Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the Mortgage Files to
the Trustee.
SECTION 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 shall be made more than 120 days after the
Closing Date unless the Seller delivers to the Trustee an Opinion of Counsel,
which Opinion of Counsel shall not be at the expense of either the Trustee or
the Trust Fund, addressed to the Trustee, to the effect that such substitution
will not (i) result in the imposition of the tax on "prohibited transactions" on
the Trust Fund or contributions after the Startup Date, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or
55
(ii) cause any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificates are outstanding.
SECTION 2.06 Execution and Delivery of Certificates.
The Trustee (or the Custodian) acknowledges receipt of the items
described in Section 2.02 of this Agreement and the documents identified in the
Initial Certification in the form annexed hereto as Exhibit G and, concurrently
with such receipt, has executed and delivered to or upon the order of the
Depositor, the Certificates in authorized denominations evidencing directly or
indirectly the entire ownership of the Trust Fund. The Trustee agrees to hold
the Trust Fund and exercise the rights referred to above for the benefit of all
present and future Holders of the Certificates and to perform the duties set
forth in this Agreement to the best of its ability, to the end that the
interests of the Holders of the Certificates may be adequately and effectively
protected.
SECTION 2.07 REMIC Matters.
The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing Date. The REMIC 1 Regular Interests shall be designated as the "regular
interests" in REMIC 1. The REMIC 2 Regular Interests shall be designated as the
"regular interests" in REMIC 2. The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-IO-1, Class A-IO-2, Class A-IO-3, Class A-IO-4, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-1-IO, Class B, Class P and Class X-1
Certificates shall be designated as the "regular interests" in REMIC 3. The
Class A-RL Certificates will constitute the sole class of residual interests in
REMIC 1 and the Class A-R Certificates will represent beneficial ownership of
two residual interests, Class R-2 Interest and Class R-3 Interest, each of which
will constitute the sole class of residual interests in each of REMIC 2 and
REMIC 3, respectively. The Trustee shall not permit the creation of any
"interests" (within the meaning of Section 860G of the Code) in REMIC 1, REMIC 2
or REMIC 3 other than the Certificates, the REMIC 1 Regular Interests or the
REMIC 2 Regular Interests. The "tax matters person" with respect to each of
REMIC 1, REMIC 2 and REMIC 3 shall be the Holder of the Class A-R Certificate
and Class A-RL Certificate at any time holding the largest Percentage Interest
thereof in the manner provided under Treasury regulations section 1.860F-4(d)
and Treasury regulations section 301.6231(a)(7)-1. The fiscal year for each
REMIC shall be the calendar year. In addition, the Class X-1 Certificateholders
shall be deemed to have entered into a contractual arrangement with the Class
A-R Certificateholders or Class A-RL Certificateholders whereby the Class A-R
Certificateholders or Class A-RL Certificateholders agree to pay to the Class
X-1 Certificateholders on each Distribution Date amounts that would, in the
absence of such contractual agreement, be distributable with respect to the
residual interest in REMIC 1, REMIC 2 and REMIC 3 pursuant to Section
4.02(b)(iv)(L) (which amounts are expected to be zero).
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SECTION 2.08 Covenants of the Servicer.
The Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the Mortgage
Pool Insurer as set forth in the Mortgage Pool Insurance Policy.
The Servicer hereby covenants to the Depositor and the Trustee that
no written information, certificate of an officer, statement furnished in
writing or written report prepared by the Servicer and delivered to the
Depositor, any affiliate of the Depositor or the Trustee and prepared by the
Servicer pursuant to this Agreement will contain any untrue statement of a
material fact.
SECTION 2.09 Conveyance of REMIC Regular Interests and Acceptance of
REMIC 1, REMIC 2 and REMIC 3 by the Trustee; Issuance
of Certificates.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC 1 Regular Interests for the benefit of the Holder of the
REMIC 2 Regular Interests and the Holders of the Class R-2 Interest. The Trustee
acknowledges receipt of the REMIC 1 Regular Interests (each of which is
uncertificated) and declares that it holds and will hold the same in trust for
the exclusive use and benefit of the Holders of the REMIC 2 Regular Interests
and Holder of the Class R-2 Interest. The interests evidenced by the Class R-2
Interest, together with the REMIC 2 Regular Interests, constitute the entire
beneficial ownership interest in REMIC 2.
(b) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC 2 Regular Interests for the benefit of the Holder of the
Regular Certificates and the Class R-3 Interest. The Trustee acknowledges
receipt of the REMIC 2 Regular Interests (each of which is uncertificated) and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of the holders of the Regular Certificates and the Class R-3 Interest.
The interests evidenced by the Class R-3 Interest, together with the Regular
Certificates, constitute the entire beneficial ownership interest in REMIC 3.
(c) In exchange for the REMIC 2 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Regular
Certificates in authorized denominations evidencing (together with the Class R-3
Interest) the entire beneficial ownership interest in REMIC 3.
(d) Concurrently with (i) the assignment and delivery to the Trustee
of REMIC 1 (including the Residual Interest therein represented by the Class
A-RL Certificates) and the acceptance by the Trustee thereof, pursuant to
Section 2.01, Section 2.02 and Section 2.09(a); and (ii) the assignment and
delivery to the Trustee of REMIC 2 (including the Residual Interest therein
represented by the Class R-2 Interest) and the acceptance by the Trustee
thereof, pursuant to Section 2.09(b); and (iii) the assignment and delivery to
the Trustee of REMIC 3 (including the Residual
57
Interest therein represented by the Class R-3 Interest) and the acceptance by
the Trustee thereof, pursuant to Section 2.09(c) the Trustee, pursuant to the
written request of the Depositor executed by an officer of the Depositor, has
executed, authenticated and delivered to or upon the order of the Depositor, the
Class A-RL Certificates and the Class A-R Certificates in authorized
denominations evidencing the Class R-2 Interest and the Class R-3 Interest.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement, with Accepted Servicing Practices and in accordance with the Radian
Guidelines (to the extent such Radian Guidelines are not inconsistent with the
terms of this Agreement). Notwithstanding anything in this Agreement, any
Servicing Agreement or any Credit Risk Management Agreement to the contrary, the
Servicer shall have no duty or obligation to enforce the Credit Risk Management
Agreement or to supervise, monitor or oversee the activities of the Credit Risk
Manager under the Credit Risk Management Agreement with respect to any action
taken or not taken by the Servicer pursuant to a recommendation of the Credit
Risk Manager. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (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; provided that the Servicer shall not take any action that is
materially inconsistent with or materially prejudices the interests of the Trust
Fund or the Certificateholders in any Mortgage Loan or the rights and interests
of the Depositor, the Trustee or the Certificateholders under this Agreement
unless such action is specifically called for by the terms hereof. The Trustee
will provide a limited power of attorney to the Servicer, prepared by the
Servicer and reasonably acceptable to the Trustee, to permit the Servicer to act
on behalf of the Trustee under this Agreement. The Servicer hereby indemnifies
the Trustee for all costs and expenses incurred by the Trustee in connection
with the negligent or willful misuse of such power of attorney. The Servicer
shall represent and protect the interests of the Trust Fund in the same manner
as it protects its own interests in mortgage loans in its own portfolio in any
claim, proceeding or litigation regarding a Mortgage Loan. The Servicer further
is hereby authorized and empowered in its own name or in the name of the
Subservicer, when the Servicer or the Subservicer, as the case may be, believes
it is appropriate in its best judgment to register any Mortgage Loan on the
MERS(R) System, or cause the removal from the registration of any Mortgage Loan
on the MERS(R) System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. Any reasonable expenses incurred in connection with the
actions described in the preceding sentence or as a result of MERS discontinuing
or becoming unable to continue operations in connection with the MERS(R) System,
shall be reimbursable by the Trust Fund to the Servicer. Notwithstanding the
foregoing, subject to Section 3.05(a), the Servicer shall not make or permit any
modification, waiver or amendment of any
59
Mortgage Loan that would both constitute a sale or exchange of such Mortgage
Loan within the meaning of Section 1001 of the Code and any proposed, temporary
or final regulations promulgated thereunder (other than in connection with a
proposed conveyance or assumption of such Mortgage Loan that is treated as a
Principal Prepayment in Full pursuant to Section 3.10 hereof) which would cause
any of REMIC 1 , REMIC 2 or REMIC 3 to fail to qualify as a REMIC. Without
limiting the generality of the foregoing, the Servicer, in its own name or in
the name of the Depositor and the Trustee, is hereby authorized and empowered by
the Depositor and the Trustee, when the Servicer believes it appropriate in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by either or
both of them as are necessary or appropriate to enable the Servicer to service
and administer the Mortgage Loans to the extent that the Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents and a written request signed by an
authorized officer, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Servicer.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on any Mortgaged
Property (to the extent the Servicer has been notified that such taxes or
assessments have not paid by the related Mortgagor or the owner or the servicer
of the related First Mortgage Loan), which advances shall be reimbursable in the
first instance from related collections from the Mortgagors pursuant to Section
3.06, and further as provided in Section 3.08; provided, however, that the
Servicer shall be required to advance only to the extent that such advances, in
the good faith judgment of the Servicer, will be recoverable by the Servicer out
of Insurance Proceeds, Liquidation Proceeds, or otherwise out of the proceeds of
the related Mortgage Loan; and provided, further, that such payments shall be
advanced within such time period required to avoid the loss of the Mortgaged
Property by foreclosure of a tax or other lien. The costs incurred by the
Servicer, if any, in effecting the timely payments of taxes and assessments on
the Mortgaged Properties and related insurance premiums shall not, for the
purpose of calculating monthly distributions to the Certificateholders, be added
to the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
Subject to the provisions of the first paragraph of this Section,
the Trustee shall execute, at the written request of the Servicer, and furnish
to the Servicer and any Subservicer such documents as are necessary or
appropriate to enable the Servicer or any Subservicer to carry out their
servicing and administrative duties hereunder, and the Trustee hereby grants to
the Servicer a power of attorney, to be completed in the form of Exhibit AA
hereto, to carry out such duties. The Trustee shall not be liable for the
actions of the Servicer or any Subservicers under such powers of attorney.
If the Mortgage relating to a Mortgage Loan had a lien senior to the
Mortgage Loan on the related Mortgaged Property as of the Cut-off Date, then the
Servicer, in such capacity, may consent to the refinancing of the prior senior
lien, provided that the following requirements are met:
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(i) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such
refinancing; and
(ii) the interest rate, or, in the case of an adjustable rate
existing senior lien, the maximum interest rate, for the loan evidencing
the refinanced senior lien is no more than 2.0% higher than the interest
rate or the maximum interest rate, as the case may be, on the loan
evidencing the existing senior lien immediately prior to the date of such
refinancing; and
(iii) the loan evidencing the refinanced senior lien is not subject
to negative amortization.
With respect to the Mortgage Loans, the Servicer agrees that, with
respect to the Mortgagors of such Mortgage Loans, the Servicer shall furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company on a monthly basis.
SECTION 3.02 Subservicing; Enforcement of the Obligations of
Subservicers.
(a) The Mortgage Loans may be subserviced by a Subservicer on behalf
of the Servicer in accordance with the servicing provisions of this Agreement,
provided that the Subservicer is an approved Xxxxxx Xxx or Xxxxxxx Mac
seller/servicer in good standing. The Servicer may perform any of its servicing
responsibilities hereunder or may cause the Subservicer to perform any such
servicing responsibilities on its behalf, but the use by the Servicer of the
Subservicer shall not release the Servicer from any of its obligations hereunder
and the Servicer shall remain responsible hereunder for all acts and omissions
of the Subservicer as fully as if such acts and omissions were those of the
Servicer. The Servicer shall pay all fees and expenses of any Subservicer
engaged by the Servicer from its own funds.
Notwithstanding the foregoing, the Servicer shall be entitled to
outsource one or more separate servicing functions to a Person (each, an
"Outsourcer") that does not meet the eligibility requirements for a Subservicer,
so long as such outsourcing does not constitute the delegation of the Servicer's
obligation to perform all or substantially all of the servicing of the related
Mortgage Loans to such Outsourcer. In such event, the use by the Servicer of any
such Outsourcer shall not release the Servicer from any of its obligations
hereunder and the Servicer shall remain responsible hereunder for all acts and
omissions of such Outsourcer as fully as if such acts and omissions were those
of the Servicer, and the Servicer shall pay all fees and expenses of the
Outsourcer from the Servicer's own funds.
(b) At the cost and expense of the Servicer, without any right of
reimbursement from the Depositor, Trustee, the Trust Fund, or the applicable
Collection Account, the Servicer shall be entitled to terminate the rights and
responsibilities of its Subservicer and arrange for any servicing
responsibilities to be performed by a successor Subservicer meeting the
requirements set forth in Section 3.02(a), provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Servicer, at the
Servicer's option, from electing to service the related Mortgage Loans
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itself. In the event that the Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 7.01, and if requested to do so by
the Trustee, the Servicer shall at its own cost and expense terminate the rights
and responsibilities of its Subservicer as soon as is reasonably possible. The
Servicer shall pay all fees, expenses or penalties necessary in order to
terminate the rights and responsibilities of its Subservicer from the Servicer's
own funds without any right of reimbursement from the Depositor, Trustee, the
Trust Fund, or the Collection Account.
(c) Notwithstanding any of the provisions of this Agreement relating
to agreements or arrangements between the Servicer and its Subservicer, the
Servicer and its Outsourcer, or any reference herein to actions taken through
the Subservicer, the Outsourcer, or otherwise, no Servicer shall be relieved of
its obligations to the Depositor, Trustee or Certificateholders and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the related Mortgage Loans. The Servicer
shall be entitled to enter into an agreement with its Subservicer and Outsourcer
for indemnification of the Servicer or Outsourcer, as applicable, by such
Subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
For purposes of this Agreement, the Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the related
Mortgage Loans that are received by a related Subservicer or Outsourcer, as
applicable, regardless of whether such payments are remitted by the Subservicer
or Outsourcer, as applicable, to the Servicer.
Any Subservicing Agreement and any other transactions or services
relating to the Mortgage Loans involving a Subservicer or an Outsourcer shall be
deemed to be between the Subservicer or an Outsourcer, and the Servicer alone,
and the Depositor, the Trustee and the other Servicer shall have no obligations,
duties or liabilities with respect to a Subservicer including no obligation,
duty or liability of the Depositor and Trustee or the Trust Fund to pay a
Subservicer's fees and expenses.
SECTION 3.03 [Reserved].
SECTION 3.04 Trustee to Act as Servicer.
(a) In the event that the Servicer shall for any reason no longer be
the Servicer hereunder (including by reason of an Event of Default), the Trustee
or its successor shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Servicer pursuant to Section 3.09 hereof or any acts or
omissions of the related predecessor Servicer hereunder, (ii) obligated to make
Advances if it is prohibited from doing so by applicable law or (iii) deemed to
have made any representations and warranties of the Servicer hereunder). Any
such assumption shall be subject to Section 7.02 hereof.
The Servicer shall, upon request of the Trustee, but at the expense
of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement or substitute Subservicing Agreement and
the Mortgage Loans then being serviced thereunder and hereunder by the Servicer
and an accounting of amounts collected or held by it and otherwise use
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its best efforts to effect the orderly and efficient transfer of the substitute
Subservicing Agreement to the assuming party.
(b) [reserved]
SECTION 3.05 Collection of Mortgage Loans; Collection Accounts;
Certificate Account.
(a) Continuously from the date hereof until the principal and
interest on all Mortgage Loans have been paid in full or such Mortgage Loans
have become Liquidated Mortgage Loans, the Servicer shall proceed in accordance
with the customary and usual standards of practice of prudent mortgage loan
servicers to collect all payments due under each of the related Mortgage Loans
when the same shall become due and payable to the extent consistent with this
Agreement and, consistent with such standard, with respect to Mortgage Loans for
which the Servicer collects escrow payments, shall ascertain and estimate Escrow
Payments and all other charges that will become due and payable with respect to
the Mortgage Loans and the Mortgaged Properties, to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable. Consistent with the terms of this
Agreement, the Servicer may also waive, modify or vary any term of any Mortgage
Loan or consent to the postponement of strict compliance with any such term or
in any manner grant indulgence to any Mortgagor if in the Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action);
provided, however, that the Servicer may not modify materially or permit any
Subservicer to modify any Mortgage Loan, including without limitation any
modification that would change the Mortgage Rate, forgive the payment of any
principal or interest (unless in connection with the liquidation of the related
Mortgage Loan or except in connection with prepayments to the extent that such
reamortization is not inconsistent with the terms of the Mortgage Loan), or
extend the final maturity date of such Mortgage Loan, unless such Mortgage Loan
is in default or, in the judgment of the Servicer, such default is reasonably
foreseeable; and that no such modification shall reduce the interest rate on a
Mortgage Loan below the rate at which the Servicing Fee with respect to such
Mortgage Loan accrues and provided, further, that any such waiver, modification,
postponement or indulgence granted to a Mortgagor by the Servicer in connection
with its servicing of the related First Mortgage Loan shall not be considered
relevant to a determination of whether the Servicer has acted consistently with
the terms and standards of this Agreement, so long as in the Servicer's
determination such action is not materially adverse to the interests of the
Certificateholders. Notwithstanding anything to the contrary in this paragraph,
no such modification will be granted without the prior consent of the Mortgage
Pool Insurer if so required in the Mortgage Pool Insurance Policy. In the event
of any such arrangement, the Servicer shall make Advances on the related
Mortgage Loan in accordance with the provisions of Section 4.01 during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements. The Servicer
shall not be required to institute or join in litigation with respect to
collection of any payment (whether under a Mortgage, Mortgage Note or otherwise
or against any public or governmental authority with respect to a taking or
condemnation) if it reasonably believes that enforcing the provision of the
Mortgage or other instrument pursuant to which such payment is required is
prohibited by applicable law.
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(b) The Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Collection
Accounts, in the form of time deposit or demand accounts, titled "[Servicer's
name], in trust for the Holders of First Franklin Mortgage Loan Trust 2204-FFB,
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB" or, if
established and maintained by a Subservicer on behalf of the Servicer,
"[Subservicer's name], in trust for [Servicer's name]" or "[Subservicer's name],
as agent, trustee and/or bailee of principal and interest custodial account for
[Servicer's name], its successors and assigns, for various owners of interest in
[Servicer's name] mortgage-backed pools". Each Collection Account shall be an
Eligible Account. Any funds deposited in a Collection Account shall at all times
be either invested in Eligible Investments or shall be fully insured to the full
extent permitted under applicable law. Funds deposited in a Collection Account
may be drawn on by the applicable Servicer in accordance with Section 3.08.
The Servicer shall deposit in the Collection Account within two
Business Days of receipt and retain therein, the following collections remitted
by Subservicers or payments received by the Servicer and payments made by the
Servicer subsequent to the Cut-off Date, other than payments of principal and
interest due on or before the Cut-off Date:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the per annum rate equal to the Mortgage Rate reduced by the
related Servicing Fee Rate;
(iii) all Liquidation Proceeds on the Mortgage Loans;
(iv) all Insurance Proceeds (other than any proceeds from the
Mortgage Pool Insurance Policy) on the Mortgage Loans including amounts
required to be deposited pursuant to Section 3.09 (other than proceeds to
be held in the Escrow Account and applied to the restoration or repair of
the Mortgaged Property or released to the Mortgagor in accordance with
Section 3.09);
(v) all Advances made by the Servicer pursuant to Section 4.01;
(vi) with respect to each Principal Prepayment on the Mortgage
Loans, the Prepayment Interest Shortfall, if any, for the Prepayment
Period. The aggregate of such deposits shall be made from the Servicer's
own funds, without reimbursement therefor, up to a maximum amount per
month equal to the Compensating Interest Payment, if any, for the Mortgage
Loans and that Distribution Date;
(vii) any amounts required to be deposited by the Servicer in
respect of net monthly income from REO Property pursuant to Section 3.11;
and
(viii) any other amounts required to be deposited hereunder
including all collected Prepayment Charges.
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The foregoing requirements for deposit into each Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, Ancillary Income need not be deposited by the
Servicer into such Collection Account. In addition, notwithstanding the
provisions of this Section 3.05, the Servicer may deduct from amounts received
by it, prior to deposit to the applicable Collection Account, any portion of any
Scheduled Payment representing the applicable Servicing Fee. In the event that
the Servicer shall remit any amount not required to be remitted, it may at any
time withdraw or direct the institution maintaining the related Collection
Account to withdraw such amount from such Collection Account, any provision
herein to the contrary notwithstanding. Such withdrawal or direction may be
accomplished by delivering written notice thereof to the Trustee or such other
institution maintaining such Collection Account which describes the amounts
deposited in error in such Collection Account. The Servicer shall maintain
adequate records with respect to all withdrawals made by it pursuant to this
Section. All funds deposited in a Collection Account shall be held in trust for
the Certificateholders until withdrawn in accordance with Section 3.08.
(c) On or prior to the Closing Date, the Trustee shall establish and
maintain, on behalf of the Certificateholders, the Certificate Account. The
Trustee shall, promptly upon receipt, deposit in the Certificate Account and
retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.08(viii);
(ii) any amount deposited by the Trustee pursuant to Section 3.05(e)
in connection with any losses on Eligible Investments;
(iii) any proceeds received from the Mortgage Pool Insurance Policy
and any recoveries received by the Mortgage Pool Insurer (pursuant to
Section 4.12) on any Mortgage Loan not purchased by the Mortgage Pool
Insurer pursuant to Section 3.11(g) (net of amounts reimbursable to the
Mortgage Pool Insurer for claims previously paid by the Mortgage Pool
Insurer on the related Mortgage Loans);
(iv) any other amounts deposited hereunder which are required to be
deposited in the Certificate Account.
In the event that the Servicer shall remit to the Trustee any amount
not required to be remitted, it may at any time direct the Trustee to withdraw
such amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in the
Certificate Account. All funds deposited in the Certificate Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08(b).
In no event shall the Trustee incur liability for withdrawals from the
Certificate Account at the direction of the Servicer.
(d) Each institution at which a Collection Account or the
Certificate Account is maintained shall either hold such funds on deposit
uninvested or shall invest the funds therein as
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directed in writing by the Servicer (in the case of a Collection Account) or the
Trustee (in the case of the Certificate Account), in Eligible Investments, which
shall mature not later than (i) in the case of a Collection Account, the second
Business Day immediately preceding the related Distribution Date and (ii) in the
case of the Certificate Account, the Business Day immediately preceding the
Distribution Date and, in each case, shall not be sold or disposed of prior to
its maturity. All income and gain net of any losses realized from any such
balances or investment of funds on deposit in a Collection Account shall be for
the benefit of the Servicer as servicing compensation and shall be remitted to
it monthly as provided herein. The amount of any realized losses in a Collection
Account incurred in any such account in respect of any such investments shall
promptly be deposited by the Servicer in the related Collection Account. The
Trustee in its fiduciary capacity shall not be liable for the amount of any loss
incurred in respect of any investment or lack of investment of funds held in a
Collection Account. All income and gain net of any losses realized from any such
investment of funds on deposit in the Certificate Account shall be for the
benefit of the Trustee as compensation and shall be remitted to it monthly as
provided herein. The amount of any realized losses in the Certificate Account
incurred in any such account in respect of any such investments shall promptly
be deposited by the Trustee in the Certificate Account.
(e) The Servicer shall give notice to the Trustee, the Seller, each
Rating Agency and the Depositor of any proposed change of the location of the
related Collection Account prior to any change thereof. The Trustee shall give
notice to the Servicer, the Seller, each Rating Agency and the Depositor of any
proposed change of the location of the Certificate Account prior to any change
thereof.
SECTION 3.06 Establishment of and Deposits to Escrow Accounts;
Permitted Withdrawals from Escrow Accounts; Payments of
Taxes, Insurance and Other Charges.
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Servicer shall segregate and hold all funds
collected and received pursuant to a Mortgage Loan constituting Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts, in the form of time deposit
or demand accounts, titled, "First Franklin Mortgage Loan Trust 2004-FFB, Home
Equity Mortgage Pass-Through Certificates, Series 2004-FFB" or, if established
and maintained by a Subservicer on behalf of the Servicer, "[Subservicer's
name], in trust for [Servicer's name]" or "[Subservicer's name], as agent,
trustee and/or bailee of taxes and insurance custodial account for [Servicer's
name], its successors and assigns, for various owners of interest in [Servicer's
name] mortgage-backed pools". The Escrow Accounts shall be Eligible Accounts.
Funds deposited in the Escrow Account may be drawn on by the Servicer in
accordance with Section 3.06(b). The creation of any Escrow Account shall be
evidenced by a certification in the form of Exhibit P-1 hereto, in the case of
an account established with the Servicer, or by a letter agreement in the form
of Exhibit P-2 hereto, in the case of an account held by a depository other than
the Servicer. A copy of such certification shall be furnished to the Depositor
and Trustee.
(b) The Servicer shall deposit in its Escrow Account or Accounts on
a daily basis within one Business Day of receipt and retain therein:
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(i) all Escrow Payments collected on account of the related Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds which are to be
applied to the restoration or repair of any Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06(c). The Servicer shall be entitled to retain any interest paid on
funds deposited in the related Escrow Account by the depository institution,
other than interest on escrowed funds required by law to be paid to the
Mortgagor. To the extent required by law, the applicable Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
(c) Withdrawals from the Escrow Account or Accounts may be made by
the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advances made by
the Servicer pursuant to this Agreement with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan which
represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the related Collection Account to reduce the
principal balance of the related Mortgage Loan in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restore or repair of the related Mortgaged
Property in accordance with the procedures outlined in Section 3.09;
(vi) to pay to the Servicer, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in such Escrow Account;
and
(vii) to clear and terminate such Escrow Account on the termination
of this Agreement.
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SECTION 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans; Inspections.
(a) The Servicer shall afford the Depositor, the Trustee and the
Mortgage Pool Insurer reasonable access to all records and documentation
regarding the Mortgage Loans and all accounts, insurance information and other
matters relating to this Agreement, such access being afforded without charge,
but only upon reasonable request and during normal business hours at the office
designated by the Servicer.
(b) The Servicer shall inspect the Mortgaged Properties as often as
deemed necessary by the Servicer in the Servicer's sole discretion, to assure
itself that the value of such Mortgaged Property is being preserved. In
addition, if any Mortgage Loan is more than 60 days delinquent, the Servicer
shall conduct subsequent inspections in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage guaranty insurer. The
Servicer shall keep a written or electronic report of each such inspection.
SECTION 3.08 Permitted Withdrawals from the Collection Accounts and
Certificate Account.
The Servicer may (and in the case of clause (viii) below, shall)
from time to time make withdrawals from the related Collection Account for the
following purposes:
(i) to pay to the Servicer (to the extent not previously retained by
the Servicer) the servicing compensation to which it is entitled pursuant
to Section 3.14, and to pay to the Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in or
credited to such Collection Account;
(ii) to reimburse the Servicer for unreimbursed Advances made by it,
such right of reimbursement pursuant to this subclause (ii) being limited
to amounts received on the Mortgage Loan(s) in respect of which any such
Advance was made (including without limitation, late recoveries of
payments, Liquidation Proceeds and Insurance Proceeds, amounts
representing proceeds of other insurance policies, if any, covering the
related Mortgaged Property, rental and other income from REO Property and
proceeds of any purchase or repurchase of the related Mortgage Loan, to
the extent received by the Servicer);
(iii) to reimburse the Servicer for any Nonrecoverable Advance
previously made from collections or proceeds of any of the Mortgage Loans;
(iv) to reimburse the Servicer for (A) unreimbursed Servicing
Advances, the Servicer's right to reimbursement pursuant to this clause
(A) with respect to any Mortgage Loan being limited to amounts received on
such Mortgage Loan which represent late payments of principal and/or
interest (including, without limitation, Liquidation Proceeds and
Insurance Proceeds, amounts representing proceeds of other insurance
policies, if any, covering the related Mortgaged Property, rental and
other income from REO Property and proceeds of any purchase or repurchase
of the related Mortgage Loan with respect to such
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Mortgage Loan) respecting which any such advance was made, (B) for unpaid
Servicing Fees as provided in Section 3.11;
(v) to pay to the purchaser, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant to
Section 2.02, 2.03 or 3.11, all amounts received thereon after the date of
such purchase;
(vi) to reimburse the Servicer or the Depositor for expenses
incurred by any of them and reimbursable pursuant to Section 6.03 hereof;
(vii) to withdraw any amount deposited in such Collection Account
and not required to be deposited therein;
(viii) on or prior to the Servicer Cash Remittance Date, to withdraw
an amount equal to the Available Funds plus any related Expense Fees
(other than the Servicing Fee) for such Distribution Date and any
Prepayment Charges received in respect of the Mortgage Loans, subject to
the collection of funds included in the definition of "Available Funds"
and remit such amount to the Trustee for deposit in the Certificate
Account; and
(ix) to clear and terminate such Collection Account upon termination
of this Agreement pursuant to Section 9.01 hereof.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan basis for the purpose of justifying any withdrawal from the
Collection Account pursuant to such subclauses (i), (ii), (iv) and (v). Prior to
making any withdrawal from a Collection Account pursuant to subclause (iii), the
Servicer shall deliver to the Trustee a certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loans(s), and their
respective portions of such Nonrecoverable Advance.
The Trustee shall withdraw funds from the Certificate Account for
distributions to the Certificateholders, the Mortgage Pool Insurer and the
Credit Risk Manager, if applicable, in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to withhold pursuant to the last paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to itself the Trustee Fee and any investment income
earned for the related Distribution Date;
(ii) to withdraw and return to the applicable Servicer for deposit
to the Collection Account any amount deposited in the Certificate Account
and not required to be deposited therein; and
(iii) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
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SECTION 3.09 Maintenance of Hazard Insurance and Mortgage Impairment
Insurance; Claims; Restoration of Mortgaged Property.
The Servicer shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage on
all of the related Mortgage Loans, which policy shall provide coverage in an
amount equal to the amount at least equal to the lesser of (i) the maximum
insurable value of the improvements securing such Mortgage Loan and (ii) the
greater of (A) the outstanding principal balance of the Mortgage Loan and (B) an
amount such that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming co-insurer. Any amounts collected
by the Servicer under any such policy relating to a Mortgage Loan (for the
avoidance of doubt, remaining after application of any such amounts to any
related First Mortgage Loan) shall be deposited in the related Collection
Account subject to withdrawal pursuant to Section 3.08. Such policy may contain
a deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a standard hazard insurance policy,
and there shall have been a loss which would have been covered by such policy,
the Servicer shall deposit in the related Collection Account at the time of such
loss the amount not otherwise payable under the blanket policy because of such
deductible clause which is in excess of a deductible under a standard hazard
insurance policy, such amount to be deposited from the Servicer's funds, without
reimbursement therefor. Upon request of the Trustee, the Servicer shall cause to
be delivered to the Trustee a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to the Trustee. In
connection with its activities as Servicer of the Mortgage Loans, the Servicer
agrees to present, on behalf of itself, the Depositor, and the Trustee for the
benefit of the Certificateholders, claims under any such blanket policy.
Pursuant to Section 3.05, any amounts collected by the Servicer
under any such policies (other than amounts to be deposited in the related
Escrow Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the Servicer's normal servicing
procedures) shall be deposited in the related Collection Account (subject to
withdrawal pursuant to Section 3.08). Any costs incurred by the Servicer in
maintaining such insurance shall be recoverable by the Servicer as a Servicing
Advance out of payments by the related Mortgagor or out of Insurance Proceeds or
Liquidation Proceeds. Notwithstanding anything to the contrary in this
paragraph, the Servicer shall be required to pay the costs of maintaining any
insurance contemplated by this Section 3.09 only to the extent that such
advances, in the good faith judgment of the Servicer, will be recoverable.
The Servicer need not obtain the approval of the Trustee prior to
releasing any Insurance Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in accordance
with Accepted Servicing Practices. At a minimum, the Servicer shall comply with
the following conditions in connection with any such release of Insurance
Proceeds:
(i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with
respect thereto;
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(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens; and
(iii) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds in the related Escrow Account, if any.
If the Trustee is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Trustee.
SECTION 3.10 Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
The Servicer shall use its best efforts to enforce any "due-on-sale"
provision contained in any related Mortgage or Mortgage Note and to deny
assumption by the person to whom the Mortgaged Property has been or is about to
be sold whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Servicer shall not exercise such
rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related Primary
Insurance Policy, if any or, if consistent with Accepted Servicing Practices,
the Servicer believes the collections and other recoveries in respect of such
Mortgage Loans could reasonably be expected to be maximized if the Mortgage Loan
were not accelerated.
If the Servicer reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause or, if any of the other conditions set
forth in the last sentence of the preceding paragraph apply, the Servicer shall,
with the prior written consent of the Mortgage Pool Insurer, enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Servicer is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Servicer has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to be in default
under this Section by reason of any transfer or assumption which the Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever. In connection with any such assumption, no material term of the
Mortgage Note, including without limitation, the Mortgage Rate borne by the
related Mortgage Note, the term of the Mortgage Loan or the outstanding
principal amount of the Mortgage Loan shall be changed.
Subject to the Servicer's duty to enforce any due-on-sale clause to
the extent set forth in this Section 3.10, in any case in which a Mortgaged
Property has been conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption agreement or modification agreement
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or supplement to the Mortgage Note or Mortgage that requires the signature of
the Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Servicer shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
may be changed. Together with each such substitution, assumption or other
agreement or instrument delivered to the Trustee for execution by it, the
Servicer shall deliver an Officer's Certificate signed by a Servicing Officer
stating that the requirements of this Section 3.10 have been met in connection
therewith. The Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Servicer for entering into an assumption, modification or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.
SECTION 3.11 Realization Upon Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans.
(a) (i) The Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
related Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments.
With respect to such of the Mortgage Loans as come into and continue in default,
the Servicer will decide, with the consent of the Mortgage Pool Insurer, whether
to (i) foreclose upon the Mortgaged Properties securing such Mortgage Loans,
(ii) write off the unpaid principal balance of the Mortgage Loans as bad debt,
(iii) take a deed in lieu of foreclosure, (iv) accept a short sale (a payoff of
the Mortgage Loan for an amount less than the total amount contractually owed in
order to facilitate a sale of the Mortgaged Property by the Mortgagor) or permit
a short refinancing (a payoff of the Mortgage Loan for an amount less than the
total amount contractually owed in order to facilitate refinancing transactions
by the Mortgagor not involving a sale of the Mortgaged Property), (v) arrange
for a repayment plan, or (vi) agree to a modification in accordance with this
Agreement. In connection with such decision, the Servicer shall take such action
as (i) the Servicer would take under similar circumstances with respect to a
similar mortgage loan held for its own account for investment, (ii) shall be
consistent with Accepted Servicing Practices, (iii) the Servicer shall determine
consistently with Accepted Servicing Practices to be in the best interest of the
Trustee and Certificateholders, provided, that actions taken by the Servicer in
connection with its servicing of the related First Mortgage Loan shall not be
considered relevant to a determination of whether the Servicer has met the
standard set forth in this clause (iii), so long as so long as in the Servicer's
determination such action is not materially adverse to the interests of the
Certificateholders and (iv) is consistent with the requirements of the insurer
under any Required Insurance Policy and the Mortgage Pool Insurer under the
Mortgage Pool Insurance Policy; provided, however, that the Servicer shall not
be required to expend its own funds in connection with any
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foreclosure or towards the restoration of any property unless it shall determine
in its sole discretion (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the related Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the related Collection Account). The
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the liquidation proceeds with respect to the related
Mortgaged Property, as provided in the definition of Liquidation Proceeds and as
provided in Section 3.08(iv)(A).
(ii) Notwithstanding anything to the contrary contained in this
Agreement, with respect to any Mortgage Loan that is one hundred five (105) days
delinquent, the Servicer shall obtain a broker's price opinion with respect to
the related Mortgaged Property and shall use all reasonable efforts to obtain a
total indebtedness balance (including, but not limited to, unpaid principal,
interest, escrows, taxes and expenses) for any related senior lien. The cost of
obtaining any such broker's price opinion shall be reimbursable to the Servicer
as a Servicing Advance pursuant to Section 3.08(iii) or (iv). After obtaining
the related broker's price opinion, the Servicer will determine whether any
Significant Net Recovery is possible through foreclosure proceedings or other
liquidation of the related Mortgaged Property. If the Servicer determines that
(x) no Significant Net Recovery is possible or (y) the potential Net Recoveries
are anticipated to be an amount, determined by the Servicer in its good faith
judgment and in light of other mitigating circumstances, that is insufficient to
warrant proceeding through foreclosure or other liquidation of the related
Mortgaged Property, it may, at its discretion, charge off such delinquent
Mortgage Loan in accordance with subsections (a)(iii) and (a)(iv) below.
(iii) With respect to any Mortgage Loan for which a claim was not
paid by the Mortgage Pool Insurer (and which was not purchased pursuant to
paragraph (g) below), if the Servicer determines based on the broker's price
opinion obtained under paragraph (a)(ii) above and other relevant considerations
that (x) no Significant Net Recovery is possible through foreclosure proceedings
or other liquidation of the related Mortgaged Property or (y) the potential Net
Recoveries are anticipated to be an amount, determined by the Servicer in its
good faith judgment and in light of other mitigating circumstances, that is
insufficient to warrant proceeding through foreclosure or other liquidation of
the related Mortgaged Property, it will be obligated to charge off the related
Mortgage Loan at the time such Mortgage Loan becomes 210 days delinquent. Once a
Mortgage Loan has been charged off, the Servicer will discontinue making
Advances, the Servicer will not be entitled to any additional servicing
compensation (except as described in paragraphs(a)(ii) or (a)(iv) of this
Section 3.11), the Charged Off Loan will give rise to a Realized Loss, and the
Servicer will follow the procedures described in paragraph (a)(iv) below. If the
Servicer determines that (x) a Significant Net Recovery is possible through
foreclosure proceedings or other liquidation of the Mortgaged Property and (y)
the potential Net Recoveries are anticipated to be an amount, determined by the
Servicer in its good faith judgment and in light of other mitigating
circumstances, that is sufficient to warrant proceeding through foreclosure or
other liquidation of the related Mortgaged Property, the Servicer may continue
to make Advances or Servicing Advances on the related Mortgage Loan that has
become 210 days delinquent and will notify the Credit Risk Manager and the
Mortgage Pool Insurer of that decision as part of its monthly data report to the
Credit Risk Manager and the Mortgage Pool Insurer.
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(iv) Any Mortgage Loan that becomes a Charged Off Loan may continue
to be serviced by Wilshire for the Certificateholders using Wilshire Special
Servicing. Wilshire will accrue, but not be entitled to any Servicing Fees and
reimbursement of expenses in connection with such Charged Off Loans, except to
the extent of funds available from the aggregate amount of recoveries on all
Charged Off Loans. Such aggregate recovery amounts on Charged Off Loans shall be
paid to Wilshire first, as reimbursement of any outstanding and unpaid expenses,
and second, as any accrued and unpaid Servicing Fees. Wilshire will only be
entitled to previously accrued Servicing Fees and expenses on any such Charged
Off Loans. Wilshire will not be entitled to receive any future unaccrued
Servicing Fees or expenses from collections on such Charged Off Loans. Any
Charged Off Loan serviced by Wilshire using Wilshire Special Servicing shall be
so serviced until the Release Date described below. Any Net Recoveries on such
Charged Off Loans received prior to the Release Date will be included in
Available Funds.
On the date (the "Release Date") which is no more than six months after
the date on which Wilshire begins servicing any Charged Off Loans using Wilshire
Special Servicing, unless specific Net Recoveries are anticipated by Wilshire on
a particular Charged Off Loan following consultation with and approval by the
Mortgage Pool Insurer (in which case the Release Date will be delayed until all
such specific anticipated Net Recoveries are received), such Charged Off Loan
will be released from the Trust Fund, will no longer be an asset of any REMIC,
and will be transferred to the Class X-2 Certificateholders, without recourse,
and thereafter (i) those Holders will be entitled to any amounts subsequently
received in respect of any such Released Loans, (ii) the Majority in Interest
Class X-2 Certificateholder may designate the Servicer to service any such
Released Loan and (iii) the Majority in Interest Class X-2 Certificateholder may
sell any such Released Loan to a third party; provided, however, that it shall
not be necessary for Wilshire to consult with and receive the approval of the
Mortgage Pool Insurer with respect to any Charged Off Loan that satisfies the
following conditions: (a) the outstanding Stated Principal Balance of such
Charged Off Loan is less than $50,000, (b) the Mortgagor has made no Scheduled
Payments on such Charged Off Loan within the past 90 days and (c) (1) the first
lien related to such Charged Off Loan has been liquidated and there are no
excess proceeds to be applied toward such Charged Off Loan or (2) the first lien
related to such Charged Off Loan is 120 days or more delinquent and the current
loan-to-value ratio of such related first lien is greater than 85% based on a
broker's price opinion dated within the past six months. Notwithstanding the
previous sentence, if at any time after a Mortgage Loan has been Charged Off and
prior to six months after the date on which Wilshire begins servicing such
Charged Off Loan using Wilshire Special Servicing, Wilshire determines that
there will not be any Net Recoveries on such Charged Off Loan under any
circumstances, Wilshire may release such Charged Off Loan to the Majority in
Interest Class X-2 Certificateholder in accordance with the provisions set forth
in the previous sentence.
Notwithstanding the foregoing, the procedures described above in
this subsection 3.11(a)(iv) relating to the treatment of Charged Off Loans may
be modified at any time at the discretion of the Majority in Interest Class X-1
Certificateholder, with the consent of Wilshire and the Mortgage Pool Insurer,
which consents shall not be unreasonably withheld; provided, however, that in no
event shall the Majority in Interest Class X-1 Certificateholder change the fee
structure relating to Charged Off Loans in a manner that would cause fees to be
paid to Wilshire other than from recoveries on Charged Off Loans.
The Trustee shall track collections received by Wilshire on any
Charged Off Loans based upon loan level data provided to the Trustee by Wilshire
on each Servicer Data Remittance Date in a report in the form of Exhibit U
hereto, identifying the Charged Off Loans as of the related Due Period that
Wilshire will continue to service until the related Release Date using Wilshire
Special Servicing. On each Distribution Date, the Trustee shall verify, based on
the recovery and expense information provided by Wilshire on the Servicer Data
Remittance Date, (i) the aggregate amount of accrued and unpaid Servicing Fees
to be paid to Wilshire and expenses to be reimbursed to Wilshire on such Charged
Off Loans as of the related Due Period and (ii) the amount of Net
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Recoveries on such Charged Off Loans for such Distribution Date. The Trustee
shall be entitled to rely, without independent verification, on the loan level
data provided by Wilshire that identifies the recovery amounts and the
outstanding and unpaid expenses on any Charged Off Loan in order to verify the
amount in clause (ii) of the previous sentence. The Trustee will be responsible
for independently verifying the aggregate amount of accrued and unpaid Servicing
Fees described in clause (i) of the second preceding sentence to be paid to
Wilshire.
(v) Notwithstanding anything to the contrary contained in this
Agreement, in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Trustee otherwise requests, an environmental inspection or review of
such Mortgaged Property conducted by a qualified inspector shall be arranged for
by the Servicer. Upon completion of the inspection, the Servicer shall promptly
provide the Trustee with a written report of environmental inspection.
(vi) In the event the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes, the Servicer shall not proceed with foreclosure or acceptance of a deed
in lieu of foreclosure if the estimated costs of the environmental clean up, as
estimated in the environmental inspection report, together with the Servicing
Advances made by the Servicer and the estimated costs of foreclosure or
acceptance of a deed in lieu of foreclosure exceeds the estimated value of the
Mortgaged Property. If however, the aggregate of such clean up and foreclosure
costs and Servicing Advances are less than or equal to the estimated value of
the Mortgaged Property, then the Servicer may, in its reasonable judgment and in
accordance with Accepted Servicing Practices, choose to proceed with foreclosure
or acceptance of a deed in lieu of foreclosure and the Servicer shall be
reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental clean
up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.08 hereof. In the event the Servicer
does not proceed with foreclosure or acceptance of a deed in lieu of foreclosure
pursuant to the first sentence of this paragraph, the Servicer shall be
reimbursed for all Servicing Advances made with respect to the related Mortgaged
Property from the related Collection Account pursuant to Section 3.08 hereof,
the Servicer shall have no further obligation to service such Mortgage Loan
under the provisions of this Agreement.
(b) With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer shall ensure
that the title to such REO Property references this Agreement and the Trustee's
capacity hereunder. Pursuant to its efforts to sell such REO Property, the
Servicer shall in accordance with Accepted Servicing Practices manage, conserve,
protect and operate each REO Property for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer may rent such
75
property, as the Servicer deems to be in the best interest of the Trustee and
the Certificateholders for the period prior to the sale of such REO Property on
such terms and conditions and for such periods as the Servicer deems to be in
the best interest of the Trustee and the Certificateholders. The Servicer shall
furnish to the Trustee on or before each Distribution Date a statement with
respect to any REO Property covering the operation of such REO Property for the
previous calendar month and the Servicer's efforts in connection with the sale
of such REO Property and any rental of such REO Property incidental to the sale
thereof for the previous calendar month. That statement shall be accompanied by
such other information as the Trustee shall reasonably request and which is
necessary to enable the Trustee to comply with the reporting requirements of the
REMIC Provisions. The net monthly rental income, if any, from such REO Property
shall be deposited in the related Collection Account no later than the close of
business on each Determination Date. The Servicer shall perform the tax
reporting and withholding required by Sections 1445 and 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by Section
6050H of the Code with respect to the receipt of mortgage interest from
individuals and any tax reporting required by Section 6050P of the Code with
respect to the cancellation of indebtedness by certain financial entities, by
preparing such tax and information returns as may be required, in the form
required, and delivering the same to the Trustee for filing.
To the extent consistent with Accepted Servicing Practices, the
Servicer shall also maintain on each REO Property fire and hazard insurance with
extended coverage in amount which is equal to the outstanding principal balance
of the related Mortgage Loan (as reduced by any amount applied as a reduction of
principal at the time of acquisition of the REO Property), liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required above. Any costs
incurred by the Servicer in maintaining such insurance shall be recoverable by
the Servicer as a Servicing Advance out of payments by the related Mortgagor or
out of Insurance Proceeds or Liquidation Proceeds. Notwithstanding anything to
the contrary in this paragraph, the Servicer shall be required to pay the costs
of maintaining any insurance contemplated by this Section 3.11(b) only to the
extent that such advances, in the good faith judgment of the Servicer, will be
recoverable.
(c) In the event that the Trust Fund acquires any Mortgaged Property
as aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
three years after the end of the calendar year of its acquisition by the Trust
Fund unless (i) the Trustee shall have been supplied with an Opinion of Counsel
to the effect that the holding by the Trust Fund of such Mortgaged Property
subsequent to such three-year period will not result in the imposition of taxes
on "prohibited transactions" of any REMIC hereunder as defined in section 860F
of the Code or cause any REMIC hereunder to fail to qualify as a REMIC at any
time that any Certificates are outstanding, in which case the Trust Fund may
continue to hold such Mortgaged Property (subject to any conditions contained in
such Opinion of Counsel) or (ii) the Servicer shall have applied for, prior to
the expiration of such three-year period, an extension of such three-year period
in the manner contemplated by Section 856(e)(3) of the Code, in which case the
three-year period shall be extended by the applicable extension period. The
Servicer shall be entitled to be reimbursed from the Collection Account, as a
Servicing Advance, for any costs incurred in obtaining such Opinion of Counsel.
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust
76
Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject any REMIC hereunder to
the imposition of any federal, state or local income taxes on the income earned
from such Mortgaged Property under Section 860G(c) of the Code or otherwise,
unless the Servicer has agreed to indemnify and hold harmless the Trust Fund
with respect to the imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of whose
obligor is not a United States Person, as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a
deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on the Mortgage Loan.
(d) The decision of the Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO Properties,
net of reimbursement to the Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
applicable accrued and unpaid Servicing Fees, and unreimbursed Advances and
Servicing Advances, shall be applied to the payment of principal of and interest
on the related defaulted Mortgage Loans (with interest accruing as though such
Mortgage Loans were still current) and all such income shall be deemed, for all
purposes in this Agreement, to be payments on account of principal and interest
on the related Mortgage Notes and shall be deposited into the related Collection
Account. To the extent the net income received during any calendar month is in
excess of the amount attributable to amortizing principal and accrued interest
at the related Mortgage Rate on the related Mortgage Loan for such calendar
month, such excess shall be considered to be a partial prepayment of principal
of the related Mortgage Loan.
(e) The proceeds from any liquidation of a Mortgage Loan, as well as
any income from an REO Property, if applicable, will be applied in the following
order of priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances and Servicing Fees; second, to reimburse the Servicer for any
unreimbursed Advances; third, to reimburse the related Collection Account for
any Nonrecoverable Advances (or portions thereof) that were previously withdrawn
by the Servicer pursuant to Section 3.08(iii) that related to such Mortgage
Loan; fourth, to accrued and unpaid interest (to the extent no Advance has been
made for such amount or any such Advance has been reimbursed) on the Mortgage
Loan or related REO Property, at the per annum rate equal to the related
Mortgage Rate reduced by the related Servicing Fee Rate, to the Due Date
occurring in the month in which such amounts are required to be distributed; and
fifth, as a recovery of principal of the Mortgage Loan. Excess proceeds, if any,
from the liquidation of a Liquidated Mortgage Loan will be retained by the
Servicer as additional servicing compensation pursuant to Section 3.14.
(f) [reserved].
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(g) The Mortgage Pool Insurer, at its option, may (but is not
obligated to) repurchase from the Trust Fund, any Mortgage Loan for which it has
not paid a claim, regardless of whether a claim has been approved for such
Mortgage Loan or a Realized Loss on such Mortgage Loan has been applied to the
Deductible, and (a) that is delinquent in payment by three or more Scheduled
Payments or (b) with respect to which there has been initiated legal action or
other proceedings for the foreclosure of the related Mortgaged Property either
judicially or non-judicially. If it elects to make any such repurchase, the
Mortgage Pool Insurer shall repurchase such Mortgage Loan with its own funds at
a price equal to the Repurchase Price for such Mortgage Loan. Any such purchase
shall reduce the amount of available coverage under the Mortgage Pool Insurance
Policy by the amount of such Repurchase Price and any recoveries by the Mortgage
Pool Insurer on any such Mortgage Loans may be retained by the Mortgage Pool
Insurer; provided, however, that any reduction in the amount of coverage under
the Mortgage Pool Insurance Policy due to any repurchase pursuant to this
paragraph shall be offset by any recoveries to the Mortgage Pool Insurer from
such Mortgage Loans. If the Mortgage Pool Insurer does not exercise its right
pursuant to this paragraph with respect to any Mortgage Loan, then the Majority
in Interest Class X-2 Certificateholder may purchase any such Mortgage Loan at
the Repurchase Price. The Majority in Interest Class X-2 Certificateholder may
designate any servicer to service any such Mortgage Loan purchased from the
Trust.
SECTION 3.12 Trustee to Cooperate; Release of Mortgage Files.
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 will immediately notify the Trustee
(or the Custodian, as the case may be) by delivering, or causing to be delivered
a "Request for Release" substantially in the form of Exhibit M. Upon receipt of
such request, the Trustee (or the Custodian, as the case may be) shall within
three Business Days release the related Mortgage File to the Servicer, and the
Trustee shall within three Business Days of the Servicer's direction execute and
deliver to the Servicer the request for reconveyance, deed of reconveyance or
release or satisfaction of mortgage or such instrument releasing the lien of the
Mortgage in each case provided by the Servicer, together with the Mortgage Note
with written evidence of cancellation thereon. The Servicer is authorized to
cause the removal from the registration on the MERS(R) System of such Mortgage,
if applicable, and to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release. Expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the related Mortgagor to the extent permitted by law and otherwise shall
constitute a Servicing Advance. From time to time and as shall be appropriate
for the servicing or foreclosure of any Mortgage Loan, including for such
purpose, collection under any policy of flood insurance, any fidelity bond or
errors or omissions policy, or for the purposes of effecting a partial release
of any Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Trustee shall, within three Business Days of
delivery to the Trustee (or the Custodian, as the case may be) of a Request for
Release in the form of Exhibit M signed by a Servicing Officer, release the
Mortgage File to the Servicer. Subject to the further limitations set forth
below, the Servicer shall cause the Mortgage File or documents so released to be
returned to the Trustee (or the Custodian, as the case may be) when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan is
liquidated and the proceeds thereof are
78
deposited in the related Collection Account, in which case the Servicer shall
deliver to the Trustee (or the Custodian, as the case may be) a Request for
Release in the form of Exhibit M, signed by a Servicing Officer.
If the Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Servicer shall, if applicable, deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents (which, if acceptable by the related court,
may be copies) necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity.
SECTION 3.13 Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
Servicer from time to time required to be delivered to the Trustee pursuant to
the terms hereof and shall account fully to the Trustee for any funds received
by the Servicer or which otherwise are collected by the Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All Mortgage
Files and funds collected or held by, or under the control of, the Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including but not limited to,
any funds on deposit in a Collection Account, shall be held by the Servicer for
and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
The Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the related Collection Account,
Certificate Account or any related Escrow Account, or any funds that otherwise
are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien (other than the lien of a related First
Mortgage Loan), security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are properly due and
payable to the Servicer under this Agreement.
SECTION 3.14 Servicing Fee.
As compensation for its services hereunder, the Servicer shall be
entitled to withdraw from the Collection Account or to retain from interest
payments on the related Mortgage Loans the amount of its Servicing Fee for each
Mortgage Loan, less any amounts in respect of its Servicing Fee payable by the
Servicer pursuant to Section 3.05(b)(vi). The Servicing Fee is limited to, and
payable solely from, the interest portion of such Scheduled Payments collected
by the Servicer or as otherwise provided in Section 3.08.
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Additional servicing compensation in the form of Ancillary Income
shall be retained by the Servicer. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including the payment of any expenses incurred in connection with any
Subservicing Agreement entered into pursuant to Section 3.02) and shall not be
entitled to reimbursement thereof except as specifically provided for in this
Agreement.
SECTION 3.15 Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinate Certificates and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the related Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices designated by the Servicer. Nothing
in this Section shall limit the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of the Servicer to provide access as provided in this Section as
a result of such obligation shall not constitute a breach of this Section.
Nothing in this Section 3.15 shall require the Servicer to collect, create,
collate or otherwise generate any information that it does not generate in its
usual course of business.
SECTION 3.16 Annual Statement as to Compliance.
Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b) with
respect to any calendar year during which the Depositor's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission (or, in
each case, if such day is not a Business Day, the immediately preceding Business
Day), the Servicer shall deliver to the Depositor, the Rating Agencies and the
Trustee an Officer's Certificate stating, as to the signer thereof, that (i) a
review of the activities of the Servicer during the preceding calendar year and
of the performance of the Servicer under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and the action being taken by the
Servicer to cure such default.
SECTION 3.17 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b) with
respect to any calendar year during which the Depositor's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission (or, in
each case, if such day is not
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a Business Day, the immediately preceding Business Day), the Servicer at its
expense shall cause a nationally or regionally recognized firm of independent
public accountants (who may also render other services to the Servicer, the
Seller or any affiliate thereof) which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Trustee and the
Depositor to the effect that such firm has examined certain documents and
records relating to the servicing of mortgage loans which the Servicer is
servicing, which may include the related Mortgage Loans or similar mortgage
loans, and that, on the basis of such examination, conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
the Audit Guide for HUD Approved Title II Approved Mortgagees and Loan
Correspondent Programs, nothing has come to their attention which would indicate
that such servicing has not been conducted in compliance with Accepted Servicing
Practices, 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. In addition, the Servicer shall disclose to such firm all significant
deficiencies relating to the Servicer's compliance with the minimum servicing
standards set forth in this Agreement. In rendering such statement, such firm
may rely, as to matters relating to direct servicing of mortgage loans by
Subservicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Guide for HUD Approved Title II Approved
Mortgagees and Loan Correspondent Programs (rendered within one year of such
statement) of independent public accountants with respect to the related
Subservicer. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided such
statement is delivered by the Servicer to the Trustee.
SECTION 3.18 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the related Mortgage Loans ("Servicer Employees"). The amount of
coverage under any such Fidelity Bond and Errors and Omissions Insurance Policy
shall be at least equal to the coverage maintained by the Servicer in order to
be acceptable to Xxxxxx Xxx or Xxxxxxx Mac to service loans for it or otherwise
in an amount as is commercially available at a cost that is generally not
regarded as excessive by industry standards. No provision of this Section 3.18
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Servicer from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such bond and insurance policy
shall be at least equal to the corresponding amounts required by Xxxxxx Mae.
Upon the request of the Trustee, the Servicer shall cause to be delivered to the
Trustee a certificate of insurance of the insurer and the surety including a
statement from the surety and the insurer that such fidelity bond and insurance
policy shall in no event be terminated or materially modified without 30 days'
prior written notice to the Trustee.
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SECTION 3.19 Duties of the Credit Risk Manager.
The Depositor appoints The Murrayhill Company as Credit Risk
Manager. For and on behalf of the Depositor, and the Trustee, the Credit Risk
Manager will provide the Depositor with reports and recommendations concerning
Mortgage Loans that are past due, as to which there has been commencement of
foreclosure, as to which there has been forbearance in exercise of remedies
which are in default, as to which obligor is the subject of bankruptcy,
receivership, or an arrangement of creditors, or as to which have become REO
Properties. Such reports and recommendations will be based upon information
provided to the Credit Risk Manager pursuant to the Credit Risk Management
Agreement and the Credit Risk Manager shall look solely to the Servicer for all
information and data (including loss and delinquency information and data) and
loan level information and data relating to the servicing of the Mortgage Loans.
Upon receipt of notice from the Mortgage Pool Insurer with respect to any claim
rejected by the Mortgage Pool Insurer (the "Claims Report") under the Mortgage
Pool Insurance Policy, the Credit Risk Manager shall review any such rejected
claim and shall make a recommendation, based on the information provided by the
Mortgage Pool Insurer, as to whether the claim was rejected due to the
Servicer's failure to comply with the terms of the related Mortgage Pool
Insurance Policy or the claims-filing procedures of the Mortgage Pool Insurer.
The Credit Risk Manager shall promptly notify the Depositor, the Seller, the
Servicer and the Trustee with written information regarding such recommendation
and the basis of such recommendation along with the related Claims Report. If
the Credit Risk Manager is no longer able to perform its duties hereunder, the
Depositor shall terminate the Credit Risk Manager and cause the appointment of a
successor Credit Risk Manager. Upon any termination of the Credit Risk Manager
or the appointment of a successor Credit Risk Manager, the Depositor shall give
written notice thereof to the Seller, the Servicer, the Trustee and each Rating
Agency. Notwithstanding the foregoing, the termination of the Credit Risk
Manager pursuant to this Section 3.19 shall not become effective until the
appointment of a successor Credit Risk Manager.
SECTION 3.20 Limitation Upon Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
the Trustee, the Certificateholders or the Depositor for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, in reliance upon information provided by the Servicer under the
Credit Risk Management Agreement or of errors in judgment; provided, however,
that this provision shall not protect the Credit Risk Manager or any such person
against liability that would otherwise be imposed by reason of willful
malfeasance, bad faith or gross negligence in its performance of its duties
under this Agreement or the Credit Risk Manager Agreement. The Credit Risk
Manager and any director, officer, employee or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder, and may
rely in good faith upon the accuracy of information furnished by the Servicer
pursuant to the Credit Risk Management Agreement in the performance of its
duties thereunder and hereunder.
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SECTION 3.21 Advance Facility.
(a) Wilshire is hereby authorized to enter into a financing or other
facility (any such arrangement, an "Advance Facility") under which (1) Wilshire
assigns or pledges to another Person (an "Advancing Person") the Servicer's
rights under this Agreement to be reimbursed for any Advances or Servicing
Advances and/or (2) an Advancing Person agrees to fund some or all Advances
and/or Servicing Advances required to be made by Wilshire pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before Wilshire may enter into an Advance Facility; provided, however,
that the consent of the Trustee (which consent shall not be unreasonably
withheld) shall be required before Wilshire may cause to be outstanding at one
time more than one Advance Facility with respect to Advances or more than one
Advance Facility with respect to Servicing Advances. Notwithstanding the
existence of any Advance Facility under which an Advancing Person agrees to fund
Advances and/or Servicing Advances on the Servicer's behalf, Wilshire shall
remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement, and shall not be
relieved of such obligations by virtue of such Advance Facility. If Wilshire
enters into an Advance Facility, and for so long as an Advancing Person remains
entitled to receive reimbursement for any Advances or Servicing Advances
outstanding and previously unreimbursed pursuant to this Agreement, then
Wilshire may elect by providing written notice to the Trustee not to be
permitted to reimburse itself for Advances and/or Servicing Advances, as
applicable, pursuant to Section 3.08 of this Agreement, but following any such
election Wilshire shall be required to include amounts collected that would
otherwise be retained by Wilshire to reimburse it for previously unreimbursed
Advances ("Advance Reimbursement Amounts") and/or previously unreimbursed
Servicing Advances ("Servicing Advance Reimbursement Amounts" and together with
Advance Reimbursement Amounts, "Reimbursement Amounts") (in each case to the
extent such type of Reimbursement Amount is included in the Advance Facility) in
the remittance to the Trustee made pursuant to this Agreement to the extent of
amounts on deposit in the Collection Account on the Servicer Cash Remittance
Date. Notwithstanding anything to the contrary herein, in no event shall Advance
Reimbursement Amounts or Servicing Advance Reimbursement Amounts be included in
Interest Remittance Amounts or Principal Remittance Amounts or distributed to
Certificateholders. Wilshire if making the election set forth herein, shall
report to the Trustee the portions of the Reimbursement Amounts that consist of
Advance Reimbursement Amounts and Servicing Advance Reimbursement Amounts,
respectively.
(b) If Wilshire enters into an Advance Facility and makes the
election set forth in Section 3.21(a), Wilshire and the related Advancing Person
shall deliver to the Trustee a written notice and payment instruction (an
"Advance Facility Notice"), providing the Trustee with written payment
instructions as to where to remit Advance Reimbursement Amounts and/or Servicing
Advance Reimbursement Amounts (each to the extent such type of Reimbursement
Amount is included within the Advance Facility) on subsequent Distribution
Dates. The payment instruction shall require the applicable Reimbursement
Amounts to be distributed to the Advancing Person or to a trustee or custodian
(an "Advance Facility Trustee") designated in the Advance Facility Notice. An
Advance Facility Notice may only be terminated by the joint written direction of
Wilshire and the related Advancing Person (and any related Advance Facility
Trustee); provided, however, that the provisions of this Section 3.21 shall
cease to be applicable when all Advances and Servicing Advances funded by an
Advancing Person, and when all Advances and Servicing Advances (the
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rights to be reimbursed for which have been assigned or pledged to an Advancing
Person), have been repaid to the related Advancing Person in full.
(c) Reimbursement Amounts shall consist solely of amounts in respect
of Advances and/or Servicing Advances made with respect to the Mortgage Loans
for which Wilshire would be permitted to reimburse itself in accordance with
Section 3.08(ii), (iii) and (iv) hereof, assuming Wilshire had made the related
Advance(s) and/or Servicing Advance(s). Notwithstanding the foregoing, no Person
shall be entitled to reimbursement from funds held in the Collection Account for
future distribution to Certificateholders pursuant to the provisions of Section
4.01. The Trustee shall not have any duty or liability with respect to the
calculation of any Reimbursement Amount and shall be entitled to rely without
independent investigation on the Advance Facility Notice and on the Servicer's
report of the amount of Advance Reimbursement Amounts and Servicing Advance
Reimbursement Amounts that were included in the remittance from Wilshire to the
Trustee pursuant to Section 3.08(viii). Wilshire shall maintain and provide to
any successor Servicer a detailed accounting on a loan-by-loan basis as to
amounts advanced by, pledged or assigned to, and reimbursed to any Advancing
Person. The successor Servicer shall be entitled to rely on any such information
provided by Wilshire and the successor Servicer shall not be liable for any
errors in such information.
(d) An Advancing Person who receives an assignment or pledge of the
rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Subservicer set forth in Section 3.02 hereof.
(e) With respect to any Advance Facility pursuant to which Wilshire
has made the election set forth in Section 3.21(a), the documentation
establishing any Advance Facility shall require that Reimbursement Amounts
distributed with respect to each Mortgage Loan be allocated to outstanding
unreimbursed Advances or Servicing Advances (as the case may be) made with
respect to that Mortgage Loan on a "first-in, first-out" (FIFO) basis. Such
documentation shall also require Wilshire to provide to the related Advancing
Person or Advance Facility Trustee loan-by- loan information with respect to
each Reimbursement Amount distributed by the Trustee to such Advancing Person or
Advance Facility Trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility Trustee to make the FIFO allocation of each
Reimbursement Amount with respect to each Mortgage Loan. Wilshire shall remain
entitled to be reimbursed by the Advancing Person or Advance Facility Trustee
for all Advances and Servicing Advances funded by Wilshire to the extent the
related rights to be reimbursed therefor have not been assigned or pledged to an
Advancing Person.
(f) If Wilshire enters into an Advance Facility, Wilshire shall
indemnify the Trustee and the Trust and any successor Servicer, as applicable,
from and against any claims, losses, liabilities or damages resulting from any
claim by the related Advancing Person, except to the extent that such claim,
loss, liability or damage resulted from or arose out of negligence, recklessness
or willful misconduct on the part of the successor Servicer or the Trustee, or
failure by the successor Servicer or the Trustee to remit funds as required by
Section 3.21(b). Any amendment to this Section 3.21 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 3.21, including
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amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Seller and Wilshire without the consent of any
Certificateholder notwithstanding anything to the contrary in Section 10.01 of
or elsewhere in this Agreement.
SECTION 3.22 Maintenance of Pool Insurance Policy.
The Servicer shall exercise its commercially reasonable efforts to
maintain and keep the Mortgage Pool Insurance Policy in full force and effect
until (a) each Mortgage Loan has been paid in full, liquidated or is no longer
an asset of the Trust Fund or (b) the Certificates are no longer outstanding,
unless coverage thereunder has been exhausted through payment of claims. The
Trustee shall pay on each Distribution Date in accordance with Section 4.02(a)
the Mortgage Pool Insurer Fee from amounts on deposit in the Certificate
Account.
In the event that the Mortgage Pool Insurance Policy is canceled or
terminated for any reason, the Servicer shall use its commercially reasonable
efforts to obtain a replacement Mortgage Pool Insurance Policy from a Qualified
Insurer that is acceptable to each Rating Agency. Any such replacement policy
will provide for an amount of coverage equal to the then remaining coverage
amount of the Mortgage Pool Insurance Policy, provided, however, that if the
premium cost of the replacement policy exceeds the premium cost of the Mortgage
Pool Insurance Policy, the coverage amount of the replacement policy shall be
reduced so that the premium cost therefore will not exceed 100% of the premium
cost of the Mortgage Pool Insurance Policy. Alternatively, at its option, the
Depositor may provide other credit enhancement acceptable to each Rating Agency,
but is under no obligation to do so. In the event that the claims-paying ability
rating of the Mortgage Pool Insurer is reduced to below investment grade by both
of the Rating Agencies and such reduction results in a downgrading of any of the
Certificates, upon receipt by the Trustee of written notice of such downgrade of
the Certificates, the Mortgage Pool Insurance Policy may be canceled by the
Trustee and the Mortgage Pool Insurer will not be entitled to receive any
additional premium payments after the related cancellation and will not be
entitled to any additional reimbursement from Available Funds for any claims
that have been paid.
In connection with its activities as administrator and servicer of
the Mortgage Loans, the Servicer agrees to file, on behalf of itself, the
Trustee, the Depositor and the Certificateholders claims and provide notices and
other information to the Mortgage Pool Insurer in a timely fashion in accordance
with the terms of the Mortgage Pool Insurance Policy and, in this regard, to
take such action as shall be necessary to permit recovery under the Mortgage
Pool Insurance Policy respecting a related defaulted Mortgage Loan. The Servicer
shall comply will all applicable terms of the Mortgage Pool Insurance Policy and
the claims-filing procedures of the Mortgage Pool Insurer, to the extent
necessary to avoid any adjustments to claims paid under the related Mortgage
Pool Insurance Policy.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01 Advances by the Servicer.
The Servicer shall deposit in a Collection Account an amount equal
to all Scheduled Payments (with interest at the Mortgage Rate less the Servicing
Fee Rate) which were due but not received on the related Mortgage Loans during
the applicable Due Period; provided however, that with respect to any Balloon
Loan that is delinquent on its maturity date, the Servicer will not be required
to advance the related balloon payment but will be required to continue to make
Advances in accordance with this Section 4.01 with respect to such Balloon Loan
in an amount equal to an assumed scheduled payment that would otherwise be due
based on the original amortization schedule for that Mortgage Loan (with
interest at the Mortgage Rate less the Servicing Fee Rate). The Servicer's
obligation to make such Advances as to any related Mortgage Loan will continue
through the last Scheduled Payment due prior to the payment in full of such
Mortgage Loan, or through the date that the related Mortgaged Property has, in
the judgment of the Servicer, been completely liquidated; provided however, that
such obligation with respect to any related Mortgage Loan shall cease if the
Servicer determines, in its reasonable opinion, that Advances with respect to
such Mortgage Loan are Nonrecoverable Advances; provided that the Servicer will
be required to make Advances until the earlier of (i) the time at which the
related Mortgage Loan becomes 150 days delinquent or (ii) the time at which the
Servicer determines that such Advances with respect to such Mortgage Loan are
Nonrecoverable Advances. In the event that the Servicer determines that any such
Advances are Nonrecoverable Advances, the Servicer shall provide the Trustee
with a certificate signed by a Servicing Officer evidencing such determination.
If an Advance is required to be made hereunder, the Servicer shall
on the second Business Day immediately preceding the Distribution Date
immediately following the related Determination Date either (i) deposit in the
Collection Account from its own funds an amount equal to such Advance, (ii)
cause to be made an appropriate entry in the records of the Collection Account
that funds in such account being held for future distribution or withdrawal have
been, as permitted by this Section 4.01, used by the Servicer to make such
Advance or (iii) make Advances in the form of any combination of clauses (i) and
(ii) aggregating the amount of such Advance. Any such funds being held in a
Collection Account for future distribution and so used shall be replaced by the
Servicer from its own funds by deposit in such Collection Account on or before
any future Distribution Date in which such funds would be due. The Servicer
shall be entitled to be reimbursed from the Collection Account for all Advances
of its own funds made pursuant to this Section as provided in Section 3.08.
SECTION 4.02 Priorities of Distribution.
(a) On each Distribution Date, prior to making distributions to the
holders of the Certificates, the Trustee first, shall pay itself the Trustee's
Fee for such Distribution Date, second, shall pay the Credit Risk Manager the
Credit Risk Manager Fee and third shall remit to the Mortgage
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Pool Insurer, by fund transfer from an account in the name of the Philadelphia
office of the Trustee, in immediately available funds, the Mortgage Pool Insurer
Fee.
(b) With respect to the Available Funds, including any funds
received from the Mortgage Pool Insurance Policy, on each Distribution Date, the
Trustee shall withdraw such Available Funds from the Certificate Account and
based on the information provided to it by the Servicer, apply such funds to
distributions on the Certificates in the following order and priority and, in
each case, to the extent of such Available Funds remaining:
(i) On each Distribution Date, the Trustee shall distribute the
Interest Remittance Amount for such date in the following order of
priority:
A. to the Senior Certificates, concurrently and pro rata, Current
Interest and any Carryforward Interest, as applicable, for
each such Class and such Distribution Date;
B. to the Class M-1 Certificates and Class M-1-IO Certificates,
concurrently and pro rata, Current Interest and any
Carryforward Interest for such Class and such Distribution
Date;
C. to the Class M-2 Certificates, Current Interest and any
Carryforward Interest for such Class and such Distribution
Date;
D. to the Class M-3 Certificates Current Interest and any
Carryforward Interest for such Class and such Distribution
Date;
E. to the Class M-4 Certificates Current Interest and any
Carryforward Interest for such Class and such Distribution
Date;
F. to the Class M-5 Certificates Current Interest and any
Carryforward Interest for such Class and such Distribution
Date;
G. to the Class B Certificates, Current Interest and any
Carryforward Interest for each such Class and such
Distribution Date; and
H. for application in the same manner as the Monthly Excess
Cashflow for such Distribution Date as provided in clause (iv)
of this Section 4.02(b), any Interest Remittance Amount
remaining after application pursuant to clauses A. through G.
above.
(ii) On each Distribution Date (a) prior to the Stepdown Date or (b)
with respect to which a Trigger Event has occurred, the Trustee shall
distribute the Principal Payment Amount for such date in the following
order of priority:
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A. commencing on the Distribution Date in August 2009, to the
Class P Certificates, until the Class Principal Balance of
such class has been reduced to zero;
B. first to the Class A-R Certificates and Class A-RL
Certificates, concurrently on a pro rata basis, based on their
respective Class Principal Balances, until the Class Principal
Balance of each such Class has been reduced to zero, and then
concurrently on a pro rata basis, as follows: (a) to the Class
A-1 Certificates, until the Class Principal Balance thereof
has been reduced to zero and (b) to the Class A-2, Class A-3
and Class A-4 Certificates, with the total amount under this
clause (ii)(B)(b) distributed sequentially to the Class A-2,
Class A-3 and Class A-4 Certificates, in that order, in each
case until the Class Principal Balance thereof has been
reduced to zero;
C. to the Class M-1 Certificates, until the Class Principal
Balance of such Class has been reduced to zero;
D. to the Class M-2 Certificates, until the Class Principal
Balance of such Class has been reduced to zero;
E. to the Class M-3 Certificates, until the Class Principal
Balance of such Class has been reduced to zero;
F. to the Class M-4 Certificates, until the Class Principal
Balance of such Class has been reduced to zero;
G. to the Class M-5 Certificates, until the Class Principal
Balance of such Class has been reduced to zero;
H. to the Class B Certificates, until the Class Principal Balance
of such Class has been reduced to zero; and
I. for application in the same manner as the Monthly Excess
Cashflow for such Distribution Date, as provided in clause
(iv) of this Section 4.02(b), any Principal Payment Amount
remaining after application pursuant to clauses A. through H.
above.
(iii) On each Distribution Date (a) on or after the Stepdown Date
and (b) with respect to which a Trigger Event is not in effect, the
Trustee shall distribute the Principal Payment Amount for such date in the
following order of priority:
A. commencing on the Distribution Date in August 2009 or
thereafter, to the Class P Certificates, until the Class
Principal Balance of such class has been reduced to zero;
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B. to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, the Senior Principal Payment Amount for such
Distribution Date, allocated concurrently on a pro rata basis,
as follows: (a) to the Class A-1 Certificates, until the Class
Principal Balance thereof has been reduced to zero and (b) to
the Class A-2, Class A-3 and Class A-4 Certificates, with the
total amount under this clause (iii)(B)(b) distributed
sequentially to the Class A-2, Class A-3 and Class A-4
Certificates, in that order, in each case until the Class
Principal Balance thereof has been reduced to zero;
C. to the Class M-1 Certificates, the Class M-1 Principal Payment
Amount for such Distribution Date, until the Class Principal
Balance of such Class has been reduced to zero;
D. to the Class M-2 Certificates, the Class M-2 Principal Payment
Amount for such Distribution Date, until the Class Principal
Balance of such Class has been reduced to zero;
E. to the Class M-3 Certificates, the Class M-3 Principal Payment
Amount for such Distribution Date, until the Class Principal
Balance of such Class has been reduced to zero;
F. to the Class M-4 Certificates, the Class M-4 Principal Payment
Amount for such Distribution Date, until the Class Principal
Balance of such Class has been reduced to zero;
G. to the Class M-5 Certificates, the Class M-5 Principal Payment
Amount for such Distribution Date, until the Class Principal
Balance of such Class has been reduced to zero;
H. to the Class B Certificates, the Class B Principal Payment
Amount for such Distribution Date, until the Class Principal
Balance of such Class has been reduced to zero; and
I. for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in clause (iv) of this Section
4.02(b), any Principal Payment Amount remaining after
application pursuant to clauses A. through H. above.
(iv) On each Distribution Date, the Trustee shall distribute the
Monthly Excess Cashflow for such date in the following order of priority:
A. an amount equal to the aggregate Realized Losses on the
Mortgage Loans incurred during the related Collection Period,
such amount to be added to the Principal Payment Amount and
distributed as set forth above in Section 4.02(b)(ii) and
(iii) (any such amount, an "Excess Cashflow Loss Payment");
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B. if there are no outstanding Deferred Amounts for the Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class B
Certificates, to the Mortgage Pool Insurer, in an amount equal
to any claim amount previously paid under the Mortgage Pool
Insurance Policy that remains unreimbursed;
C. (I) except for the first Distribution Date, until the
Overcollateralization Amount equals the Targeted
Overcollateralization Amount for such date, on each
Distribution Date (a) prior to the Stepdown Date or (b)
with respect to which a Trigger Event has occurred, to
the extent of Monthly Excess Interest for such
Distribution Date, to fund any principal distributions
to the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-R, Class A-RL, Class P, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5 and Class B Certificates
required to be made on such Distribution Date set forth
above in clause (ii) above, after giving effect to the
distribution of the Principal Payment Amount for such
Distribution Date, in accordance with the priorities set
forth therein.
(II) on each Distribution Date on or after the Stepdown Date
and with respect to which a Trigger Event is not in
effect, to fund any principal distributions to the Class
A-1, Class A-2, Class A-3, Class A-4, Class A-R, Class
A-RL, Class P, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class B Certificates required to be
made on such Distribution Date set forth above in clause
(iii) above, after giving effect to the distribution of
the Principal Payment Amount for such Distribution Date,
in accordance with the priorities set forth therein;
D. to the Class M-1 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate for such
Class;
E. to the Class M-2 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate for such
Class;
F. to the Class M-3 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate for such
Class;
G. to the Class M-4 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate for such
Class;
H. to the Class M-5 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate for such
Class;
I. to the Class B Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate for such
Class;
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J. to the Mortgage Pool Insurer, in an amount equal to any claim
amount previously paid under the Mortgage Pool Insurance
Policy that remains unreimbursed;
K. to the Class X-1 Certificate, the Class X-1 Distributable
Amount for such Distribution Date reduced by amounts
distributed pursuant to clause H of Section 4.02(b)(i) for
such Distribution Date, the amount of any
Overcollateralization Release Amount for such Distribution
Date and, for any Distribution Date on or after which the
aggregate Class Principal Balance of the Regular Certificates
has been reduced to zero, the Overcollateralization Amount;
and
L. to the Class A-R Certificate or Class A-RL Certificate, as
applicable, any remaining amount; provided, however that any
amount that would be distributable pursuant to this priority
(L) shall not be paid with respect to the Class A-R
Certificate or Class A-RL Certificates, as applicable, but
shall be paid instead with respect to the Class X-1
Certificates pursuant to a contract that exists under this
Agreement between the Class A-R Certificateholders or Class
A-RL Certificateholders and the Class X-1 Certificateholders.
(v) On each Distribution Date, the Trustee shall distribute to the
Holder of the Class P Certificate, the aggregate of all Prepayment Charges
collected during the preceding Prepayment Period.
(vi) On the first Distribution Date only, the Trustee shall
distribute the Monthly Excess Cashflow for such date to the Class X-1
Certificate.
(vii) On each Distribution Date, following the foregoing
distributions, an amount equal to the amount of Net Recoveries included in
the Available Funds for such Distribution Date shall be applied to
increase the Class Principal Balance of the Class of Certificates with the
Highest Priority up to the extent of such Realized Losses previously
allocated to that Class of Certificates pursuant to Section 4.05. An
amount equal to the amount of any remaining Net Recoveries shall be
applied to increase the Class Principal Balance of the Class of
Certificates with the next Highest Priority, up to the amount of such
Realized Losses previously allocated to that Class of Certificates
pursuant to Section 4.05, and so on. Holders of such Certificates will not
be entitled to any distribution in respect of interest on the amount of
such increases for any Interest Accrual Period preceding the Distribution
Date on which such increase occurs. Any such increases shall be applied to
the Class Principal Balance of each Certificate of such Class in
accordance with its respective Percentage Interest.
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SECTION 4.03 [Reserved]
SECTION 4.04 [Reserved]
SECTION 4.05 Allocation of Realized Losses.
On each Distribution Date, the Trustee shall determine the total of
the Applied Loss Amount, if any, for such Distribution Date. The Applied Loss
Amount for any Distribution Date shall be applied by reducing the Class
Principal Balance of each Class of Subordinate Certificates beginning with the
Class of Subordinate Certificates then outstanding with the lowest relative
payment priority, in each case until the respective Class Principal Balance
thereof is reduced to zero. Any Applied Loss Amount allocated to a Class of
Subordinate Certificates shall be allocated among the Subordinate Certificates
of such Class in proportion to their respective Percentage Interests.
All Realized Losses on the Mortgage Loans shall be deemed to have
been allocated to the following REMIC 1 Regular Interests in the specified
percentages, as follows: first to Uncertificated Accrued Interest payable to the
REMIC 1 Regular Interests MT-AA and MT-ZZ up to an aggregate amount equal to the
excess of (a) the REMIC 1 Interest Loss Allocation Amount over (b) Prepayment
Interest Shortfalls (to the extent not covered by Compensating Interest)
relating to the Mortgage Loans for such Distribution Date, 98% and 2%,
respectively; second, to the Uncertificated Principal Balances of the REMIC 1
Regular Interests MT-AA and MT-ZZ up to an aggregate amount equal to the REMIC 1
Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest MT-AA, REMIC 1
Regular Interest MT-B, and REMIC 1 Regular Interest MT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest MT-B has been reduced to zero; fourth, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest MT-AA, REMIC 1 Regular Interest MT-M-5 and
REMIC 1 Regular Interest MT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest MT-M-5 has been
reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest MT-AA, REMIC 1 Regular Interest MT-M-4 and REMIC 1 Regular
Interest MT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest MT-M-4 has been reduced to zero; sixth, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest MT-AA, REMIC 1
Regular Interest MT-M-3 and REMIC 1 Regular Interest MT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest MT-M-3 has been reduced to zero; seventh, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest MT-AA, REMIC 1 Regular Interest
MT-M-2 and REMIC 1 Regular Interest MT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 1 Regular Interest MT-M-2 has been
reduced to zero; and eighth, to the Uncertificated Principal Balance of REMIC 1
Regular Interest MT-AA, REMIC 1 Regular Interest MT-M-1 and REMIC 1 Regular
Interest MT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest MT-M-1 has been reduced to zero; All
Realized Losses on the REMIC 1 Regular Interests shall be deemed to have been
allocated to the REMIC 2 Regular Interests in specified percentages and in the
same priority as that allocated to the Corresponding Certificates.
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SECTION 4.06 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall
prepare, and make available on the website maintained by the Trustee at
xxxx://xxx.xxxxxxxx.xxx/xxx, a statement setting forth with respect to the
related distribution, the items listed on Exhibit V.
Assistance in using the website can be obtained by calling the
Trustee's customer service desk at 000-000-0000. Parties that are unable to use
the website are entitled to have a paper copy mailed to them via first class
mail by written notice to the Trustee at its Corporate Trust Office. The
Trustee's responsibility for disbursing the above information to the
Certificateholders is limited to the availability, timeliness and accuracy of
the information derived from the Servicer. The foregoing information shall be
reported to the Trustee each month on or before the Servicer Data Remittance
Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in, items (i)(c), (i)(d), (i)(g), (i)(j), (i)(k),
(ii)(c), (ii)(d), (ii)(g), (ii)(i), (v)(d), (v)(e) and (v)(s) of Exhibit V
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
SECTION 4.07 Distributions on the REMIC 1 Regular Interests and
REMIC 2 Regular Interests.
(a) Distributions on the REMIC 1 Regular Interests.
On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed by REMIC 1 to REMIC 2
on account of the REMIC 1 Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class A-RL Certificates, as the
case may be:
(i) first, to the extent of the sum of Available Funds for such
Distribution Date, to Holders of REMIC 1 Regular Interests XX-XX, XX-X-0,
XX-X-0, XX-X-0, XX-X-0, LT-M- 1, LT-M-2, LT-M-3, XX-X-0, XX-X-0, XX-X,
XX-XX, XX-X and LT-R, pro rata, in an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution
Dates. Amounts payable as Uncertificated Accrued Interest in respect of
REMIC 1 Regular Interest LT-ZZ shall be reduced when the REMIC 1
Overcollateralization Amount is less than the REMIC 1
Overcollateralization Target Amount, by the lesser of (x) the amount of
such difference and (y) the REMIC 1 Regular Interest LT-ZZ Maximum
Interest Deferral Amount and such amount will be payable to the Holders of
REMIC 1 Regular Interests XX-XX, XX-X-0, LT- X-0, XX-X-0, XX-X-0, XX-X-0,
LT-M-2, XX-X-0, XX-X-0, XX-X-0, XX-X, LT-ZZ and LT-P in the same
proportion as the amounts are allocated to the Corresponding Interest,
pursuant to Section 4.07(b) herein, for each such REMIC 1 Regular
Interest, and the
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Uncertificated Principal Balance of the REMIC 1 Regular Interest LT-ZZ
shall be increased by such amount;
(ii) second, to the Holders of REMIC 1 Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clause (i) above, the amount
of any Prepayment Charges for such Distribution Date, allocated as
follows:
(a) to the Holders of REMIC 1 Regular Interest LT-R, an amount
equal to the amount of principal distributed to the holder of the
Corresponding Interest on such Distribution Date pursuant to Section
4.07(b).
(b) to the Holders of REMIC 1 Regular Interest LT-P, an amount
equal to the amount of principal distributed to the holder of the
Corresponding Interest on such Distribution Date pursuant to Section
4.07(b); and
(iii) third, to the Holders of REMIC 1 Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clauses (i) and (ii) above,
allocated as follows:
(a) 98% of such remainder with respect to the Holders of REMIC
1 Regular Interest LT-AA, until the Uncertificated Principal Balance
of such Uncertificated REMIC 1 Regular Interest is reduced to zero;
(b) 2% of such remainder, first, with respect to the Holders
of REMIC 1 Regular Interest XX-X-0, XX-X-0, XX-X-0, XX-X-0, LT-M-1,
LT-M-2, LT-M-3, LT-M-4, LT-M-4, MT-B, in an aggregate amount equal
to 1% of and in the same proportion as principal payments are
allocated to the Corresponding Interests, until the Uncertificated
Principal Balances of such REMIC 1 Regular Interests are reduced to
zero; and second, to the Holders of REMIC 1 Regular Interest LT-ZZ,
until the Uncertificated Principal Balance of such REMIC 1 Regular
Interest is reduced to zero; then
(c) any remaining amount to the Holders of the Class A-R
Certificates (in respect of the Class R-1 Interest);
(b) Distributions on the REMIC 2 Regular Interests.
On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed by REMIC 2 to REMIC 3
on account of the REMIC 2 Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class A-R Certificates (in respect
of the Class R-2 Interest), as the case may be:
(i) first, each of the REMIC 2 Regular Interests shall accrue
interest at the Uncertificated REMIC 2 Pass-Through Rates equal to those
set forth in Preliminary Statement;
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(ii) second, distributions of principal shall be payable to, and
shortfalls, losses and prepayments are allocable to, the REMIC 2 Regular
Interests as such amounts are payable and allocable to the Corresponding
Certificates; and
(iii) third, REMIC 2 Regular Interest MT-P shall be entitled to the
amounts of any Prepayment Charges paybable and allocable to the
Corresponding Certificate on such Distribution Date pursuant to Section
4.02(b)(v).
SECTION 4.08 [Reserved].
SECTION 4.09 Prepayment Charges.
Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment of a Mortgage Loan, the Servicer may not waive
any Prepayment Charge or portion thereof required by the terms of the related
Mortgage Note unless (i) the Mortgage Loan is in default or foreseeable default
and such waiver (a) is standard and customary in servicing similar mortgage
loans to the Mortgage Loans and (b) would, in the reasonable judgment of the
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan or (ii)(A) the
enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium,
receivership, or other similar law relating to creditors' rights generally or
(2) due to acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law. For the avoidance of doubt, the Servicer may waive a Prepayment
Charge in connection with a short sale or short payoff on a defaulted Mortgage
Loan. If the Servicer has waived all or a portion of a Prepayment Charge
relating to a Principal Prepayment, other than as provided above, the Servicer
shall deliver to the Trustee no later than the Business Day immediately
preceding the next Distribution Date, for deposit into the Certificate Account
the amount of such Prepayment Charge (or such portion thereof as had been
waived) for distribution in accordance with the terms of this Agreement;
provided, however, the Servicer shall not have any obligation to pay the amount
of any uncollected Prepayment Charge under this Section 4.09 if the Servicer did
not have a copy of the related Mortgage Note, the Servicer requested via email a
copy of the same from the Trustee and the Trustee failed to provide such a copy
within two (2) Business Days of receipt of such request. If the Servicer has
waived all or a portion of a Prepayment Charge for any reason, it shall promptly
notify the Trustee thereof and shall include such information in any monthly
reports it provides the Trustee. Notwithstanding any provision in this Agreement
to the contrary, in the event the Prepayment Charge payable under the terms of
the Mortgage Note is different from the amount of the Prepayment Charge set
forth in the Mortgage Loan Schedule or other information provided to the
Servicer, the Servicer shall rely conclusively on the Prepayment Charge as set
forth under the terms of the Mortgage Note. To the extent the Prepayment Charge
payable under the terms of the Mortgage Note is less than the amount of the
Prepayment Charge set forth in the Mortgage Loan Schedule or other information
provided to the Servicer, the Servicer shall not have any liability or
obligation with respect to such difference, and in addition shall not have any
liability or obligation to pay the amount of any uncollected Prepayment Charge
if the failure to collect such amount is the direct result of inaccurate or
incomplete information on the Mortgage Loan Schedule.
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SECTION 4.10 Servicer to Cooperate.
The Servicer shall provide to the Trustee the information set forth
in Exhibit Z hereto in such form as the Trustee shall reasonably request with
respect to each Mortgage Loan no later than twelve noon on the Servicer Data
Remittance Date to enable the Trustee to calculate the amounts to be distributed
to each Class of Certificates and otherwise perform its distribution, accounting
and reporting requirements hereunder.
SECTION 4.11 The Interest Rate Cap Agreement and the Interest Rate
Cap Account.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Certificates, the Interest Rate Cap
Account. The Interest Rate Cap Account shall be an Eligible Account, and funds
on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Trustee pursuant to this Agreement.
(b) On or prior to the Closing Date, the Trustee, on behalf of the
Trust, is hereby directed to enter into the Interest Rate Cap Agreement for the
benefit of the Holders of the Class A-2 Certificates. The Interest Rate Cap
Agreement will be an asset of the Trust Fund but will not be an asset of any
REMIC. The Trustee shall deposit any amounts received with respect to the
Interest Rate Cap Agreement into the Interest Rate Cap Account.
(c) The Trustee will prepare and deliver any notices required to be
delivered to the Interest Rate Cap Agreement Counterparty under Sections 2(b),
2(d), 4(d), 5(a), 6(a), 6(b), 6(d) and 12(b) of the ISDA Master Agreement.
(d) The Trustee shall terminate the Interest Rate Cap Agreement
Counterparty upon the occurrence of an event of default under the Interest Rate
Cap Agreement of which a Responsible Officer of the Trustee has actual
knowledge. Upon such a termination, the Interest Rate Cap Agreement Counterparty
may be required to pay a termination payment to the Trustee in respect of the
Interest Rate Cap Agreement. Any such termination payment shall be applied by
the Trustee to the purchase of a substantially equivalent interest rate cap
agreement at the written direction of the Majority in Interest Class X-1
Certificateholder.
(e) On each Distribution Date, an amount equal to the Basis Risk
Shortfall for such Distribution Date shall be withdrawn by the Trustee from
amounts on deposit in the Interest Rate Cap Account (including any amounts
received from the Interest Rate Cap Agreement for such Distribution Date and
distributed to the Class A-2 Certificates.
(f) The Trustee shall account for the Interest Rate Cap Account as
an outside reserve fund within the meaning of Treasury regulation 1.860G-2(h)
and not an asset of any REMIC created pursuant to this Agreement. The Trustee
shall treat amounts paid by the Interest Rate Cap Account as payments made from
outside the REMIC's for all federal tax purposes. The Class X-1
Certificateholders will be the owner of the Interest Rate Cap Account for
federal tax purposes. All funds in the Interest Rate Cap Account shall remain
uninvested with no liability for interest or other
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compensation thereon. Upon reduction of the Class Principal Balance of the Class
A-2 Certificates to zero, any amounts remaining in the Interest Rate Cap Account
shall be distributed to the Class X-1 Certificateholders.
(g) Amounts in the Interest Rate Cap Account not used on any
Distribution Date as described in Section 4.11(c) shall remain on deposit in the
Interest Rate Cap Account and may be available on future Distribution Dates to
make the payments described in Section 4.11(c), until the Class Principal
Balance of the Class A-2 Certificates has been reduced to zero.
SECTION 4.12 Mortgage Pool Insurance Policy
Not later than the close of business on the second Business Day following
each Servicer Data Remittance Date, the Trustee shall notify the Mortgage Pool
Insurer of the amount of the Deductible for the related Distribution Date. If
the Deductible is less than the aggregate claim amount for each claim filed by
the Servicer under the Mortgage Pool Insurance Policy and approved by the
Mortgage Pool Insurer during the calendar month prior to the month of such
Servicer Data Remittance Date and Distribution Date, the Trustee shall notify
the Mortgage Pool Insurer of the aggregate amount of approved claims by the
Mortgage Pool Insurer. If the Deductible is less than the aggregate claim amount
of approved claims, the Mortgage Pool Insurer, in its sole discretion, will
determine the losses allocable to the Deductible and the losses allocable to the
Mortgage Pool Insurance Policy and pay the amount of such shortfall to the
Trustee, by wire transfer, not later than the close of business on the fourth
Business Day after the related Servicer Data Remittance Date. If the Deductible
is less than the aggregate claim amount of approved claims, the Mortgage Pool
Insurer will notify the Trustee and the Servicer in writing, not later than the
close of business on the fourth Business Day after the related Servicer Data
Remittance Date, of the losses allocable to the Deductible and the losses
allocable to the Mortgage Pool Insurance Policy, identifying the Mortgage Loans
for which a claim was paid under the Mortgage Pool Insurance Policy, and the
amount of such claim that was paid. With respect to each Mortgage Loan for which
a claim was paid under the Mortgage Pool Insurance Policy, such Mortgage Loan
shall be assigned to the Mortgage Pool Insurer and shall thereafter be serviced
by the Mortgage Pool Insurer. The Mortgage Pool Insurer may retain any
recoveries on such Mortgage Loans as reimbursement for the amount of any claims
paid with respect to such Mortgage Loans, provided however that any recoveries
in excess of the amount of the claim paid by the Mortgage Pool Insurer with
respect to a Mortgage Loan shall be included in Available Funds.
The Mortgage Pool Insurer shall be an express third-party
beneficiary of this Agreement, entitled to enforce the provisions hereof as if a
party hereto.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least five Business Days prior to the related Record
Date and (ii) such Holder shall hold (A) a Notional Amount Certificate, (B) 100%
of the Class Principal Balance of any Class of Certificates or (C) Certificates
of any Class with aggregate principal Denominations of not less than $1,000,000
or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer upon the written order of the
Depositor. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time 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
countersignature and delivery of any 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 countersigned
by the Trustee by manual signature, 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
shall be dated the date of their countersignature. On the Closing Date, the
Trustee shall countersign the Certificates to be issued at the written direction
of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restriction or transfer imposed under
Article V of this Agreement or under applicable law with respect to any transfer
of any Certificate, or any interest therein, other than to require delivery of
the certification(s) and/or opinions of counsel described in Article V
applicable with respect to changes in registration of record ownership of
Certificates in the Certificate Register. The Trustee shall have no liability
for transfers, including transfers made through the book-entry
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facilities of the Depository or between or among Depository Participants or
beneficial owners of the Certificates made in violation of applicable
restrictions.
SECTION 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and 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. Upon surrender for registration of transfer of
any Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, 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 duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but 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 may be required.
All Certificates surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
in connection with any transfer of a Private Certificate by the Depositor to any
affiliate, in the event that a transfer is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit J (the "Transferor Certificate") and
(i) deliver a letter in substantially the form of either (A) Exhibit K (the
"Investment Letter") provided that all of the Class X Certificates of a Class
shall be transferred to one investor or the Depositor otherwise consents to such
transfer, or (B) Exhibit L (the "Rule 144A Letter") or (ii) there shall be
delivered to the Trustee at the expense of the transferor an Opinion of Counsel
that such transfer may be made pursuant to an exemption from the Securities Act.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
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related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor,
the Seller and the Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless
the Trustee shall have received either (i) a representation from the transferee
of such Certificate, acceptable to and in form and substance satisfactory to the
Trustee (in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit K
or Exhibit L, or Exhibit I, as applicable), to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA
or a plan subject to Section 4975 of the Code, nor a person acting on behalf of
any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer or (ii) in the case of any such
ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel shall
not be an expense of either the Trustee or the Trust Fund, addressed to the
Trustee for the benefit of the Trustee, the Depositor and the Servicer and on
which they may rely, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee, the Depositor
or the Servicer to any obligation in addition to those expressly undertaken in
this Agreement or to any liability. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA-Restricted Certificate to or
on behalf of an employee benefit plan subject to ERISA or to the Code without
the delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA- Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
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(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to recover
from any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as
it became other than a Permitted Transferee, all payments made on such
Residual Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be
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deleted) with respect to Transfers occurring after delivery to the Trustee of an
Opinion of Counsel, which Opinion of Counsel shall not be an expense of the
Trust Fund, the Trustee, the Seller or the Servicer, to the effect that the
elimination of such restrictions will not cause the Trust Fund hereunder to fail
to qualify as a REMIC at any time that the Certificates are outstanding or
result in the imposition of any tax on the Trust Fund, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Residual Certificate hereby consents to any amendment of this Agreement which,
based on an Opinion of Counsel furnished to the Trustee, is reasonably necessary
(a) to ensure that the record ownership of, or any beneficial interest in, a
Residual Certificate is not transferred, directly or indirectly, to a Person
that is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Residual Certificate which is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates 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 Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(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
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of 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; and
(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.
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.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor, with the consent of
the Depository Participants, advises the Trustee in writing that it elects to
terminate the book-entry system through the Depository or (z) after the
occurrence of an Event of Default, Certificate Owners representing at least 51%
of the Certificate 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
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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 (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to the
Trustee of the related Class of Certificates by the Depository, accompanied by
the instructions from the Depository for registration, the Trustee shall issue
the Definitive Certificates.
In addition, if an Event of Default has occurred and is continuing, each
Certificate Owner materially adversely affected thereby may at its option
request a Definitive Certificate evidencing such Certificate Owner's Percentage
Interest in the related Class of Certificates. In order to make such request,
such Certificate Owner shall, subject to the rules and procedures of the
Depository, provide the Depository or the related Depository Participant with
directions for the Trustee to exchange or cause the exchange of the Certificate
Owner's interest in such Class of Certificates for an equivalent Percentage
Interest in fully registered definitive form. Upon receipt by the Trustee of
instruction from the Depository directing the Trustee to effect such exchange
(such instructions to contain information regarding the Class of Certificates
and the Certificate Balance being exchanged, the Depository Participant account
to be debited with the decrease, the registered holder of and delivery
instructions for the Definitive Certificates and any other information
reasonably required by the Trustee), (i) the Trustee shall instruct the
Depository to reduce the related Depository Participant's account by the
aggregate Certificate Balance of the Definitive Certificates, (ii) the Trustee
shall execute, authenticate and deliver, in accordance with the registration and
delivery instructions provided by the Depository, a Definitive Certificate
evidencing such Certificate Owner's Percentage Interest in such Class of
Certificates and (iii) the Trustee shall execute and authenticate a new
Book-Entry Certificate reflecting the reduction in the aggregate Class Principal
Balance of such Class of Certificates by the amount of the Definitive
Certificates.
None of the Seller, the Servicer, the Depositor or the Trustee shall be
liable for any delay in delivery of any instruction required under this section
and each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Trustee with an adequate inventory
of certificates to facilitate the issuance and transfer of Definitive
Certificates. 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; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Trustee such security
or indemnity as may be required by it to hold it harmless, then, in the absence
of notice to 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 Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Trustee may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be
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imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
SECTION 5.04 Persons Deemed Owners.
The Servicer, the Trustee and any agent of the Servicer or the
Trustee may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and none of the
Servicer, the Trustee or any agent of the Servicer or the Trustee shall be
affected by any notice to the contrary.
SECTION 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or the Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.06 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies in New York, New York where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies in Pennsylvania where the Mortgage
Pool Insurance Policy shall be delivered. The Trustee initially designates its
office at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 for
such purposes. The Mortgage Pool Insurance Policy shall be held at the office of
the Trustee located at One Xxxxxxx Xxxxx, 00xx Xxxxx, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000. The Trustee will give prompt written notice to
the Certificateholders and the Mortgage Pool Insurer of any change in such
location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR, THE SELLER AND THE SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the Sellers
and the Servicer.
The Depositor, the Seller and the Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
SECTION 6.02 Merger or Consolidation of the Depositor, the Seller or
the Servicer.
The Depositor, the Seller and the Servicer will each keep in full
effect its existence, rights and franchises as a corporation under the laws of
the United States or under the laws of one of the states thereof or as a
federally chartered savings bank organized under the laws of the United States
and will each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Mortgage Loans and to perform its respective duties under this Agreement.
Notwithstanding the foregoing, the Seller or the Servicer may be merged or
consolidated into another Person in accordance with the following paragraph.
Any Person into which the Depositor, the Seller or the Servicer may
be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Seller or the Servicer shall be a
party, or any person succeeding to the business of the Depositor, the Seller or
the Servicer, shall be the successor of the Depositor, the Seller or the
Servicer, as the case may be, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor or
surviving Person with respect to a merger or consolidation of the Servicer shall
be an institution which is a Xxxxxx Xxx or Xxxxxxx Mac approved company in good
standing. In addition to the foregoing, there must be delivered to the Trustee a
letter from each of the Rating Agencies, to the effect that such merger,
conversion or consolidation of the Servicer will not result in a
disqualification, withdrawal or downgrade of the then current rating of any of
the Certificates.
SECTION 6.03 Limitation on Liability of the Depositor, the Seller,
the Servicer and Others.
None of the Depositor, the Seller, the Servicer nor any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Seller, the Servicer or any such
Person against any breach of representations or warranties made by it herein or
protect the Depositor, the Seller, the Servicer or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of reckless
disregard
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of obligations and duties hereunder. The Depositor, the Seller, the Servicer and
any director, officer, employee or agent of the Depositor, the Seller or the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor, the Seller, the Trustee, the Servicer and any director, officer,
employee or agent of the Depositor, the Seller, the Trustee, or the Servicer
shall be indemnified by the Trust Fund out of the Collection Account and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of its duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. None of the Depositor,
the Seller or the Servicer shall be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to its respective duties
hereunder and which in its opinion may involve it in any expense or liability;
provided, however, that any of the Depositor, the Seller or the Servicer may in
its discretion undertake any such action that it may deem necessary or desirable
in respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Seller and the Servicer shall be entitled to be reimbursed
therefor out of the Collection Account. The Servicer's right to indemnity or
reimbursement pursuant to this Section 6.03 shall survive the resignation or
termination of the Servicer as set forth herein.
SECTION 6.04 Limitation on Resignation of the Servicer.
(a) Subject to Section 6.04(b) below, the Servicer shall not resign
from the obligations and duties hereby imposed on it except (a)(i) upon
appointment, pursuant to the provisions of Section 7.02, of a successor servicer
which (x) has a net worth of not less than $10,000,000 and (y) is a Xxxxxx Xxx
or Xxxxxxx Mac approved company in good standing, (ii) receipt by the Trustee of
a letter from each Rating Agency that such a resignation and appointment will
not result in a qualification, withdrawal or downgrading of the then current
rating of any of the Certificates and (iii) has the written approval of the
Mortgage Pool Insurer as contemplated under the Mortgage Pool Insurance Policy,
or (b) upon determination that its duties hereunder are no longer permissible
under applicable law. Any such determination under clause (b) permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed the Servicer's
responsibilities, duties, liabilities and obligations hereunder and the
requirements of Section 7.02 have been satisfied.
(b) Notwithstanding the foregoing, at the Seller's request, so long
as it is the owner of the servicing rights, Wilshire shall resign upon the
Seller's selection and appointment of a successor servicer; provided that the
Seller delivers to the Trustee the letter required by Section 6.04(a)(ii) above.
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ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.
"Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to make any deposit or payment
required pursuant to this Agreement which continues unremedied for a
period of one Business Day (or, in the case of any such failure to make
any deposit or payment due to any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis or act of god, for a period of three Business Days)
after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Trustee
or the Depositor, or to the Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced by
the Certificates; or
(ii) any failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer set forth in this Agreement, which failure or breach (a)
materially affects the rights of the Certificateholders or the Mortgage
Pool Insurer and (b) continues unremedied for a period of 30 days after
the date on which written notice of such failure or breach, requiring the
same to be remedied, shall have been given to the Servicer by the Trustee
or the Depositor, or to the Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced by
the Certificates; or
(iii) if a representation or warranty set forth in Section 2.03(b)
hereof shall prove to be materially incorrect as of the time made in any
respect that materially and adversely affects interests of the
Certificateholders or the Mortgage Pool Insurer, and the circumstances or
condition in respect of which such representation or warranty was
incorrect shall not have been eliminated or cured, within 30 days (or, if
such breach is not capable of being cured within 30 days and provided that
the Servicer believes in good faith that such breach can be cured and is
diligently pursuing the cure thereof, within 90 days) after the date on
which written notice thereof shall have been given to the Servicer by the
Trustee for the benefit of the Certificateholders or by the Depositor; or
(iv) failure by the Servicer to maintain, if required, its license
to do business in any jurisdiction where the related Mortgaged Property is
located; or
(v) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
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(vi) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to the Servicer or of or relating to all or substantially all of its
property; or
(vii) any failure of the Servicer to make any Advance, to the extent
required under Section 4.01 in the manner and at the time required to be
made from its own funds pursuant to this Agreement and after receipt of
notice from the Trustee, which failure continues unremedied after the
close of business on the Business Day immediately preceding the related
Distribution Date; or
(viii) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
or commence a voluntary case under, any applicable insolvency, bankruptcy
or reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations or cease its
normal business operations for three Business Days; or
(ix) (a) either (I) the servicer rankings or ratings of the Servicer
are downgraded two or more levels below the level in effect on the Closing
Date by one or more of the Rating Agencies rating the Certificates or (II)
the servicer rankings or ratings for the Servicer are downgraded to "below
average" status by one or more of the Rating Agencies rating the
Certificates or (b) one or more Classes of the Certificates are downgraded
or placed on negative watch due in whole or in part to the performance or
servicing of the Servicer.
Other than an Event of Default resulting from a failure of the
Servicer to make any Advance, if an Event of Default described in clauses (i)
through (viii) of this Section shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, or at the direction of the Holders of Certificates evidencing not less than
51% of the Voting Rights evidenced by the Certificates, the Trustee shall by
notice in writing to the Servicer (with a copy to each Rating Agency and the
Mortgage Pool Insurer), terminate all of the rights and obligations of the
Servicer under this Agreement and in and to the related Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder (other
than the rights to reimbursement for Advances and Servicing Advances previously
made pursuant to this Agreement, the right to accrued and unpaid Servicing Fees
and the rights under Section 6.03 with respect to events occurring prior to such
termination). If an Event of Default results from the failure of the Servicer to
make an Advance, the Trustee shall prior to the Distribution Date occurring in
the succeeding calendar month, by notice in writing to the Servicer and the
Depositor (with a copy to each Rating Agency and the Mortgage Pool Insurer),
terminate all of the rights and obligations of the Servicer under this Agreement
prior to the Distribution Date occurring in the succeeding calendar month and in
and to the related Mortgage Loans and the proceeds thereof, other than its
rights as a Certificateholder hereunder. If an Event of Default described in
clause (ix) of this Section occurs, the Trustee shall, at the direction of the
Seller, by notice in writing to the Servicer, terminate all of the rights and
obligations of the Servicer under this Agreement (other than rights to
reimbursement for Advances and Servicing Advances previously made, as provided
in Section 3.08, the right to accrued and unpaid Servicing Fees and the rights
under Section 6.03 with respect to events occurring
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prior to such termination) and shall appoint as successor Servicer the entity
selected by the Seller in accordance with Section 7.02; provided the Seller
shall first furnish to the Trustee a letter from each Rating Agency that the
appointment of such successor will not result in a downgrading of the rating of
any of the Certificates.
Upon receipt by the Servicer of such written notice of termination,
all authority and power of the Servicer under this Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee or its nominee. Upon written request from the Trustee, the Servicer
shall prepare, execute and deliver to the successor entity designated by the
Trustee any and all documents and other instruments, place in such successor's
possession all related Mortgage Files, and do or cause to be done all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Servicer's sole
expense. The Servicer shall cooperate with the Trustee and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Collection Account or Escrow Account or thereafter received
with respect to the Mortgage Loans. The Trustee shall thereupon make any
Advance. The Trustee is hereby authorized and empowered to execute and deliver,
on behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise.
SECTION 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 of this Agreement or the resignation of the Servicer
pursuant to Section 6.04, the Trustee shall, subject to and to the extent
provided herein and subject to the written approval of the Mortgage Pool
Insurer, be the successor to the Servicer, but only in its capacity as servicer
under this Agreement, and not in any other, and the transactions set forth
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof and
applicable law including the obligation to make Advances pursuant to Section
4.01. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans that the Servicer would have been entitled to
charge to the Collection Account, provided that the terminated Servicer shall
nonetheless be entitled to payment or reimbursement as provided in Section 3.08
to the extent that such payment or reimbursement relates to the period prior to
termination of the Servicer. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.01, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to 4.01 hereof, or if it is
otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder. Any successor to the Servicer shall be an
institution which is a Xxxxxx Xxx or Xxxxxxx Mac approved seller/servicer for
first and second loans in good standing, which has a net
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worth of at least $10,000,000, which is willing to service the related Mortgage
Loans, which is approved in writing by the Mortgage Pool Insurer and which
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, containing an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 6.03 hereof
incurred prior to termination of the Servicer under Section 7.01 hereunder),
with like effect as if originally named as a party to this Agreement; provided
that each Rating Agency acknowledges that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be
qualified, withdrawn or downgraded as a result of such assignment and
delegation. Pending appointment of a successor to the Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to the limitations described herein, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the Mortgage Loans as it and such successor shall agree; provided, however, that
no such compensation shall be in excess of the Servicing Fee. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. Neither the Trustee nor any
other successor servicer shall be deemed to be in default by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
In connection with the termination or resignation of the Servicer
hereunder, either (i) the successor servicer, including the Trustee if the
Trustee is acting as successor Servicer, shall represent and warrant that it is
a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, in which case the
predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to revise its records to reflect the transfer of servicing to the successor
Servicer as necessary under MERS' rules and regulations, or (ii) the predecessor
Servicer shall cooperate with the successor Servicer in causing MERS to execute
and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Trustee and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor Servicer. The predecessor Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Servicer shall bear any and all fees of MERS, costs of preparing any
assignments of Mortgage, and fees and costs of filing any assignments of
Mortgage that may be required under this subsection.
Any successor to the Servicer shall give notice to the Mortgagors of
such change of servicer and shall, during the term of its service as servicer,
maintain in force the policy or policies that the Servicer is required to
maintain pursuant to this Agreement.
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SECTION 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder actually known to the Trustee, unless such Event of
Default shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
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) unless an Event of Default actually known to the Trustee shall
have occurred and be continuing, 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 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 which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(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 finally proven 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 Holders of Certificates evidencing not less than 25%
of the Voting Rights of Certificates 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.
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SECTION 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officers' 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 and
the Trustee shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants 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 advice
or Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(iv) 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 so to do by
Holders of Certificates evidencing not less than 25% of the Voting Rights
allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
affiliates, accountants or attorneys;
(vi) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers hereunder
if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not assured
to it;
(vii) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the
investment security);
(viii) the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have received
written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the
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Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred therein or thereby.
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Depositor or the Seller, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document, or of MERS or the
MERS(R) System, other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
SECTION 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the Depositor,
the Seller, the Servicer and their affiliates, with the same rights as it would
have if it were not the Trustee.
SECTION 8.05 Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Certificate Account on each Distribution Date
prior to making distributions pursuant to Section 4.02 an amount equal to the
Trustee Fee for such Distribution Date. The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Depositor and the
Servicer, to the extent such indemnity related to the failure of the Servicer to
perform its servicing obligations in accordance with this Agreement, and held
harmless against any loss, liability or expense (including reasonable attorney's
fees and expenses) (i) incurred in connection with any claim or legal action
relating to (a) this Agreement, (b) the Custodial Agreement, (c) the
Certificates, or (d) the performance of any of the Trustee's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the Trustee's
duties hereunder or incurred by reason of any action of the Trustee taken at the
direction of the Certificateholders and (ii) resulting from any error in any tax
or information return prepared by the Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder. Without limiting the foregoing, the Depositor covenants and agrees,
except as otherwise agreed upon in writing by the Depositor and the Trustee, and
except for any such expense, disbursement or advance as may arise from the
Trustee's negligence, bad faith or willful misconduct, to pay or reimburse the
Trustee, for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Agreement
with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage
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such persons to perform acts or services hereunder and (C) printing and
engraving expenses in connection with preparing any Definitive Certificates.
Except as otherwise provided herein, the Trustee shall not be entitled to
payment or reimbursement for any routine ongoing expenses incurred by the
Trustee in the ordinary course of its duties as Trustee, Registrar or agent for
the Tax Matters Person hereunder or for any other expenses.
SECTION 8.06 Eligibility Requirements for the Trustee and Custodian.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or 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, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current Ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor and
its affiliates or the Servicer and its affiliates; provided, however, that such
entity cannot be an affiliate of the Seller, the Depositor or the Servicer other
than the Trustee in its role as successor to the Servicer.
SECTION 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Seller, the Servicer and each Rating Agency not less than 60 days before the
date specified in such notice, when, subject to Section 8.08, such resignation
is to take effect, and acceptance by a successor trustee in accordance with
Section 8.08 meeting the qualifications set forth in Section 8.06. If no
successor trustee meeting such qualifications shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation or removal (as provided below), the resigning or removed Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request thereto by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor may remove the Trustee
and appoint a successor trustee by written instrument, in triplicate, one copy
of which shall be delivered to the Trustee, one copy to the Servicer and the
Seller and one copy to the successor trustee.
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The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer and the Seller, one complete
set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the successor trustee. All costs and expenses incurred by the Trustee
in connection with the removal of the Trustee without cause shall be reimbursed
to the Trustee from amounts on deposit in the Collection Account.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Servicer and the Seller 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 the like effect as if originally
named as trustee herein. The Depositor, the Servicer and the predecessor trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and its appointment shall not
adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor 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 Depositor.
SECTION 8.09 Merger or Consolidation of the 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 that such corporation shall be eligible under
the provisions of Section 8.06 without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
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SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, 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 any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case an Event of Default 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 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the applicable Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder and such appointment
shall not, and shall not be deemed to, constitute any such separate
trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to
any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of
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them. Every instrument appointing any separate trustee or co-trustee shall refer
to this Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer and the Depositor.
Any separate trustee or co-trustee 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.
SECTION 8.11 Tax Matters.
It is intended that the assets with respect to which the REMIC
elections are to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters relating to each such segregated
pool of assets shall be such as to qualify such assets as, a "real estate
mortgage investment conduit" as defined in and in accordance with the Trust Fund
Provisions. In furtherance of such intention, the Trustee covenants and agrees
that it shall act as agent (and the Trustee is hereby appointed to act as agent)
for the Tax Matters Person and on behalf of the Trust Fund and that in such
capacity it shall: (a) 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 or any successor form adopted by the Internal Revenue Service) 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 each of REMIC 1, REMIC 2 and REMIC
3 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; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such form, and
update such information at the time or times in the manner required by the Code;
(c) make or cause to be made elections that the assets of each of REMIC 1, REMIC
2 and REMIC be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law); (d) 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 and reports 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 the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Residual Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non-Permitted Transferee is the
record holder of an interest (the reasonable cost
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of computing and furnishing such information may be charged to the Person liable
for such tax); (f) to the extent that they are under its control, conduct
matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status of REMIC 1, REMIC 2 and REMIC 3 as a
REMIC under the REMIC Provisions; (g) not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of REMIC 1, REMIC 2 or REMIC 3; (h) pay, from the sources specified in
the fourth paragraph of this Section 8.11, the amount of any federal or state
tax, including prohibited transaction taxes as described below, imposed on the
Trust Fund prior to its termination when and as the same shall be due and
payable (but such obligation shall not prevent the Trustee or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Trustee from withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings); (i) 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; (j) maintain records relating to the Trust
Fund, including but not limited to the income, expenses, assets and liabilities
thereof and the fair market value and adjusted basis of the assets determined at
such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent the Trust Fund in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year of
the Trust Fund, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of the Trust
Fund, and otherwise act on behalf of the Trust Fund in relation to any tax
matter or controversy involving it.
To the extent that they are under its control, the Servicer shall
conduct matters relating to the assets of each REMIC at all times that any
Certificates are outstanding so as to maintain the status of REMIC 1, REMIC 2
and REMIC 3 as a REMIC under the REMIC Provisions. No Servicer shall knowingly
or intentionally take any action that would cause the termination of the REMIC
status of REMIC 1, REMIC 2 or REMIC 3.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten (10) days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to the Trust Fund after the Startup Day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, if not paid as
otherwise provided for herein, such tax shall be paid by (i) the Trustee, if any
such other tax arises
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out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) the Servicer or the Seller, in the case of any such minimum
tax, if such tax arises out of or results from a breach by the Servicer or the
Seller of any of their obligations under this Agreement or (iii) the Seller, if
any such tax arises out of or results from the Seller's obligation to repurchase
a related Mortgage Loan pursuant to Section 2.02 or 2.03 or (iv) in all other
cases, or in the event that the Trustee, the Servicer or Seller fails to honor
its obligations under the preceding clauses (i), (ii) or (iii), any such tax
will be paid with amounts otherwise to be distributed to the Certificateholders,
as provided in Section 4.02.
Neither the Servicer nor the Trustee shall enter into any
arrangement by which any of REMIC 1, REMIC 2 or REMIC 3 will receive a fee or
other compensation for services nor permit any of REMIC 1, REMIC 2 or REMIC 3 to
receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
SECTION 8.12 Commission Reporting.
(a) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with the Trust's satisfying the reporting requirements
under the Exchange Act. The Trustee shall prepare on behalf of the Depositor any
Forms 8-K and 10-K customary for similar securities as required by the Exchange
Act and the rules and regulations of the Commission thereunder, and the
Depositor shall sign and the Trustee shall file (via XXXXX) such Forms on behalf
of the Depositor. The Depositor hereby grants to the Trustee a limited power of
attorney to execute and file each such document on behalf of the Depositor. Such
power of attorney shall continue until the earlier of (i) receipt by the Trustee
from the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust.
(b) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, with a copy of the statement to the Certificateholders
for such Distribution Date as an exhibit thereto. Prior to March 31st of the
calendar year following the calendar year during which the Closing Date occurs
(or such earlier date as may be required by the Exchange Act and the rules and
regulations of the Commission), the Trustee shall file a Form 10-K, in substance
as required by applicable law or applicable Commission staff's interpretations.
Such Form 10-K shall include as exhibits, the Servicer's annual statement of
compliance described under Section 3.16 and the accountant's report described
under Section 3.17, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits promptly after they are
delivered to the Trustee. The Trustee shall have no liability with respect to
any failure to properly or timely prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence or willful misconduct. The
Form 10-K shall also include a certification in the form attached hereto as
Exhibit W (the "Depositor Certification"), which shall be signed by the senior
officer of the Depositor in charge of securitization. The Trustee shall have no
responsibility to file any items other than those specified in this Section
8.12.
(c) Not later than 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules
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and regulations of the Commission (or, if such day is not a Business Day, the
immediately preceding Business Day), the Trustee shall sign a certification in
the form attached hereto as Exhibit X (the "Trustee Certification") for the
benefit of the Depositor and its officers, directors and affiliates regarding
certain aspects of items 1 through 3 of the Depositor Certification. In
addition, the Trustee shall, subject to the provisions of Section 8.01 and 8.02
hereof, indemnify and hold harmless the Depositor and each Person, if any, who
"controls" the Depositor within the meaning of the Securities Act and its
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 8.12 or any inaccuracy
made in the Trustee Certification. If the indemnification provided for in this
Section 8.12(c) is unavailable or insufficient to hold harmless such Persons,
then the Trustee shall contribute to the amount paid or payable by such Persons
as a result of the losses, claims, damages or liabilities of such Persons in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other. The Trustee acknowledges that the
Depositor is relying on the Trustee's performance of its obligations under this
Section 8.12 in order to perform its obligations under Section 8.12(b) above.
(d) Not later than 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission (or, if
such day is not a Business Day, the immediately preceding Business Day), the
Servicer will deliver to the Depositor and the Trustee an Officer's Certificate
for the prior calendar year in substantially the form of Exhibit Y to this
Agreement. The Servicer agrees to indemnify and hold harmless the Depositor, the
Trustee and each Person, if any, who "controls" the Depositor or the Trustee
within the meaning of the Securities Act and their respective officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs, fees and expenses that such Person may sustain arising out of
third party claims based on (i) the failure of the Servicer to deliver or caused
to be delivered when required any Officer's Certificate pursuant to this Section
8.12(d), or (ii) any material misstatement or omission contained in any
Officer's Certificate provided pursuant to this Section 8.12(d). If an event
occurs that would otherwise result in an indemnification obligation under
clauses (i) or (ii) above, but the indemnification provided for in this Section
8.12(d) by the Servicer is unavailable or insufficient to hold harmless such
Persons, then the Servicer shall contribute to the amount paid or payable by
such Persons as a result of the losses, claims, damages or liabilities of such
Persons in such proportion as is appropriate to reflect the relative fault of
the Depositor or Trustee on the one hand and the Servicer on the other. The
Servicer acknowledges that the Depositor and the Trustee are relying on the
Servicer's performance of its obligations under this Agreement in order to
perform their respective obligations under this Section 8.12.
(e) Upon any filing with the Commission, the Trustee shall promptly
deliver to the Depositor a copy of any executed report, statement or
information.
(f) If the Commission issues additional interpretative guidance or
promulgates additional rules or regulations, or if other changes in applicable
law occur, that would require the reporting arrangements, or the allocation of
responsibilities with respect thereto, described in this Section 8.12, to be
conducted differently than as described, the Depositor, Servicer and Trustee
will reasonably cooperate to amend the provisions of this Section 8.12 in order
to comply with such
121
amended reporting requirements and such amendment of this Section 8.12. Any such
amendment shall be made in accordance with Section 10.01 without the consent of
the Certificateholders, and may result in a change in the reports filed by the
Trustee on behalf of the Trust under the Exchange Act. Notwithstanding the
foregoing, the Depositor, Servicer and Trustee shall not be obligated to enter
into any amendment pursuant to this Section 8.12 that adversely affects its
obligations and immunities under this Agreement.
(g) Prior to January 31 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15D Suspension
Notification with respect to the Trust.
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ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation, Purchase or Auction of
the Mortgage Loans.
Subject to Section 9.03, the rights, obligations and
responsibilities of the Depositor, the Seller, the Servicers and the Trustee
created hereunder with respect to the Trust Fund shall terminate upon the
earliest of:
(a) the purchase by the Optional Termination Holder of all Mortgage Loans
(and REO Properties) remaining at the price equal to the greater of (I) the sum
of (A) 100% of the Aggregate Loan Balance (other than in respect of REO
Property) plus one month's accrued interest thereon at the applicable Mortgage
Rate, (B) with respect to any REO Property, the lesser of (x) the appraised
value of any REO Property as determined by the higher of two independent
valuations completed by two independent companies selected by the Depositor at
the expense of the Depositor and (y) the Stated Principal Balance of each
Mortgage Loan related to any REO Property, in each case plus accrued and unpaid
interest thereon at the applicable Mortgage Rate and (C) any remaining
unreimbursed Advances, Servicing Advances and Servicing Fees payable to the
Servicer and any unreimbursed Advances (made by the Trustee as successor
Servicer), Trustee Fees and expenses payable to the Trustee (the sum of (A), (B)
and (C), collectively, the "Par Value") and (II) the Fair Market Value;
(b) the later of (i) the maturity or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and
the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement; and
(c) the purchase by the Auction Purchaser of all the Mortgage Loans and
all property acquired in respect of any remaining Mortgage Loan (the "Trust
Collateral"), in each case as described below.
In no event shall the trusts created hereby continue beyond the
expiration of 21 years from the death of the survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof. The right to repurchase all Mortgage Loans
and REO Properties pursuant to clause (a) above shall be conditioned upon the
aggregate Stated Principal Balance of the Mortgage Loans and the appraised value
of the REO Properties at the time of any such repurchase, aggregating less than
ten percent of the Aggregate Loan Balance as of the Cut-off Date.
If the Optional Termination Holder has not exercised its purchase
option described above, on any Distribution Date on or after the date on which
the aggregate Stated Principal Balance of the Mortgage Loans and the appraised
value of the REO Properties at the time of the purchase is less than five
percent of the Aggregate Loan Balance as of the Cut-off Date (the "Auction
Date"), the Trustee shall solicit, or cause to be solicited, good faith bids for
the Trust Collateral from at least three institutions that are regular
purchasers and/or sellers in the secondary market of residential
123
whole mortgage loans similar to the Mortgage Loans. If the Trustee receives at
least three bids for the Trust Collateral, and one of such bids is equal to or
greater than the Par Value, the Trustee shall sell the Trust Collateral to the
highest bidder (the "Auction Purchaser") at the price offered by the Auction
Purchaser (the "Mortgage Loan Purchase Price") and following such sale shall
have no further liability or responsibility therefor. If the Trustee receives
less than three bids, or does not receive any bid that is equal to or greater
than the Par Value, the Trustee shall continue conducting auctions every six
months until the earlier of (a) the completion of a successful auction and (b)
the Optional Termination Holder exercises its purchase option. Only expenses
incurred by the Trustee in connection with the solicitation of bids for a
successful auction described in this paragraph shall be payable to the Trustee,
out of the Mortgage Loan Purchase Price received in connection with such
successful auction, as described in Section 9.02 hereof; provided, however that
any indemnification rights available to the Trustee under this Agreement in
connection with any auctions will not be limited by this sentence.
SECTION 9.02 Final Distribution on the Certificates.
If on any Determination Date, the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Accounts and Certificate Account, the Trustee
shall promptly send a final distribution notice to each Certificateholder. If
the Optional Termination Holder above elects to terminate the Trust Fund
pursuant to Section 9.01 or the Auction Purchaser purchases the Trust Collateral
pursuant to Section 9.01, at least 20 days prior to the date notice is to be
mailed to the affected Certificateholders such Person shall notify the Servicers
and the Trustee of the date the Optional Termination Holder or the Auction
Purchaser intends to terminate the Trust Fund and of the applicable repurchase
price of the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders shall surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month next preceding the month of
such final distribution. Any such notice shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon presentation
and surrender of Certificates at the office therein designated, (b) the amount
of such final distribution, (c) the location of the office or agency at which
such presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The Trustee shall give such notice to each Rating
Agency at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Trustee
shall cause the final distribution to the Certificateholders of each Class on
the final Distribution Date to be made in accordance with the priorities of
Section 4.02. On the final Distribution Date, the Overcollateralization Amount
shall be distributed to the Class X-1 Certificates in accordance with Section
4.02(b)(iv)(K) hereof. Notwithstanding the foregoing, if the final Distribution
Date has occurred as a result of the Optional Termination Holder's purchase of
the Trust Fund pursuant to Section 9.01(a) or the purchase of the Trust
Collateral by the Auction Purchaser pursuant to Section 9.01(c), all amounts, if
any, in excess of the Par Value shall be distributed by the Trustee directly to
124
the Class A-RL Certificateholders. All amounts described in the definition of
"Par Value" payable to the Trustee shall be paid to the Trustee from the
proceeds of an optional termination or from the Mortgage Loan Purchase Price
received in connection with a successful auction, as applicable, prior to any
distributions to Certificateholders.
In the event that any affected Certificateholders shall not
surrender 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 six months after the second notice all the applicable
Certificates shall not have 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 a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class A-R Certificateholders and Class A-RL Certificateholders shall be
entitled to all unclaimed funds and other assets of the Trust Fund which remain
subject hereto and the Trustee shall be discharged from all further liability
with respect to the Certificates and this Agreement.
SECTION 9.03 Additional Termination Requirements.
(a) In the event that the Optional Termination Holder exercises its
purchase option with respect to the Mortgage Loans as provided in Section 9.01
or the Auction Purchaser purchases the Mortgage Loans pursuant to Section 9.01,
at such time as the Mortgage Loans are so purchased, the Trust Fund shall be
terminated in accordance with the following additional requirements, unless the
Trustee has been supplied with an Opinion of Counsel, at the expense of the
Depositor, to the effect that the failure to comply with the requirements of
this Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" on any REMIC as defined in Section 860F of the Code, or (ii) cause
REMIC 1, REMIC 2 and REMIC 3 to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date set
forth in the notice given by the Trustee under Section
9.02, the Depositor shall prepare and the Trustee, at
the expense of the Depositor, shall adopt a plan of
complete liquidation within the meaning of Section
860F(a)(4) of the Code which, as evidenced by an Opinion
of Counsel (which opinion shall not be an expense of the
Trustee, the Tax Matters Person or the Trust Fund),
meets the requirements of a qualified liquidation;
(2) 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 Depositor for cash
in accordance with Section 9.01; and
On the date specified for final payment of the
Certificates, the Trustee shall, after payment of any
unreimbursed Advances,
125
Servicing Advances, Servicing Fees or other fee
compensation payable to the Servicer pursuant to this
Agreement, make final distributions of principal and
interest on the Certificates in accordance with Section
4.02 and distribute or credit, or cause to be
distributed or credited, to the Holders of the Residual
Certificates all cash on hand after such final payment
(other than the cash retained to meet claims), and the
Trust Fund (and any REMIC) shall terminate at that time.
(b) The Trustee as agent for REMIC 1, REMIC 2 and REMIC 3 hereby
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Depositor, and the receipt of the Opinion of Counsel referred to
in Section 9.03(a)(1) and to take such other action in connection therewith as
may be reasonably requested by the Depositor.
(c) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to prepare and the Trustee to adopt and sign a
plan of complete liquidation.
126
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Servicer, the Seller and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Seller or the Servicer, (iv) to add any other provisions with
respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided that any action pursuant to clauses (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund, but shall be at the expense of
the party proposing such amendment), adversely affect in any material respect
the interests of any Certificateholder; provided, however, that no such Opinion
of Counsel shall be required if the Person requesting the amendment obtains a
letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Seller and the
Servicer also 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 helpful to (i) maintain the
qualification of REMIC 1, REMIC 2 and REMIC 3 as a REMIC under the Code, (ii)
avoid or minimize the risk of the imposition of any tax on the Trust Fund
pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
Notwithstanding the foregoing, any amendment to this Agreement shall
require the prior written consent (which consent shall not be unreasonably
withheld) of the Mortgage Pool Insurer if such amendment adversely affects in
any respect the rights or interests of the Mortgage Pool Insurer.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of a Majority in Interest of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described
127
in clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating 66%, or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
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, which opinion shall not be an expense
of the Trustee or the Trust Fund, but shall be at the expense of the party
preparing such amendment, to the effect that such amendment will not cause the
imposition of any federal tax on the Trust Fund or the Certificateholders or
cause REMIC 1, REMIC 2 and REMIC 3 to fail to qualify as a REMIC at any time
that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement, the
Trustee shall furnish written notification of the substance or a copy of such
amendment to each Certificateholder if the consent of Certificateholders was
required and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 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.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
SECTION 10.02 Recordation of Agreement; Counterparts.
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 Depositor at its expense, but only upon
direction by the Trustee 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.
128
SECTION 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 10.04 [Reserved]
SECTION 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Servicer or the Trustee
and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02 and 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following to the extent such items are in its possession:
(i) Each report to Certificateholders described in Section 4.06 and
3.19;
(ii) Each annual statement as to compliance described in Section
3.16;
(iii) Each annual independent public accountants' servicing report
described in Section 3.17; and
(iv) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor and the Seller, Eleven Madison Avenue, 4th Floor, New York, New
York 10010, Attention: Xxxx X. Xxxxxx (with a copy to Credit Suisse First Boston
Mortgage Securities Corp., Eleven Madison Avenue, 4th Floor, New York, New York
10010, Attention: Office of the General Counsel), (b) in the case of the
Trustee,
129
the Corporate Trust Office or such other address as the Trustee may hereafter
furnish to the Depositor and the Servicer, (c) in the case of Wilshire, 00000 XX
Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000 Attention: Xxx Xxxxxxx, with a
copy to Stoel Rives LLP, 000 XX Xxxxx, Xxxxxxxx, Xxxxxx 00000 Attention: Xxxx
Xxxxxx or such other address as may be hereafter furnished in writing to the
Depositor and the Trustee by the Servicer and (d) in the case of each of the
Rating Agencies, the address specified therefor in the definition corresponding
to the name of such Rating Agency. Notices to Certificateholders shall be deemed
given when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.
SECTION 10.06 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 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 6.02 and 6.04, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor;
provided, however, that neither the Depositor nor the Trustee shall consent to
any such assignment unless each Rating Agency has confirmed in writing that such
assignment will not cause a reduction or withdrawal of the ratings then assigned
by it to any Class of Certificates.
SECTION 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) 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 or members
of an association; nor shall any Certificateholder be under any liability to any
third party 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
itself 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 an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced
130
by the Certificates shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and 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 itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the 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
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.09 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
SECTION 10.10 Non-Solicitation
From and after the date of this Agreement, each of the Depositor,
the Seller, the Servicer and the Trustee agrees that it will not take any action
or permit or cause any action to be taken by any of its agents or affiliates, or
by any independent contractors on any such party's behalf, to personally, by
telephone, by mail, or electronically by e-mail or through the internet or
otherwise, solicit the borrower or obligor under any Mortgage Loan to refinance
the Mortgage Loan, in whole or in part. Notwithstanding the foregoing, it is
understood and agreed that promotions undertaken by the Depositor, the Seller,
the Servicer or the Trustee or any affiliate of any such party that originates
mortgage loans in the normal course, which are directed to the general public at
large, or segments thereof, including, without limitation, mass mailings based
on commercially acquired mailing lists or newspaper, internet, company website,
radio and television advertisements shall not constitute solicitation under this
Section 10.10, provided, that no segment of the general public shall consist
primarily of the borrowers or obligors under the Mortgage Loans. None of the
Depositor, the Seller, the Servicer or the Trustee shall permit the sale of the
name of any Mortgagor or any list of names that consist primarily of the
Mortgages to any Person.
131
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller, the
Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.,
as Depositor
By:
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
JPMORGAN CHASE BANK,
as Trustee
By:
-----------------------------
Name:
Title:
DLJ MORTGAGE CAPITAL, INC.,
as Seller
By:
-----------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
WILSHIRE CREDIT CORPORATION,
as Servicer
By:
-----------------------------
Name:
Title:
[Notary pages to be attached]
EXHIBIT A
[FORM OF CLASS A CERTIFICATE]
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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
A-1
Certificate No. [____] [_%][Adjustable] Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this Certificate
July 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all Certificates
July 26, 2004 of this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
June 25, 2024
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
Class [_______]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by fixed rate, second lien residential mortgage
loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. This Certificate is payable solely
from the assets of the Trust and does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer or
the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Mortgage Loans
deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire"or the "Servicer") and JPMorgan Chase Bank as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned to such terms in the Agreement. This
Certificate is issued under and is subject
A-2
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.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
A-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: July 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By
-------------------------------
Countersigned:
By
----------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
A-4
EXHIBIT B
[FORM OF SUBORDINATE CERTIFICATE]
[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.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
B-1
Certificate No. [____] [_%][Variable] Pass-Through Rate
Cut-off Date: Initial [Certificate Balance] [Notional Amount]
July 1, 2004 of this Certificate ("Denomination"):
$[_________________]
First Distribution Date: Initial [Certificate Balances] [Notional
August 25, 0000 Xxxxxx] of all Certificates of this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
June 25, 2024
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
Class [_______]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by fixed rate, second lien residential mortgage
loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. This Certificate is payable solely
from the assets of the Trust and does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer or
the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [__________] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Mortgage Loans
deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned to such terms in the Agreement.
This Certificate is issued under and is subject
B-2
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.
No transfer of a Certificate of this Class shall be made except in
compliance with section 5.02 of the Pooling Servicing Agreement.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: July 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By
-----------------------------
Countersigned:
By
---------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
B-4
EXHIBIT C
[FORM OF RESIDUAL CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-1
Certificate No. [____] Variable Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this Certificate
July 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all Certificates
August 25, 2004 of this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
June 25, 2024
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
Class [_______]
evidencing the distributions allocable to the Class [A-R][A-RL]
Certificates with respect to a Trust Fund consisting primarily of a pool
of conventional mortgage loans (the "Mortgage Loans") secured by fixed
rate, second lien residential mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. This Certificate is payable solely
from the assets of the Trust and does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer or
the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [______________________] is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned to such terms in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the
C-2
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust Fund
will be made only upon presentment and surrender of this Class [A-R][A-RL]
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York.
No transfer of a Class [A-R][A-RL] Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, or a person acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee or the Trust Fund
or (ii) in the case of any such Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement,
or using such plan's or arrangement's assets, an Opinion of Counsel addressed to
the Trustee, for the benefit of the Trustee, the Depositor and the Servicer and
on which they may rely, and satisfactory to the Trustee to the effect that the
purchase or holding of such Certificate will not result in the assets of the
Trust Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee to
any obligation in addition to those undertaken in this Agreement, which Opinion
of Counsel shall not be an expense of the Trustee or the Trust Fund.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Class [A-R][A-RL] Certificate to or on behalf of an employee benefit plan
subject to ERISA or to the Code without the Opinion of Counsel satisfactory to
the Trustee as described above shall be void and of no effect.
Each Holder of this Class [A-R][A-RL] Certificate will be deemed to have
agreed to be bound by the restrictions of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class A-R Certificate must be a Permitted Transferee,
(ii) no Ownership Interest in this Class [A-R][A-RL] Certificate may be
transferred without delivery to the Trustee of (a) a transfer affidavit of the
proposed transferee and (b) a transfer certificate of the transferor, each of
such documents to be in the form described in the Agreement, (iii) each person
holding or acquiring any Ownership Interest in this Class [A-R][A-RL]
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Class [A-R][A-RL]
Certificate must agree not to transfer an Ownership Interest in this Class
[A-R][A-RL] Certificate if it has actual knowledge that the proposed transferee
is not a Permitted Transferee and (v) any attempted or purported transfer of any
Ownership Interest in this Class [A-R][A-RL] Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
C-3
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: July 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By
------------------------------
Countersigned:
By
----------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
C-4
EXHIBIT D
[FORM OF NOTIONAL AMOUNT CERTIFICATE]
[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.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
[THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.]
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
D-1
Certificate No. [____] Variable Interest Rate
Cut-off Date: Initial Notional Amount of this Certificate
July 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Notional Amount of all Certificates of
August 25, 2004 this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
June 25, 2024
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust Series 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
Class [ ]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by fixed rate, second lien residential mortgage
loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
This Certificate is payable solely from the assets of the Trust and does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Servicer or the Trustee referred to below or any of
their respective affiliates. This Certificate and the Mortgage Loans are not
guaranteed or insured by any governmental agency or instrumentality.
This certifies that ___________, is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Mortgage Loans
deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"),Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned to such terms 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.
D-2
[This Certificate has not been registered under the Securities Act of 1933, as
amended ("the Act"). Any resale or transfer of this Certificate without
registration thereof under the Act may only be made in a transaction exempted
from the registration requirements of the Act and in accordance with the
provisions of the Agreement referred to herein.]
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
D-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: July 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By
------------------------------
Countersigned:
By
---------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
D-4
EXHIBIT E
[FORM OF CLASS P CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
E-1
Certificate No. [____] Variable Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this Certificate
July 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all Certificates
August 25, 2004 of this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
June 25, 2024
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
Class [_______]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by fixed rate, first and second lien residential
mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance of this Class P Certificate
at any time may be less than the Initial Certificate Balance set forth on the
face hereof, as described herein. This Class P Certificate does not evidence an
obligation of, or an interest in, and is not guaranteed by the Depositor, the
Servicer or the Trustee referred to below or any of their respective affiliates.
This certifies that _________________ is the registered owner of the
Percentage Interest evidenced by this Class P Certificate (obtained by dividing
the Denomination of this Class P Certificate by the Initial Class Principal
Balance) in certain distributions with respect to a Trust consisting primarily
of the Mortgage Loans deposited by Credit Suisse First Boston Mortgage
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of July 1, 2004 (the "Agreement") among the
Depositor, DLJ Mortgage Capital Inc., as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank,
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Class P
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class P
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
E-2
This Certificate does not have a pass-through rate and will be entitled to
distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Seller, the Servicer or the Depositor; or there shall be
delivered to the Trustee and the Depositor a transferor certificate by the
transferor and an investment letter shall be executed by the transferee. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of a Class P Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, or a person acting
on behalf of any such plan or arrangement or using the assets of any such plan
or arrangement to effect such transfer, which representation letter shall not be
an expense of the Trustee or the Trust Fund or (ii) in the case of any such
Class P Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement, or using such
plan's or arrangement's assets, an Opinion of Counsel addressed to the Trustee,
for the benefit of the Trustee, the Depositor and the Servicer and on which they
may rely, and satisfactory to the Trustee to the effect that the purchase or
holding of such Class P Certificate will not result in the assets of the Trust
Fund being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee to any
obligation in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Trustee or the Trust Fund.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Class P Certificate to or on behalf of an employee benefit plan subject to
ERISA or to the Code without the Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect.
Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
E-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: July 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By
----------------------------
Countersigned:
By
----------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
E-4
EXHIBIT F
[FORM OF REVERSE OF CERTIFICATES]
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
Class [_______]
This Certificate is one of a duly authorized issue of Certificates
designated as Credit Suisse First Boston Mortgage Securities Corp., Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made 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"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. [The Record Date applicable to each Distribution Date
is the last Business Day of the month next preceding the month of such
Distribution Date.][The Record Date applicable to each Distribution Date is the
Business Day immediately preceding the related Distribution Date; provided that
if this Certificate is not a Book-Entry Certificate, then the Record Date
applicable to each Distribution Date is the last Business Day of the month next
preceding such Distribution Date.]
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
F-1
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. 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 therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, 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 in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund 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 in authorized denominations
and 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 Depositor, the Servicer, the Seller and the Trustee and any agent of
the Depositor or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and the Seller, the
Depositor, the Trustee, or any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the sum of the aggregate Stated
Principal Balance of the Mortgage Loans and the appraised value of the REO
Properties at the time of repurchase is less than 10% of the sum of the
Aggregate Collateral Balance of the Mortgage Loans as of the Cut-off Date, the
Optional Termination Holder will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and REO Properties at a purchase
price determined as provided in the Agreement. If the Optional Termination
Holder does not exercise its option to purchase, on any Distribution Date on
which the sum of the aggregate Stated Principal Balance of the Mortgage Loans
and the appraised value of the REO Properties at the time of repurchase is less
than 5% of the sum of the Aggregate Collateral Balance of the Mortgage Loans as
of the Cut-off Date, the Trustee shall conduct an auction and upon satisfaction
of the conditions described in the Agreement, the Auction Purchaser shall
purchase the Trust Collateral at a purchase price determined as provided in the
F-2
Agreement. In the event that no such optional termination occurs and no purchase
pursuant to an auction occurs, the obligations and responsibilities created by
the Agreement will terminate upon the later of the maturity or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the distribution to Certificateholders of all amounts required to
be distributed pursuant to the Agreement. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
F-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number __________ , or, if mailed by check, to _________________________
________________________________________________________________________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ____________________________, the assignee named
above, or _____________________________, as its agent.
F-4
EXHIBIT G
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
July 29, 2004
______________________________
______________________________
Cut-off Date Principal Balance:
$_______________
JPMorgan Chase Bank,
as Trustee, for the
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Custodial Agreement, dated as of July 1, 2004, between JPMorgan
Chase Bank, as Trustee and LaSalle Bank National Association, as
Custodian
Ladies and Gentlemen:
In accordance with the provisions of Section 4 of the above-referenced
Custodial Agreement, the undersigned, as the Custodian, hereby certifies as to
each Mortgage Loan in the Mortgage Loan Schedule that (i) it has received: the
original Mortgage Note and Assignment of Mortgage with respect to each Mortgage
Loan identified on the Mortgage Loan Schedule attached hereto as Exhibit A and
(ii) such Mortgage Note has been reviewed by it and appears regular on its face
and relates.
The Custodian makes no representations as to: (i) the validity, legality,
enforceability, sufficiency, due authorization or genuineness of any of the
documents contained in each Custodial File or of any of the Mortgage Loans or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.
The Custodian hereby confirms that it is holding each such Mortgage Note
and Assignment of Mortgage as agent and bailee of, and custodian for the
exclusive use and benefit, and subject to the sole direction, of the Trustee
pursuant to the terms and conditions of the Custodial Agreement.
This Trust Receipt and Initial Certification is not divisible or
negotiable.
The Custodian will accept and act on instructions with respect to the
Mortgage Loans subject hereto upon surrender of this Trust Receipt and Initial
Certification at its office at LaSalle Bank National Association: 0000 Xxxxx
Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx, 00000.
G-1
Capitalized terms used herein shall have the meaning ascribed to them in
the Custodial Agreement.
LASALLE BANK NATIONAL ASSOCIATION
as Custodian
By:
------------------------------
Name:
Title:
G-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF CUSTODIAN
Trust Receipt #_________
Cut-off Date Principal Balance
$_____________
[To be addressed to the Trustee of record]
______________________________
______________________________
Re: Custodial Agreement, dated as of July 1, 2004, between JPMorgan
Chase Bank, as Trustee and LaSalle Bank National Association, as
Custodian
Ladies and Gentlemen:
In accordance with the provisions of Section 6 of the above-referenced
Custodial Agreement, the undersigned, as the Custodian, hereby certifies that as
to each Mortgage Loan listed on the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan listed on the attachment hereto)
it has reviewed the Custodial Files and has determined that (i) all documents
required to be delivered to it pursuant to Sections 2(i)-(ix) of the Custodial
Agreement are in its possession; (ii) such documents have been reviewed by it
and appear regular on their face and related to such Mortgage Loan; (iii) all
Assignments of Mortgage or intervening assignments of mortgage, as applicable,
have been submitted for recording in the jurisdictions in which recording is
necessary; and (iv) each Mortgage Note has been endorsed as provided in Section
2(ii) of the Custodial Agreement and each Mortgage has been assigned in
accordance with Section 2(iii) of the Custodial Agreement. The Custodian makes
no representations as to: (i) validity, legality, enforceability, sufficiency,
due authorization or genuineness of any of the documents contained in each
Custodial File or of any of the Mortgage Loans, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
The Custodian hereby confirms that it is holding each such Custodial File
as agent and bailee of, and custodian for the exclusion use and benefit, and
subject to the sole direction, of Trustee pursuant to the terms and conditions
of the Custodial Agreement.
This Trust Receipt and Final Certification is not divisible or negotiable.
The Custodian will accept and act on instructions with respect to the
Mortgage Loans subject hereto upon surrender of this Trust Receipt and Final
Certification at its office at LaSalle Bank National Association: 0000 Xxxxx
Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx, 00000.
H-1
Capitalized terms used herein shall have the meaning ascribed to them in
the Custodial Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By:
-------------------------------
Name:
Title:
H-2
EXHIBIT I
TRANSFER AFFIDAVIT
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
Class [_______]
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________ , the proposed
Transferee of an Ownership Interest in a Class [A-R][A-RL] Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Series, among Credit Suisse First
Boston Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as
seller ("DLJMC"),Wilshire Credit Corporation as servicer ("Wilshire") and
JPMorgan Chase Bank as trustee (the "Trustee"). Capitalized terms used, but not
defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax will
be imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will 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 not a Permitted Transferee, 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 an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (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
I-1
cooperatives and, except as may be provided in Treasury Regulations, persons
holding interests in pass-through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. 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.
6. The Transferee agrees to require a Transfer Affidavit from any Person
to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, 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 that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as EXHIBIT J to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is [_____________].
9. The Transferee is a United States Person.
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. The Transferee is (a) not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, and the Transferee
is not acting on behalf of such a plan or (b) either an employee benefit plan
that is subject to ERISA or a plan that is subject to Section 4975 of the Code
or the Transferee is acting on behalf of such a plan, and the Transferee will
provide an Opinion of Counsel in accordance with the provisions of Agreement.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this _____ day of _____________, 20___.
-----------------------------------
Print Name of Transferee
By:
--------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
------------------------------
[Assistant] Secretary
Personally appeared before me the above-named , known or proved to me to
be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this ______ day of _______________, 20___.
--------------------------------------
NOTARY PUBLIC
My Commission expires the _____ day of
_________________, 20___.
I-3
EXHIBIT 1
to
EXHIBIT I
Certain Definitions
"Ownership Interest": As to any Residual Certificate, any ownership or
security interest in such Certificate including any interest in such Certificate
as the Holder thereof and any other interest therein, whether direct or
indirect, legal or beneficial.
"Permitted Transferee": Any person other than (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 section 521 of the Code)
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) on any
excess inclusions (as defined in section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a
United States Person, and (vi) a Person designated as a non-Permitted Transferee
by the Depositor based upon an Opinion of Counsel that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code 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, with
the exception of Xxxxxxx Mac, a majority of its board of directors is not
selected by such government unit.
"Person": Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
I-1-1
EXHIBIT 2
to
EXHIBIT I
Section 5.02(c) of the Agreement
Each Person who has or who acquires any Ownership Interest in a Residual
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions, and the rights
of each Person acquiring any Ownership Interest in a Residual Certificate are
expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to recover
from any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as
it became other than a Permitted Transferee, all payments made on
I-2-1
such Residual Certificate at and after either such time. Any such payments
so recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Seller or
the Servicer, to the effect that the elimination of such restrictions will not
cause the Trust Fund hereunder to fail to qualify as a REMIC at any time that
the Certificates are outstanding or result in the imposition of any tax on the
Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Residual Certificate hereby consents to
any amendment of this Agreement which, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Residual Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Residual Certificate which is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
I-2-2
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB,
Class [___]
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that [FOR PRIVATE CERTIFCATES: (a) we understand that the Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed by us in a transaction that is exempt from the registration
requirements of the Act and (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner that
would be deemed, or taken any other action which would result in, a violation of
Section 5 of the Act][FOR CLASS A-R CERTIFICATES AND CLASS A-RL CERTIFICATES: we
have no knowledge the Transferee is not a Permitted Transferee].
Very truly yours,
-------------------------------------
Print Name of Transferor
By:
----------------------------------
Authorized Officer
J-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB,
Class [___]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
insitutional "accredited investor," as defined in Regulation D under the Act,
and have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement nor are we using the assets of any such plan or
arrangement to effect such or we have provided the opinion letter set forth in
section 5.02 of the Pooling and Servicing Agreement, (f) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(h) below), (g) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (h) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser
K-1
or transferee of such Certificate has executed and delivered to you a
certificate to substantially the same effect as this certificate, and (3) the
purchaser or transferee has otherwise complied with any conditions for transfer
set forth in the Pooling and Servicing Agreement.
Very truly yours,
-----------------------------------
Print Name of Transferee
By:
--------------------------------
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
____________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB,
Class [___]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, nor are we acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such acquisition,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Act or that would render the disposition of the Certificates a
violation of Section 5 of the Act or require registration pursuant thereto, nor
will act, nor has authorized or will authorize any person to act, in such manner
with respect to the Certificates, (f) we are a "qualified institutional buyer"
as that term is defined in Rule 144A under the Act ("Rule 144A") and have
completed either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2, (g) we are aware that the sale to us is being made in
reliance on Rule 144A, and (h) we are acquiring the Certificates for our own
L-1
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (A) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (B) pursuant to another exemption from registration under the Act.
Very truly yours,
----------------------------------
Print Name of Transferee
By:
-------------------------------
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $___________(1) in securities (except for the
1 excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization described
in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking and
is supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has
an audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
----------
(1) Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least $10,000,000
in securities.
L-1-1
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar official
or agency of a State, territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality of
the State or its political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
L-1-2
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
---------------------------------
Print Name of Buyer
By:
------------------------------
Name:
Title:
Date:
----------------------------
L-1-3
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $ in securities (other than the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi)
L-2-1
securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own
account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of
the Certificates will constitute a reaffirmation of this certification by
the undersigned as of the date of such purchase.
-----------------------------------
Print Name of Buyer or Adviser
By:
--------------------------------
Name:
Title:
IF AN ADVISER:
-----------------------------------
Print Name of Buyer
Date:
------------------------------
L-2-2
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
First Franklin Mortgage Loan Trust 2004-FFB
Home Equity Mortgage Pass-Through Certificates, Series 2004-FFB
Loan Information
Name of Mortgagor: _____________________________________
Servicer
Loan No.: _____________________________________
Trustee
Name:
Address: _____________________________________
_____________________________________
_____________________________________
Trustee
Mortgage File No.:
The undersigned Servicer hereby acknowledges that it has received from
LaSalle Bank National Association, as Custodian for the Holders of Mortgage
Pass-Through Certificates, of the above-referenced Series, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series among Credit Suisse First Boston Mortgage Securities
Corp. as depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire
Credit Corporation as servicer ("Wilshire") and JPMorgan Chase Bank as trustee
(the "Trustee").
( ) Mortgage Note dated _____________________, _______, in the original
principal sum of $___________________, made by ____________________.
payable to, or endorsed to the order of, the Trustee.
( ) Mortgage recorded on ________________ as instrument no. ______________ in
the County Recorder's Office of the County of ___________________, State
of ___________ in book/reel/docket _________________ of official records
at page/image _____________.
M-1
( ) Deed of Trust recorded on _____________ as instrument no. ______________
in the County Recorder's Office of the County of _______________, State of
______________ in book/reel/docket _____________________ of official
records at page/image _________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________ as instrument no. ______________ in the County Recorder's Office
of the County of ______, State of ________________ in book/reel/docket
_______________ of official records at page/image _______________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ______________________________________________________
( ) ______________________________________________________
( ) ______________________________________________________
( ) ______________________________________________________
The undersigned Servicer hereby acknowledges and agrees as follows:
(1) Such Servicer shall hold and retain possession of the Documents
in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) Such Servicer shall not cause or knowingly permit the Documents
to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor
shall the Servicer, if applicable, assert or seek to assert any
claims or rights of setoff to or against the Documents or any
proceeds thereof.
(3) Such Servicer shall return each and every Document previously
requested from the Mortgage File to the Custodian when the need
therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided
in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds
of proceeds, coming into the possession or control of such Servicer
shall at all times be earmarked for the account of the Custodian,
and such Servicer shall keep the Documents and any proceeds separate
and distinct from all other property in such Servicer's possession,
custody or control.
M-2
[Servicer]
By
-----------------------------------
Its
----------------------------------
Date: ____________, 20__
M-3
EXHIBIT N
FORM OF SUBSEQUENT TRANSFER AGREEMENT
THIS SUBSEQUENT TRANSFER AGREEMENT, dated as of _________ ___, 2004 (this
"Subsequent Transfer Agreement"), among CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., a Delaware corporation, as depositor (the "Depositor"), DLJ
MORTGAGE CAPITAL, INC., a Delaware corporation, in its capacity as seller under
the Pooling and Servicing Agreement referred to below (the "Seller"), WILSHIRE
CREDIT CORPORATION, as servicer ("Wilshire" or the "Servicer") and JPMORGAN
CHASE BANK, a national banking association, as trustee (the "Trustee");
WHEREAS, the parties hereto are also among the parties to the Pooling and
Servicing Agreement among Credit Suisse First Boston Mortgage Securities Corp.,
as depositor, Option One Mortgage Corporation, as servicer, Wilshire Credit
Corporation, as servicer, DLJ Mortgage Capital, Inc., as seller and JPMorgan
Chase Bank, as trustee, dated as of July 1, 2004 (the "Pooling and Servicing
Agreement"), in relation to the Home Equity Mortgage Pass-Through Certificates,
Series 2004-FFB;
WHEREAS, Sections 2.01(f) of the Pooling and Servicing Agreement provides
for the parties hereto to enter into this Subsequent Transfer Agreement in
accordance with the terms and conditions of the Pooling and Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged
the parties hereto agree as follows:
(i) The "Subsequent Transfer Date" with respect to this Subsequent
Transfer Agreement shall be ____________, 200__.
(ii) The "Aggregate Subsequent Purchase Amount" with respect to this
Subsequent Transfer Agreement shall be $____________, provided, however, that
such amount shall not exceed the amount on deposit in the Pre-Funding Account.
(iii) The Subsequent Mortgage Loans conveyed on the Subsequent Transfer
Date shall satisfy the pool characteristics for the Trust Fund identified in
Section 2.01(f) of the Pooling and Servicing Agreement.
(iv) In case any provision of this Subsequent Transfer Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions or obligations shall not in any way be affected or
impaired thereby.
(v) In the event of any conflict between the provisions of this Subsequent
Transfer Agreement and the Pooling and Servicing Agreement, the provisions of
the Pooling and Servicing Agreement shall prevail. Capitalized terms used herein
and not otherwise defined have the meanings in the Pooling and Servicing
Agreement.
N-1
(vi) The Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee for the benefit of the Certificateholders, without
recourse, all right title and interest in the Subsequent Mortgage Loans
identified in Schedule A, including all interest and principal due on or with
respect to such Subsequent Mortgage Loans on or after the Subsequent Cut-off
Date and all interest and principal payments on such Subsequent Mortgage Loans
received prior to the Subsequent Cut-off Date in respect of installments of
interest and principal due thereafter, but not including principal and interest
due on such Subsequent Mortgage Loans prior to the Subsequent Cut-off Date, any
insurance policies in respect of such Subsequent Mortgage Loans and all proceeds
of any of the foregoing.
(vii) This Subsequent Transfer Agreement shall be governed by, and shall
be construed and enforced in accordance with the laws of the State of New York.
(viii) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
N-2
EXHIBIT O-1
FORM OF COLLECTION ACCOUNT CERTIFICATION
[ ], 20__
[Servicer's name] hereby certifies that it has established the account
described below as a Collection Account pursuant to Section 3.05 of the Pooling
and Servicing Agreement, dated as of July 1, 2004, among Credit Suisse First
Boston Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as
seller ("DLJMC"), Option One Mortgage Corporation as servicer ("Option One"),
Wilshire Credit Corporation as servicer ("Wilshire"), and JPMorgan Chase Bank as
trustee (the "Trustee").
Title of Account: [Servicer's Name], in trust for the Holders of Credit Suisse
First Boston Mortgage Securities Corp., Home Equity Mortgage
Pass-Through Certificates, Series 2004-FFB.
Account Number: ______________
Address of officer or branch
of the Company at which
Account is maintained:
___________________________________
___________________________________
___________________________________
[Servicer's Name], AS SERVICER
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
O-1-1
EXHIBIT O-2
FORM OF COLLECTION ACCOUNT LETTER AGREEMENT
[ ], 20__
To: ______________________
______________________
______________________
(the "Depository")
As Servicer under the Pooling and Servicing Agreement, dated as of July 1,
2004, among Credit Suisse First Boston Mortgage Securities Corp. as depositor,
DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Option One Mortgage Corporation
as servicer ("Option One"), Wilshire Credit Corporation as servicer ("Wilshire")
and JPMorgan Chase Bank as trustee (the "Trustee") (the "Agreement"), we hereby
authorize and request you to establish an account, as a Collection Account
pursuant to Section 3.05 of the Agreement, to be designated as "[Servicer's
Name], in trust for the Holders of Credit Suisse First Boston Mortgage
Securities Corp., Home Equity Mortgage Pass- Through Certificates, Series
2004-FFB." All deposits in the account shall be subject to withdrawal therefrom
by order signed by the Servicer. This letter is submitted to you in duplicate.
Please execute and return one original to us.
[Servicer's Name], AS SERVICER
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
O-2-1
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number _________ at the office of the
Depository indicated above and agrees to honor withdrawals on such account as
provided above. The full amount deposited at any time in the account will be
insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund ("BIF") or the Savings Association Insurance
Fund ("SAIF").
----------------------------------
Depository
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Date:
-----------------------------
X-0-0
XXXXXXX X-0
FORM OF ESCROW ACCOUNT CERTIFICATION
[ ], 20__
[Servicer's Name] hereby certifies that it has established the account
described below as an Escrow Account pursuant to Section 3.06 of the Pooling and
Servicing Agreement, dated as of July 1, 2004, among Credit Suisse First Boston
Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as seller
("DLJMC"), Option One Mortgage Corporation as servicer ("Option One"), Wilshire
Credit Corporation as servicer ("Wilshire") and JPMorgan Chase Bank as trustee
(the "Trustee").
Title of Account: "[Servicer's Name], in trust for Credit Suisse First Boston
Mortgage Securities Corp., First Franklin Mortgage Loan Trust
2004-FFB, Home Equity Mortgage Pass-Through Certificates,
Series 2004-FFB and various mortgagors"
Account Number: ____________________
Address of officer or branch
of the Company at which
Account is maintained:
___________________________________
___________________________________
___________________________________
[Servicer's Name], AS SERVICER
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
X-0-0
XXXXXXX X-0
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
[ ], 20__
To: ________________________
________________________
________________________
(the "Depository")
As Servicer under the Pooling and Servicing Agreement, dated as of July 1,
2004, among Credit Suisse First Boston Mortgage Securities Corp. as depositor,
DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Option One Mortgage Corporation
as servicer ("Option One"), Wilshire Credit Corporation as servicer ("Wilshire")
and JPMorgan Chase Bank as trustee (the "Trustee") (the "Agreement"), we hereby
authorize and request you to establish an account, as an Escrow Account pursuant
to Section 3.06 of the Agreement, to be designated as "Credit Suisse First
Boston Mortgage Securities Corp., First Franklin Mortgage Loan Trust 2004-FFB,
Home Equity Mortgage Pass- Through Certificates, Series 2004-FFB". All deposits
in the account shall be subject to withdrawal therefrom by order signed by the
Servicer. This letter is submitted to you in duplicate. Please execute and
return one original to us.
[SERVICER'S NAME], AS SERVICER
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
P-2-1
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ________________ at the office
of the Depository indicated above and agrees to honor withdrawals on such
account as provided above. The full amount deposited at any time in the account
will be insured up to applicable limits by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
------------------------
Depository
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
P-2-2
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
FORM OF CUSTODIAL AGREEMENT
(Available Upon Request)
R-1
EXHIBIT S
[Reserved]
S-1
EXHIBIT T
DATA FIELDS FOR OPTION ONE SERVICED LOANS TRANSFERRED TO WILSHIRE
T-1
EXHIBIT U
CHARGED OFF LOAN DATA REPORT
(Available Upon Request)
U-1
EXHIBIT V
FORM OF MONTHLY STATEMENT TO CERTIFICATEHOLDERS
(i) with respect to each Class of Certificates which are not Notional
Amount Certificates and, unless otherwise stated, the related Distribution Date,
a. the initial Class Principal Balance of such Class as of the
Closing Date;
b. the Class Principal Balance of such Class before giving effect to
the distribution of principal and interest;
c. the amount of the related distribution on such Class allocable to
interest;
d. the amount of the related distribution on such Class allocable to
principal;
e. the sum of the principal and interest payable to such Class;
f. the Realized Loss allocable to such Class;
g. the Carryforward Interest allocable to such Class;
h. the Class Principal Balance of such Class after giving effect to
the distribution of principal and interest;
i. the Pass-Through Rate for such Class;
j. [reserved];
k. any shortfall in principal allocable to such Class, if such
amount is greater than zero; and
l. any shortfall in interest allocable to such Class, if such amount
is greater than zero.
(ii) with respect to each Class of Certificates which are Notional Amount
Certificates and, unless otherwise stated, the related Distribution Date,
a. the Notional Amount of such Class as of the Cut-off Date;
b. the Notional Amount of such Class before giving effect to the
distribution of interest;
c. the amount of the related distribution on such Class allocable to
interest;
d. the amount of the related distribution on such Class allocable to
principal;
V-1
e. the sum of the principal and interest payable to such class;
f. the Realized Loss allocable to such Class;
g. the Deferred Interest allocable to such Class;
h. the Notional Amount of such Class after giving effect to the
distribution of interest;
i. the Pass-Through Rate for such Class; and
j. [reserved].
(iii) with respect to a $1000 factor of the Initial Class Principal
Balance of each Class of Certificates which are not Notional Amount Certificates
and the related Distribution Date,
a. the CUSIP number assigned to such Class;
b. the Class Principal Balance of such Class factor prior to giving
effect to the distribution of principal and interest;
c. the amount of the related distribution allocable to interest on
such Class factor;
d. the amount of the related distribution allocable to principal on
such Class factor;
e. the sum of the principal and interest payable to such Class
factor; and
f. the Class Principal Balance of such Class factor after giving
effect to the distribution of principal and interest.
(iv) with respect to a $1000 factor of the Initial Class Principal Balance
of each Class of Certificates which are Notional Amount Certificates and the
related Distribution Date,
a. the CUSIP number assigned to such Class;
b. the Notional Amount of such Class factor prior to giving effect
to the distribution of interest;
c. the amount of the related distribution allocable to interest on
such Class factor;
d. the amount of the related distribution allocable to principal on
such Class factor;
e. the sum of the principal and interest payable to such Class
factor; and
V-2
f. the Notional Amount of such Class factor after giving effect to
the distribution of interest.
(v) with respect to the related Distribution Date,
a. the Principal Payment Amount or Principal Remittance Amount;
b. the amount of Curtailments;
c. the amount of Curtailment interest adjustments;
d. the Scheduled Payment of principal;
e. the amount of Principal Prepayments;
f. the amount of principal as a result of repurchased Mortgage
Loans;
g. the Substitution Adjustment Amount;
h. the aggregate amount of scheduled interest prior to reduction for
fees;
i. the amount of Net Recoveries;
j. the amount of reimbursements of Nonrecoverable Advances
previously made;
k. the amount of recovery of reimbursements previously deemed
nonrecoverable;
l. the amount of net Liquidation Proceeds;
m. the amount of Insurance Proceeds;
n. the amount of any other distributions allocable to principal;
o. the number of Mortgage Loans as of the first day of the related
Collection Period;
p. the aggregate Stated Principal Balance of the Mortgage Loans as
of the first day of the related Collection Period;
q. the number of Mortgage Loans as of the last day of the related
Collection Period;
r. the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Collection Period;
V-3
s. the sum of the Servicing Fee, the Credit Risk Manager Fee and the
Trustee Fee ;
t. the amount of current Advances ;
u. the amount of outstanding Advances ;
v. the number and aggregate principal amounts of Mortgage Loans
delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 days or more,
including delinquent bankrupt Mortgage Loans but excluding Mortgage Loans in
foreclosure and REO Property;
w. the number and aggregate principal amounts of Mortgage Loans that
are currently in bankruptcy, but not delinquent;
x. the number and aggregate principal amounts of Mortgage Loans that
are in foreclosure;
y. the Delinquency Rate, Rolling Three Month Delinquency Rate, the
Senior Enhancement Percentage and whether a Trigger Event is in effect ;
z. the number and aggregate principal amount of any REO Properties
as of the close of business on the Determination Date preceding such
Distribution Date;
aa. current Realized Losses;
bb. Cumulative Net Realized Losses and whether a Cumulative Loss
Event is occurring;
cc. the weighted average term to maturity of the Mortgage Loans as
of the close of business on the last day of the calendar month preceding the
related Distribution Date;
dd. the number of Mortgage Loans that have Prepayment Penalties and
for which prepayments were made during the related Collection Period, as
applicable;
ee. the aggregate principal balance of Mortgage Loans that have
Prepayment Penalties and for which prepayments were made during the related
Collection Period, as applicable;
ff. the aggregate amount of Prepayment Penalties collected during
the related Collection Period, as applicable;
gg. [reserved];
hh. The amount of any funds remaining in the Pre-Funding Account as
of such Distribution Date;
ii. the weighted average Net Mortgage Rate;
V-4
jj. the Net Excess Spread; and
kk. [reserved].
(vi) with respect to the related Distribution Date,
a. the Targeted Overcollateralization Amount;
b. the Overcollateralization Amount;
c. the amount, if any, by which the Targeted Overcollateralization
Amount exceeds the Overcollateralization Amount;
d. the Overcollateralization Release Amount;
e. the Monthly Excess Interest; and
f. the amount of any payment to the Class X-1 Certificates.
V-5
EXHIBIT W
FORM OF DEPOSITOR CERTIFICATION
Re: Credit Suisse First Boston Mortgage Securities Corp.
First Franklin Mortgage Loan Trust 2004-FFB
I, __________________________, certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form 8-K
containing distribution and servicing reports filed in respect of periods
included in the year covered by this annual report, of First Franklin Mortgage
Loan Trust 2004-FFB (the "Trust");
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information required to be prepared
by the Trustee based upon the servicing information required to be provided by
each Servicer under the Pooling and Servicing Agreement is included in these
reports;
4. Based on my knowledge and upon the annual compliance statements included in
the report and required to be delivered to the Trustee in accordance with the
terms of the Pooling and Servicing Agreement and based upon the review required
under the Pooling and Servicing Agreement, and except as disclosed in the
report, each Servicer has fulfilled its obligations under the Pooling and
Servicing Agreement; and
5. The reports disclose all significant deficiencies relating to each Servicer's
compliance with the minimum servicing standards based, in each case, upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar standard as set forth in the Pooling and Servicing Agreement, that is
included in these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: each Servicer
and the Trustee.
Capitalized terms used but not defined herein have the meanings ascribed
to them in the Pooling and Servicing Agreement, dated July 1, 2004 (the "Pooling
and Servicing Agreement"), among Credit Suisse First Boston Mortgage Securities
Corp., as depositor (the "Depositor"), DLJ Mortgage Capital, Inc., as seller,
Option One Mortgage Corporation as servicer ("Option One") Wilshire Credit
Corporation, as servicer ("Wilshire") and JPMorgan Chase Bank, as trustee (the
"Trustee").
----------------------------------
[Name]
W-1
[Title]
[Date]
W-2
EXHIBIT X
FORM OF TRUSTEE CERTIFICATION
Re: Credit Suisse First Boston Mortgage Securities Corp.
First Franklin Mortgage Loan Trust 2004-FFB
JPMorgan Chase Bank (the "Trustee") hereby certifies to Credit Suisse
First Boston Mortgage Securities Corp. (the "Depositor"), and each Person, if
any, who "controls" the Depositor within the meaning of the Securities Act of
1933, as amended, and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. The Trustee has reviewed the annual report on Form 10-K for the fiscal
year [___], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Depositor relating to the above-referenced trust;
2. Based on the Trustee's knowledge, and assuming the accuracy and
completeness of the information supplied to the Trustee by each Servicer, the
distribution information in the distribution reports contained in all reports on
Form 8-K included in the year covered by the annual report on Form 10-K for
fiscal year [_____], prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
required by the Pooling and Servicing Agreement to be included therein and
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on the Trustee's knowledge, the distribution information required
to be provided by the Trustee under the Pooling and Servicing Agreement is
included in these reports.
Capitalized terms used but not defined herein have the meanings ascribed
to them in the Pooling and Servicing Agreement, dated July 1, 2004 (the "Pooling
and Servicing Agreement"), among Credit Suisse First Boston Mortgage Securities
Corp., as depositor (the "Depositor"), DLJ Mortgage Capital, Inc., as seller,
Option One Mortgage Corporation as servicer ("Option One") Wilshire Credit
Corporation, as servicer ("Wilshire") and JPMorgan Chase Bank, as trustee (the
"Trustee").
JPMORGAN CHASE BANK,
as Trustee
By:
--------------------------------
[Name]
[Title]
[Date]
X-1
EXHIBIT Y
FORM SERVICER CERTIFICATION
Re: Credit Suisse First Boston Mortgage Securities Corp.
First Franklin Mortgage Loan Trust 2004-FFB
I, ___________________________, a duly elected and acting officer of
[__________________] (the "Servicer"), certify pursuant to Section 8.12(d) of
the Pooling and Servicing Agreement to the Depositor, the Trustee and each
Person, if any, who "controls" the Depositor or the Trustee within the meaning
of the Securities Act of 1933, as amended, and their respective officers and
directors, with respect to the calendar year immediately preceding the date of
this Certificate (the "Relevant Year"), as follows":
1. For purposes of this Certificate, "Relevant Information" means the
information in the certificate provided pursuant to Section 3.16 of the Pooling
and Servicing Agreement (the "Annual Compliance Certificate") for the Relevant
Year and the information in all servicing reports required pursuant to the
Pooling and Servicing Agreement to be provided by the Servicer to the Trustee
during the Relevant Year (as such information is amended or corrected in writing
and delivered to the Trustee). Based on my knowledge, the Relevant Information,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein which is necessary
to make the statements made therein, in light of the circumstances under which
such statements were made, not misleading as of the last day of the Relevant
Year;
2. The Relevant Information required to be provided to the Trustee under the
Pooling and Servicing Agreement has been provided to the Trustee;
3. I am responsible for reviewing the activities performed by the Servicer under
the Pooling and Servicing Agreement during the Relevant Year. Based upon the
review required under the Pooling and Servicing Agreement and except as
disclosed in the Annual Compliance Certificate or the accountants' statement
provided pursuant to Section 3.17 of the Pooling and Servicing Agreement, to the
best of my knowledge, the Servicer has fulfilled its obligations under the
Pooling and Servicing Agreement throughout the Relevant Year.
Capitalized terms used but not defined herein have the meanings ascribed
to them in the Pooling and Servicing Agreement, dated July 1, 2004 (the "Pooling
and Servicing Agreement"), among Credit Suisse First Boston Mortgage Securities
Corp., as depositor (the "Depositor"), DLJ Mortgage Capital, Inc., as seller,
Option One Mortgage Corporation, as servicer ("Option One") Wilshire Credit
Corporation, as servicer ("Wilshire") and JPMorgan Chase Bank, as trustee (the
"Trustee").
[____________________________],
as Servicer
By:
----------------------------
[Name]
[Title]
Y-1
EXHIBIT Z
INFORMATION TO BE PROVIDED BY SERVICER TO TRUSTEE
The following information with respect to each Mortgage Loan will be
e-mailed by each Servicer to the Trustee in accordance with Section 4.10:
Servicer loan number
Trust loan number (if applicable)
Scheduled net interest
Scheduled principal
Curtailment applied
Curtailment adjustment
Mortgage Rate
Servicing Fee Rate
P&I payment
Beginning scheduled balance
Ending scheduled balance
Ending actual principal balance
Due Date
Prepayment in full principal
Prepayment in full net interest
Prepayment in full penalty
Delinquencies:
1-30
31-60
61-90
90+
Foreclosures
REO Properties
Loss amounts and loss types
Z-1
EXHIBIT AA
FORM OF LIMITED POWER OF ATTORNEY
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, a New York banking
corporation, having a place of business at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx
Xxxx, X.X. 00000, as Trustee (and in no personal or other representative
capacity) under the Pooling and Servicing Agreement, dated as of July 1, 2004
(as amended, restated, supplemented or otherwise modified from time to time, the
"Agreement"; capitalized terms not defined herein have the definitions assigned
to such terms in the Agreement), relating to the Home Equity Mortgage
Pass-Through Certificates, Series 2004-FFB, hereby appoints [_______________],
in its capacity as a Servicer under the Agreement, as the Trustee's true and
lawful Special Attorney-in-Fact, in the Trustee's name, place and stead and for
the Trustee's benefit, but only in its capacity as Trustee aforesaid, to perform
all acts and execute all documents as may be customary, necessary and
appropriate to effectuate the following enumerated transactions in respect of
any mortgage, deed of trust, promissory note or real estate owned from time to
time owned (beneficially or in title, whether the Trustee is named therein as
mortgagee or beneficiary or has become mortgagee or beneficiary by virtue of
endorsement, assignment or other conveyance) or held by or registered to the
Trustee (directly or through custodians or nominees), or in respect of which the
Trustee has a security interest or other lien, all as provided under the
applicable Agreement and only to the extent the respective Trustee has an
interest therein under the Agreement, and in respect of which the Servicer is
acting as servicer pursuant to the Agreement (the "Mortgage Documents").
This appointment shall apply to the following enumerated transactions under the
Agreement only:
1. The modification or re-recording of any Mortgage Document for the
purpose of correcting it to conform to the original intent of the parties
thereto or to correct title errors discovered after title insurance was issued
and where such modification or re-recording does not adversely affect the lien
under the Mortgage Document as insured.
2. The subordination of the lien under a Mortgage Document to an easement
in favor of a public utility company or a state or federal agency or unit with
powers of eminent domain including, without limitation, the execution of partial
satisfactions/releases, partial reconveyances and the execution of requests to
trustees to accomplish same.
3. The conveyance of the properties subject to a Mortgage Document to the
applicable mortgage insurer, or the closing of the title to the property to be
acquired as real estate so owned, or conveyance of title to real estate so
owned.
4. The completion of loan assumption and modification agreements in
respect of Mortgage Documents.
AA-1
5. The full or partial satisfaction/release of a Mortgage Document or full
conveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related note.
6. The assignment of any Mortgage Document, in connection with the
repurchase of the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage Document upon payment and discharge
of all sums secured thereby in conjunction with the refinancing thereof,
including, without limitation, the assignment of the related note.
8. With respect to a Mortgage Document, the foreclosure, the taking of a
deed in lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such foreclosure,
including, without limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a deed of trust,
in accordance with state law and the deed of trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage Document or state law to
expeditiously complete said transactions in paragraphs 8(a)
through 8(e), above.
9. Demand, xxx for, recover, collection and receive each and every sum of
money, debt, account and interest (which now is, or hereafter shall become due
and payable) belonging to or claimed by the Trustee under the Mortgage
Documents, and to use or take any lawful means for recovery thereof by legal
process or otherwise.
10. Endorse on behalf of the Trustee all checks, drafts and/or negotiable
instruments made payable to the Trustee in respect of the Mortgage Documents.
The Trustee gives the Special Attorney-in-Fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by this
Limited Power of Attorney, subject to the terms and conditions set forth in the
Agreement including the standard of care applicable to servicers in the
Agreement, and hereby does ratify and confirm what such Special Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
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IN WITNESS WHEREOF, the Trustee has caused its corporate name and seal to be
hereto signed and affixed and these presents to be acknowledged by its duly
elected and authorized officer this ___ day of ___ , 200_.
JPMORGAN CHASE BANK, as Trustee
By:
--------------------------------
Name:
Title:
WITNESS: WITNESS:
------------------------------- -----------------------------------
Name: Name:
Title: Title:
XXXXX XX XXX XXXX
XX
XXXXXX XX XXX XXXX
Xx ______________, 200_, before me, the undersigned, a Notary Public in
and for said state, personally appeared __________________, personally known to
me to be the person whose name is subscribed to the within instrument and to be
a duly authorized and acting Senior Vice President of JPMorgan Chase Bank, and
such person acknowledged to me that such person executed the within instrument
in such person's authorized capacity as a Senior Vice President of JPMorgan
Chase Bank, and that by such signature on the within instrument the entity upon
behalf of which such person acted executed the instrument.
WITNESS my hand and official seal.
------------------------------
Notary Public
AA-3
EXHIBIT BB
MORTGAGE POOL INSURANCE POLICY
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Radian Insurance Inc.
Second Mortgage Pool Insurance Policy
Radian Insurance Inc. - 0000 Xxxxxx Xxxxxx - Xxxxxxxxxxxx, XX - 00000
--------------------------------------------------------------------------------
Radian Insurance Inc., a Pennsylvania corporation and a stock insurance company
(herein called the "Company") agrees to pay to the Insured identified below, in
consideration of the premium paid or to be paid as specified herein, the Loss
sustained by reason of the Default by a Borrower on any Loan insured under this
Policy and listed in the attached Schedule, subject to the terms and conditions
contained herein.
Insured JPMorgan Chase Bank, as trustee (the "Trustee") of First Franklin
Mortgage Loan Trust 2004-FFB (the "Trust"), under a Pooling and
Servicing Agreement, dated as of July 1, 2004 (the "Pooling and
Servicing Agreement"), among Credit Suisse First Boston Mortgage
Securities Corp., as depositor, DLJ Mortgage Capital, Inc., as
seller ("Seller"), Wilshire Credit Corporation, as servicer
("Servicer"), and the Trustee, providing for the issuance by the
Trust of its Home Equity Mortgage Pass-Through Certificates, Series
2004-FFB (collectively, the "Securities"), through the Trustee's
agent, JPMorgan Chase Trust Co. (the "Insured's Agent"), in its
Pennsylvania office located at 0000 Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxxxx, XX 00000 (the "Agent's Address").
R0124-01-7 34489-000 July 1, 2004
Policy number Insured's Identification number Effective date of policy
--------------------------------------------------------------------------------
Premium rate and payments 1/12 of 0.82% of the Total Amortized Insured Loan
Amount with respect to each Premium Payment Date,
payable on such Premium Payment Date in
immediately available funds by wire transfer of
such funds to an account designated by the
Company.
Premium payment date The Effective Date and, thereafter, the 25th day
of each month or if such day is not a business
day, the first business day thereafter, commencing
in August, 2004.
Total insured loan amount $418,411,623
Aggregate loss percentage 9.0%
Maximum aggregate liability $37,657,046
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Terms and Conditions
1. Definitions
1.1 Amortized Insured Loan Amount means the unpaid principal balance of the Loan
outstanding as of the first day of the month. On or before the tenth day of each
month, the Insured shall provide the Company with a report, made on a form or in
a format provided or approved by the Company, specifying the Amortized Insured
Loan Amount of each Loan.
1.2 Borrower means any individual legally obligated to repay the debt obligation
created by a Loan, including any co-borrower, co-signer, co-obligor, or
guarantor of the Loan.
1.3 Claim means the timely filed written request, made on a form or in a format
provided or approved by the Company, to receive the benefits of this Policy.
1.4 Claim Amount means the amount calculated in accordance with Section 6.2 of
this Policy.
1.5 Combined Loan-to-Value means that ratio, expressed as a percentage, equal
to:
a. the sum of:
1. (a) the outstanding principal balance of the Loan as of the date the Loan was
Consummated; and
2. the outstanding principal balance, as of the date the Loan was Consummated,
of the loan secured by the First Deed of Trust;
divided by
b. the Fair Market Value of the Property.
1.6 Consummated means the date on which the loan was closed and all related loan
documents were executed.
1.7 Deductible means, as of any Distribution Date (as defined in the Pooling and
Servicing Agreement) for the Securities, the sum of (i) Monthly Excess Cashflow
(as defined in the Pooling and Servicing Agreement) (after giving effect to
distributions of principal and interest other than distributions to increase the
Overcollateralization Amount (as defined in the Pooling and Servicing
Agreement)) and all reimbursements of Deferred Amounts (as defined in the
Pooling and Servicing Agreement) and (ii) the Overcollateralization Amount. The
Deductible will be applied to cover Losses on the Loans in accordance with the
provisions of the Pooling and Servicing Agreement. Subject to the Maximum
Aggregate Liability and any other conditions in this Policy, at any time that
the Deductible is equal to zero, the Company shall be liable to pay Claims as
set forth in this Policy.
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1.8 Default means the failure by a Borrower (s) to pay when due a scheduled
periodic payment due under the terms of a Loan, or (b) to pay all amounts due on
acceleration of the Loan by the Insured after breach by the Borrower of a
due-on-sale provision in the Loan, granting the Insured the right to accelerate
the Loan upon transfer of title to, or an interest in, the Property, or (c) to
pay when due any scheduled periodic payment or any other amount due on any debt
or other obligation representing an encumbrance or lien superior to the Loan
(including, but not limited to, the First Deed of Trust and tax or other liens
or encumbrances).
A Loan is deemed to be in Default for that month, as appropriate: (a) as of the
close of business on the installment due date for which a scheduled periodic
payment has not been made; (b) as of the close of business on the due date
stated in the notice of acceleration given pursuant to the due-on-sale provision
in the Loan; (c) as of the installment due date for which a scheduled periodic
payment has not been made under the First Deed of Trust; or (d) as of the due
date for payment of any amount due on any other debt or other obligation
representing an encumbrance or lien superior to the Loan. The Loan shall be
considered to remain in Default until filing of a Claim so long as such
scheduled periodic payment has not been made or violation of the due-on-sale
clause continues. For example, a Loan is "four (4) months in Default" if the
monthly installments due on January 1 through April 1 remain unpaid as of the
close of business on April 1 or if a basis for acceleration exists for a
continuous period of four (4) months.
1.9 Eligibility Criteria means the requirements established in the underwriting
guidelines of the originator of the Loan and as otherwise established by the
Company and of which the Company notifies the Insured, as the same may be
amended from time to time by the Company on prior written notice to the Insured.
1.10 Eligible Note means the written evidence of indebtedness, unless otherwise
amended or limited by the Eligibility Criteria:
a. under which the Borrower is obligated to repay a Loan in amortizing monthly
installments of principal and interest;
b. with an initial term of at least twelve (12) months;
c. secured by a Second Deed of Trust as of the Effective Date; and
d. containing therein or in the Second Deed of Trust, where permitted by law,
1. a clause providing for the acceleration of maturity, at the option of the
holder, upon default,
2. a due-on-sale clause,
3. a clause permitting the Insured to make payments on any debt or other
obligation representing a lien or other encumbrance which is in default and
which has priority over any Second Deed of Trust,
BB-4
4. a clause providing that the Borrower agrees not to take additional advances
under any loan secured by a lien or other encumbrance with priority over the
Second Deed of Trust,
5. a waiver of the Borrower's homestead exemption, and
6. clause providing that any default of the scheduled periodic payment under the
First Deed of Trust is considered to be a default under the Loan.
1.11 Fair Market Value means the appraised value of the Property, or other
acceptable evidence of value of the Property, as of the date of Consummation;
provided that, if the Loan is for the purpose of purchasing the Property, the
Fair Market Value shall be the lesser of the sales price or the appraised value
as of the date of Consummation.
1.12 First Deed of Trust means a mortgage, deed of trust, or other instrument
which:
a. constitutes or is equivalent to a first lien or encumbrance on the Property,
subject only to the Permitted Encumbrances, and
b. will allow the Person secured thereby, directly or by a trustee or other
Person, to foreclose on the Property (by power-of-sale, judicially or otherwise)
upon default thereunder or under the loan secured by such instrument and thereby
acquire title to the Property, subject only to the Permitted Encumbrances.
1.13 Insured means the Person designated on the face of this Policy.
1.14 Insured Loan Amount means the unpaid principal balance of the Loan as of
the Effective Date as set forth on the attached Schedule or, in the case of a
substituted Loan, on the date of substitution.
1.15 Liquidated Loan has the meaning provided in the Pooling and Servicing
Agreement; provided that, for the purposes of this Policy, a Liquidated Loan may
be a Loan that has been liquidated through the sale of such Loan and the
reference to the Servicer in the definition of "Liquidated Loan" in the Pooling
and Servicing Agreement shall be deemed to be a reference to the Company on a
servicing-released basis pursuant to Section 6.7 during any time that such Loan
is serviced by or on behalf of the Company.
1.16 Loan means a disbursement of proceeds or advance of credit by the Insured
to or for the benefit of a Borrower who promises to repay the principal amount
of such disbursement, or any future disbursement, plus interest, if any, at a
stated annual rate over time, which is evidenced, in any event, by an Eligible
Note secured by a Second Deed of Trust, and which is listed on the attached
Schedule (or substituted therefor with the Company's prior written approval) and
to which coverage under this Policy has been extended.
1.17 Loan File means, with respect to a Loan, the documents (including all
documents in electronic format) created or received in connection with the
origination and closing of the Loan, including the Loan File Documents.
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1.18 Loan File Documents mean:
a. the fully-completed Loan application, dated and signed by the Borrower,
b. the credit bureau report on the Borrower obtained in the Loan application
process and any updated credit bureau reports on the Borrower obtained by the
Insured,
c. the verification of the Borrower's income obtained in the Loan application
process,
d. the evidence of Property improvements to be completed, if applicable, which
was obtained before or at the time the Loan was Consummated, and the original
applicable completion certificates signed by the Borrower,
e. a copy of the tax assessment, warranty deed or recorded land contract for
sale, if applicable, obtained before or at the time the Loan was Consummated,
f. the original Eligible Note,
g. the original, recorded Second Deed of Trust,
h. the loan history record, maintained by the Insured in its normal course of
business, of payments made on the Loan,
i. the documentary evidence of the Insured's efforts to effect a cure of any
Default and to collect the Loan,
j. the appraisal, or other acceptable evidence of value of the Property approved
by the Company,
k. the documentary evidence obtained by the Insured, before or at the time the
Loan was Consummated, that the Combined Loan-to-Value did not exceed the
percentage as set forth in the Eligibility Criteria which is applicable to the
Loan,
l. the Regulation Z disclosure statement,
m. the documentary evidence (such as cancelled checks) that any debts to be paid
with the Loan proceeds were paid directly by the Insured, and
n. the original documentary evidence of the normal and customary title search
obtained by the Insured showing that the Loan was, or was to be immediately
after the Loan was Consummated, secured by a mortgage, deed of trust, or other
instrument which constituted or was equivalent to a Second Deed of Trust.
1.19 Loss means, after the Deductible has been exhausted, the liability of the
Company with respect to a Loan for payment of a Perfected Claim which is
calculated in accordance with Section 6.2. A Loss shall be deemed to have
occurred when a Default on a Loan occurs, even though the
BB-6
amount of Loss is not then either presently ascertainable or due and payable.
Loss does not include any loss on a Mortgage Loan by reason of any insolvency
proceeding or the application of the Servicemembers Civil Relief Act, the
California Military and Veterans Code and/or any similar state or local law.
1.20 Maximum Aggregate Liability means the Aggregate Loss Percentage of the
Total Insured Loan Amount. The Maximum Aggregate Liability shall be increased
by, and the Insured shall otherwise receive credit for, any recoveries by the
Company from any Borrower or any other Person or in any other respect in
connection with the Loan or in connection with any payment made by the Company
under this Policy.
1.21 Perfected Claim means a Claim received by the Company which contains all
information and proof required by the Company and for which all requirements of
this Policy applicable to payment of a Claim are satisfied.
1.22 Permitted Encumbrances means only the following liens, encumbrances,
covenants, conditions, restrictions, easements and rights of redemption:
a. Any lien established by public bond, assessment or tax, when no installment,
call or payment of or under such bond, assessment or tax is delinquent;
b. Any municipal and zoning ordinances and exceptions to title waived by the
regulations of federal mortgage insurers and guarantors with respect to
mortgages on one-to-four family residences in effect on the date on which the
Loan was closed and all documents were executed; and
c. Any other impediments which will not have a materially adverse effect on
either the transferability of the Property or the sale thereof to a bona fide
purchaser.
1.23 Person means any individual, corporation, partnership, association or other
entity.
1.24 Physical Damage means any tangible injury to a Property, whether caused by
accident, natural occurrence, or any other reason, including damage caused by
defects in construction, land subsidence, earth movement or slippage, fire,
flood, earthquake, riot, vandalism or any environmental condition including
contamination by toxic or hazardous waste, chemicals or other substances.
1.25 Policy means this contract of insurance and all commitments, applications,
endorsements and schedules, which are incorporated in this Policy, related to
Loans insured under this Policy.
1.26 Property means a Residential real property and all improvements thereon
which secure the Loan, together with all easements and appurtenances, all rights
of access, all rights to use common areas, recreational and other facilities,
and all of their replacements or additions.
1.27 Purchase Price means, as to any Loan which the Company has exercised its
right to purchase under Section 6.7, the sum of (a) the unpaid principal balance
of such Loan as of the date of purchase or in the case of a Loan for which any
such Loss has been so charged, the amount of such Loss, (b)
BB-7
other than in the case of a Loan for which any such Loss has been so charged,
accrued and unpaid interest thereon through the date of payment for such
purchase and (c) if the Loan is to be purchased on a servicing-released basis,
and other than in the case of a Loan for which any such Loss has been so
charged, any unreimbursed servicing advances related to such Loan. In
calculating any Purchase Price, the same shall not include any amount in respect
of the Servicemembers Civil Relief Act, the California Military and Veterans
Code and/or any similar state or local law.
1.28 Residential means a type of building or a portion thereof which is designed
for occupancy by not more than four (4) families, or a single-family
condominium, of a unit in a planned unit development.
1.29 Schedule means the schedule attached hereto listing the Loans secured by
Second Deeds of Trust for which coverage under this Policy has been extended.
1.30 Second Deed of Trust means a mortgage, deed of trust, or other similar
instrument which constitutes or is equivalent to a lien or encumbrance on the
related Property and which secures a Loan, subject only to the related First
Deed of Trust and the Permitted Encumbrances, and allows the Person secured
thereby, directly or by a trustee or other Person, to foreclose on the Property
(by power-of-sale, judicially or otherwise) upon Default thereunder or under the
Loan secured by such instrument and thereby acquire title to the Property,
subject only to the First Deed of Trust and the Permitted Encumbrances.
1.31 Servicer means that Person acting on behalf of the owner of a Loan (or on
behalf of the owner's designee, if any) to service the Loan and of whom the
Company has been notified. The Servicer acts as a representative of the owner of
the Loan (and the owner's designee, if any) and will bind the owner and its
designee for all purposes of this Policy, including providing information to the
Company, receiving any notices, paying premiums, accepting Loss payments and
performing any other acts under this Policy. References in this Policy to a
Servicer's obligations will not be construed as relieving the owner or its
designee of responsibility for the Servicer's performance.
1.32 Total Amortized Insured Loan Amount means the sum of the Amortized Insured
Loan Amounts of all the Loans.
1.33 Total Insured Loan Amount means the sum of the Insured Loan Amounts of all
the Loans.
1.34 Trailing Payment mean any payment on the Loan received by the Insured after
a Claim has been filed with the Company. Any pronouns, when used in this Policy,
shall mean the singular or plural, masculine or feminine, as the case may be.
2. Obtaining Coverage and Payment of Premiums; Insured
2.1 Coverage - The Effective Date of this Policy shall be the date specified on
the face hereof. Subject to the Company's right to cancel as set forth in
Section 2.2 and applicable law, this Policy shall continue in force until (a)
each Loan has been paid in full, has become a Liquidated Loan or, whether
because the transfer of the Loans by the Seller pursuant to the Pooling and
Servicing
BB-8
Agreement has been disregarded or for any other reason, is no longer owned by,
or pledged by the Depositor pursuant to Section 2.01 of the Pooling and
Servicing Agreement to, the Trustee for the benefit of the holders of the
Securities or (b) the Securities no longer remain outstanding, whether because
the Securities have been redeemed, have been paid in full or otherwise have had
their respective principal balances reduced to zero. This Policy may be canceled
by the Insured in whole but not in part at any time that the Company's financial
strength is rated less than "Baa3" by Xxxxx'x Investors Service, Inc. and less
than "BBB-" by Standard & Poor's Ratings Service and such reduction results in a
downgrading of any of the Securities, and from and after any such cancellation
by the Insured, the Company shall not be entitled to any further premiums under
the Policy or to any additional reimbursements from Available Funds (as defined
in the Pooling and Servicing Agreement) for any claims that have been paid.
2.2 Premium - The premium for this Policy shall be paid in the manner and at the
rate specified on the face hereof. Failure to pay any installment of the premium
within thirty (30) days of the Premium Payment Date shall terminate the
liability of the Company with respect to the coverage contained in the Policy,
which Policy shall be canceled. There shall be no refund of premium under this
Policy. If the liability of the Company for all Losses under this Policy reaches
the Maximum Aggregate Liability, the total premium under this Policy is due and
payable and shall remain due and payable; provided, however, that the premium
shall continue to be calculated and paid in the manner specified on the face
hereof.
2.3 Insured - This Policy shall be delivered to and held by the Insured through
the Insured's Agent, any premiums shall be paid by the Insured through the
Insured's Agent, and any claims shall be paid to the Insured through the
Insured's Agent, in each case at the Agent's Address.
3. Changes in Various Loan Terms, Servicing and Insured; Duplication of
Insurance Benefits; Reports to Servicer and Insured
3.1 Loan Modifications - Unless advance written approval is provided by, or
obtained from, the Company, the Insured may not make any change in the terms of
a Loan, including the borrowed amount, interest rate, term or amortization
schedule of the Loan, except as permitted by terms of the Loan; nor make any
change in the Property or other collateral securing the Loan; nor release the
Borrower from liability on a Loan; nor subordinate the Second Deed of Trust.
3.2 Open-End Provisions - The Insured may not increase the principal balance of
any Loan, unless the written approval of the Company has been obtained.
3.3 Assumptions - If a Loan is assumed with the Insured's approval, the
Company's liability for coverage of such Loan shall terminate as of the date of
such assumption, unless the Company approves the assumption in writing. The
Company shall not unreasonably withhold approval of an assumption.
3.4 Change of Servicing and Servicing Guidelines - The Loans shall be serviced
by Wilshire Credit Corporation in accordance with the 2nd lien servicing
guidelines of the Company and the Service Level Agreement dated April 29, 2004
between the Company and Wilshire Credit Corporation (together, the "Servicing
Guidelines"), to the extent not inconsistent with the Pooling
BB-9
and Servicing Agreement. Servicing of a Loan may be sold, transferred or
assigned to a Person approved in writing by the Company without affecting the
coverage hereunder for such Loan, subject, nevertheless, to all of the terms and
conditions hereof and to all defenses which the Company may have had prior to
any such sale, transfer or assignment, and provided that written notice thereof
is given to the Company. Any changes, amendments or updates to the Servicing
Guidelines (including, but not limited to, those arising from the sale, transfer
or assignment of servicing) must be submitted to the Company and approved in
writing by the Company prior to implementation.
3.5 Loan Assignment - The sale, assignment or transfer of a Loan by the Insured
shall terminate coverage of the Loan hereunder.
3.6 Duplication of Insurance Benefits - The coverage under this Policy shall be
excess over any other insurance, including any primary mortgage insurance, which
may apply to the Property or to the Loan.
3.7 Reports to Servicer and Insured - With respect to a Loan as to which the
Company has paid a Claim Amount, the Company shall inform the Servicer and the
Insured of any subsequent recoveries on such Loan and shall deliver to each of
them a report (on a quarterly basis) on the remaining Maximum Aggregate
Liability under the Policy, increased by the amount of any such subsequent
recoveries. With respect to any Loan purchased by the Insurer on a
servicing-released basis, the Company shall provide the Insured with periodic
reports for the purposes of monitoring such Loan and tracking the collections
with respect thereto.
4. Exclusions From Coverage
The Company will not be liable for, and this Policy will not apply to, extend to
or cover the following:
4.1 Effective Date - Any Claim resulting from a Default existing at the
Effective Date or occurring after cancellation of this Policy.
4.2 Incomplete Construction - Any Claim when, as of the date of such Claim: (a)
construction of a Property is not completed in accordance with the construction
plans and specifications upon which the Fair Market Value of the Property was
based, or (b) a required completion certificate was falsely certified by the
Borrower.
4.3 Negligence - Any Claim where there was negligence by the Insured, the
Servicer or any other Person with respect to the Loan.
4.4 Non-Approved Servicer - Any Claim occurring if Wilshire Credit Corporation
was not the servicer of the related Loan as of the Closing Date or when, at time
of Default or thereafter, the Servicer is not approved in writing by the
Company.
4.5 Physical Damage - Any Claim where, at any time after the Effective Date,
Physical Damage to a Property (other than reasonable wear and tear) occurs or
manifests itself.
BB-10
4.6 Combined Loan-to-Value - Any Claim if the Combined Loan-to-Value exceeded
the percentage as set forth in the Eligibility Criteria which is applicable to
the Loan.
4.7 Second Lien Status - Any Claim, if the mortgage, deed of trust or other
similar instrument executed by the Borrower and Insured hereunder does not
provide the Insured with a Second Deed of Trust.
4.8 Future Advances - Any Claim, if the First Deed of Trust allows for future
advances, after the date the loan was consummated.
4.9 Breach of Obligations or Representations or Failure to Comply with Terms -
Any Claim involving or arising out of any breach by the Insured, the Seller or
any other Person of its obligations, representations or warranties under, or its
failure to comply with the terms of, this Policy, the Servicing Guidelines or
the Pooling and Servicing Agreement or of its obligations as imposed by
operation of law.
4.10 Borrower Defenses - Any Claim if, under applicable law, the Borrower did
successfully assert or may have successfully asserted any defense against the
Insured so as to release in whole or in part the Borrower's obligation to repay
the Loan, provided, however, that this exclusion shall only apply to the extent
and amount of such release.
4.11 Non-Eligible Loans - Any Claim if the Loan did not meet the Eligibility
Criteria on the Effective Date or the date a Loan was substituted for another
Loan with the Company's written approval.
4.12 Failure to Provide Loan File - Any Claim if the Insured does not provide or
cause to be provided to the Company the Loan File within ten days of the
Company's request therefor.
4.13 Fraud - Any Claim if fraud, error, omission, misrepresentation, dishonesty,
negligence or similar occurrence with respect to a Loan has taken place on the
part of the originator or the mortgagor, or, on the part of any other party
involved in the origination of the Loan.
4.14 Inaccurate Information - Any Claim if the description of a Loan contained
in the electronic tape transmission ("ETT") and any other information,
documents, data or statements submitted to the Company by or on behalf of the
Insured is not true and accurate in all material respects.
4.15 Property - Any Claim if the property identified as the security for each
Loan does not consist of real estate improved by a one to four-family dwelling
and located in the United States of America.
4.16 FICO Scores - Any Claim if a credit report with FICO score was not obtained
and utilized in the underwriting of the related Loan and accurately set forth in
the ETT and at least two FICO scores were not available with respect to such
Loan. The FICO score will be the median of the FICO scores obtained from each of
the three main consumer credit information vendors or, if only two FICO scores
are available, the lower of the two FICO scores.
BB-11
4.17 Underwriting Guidelines - Any Claim if a Loan was underwritten at the time
it was originated in a manner not consistent in all material respects with the
underwriting guidelines and procedures of, First Franklin Financial Corporation,
dated December 8, 2003 (the "Underwriting Guidelines"), subject to such
variances as are justified under the Underwriting Guidelines by compensating
factors identified and reflected in the related credit file at such time in
connection with underwriting such Loan.
4.18 Applicable Laws - Any Claim if a Loan was not originated in compliance with
all applicable laws and regulations.
4.19 Delinquent - Any Claim if, as of the Cut-Off Date, a Loan is thirty (30)
days or more past due on a scheduled monthly payment and a Loan that has been
thirty (30) or more days past due on any such monthly payment in the preceding
twelve months.
5. Conditions Precedent to Payment of Claim
It is a condition precedent to the Company's obligation to pay a Loss that the
Insured comply with all of the following requirements:
5.1 Notice of Default - The Insured must give the Company written notice within
fifteen (15) days after either the end of each calendar month or such other day
of the month agreed to by the Company and the Insured, of:
1. Each Loan on which the Borrower has become two (2) months in Default on the
Loan during the period covered by such notice; or
2. Each Loan on which any proceedings which affect the Loan or the Property or
the Insured's or Borrower's interest therein have been started during the period
covered by such notice, by either the Insured or the holder (owner) of the first
or any subordinate mortgage lien on the Property.
5.2 Monthly Reports - Following a notice of Default on the Loan, the Insured
must give the Company monthly reports on forms or in a format acceptable to the
Company on the status of the Loan and on the servicing efforts undertaken to
remedy the Default. These monthly reports must continue until the Borrower is no
longer in Default, any proceedings terminate, or until the Company has settled a
Claim with respect to such Loan.
5.3 Company's Option to Accelerate Filing of a Claim - If the Company so
directs, at any time after receiving the Insured's notice of Default, the
Insured shall file a Claim within thirty (30) days after notice from the
Company. The Company shall then make a payment of Loss in accordance with
Section 6.3. If a Loan for which the Company has paid a Claim is subsequently
brought current by the Borrower, the Insured shall refund to the Company the
Loss paid by the Company with respect to that Loan.
5.4 Mitigation of Damages - The Insured shall:
BB-12
a. Actively pursue reasonable opportunities to prevent and/or mitigate the Loss,
including, without limitation good faith efforts by the Insured to: (i) obtain a
cure of the Default; (ii) collect amounts due under the Loan; (iii) inspect and
appraise the Property; and (iv) implement a short payoff, deed in lieu of
foreclosure, note sale or lump sum cash settlement (collectively referred to
herein as a "Liquidating Workout"), including, as necessary, waiver of any
prepayment penalties, late fees, or similar charges. Notwithstanding the
foregoing, the Insured shall not finalize or implement any Liquidating Workout
without the Company's prior written approval.
b. Following payment of any Claim Amount, promptly forward to the Company any
and all Trailing Payments, First Deed of Trust foreclosure notices, and any
other information or documentation reasonably likely to assist the Company in
mitigating Loss
c. Without limiting the foregoing, assert its rights in any bankruptcy or
similar state proceeding, including filing a proof of claim, filing a responsive
pleading, and otherwise taking appropriate steps to protect its interest,
whether a priority interest or not, to any potential excess proceeds in any
foreclosure or similar action involving the Property, and
d. In the event the Insured acquires the Property, which acquisition shall be
made only upon receipt of prior written approval of the Company, use good faith
efforts to timely dispose of the Property at the then fair market value of the
Property.
5.5 Claim Information and Other Requirements - At the time of filing of the
Claim, the Insured must provide the Company with:
a. All information reasonably requested by the Company, including, but not
limited to, the Loan File;
b. A completed form furnished by or acceptable to the Company for payment of a
Claim;
c. An assignment, containing customary representations and warranties, duly and
properly executed and in recordable form and, in the case of a Liquidated Loan
or the exercise by the Company of its right to purchase a Loan under Section
6.7, delivered by or on behalf of the Insured on a servicing-released or, in the
case of such exercise, -retained basis as separately agreed by the Company with
the Servicer, of all the Insured's ownership right, title and interest in and to
1. the Loan,
2. the Eligible Note, properly endorsed in blank, and
3. the originals (or in the case of recorded documents which have not been
returned by the recording office, certified copies) of any and all documents
executed and delivered by or to the Borrower or by any holder of such Loan
including,
(i) any Second Deed of Trust, and
(ii) any policies of title insurance, letter reports of title, or opinions of
title and surveys.
BB-13
The obligation of the Insured to provide the Company with information reasonably
requested by the Company shall continue until payment of the Claim. For the
avoidance of doubt, the Company shall not be liable for any loss on a Loan on
the optional termination of the Trust pursuant to Section 9.01 of the Pooling
and Servicing Agreement if the Company has not received with respect to such
Loan a Perfected Claim calculated in accordance with Section 6.3. Upon
assignment of the Second Deed of Trust to the Company, the Insured shall notify
the Borrower of any change in the servicer.
The Company shall be entitled to subsequent recoveries, if any, on a Loan with
respect to which a Claim Amount was paid by the Company; provided, however, that
the Company shall remit to the Insured any subsequent recoveries in excess of
the Claim Amount paid by the Company with respect to such Loan and the Maximum
Aggregate Liability will be increased by the amount of any such subsequent
recoveries retained by the Company.
5.6 Collection and Loss Mitigation Assistance - The Insured shall permit the
Company to cooperatively assist the Insured in the collection of moneys due
under the Loan and the identification of loss mitigation opportunities,
including obtaining information from the Borrower and/or any other appropriate
source, and attempting to develop repayment plans and/or workout strategies
acceptable to the Insured. Without limiting the foregoing, at its sole
discretion the Company shall have the right to instruct the Insured to waive any
prepayment penalties, late fees, or similar charges.
6. Loss Payment Procedure
6.1 Filing of Claim - The Insured must file a Claim regardless of whether the
Deductible is available to cover losses or a Loss is payable under this Policy:
(i) no earlier than the date on which the Loan becomes five (5) months in
Default; and (ii) no later than thirty (30) days after the Loan becomes six (6)
months in Default or within the thirty (30) day period specified in Section 5.3
(Company's Option to Accelerate Filing of a Claim), unless a written extension
has been granted by the Company. If the Insured fails to file a Claim within the
applicable time, such failure shall be deemed to have been an election by the
Insured to waive any right to any benefit under this Policy with respect to such
Loan.
6.2 Calculation of Claim Amount - The Claim Amount shall be an amount equal to
the lesser of:
a. one hundred and ten percent (110%) of the unpaid principal balance due under
the Loan as of the date of Default without capitalization of delinquent
interest, penalties or advances and
b. the sum of one hundred percent (100%) of the unpaid principal balance due
under the Loan as of the date of Default, plus the amount of the accumulated
delinquent interest computed to the end of the month prior to the date of Claim
payment at the Loan rate of interest, plus foreclosure costs, including court
costs and reasonable attorneys' fees, paid by the Insured and approved by the
Company
as reduced by any amounts covered by the Deductible under the Pooling and
Servicing Agreement.
BB-14
Subject to Sections 3.1 and 3.2, in calculating such amounts, the unpaid
principal balance shall not exceed the Insured Loan Amount and the unpaid
principal balance and interest shall be reduced by any amounts obtained by a
short payoff or other transaction approved in writing by the Company, and by any
reduction in any insolvency proceeding or under the Servicemembers Civil Relief
Act, the California Military and Veterans Code and/or any similar state or local
law. 6.3 Claim Withdrawal -
a. If, at any time prior to payment of the Claim Amount by the Company, the
Insured receives any payment(s) which either: (i) cures the Default on the Loan;
or (ii) results in the Loan being less than ninety (90) days in Default, the
Insured shall apply such payment(s) to the Loan and shall withdraw the related
Claim by providing prompt written notice to the Company of such withdrawal.
b. If, at any time prior to payment of the Claim Amount, the Insured receives
payment(s) constituting full payoff of the Loan, the Insured shall apply such
payment(s) to the Loan and shall withdraw the related Claim by providing prompt
written notice to the Company of such withdrawal. In such event, the Loan shall
no longer be covered under this Policy and shall be removed from the Schedule.
6.4 Payment of Loss - Whenever a Loss becomes payable after the Deductible has
been exhausted, the Company shall pay to the Insured, within sixty (60) days
after the Insured has filed a Claim in accordance with Section 5.3 (Company's
Option to Accelerate Filing of a Claim) or Section 6.1 (Filing of Claim) the
Claim Amount less any payments previously made by the Company with respect to
that Loan; provided, however, that on or after the date on which the aggregate
Losses paid by the Company under this Policy is an amount equal to the Maximum
Aggregate Liability, the liability of the Company to pay any additional Losses
under this Policy ceases, notwithstanding the payment of additional premium due
under this Policy. All payments by the Company hereunder shall be made either by
wire transfer or by check, at the Insured's election and as so specified in a
written notice to the Company. In the event that payments shall be made by wire
transfer, the Insured shall provide written wiring instructions to the Company.
6.5 Trailing Payments - After payment by the Company of any Claim Amount
hereunder, any and all Trailing Payments (appropriately endorsed) shall be
promptly remitted by the Insured to the Company.
6.6 Discharge of Obligation - Payment by the Company of the amount of Loss
required to be paid in accordance with this Policy will be full and final
discharge of its obligation with respect to such Loss under this Policy.
6.7 Option to Purchase a Loan - After the Deductible is no longer available and
the Company is required to pay Claims, the Company shall have the first right
but not the obligation to purchase on a servicing-released or, at the option of
the Company, servicing-retained basis, and without recourse, any Loan that is
ninety (90) days or more delinquent and as to which the Company has not paid a
Claim for a Loss, regardless of whether it has approved a Claim for a Loss on
such Loan or any Loss on such Loan has been charged against the Deductible or
the Securities, by notifying the Insured at any time that it is exercising such
right and by paying the related Purchase Price on the last day of a calendar
month in accordance with the definition of the term "Purchase Price" hereunder.
BB-15
7. Additional Conditions
7.1 Proceedings of Eminent Domain - In the event that part or all of a Property
is taken by eminent domain, or condemnation or by any other proceedings by
federal, state or local governmental unit or agency, the Insured must require
that the Borrower apply the maximum permissible amount of any compensation
awarded in such proceedings to reduce the principal balance of the Loan, in
accordance with the law of the jurisdiction where the Property is located.
7.2 Subrogation - To the extent that the Company is entitled under applicable
law to pursue an action on the Eligible Note, the Company shall be subrogated,
upon payment of the related Loss, in the amount thereof to all of the Insured's
rights of recovery against a Borrower and any other Person relating to the Loan
or to the Property. The Insured must execute and deliver at the request of the
Company such instruments and papers, including, but not limited to, an
assignment of the Eligible Note and undertake such other actions as may be
necessary to transfer, assign and secure such rights. The Insured shall refrain
from any action, either before or after payment of a Loss, that prejudices such
rights.
7.3 Policy for Exclusive Benefit of Insured - The coverage provided under this
Policy shall be for the sole and exclusive benefit of the Insured, and in no
event shall any Borrower or other Person be deemed a party to, or an intended
beneficiary of, this Policy.
7.4 Arbitration of Disputes; Suits and Actions Brought by the Insured
a. Unless prohibited by applicable law, or otherwise mutually agreed by the
Company and Insured, all controversies, disputes or other assertions of
liability or rights arising out of or relating to this Policy including the
breach, interpretation or construction thereof, shall be settled by arbitration.
Notwithstanding the foregoing, the Company or the Insured both retain the right
to seek a declaratory judgment from a court of competent jurisdiction on matters
of interpretation of this Policy. Such arbitration shall be conducted in
accordance with the Title Insurance Arbitration Rules of the American
Arbitration Association in effect on the date the demand for arbitration is
made, or if such Rules are not then in effect, such other Rules of the American
Arbitration Association as the Company may designate as its replacement.
b. The arbitrator(s) shall be neutral person(s) selected from the American
Arbitration Association's National Panel of Arbitrators familiar with the
mortgage lending or mortgage guaranty insurance business. Any proposed
arbitrator may be disqualified during the selection process, at the option of
either party, if they are, or during the previous two (2) years have been, an
employee, officer or director of any mortgage guaranty insurer, or of any entity
engaged in the origination, purchase, sale or servicing of mortgage loans or
mortgage-backed securities.
c. No suit or action (including arbitration hereunder) brought by the Insured
against the Company with respect to the Company's liability for a Claim under
this Policy shall be sustained in any court of law or equity or by arbitration
unless the Insured has substantially complied with the terms and conditions of
this Policy. A suit or action against the Company must be commenced within three
(3) years after the Loss can be determined unless otherwise required by
applicable law.
BB-16
d. If a dispute arises concerning a Loan which involves either the Property or
the Insured, the Company has the right to protect its interest by defending the
suit, even if the allegations contained in such suit are groundless, false or
fraudulent. The Company is not required to defend any lawsuit involving the
Insured, the Property or the Loan.
7.5 Release of Borrower - The Insured's execution of a release or waiver of the
right to collect any portion of the unpaid principal balance of a Loan or other
amounts due under the Loan shall release the Company from its obligation to the
extent and amount of said release.
7.6 Amendments; No Waiver; Rights and Remedies; Use of Term "Including"
a. No condition or requirement of this Policy shall be deemed waived, modified
or otherwise compromised unless that waiver, modification or compromise is
stated in a writing properly executed on behalf of the Company. Each of the
conditions and requirements of this Policy is severable, and a waiver,
modification or compromise of one will not be construed as a waiver,
modification or compromise of any other.
b. No right or remedy of the Company provided for by this Policy shall be
exclusive of, or limit, any other rights or remedies set forth in this Policy or
otherwise available to the Company at law or equity.
c. As used in this Policy, the term "include" or "including" shall mean "include
or including, without limitation."
7.7 No Agency - Neither the Insured, nor any Servicer, nor any of their
respective employees or agents, shall be deemed for any reason to be agents of
the Company. Neither the Company, nor any of its employees or agents (including
any Person underwriting the Loan on behalf of the Insured), shall be deemed for
any reason to be agents of the Insured or Servicer.
7.8 Successors and Assigns - This Policy shall inure to the benefit of and shall
be binding upon the Company and the Insured and their respective successors and
permitted assigns.
7.9 Applicable Law and Conformity to Law - All matters under this Policy and the
provisions hereof shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania, without regard to its conflicts or choice
of law provisions.
7.10 Notice - All claims, premium payments, tenders, reports, other data and any
other notices required to be submitted to the Company by the Insured must be
sent to the Company at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000. The Company
may change this address by giving written notice to the Insured. Unless the
Insured otherwise notifies the Company in writing, all notices to the Insured
must be sent to the address on the face of this Policy or, if the Insured is not
located at such address, to the last known address of the Insured.
All notices under this Policy, whether or not identified in this Policy as
required to be in writing, shall be effective only if in writing and only upon
receipt thereof. Written notices may instead be given in the form of telecopy
or, if acceptable to the Company (for notices given to the Company)
BB-17
or to the Insured (for notices given to the Insured) in the form of computer
tape or computer-generated or any other electronic message. A telecopy or such
tape or message shall be effective only when received. The Company and the
Insured may mutually agree that notices will be sent to any additional Person.
Except as expressly agreed to by the Company and the Insured, no liability shall
be incurred by the Company for the failure to give a notice to a Person other
than the Insured.
7.11 Reports and Examinations - The Company may request, and the Insured must
provide, such files, reports or information as the Company may deem necessary
pertaining to any Loan, and the Company shall be entitled to inspect the files,
books and records of the Insured or any of its representatives pertaining to
such Loan. Without limiting the foregoing, the Insured shall provide the Company
from time to time with the principal balances and other information necessary
for the Company to confirm the premiums for this Policy.
7.12 Electronic Media - The Company and the Insured may, from time to time,
deliver or transfer information, documents or other data between them by
electronic media acceptable to them. In addition, the Company and the Insured
may maintain information, documents or other data on electronic media or other
media generally accepted for business records, including microfiche. Such
electronic or other media shall be as equally acceptable for all purposes
between the Insured and the Company as information, documents or other data
maintained in printed or written form.
7.13 Duty of Cooperation - Whenever requested by the Company, whether or not a
notice of Default has been submitted, the Insured shall cooperate with the
Company and furnish all reasonable aid, evidence and information in the
possession of the Insured or to which the Insured has access with respect to any
Loan, including all documents, files, computer data or other information
requested by the Company upon reasonable notice. To the extent the Company is
prejudiced by any failure of the Insured to cooperate, the Company's remedy
shall be to reduce the Loss by the estimated extent of such prejudice.
BB-18
IN WITNESS WHEREOF, the Company has caused these presents to be signed by its
duly authorized officers.
Radian Insurance Inc.
--------------------------
--------------------------
BB-19
EXHIBIT CC
FORM OF INTEREST RATE CAP AGREEMENT
CC-1
29 July 2004
XX Xxxxxx Xxxxx Bank, not individually, but solely as trustee for
First Franklin Mortgage Loan Trust 2004-FFB, Home Equity
Mortgage Pass-Through Certificates, Series 2004-FFB
c/o XX Xxxxxx Xxxxx Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
External ID: 53025254R
Dear Sirs,
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into between us on the
Trade Date specified below (the "Swap Transaction"). This Confirmation
constitutes a "Confirmation" as referred to in the Agreement specified below.
In this Confirmation "CSFBi" means Credit Suisse First Boston International and
"Counterparty" means JPMorgan Chase Bank, not individually, but solely as
trustee for First Franklin Mortgage Loan Trust 2004-FFB, Home Equity Mortgage
Pass-Through Certificates, Series 2004-FFB
(a) The definitions and provisions contained in the 2000 ISDA Definitions
(as published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.
This Confirmation supplements, forms part of, and is subject to, the 1992
ISDA Master Agreement dated as of 29 July 2004 as amended and supplemented
from time to time (the "Agreement"), between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified below. All terms used herein and not otherwise defined are given
their meaning in the Pooling and Servicing Agreement dated as of 1 July
2004 among Credit Suisse First Boston Mortgage Securities Corp., a
wholly-owned special purpose subsidiary of Credit Suisse First Boston,
Inc. (the "Depositor"), DLJ Mortgage Capital, Inc. (the "Seller"),
Wilshire Credit Corporation (the "Servicer") and JPMorgan Chase Bank (the
"Trustee").
CSFBi and Counterparty each represents to the other that it has entered
into this Swap Transaction in reliance upon such tax, accounting,
regulatory, legal, and financial advice as it deems necessary and not upon
any view expressed by the other.
Transaction Type: Rate Cap Transaction
CC-2
Notional Amount: The Calculation Base Amount, which shall initially
be USD 1,654,000.00, subject to amortization as
set out in the Additional Terms
Trade Date: 23 July 2004
Effective Date: 29 July 2004
Termination Date: 25 June 2008, subject to adjustment in accordance
with the Modified Following Business Day
Convention
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: 29 July 2004, subject to adjustment in accordance
with the Modified Following Business Day
Convention
Fixed Amount: USD 257,000.00
Floating Amounts:
Floating Rate Payer: CSFBi
Floating Rate Payer
Payment Dates: The 25th day of each month, commencing on 25
August 2004, and ending on 25 June 2008,
inclusive, subject to adjustment in accordance
with the Modified Following Business Day
Convention
Floating Amounts The amount calculated pursuant to Section 6.1(a)
of the 2000 ISDA Definitions as the Floating
Amount shall be multiplied by 100 (the "Payment
Factor"), and the resulting product shall be the
actual Floating Amount for the respective
Calculation Period
Cap Rate: 5.60%
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: None
Floating Rate
Day Count Fraction: Actual/360
CC-3
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York
Calculation Agent: CSFBi
Account Details:
Payments to CSFBi: Bank of New York
SWIFT XXXXXX0X
for favour CS First Boston International,
London
A/c No. 8900360968
Payments to Counterparty: To be advised under separate cover or
telephone confirmed prior to each
Payment Date.
Credit Suisse First Boston International is regulated by the Financial Services
Authority and has entered into this transaction as principal. The time at which
the above transaction was executed will be notified to Counterparty on request.
ADDITIONAL TERMS
Period up to but excluding
the Payment Date scheduled USD Calculation Base
to occur on: Amount:
25-Aug-04 1,654,000.00
25-Sep-04 1,599,474.14
25-Oct-04 1,540,083.69
25-Nov-04 1,481,777.36
25-Dec-04 1,424,534.89
25-Jan-05 1,368,336.34
25-Feb-05 1,313,162.18
25-Mar-05 1,258,993.21
25-Apr-05 1,205,810.60
25-May-05 1,153,595.87
25-Jun-05 1,102,330.88
25-Jul-05 1,051,997.82
25-Aug-05 1,002,579.22
25-Sep-05 954,057.91
25-Oct-05 906,417.07
25-Nov-05 859,640.16
CC-4
25-Dec-05 813,710.97
25-Jan-06 768,613.57
25-Feb-06 727,789.72
25-Mar-06 688,993.20
25-Apr-06 650,924.32
25-May-06 613,569.56
25-Jun-06 576,915.59
25-Jul-06 540,949.40
25-Aug-06 505,658.18
25-Sep-06 471,029.35
25-Oct-06 437,050.59
25-Nov-06 403,709.80
25-Dec-06 370,995.10
25-Jan-07 338,894.82
25-Feb-07 307,397.53
25-Mar-07 276,491.98
25-Apr-07 246,167.18
25-May-07 216,412.27
25-Jun-07 187,216.66
25-Jul-07 158,569.93
25-Aug-07 130,461.85
25-Sep-07 116,160.45
25-Oct-07 103,390.26
25-Nov-07 90,860.30
25-Dec-07 78,566.10
25-Jan-08 66,503.28
25-Feb-08 54,667.51
25-Mar-08 43,054.56
25-Apr-08 31,660.28
25-May-08 20,480.59
25-Jun-08 9,511.47
Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation.
Yours faithfully,
Credit Suisse First Boston International
CC-5
By its Agent: Credit Suisse First Boston LLC
By:
-----------------------------
Name:
Title:
Confirmed as of the date first written above:
XX Xxxxxx Xxxxx Bank, not individually, but solely as trustee for
First Franklin Mortgage Loan Trust 2004-FFB, Home Equity
Mortgage Pass-Through Certificates, Series 2004-FFB
By:
-----------------------------
Name:
Title:
CC-6
Schedule
to the
Master Agreement
dated as of July 29, 2004
between
Credit Suisse First Boston International, and JPMorgan Chase Bank, not individually,
an unlimited company incorporated under but solely as trustee for First Franklin
the laws of England and Wales Mortgage Loan Trust 2004_FFB, Home
("Party A") Equity Mortgage Pass_Through
Certificates, Series 2004_FFB
("Party B")
Part 1
Termination Provisions
In this Agreement:
(a) Specified Entity. "Specified Entity" means for the purpose
of the "Default under Specified Transaction" provision (Section
5(a)(v)), in relation to Party A, its Affiliates and in relation to
Party B, its Affiliates.
(b) Specified Transaction. Specified Transaction will have the
meaning specified in Section 14.
(c) Certain Events of Default. The following Events of Default
will apply to the parties so specified below, and the definition of
"Events of Default" in Section 14 is deemed to be modified
accordingly:
Section 5(a)(i) (Failure to Pay or Deliver) will apply to Party A and
Party B.
Section 5(a)(ii) (Breach of Agreement) will not apply to Party A or Party
B.
Section 5(a)(iii) (Credit Support Default) will not apply to Party A or
Party B.
Section 5(a)(iv) (Misrepresentation) will not apply to Party A or Party B.
Section 5(a)(v) (Default under Specified Transaction) will not apply to
Party A or Party B.
Section 5(a)(vi) (Cross Default) will not apply to Party A or Party B.
Section 5(a)(vii) (Bankruptcy) will apply to Party A and Party B.
Section 5(a)(viii) (Merger without Assumption) will apply to Party A and
Party B.
(d) Credit Event Upon Merger. The "Credit Event Upon Merger" provision
(Section 5(b)(iv)) will not apply to Party A and will not apply to Party B.
(e) Automatic Early Termination. The "Automatic Early Termination"
provision of Section 6(a) will not apply to Party A and will not apply to Party
B.
(f) Payments on Early Termination. For the purpose of Section 6(e), the
Second Method and Market Quotation will apply.
(g) Termination Currency. "Termination Currency" means United States
Dollars.
(h) Additional Termination Events. The following Additional Termination
Events will apply. In the case of (i) and (ii), Party B would be sole Affected
Party:
CC-7
(i) the occurrence of a termination of the Trust pursuant to Section 9.01
of the PSA,
(ii) the final distribution of the Trust's assets pursuant to Section 9.02
of the PSA, or
(iii) If Party A no longer has a long-term credit rating of at least
A (or its equivalent) from at least one of the Rating Agencies (a "Counterparty
Rating Agency Downgrade"), provided that neither of the following events shall
occur: Party A shall, no later than the 30th day following the Counterparty
Rating Agency Downgrade, either (1) obtain a substitute Counterparty that is a
bank or other financial institution that has a rating that is in one of the
three highest long-term credit rating categories from at least one of the Rating
Agencies rating the Certificates, (2) obtain a guaranty of or a contingent
agreement of another person with a long-term credit rating of at least A (or its
equivalent) from at least one of the Rating Agencies to honor Party A's
obligations hereunder, (3) post collateral under agreements and other
instruments satisfactory to the Rating Agencies, which will be sufficient to
restore the ratings of the Offered Certificates, or (4) establish any other
arrangement satisfactory to the Rating Agencies to restore the ratings of the
Offered Certificates.
CC-8
Part 2
Tax Representations
1. Payer Tax Representations. For the purpose of Section 3(e), Party A and
Party B each makes the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e)) to be
made by it to the other party under this Agreement. In making this
representation, it may rely on:
(i) the accuracy of any representation made by the other party pursuant
to Section 3(f);
2. the satisfaction of the agreement of the other party contained in
Section 4(a)(i) or 4(a)(iii) and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii); and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d);
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii), and the other party does not deliver a
form or document under Section 4(a)(iii) by reason of material prejudice
to its legal or commercial position.
(b) Payee Tax Representations. For the purpose of Section 3(f),
(i) Party A makes the following Payee Tax Representations:
1. Party A is a recognized U.K. bank, as defined in Section 840A
of the UK Income and Corporation Taxes Act of 1988 and is
entering into each Transaction in the ordinary course of its
trade or business.
2. Party A has been approved by the U.S. Internal Revenue Service
as a Withholding Foreign Partnership and Party A's Withholding
Foreign Partnership Employer Identification Number is
00-0000000.
3. Party A is a partnership that agrees to comply with any
withholding obligation under Section 1446 of the U.S. Internal
Revenue Code.
(ii) Party B makes no Payee Tax Representations.
CC-9
Part 3
Agreement to Deliver Documents
Each party agrees to deliver the following documents as applicable:-
(a) For the purpose of Section 4(a)(i), tax forms, documents or certificates
to be delivered are:
Party required to deliver Form/Document/Certificate Date by which to be delivered
documents
Not Applicable Not Applicable
Party A U.S. Internal Revenue Service From Promptly after the earlier of (i)
W-8IMY and any successor form thereto reasonable demand by Party C or (ii)
learning that such form or document
is required.
(b) For the purpose of Section 4(a)(ii), other documents to be delivered are:
Party required to deliver Form/Document/Certificate Date by which to be delivered Covered by Section
documents 3(d) Representation
Party A and Party B Evidence reasonably Upon execution of this Yes
satisfactory to the other Agreement and, if requested,
party as to the names, true upon execution of any
signatures and authority of Confirmation
the officers or officials
signing this Agreement or any
Confirmation on its behalf.
Party A Certified copies of the At or promptly following Yes
charter and by-laws of such execution of this Agreement.
party (or a resolution
containing excerpts of such
party's by-laws), and of the
resolutions of the board of
directors of such party, or
other applicable document,
authorizing the execution and
delivery of this Agreement and
each Confirmation by such party
Party A and Party B An opinion of counsel (which, Upon execution of this No
in the case of Party B shall Agreement
be in-house counsel of Party A
or an affiliate) to such party
reasonably satisfactory in
form and substance to the
other party covering the
enforceability of this
Agreement against such party
CC-10
Party A A copy of the annual report Upon request, as soon as Yes
for such party containing publicly available
audited or certified financial
statements for the most
recently ended financial year
CC-11
Part 4
Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):
(i) (1) Address for notices or communications to Party A:
Notwithstanding section 12 (a) of the Agreement all notices
including those to be given under Section 5 or 6 may be given
by facsimile transmission or electronic messaging system.
Address: One Cabot Square Attention: (1) Head of Credit Risk Management;
Xxxxxx X00 0XX (2) Managing Director -
England Operations Department;
(3) Managing Director - Legal
Department
Telex No.: 264521 Answerback: CSFBI G
(For all purposes.)
(2) For the purpose of facsimile notices or communications under this
Agreement:-
Facsimile No.: x00 000 0000 0000
Attention: General Counsel Europe - Legal and Compliance Department
Telephone number for oral confirmation of receipt of facsimile in legible
form: x00 000 0000 0000
Designated responsible employee for the purposes of Section 12(a)(iii):
Senior Legal Secretary
With a copy to:
Facsimile No. x00 (0) 000 000 0000
Head of Credit Risk Management
With a copy to:
Facsimile No. x00 (0) 000 000 0000
Global Head of OTC Operations, Operations Department.
(ii) Address for notices or communications to Party B:
Address: First Franklin Mortgage Loan Attention: Institutional Trust
Trust Series 2004-FFB Services/Global Debt: First
c/o JPMorgan Xxxxx Xxxxxxxx Mortgage Loan
0 Xxx Xxxx Xxxxx, 0xx xxxxx Trust Series 2004-FFB
Xxx Xxxx, XX 00000-0000
Telephone No.: 000-000-0000 Facsimile No.: 000-000-0000
(For all purposes.)
with a copy to:
CC-12
Address: Credit Suisse First Boston LLC Attention: Xxxx Xxxxxx
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone No.: 000-000-0000 Facsimile No.: 000-000-0000
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Credit Suisse First Boston LLC,
Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (Attention: General Counsel,
Legal and Compliance Department).
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A unless otherwise
agreed in a Confirmation in relation to the relevant Transaction.
(f) Credit Support Document. Details of any Credit Support Document: none.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Not applicable.
Credit Support Provider means in relation to Party B: Not applicable.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine provisions other than New York General Obligations Law Section
5-1401. Each party hereby submits to the jurisdiction of the Courts of the State
of New York.
(i) Netting of Payments. Section 2(c)(ii) of this Agreement will apply to
any Transactions from the date of this Agreement.
(j) Affiliate. Affiliate will have the meaning specified in Section 14.
CC-13
Part 5
Other Provisions
(a) Scope of Agreement. Any Specified Transaction (whether now existing or
hereafter entered into) between the parties, the Confirmation of which fails by
its terms expressly to include application of this Agreement, shall not be
governed under this Agreement.
(b) Definitions.
(i) Unless otherwise specified in a Confirmation, this Agreement and
each Transaction between the parties are subject to the 2000 ISDA Definitions as
published by the International Swap and Derivatives Association, Inc. (the
"Definitions"), and will be governed in all relevant respects by the provisions
set forth in the Definitions, without regard to any amendment to the Definitions
subsequent to the date hereof. In the event of any inconsistency between the
provisions of this Agreement and the Definitions, this Agreement will prevail.
(ii) Terms used and not otherwise defined herein (or in the
Definitions) shall have the respective meanings ascribed to such terms in the
Pooling and Servicing Agreement, dated as of July 1, 2004 (the "PSA"), between
Credit Suisse First Boston Mortgage Securities Corp., as Depositor, DLJ Mortgage
Capital, Inc., as Seller, Wilshire Credit Corporation, as Servicer, and JPMorgan
Chase Bank (the "Trustee"), as trustee. In the event of any inconsistency
between the provisions of the PSA and this Agreement, this Agreement will
prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Agreement or the Definitions or the PSA, such Confirmation
will prevail for the purpose of the relevant Transaction.
(c) Confirmations. Each Confirmation shall be substantially in the form of
one of the Exhibits to the Definitions, in any other form which is published by
the International Swaps and Derivatives Association, Inc. or in such other form
as the parties may agree.
(d) Section 1(c). For purposes of Section 1(c) of the Agreement, this
Transaction shall be the sole Transaction under the Agreement.
(e) Independent Reliance. The parties agree to amend Section 3 of this
Agreement by the addition of the following provision at the end thereof and
marked as subsection (g).
"(g) Independent Reliance. It is entering into this Agreement and
will enter into each Transaction in reliance upon such tax,
accounting, regulatory, legal, and financial advice as it deems
necessary and not upon any view expressed by the other party."
(f) Regarding Party A. Party B acknowledges and agrees that Party A has
had and will have no involvement in and, accordingly Party A accepts no
responsibility for: (i) the establishment, structure, or choice of assets of
Party B; (ii) the selection of any person performing services for or acting on
behalf of Party B; (iii) the selection of Party A as the Counterparty; (iv) the
terms of the Certificates; (v) the preparation of or passing on the disclosure
and other information contained in any offering circular for the Certificates,
the PSA, or any other agreements or documents used by Party B or any other party
in connection with the marketing and sale of the Certificates; (vi) the ongoing
operations and administration of Party B, including the furnishing of any
information to Party B which is not specifically required under this Agreement;
or (vii) any other aspect of Party B's existence.
CC-14
(g) Change of Account. Section 2(b) of this Agreement is hereby amended by
the addition of the following after the word "delivery" in the first line
thereof:- "to another account in the same legal and tax jurisdiction as the
original account"
(h) Set-off. Notwithstanding any provision of this Agreement or any other
existing or future agreement, each party irrevocably waives, to the extent
possible under applicable law, any and all rights it may have to set off, net,
recoup or otherwise withhold or suspend or condition payment or performance of
any obligation between it and the other party hereunder against any obligation
between it and the other party under any other agreements. The last sentence of
the first paragraph of Section 6(e) of the ISDA Form Master Agreement shall not
apply for purposes of this Transaction.
(i) Recording of Conversation. Each party to this agreement acknowledges
and agrees to the tape recording of conversations between the parties to this
Agreement whether by one or other or both of the parties and each party hereby
consents to such recordings being used as evidence in Proceedings
(j) Commodity Exchange Act. Each party represents to the other party on
and as of the date hereof and on each date on which a Transaction is entered
into among them that:
(i) such party is an "eligible contract participant" as defined in
the U.S. Commodity Exchange Act, as amended (the "CEA");
(ii) neither this Agreement nor any Transaction has been executed or
traded on a "trading facility" as such term is defined in the CEA; and
(iii) such party is entering into each Transaction in connection
with its business or a line of business or investments and the terms of this
Agreement and each Transaction have been individually tailored and negotiated.
(k) Waiver of Right to Trial by Jury. Each party waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any suit, action or proceeding relating to this Agreement or any
Credit Support Document. Each party (i) certifies that no representative, agent
or attorney of the other party or any Credit Support Provider has represented,
expressly or otherwise, that such other party would not, in the event of such a
suit action or proceeding, seek to enforce the foregoing waiver and (ii)
acknowledges that it and the other party have been induced to enter into this
Agreement and provide for any Credit Support Document, as applicable, by, among
other things, the mutual waivers and certifications in this Section.
(l) Non-Petition. Without impairing any right afforded to it under the PSA
as a third-party beneficiary, Party A agrees that it shall not institute
against, or join any other person in instituting against, Party B any
bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation
proceedings or other proceedings under U.S. Federal or state bankruptcy or
similar laws (of any other jurisdiction) until at least one year and one day
(or, if longer, the applicable preference period) after the payment in full of
all of the Certificates issued under the PSA; and, further acknowledges that
Party B's obligations hereunder shall be solely the obligations of Party B and
Party A shall have no recourse, in the absence of negligence, willful misconduct
or fraud, to any of the directors, officers, employees, shareholders or
affiliates of Party B with respect to any claims, losses, damages, liabilities,
indemnities or other obligations in connection with any transactions
contemplated hereby and further, that recourse in respect of any obligations of
Party B hereunder will be limited to the assets of the Trust as determined in
accordance with the terms of the PSA and, on exhaustion thereof, all claims
against Party B arising from this Agreement or contemplated hereby shall be
extinguished.
CC-15
(m) Amendment. Party A and Party B may amend, transfer or assign this
Agreement with confirmation from the Rating Agencies (as defined in the PSA)
that such amendment would not cause a reduction or withdrawal of the then
current rating (if any) of any of the Certificates.
(n) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that (i) the Agreement is executed and delivered by the Trustee, not
individually or personally but solely as trustee of Party B under the PSA, in
the exercise of the powers and authority conferred and vested in it, (ii) each
of the representations, undertakings and agreements by the Trustee is made and
intended for the purpose of binding only Party B, (iii) nothing herein contained
shall be construed as creating any liability for the Trustee, individually or
personally, to perform any covenant (either express or implied) contained
herein, and all such liability, if any, is hereby expressly waived by the
parties hereto, and such waiver shall bind any third party making a claim by or
through one of the parties hereto, and (d) other than in the case of the
Trustee's negligence, wilful misconduct or fraud, under no circumstances shall
the Trustee be personally liable for the payment of any indebtedness or expenses
of Party B, or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by Party B under the
Agreement or any related document.
(o) Limitation on Early Termination. Notwithstanding the terms of Sections
5 and 6 of the Agreement, if Party B has satisfied its payment obligations under
Section 2(a)(i) of the Agreement, then unless Party A is required pursuant to
appropriate proceedings to return to Party B or otherwise returns to
Counterparty upon demand of Counterparty any portion of such payment, (a) the
occurrence of an event described in Section 5(a) of the ISDA Form Master
Agreement with respect to Party B shall not constitute an Event of Default or
Potential Event of Default with respect to Party B as the Defaulting Party and
(b) Party A shall be entitled to designate an Early Termination Date pursuant to
Section 6 of the ISDA Form Master Agreement only as a result of a Termination
Event set forth in either Section 5(b)(i) or Section 5(b)(ii) of the ISDA Form
Master Agreement with respect to Party A as the Affected Party or Section
5(b)(iii) of the ISDA Form Master Agreement with respect to Party A as the
Burdened Party. For purposes of the Transaction to which this Agreement relates,
Party B's only obligation under Section 2(a)(i) of the ISDA Form Master
Agreement is to pay the Fixed Amount on the Fixed Rate Payer Payment Date.
CC-16
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized representatives as of the date of the Agreement.
CREDIT SUISSE FIRST BOSTON JPMORGAN CHASE BANK, NOT IN ITS
INTERNATIONAL INDIVIDUAL CAPACITY, BUT SOLELY AS
TRUSTEE FOR FIRST FRANKLIN MORTGAGE
LOAN TRUST 2004-FFB
By: By:
------------------------------ -----------------------------------
Name: Name:
Title: Title:
By:
------------------------------
Name:
Title:
CC-17
SCHEDULE I
MORTGAGE LOAN SCHEDULE
(Available Upon Request)
I-1
SCHEDULE II
SELLER'S REPRESENTATIONS AND WARRANTIES
(i) The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation;
(ii) The Seller has full corporate power to own its property, to carry on
its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) The execution and delivery by the Seller of this Agreement have been
duly authorized by all necessary corporate action on the part of the Seller; and
neither the execution and delivery of this Agreement, nor the consummation of
the transactions herein contemplated hereby, nor compliance with the provisions
hereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Seller or its properties or the
certificate of incorporation or by-laws of the Seller, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Seller's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(iv) The execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given or
made and, in connection with the recordation of the Mortgages, powers of
attorney or assignments of Mortgages not yet completed;
(v) This Agreement has been duly executed and delivered by the Seller and,
assuming due authorization, execution and delivery by the Trustee, the Servicer
and the Depositor, constitutes a valid and binding obligation of the Seller
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally); and
(vi) There are no actions, litigation, suits or proceedings pending or to
the knowledge of the Seller, threatened against the Seller before or by any
court, administrative agency, arbitrator or governmental body (i) with respect
to any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Seller if determined adversely
to the Seller would reasonably be expected to materially and adversely affect
the Seller's ability to perform its obligations under this Agreement; and the
Seller is not in default with respect to any order of any court, administrative
agency, arbitrator or governmental body so as to materially and adversely affect
the transactions contemplated by this Agreement.
II-1
SCHEDULE IIIA
WILSHIRE REPRESENTATIONS AND WARRANTIES
(i) Wilshire is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation;
(ii) Wilshire has full corporate power to own its property, to carry on
its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) The execution and delivery by Wilshire of this Agreement have been
duly authorized by all necessary corporate action on the part of Wilshire; and
neither the execution and delivery of this Agreement, nor the consummation of
the transactions herein contemplated hereby, nor compliance with the provisions
hereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on Wilshire or its properties or the
certificate of incorporation or bylaws of Wilshire, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on Wilshire ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(iv) This Agreement has been duly executed and delivered by Wilshire and,
assuming due authorization, execution and delivery by the Trustee, the Seller
and the Depositor, constitutes a valid and binding obligation of Wilshire
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally); and
(v) There are no actions, litigation, suits or proceedings pending or to
the knowledge of Wilshire, threatened against Wilshire before or by any court,
administrative agency, arbitrator or governmental body (a) with respect to any
of the transactions contemplated by this Agreement or (b) with respect to any
other matter which in the judgment of Wilshire if determined adversely to
Wilshire would reasonably be expected to materially and adversely affect
Wilshire's ability to perform its obligations under this Agreement, other than
as Servicer has previously advised Seller; and Wilshire is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement.
IIIA-1
SCHEDULE IV
REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS
DLJMC, in its capacity as Seller, hereby makes the representations and
warranties set forth in this Schedule IV to the Depositor and the Trustee, as of
the Closing Date, or the date specified herein, with respect to the Mortgage
Loans identified on Schedule I hereto.
(i) The Seller or its affiliate is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by the Mortgage Note.
Immediately prior to the transfer and assignment to the Depositor on the Closing
Date, the Mortgage Loan, including the Mortgage Note and the Mortgage, were not
subject to an assignment or pledge, and the Seller had good and marketable title
to and was the sole owner thereof and had full right to transfer and sell the
Mortgage Loan to the Depositor free and clear of any encumbrance, equity, lien,
pledge, charge, claim or security interest and has the full right and authority
subject to no interest or participation of, or agreement with, any other party,
to sell and assign the Mortgage Loan and following the sale of the Mortgage
Loan, the Depositor will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest.
(ii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects.
(iii) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Depositor. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, from the terms thereof except
in connection with an assumption agreement and which assumption agreement is
part of the Mortgage File and the terms of which are reflected in the Mortgage
Loan Schedule; the substance of any such waiver, alteration or modification has
been approved by the issuer of any related Primary Insurance Policy and title
insurance policy, to the extent required by the related policies.
(iv) The Mortgage Loan complies with all the terms, conditions and
requirements of the originator's underwriting standards in effect at the time of
origination of such Mortgage Loan.
(v) The information set forth in the Mortgage Loan Schedule, attached to
the Agreement as Schedule I, is complete, true and correct in all material
respects as of the Cut-off Date.
(vi) With respect to any first lien Mortgage Loan, the related Mortgage is
a valid, subsisting, enforceable and perfected first lien on the Mortgaged
Property and, with respect to any second lien Mortgage Loan, the related
Mortgage is a valid, subsisting, enforceable and perfected second lien on the
Mortgaged Property, and all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any security interest or other interest or right
thereto. Such lien is free and clear of all
IV-1
adverse claims, liens and encumbrances having priority over the first or second
lien, as applicable, of the Mortgage subject only to (1) with respect to any
Second Mortgage Loan, the related First Mortgage Loan, (2) the lien of
non-delinquent current real property taxes and assessments not yet due and
payable, (3) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording which are
acceptable to mortgage lending institutions generally and either (A) which are
referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan, or (B) which do not adversely affect the appraised value of
the Mortgaged Property as set forth in such appraisal, and (4) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates (1) with
respect to any First Mortgage Loan, a valid, subsisting, enforceable and
perfected first lien and first priority security interest and (2) with respect
to any second lien Mortgage Loan, a valid, subsisting, enforceable and perfected
second lien and second priority security interest, in each case, on the property
described therein, and the Seller has the full right to sell and assign the same
to the Depositor.
(vii) There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such liens) affecting the related Mortgaged Property which
are or may be liens prior to or equal to the lien of the related Mortgage.
(viii) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or escrow funds have been established in an
amount sufficient to pay for every such escrowed item which remains unpaid and
which has been assessed but is not yet due and payable.
(ix) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render the
Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim or defense has
been asserted with respect thereto.
(x) The Mortgaged Property is not subject to any material damage by waste,
fire, earthquake, windstorm, flood or other casualty. At origination of the
Mortgage Loan there was, and there currently is, no proceeding pending for the
total or partial condemnation of the Mortgaged Property.
(xi) All improvements subject to the Mortgage which were considered in
determining the appraised value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) and no improvements on
adjoining properties encroach upon the Mortgaged Property except those which are
insured against by a title insurance policy and all improvements on the property
comply with all applicable zoning and subdivision laws and ordinances.
(xii) Seller has delivered or caused to be delivered to the Trustee or the
Custodian on behalf of the Trustee the original Mortgage bearing evidence that
such instruments have been recorded in the appropriate jurisdiction where the
Mortgaged Property is located as determined by the Seller (or, in
IV-2
lieu of the original of the Mortgage or the assignment thereof, a duplicate or
conformed copy of the Mortgage or the instrument of assignment, if any, together
with a certificate of receipt from the Seller or the settlement agent who
handled the closing of the Mortgage Loan, certifying that such copy or copies
represent true and correct copy(ies) of the original(s) and that such
original(s) have been or are currently submitted to be recorded in the
appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located) or a certification or receipt of the recording
authority evidencing the same.
(xiii) The Mortgage File contains each of the documents specified in
Section 2.01(b) of the Agreement.
(xiv) As of the Closing Date, each Mortgage Loan shall be serviced in all
material respects in accordance with the terms of the Agreement.
(xv) All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the FNMA Guides,
against loss by fire, hazards of extended coverage and such other hazards as are
provided for in the FNMA Guides or by FHLMC, as well as all additional
requirements set forth in this Agreement. All such standard hazard policies are
in full force and effect and on the date of origination contained a standard
mortgagee clause naming the Seller and its successors in interest and assigns as
loss payee and such clause is still in effect and all premiums due thereon have
been paid. If at the time of origination, the Mortgage Loan was required to have
flood insurance coverage in accordance with the Flood Disaster Protection Act of
1973, as amended, such Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration which policy conforms to FNMA and FHLMC requirements, as well as
all additional requirements set forth in this Agreement. Such policy was issued
by an insurer acceptable under FNMA or FHLMC guidelines. The Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost
and expense, and upon the Mortgagor's failure to do so, authorizes the holder of
the Mortgage to maintain such insurance at the Mortgagor's cost and expense and
to seek reimbursement therefor from the Mortgagor.
(xvi) With respect to each Mortgage Loan that has a Prepayment Penalty
feature, each such Prepayment Penalty is enforceable and, at the time such
Mortgage Loan was originated, each Prepayment Penalty complied with applicable
federal, state and local law, subject to federal preemption where applicable.
(xvii) As of the Cut-off Date, no Mortgage Loan is (a) a non-performing
loan (i.e. a mortgage loan that is more than 90 days delinquent); (b) a
re-performing loan (i.e. a mortgage loan that was more than 90 days delinquent
within the twelve month period preceding the Cut-off Date but is contractually
current); or (c) a sub-performing loan (i.e. a mortgage loan that is at least 30
days delinquent but subject to a payment plan or agreement pursuant to which the
Mortgagor is contractually current).
(xviii) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application affecting the rights of creditors and by general equitable
principles.
(xix) To the knowledge of the Seller, (i) no proceeds from any Mortgage
Loan were used to finance single-premium credit insurance policies, (ii) no
Mortgage Loan originated prior to October 1, 2002 will impose a Prepayment
Penalty for a term in excess of five years and no Mortgage Loan
IV-3
originated on or after October 1, 2002 will impose a Prepayment Penalty for a
term in excess of three years, (iii) the related Servicer of each Mortgage Loan
has fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information on its borrower
credit files to Equifax, Experian and Trans Union Credit Information on a
monthly basis and (iv) no Mortgage Loan secured by a Mortgaged Property located
in the State of Georgia was originated on or after October 1, 2002 and before
March 7, 2003 and no Mortgage Loan secured by Mortgaged Property located in the
State of Georgia that was originated on or after March 7, 2003 is a "high cost
home loan" as defined in the Georgia Fair Lending Act (HB 1361), as amended.
(xx) Each Mortgage Loan at the time it was made complied in all material
respects with applicable local, state and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
(xxi) No Mortgage Loan is classified as (a) a "high cost mortgage loan"
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost
home," "covered," "high cost," "high risk home" or "predatory" loan under any
other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees).
(xxii) No Mortgage Loan is a High Cost Loan or Covered Loan as such terms
are defined in Version 5.6 Revised; Appendix E of the Standard & Poor's
LEVELS(R) Glossary.
(xxiii) The description of each Mortgage Loan contained in the electronic
tape transmission ("ETT") and any other information, documents, data or
statements submitted to the Mortgage Pool Insurer by or on behalf of the Seller
is true and accurate in all material respects.
(xxiv) The Mortgaged Property with respect to each Mortgage Loan consists
of real estate improved by a one to four-family dwelling and located in the
United States of America.
(xxv) A credit report with FICO score was obtained and utilized in the
underwriting of each Mortgage Loan.
(xxvi) Each Mortgage Loan was underwritten at the time it was originated
in a manner consistent in all material respects with the underwriting guidelines
and procedures of, First Franklin Financial Corporation, dated December 8, 2003
(the "Underwriting Guidelines"), subject to such variances as are justified
under the Underwriting Guidelines by compensating factors identified and
reflected in the related credit file at such time in connection with
underwriting such Mortgage Loan.
(xxvii) No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of the originator or the related Mortgagor, or, on the part of any other party
involved in the origination of the Mortgage Loan.
(xxviii) Each Mortgage Loan was secured by a second mortgage lien on a
residential property as of the Closing Date.
(xxix) As of the Cut-off Date, each Mortgage Loan is not 30 days or more
past due on a Scheduled Payment and no Mortgage Loan has been 30 or more days
past due on any Scheduled Payment in the 12 months preceding the Cut-off Date.
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