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DLJ MORTGAGE ACCEPTANCE CORP.,
Depositor,
TEMPLE-INLAND MORTGAGE CORPORATION
Master Servicer,
and
BANKERS TRUST COMPANY,
Trustee
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 1996
---------------------------------
Mortgage Pass-Through Certificates
Series 1996-QE3
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TABLE OF CONTENTS
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PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms........................................ 2
Accrued Certificate Interest........................................ 2
Adjustment Date..................................................... 3
Advance ....................................................... 3
Agreement ....................................................... 3
Anniversary ....................................................... 3
Assignment ....................................................... 3
Assignment Agreement................................................ 3
Available Distribution Amount....................................... 3
Bankruptcy Amount................................................... 3
Bankruptcy Code..................................................... 4
Bankruptcy Loss..................................................... 4
Book-Entry Certificate.............................................. 4
Business Day ....................................................... 4
Cash Liquidation.................................................... 4
Certificate ....................................................... 4
Certificate Account................................................. 4
Certificate Account Deposit Date.................................... 4
Certificateholder" or "Holder....................................... 4
Certificate Owner................................................... 5
Certificate Principal Balance....................................... 5
Certificate Register................................................ 6
Class ....................................................... 6
Class A-1 Certificate............................................... 6
Class A-1 Percentage................................................ 6
Class A-2 Certificate............................................... 6
Class A-2 Percentage................................................ 7
Class B Certificate................................................. 7
Class B Certificate Termination Date................................ 7
Class B Percentage.................................................. 7
Class B-1 Certificate............................................... 7
Class B-1 Percentage................................................ 7
Class B Prepayment Percentage....................................... 7
Class B-2 Certificate............................................... 7
Class B-2 Percentage................................................ 8
Class R Accrual Amount.............................................. 8
Class R Certificate................................................. 8
Class R Percentage.................................................. 8
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PAGE
Class SA Certificate................................................ 8
Class SB Accrual Amount............................................. 8
Class SB Certificate................................................ 8
Closing Date ....................................................... 8
Code ....................................................... 8
Collateral Value.................................................... 9
Corporate Trust Office.............................................. 9
Custodial Account................................................... 9
Cut-off Date ....................................................... 9
Debt Service Reduction.............................................. 9
Deficient Valuation................................................. 9
Definitive Certificate.............................................. 9
Depositor ....................................................... 9
Depository ....................................................... 9
Determination Date.................................................. 10
Disqualified Organization........................................... 10
Distribution Date................................................... 10
Due Date ....................................................... 10
Due Period ....................................................... 10
Duff & Xxxxxx....................................................... 10
Eligible Account.................................................... 10
Event of Default.................................................... 11
Excess Bankruptcy Loss.............................................. 11
Excess Fraud Loss................................................... 11
Excess Proceeds..................................................... 11
Excess Proceeds Account............................................. 11
Excess Special Hazard Loss.......................................... 11
Extraordinary Events................................................ 11
Extraordinary Losses................................................ 12
FDIC ....................................................... 12
FHLMC ....................................................... 12
Fixed Strip Rate.................................................... 12
FNMA ....................................................... 12
Fraud Loss Amount................................................... 12
Fraud Losses ....................................................... 13
Funding Date ....................................................... 13
Gross Margin ....................................................... 13
High Cost Loan...................................................... 13
Index ....................................................... 13
Initial Certificate Principal Balance............................... 13
Initial Loss Coverage............................................... 13
Insurance Policy.................................................... 14
Insurance Proceeds.................................................. 14
Late Collections.................................................... 14
Liquidation Proceeds................................................ 14
ii
PAGE
Loan-to-Value Ratio................................................. 14
Loss Severity Percentage............................................ 15
Master Servicer..................................................... 15
Maximum Rate ....................................................... 15
Minimum Rate ....................................................... 15
Monthly Payment..................................................... 15
Xxxxx'x ....................................................... 15
Mortgage ....................................................... 15
Mortgage File....................................................... 15
Mortgage Loan....................................................... 15
Mortgage Loan Purchase Agreement.................................... 15
Mortgage Loan Schedule.............................................. 15
Mortgage Note....................................................... 17
Mortgage Rate....................................................... 17
Mortgaged Property.................................................. 17
Mortgagor ....................................................... 17
Net Mortgage Rate................................................... 17
Nonrecoverable Advance.............................................. 17
Non-United States Person............................................ 17
Notional Amount..................................................... 17
Officers' Certificate............................................... 18
Opinion of Counsel.................................................. 18
Original Senior Percentage.......................................... 18
OTS ....................................................... 18
Outstanding Class SB Unpaid Interest Amount......................... 18
Outstanding Mortgage Loan........................................... 18
Ownership Interest.................................................. 18
Pass-Through Rate................................................... 18
Percentage Interest................................................. 19
Periodic Rate Cap................................................... 19
Permitted Instruments............................................... 19
Permitted Transferee................................................ 20
Person ....................................................... 20
Pool Strip Rate..................................................... 20
Prepayment Assumption............................................... 20
Prepayment Interest Shortfall....................................... 21
Prepayment Period................................................... 21
Primary Hazard Insurance Policy..................................... 21
Principal Prepayment................................................ 21
Prospective Losses.................................................. 21
Purchase Price...................................................... 21
Rating Agency....................................................... 21
Realized Loss....................................................... 22
Record Date ....................................................... 22
Regular Certificate................................................. 22
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PAGE
REMIC ....................................................... 22
REMIC Provisions.................................................... 22
REO Acquisition..................................................... 22
REO Disposition..................................................... 22
REO Imputed Interest................................................ 23
REO Proceeds ....................................................... 23
REO Property ....................................................... 23
Request for Release................................................. 23
Residual Certificate................................................ 23
Responsible Officer................................................. 23
Rule 144A ....................................................... 23
Scheduled Principal and Net Recoveries.............................. 23
Seller ....................................................... 24
Seller's Warranty Certificate....................................... 24
Senior Certificate.................................................. 24
Senior Percentage................................................... 24
Senior Prepayment Percentage........................................ 25
Servicing Account................................................... 26
Servicing Advances.................................................. 26
Servicing Fee....................................................... 26
Servicing Fee Rate.................................................. 26
Servicing Officer................................................... 26
Single Certificate.................................................. 26
Special Hazard Amount............................................... 26
Special Hazard Loss................................................. 27
Special Hazard Percentage........................................... 27
Standard & Poor's................................................... 27
Startup Day ....................................................... 27
Stated Principal Balance............................................ 27
Sub-Servicer ....................................................... 27
Sub-Servicer Remittance Date........................................ 27
Sub-Servicing Account............................................... 27
Sub-Servicing Agreement............................................. 28
Tax Returns ....................................................... 28
Total Expected Losses............................................... 28
Transfer ....................................................... 28
Transferee ....................................................... 28
Transferor ....................................................... 28
Trust Fund ....................................................... 28
Trustee ....................................................... 28
Uninsured Xxxxx..................................................... 00
Xxxxxx Xxxxxx Person................................................ 29
Voting Rights....................................................... 29
ARTICLE II
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PAGE
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans........................... 30
2.02. Acceptance of the Trust Fund by the
Trustee................................................ 33
2.03. Representations, Warranties and
Covenants of the Master Servicer and the
Depositor.............................................. 34
2.04. Representations and Warranties of the
Seller................................................. 36
2.05. Issuance of Certificates Evidencing
Interests in the Trust Fund............................ 37
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
3.01. Master Servicer to Act as Master
Servicer............................................... 38
3.02. Sub-Servicing Agreements Between
Master Servicer and Sub-Servicers...................... 39
3.03. Successor Sub-Servicers................................ 40
3.04. Liability of the Master Servicer....................... 40
3.05. No Contractual Relationship Between
Sub-Servicers and Trustee or
Certificateholders..................................... 41
3.06. Assumption or Termination of Sub-
Servicing Agreements by Trustee........................ 41
3.07. Collection of Certain Mortgage Loan
Payments............................................... 41
3.08. Sub-Servicing Accounts................................. 42
3.09. Collection of Taxes, Assessments and
Similar Items; Servicing Accounts...................... 42
3.10. Custodial Account...................................... 43
3.11. Permitted Withdrawals From the
Custodial Account...................................... 44
3.12. Permitted Instruments.................................. 45
3.13. Maintenance of Primary Hazard
Insurance.............................................. 46
3.14. Enforcement of Due-on-Sale Clauses;
Assumption Agreements.................................. 47
3.15. Realization Upon Defaulted Mortgage
Loans.................................................. 48
3.16. Trustee to Cooperate; Release of
Mortgage Files......................................... 49
3.17. Servicing Compensation................................. 50
3.18. Maintenance of Certain Servicing
Policies............................................... 50
3.19. Annual Statement as to Compliance...................... 51
3.20. Annual Independent Public Accountants'
Servicing Statement.................................... 51
3.21. Access to Certain Documentation........................ 52
3.22. Title, Conservation and Disposition of
REO Property........................................... 52
3.23. Additional Obligations of the Master
Servicer............................................... 55
3.24. Additional Obligations of the Depositor................ 55
3.25. Excess Proceeds Account................................ 56
ARTICLE IV
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PAGE
PAYMENTS TO CERTIFICATEHOLDERS
4.01. Certificate Account; Distributions..................... 58
4.02. Statements to Certificateholders....................... 65
4.03. Remittance Reports; Advances by the
Master Servicer........................................ 67
4.04. Allocation of Realized Losses.......................... 69
4.05. Information Reports to be Filed by the
Master Servicer........................................ 70
4.06. Compliance with Withholding
Requirements........................................... 70
ARTICLE V
THE CERTIFICATES
5.01. The Certificates....................................... 71
5.02. Registration of Transfer and Exchange of
Certificates........................................... 73
5.03. Mutilated, Destroyed, Lost or Stolen
Certificates........................................... 77
5.04. Persons Deemed Owners.................................. 78
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
6.01. Liability of the Depositor and the Master
Servicer............................................... 79
6.02. Merger, Consolidation or Conversion of
the Depositor or the Master Servicer................... 79
6.03. Limitation on Liability of the Depositor,
the Master Servicer and Others......................... 79
6.04. Limitation on Resignation of the Master
Servicer............................................... 80
ARTICLE VII
DEFAULT
7.01. Events of Default...................................... 81
7.02. Termination Event...................................... 83
7.03. Trustee to Act; Appointment of
Successor.............................................. 84
7.04. Notification to Certificateholders..................... 84
7.05. Waiver of Events of Default............................ 85
ARTICLE VIII
CONCERNING THE TRUSTEE
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PAGE
8.01. Duties of Trustee...................................... 86
8.02. Certain Matters Affecting the Trustee.................. 87
8.03. Trustee Not Liable for Certificates or
Mortgage Loans......................................... 88
8.04. Trustee May Own Certificates........................... 89
8.05. Master Servicer to Pay Trustee's Fees.................. 89
8.06. Eligibility Requirements for Trustee................... 89
8.07. Resignation and Removal of the Trustee................. 90
8.08. Successor Trustee...................................... 91
8.09. Merger or Consolidation of Trustee..................... 91
8.10. Appointment of Co-Trustee or Separate
Trustee................................................ 91
ARTICLE IX
TERMINATION
9.01. Termination Upon Repurchase or
Liquidation of All Mortgage Loans...................... 93
9.02. Additional Termination Requirements.................... 95
10.01. REMIC Administration................................... 96
10.02. Prohibited Transactions and Activities................. 99
10.03. Master Servicer and Trustee
Indemnification........................................ 99
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment..............................................100
11.02. Recordation of Agreement;
Counterparts...........................................101
11.03. Limitation on Rights of Certificate-
holders................................................101
11.04. Governing Law..........................................102
11.05. Notices................................................102
11.06. Severability of Provisions.............................103
11.07. Successors and Assigns; Third Party
Beneficiary............................................103
11.08. Article and Section Headings...........................103
11.09. Notice to Rating Agencies and
Certificateholder......................................103
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PAGE
EXHIBITS
Exhibit A Form of Senior Certificate
Exhibit B-1 Form of Class B Certificate
Exhibit B-2 Form of Class SB Certificate
Exhibit B-3 Form of Class R Certificate
Exhibit C Form of Trustee Initial Certification
Exhibit D Form of Trustee Final Certification
Exhibit E [Reserved]
Exhibit F-1 Request for Release
Exhibit F-2 Request for Release for Mortgage Loans Paid in Full
Exhibit G-1 Form of Investor Representation Letter
Exhibit G-2 Form of Transferor Representation Letter
Exhibit G-3 Transferor Affidavit and Agreement for
Transfers
to Non-United States Persons
Exhibit G-4 Transferee Affidavit and Agreement for
Transfers
to Non-United States Persons
Exhibit G-5 Form of Investor Representation Letter for
Insurance Companies
Exhibit H Form of Rule 144A Investment Representation
Exhibit I Mortgage Loan Schedule
Exhibit J Seller Representations and Warranties
Exhibit K Form of Notice Under Section 3.24
viii
This Pooling and Servicing Agreement, dated and effective as
of February 1, 1996, among DLJ Mortgage Acceptance Corp., as Depositor (the
"Depositor"), Temple-Inland Mortgage Corporation, as Master Servicer (the
"Master Servicer"), and Bankers Trust Company, as Trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage 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 Mortgage Loans (as defined herein). As provided
herein, the Trustee will cause an election to be made to treat the entire
segregated pool of assets subject to this Agreement (including the Mortgage
Loans) as a real estate mortgage investment conduit (a "REMIC") for federal
income tax purposes and such segregated pool of assets will be designated as the
"Trust Fund." The Class SA, Class A-1, Class A-2, Class B and Class SB
Certificates will be the "regular interests" in the Trust Fund, and the Class R
Certificates will be the "residual interest" in the Trust Fund, for purposes of
the REMIC Provisions (as defined herein) under federal income tax law.
The following table sets forth the designation, initial
Pass-Through Rate (as defined herein), aggregate Initial Certificate Principal
Balance (as defined herein), and the approximate initial percentage for each
Class of Certificates comprising the certificated interests in the Trust Fund
created hereunder.
Aggregate Initial
Initial Certificate Approximate
Pass-Through Principal Initial Class
Designation Type Rate Balance Percentage
Class SA Senior 4.2155% N/A N/A
Class A-1 Senior 7.2342% $ 22,266,203.00 83.25
Class A-2 Senior 7.2342% $ 2,808,350.00 10.50
Class B Subordinate 7.2342% $ 1,671,637.11 6.25
Class SB Subordinate 1.7000% N/A N/A
Class R Residual 7.2342% $ 0.00 0.00%
As of the Cut-off Date, the Mortgage Loans have an aggregate
Stated Principal Balance equal to $26,746,190.11.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer and the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article.
"Accrued Certificate Interest": With respect to each
Distribution Date, as to any Class A-1 Certificate, Class A-2 Certificate, Class
B Certificate or Class R Certificate, one month's interest accrued at the then
applicable Pass-Through Rate on the Certificate Principal Balance thereof
immediately prior to such Distribution Date. With respect to each Distribution
Date, as to the Class SA Certificates and the Class SB Certificates, one month's
interest accrued at the then applicable Pass-Through Rate on the Notional Amount
immediately prior to such Distribution Date. Accrued Certificate Interest will
be calculated on the basis of a 360-day year consisting of twelve 30-day months.
In each case Accrued Certificate Interest on any such Class of Certificates will
be reduced by the amount of (i) Prepayment Interest Shortfalls, if any, which
are not covered by payments by the Master Servicer pursuant to Section 3.23 with
respect to such Distribution Date, (ii) the interest portion (adjusted to the
Net Mortgage Rate) of Realized Losses (including Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses and Extraordinary Losses) not
allocated solely to the Class A-2 Certificates, the Class B Certificates, the
Class SB Certificates or the Class R Certificates pursuant to Section 4.04,
(iii) the interest portion of Advances previously made with respect to a
Mortgage Loan or REO Property which remained unreimbursed following the Cash
Liquidation or REO Disposition of such Mortgage Loan or REO Property that were
made with respect to delinquencies that ultimately constituted Excess Special
Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
Losses and (iv) any other interest shortfalls not covered by the subordination
provided by the Class A-2 Certificates, the Class B Certificates, the Class SB
Certificates and the Class R Certificates, including interest that is not
collectible from the Mortgagor pursuant to the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended, or similar legislation or regulations as in
effect from time to time, with all such reductions allocated among all of the
Certificates on a pro rata basis in proportion to their respective amounts of
Accrued Certificate Interest which would have resulted absent such reductions.
In addition to that portion of the reductions described in the preceding
sentence that are allocated to the Class A-2 Certificates, the Class B
Certificates, the Class SB Certificates or the Class R Certificates, Accrued
Certificate Interest on the Class A-2 Certificates, the Class B Certificates,
the Class SB Certificates or the Class R Certificates, as applicable, will be
reduced by the interest portion (adjusted to the Net Mortgage Rate) of the
portion of Realized Losses that are allocated solely to the Class A-2
Certificates, the Class B Certificates, the Class SB Certificates or the Class R
Certificates, as applicable, pursuant to Section 4.04.
"Adjustment Date": With respect to each Mortgage Loan, the
date set forth in the related Mortgage Note on which the Mortgage Rate may
change and each semi-annual
-3-
anniversary of such date. The first Adjustment Date as to each Mortgage Loan is
set forth in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan, any advance made by the
Master Servicer on any Distribution Date pursuant to Section 4.03.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof.
"Anniversary": Each anniversary of February 1, 1996.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Assignment Agreement": The assignment agreement dated as of
the Closing Date, between DLJMCI and the Depositor.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (a) the sum of (i) the balance on deposit
in the Custodial Account as of the close of business on the related
Determination Date and (ii) the aggregate amount of any Advances made and all
amounts required to be paid by the Master Servicer pursuant to Sections 3.13,
3.23 and 9.01 by deposits into the Certificate Account on the immediately
preceding Certificate Account Deposit Date, reduced by (b) the sum, as of the
close of business on the related Determination Date, of (i) Monthly Payments
collected but due during a Due Period subsequent to the Due Period ending on the
first day of the month of the related Distribution Date, (ii) all interest or
other income earned on deposits in the Custodial Account, (iii) any other
amounts reimbursable or payable to the Depositor, the Seller, the Trustee, the
Master Servicer or any Sub-Servicer pursuant to Section 3.11, and (iv) Insurance
Proceeds, Liquidation Proceeds, Principal Prepayments, REO Proceeds and the
proceeds of Mortgage Loan purchases made pursuant to Section 2.02, 2.04 or 3.22,
in each case received or made in the month of such Distribution Date.
"Bankruptcy Amount": As of any date of determination prior to
February 1, 1997, an amount, equal to the excess, if any, of (A) $100,000.00
(the initial "Bankruptcy Amount"), over (B) the aggregate amount of Bankruptcy
Losses allocated solely to the Class A-2 Certificates, the Class B Certificates,
the Class SB Certificates or the Class R Certificates in accordance with Section
4.04. As of any date of determination on or after February 1, 1997, an amount
equal to the excess, if any, of (1) the lesser of (a) the Bankruptcy Amount
calculated as of the close of business on the Business Day immediately preceding
the most recent Anniversary (for purposes of this definition, the "Relevant
Anniversary") and (b) the greater of (i) 0.15% times the aggregate principal
balance of the Mortgage Loans as of the Relevant Anniversary; and (ii)
$100,000.00 over (2) the aggregate amount of Bankruptcy Losses allocated solely
to the Class A-2 Certificates, the Class B Certificates, the Class SB
Certificates and the Class R Certificates in accordance with Section 4.04 since
the Relevant Anniversary.
-4-
The Bankruptcy Amount may be further reduced by the Depositor
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Depositor shall obtain written
confirmation from the Rating Agency that such reduction shall not adversely
affect the then-current rating assigned to the Certificates by the Rating Agency
and shall provide a copy of such written confirmation to the Trustee.
"Bankruptcy Code": The Bankruptcy Code of 1978, as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in California, New York or Texas (and such
other state or states in which the Custodial Account or the Certificate Account
are at the time located) or in the city in which the Corporate Trust Office of
the Trustee is located are authorized or obligated by law or executive order to
close.
"Cash Liquidation": As to any defaulted Mortgage Loan other
than a Mortgage Loan as to which an REO Acquisition occurred, the final receipt
by or on behalf of the Master Servicer of all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
"Certificate": Any Class SA, Class A-1, Class A-2, Class B,
Class SB or Class R Certificate.
"Certificate Account": The trust account or accounts created
and maintained pursuant to Section 4.01, which shall be entitled "Bankers Trust
Company, in trust for registered holders of the DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates, Series 1996-QE3, and which account or
accounts must each be an Eligible Account.
"Certificate Account Deposit Date": As to any Distribution
Date, the Business Day prior thereto.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that, neither a
Disqualified Organization nor a nonUnited States Person shall be a Holder of a
Class R Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate, other than a
Class R Certificate, registered in the name of the Depositor or the Master
Servicer or any affiliate thereof shall be deemed not to be outstanding and the
Voting Rights to which it is entitled shall not be taken into account in
determining whether the requisite percentage of Voting
-5-
Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee shall be entitled to rely upon
a certification of the Depositor or the Master Servicer in determining if any
Certificates are registered in the name of a respective affiliate. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through the
Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee shall be required to recognize as a
"Holder" or "Certificateholder" only the Person in whose name a Certificate is
registered in the Certificate Register.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
"Certificate Principal Balance": With respect to each Class
A-1 Certificate or Class A-2 Certificate, on any date of determination, an
amount equal to (i) the Initial Certificate Principal Balance of such
Certificate as specified on the face thereof, minus (ii) the sum of (a) the
aggregate of all amounts previously distributed with respect to such
Certificates (or any predecessor Certificate) and applied to reduce the
Certificate Principal Balance thereof pursuant to Section 4.01(b), and (b) the
aggregate of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously allocated to
such Certificate (or any predecessor Certificate) pursuant to Section 4.04;
provided, that if the Certificate Principal Balances of the Class B Certificates
have been reduced to zero and if the Certificate Principal Balance of the Class
R Certificates would be equal to zero if determined without regard to this
proviso, the Certificate Principal Balance of each Class A-2 Certificate, at any
given time, shall thereafter be an amount equal to (i) the Percentage Interest
evidenced by such Certificate times (ii) the excess, if any of (a) the then
aggregate Stated Principal Balance of the Mortgage Loans (or related REO
Properties) over (b) the aggregate Certificate Principal Balance of the Class
A-1 Certificates. With respect to each Class B Certificate, on any date of
determination, an amount equal to (i) the initial Certificate Principal Balance
of such Class B Certificate, as specified on the face thereof, minus (ii) the
sum of (a) the aggregate of all amounts previously distributed with respect to
such Certificate (or any predecessor Certificate) and applied to reduce the
Certificate Principal Balance thereof pursuant to Section 4.01(b), and (b) the
aggregate of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously allocated to
such Certificate (or any predecessor Certificate) pursuant to Section 4.04;
provided that if the Certificate Principal Balance of the Class R Certificates
would be equal to zero if determined without regard to this proviso, the
Certificate Principal Balance of each Class B Certificate, at any given time,
shall thereafter be an amount equal to (i) the Percentage Interest evidenced by
such Certificate times (ii) the excess, if any, of (a) the then aggregate Stated
Principal Balance of the Mortgage Loans (or related REO Properties) over (b) the
sum of the then aggregate Certificate Principal Balance of all of the Class A-1
Certificates and Class A-2 Certificates. With respect to each Class R
Certificate, on any date of determination, an amount equal to the Percentage
Interest evidenced thereby multiplied by the excess, if any, of (x) the then
aggregate Stated Principal Balance of
-6-
the Mortgage Loans over (y) the then aggregate Certificate Principal Balances of
the Senior Certificates and the Class B Certificates. The Class SA Certificates
and Class SB Certificates have no principal balances.
"Certificate Register": The register maintained pursuant to
Section 5.02(a).
"Class": Collectively, all of the Certificates bearing the
same designation.
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit A, senior with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.04, and evidencing an
interest designated as a "regular interest" in the Trust Fund for purposes of
the REMIC Provisions.
"Class A-1 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class A-1
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or
related REO Properties) immediately prior to such Distribution Date.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit A, subordinate to the Class SA Certificates, Class A-1
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.04, and evidencing an interest designated as a
"regular interest" in the Trust Fund for purposes of the REMIC Provisions.
"Class A-2 Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class A-2
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or
related REO Properties) immediately prior to such Distribution Date; provided,
that if the Certificate Principal Balance of the Class B Certificates has been
reduced to zero, prior to such Distribution Date and if the Certificate
Principal Balance of the Class R Certificates would be zero immediately after
such Distribution Date if determined without regard to this proviso, then
thereafter the Class A-2 Percentage as of any date of determination shall be
100% minus the then applicable Class A-1 Percentage.
"Class B Certificate": Any one of the Class B Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-1, subordinate to the Senior Certificates with
respect to distributions and the allocation of Realized Losses as set forth in
Section 4.04, and evidencing an interest designated as a "regular interest" in
the Trust Fund for purposes of the REMIC Provisions.
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"Class B Certificate Termination Date": The Distribution Date
upon which the Certificate Principal Balances of the Class B Certificates are
reduced to zero.
"Class B Percentage": With respect to any Distribution Date,
the lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date; provided, that if the
the Certificate Principal Balance of the Class R Certificates would be zero
immediately after such Distribution Date if determined without regard to this
proviso, then the Class B Percentage as of such date of determination shall be
100% minus the then applicable Senior Percentage.
"Class B Prepayment Percentage": With respect to any
Distribution Date, 100% minus the Senior Prepayment Percentage for such
Distribution Date.
"Class R Accrual Amount": With respect to each Distribution
Date, the amount of Accrued Certificate Interest on the Class R Certificates on
such Distribution Date, to the extent such interest was not distributed to the
Class R Certificates on such Distribution Date in accordance with Section
4.01(d).
"Class R Certificate": Any one of the Class R Certificates,
executed, authenticated and delivered hereunder by the Trustee substantially in
the form annexed hereto as Exhibit B-3, as further described in the recitals
hereto, evidencing an interest designated as a "residual interest" in the Trust
Fund for purposes of the REMIC Provisions.
"Class R Percentage": With respect to any Distribution Date, a
percentage equal to 100% minus the sum of the then applicable Senior Percentage
and the then applicable Class B Percentage.
"Class SA Certificate": Any one of the Class SA Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit A, senior with respect to distributions and to the
allocation of Realized Losses as set forth in Section 4.04, and evidencing an
interest designated as a "regular interest" in the Trust Fund for purposes of
the REMIC Provisions.
"Class SB Accrual Amount": With respect to each Distribution
Date, the amount of Accrued Certificate Interest on the Class SB Certificates on
such Distribution Date, to the extent such interest was not distributed to the
Class SB Certificates on such Distribution Date in accordance with Section
4.01(d).
"Class SB Certificate": Any one of the Class SB Certificates
executed, authenti- cated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit B-2, subordinate to the Senior Certificates and the
Class B Certificates with respect to distributions
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and the allocation of Realized Losses as set forth in Section 4.04, and
evidencing an interest designated as a "regular interest" in the Trust Fund for
purposes of the REMIC Provisions.
"Closing Date": March 5, 1996.
"Code": The Internal Revenue Code of 1986.
"Collateral Value": The appraised value of a Mortgaged
Property based upon the lesser of (i) the appraisal (as reviewed and approved by
the Seller) made at the time of the origination of the related Mortgage Loan, or
(ii) the sales price of such Mortgaged Property at such time of origination.
With respect to a Mortgage Loan the proceeds of which were used to refinance an
existing mortgage loan, the appraised value (as reviewed and approved by the
Seller) of the Mortgaged Property based upon the appraisal (as reviewed and
approved by the Seller) obtained at the time of refinancing.
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business
related to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: DLJ/Quality 1996-QE3.
"Custodial Account": The custodial account or accounts created
and maintained pursuant to Section 3.10 in the name of a depository institution,
as custodian for the holders of the Certificates, for the holders of certain
other interests in mortgage loans serviced or sold by the Master Servicer and
for the Master Servicer, into which the amounts set forth in Section 3.10 shall
be deposited directly. Any such account or accounts shall be an Eligible
Account.
"Cut-off Date": February 1, 1996.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan,
which valuation results from a proceeding initiated by the Mortgagor under the
Bankruptcy Code.
"Definitive Certificate": Any definitive, fully registered
Certificate.
"Depositor": DLJ Mortgage Acceptance Corp., or its successor
in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those
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Certificates that are to be Book-Entry Certificates is Cede & Co. The Depository
shall at all times be a "clearing corporation" as defined in Section 8-102(3) of
the Uniform Commercial Code of the State of New York and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended.
"Determination Date": The 15th day (or if such 15th day is not
a Business Day, the Business Day immediately preceding such 15th day) of the
month of the related Distribution Date.
"Disqualified Organization": Any of (i) the United States, any
State or political subdivision thereof, any possession of the United States, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the FHLMC, a majority of its board of directors is not
selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (unless such organization is subject to the tax imposed by
Section 511 of the Code on unrelated business taxable income), or rural electric
and telephone cooperatives described in Section 1381(a)(2)(C) of the Code and
(iv) any other Person so designated by the Trustee based upon an Opinion of
Counsel provided to the Trustee that the holding of an ownership interest in a
Residual Certificate by such Person may cause the Trust Fund or any Person
having an ownership interest in any Class of Certificates (other than such
Person) to incur liability for any federal tax imposed under the Code that would
not otherwise be imposed but for the transfer of an ownership interest in the
Residual Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Date": The 25th day of any month or, if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in March 1996.
"DLJMCI": DLJ Mortgage Capital, Inc., a Delaware corporation.
"Due Date": The first day of the month of the related
Distribution Date.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month preceding the month of such
Distribution Date (or, with respect to the first Due Period, the day following
the Cut-off Date) and ending on the related Due Date.
"Duff & Xxxxxx": Xxxx & Xxxxxx Credit Rating Co. or its
successor in interest.
"Eligible Account": An account maintained with a federal or
state chartered depository institution (i) the short-term obligations of which
are rated by each of the Rating Agencies in its highest rating at the time of
any deposit therein, or (ii) insured by the FDIC (to
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the limits established by such corporation), the uninsured deposits in which
account are otherwise secured such that, as evidenced by an Opinion of Counsel
(obtained by the Person requesting that the account be held pursuant to this
clause (ii)) delivered to the Trustee prior to the establishment of such
account, the Certificateholders will have a claim with respect to the funds in
such account and a perfected first priority security interest against any
collateral (which shall be limited to Permitted Instruments, each of which shall
mature not later than the Business Day immediately preceding the Distribution
Date next following the date of investment in such collateral or the
Distribution Date if such Permitted Instrument is an obligation of the
institution that maintains the Certificate Account or Custodial Account)
securing such funds that is superior to claims of any other depositors or
general creditors of the depository institution with which such account is
maintained or (iii) a trust account or accounts maintained with a federal or
state chartered depository institution or trust company with trust powers acting
in its fiduciary capacity or (iv) an account or accounts of a depository
institution acceptable to the Rating Agencies (as evidenced in writing by the
Rating Agencies that use of any such account as the Custodial Account, the
Excess Proceeds Account or the Certificate Account will not have an adverse
effect on the then-current ratings assigned to the Classes of the Certificates
then rated by the Rating Agencies). Eligible Accounts may bear interest.
"Event of Default": One or more of the events described in
Section 7.01.
"Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the then applicable Bankruptcy Amount.
"Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the then applicable Fraud Loss Amount.
"Excess Proceeds": With respect to each Mortgage Loan as to
which an REO Disposition has occurred, the proceeds that are specified as being
"Excess Proceeds" in Section 3.22.
"Excess Proceeds Account": The separate account or accounts
created and maintained pursuant to Section 3.25, which shall be entitled
"Bankers Trust Company, in trust for registered holders of the DLJ Mortgage
Acceptance Corp. Mortgage Pass-Through Certificates, Series 1996-QE3, Excess
Proceeds Account," and which account or accounts shall be an Eligible Account.
"Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the then applicable Special Hazard Amount.
"Extraordinary Events": Any of the following conditions with
respect to a Mortgaged Property or Mortgage Loan causing or resulting in a loss
which causes the liquidation of such Mortgage Loan:
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(a) losses which are of a type that would be covered by the
fidelity bond and the errors and omissions insurance policy required to
be maintained pursuant to Section 3.18, but are in excess of the
coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all whether controlled or uncontrolled, or remote or be
in whole or in part caused by, contributed to or aggravated by a peril
covered by the definition of the term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war,
including action in hindering, combatting or defending against an
actual, impending or expected attack;
1. by any government or sovereign power, de jure or
de facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(d) any weapon of war employing atomic fission or radioactive
force whether in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering,
combatting or defending against such an occurrence, seizure or
destruction under quarantine or customs regulations, confiscation by
order of any government or public authority; or risks of contraband or
illegal transportation or trade.
"Extraordinary Losses": Any Realized Loss incurred on a
Mortgage Loan caused by or resulting from an Extraordinary Event.
"FDIC": Federal Deposit Insurance Corporation or any
successor.
"FHLMC": Federal Home Loan Mortgage Corporation or any
successor.
"Fixed Strip Rate": 1.70% per annum.
"FNMA": Federal National Mortgage Association or any
successor.
"Fraud Loss Amount": With respect to any date of determination
after the Cut-off Date an amount equal to: (X) prior to the first Anniversary,
an amount equal to 3.00% of the aggregate outstanding principal balance of all
of the Mortgage Loans as of the Cut-off Date minus the aggregate amount of Fraud
Losses allocated solely to the Class A-2 Certificates, the Class B Certificates,
Class SB Certificates and Class R Certificates, in accordance with Section
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4.04 since the Cut-off Date, (Y) from and including the first Anniversary to but
not including the second Anniversary, an amount equal to (1) the lesser of (a)
the Fraud Loss Amount as of the day immediately preceding the first Anniversary
and (b) 2.00% of the aggregate outstanding principal balance of all of the
Mortgage Loans as of the first Anniversary minus (2) the Fraud Losses allocated
solely to the Class A-2 Certificates, the Class B Certificates, the Class SB
Certificates and the Class R Certificates, in accordance with Section 4.04 since
the first Anniversary, and (Z) from and including the second Anniversary to but
not including the fifth Anniversary, an amount equal to (1) the lesser of (a)
the Fraud Loss Amount as of the most recent Anniversary and (b) 1.00% of the
aggregate outstanding principal balance of all of the Mortgage Loans, as of the
most recent Anniversary minus (2) the Fraud Losses allocated solely to the Class
A-2 Certificates, the Class B Certificates, the Class SB Certificates and the
Class R Certificates, in accordance with Section 4.04 since the most recent
Anniversary. On and after the fifth Anniversary the Fraud Loss Amount shall be
zero.
"Fraud Losses": Realized Losses on Mortgage Loans as to which
there was fraud in the origination of such Mortgage Loan.
"Funding Date": With respect to each Mortgage Loan, the date
on which funds were advanced by or on behalf of the Seller and interest began to
accrue thereunder.
"Gross Margin": With respect to each Mortgage Loan, the fixed
rate set forth in the related Mortgage Note to be added to the related Index on
each Adjustment Date in accordance with the terms of the related Mortgage Note
used to determine the Mortgage Rate for such Mortgage Loan. The Gross Margin as
to each Mortgage Loan is set forth on the Mortgage Loan Schedule.
"High Cost Loan": The Mortgage Loans that are subject to
special rules, disclosure requirements and other provisions that were added to
the Federal Truth in Lending Act by the Home Ownership and Equity Protection Act
of 1994.
"Index": The average of the interbank offered rates for six
month United States dollar deposits in the London market based on quotations of
major banks, as published in the Western Edition of THE WALL STREET JOURNAL, as
most recently available as of the date 45 days prior to any Adjustment Date. If
such Index is not so published or is otherwise unavailable, the Master Servicer
shall select an alternate index for mortgage loans on single family residential
properties that is calculated and published or otherwise made available by an
independent third party.
"Initial Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate Principal Balance of such Class of
Certificates as of the Cut-off Date as set forth in the Preliminary Statement
hereto.
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"Insurance Policy": With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement in respect of such Mortgage Loan.
"Insurance Proceeds": Proceeds paid in respect of the Mortgage
Loans pursuant to any Primary Hazard Insurance Policy, any title insurance
policy or any other insurance policy covering a Mortgage Loan, to the extent
such proceeds are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account.
"Interim Servicing Agreement": With respect to certain
Mortgage Loans, the SubServicing Agreement between the Interim Subservicer and
the Master Servicer, as assignee, which is in existence on the Closing Date and
pursuant to which the Interim Subservicer shall be obligated to service such
Mortgage Loans during the Interim Servicing Period and to transfer the servicing
for such Mortgage Loans to the Master Servicer at the end of such Interim
Servicing Period.
"Interim Servicing Period": With respect to certain Mortgage
Loans, the period from the Closing Date through the close of business on March
31, 1996 during which time the Interim Subservicer shall service such Mortgage
Loan for the Master Servicer pursuant to the corresponding Interim Servicing
Agreement.
"Interim Subservicer": The Seller.
"Late Collections": With respect to any Mortgage Loan, all
amounts received during any Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
"Liquidation Proceeds": Amounts (other than Insurance
Proceeds) received by the Master Servicer in connection with the taking of an
entire Mortgaged Property by exercise of the power of eminent domain or
condemnation or in connection with the liquidation of a defaulted Mortgage Loan
through trustee's sale, foreclosure sale or otherwise, other than amounts
received in respect of any REO Property.
"Loan-to-Value Ratio": As of any date, the fraction, expressed
as a percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Collateral Value of the related Mortgaged Property.
"Loss Reimbursement Payment": Any payments to the holders of
the Class A-1 Certificates, the Class A-2 Certificates and the Class B
Certificates made pursuant to Sections 4.01(b)(x), (xi) or (xii) hereof.
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"Master Servicer": Temple-Inland Mortgage Corporation, or any
successor master servicer appointed as herein provided.
"Maximum Rate": With respect to each Mortgage Loan, the amount
set forth in the Mortgage Note as the maximum Mortgage Rate thereunder.
"Minimum Rate": With respect to each Mortgage Loan, the amount
set forth in the Mortgage Note as the minimum Mortgage Rate thereunder.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by a Mortgagor from time to time under the related Mortgage Note as
originally executed (after adjustment, if any, for Principal Prepayments and for
Deficient Valuations occurring prior to such Due Date, and after any adjustment
by reason of any bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period).
"Moody's": Xxxxx'x Investors Service, Inc. or its successor in
interest.
"Mortgage": The mortgage, deed of trust or any other
instrument securing the Mortgage Loan.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement; provided, that
whenever the term "Mortgage File" is used to refer to documents actually
received by the Trustee, such term shall not be deemed to include such
additional documents required to be added unless they are actually so added.
"Mortgage Loan": Each of the mortgage loans, transferred and
assigned to the Trustee pursuant to Section 2.01 or Section 2.03 and from time
to time held in the Trust Fund, the Mortgage Loans originally so transferred,
assigned and held being identified in the Mortgage Loan Schedule. As used
herein, the term "Mortgage Loan" includes the related Mortgage Note and
Mortgage.
"Mortgage Loan Purchase Agreement": With respect to any
Mortgage Loan, the mortgage loan purchase agreements between the Seller and
DLJMCI pursuant to which the Seller sold such Mortgage Loan to DLJMCI and DLJMCI
purchased such Mortgage Loan from the Seller.
"Mortgage Loan Schedule": As of any date of determination, the
schedule of Mortgage Loans included in the Trust Fund. The initial schedule of
Mortgage Loans with accompanying information transferred on the Closing Date to
the Trustee as part of the Trust Fund for the Certificates, attached hereto as
Exhibit I (and, for purposes of the Trustee's review of the Mortgage Files
pursuant to Section 2.02, in computer-readable form as delivered to the
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Trustee), which list shall set forth the following information with respect to
each Mortgage Loan:
(i) the loan number and name of the Mortgagor;
(ii) xxx xxxxxx xxxxxxx, xxxx, xxxxx and zip code of the
Mortgaged Property;
(iii) the initial Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the first payment date;
(vii) the type of Mortgaged Property;
(viii) the Monthly Payment in effect as of the Cut-off Date;
(ix) the principal balance as of the Cut-off Date;
(x) the Gross Margin;
(xi) the next Adjustment Date;
(xii) the Periodic Rate Cap;
(xiii) the Adjustment Date frequency;
(xiv) the Mortgage Rate as of the Cut-off Date;
(xv) the occupancy status;
(xvi) the purpose of the Mortgage Loan;
(xvii) the Collateral Value of the Mortgaged Property;
(xviii) the original term to maturity;
(xix) whether or not the Mortgage Loan provides for a
Principal Prepayment penalty;
(xx) the first Adjustment Date;
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(xxi) the Minimum Rate and Maximum Rate;
(xxii) the paid-through date of the Mortgage Loan;
(xxiii) the credit grade of the Mortgagor;
(xxiv) the number of units in the Mortgaged Property;
(xxv) whether or not the Mortgage Loan is a High Cost Loan;
and
(xxvi) the Pool Strip Rate as of the Cut-off Date.
The Mortgage Loan Schedule shall also set forth the total of the
amounts described under (ix) above for all of the Mortgage Loans. The Mortgage
Loan Schedule may be in the form of more than one schedule, collectively setting
forth all of the information required.
"Mortgage Note": The note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to any Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan, as adjusted from time to
time in accordance with the provisions of the Mortgage Note.
"Mortgaged Property": The underlying property securing a
Mortgage Loan.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Net Mortgage Rate": As to each Mortgage Loan, a per annum
rate of interest equal to the Mortgage Rate as in effect from time to time minus
the Servicing Fee Rate.
"Nonrecoverable Advance": Any Advance previously made or
proposed to be made in respect of a Mortgage Loan which, in the good faith
judgment of the Master Servicer, will not or, in the case of a proposed Advance,
would not be ultimately recoverable from related Late Collections, Insurance
Proceeds, Liquidation Proceeds, REO Proceeds or amounts reimbursable to the
Master Servicer pursuant to Section 4.01(b). The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance
would constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Depositor and the Trustee.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": With respect to the Class SA Certificates
and Class SB Certificates, as of any date of determination, the aggregate Stated
Principal Balance of all of the Mortgage Loans and related REO Properties
immediately prior to such date, except that the
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initial Notional Amount for the Class SA Certificates and Class SB Certificates
shall be rounded down to the nearest dollar increment.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
and by the Treasurer, the Secretary, or one of the assistant treasurers or
assistant secretaries of the Master Servicer or of the Sub-Servicer and
delivered to the Depositor and Trustee.
"Opinion of Counsel": A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to the
Trustee; except that any opinion of counsel relating to (a) the qualification of
any account required to be maintained pursuant to this Agreement as an Eligible
Account, (b) qualification of the Trust Fund as a REMIC, (c) compliance with the
REMIC Provisions or (d) resignation of the Master Servicer pursuant to Section
6.04 must be an opinion of counsel who (i) is in fact independent of the
Depositor and the Master Servicer, (ii) does not have any direct financial
interest or any material indirect financial interest in the Depositor or the
Master Servicer or in an affiliate of either and (iii) is not connected with the
Depositor or the Master Servicer as an officer, employee, director or person
performing similar functions.
"Original Senior Percentage": 93.75%, which is the fraction,
expressed as a percentage, the numerator of which is the aggregate Certificate
Principal Balance of the Class A-1 Certificates and the Class A-2 Certificates
as of the Closing Date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans as of the Closing Date.
"OTS": Office of Thrift Supervision or any successor.
"Outstanding Class SB Unpaid Interest Amount": As of any
Distribution Date, an amount equal to (i) the aggregate of the Class SB Accrual
Amounts for all preceding Distribution Dates minus (ii) the aggregate amount of
all previous distributions to the Class SB Certificateholders in reduction of
the Outstanding Class SB Unpaid Interest Amount pursuant to Section 4.01(b)(xvi)
hereof.
"Outstanding Mortgage Loan": As to any Due Date, a Mortgage
Loan (including an REO Property) which was not the subject of a Principal
Prepayment in full, Cash Liquidation or REO Disposition and which was not
purchased prior to such Due Date pursuant to Sections 2.02, 3.22 or 9.01.
"Ownership Interest": As to any 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, as owner or as pledgee.
"Pass-Through Rate": With respect to each of the Class A-1
Certificates, the Class A-2 Certificates, the Class B Certificates and the Class
R Certificates, on each Distribution Date, a rate equal to the weighted average,
expressed as a percentage, of the related Net
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Mortgage Rates over the sum of the Fixed Strip Rates and Pool Strip Rates of all
Mortgage Loans included in the Trust Fund as of the Due Date in the month next
preceding the month in which such Distribution Date occurs, weighted on the
basis of the Stated Principal Balances of such Mortgage Loans, which Stated
Principal Balances shall be the Stated Principal Balances of such Mortgage Loans
at the close of business on the immediately preceding Distribution Date after
giving effect to distributions thereon allocable to principal (or, in the case
of the PassThrough Rate for the initial Distribution Date, at the close of
business on the Cut-off Date). With respect to the Class SA Certificates and any
Distribution Date, a rate equal to the weighted average, expressed as a
percentage, of the Pool Strip Rates of all Mortgage Loans included in the Trust
Fund as of the Due Date in the month immediately preceding the month in which
such Distribution Date occurs, weighted on the basis of the respective Stated
Principal Balances of such Mortgage Loans, which Stated Principal Balances shall
be the Stated Principal Balances of such Mortgage Loans at the close of business
on the immediately preceding Distribution Date after giving effect to
distributions thereon allocable to principal (or, in the case of the PassThrough
Rate for the initial Distribution Date, at the close of business on the Cut-off
Date). With respect to the Class SB Certificates, the Fixed Strip Rate.
"Percentage Interest": With respect to any Certificate (other
than a Residual Certificate), the undivided beneficial ownership interest in the
related Class evidenced by such Certificate, which as to each such Certificate
shall be equal to the initial Certificate Principal Balance (or portion of the
Notional Amount set forth on the face thereof, as applicable) thereof divided by
the aggregate initial Certificate Principal Balance (or Notional Amount, as
applicable) of all of the Certificates of the same Class, expressed as a
percentage carried to four decimal places. With respect to a Residual
Certificate, the interest in distributions to be made with respect to such Class
evidenced thereby, expressed as a percentage carried to four decimal places, as
stated on the face of such Certificate.
"Periodic Rate Cap": The provision in each Mortgage Note that
limits permissible increases and decreases in the Mortgage Rate on any
Adjustment Date to not more than 1.00% above or below the Mortgage Rate in
effect immediately prior to such Adjustment Date.
"Permitted Instruments": Any one or more of the following:
(i) direct obligations of, or obligations fully guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(ii) repurchase obligations (the collateral for which is held by
a third party or the Trustee) with respect to any security described in
clause (i) above, provided that the long-term unsecured obligations of
the party agreeing to repurchase such obligations are at the time rated
by each Rating Agency in one of its two highest long-term rating
categories;
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(iii) certificates of deposit, time deposits, demand deposits and
bankers' acceptances of any bank or trust company incorporated under
the laws of the United States or any state thereof or the District of
Columbia, provided that the short-term commercial paper of such bank or
trust company (or, in the case of the principal depository institution
in a depository institution holding company, the long-term unsecured
debt obligations of the depository institution holding company) at the
date of acquisition thereof has been rated by each Rating Agency in its
highest short-term rating;
(iv) mutual funds organized under the Investment Company Act of
1940 rated not less than "AAAm" by Standard & Poor's, not less than
"P-1" by Moody's and not less than "D-1" by Duff & Xxxxxx, if rated by
Duff & Xxxxxx;
(v) commercial paper (having original maturities of not more
than nine months) of any corporation incorporated under the laws of the
United States or any state thereof or the District of Columbia which on
the date of acquisition has been rated by each Rating Agency in its
highest short-term rating; and
(vi) any other obligation or security acceptable to each Rating
Agency (as certified by a letter from each Rating Agency to the
Trustee) in respect of mortgage pass-through certificates rated in one
of its two highest rating categories;
provided, that no such instrument shall be a Permitted Instrument if such
instrument evidences either (a) the right to receive interest only payments with
respect to the obligations underlying such instrument or (b) both principal and
interest payments derived from obligations underlying such instrument where the
principal and interest payments with respect to such instrument provide a yield
to maturity exceeding 120% of the yield to maturity at par of such underlying
obligation.
"Permitted Transferee": Any transferee of a Class R
Certificate other than a Non- United States Person or Disqualified Organization.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pool Strip Rate": With respect to each Mortgage Loan, a fixed
percentage equal to the greater of (i) the related Gross Margin minus 4.95% and
(ii) 0.00%.
"Prepayment Assumption": A constant prepayment rate ("CPR") of
___% per annum, used solely for determining the rate of accrual of original
issue discount, market discount and amortizable premium on the Certificates for
federal income tax purposes. A CPR represents an annualized constant assumed
rate of prepayment each month of a pool of mortgage loans relative to its then
outstanding principal balance for the life of such mortgage loans.
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"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment or a Principal Prepayment in full during the related
Prepayment Period, an amount equal to the amount of interest that would have
accrued at the applicable Net Mortgage Rate on the principal balance of such
Mortgage Loan immediately prior to such prepayment, or in the case of a partial
Principal Prepayment on the amount of such prepayment, during the period
commencing on the date of prepayment, or in the case of a Principal Prepayment
in full the date as of which the prepayment is applied, and ending on the last
day of the month of prepayment.
"Prepayment Period": As to any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.
"Primary Hazard Insurance Policy": Each primary hazard
insurance policy required to be maintained pursuant to the first or the second
paragraph of Section 3.13.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.
"Purchase Price": With respect to any Mortgage Loan (or
related REO Property) required to be purchased pursuant to Section 2.02 or 2.04
or that the Master Servicer is entitled to repurchase pursuant to Section 3.22,
an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof,
(ii) unpaid accrued interest (or REO Imputed Interest) at the applicable Net
Mortgage Rate on the Stated Principal Balance thereof outstanding during each
Due Period that such interest was not paid or advanced, from the date through
which interest was last paid by the Mortgagor or advanced and distributed to
Certificateholders together with unpaid Servicing Fees from the date through
which interest was last paid by the Mortgagor, in each case to the first day of
the month in which such Purchase Price is to be distributed, plus (iii) the
aggregate of all Advances made in respect thereof that were not previously
reimbursed.
"Rating Agency": Moody's or their respective successors. If
such agency and its successors are no longer in existence, "Rating Agency" shall
be such nationally recognized statistical rating agency, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Trustee and Master Servicer. References herein to the two highest long
term debt rating categories of Moody's shall mean "Aa2" or better and references
herein to the highest short-term debt rating of Moody's shall mean "Prime - 1"
and in the case of any other Rating Agency such references shall mean such
rating categories without regard to any plus or minus.
"Realized Loss": With respect to each Mortgage Loan or REO
Property as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan as of the date of such Cash Liquidation or REO Disposition, plus
(ii) interest (and REO Imputed Interest, if any) at the Net Mortgage
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Rate from the Due Date as to which interest was last paid or advanced to
Certificateholders up to the last day of the month in which the Cash Liquidation
or REO Disposition occurred on the Stated Principal Balance of such Mortgage
Loan outstanding during each Due Period that such interest was not paid or
advanced, minus (iii) the proceeds, if any, received during the month in which
such Cash Liquidation or REO Disposition occurred, to the extent applied as
recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage
Loan, net of the portion thereof reimbursable to the Master Servicer or any
Sub-Servicer with respect to related Advances not previously reimbursed. With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect
to each Mortgage Loan which has become the subject of a Debt Service Reduction,
the amount of such Debt Service Reduction.
"Record Date": With respect to any Distribution Date (other
than the Distribution Date occurring in March 1996), the last Business Day of
the month immediately preceding the month of such Distribution Date. With
respect to the Distribution Date occurring in March 1996, the Closing Date.
"Regular Certificate": Any of the Certificates other than the
Class R Certificates.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"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 proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
"REO Acquisition": The acquisition by the Master Servicer on
behalf of the Trustee for the benefit of the Certificateholders of any REO
Property pursuant to Section 3.15.
"REO Disposition": The final receipt by or on behalf of the
Master Servicer of all Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and other payments and recoveries (including proceeds of a final sale) which the
Master Servicer expects to be finally recoverable from the sale or other
disposition of the REO Property.
"REO Imputed Interest": As to any REO Property, for any
period, an amount equivalent to interest (at the Mortgage Rate that would have
been applicable to the related Mortgage Loan had it been outstanding) on the
unpaid principal balance of the Mortgage Loan as of the date of acquisition
thereof (as such balance is reduced pursuant to Section 3.15 by any income from
the REO Property treated as a recovery of principal).
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"REO Proceeds": Proceeds, net of directly related expenses,
received in respect of any REO Property (including, without limitation, proceeds
from the rental of the related Mortgaged Property and of any REO Disposition)
which proceeds are required to be deposited into the Custodial Account as and
when received.
"REO Property": A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibits F-1 or F-2 attached hereto.
"Residual Certificate": Any of the Class R Certificates.
"Responsible Officer": When used with respect to the Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any vice president, any assistant vice president, the Secretary, any
assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any
assistant cashier, any trust officer, any assistant trust officer, the
Controller and any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Rule 144A": Rule 144A under the Securities Act of 1933, as
amended, as in effect from time to time.
"Scheduled Principal and Net Recoveries": With respect to any
Distribution Date, an amount equal to the aggregate of the following:
(1) the principal portion of each Monthly Payment on the
Outstanding Mortgage Loans due on the related Due Date, whether or not
received on or prior to the related Determination Date, less the
principal portion of related Debt Service Reductions which constitute
Excess Bankruptcy Losses;
(2) the Stated Principal Balance of any Mortgage Loan
repurchased during the related Prepayment Period; and
(3) the principal portion of all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds received during the related
Prepayment Period minus the aggregate amount of expenses incurred by
the Master Servicer in connection with the liquidation of the related
Mortgage Loans to the extent such expenses are not otherwise
recoverable from such Insurance Proceeds, Liquidation Proceeds or REO
Proceeds; but only to the extent that any such amounts either (A) were
not received in connection with a Cash
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Liquidation or REO Disposition, or (B) were received in connection with
a Cash Liquidation or REO Disposition which resulted in an Excess
Special Hazard Loss, Excess Bankruptcy Loss, Excess Fraud Loss or
Extraordinary Loss.
"Seller": Quality Mortgage USA, Inc., and its successors and
assigns.
"Seller's Warranty Certificate": The Seller's Warranty
Certificate dated the Closing Date and executed by the Seller with respect to
the Mortgage Loans purchased under the related Mortgage Loan Purchase Agreements
between the Seller and DLJMCI.
"Senior Accrual Diversion Amount": With respect to any
Distribution Date prior to the Class B Certificate Termination Date, an amount
equal to the lesser of (A) the Accrued Certificate Interest on the Class SB
Certificates for such Distribution Date, and (B) the amount, if any, by which
the aggregate of all Senior Accrual Diversion Amounts for all preceding
Distribution Dates is less than the sum of (i) an amount equal to 5.250% of the
aggregate Certificate Principal Balance of all Classes of Certificates as of the
Cut-off Date and (ii) 100% of all Realized Losses allocated to any class of
Certificates on such Distribution Date and on all preceding Distribution Dates
(except to the extent such Realized Losses were allocated to any of the Class
A-1 Certificates, the Class A-2 Certificates or the Class B Certificates on any
such preceding Distribution Date).
"Senior Certificate": Any of the Class SA Certificates, the
Class A-1 Certificates or the Class A-2 Certificates.
"Senior Percentage": With respect to any Distribution Date,
the sum of the then applicable Class A-1 Percentage and the then applicable
Class A-2 Percentage.
"Senior Prepayment Percentage": The Senior Prepayment
Percentage shall equal, with respect to any Distribution Date, the percentage
indicated below:
Senior Prepayment
Distribution Date Percentage
March 1996 through 100%
February 2006
March 2006 through Senior Percentage, plus 70% of
February 2007 the difference between 100% and the Senior
Percentage
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March 2007 through Senior Percentage, plus 60% of
February 2008 the difference between 100% and the Senior
Percentage
March 2008 through Senior Percentage, plus 40% of
February 2009 the difference between 100% and the Senior
Percentage
March 2009 through Senior Percentage, plus 20% of
February 2010 the difference between 100% and the Senior
Percentage
March 2010 and Senior Percentage;
thereafter
provided, however, (i) that any scheduled reduction to the Senior Prepayment
Percentage described above shall not occur as of any Distribution Date unless
either (a)(1) the outstanding principal balance of Mortgage Loans delinquent 60
days or more (including foreclosure and REO Property) averaged over the last six
months, as a percentage of the aggregate outstanding principal balance of all
Mortgage Loans averaged over the last six months, does not exceed 2% and (2)
Realized Losses on the Mortgage Loans to date for such Distribution Date if
occurring during the eleventh, twelfth, thirteenth, fourteenth or fifteenth year
(or any year thereafter) after March 1996 are less than 30%, 35%, 40%, 45% and
50%, respectively, of the sum of the Initial Certificate Principal Balance of
the Class B Certificates and 5.25% of the initial Certificate Principal Balances
of all of the Certificates or (b)(1) the aggregate outstanding principal balance
of the Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans to date
are less than 10% of the sum of the Initial Certificate Principal Balance of the
Class B Certificates and 5.25% of the initial Certificate Principal Balances of
all of the Certificates and (ii) that for any Distribution Date on which the
Senior Percentage is greater than the Original Senior Percentage, the Prepayment
Percentage for such Distribution Date shall be 100%. Notwithstanding the
foregoing, upon the reduction of the aggregate Certificate Principal Balance of
the Senior Certificates to zero, the Senior Prepayment Percentage will equal 0%.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and
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liquidation of any REO Property and (iv) compliance with the obligations under
the second paragraph of Section 3.01 and Section 3.09.
"Servicing Fee": As to each Mortgage Loan, an amount, payable
out of any payment of interest on the Mortgage Loan, equal to interest at the
applicable Servicing Fee Rate on the Stated Principal Balance of such Mortgage
Loan for the calendar month preceding the month in which the payment is due
(alternatively, in the event such payment of interest accompanies a Principal
Prepayment in full made by the Mortgagor, interest for the number of days
covered by such payment of interest).
"Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate of 0.750%.
"Servicing Officer": Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans, whose name and specimen signature appear on a list of servicing
officers furnished to the Trustee by the Master Servicer, as such list may from
time to time be amended.
"Single Certificate": A Certificate of any Class evidencing an
Initial Certificate Principal Balance of $1,000.
"Special Hazard Amount": As of any Distribution Date, an
amount equal to $639,863 (the initial "Special Hazard Amount") minus the sum of
(i) the aggregate amount of Special Hazard Losses allocated solely to the Class
A-2 Certificates, the Class B Certificates, the Class SB Certificates and the
Class R Certificates in accordance with Section 4.04 and (ii) the Adjustment
Amount (as defined below) as most recently calculated. For each Anniversary, the
Adjustment Amount shall be calculated and shall be equal to the amount, if any,
by which the amount calculated in accordance with the preceding sentence
(without giving effect to the deduction of the Adjustment Amount for such
Anniversary) exceeds the greater of (A) the product of the Special Hazard
Percentage for such Anniversary multiplied by the outstanding principal balance
of all the Mortgage Loans on such Anniversary and (B) twice the outstanding
principal balance of the Mortgage Loan in the Trust Fund which has the largest
outstanding principal balance on such Anniversary.
"Special Hazard Loss": Any Realized Loss suffered by a
Mortgaged Property on account of direct physical loss, but not including (i) any
loss of a type covered by a hazard insurance policy or a flood insurance policy
required to be maintained in respect to such Mortgaged Property pursuant to
Section 3.13 to the extent of the amount of such loss covered thereby, or (ii)
any Extraordinary Loss.
"Special Hazard Percentage": As of each Anniversary, the
greater of (i) 1% (or, if greater than 1%, the highest percentage of Mortgage
Loans, by principal balance, in any California zip code area) times the
aggregate principal balance of all of the Mortgage Loans on
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such Anniversary and (ii) twice the principal balance of the single Mortgage
Loan having the largest principal balance.
"Standard & Poor's": Standard & Poor's Ratings Services, a
division of XxXxxx-Xxxx, Inc., or its successor in interest.
"Startup Day": The day designated as such pursuant to Article
X hereof.
"Stated Principal Balance": With respect to any Mortgage Loan
or related REO Property at any given time, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut-off Date, after application of principal
payments due on or before such date, whether or not received, minus (ii) the sum
of (a) the principal portion of the Monthly Payments due with respect to such
Mortgage Loan or REO Property during each Due Period ending prior to the most
recent Distribution Date which were distributed or with respect to which an
Advance was distributed, and (b) all Principal Prepayments with respect to such
Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation Proceeds
and net income from a REO Property to the extent applied by the Master Servicer
as recoveries of principal in accordance with Section 3.15 with respect to such
Mortgage Loan or REO Property, which were distributed pursuant to Section 4.01
on any previous Distribution Date, and (c) any Realized Loss with respect
thereto allocated pursuant to Section 4.04 for any previous Distribution Date.
"Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicer Remittance Date": The 18th day of each month, or
if such day is not a Business Day, the immediately preceding Business Day.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer and any successor Sub-Servicer relating to
servicing and administration of certain Mortgage Loans as provided in Section
3.02.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information, reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
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"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer of any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trust Fund": 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) the
Mortgage Loans (exclusive of payments of principal and interest due on or before
the Cut-off Date, if any) as from time to time are subject to this Agreement and
all payments under and proceeds of the Mortgage Loans (exclusive of any
prepayment fees and late payment charges received on the Mortgage Loans),
together with all documents included in the related Mortgage File, subject to
Section 2.01; (ii) such funds or assets as from time to time are deposited in
the Custodial Account, the Excess Proceeds Account or the Certificate Account;
(iii) any REO Property; (iv) the Primary Hazard Insurance Policies, if any, and
all other Insurance Policies with respect to the Mortgage Loans; and (v) the
Depositor's interest in respect of the representations and warranties made by
the Seller in each Mortgage Loan Purchase Agreement and in the Seller's Warranty
Certificate, as assigned to the Trustee pursuant to Section 2.04 hereof.
"Trustee": Bankers Trust Company, or its successor in
interest, or any successor trustee appointed as herein provided.
"Uninsured Cause": Any cause of damage to property subject to
a Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 3.13.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States. The term "United States" shall have the meaning set forth in
Section 7701 of the Code or successor provisions.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, 95% of all of the Voting Rights shall be allocated among
Holders of the Class A-1 Certificates, the Class A-2 Certificates and the Class
B Certificates in proportion to the outstanding Certificate Principal Balances
of their respective Certificates; and the Holders of the Class SA Certificates,
the Class SB Certificates, Class R Certificates shall collectively be entitled
to 2%, 2% and 1%
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respectively, of all of the Voting Rights, allocated among the Certificates of
each such Class in accordance with their respective Percentage Interests.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, as of the Closing Date, and concurrently with
the execution and delivery hereof, does hereby assign, transfer, sell, set over
and otherwise convey to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Mortgage Loans identified on the
Mortgage Loan Schedule (exclusive of any prepayment fees and late payment
charges received thereon) and all other assets included or to be included in the
Trust Fund for the benefit of the Certificateholders. Such assignment includes
all principal and interest received by the Master Servicer on or with respect to
the Mortgage Loans (other than payment of principal and interest due on or
before the Cut-off Date).
The Master Servicer hereby acknowledges the receipt by it of
cash in an amount equal to $271.88 representing interest at the Net Mortgage
Rate, for the calendar month of February, 1996, for those Mortgage Loans which
do not have Monthly Payments due on March 1, 1996. The Master Servicer shall
hold such amount in the Custodial Account and shall include such amount in the
Available Distribution Amount of the Distribution Date in March, 1996.
In connection with the foregoing transfer and assignment of
the Mortgage Loans, the following documents or instruments shall be delivered
to, and deposited with, the Trustee with respect to each Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse to the
order of "Bankers Trust Company, as trustee" with all intervening
endorsements showing a complete chain of endorsements from the
originator to the Person endorsing it to the Trustee;
(ii) the original recorded Mortgage or, if the original Mortgage
has not been returned from the applicable public recording office, a
copy of the Mortgage certified by the Seller to be a true and complete
copy of the original Mortgage submitted to the title insurance company
for recording;
(iii) a duly executed original Assignment of the Mortgage in
recordable form to "Bankers Trust Company, as trustee" or to "Bankers
Trust Company, as trustee for the holders of DLJ Mortgage Acceptance
Corp. Mortgage Pass-Through Certificates";
(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the originator
thereof to the Person assigning it to the Trustee or, if any such
Assignment has not been returned from the applicable public recording
office, a copy of such Assignment certified by the Seller to be a true
and
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complete copy of the original Assignment submitted to the title
insurance company for recording;
(v) the original lender's title insurance policy, or, if such
policy has not been issued and if the Mortgage Loan was funded through
a title insurance company pursuant to escrow or closing instructions
precluding the title insurance company or other comparable escrow or
closing agent from funding until it is prepared to issue the required
title insurance coverage, a copy of such escrow or closing
instructions;
(vi) the original of any assumption, modification, extension or
guaranty agreement;
(vii) the original or a copy of the preliminary title report (or
equivalent thereof) on the Mortgage Property;
(viii) if any of the documents or instruments referred to above was
executed on behalf of the Mortgagor by another Person, the original
power of attorney or other instrument that authorized and empowered
such Person to sign, or a copy thereof certified by the Seller (or by
an officer of the applicable title insurance or escrow company) to be a
true and correct copy of the original; and
(ix) with respect to any High Cost Loan, the notice to assignees
that the Mortgage Loan is subject to special truth in lending rules, to
the extent required by applicable law.
The Depositor hereby assigns to the Trustee, for the benefit of the
Certificateholders, its interest in respect of obligations of the Seller to
deliver the Mortgage Files with respect to the Mortgage Loans. Insofar as any
Mortgage Loan Purchase Agreement or the Seller's Warranty Certificate relates to
any such obligation and any remedies provided thereunder for any breach of such
obligations, such right, title and interest may be enforced by the Trustee on
behalf of the Certificateholders.
The Seller is obligated pursuant to each Mortgage Loan Purchase
Agreement to deliver to the Trustee: (a) either the original recorded Mortgage,
or in the event such original cannot be delivered by the Seller, a copy of such
Mortgage certified as true and complete by the appropriate recording office, in
those instances where a copy thereof certified by the Seller was delivered to
the Trustee pursuant to clause (ii) above; and (b) either the original
Assignment or Assignments of the Mortgage, with evidence of recording thereon,
showing a complete chain of assignment from the originator to the Seller, or in
the event such original cannot be delivered by the Seller, a copy of such
Assignment or Assignments certified as true and complete by the appropriate
recording office, in those instances where copies thereof certified by the
Seller were delivered to the Trustee pursuant to clause (iv) above.
Notwithstanding anything to the contrary contained in this Section 2.01, in
those instances where the public recording office retains the original Mortgage
after it has been recorded, the Seller shall be deemed to have satisfied its
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obligations hereunder upon delivery to the Trustee of a copy of such Mortgage
certified by the public recording office to be a true and complete copy of the
recorded original thereof.
As promptly as practicable after the Closing Date, the Seller
shall cause to be delivered to the appropriate public office for recordation in
the real property records the Assignment referred to in clause (iii) and to the
extent necessary in clause (iv) of this Section 2.01. While such Assignment to
be recorded is being recorded, the Trustee shall retain a photocopy of such
Assignment. If any Assignment is lost or returned unrecorded to the Trustee
because of any defect therein, the Seller is required to prepare a substitute
Assignment or cure such defect, as the case may be, and the Trustee shall cause
such Assignment to be recorded in accordance with this paragraph.
The Seller is required under each Mortgage Loan Purchase
Agreement to exercise its best reasonable efforts to deliver or cause to be
delivered to the Trustee within 120 days of the Closing Date, or such other date
as is set forth in such Mortgage Loan Purchase Agreement, the original or a
photocopy of the title insurance policy with respect to each of the related
Mortgage Loans, assigned to the Trustee pursuant to this Section 2.01.
All original documents relating to the Mortgage Loans which
are not delivered to the Trustee, to the extent delivered by the Seller to the
Master Servicer, are and shall be held by the Master Servicer in trust for the
benefit of the Trustee on behalf of the Certificateholders.
Except as may otherwise expressly be provided herein, neither
the Depositor, the Master Servicer nor the Trustee shall (and the Master
Servicer shall ensure that no Sub-Servicer shall) assign, sell, dispose of or
transfer any interest in the Trust Fund or any portion thereof, or permit the
Trust Fund or any portion thereof to be subject to any lien, claim, mortgage,
security interest, pledge or other encumbrance of, any other Person.
It is intended that the conveyance of the Mortgage Loans by
the Depositor to the Trustee as provided in this Section be, and be construed
as, a sale of the Mortgage Loans by the Depositor to the Trustee for the benefit
of the Certificateholders. It is, further, not intended 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 the
Mortgage Loans are held to be property of the Depositor, or if for any reason
this Agreement is held or deemed to create a security interest in the Mortgage
Loans, then it is intended that, (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 and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in this Section shall be deemed to
be (1) a grant by the Depositor to the Trustee of a security interest in all of
the Depositor's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (A) the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related insurance
policies and all other documents in the related Mortgage Files, (B) all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof and (C) all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments,
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securities or other property, including without limitation all amounts from time
to time held or invested in the Certificate Account, the Excess Proceeds Account
or the Custodial Account, whether in the form of cash, instruments, securities
or other property and (2) an assignment by the Depositor to the Trustee of any
security interest in any and all of the Seller's or DLJMCI's right (including
the power to convey title thereto), title and interest, whether now owned or
hereafter acquired, in and to the property described in the foregoing clauses
(1)(A) through (C) granted by the Seller to the Depositor pursuant to the
related Mortgage Loan Purchase Agreements or granted by DLJMCI to the Depositor
pursuant to the Assignment Agreement; (c) the possession by the Trustee or its
agent of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" or possession by a purchaser or a person
designated by such secured party, for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction (including, without
limitation, Sections 9-305, 8-313 or 8-321 thereof); 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 purpose of perfecting
such security interest under applicable law. The Depositor and the Trustee at
the Depositor's direction shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Agreement.
SECTION 2.02. Acceptance of the Trust Fund by the
Trustee.
The Trustee acknowledges receipt (subject to any exceptions
noted in the Initial Certification described below) of the documents referred to
in Section 2.01 above and all other assets included in the Trust Fund and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will hold
such other assets included in the Trust Fund (to the extent delivered or
assigned to the Trustee), in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders,
to review each Mortgage File on or before the Closing Date to ascertain that all
documents required to be delivered to it are in its possession, and the Trustee
agrees to execute and deliver to the Depositor and the Master Servicer on the
Closing Date an Initial Certification in the form annexed hereto as Exhibit C to
the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (i) all
documents required to be delivered to it pursuant to this Agreement with respect
to such Mortgage Loan are in its possession, (ii) such documents have been
reviewed by it and appear regular on their face and relate to such Mortgage Loan
and (iii) based on its examination and only as to the foregoing documents, the
information set forth in items (i) - (vii), (x), (xii), (xiii), (xx) and (xxi)
of the
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definition of the "Mortgage Loan Schedule" accurately reflects information set
forth in the Mortgage File. Neither the Trustee nor the Master Servicer shall be
under any duty to determine whether any Mortgage File should include any of the
documents specified in clause (vi) of Section 2.01. Neither the Trustee nor the
Master Servicer 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 or that they are other than
what they purport to be on their face.
Within 90 days of the Closing Date the Trustee shall deliver
to the Depositor and the Master Servicer a Final Certification in the form
annexed hereto as Exhibit D evidencing the completeness of the Mortgage Files,
with any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and
preparing the certifications referred to above the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective in
any material respect and in such manner as to materially and adversely affect
the interests of Certificateholders in the related Mortgage Loan, the Trustee
shall promptly notify the Seller, the Master Servicer and the Depositor. The
Trustee shall promptly notify the Seller of such defect and request that the
Seller cure any such defect within 60 days from the date on which the Seller was
notified of such defect, and if the Seller does not cure such defect in all
material respects during such period, request that the Seller purchase such
Mortgage Loan from the Trust Fund on behalf of the Certificateholders at the
Purchase Price, plus all other amounts due under the related Mortgage Loan
Purchase Agreement in respect thereof, within 90 days after the date on which
the Seller was notified of such defect. It is understood and agreed that the
obligation of the Seller to cure a material defect in, or purchase any Mortgage
Loan as to which a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders. The Purchase
Price and such other amounts for the purchased Mortgage Loan shall be deposited
or caused to be deposited upon receipt by the Master Servicer in the Custodial
Account and, upon receipt by the Trustee of written notification of such deposit
signed by a Servicing Officer, the Trustee shall release or cause to be released
to the Seller the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Seller shall require as necessary to vest in the Seller ownership of any
Mortgage Loan released pursuant hereto and at such time the Trustee shall have
no further responsibility with respect to the related Mortgage File.
SECTION 2.03. Representations, Warranties and
Covenants of the Master Servicer and
the Depositor.
(a) The Master Servicer hereby represents and warrants to and
covenants with the Depositor and the Trustee for the benefit of
Certificateholders that:
(i) The Master Servicer is, and throughout the term
hereof shall remain, a corporation duly organized, validly existing and
in good standing under the
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laws of the State of Nevada (except as otherwise permitted pursuant to
Section 6.02), the Master Servicer is, and shall remain, in compliance
with the laws of each state in which any Mortgaged Property is located
to the extent necessary to perform its obligations under this
Agreement, and the Master Servicer is, and shall remain, approved to
sell mortgage loans to and service mortgage loans for FNMA and FHLMC;
(ii) The execution and delivery of this Agreement by the
Master Servicer, and the performance and compliance with the terms of
this Agreement by the Master Servicer, will not violate the Master
Servicer's charter or bylaws or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets;
(iii) The Master Servicer has the full power and authority
to enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance
of this Agreement, and has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization,
execution and delivery by the Depositor and the Trustee, constitutes a
valid, legal and binding obligation of the Master Servicer, enforceable
against the Master Servicer in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights generally, and (B) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law;
(v) The Master Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation is likely to
affect materially and adversely either the ability of the Master
Servicer to perform its obligations under this Agreement or the
financial condition of the Master Servicer;
(vi) No litigation is pending or, to the best of the
Master Servicer's knowledge, threatened against the Master Servicer
which would prohibit its entering into this Agreement or performing its
obligations under this Agreement or is likely to affect materially and
adversely either the ability of the Master Servicer to perform its
obligations under this Agreement or the financial condition of the
Master Servicer;
(vii) The Master Servicer will comply in all material
respects in the performance of this Agreement with all reasonable rules
and requirements of each insurer under each Insurance Policy;
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(viii) The execution of this Agreement and the performance
of the Master Servicer's obligations hereunder do not require any
license, consent or approval of any state or federal court, agency,
regulatory authority or other governmental body having jurisdiction
over the Master Servicer, other than such as have been obtained; and
(ix) No information, certificate of an officer, statement
furnished in writing or report delivered to the Depositor, any
affiliate of the Depositor or the Trustee by the Master Servicer will,
to the knowledge of the Master Servicer, contain any untrue statement
of a material fact or omit a material fact necessary to make the
information, certificate, statement or report not misleading.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.03(a) shall survive the
execution and delivery of this Agreement, and shall inure to the benefit of the
Depositor, the Trustee and the Certificateholders. Upon discovery by the
Depositor, the Trustee or the Master Servicer of a breach of any of the
foregoing representations, warranties and covenants that materially and
adversely affects the interests of the Depositor or the Trustee, the party
discovering such breach shall give prompt written notice to the other parties.
(b) The Depositor hereby represents and warrants to the Master
Servicer and the Trustee for the benefit of Certificateholders that as of the
Closing Date (or, if otherwise specified below, as of the date so specified):
(i) Assuming that representation (v) of the Seller set
forth in Exhibit J hereto is true and correct, then
immediately prior to the assignment of the Mortgage Loans to
the Trustee, the Depositor had good title to, and was the sole
owner of, each Mortgage Loan free and clear of any pledge,
lien, encumbrance or security interest (other than rights to
servicing and related compensation) and such assignment
validly transfers ownership of the Mortgage Loans to the
Trustee free and clear of any pledge, lien, encumbrance or
security interest; and
(ii) The representations and warranties of the Seller
with respect to the Mortgage Loans and the remedies therefor
that are contained in the related Mortgage Loan Purchase
Agreements and in the Seller's Warranty Certificate are as set
forth in Exhibit J hereto.
It is understood and agreed that the representations and warranties set forth in
this Section 2.03(b) shall survive delivery of the respective Mortgage Files to
the Trustee.
Upon discovery by either the Depositor, the Master Servicer or
the Trustee of a breach of any representation or warranty set forth in this
Section 2.03 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties.
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SECTION 2.04. Representations and Warranties of
the Seller.
The Depositor hereby assigns to the Trustee for the benefit of
the Certificateholders its interest in respect of the representations and
warranties made by the Seller in each Mortgage Loan Purchase Agreement or the
exhibits thereto and in the Seller's Warranty Certificate. Insofar as any
Mortgage Loan Purchase Agreement or the Seller's Warranty Certificate relates to
any such representations and warranties and any remedies provided thereunder for
any breach of such representations and warranties, such right, title and
interest may be enforced by the Trustee on behalf of the Certificateholders.
Upon the discovery by the Depositor, the Master Servicer or the Trustee of a
breach of any of the representations and warranties made in any Mortgage Loan
Purchase Agreement or the Seller's Warranty Certificate in respect of any
Mortgage Loan which are set forth in Exhibit J attached hereto which materially
and adversely affects the interests of the Certificateholders in such Mortgage
Loan, the party discovering such breach shall give prompt written notice to the
other parties. The Trustee shall promptly notify the Seller of such breach and
request that such Seller shall, within 90 days from the date that the Depositor,
the Master Servicer or the Trustee was notified of such breach, either (i) cure
such breach in all material respects or (ii) purchase such Mortgage Loan from
the Trust Fund at the Purchase Price, plus all other amounts due under the
related Mortgage Loan Purchase Agreement in respect thereof, and in the manner
set forth in Section 2.02. Except as expressly set forth herein neither the
Trustee nor the Master Servicer is under any obligation to discover any breach
of the above mentioned representations and warranties. It is understood and
agreed that the obligation of the Seller to cure such breach or purchase such
Mortgage Loan as to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on behalf of Certificateholders.
SECTION 2.05. Issuance of Certificates Evidencing
Interests in the Trust Fund.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery of the Mortgage Files to it together with the assignment
to it of all other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor, executed by an
officer of the Depositor, has executed and caused to be authenticated and
delivered to, or upon the order of, the Depositor the Certificates in authorized
denominations which evidence ownership of the entire Trust Fund.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Master Servicer to Act as Master
Servicer.
The Master Servicer shall service and administer the Mortgage
Loans in accordance with this Agreement, the related Mortgage Notes and
Mortgages and the customary and usual standards of practice of prudent mortgage
lenders in the respective states in which the Mortgaged Properties are located,
and shall have full power and authority, acting alone and/or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration that it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment, to (i) execute and deliver, on behalf of the
Certificateholders and the Trustee 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 the
Mortgaged Properties, (ii) institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and (iii) cause title to such properties to be held by the Trustee or its
nominee on behalf of Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. Subject to Section 3.16, the Trustee shall execute based on the
written request of the Master Servicer and furnish to the Master Servicer and
any Sub-Servicer any special or limited powers of attorney and other documents
necessary or appropriate to enable the Master Servicer and any Sub-Servicer to
carry out their servicing and administrative duties hereunder. The Trustee shall
not be liable for any action taken by the Master Servicer or any Sub-Servicer
pursuant to the application of such special or limited powers of attorney.
In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. No costs incurred by the Master Servicer or by
Sub-Servicers in effecting the payment of taxes and assessments on the Mortgaged
Properties shall, for the purpose of calculating distributions to
Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loans so permit.
It is expressly understood and agreed that in light of the
underwriting criteria applicable to the Mortgage Loans, special servicing
procedures are desirable in order to minimize the delinquency and loss
experience of the Mortgage Loans. The Master Servicer
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hereby covenants that it will use reasonable efforts to prevent and to resolve
delinquencies promptly and appropriately in light of the underwriting criteria
applicable to the Mortgage Loans and that it will modify its procedures from
time to time in accordance with the reasonable written request of the Depositor.
Notwithstanding anything in this Agreement to the contrary, the Master Servicer
shall not (unless the Mortgagor is in default with respect to the Mortgage Loan
or such default is, in the judgment of the Master Servicer, reasonably
foreseeable) make or permit any modification, waiver or amendment of any term of
any Mortgage Loan that would both (i) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and cause the Trust Fund to fail to
qualify as a REMIC under the Code or (ii) cause the imposition of any tax on
"prohibited transactions" or "contributions" after the Startup Day under the
REMIC Provisions.
The relationship of the Master Servicer (and of any successor
to the Master Servicer under this Agreement) to the Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
SECTION 3.02. Sub-Servicing Agreements Between
Master Servicer and Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing
Agreements with SubServicers for the servicing and administration of the
Mortgage Loans and for the performance of any and all other activities of the
Master Servicer hereunder. Each Sub-Servicer shall be either (i) an institution
the accounts of which are insured by the FDIC or (ii) another entity that
engages in the business of originating or servicing mortgage loans, and in
either case shall be authorized to transact business in the state or states in
which the related Mortgaged Properties it is to service are situated, if and to
the extent required by applicable law to enable the SubServicer to perform its
obligations hereunder and under the Sub-Servicing Agreement, and in either case
shall be a FHLMC or FNMA approved mortgage servicer. Each Sub-Servicing
Agreement must impose on the Sub-Servicer requirements conforming to the
provisions set forth in Section 3.08 and provide for servicing of the Mortgage
Loans consistent with the terms of this Agreement. With the consent of the
Trustee, which consent shall not be unreasonably withheld, the Master Servicer
and the Sub-Servicers may enter into Sub-Servicing Agreements and make
amendments to the Sub-Servicing Agreements or enter into different forms of
Sub-Servicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of this
Agreement, and that no such amendment or different form shall be made or entered
into which could be reasonably expected to be materially adverse to the
interests of the Certificateholders, without the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights. Notwithstanding any
inconsistent or contrary provision of this Agreement, neither any Interim
Subservicer nor any Interim Servicing Agreement shall be subject to the
foregoing provisions during the Interim Servicing Period for any related
Mortgage Loan.
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(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each SubServicer under the related Sub-Servicing
Agreement, including, without limitation, any obligation to make advances in
respect of delinquent payments as required by a Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, but shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement only
to the extent, if any, that such recovery exceeds all amounts due in respect of
the related Mortgage Loans or (ii) from a specific recovery of costs, expenses
or attorneys' fees against the party against whom such enforcement is directed.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02. Each
Sub-Servicing Agreement, if any, shall include the provision that such agreement
may be immediately terminated by any successor Master Servicer without cause and
without payment of any fee or penalty in the event that the Master Servicer
shall, for any reason, no longer be the Master Servicer (including by reason of
an Event of Default).
Any Sub-Servicing Agreement entered into by the Master
Servicer shall include the provision that such agreement may be immediately
terminated without cause and without any termination fee by any successor Master
Servicer hereunder.
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a SubServicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on Mortgage Loans when the Sub-Servicer has received
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such payments. The Master Servicer shall be entitled to enter into any agreement
with a SubServicer for indemnification of the Master Servicer by such
Sub-Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and Trustee or
Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.06.
SECTION 3.06. Assumption or Termination of
Sub-Servicing Agreements by Trustee.
In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of an Event of Default), the
Trustee or its designee shall thereupon assume all of the rights and obligations
of the Master Servicer under each Sub-Servicing Agreement that the Master
Servicer may have entered into, unless the Trustee is then permitted and elects
to terminate any Sub-Servicing Agreement in accordance with its terms. Subject
to Section 3.03, the Trustee, its designee or the successor servicer for the
Trustee shall be deemed to have assumed all of the Master Servicer's interest
therein and to have replaced the Master Servicer as a party to each
Sub-Servicing Agreement to the same extent as if the Sub-Servicing Agreements
had been assigned to the assuming party, except that the Master Servicer shall
not thereby be relieved of any liability or obligations under the Sub-Servicing
Agreements, and the Master Servicer shall continue to be entitled to any rights
or benefits which arose prior to its termination as master servicer.
The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.
SECTION 3.07. Collection of Certain Mortgage Loan
Payments.
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Insurance Policy, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. The Master
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment
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(whether under a Mortgage, Mortgage Note, Primary Hazard Insurance Policy or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that it is prohibited by
applicable law from enforcing the provision of the Mortgage or other instrument
pursuant to which such payment is required. Notwithstanding the foregoing, the
Master Servicer may not waive any late payment charge or any prepayment charge
or penalty interest in connection with the prepayment of a Mortgage Loan without
the express written consent of the Seller, except as otherwise required under
applicable law. The Master Servicer shall be responsible for preparing and
distributing all information statements relating to payments on the Mortgage
Loans, in accordance with all applicable federal and state tax laws and
regulations.
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Master Servicer. All amounts held in a
Sub-Servicing Account shall be held in trust for the Trustee for the benefit of
the Certificateholders. The Sub-Servicer will be required to deposit into the
Sub-Servicing Account no later than the first Business Day after receipt all
proceeds of Mortgage Loans received by the Sub-Servicer, less its servicing
compensation and any unreimbursed expenses and advances, to the extent permitted
by the Sub-Servicing Agreement. On each Sub-Servicer Remittance Date the
Sub-Servicer will be required to remit to the Master Servicer all funds held in
the SubServicing Account with respect to any Mortgage Loan as of the
Sub-Servicer Remittance Date, after deducting from such remittance an amount
equal to the servicing compensation and unreimbursed expenses and advances to
which it is then entitled pursuant to the related SubServicing Agreement, to the
extent not previously paid to or retained by it. In addition, on each
Sub-Servicer Remittance Date the Sub-Servicer will be required to remit to the
Master Servicer any amounts required to be advanced pursuant to the related
Sub-Servicing Agreement. The Sub-Servicer will also be required to remit to the
Master Servicer, within one Business Day of receipt, the proceeds of any
Principal Prepayment made by the Mortgagor and any Insurance Proceeds or
Liquidation Proceeds.
SECTION 3.09. Collection of Taxes, Assessments and
Similar Items; Servicing Accounts.
The Master Servicer and the Sub-Servicers shall establish and
maintain one or more accounts (the "Servicing Accounts"), and shall deposit and
retain therein all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, Primary Hazard Insurance
Policy premiums, and comparable items for the account of the Mortgagors, to the
extent that the Master Servicer customarily escrows for such amounts.
Withdrawals of amounts so collected from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, Primary Hazard Insurance Policy
premiums and comparable items; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related
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Sub-Servicing Agreement) out of related collections for any payments made
pursuant to Sections 3.01 (with respect to taxes and assessments), and 3.13
(with respect to Primary Hazard Insurance Policies); (iii) refund to Mortgagors
any sums as may be determined to be overages; or (iv) clear and terminate the
Servicing Account at the termination of this Agreement pursuant to Section 9.01.
As part of its servicing duties, the Master Servicer or Sub-Servicers shall, if
and to the extent required by law, pay to the Mortgagors interest on funds in
Servicing Accounts from its or their own funds, without any reimbursement
therefor.
SECTION 3.10. Custodial Account.
(a) The Master Servicer shall establish and maintain one or
more accounts (collectively, the "Custodial Account") in which the Master
Servicer shall deposit or cause to be deposited on a daily basis, or as and when
received from the Sub-Servicers, the following payments and collections received
or made by or on behalf of it subsequent to the Cut-off Date, or received by it
prior to the Cut-off Date but allocable to a period subsequent thereto (other
than in respect of principal and interest on the Mortgage Loans due on or before
the Cut-off Date):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans,
exclusive of any portion thereof representing interest in excess of the
related Net Mortgage Rate;
(iii) all Insurance Proceeds, other than proceeds that represent
reimbursement of costs and expenses incurred by the Master Servicer in
connection with presenting claims under the related Insurance Policies,
Liquidation Proceeds and REO Proceeds;
(iv) all proceeds of any Mortgage Loan or REO Property
repurchased or purchased in accordance with Sections 2.02, 2.04, 3.22
or 9.01;
(v) any amounts required to be deposited pursuant to Sections
3.12 or 3.13; and
(vi) all amounts transferred from the Certificate Account to the
Custodial Account in accordance with Section 4.01(b).
The foregoing requirements for deposit in the Custodial
Account shall be exclusive. In the event the Master Servicer shall deposit in
the Custodial Account any amount not required to be deposited therein, it may
withdraw such amount from the Custodial Account, any provision herein to the
contrary notwithstanding. The Custodial Account shall be maintained as a
segregated account, separate and apart from trust funds created for mortgage
pass-through certificates of other series, and the other accounts of the Master
Servicer.
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(b) Funds in the Custodial Account may be invested in
Permitted Instruments in accordance with the provisions set forth in Section
3.12. The Master Servicer shall give notice to the Trustee and the Depositor of
the location of the Custodial Account after any change thereof.
(c) Payments in the nature of prepayment fees and late payment
charges received on the Mortgage Loans shall not be deposited in the Custodial
Account, but rather shall be received and held by the Master Servicer solely for
the benefit of and at the direction of the Seller. Upon receipt, such amounts
shall be deposited by the Master Servicer into a separate account meeting the
requirements for an Eligible Account, and such amounts shall be distributed by
the Master Servicer to the Seller on a monthly basis. Such amounts shall not be
applied or made available by the Master Servicer for any other purpose.
SECTION 3.11. Permitted Withdrawals From the
Custodial Account.
The Master Servicer may, from time to time as provided herein,
make withdrawals from the Custodial Account of amounts on deposit therein
pursuant to Section 3.10 that are attributable to the Mortgage Loans for the
following purposes:
(i) to make deposits into the Certificate Account in
the amounts and in the manner provided for in Section 4.01;
(ii) to pay to itself, the Depositor, the Seller or any
other appropriate person, as the case may be, with respect to each
Mortgage Loan that has previously been purchased or repurchased
pursuant to Sections 2.02, 2.04, 3.22 or 9.01 all amounts received
thereon and not yet distributed as of the date of purchase or
repurchase;
(iii) to reimburse itself or any Sub-Servicer for
Advances not previously reimbursed, the Master Servicer's or any
Sub-Servicer's right to reimbursement pursuant to this clause (iii)
being limited to amounts received which represent Late Collections (net
of the Servicing Fees) of Monthly Payments on Mortgage Loans or REO
Property with respect to which such Advances were made and as further
provided in Section 3.15;
(iv) to reimburse itself, the Trustee or the Depositor
for expenses incurred by or reimbursable to the Master Servicer, the
Trustee or the Depositor pursuant to Sections 3.22, 6.03 or 10.01(c),
except as otherwise provided in such Sections;
(v) to reimburse itself or any Sub-Servicer for costs
and expenses incurred by or reimbursable to it relating to the
prosecution of any claims pursuant to Section 3.13 that are in excess
of the amounts so recovered;
(vi) to reimburse itself or any Sub-Servicer for unpaid
Servicing Fees and unreimbursed Servicing Advances, the Master
Servicer's or any Sub-Servicer's right
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to reimbursement pursuant to this clause (vi) with respect to any
Mortgage Loan being limited to late recoveries of the payments for
which such advances were made pursuant to Section 3.01 or Section 3.09
and any other related Late Collections;
(vii) to pay itself as servicing compensation (in
addition to Servicing Fees), on or after each Distribution Date, any
interest or investment income earned on funds deposited in the
Custodial Account for the period ending on such Distribution Date,
subject to Section 8.05;
(viii) to reimburse itself or any Sub-Servicer for a any
Advance previously made which the Master Servicer has determined to be
a Nonrecoverable Advance or (b) any Advance previously made with
respect to a deliquency that ultimately constituted an Excess Special
Hazard Loss, Excess Fraud Loss, Excess Bankruptcy Loss or Extraordinary
Loss; and
(ix) to clear and terminate the Custodial Account at the
termination of this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate
accounting records on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Custodial Account pursuant to such clauses
(ii), (iii), (iv), (vi), (vii) and (viii).
In connection with clause (viii) above, the Trustee shall
notify the Master Servicer if and when the Certificate Principal Balances of the
Class A-2 Certificates, the Class B Certificates, or the Class R Certificates
have been reduced to zero.
SECTION 3.12. Permitted Instruments.
Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Instruments, each of which shall mature not later than the Business Day
immediately preceding the Certificate Account Deposit Date next following the
date of such investment (except that if such Permitted Instrument is an
obligation of the institution that maintains such account, then such Permitted
Instrument shall mature not later than such Certificate Account Deposit Date)
and shall not be sold or disposed of prior to its maturity. All income and gain
realized from any such investment as well as any interest earned on deposits in
the Custodial Account shall be for the benefit of the Master Servicer. The
Master Servicer shall deposit in the Custodial Account (with respect to
investments made hereunder of funds held therein) an amount equal to the amount
of any loss incurred in respect of any such investment immediately upon
realization of such loss without right of reimbursement.
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SECTION 3.13. Maintenance of Primary Hazard
Insurance.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan primary hazard insurance with extended coverage on the related
Mortgaged Property in an amount equal to the replacement value of the
improvements, as determined by the insurance company, on such Mortgaged
Property. The Master Servicer shall also cause to be maintained on property
acquired upon foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan,
fire insurance with extended coverage in an amount equal to the replacement
value of the improvements thereon. Pursuant to Section 3.10, any amounts
collected by the Master Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance with
the Master Servicer's normal servicing procedures) shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating monthly distributions to Certificateholders, be added
to the amount owing under the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. When the improvements securing a Mortgage
Loan are located at any time during the life of such Mortgage Loan in a
federally designated special flood hazard area, the Master Servicer shall cause
flood insurance (to the extent available) to be maintained in respect thereof.
Such flood insurance shall be in an amount equal to the lesser of (i) the
replacement value of the improvements, which are part of such Mortgaged Property
on a replacement cost basis and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Master Servicer shall obtain and
maintain a blanket fire insurance policy with extended coverage insuring against
hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first two sentences of this Section 3.13 and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master Servicer shall
be made on the Certificate Account Deposit Date next preceding the Distribution
Date which occurs in the month following the month in which payments under any
such policy would have been deposited in the Custodial Account. In connection
with its activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.
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SECTION 3.14. Enforcement of Due-on-Sale Clauses;
Assumption Agreements.
The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance by any Mortgagor of the Mortgaged
Property (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note or the
Mortgage), exercise or cause to be exercised its rights to accelerate the
maturity of such Mortgage Loan under any "due-on-sale" clause applicable
thereto; provided, however, that the Master Servicer shall not exercise any such
rights if it reasonably believes that it is prohibited by law from doing so. If
the Master Servicer is unable to enforce such "due-on-sale" clause (as provided
in the previous sentence) or if no "due-on-sale" clause is applicable, the
Master Servicer or the Sub-Servicer will enter into an assumption and
modification agreement with the Person to whom such property has been conveyed
or is proposed to be conveyed, pursuant to which such Person becomes liable
under the Mortgage Note and, to the extent permitted by applicable state law,
the Mortgagor remains liable thereon. The Master Servicer is also authorized to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as the Mortgagor and becomes liable under the Mortgage Note. Any fee
collected by or on behalf of the Master Servicer for entering into an assumption
or substitution of liability agreement will be retained by or on behalf of the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including but not
limited to the Mortgage Rate, the amount of the Monthly Payment, the Maximum
Rate, the Minimum Rate, the Gross Margin, the Periodic Rate Cap and any other
term affecting the amount or timing of payment on the Mortgage Loan) may be
changed. The Master Servicer shall not enter into any substitution or assumption
if such substitution or assumption shall (i) constitute a "significant
modification" effecting an exchange or reissuance of such Mortgage Loan under
the Code (or final, temporary or proposed Treasury Regulations promulgated
thereunder) and cause the Trust Fund to fail to qualify as a REMIC under the
REMIC Provisions or (ii) cause the imposition of any tax on "prohibited
transactions" or "contributions" after the Startup Day under the REMIC
provisions. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original copy of such substitution or assumption agreement, which
copy 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.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption that the
Master Servicer may be restricted by law from preventing, for any reason
whatsoever. For purposes of this Section 3.14, the term "assumption" is deemed
to also include a sale of a Mortgaged Property that is not accompanied by an
assumption or substitution of liability agreement.
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SECTION 3.15. Realization Upon Defaulted Mortgage
Loans.
The Master Servicer shall exercise reasonable efforts,
consistent with the procedures that the Master Servicer would use in servicing
loans for its own account, to foreclose upon or otherwise comparably convert
(which may include an REO Acquisition) the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from the Trust Fund
pursuant to any other provision hereof. The Master Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by Certificateholders, taking
into account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its sole discretion (i) that such
restoration will increase the net proceeds of liquidation of the related
Mortgage Loan to Certificateholders after reimbursement to itself for such
expenses, and (ii) that such expenses will be recoverable by the Master Servicer
through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. The Master 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 related property, as contemplated in Section 3.11.
The proceeds of any Cash Liquidation or REO Disposition, as
well as any recovery resulting from a partial collection of Insurance Proceeds
or Liquidation Proceeds or any income from an REO Property, will be applied in
the following order of priority: first, to reimburse the Master Servicer or any
Sub-Servicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11(vi) or 3.22; second, to accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the Mortgage Rate, to the last day of the month
in which the Cash Liquidation or REO Disposition occurred, or to the Due Date
prior to the Distribution Date on which such amounts are to be distributed if
not in connection with a Cash Liquidation or REO Disposition; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, to interest
at the Net Mortgage Rate. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(vi). The portions of the recovery so allocated to
interest at the Net Mortgage Rate and to principal of the Mortgage Loan shall be
applied as follows: first, to reimburse the Master Servicer or any SubServicer
for any related unreimbursed Advances in accordance with Section 3.11(iii) or
3.22, and second, for distribution in accordance with the provisions of Section
4.01(b), subject to Section 3.22 with respect to certain recoveries from an REO
Disposition constituting Excess Proceeds.
Notwithstanding any other provision of this Agreement, no REO
Property shall be acquired by the Trust Fund in such circumstances or manner or
pursuant to any terms that
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would (i) cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code (unless all such REO
Property not treated as "foreclosure property" held by the REMIC at any given
time constitutes not more than a DE MINIMIS amount of the assets of the REMIC
within the meaning of Treasury regulation Section 1.860D-1(b)(3)(i) and (ii)),
or (ii) subject the Trust Fund to the imposition of any federal income taxes
under the Code, unless the Master Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
SECTION 3.16. Trustee to Cooperate; Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by a certification (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the Custodial
Account pursuant to Section 3.10 have been or will be so deposited) of a
Servicing Officer and shall request delivery to it of the Mortgage File in the
form of the Request for Release attached hereto as Exhibit F-2. Upon receipt of
such certification and request, the Trustee shall promptly release the related
Mortgage File to the Master Servicer. Subject to the receipt by the Master
Servicer of the proceeds of such payment in full and the payment of all related
fees and expenses, the Master Servicer shall arrange for the release to the
Mortgagor of the original cancelled Mortgage Note. All other documents in the
Mortgage File shall be retained by the Master Servicer to the extent required by
applicable law. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account, the Excess Proceeds Account or the Certificate Account.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loan, the Trustee shall, upon
request of the Master Servicer and delivery to the Trustee of a Request for
Release in the form attached hereto as Exhibit F-1, release the related Mortgage
File to the Master Servicer, and the Trustee shall execute such documents as the
Master Servicer shall prepare and request as being necessary to the prosecution
of any such proceedings. Such Request for Release shall obligate the Master
Servicer to return each document previously requested from the Mortgage File to
the Trustee when the need therefor by the Master Servicer no longer exists,
unless the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Custodial Account or
the Mortgage File or such document has been delivered to an attorney, or to a
public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certification of a Servicing Officer in the form of the
Request for Release attached hereto as Exhibit F-1, stating that such Mortgage
Loan was liquidated and that all amounts received or
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to be received in connection with such liquidation which are required to be
deposited into the Custodial Account have been or will be so deposited, or that
such Mortgage Loan has become an REO Property, a copy of such Request for
Release shall be released by the Trustee to the Master Servicer.
Upon written request of a Servicing Officer, the Trustee shall
execute and deliver to the Master Servicer any court pleadings, requests for
trustee's sale or other documents prepared by the Master Servicer that are
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or to any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage
or otherwise available at law or in equity. Each such request that such
pleadings or documents be executed by the Trustee shall include a certification
as to the reason such documents or pleadings are required and that the execution
and delivery thereof by the Trustee will not invalidate or otherwise affect the
lien of the Mortgage, except for the termination of such a lien upon completion
of the foreclosure or trustee's sale.
SECTION 3.17. Servicing Compensation.
As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain, from deposits to the Custodial Account of
amounts representing payments or recoveries of interest, the Servicing Fees with
respect to each Mortgage Loan (less any portion of such amounts retained by any
Sub-Servicer). In addition, the Master Servicer shall be entitled to recover
unpaid Servicing Fees out of related Late Collections to the extent permitted in
Section 3.11.
The Master Servicer also shall be entitled pursuant to Section
3.11 to receive from the Custodial Account as additional servicing compensation
interest or other income earned on deposits therein, subject to Section 3.23, as
well as any assumption fees and reconveyance fees. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of the premiums for any blanket policy
insuring against hazard losses pursuant to Section 3.13, servicing compensation
of the SubServicers to the extent not retained by it and the fees and expenses
of the Trustee), and shall not be entitled to reimbursement therefor except as
specifically provided in Section 3.11. The Servicing Fee may not be transferred
in whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.
SECTION 3.18. Maintenance of Certain Servicing
Policies.
During the term of its service as Master Servicer, the Master
Servicer shall maintain in force (i) a policy or policies of insurance covering
errors and omissions in the performance of its obligations as servicer hereunder
and (ii) a fidelity bond in respect of its officers, employees or agents. Each
such policy or policies and bond shall, together, comply with the requirements
from time to time of FNMA or FHLMC for persons performing servicing
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for mortgage loans purchased by such corporation. The Master Servicer shall
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such errors and omissions policy or policies or fidelity bond
in a timely fashion in accordance with the terms of such policy or bond, and
upon the filing of any claim on any policy or bond described in this Section,
the Master Servicer shall promptly notify the Trustee of any such claims and the
Trustee shall notify the Rating Agency of such claim.
SECTION 3.19. Annual Statement as to Compliance.
The Master Servicer will deliver to the Trustee and the
Depositor on or before April 30 of each year, beginning with April 30, 1997, an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Master Servicer during the preceding fiscal year and of
its performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Master Servicer has complied in all material respects with the
minimum servicing standards set forth in the Uniform Single Attestation Program
for Mortgage Bankers and has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been noncompliance with such
servicing standards or a default in the fulfillment of any such obligation, such
Officers' Certificate shall describe such noncompliance or specify each such
default, as the case may be, known to such officers and the nature and status
thereof.
SECTION 3.20. Annual Independent Public
Accountants' Servicing Statement.
On or before April 30 of each year, beginning with April 30,
1997, the Master Servicer at its expense shall furnish to the Depositor, the
Trustee and the Seller (i) an opinion by a firm of independent certified public
accountants on the financial position of the Master Servicer at the end of its
fiscal year and the results of operations and changes in financial position of
the Master Servicer for such year then ended on the basis of an examination
conducted in accordance with generally accepted auditing standards, and (ii) a
report from such independent certified public accountants to the effect that,
based on an examination conducted substantially in accordance with standards
established by the American Institute of Certified Public Accountants, such firm
is of the opinion that the assertion made pursuant to Section 3.19 regarding
compliance with the minimum servicing standards set forth in the Uniform Single
Attestation Program for Mortgage Bankers during the preceding fiscal year is
fairly stated in all material respects, subject to such exceptions and other
qualifications that, in the opinion of such firm, such accounting standards
require it to report. In rendering such statement, such firm may rely, as to
matters relating to direct servicing of mortgage loans by Sub-Servicers, upon
comparable reports for examinations conducted substantially in accordance with
such accounting standards (rendered within one year of such statement) of
independent public accountants with respect to the related Sub-Servicer. Copies
of such report shall be provided by the Trustee to any Certificateholder upon
request at the Master Servicer's expense, provided such statement is delivered
by the Master Servicer to the Trustee.
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SECTION 3.21. Access to Certain Documentation.
(a) The Master Servicer shall provide to the OTS, the FDIC and
other federal banking regulatory agencies, and their respective examiners,
access to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS, the FDIC and such other agencies. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices of the Master Servicer designated by
it. Nothing in this Section shall derogate from the obligation of the Master
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Master Servicer to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this section.
(b) The Master Servicer shall afford the Depositor and the
Trustee, upon reasonable notice, during normal business hours access to all
records maintained by the Master Servicer in respect of its rights and
obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master Servicer shall furnish the
Depositor and the Trustee with its most recent financial statements and such
other information as the Master Servicer possesses regarding its business,
affairs, property and condition, financial or otherwise to the extent related to
the servicing of the Mortgage Loans. The Depositor may, but is not obligated to,
enforce the obligations of the Master Servicer hereunder and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Master Servicer hereunder or exercise the rights of the Master Servicer
hereunder; provided that the Master Servicer shall not be relieved of any of its
obligations hereunder by virtue of such performance by the Depositor or its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
SECTION 3.22. Title, Conservation and Disposition
of REO Property.
This Section shall apply only to REO Properties acquired for
the account of the Trust Fund, and shall not apply to any REO Property relating
to a Mortgage Loan which was purchased or repurchased from the Trust Fund
pursuant to any provision hereof. In the event that title to any such REO
Property is acquired, the deed or certificate of sale shall be issued to the
Trustee, or to its nominee, on behalf of the Certificateholders. The Master
Servicer, on behalf of the Trust Fund, shall either sell any REO Property within
two years after the Trust Fund acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code or, at the expense of the Trust Fund,
request, more than 60 days before the day on which the two-year grace period
would otherwise expire, an extension of the two-year grace period, unless the
Master Servicer has delivered to the Trustee an Opinion of Counsel (which
Opinion of Counsel shall not be an expense of the Trustee or the Trust Fund),
addressed to the Trustee and the Master Servicer, to the effect that the holding
by the Trust Fund of such REO Property subsequent to two years after its
acquisition will not result in the imposition on the Trust Fund of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause the Trust Fund to fail to qualify as a REMIC under the REMIC Provisions at
any time that any
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Certificates are outstanding. The Master Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) or result in the receipt by the Trust Fund of any "income
from nonpermitted assets" within the meaning of Section 860F(a)(2)(B) of the
Code or any "net income from foreclosure property" which is subject to taxation
under the REMIC Provisions. Pursuant to its efforts to sell such REO Property,
the Master Servicer shall either itself or through an agent selected by the
Master Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master Servicer
deems to be in the best interest of the Certificateholders for the period prior
to the sale of such REO Property.
Any REO Disposition shall be for cash only (unless changes in
the REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets. The Master Servicer
shall deposit, or cause to be deposited, on a daily basis in the Custodial
Account all revenues received with respect to the REO Properties, net of any
directly related expenses incurred and funds withheld therefrom that are
necessary for the proper operation, management and maintenance of the REO
Property.
If as of the date of acquisition of title to any REO Property
there remain outstanding unreimbursed Servicing Advances with respect to such
REO Property or any outstanding Advances allocated thereto the Master Servicer,
upon an REO Disposition, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances and any unreimbursed related Advances as well as
any unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.15.
The REO Disposition shall be carried out by the Master
Servicer at such price and upon such terms and conditions as the Master Servicer
shall determine.
The Master Servicer shall deposit the proceeds from the REO
Disposition, net of any payment to the Master Servicer as provided above, in the
Custodial Account upon receipt thereof for distribution in accordance with
Section 4.01; provided that any such net proceeds which are in excess of the
applicable Stated Principal Balance plus all unpaid REO Imputed Interest thereon
through the last day of the month in which the REO Disposition occurred ("Excess
Proceeds") shall be deposited into the Excess Proceeds Account in accordance
with the provisions of Section 3.25(a).
Notwithstanding the foregoing provisions of this Section 3.22,
with respect to any Mortgage Loan as to which the Master Servicer has received
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the Mortgaged Property, the Master
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Servicer shall promptly notify the Seller and request the Depositor to provide
directions and instructions with respect to such Mortgage Loan and shall act in
accordance with any such directions and instructions provided by the Depositor.
Furthermore, notwithstanding the preceding sentence of this Section 3.22, with
respect to any Mortgage Loan described by such sentence, the Master Servicer
shall not, on behalf of the Trustee, either (i) obtain title to the related
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or
(ii) otherwise acquire possession of, the related Mortgaged Property, unless (i)
the Depositor and the Trustee jointly direct the Master Servicer to take such
action and (ii) either (A) the Master Servicer has, at least 30 days prior to
taking such action, obtained and delivered to the Depositor an environmental
audit report prepared by a Person who regularly conducts environmental audits
using customary industry standards or (B) the Depositor has directed the Master
Servicer not to obtain an environmental audit report. If the Depositor has not
provided directions and instructions to the Master Servicer in connection with
any such Mortgage Loan within 30 days of a request by the Master Servicer for
such directions and instructions, then the Master Servicer shall take such
action as it deems to be in the best economic interest of the Trust Fund (other
than proceeding against the Mortgaged Property) and is hereby authorized at such
time as it deems appropriate to release such Mortgaged Property from the lien of
the related Mortgage. The Master Servicer hereby agrees that it shall not
require the Seller to repurchase any Mortgage Loan under the provisions of any
applicable agreement, if the Depositor has directed the Master Servicer to take
any action as described in the second preceding sentence in connection with the
related Mortgaged Property and if the Master Servicer at the time of such
direction had notice of the presence of such toxic or hazardous substance,
unless the Seller was notified of such toxic or hazardous substance and
consented to the action so directed by the Master Servicer.
The cost of the environmental audit report contemplated by
this Section 3.22 shall be advanced by the Master Servicer as an expense of the
Trust Fund, and the Master Servicer shall be reimbursed therefor from the
Custodial Account as provided in Section 3.11, any such right of reimbursement
being prior to the rights of the Certificateholders to receive any amount in the
Custodial Account.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property in compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Master Servicer as
an expense of the Trust Fund, and the Master Servicer shall be entitled to be
reimbursed therefor from the Custodial Account as provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Custodial Account.
The Master Servicer shall have the option to purchase from the
Trust Fund any Mortgage Loan that is 90 days or more delinquent (90 days or more
delinquent shall mean
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delinquent as to 4 or more Monthly Payments) and that the Master Servicer
determines in good faith will otherwise become subject to foreclosure
proceedings (such determination to be evidenced by an Officer's Certificate of
the Master Servicer delivered to the Trustee prior to purchase) for an amount
equal to the Purchase Price. The Purchase Price for any Mortgage Loan purchased
pursuant to this Section 3.22 shall be deposited in the Custodial Account, and
upon receipt of written certification from the Master Servicer of such deposit,
the Trustee shall release or cause to be released to the Master Servicer the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as the Master Servicer shall
furnish and as shall be necessary to vest in the Master Servicer title to any
Mortgage Loan released pursuant to this Section 3.22.
SECTION 3.23. Additional Obligations of the Master
Servicer.
On each Certificate Account Deposit Date, the Master Servicer
shall deliver to the Trustee for deposit in the Certificate Account from its own
funds and without any right of reimbursement therefor, a total amount equal to
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date; provided that the Master Servicer's obligations under this subsection for
any Distribution Date shall not be more than the total amount of its servicing
compensation payable with respect to the related Distribution Date.
SECTION 3.24. Additional Obligations of the
Depositor.
The Depositor agrees that on or prior to the tenth day after
the Closing Date, the Depositor shall provide the Trustee with a written
notification, substantially in the form of Exhibit K attached hereto, relating
to each Class of Certificates, setting forth (i) in the case of each Class of
such Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance of such Class of Certificates has been sold as of such date, the value
calculated pursuant to clause (b)(iii) of Exhibit K hereto, or, (b) if 10% or
more of such Class of Certificates has been sold as of such date but no single
price is paid for at least 10% of the aggregate Certificate Principal Balance of
such Class of Certificates, then the weighted average price at which the
Certificates of such Class were sold and the aggregate percentage of
Certificates of such Class sold, (c) the first single price at which at least
10% of the aggregate Certificate Principal Balance of such class of Certificates
was sold, or (d) if any Certificates of each Class of Certificates are retained
by the Depositor or an affiliate corporation, or are delivered to the Seller,
the fair market value of such Certificates as of the Closing Date, (ii) the
prepayment assumption used in pricing the Certificates, and (iii) such other
information as to matters of fact as the Trustee may reasonably request to
enable it to comply with its reporting requirements with respect to each Class
of such Certificates to the extent such information can in the good faith
judgment of the Depositor be determined by it.
SECTION 3.25. Excess Proceeds Account.
(a) The Trustee shall establish and maintain one or more
accounts (collectively, the "Excess Proceeds Account") in which the Master
Servicer shall, on behalf of
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the Trust Fund, deposit or cause to be deposited on a daily basis, or as and
when received from the Sub-Servicers, the Excess Proceeds, if any, with respect
to each Mortgage Loan as to which an REO Disposition occurs. The Excess Proceeds
Account shall be maintained as a segregated account, separate and apart from
trust funds created for mortgage pass-through certificates of other series, from
funds of investors, from funds or other assets of the Trustee, and from the
other accounts of the Trustee.
(b) On or before 2:00 P.M. Los Angeles time on each
Certificate Account Deposit Date, the Trustee shall withdraw or cause to be
withdrawn from the Excess Proceeds Account, to the extent of the amount on
deposit therein at such time, and deposit or cause to be deposited in the
Certificate Account, by wire transfer of immediately available funds, an amount
equal to the lesser of (i) the amount, if any, on deposit in the Excess Proceeds
Account as of the close of business on the related Determination Date and
(ii)(A) the sum of the aggregate amount of all Realized Losses allocated among
the Certificates on any previous Distribution Date pursuant to Section 4.04 and
the aggregate amount of all Realized Losses to be allocated among the
Certificates on the related Distribution Date pursuant to Section 4.04 minus (B)
the aggregate amount of all distributions allocated among the Certificateholders
on any previous Distribution Date in accordance with Section 4.01(b)(x), (xi) or
(xii) or in accordance with Section 4.01(f).
(c) If the amount on deposit in the Excess Proceeds Account as
of the close of business on any Determination Date would exceed the product of
1.00% and the aggregate Certificate Principal Balance of all of the Certificates
outstanding immediately after the close of business on the related Distribution
Date, the Trustee shall, on or before 2:00 P.M. Los Angeles time on the related
Certificate Account Deposit Date, withdraw or cause to be withdrawn from the
Excess Proceeds Account, to the extent of the amount on deposit therein at such
time, and deposit or cause to be deposited in the Certificate Account, by wire
transfer of immediately available funds, the excess of such amount over such
product.
(d) The Excess Proceeds Account shall be an Eligible Account
in accordance with the definition of "Excess Proceeds Account" in Section 1.01.
The Trustee shall, upon written request from the Master Servicer, invest or
cause the institution maintaining the Excess Proceeds Account to invest the
funds in the Excess Proceeds Account in one or more Permitted Instruments
designated in the name of the Trustee for the benefit of the Certificateholders,
each of which Permitted Instruments shall be held to maturity, unless payable on
demand, and shall mature, unless payable on demand, not later than the Business
Day immediately preceding the Certificate Account Deposit Date next following
the date of such investment (except that if such Permitted Instrument is an
obligation of the institution with which the Excess Proceeds Account is
maintained, then such Permitted Instrument shall mature not later than such
Certificate Account Deposit Date). All income and gain realized from any such
investment as well as any interest earned on deposits in the Excess Proceeds
Account shall be for the benefit of the Certificateholders and shall be held in
the Excess Proceeds Account (or in Permitted Instruments in which the funds in
the Excess Proceeds Account are invested) until transferred from the Excess
Proceeds Account to the Certificate Account in accordance with Section 3.25(b)
or (c).
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The amount of any loss incurred in respect of any such investment shall be borne
by the Certificateholders without any right of reimbursement.
(e) As part of each Determination Date Report delivered to the
Trustee in accordance with Section 4.03(a), the Master Servicer shall provide
information with respect to the amount, if any, of Excess Proceeds deposited in
the Excess Proceeds Account in respect of each Mortgage Loan as to which an REO
Disposition occurred during the related Prepayment Period.
(f) The Trustee shall promptly provide notice to the Depositor
and the Master Servicer of the initial location of the Excess Proceeds Account
and shall promptly provide notice to the Depositor and the Master Servicer of
the location of the Excess Proceeds Account after any change in location of the
Excess Proceeds Account.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Certificate Account; Distributions.
(a) The Trustee shall establish and maintain a Certificate
Account, in which the Master Servicer shall cause to be deposited on behalf of
the Trustee on or before 2:00 P.M. Los Angeles time on each Certificate Account
Deposit Date by wire transfer of immediately available funds an amount equal to
the sum of (i) any Advance for the immediately succeeding Distribution Date,
(ii) any amount required to be deposited in the Certificate Account pursuant to
Sections 3.13, 3.22 or 3.23 and (iii) all other amounts constituting the
Available Distribution Amount for the immediately succeeding Distribution Date.
(b) On each Distribution Date the Trustee shall distribute to
the Master Servicer in the case of a distribution pursuant to Section 4.01(b)(v)
and to each Certificateholder of record on the next preceding Record Date (other
than as provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least 5
Business Days prior to the related Record Date and such Certificateholder is the
registered owner of Certificates the aggregate Initial Certificate Principal
Balance of which is not less than $2,500,000 (or, with respect to the Class SA
Certificates and the Class SB Certificates, is the registered owner of an
aggregate initial Notional Amount of not less than $10,000,000 of the Class SA
Certificates or the Class SB Certificates), or otherwise by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register, such Certificateholder's share (based on the aggregate of the
Percentage Interests represented by Certificates of the applicable Class held by
such Holder) of the following amounts, in the following order of priority, in
each case to the extent of the Available Distribution Amount:
(i) to the Class SA Certificateholders and the Class
A-1 Certificateholders, on a pro rata basis, based on Accrued
Certificate Interest payable thereon, Accrued Certificate Interest on
such Class of Certificates for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date;
(ii) to the Class A-1 Certificateholders, the sum of the
following amounts applied to reduce the Certificate Principal Balance
thereof:
(A) the Class A-1 Percentage for such Distribution
Date times the Scheduled Principal and Net Recoveries for such
Distribution Date;
(B) an amount equal to (1) the Class A-1 Percentage
for such Distribution Date divided by the Senior Percentage for such
Distribution Date times (2)
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the Senior Prepayment Percentage for such Distribution Date times the
aggregate of all Principal Prepayments received in the related
Prepayment Period;
(C) with respect to each Mortgage Loan for which a
Cash Liquidation or an REO Disposition occurred during the related
Prepayment Period and did not result in any Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
Losses, an amount equal to the lesser of (i) the then applicable Class
A-1 Percentage of the Stated Principal Balance of such Mortgage Loan
and (ii)(a) the Class A-1 Percentage for such Distribution Date divided
by the Senior Percentage for such Distribution Date times (b) the
Senior Prepayment Percentage for such Distribution Date times the
related collections (including without limitation Insurance Proceeds,
Liquidation Proceeds and REO Proceeds) to the extent applied by the
Master Servicer as recoveries of principal of the related Mortgage Loan
pursuant to Section 3.15; and
(D) any amounts described in this Section
4.01(b)(ii), as determined for any previous Distribution Date, which
remain unpaid after application of amounts previously distributed
pursuant to this clause (D) to the extent that any such amounts are not
attributable to Realized Losses that were allocated to the Class A-2
Certificates, the Class B Certificates, the Class SB Certificates or
the Class R Certificates;
(iii) to the Class A-2 Certificateholders, Accrued
Certificate Interest on such Certificates for such Distribution Date,
plus any Accrued Certificate Interest thereon remaining unpaid from any
previous Distribution Date;
(iv) to the Class A-2 Certificateholders, the sum of the
following amounts applied to reduce the Certificate Principal Balance
thereof:
(A) the Class A-2 Percentage for such Distribution
Date times the Scheduled Principal and Net Recoveries for such
Distribution Date;
(B) an amount equal to (1) the Class A-2 Percentage
for such Distribution Date divided by the Senior Percentage
for such Distribution Date times (2) the Senior Prepayment
Percentage for such Distribution Date times the aggregate of
all Principal Prepayments received in the related Prepayment
Period;
(C) with respect to each Mortgage Loan for which a
Cash Liquidation or an REO Disposition occurred during the
related Prepayment Period and did not result in any Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses or Extraordinary Losses, an amount equal to the lesser
of (i) the then applicable Class A-2 Percentage of the Stated
Principal Balance of such Mortgage Loan and (ii)(a) the Class
A-2 Percentage for such Distribution Date divided by the
Senior Percentage for such Distribution Date times (b) the
Senior Prepayment Percentage for such Distribution Date times
the related collections (including without limitation
Insurance Proceeds, Liquidation Proceeds and REO
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Proceeds) to the extent applied by the Master Servicer as
recoveries of principal of the related Mortgage Loan pursuant
to Section 3.15; and
(D) any amounts described in this Section
4.01(b)(iv), as determined for any previous Distribution Date,
which remain unpaid after application of amounts previously
distributed pursuant to this clause (D) to the extent that any
such amounts are not attributable to Realized Losses that were
allocated to the Class B Certificates, the Class SB
Certificates and the Class R Certificates;
(v) to the Master Servicer or a Sub-Servicer, by
remitting for deposit to the Custodial Account, to the extent of and in
reimbursement for any Advances previously made with respect to any
Mortgage Loan or REO Property which remain unreimbursed in whole or in
part following the Cash Liquidation or REO Disposition of such Mortgage
Loan or REO Property, minus any such Advances that were made with
respect to delinquencies that ultimately constituted Excess Special
Hazard Losses, Excess Fraud Losses, excess Bankruptcy Losses or
Extraordinary Losses;
(vi) to the Class B Certificateholders, Accrued
Certificate Interest on the Class B Certificates for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining unpaid
from any previous Distribution Date;
(vii) to the Class B Certificateholders, the sum of the
following amount applied to reduce the Certificate Principal Balance
thereof:
(A) the Class B Percentage for such Distribution Date
times the Scheduled Principal and Net Recoveries for such
Distribution Date;
(B) an amount equal to the Class B Prepayment
Percentage times the aggregate of all Principal Prepayments
received during the related Prepayment Period;
(C) such Class's pro rata share, based on the
Certificate Principal Balance of the Class B Certificates and
the Class R Certificates, of all amounts received in
connection with a Cash Liquidation or an REO Disposition (x)
that occurred during the preceding calendar month and (y) that
did not result in any Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary
Losses, to the extent applied as recoveries of principal and
to the extent not otherwise payable to the Senior
Certificates; and
(D) any amounts described in this Section
4.01(b)(vii), as determined for any previous Distribution
Date, which remain unpaid after application of amounts
previously distributed pursuant to this clause (D) to the
extent that such amounts are not attributable to Realized
Losses which have been allocated to the Class SB Certificates
and the Class R Certificates.
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(viii) to the Class A-1 Certificateholders, an amount,
applied to reduce the Certificate Principal Balance thereof, equal to
the Class A-1 Percentage for such Distribution Date divided by the
Senior Percentage for such Distribution Date times the Senior Accrual
Diversion Amount for such Distribution Date up to and in reduction of
the Certificate Principal Balance thereof;
(ix) to the Class A-2 Certificateholders, an amount,
applied to reduce the Certificate Principal Balance thereof, equal to
the Class A-2 Percentage for such Distribution Date divided by the
Senior Percentage for such Distribution Date times the Senior Accrual
Diversion Amount for such Distribution Date up to and in reduction of
the Certificate Principal Balance thereof;
(x) to the holders of the Class A-1 Certificates, the
portion, if any, of the Available Distribution Amount remaining, but in
no event more than the principal portion of Realized Losses previously
allocated thereto and not previously reimbursed;
(xi) to the holders of the Class A-2 Certificates, the
portion, if any, of the Available Distribution Amount remaining, but in
no event more than the principal portion of Realized Losses previously
allocated thereto and not previously reimbursed;
(xii) to the holders of the Class B Certificates, the
portion, if any, of the Available Distribution Amount remaining, but in
no event more than the principal portion of Realized Losses previously
allocated thereto and not previously reimbursed;
(xiii) to the Class B Certificateholders, the amount
remaining following the distribution pursuant to clause (xii) above, up
to and in reduction of the Certificate Principal Balance thereof;
(xiv) to the Class SB Certificateholders, Accrued
Certificate Interest thereon for such Distribution Date, to the extent
such Accrued Certificate Interest is not added to the Outstanding Class
SB Unpaid Interest Amount on such Distribution Date and then, up to an
amount equal to the Outstanding Class SB Unpaid Interest Amount for
such Distribution Date, in reduction thereof;
(xv) to the Class R Certificateholders, Accrued
Certificate Interest thereon for such Distribution Date to the extent
not added to the Certificate Principal Balance thereof on such
Distribution Date in accordance with Section 4.01(d);
(xvi) to the Class R Certificates the portion, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, applied to reduce the Certificate Principal Balance of
the Class R Certificates, but in no event more than the outstanding
Certificate Principal Balance of the Class R Certificates; and
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(xvii) to the Class R Certificateholders, the balance, if
any, of the Available Distribution Amount.
(c) The Trustee shall, upon written request from the Master
Servicer, invest or cause the institution maintaining the Certificate Account to
invest the funds in the Certificate Account in Permitted Instruments designated
in the name of the Trustee for the benefit of the Certificateholders, which
shall mature not later than the Business Day next preceding the Distribution
Date next following the date of such investment (except that (i) any investment
in obligations of the institution with which the Certificate Account is
maintained may mature on such Distribution Date and (ii) any other investment
may mature on such Distribution Date if the Trustee shall agree to advance funds
on such Distribution Date to the Certificate Account in the amount payable on
such investment on such Distribution Date, pending receipt thereof to the extent
necessary to make distributions on the Certificates) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments shall be deposited in the Certificate Account
by the Master Servicer out of its own funds immediately as realized without
right of reimbursement.
(d) On each Distribution Date, Accrued Certificate Interest on
the Class SB Certificates that would otherwise be distributed on such
Certificates on such Distribution Date shall instead be added to the Outstanding
Class SB Unpaid Interest Amount; which amount will have the effect of increasing
the Certificate Principal Balance of the Class R Certificates, to the extent
provided by operation of the definition of Certificate Principal Balance (except
to the extent of any concurrent reduction thereof resulting from the allocation
of any Realized Loss thereto). On and after the Class B Certificate Termination
Date, the Accrued Certificate Interest on the Class SB Certificates shall be
payable to the Class SB Certificateholders to the extent that (i) any portion of
such Accrued Certificate Interest is not required to render such date the Class
B Certificate Termination Date in accordance with the definition thereof, (ii)
any portion of such amount is not otherwise payable to the Class A-1
Certificates or Class A-2 Certificates as a Senior Accrual Diversion Amount or
(iii) any portion of such amount is not otherwise payable to the Class A-1
Certificates, Class A-2 Certificates or Class B Certificates as reimbursement
for Realized Losses previously allocated thereto pursuant to Section
4.01(b)(xii), (xiii), (xiv) or (xv).
On each Distribution Date prior to the Class B Certificate
Termination Date, unpaid Accrued Certificate Interest on the Class R
Certificates for such Distribution Date that would otherwise be distributed on
such Certificates on such Distribution Date shall instead be added to the
Certificate Principal Balance thereof, to the extent provided by operation of
the definition of Certificate Principal Balance. On and after the Class B
Certificate Termination Date, and after the outstanding Class SB Unpaid Interest
Amount has been reduced to zero, Accrued Certificate Interest on the Class R
Certificates for such Distribution Date shall be payable to the Class R
Certificateholders. On and after the Class B Certificate Termination Date,
unpaid Accrued Certificate Interest, if any, on the Class R Certificates will
not be added
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to the Certificate Principal Balance thereof except to the extent of any portion
of such Accrued Certificate Interest required to retire the Class B Certificates
on the Class B Certificate Termination Date.
(e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five days after the Determination Date, mail to each Holder on such
date of such Class of Certificates a notice to the effect that:
(i) the Trustee expects that the final distribution
with respect to such Class of Certificates will be made on such
Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee therein specified, and
(ii) no interest shall accrue on such Certificates from
and after the end of the related previous calendar month.
Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust and credited to the account of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has been
given pursuant to this Section 4.01(e) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within six months after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall take reasonable steps as directed by the
Depositor, or appoint an agent to take reasonable steps, to contact the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the Trust Fund. If within nine months after the second notice any such
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e).
(f) On each Distribution Date, the Trustee shall distribute to
each Certificateholder of record on the next preceding Record Date (other than
as provided in Section 9.01 respecting the final distribution), in the manner
set forth in Section 4.01(b), such Certificateholder's share (based on the
aggregate of the Percentage Interests represented by the Certificates of the
applicable Class held by such Certificateholder) of the amount transferred from
the Excess Proceeds Account to the Certificate Account on the related
Certificate Account Deposit Date in accordance with Section 3.25(b), in the
following order of priority: first, to the Holders of the Class SA Certificates
and the Class A-1 Certificates on a pro rata basis, to the extent of and in
proportion to the interest portion of the aggregate amount of all Realized
Losses
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allocated to the Certificates of such Classes on such Distribution Date or any
previous Distribution Date in accordance with Section 4.04 and not subsequently
recovered through any distribution in accordance with this Section 4.01(f), and
then second, to the Holders of the Class A-1 Certificates, third, to the Holders
of the Class A-2 Certificates, and fourth, to the Holders of the Class B
Certificates, in each case to the extent of the aggregate amount of all Realized
Losses allocated to the Certificates of such Class on such Distribution Date or
any previous Distribution Date in accordance with Section 4.04 and not
subsequently recovered through any distribution in accordance with Section
4.01(b)(x), (xi), (xii), or (xiii) or in accordance with this Section 4.01(f),
and sixth, to the Holders of the Class SB Certificates, and then seventh, to the
Holders of the Class R Certificates. The distribution of any amount in
accordance with this Section 4.01(f) shall not have the effect of reducing the
Certificate Principal Balance of any Certificate to which such distribution is
allocated.
(g) On each Distribution Date, the Trustee shall distribute to
each Class R Certificateholder of record on the next preceding Record Date
(other than as provided in Section 9.01 respecting the final distribution), in
the manner set forth in Section 4.01(b), such Class R Certificateholder's share
(based on the aggregate of the Percentage Interests represented by the Class R
Certificates held by such Class R Certificateholder) of the amount transferred
from the Excess Proceeds Account to the Certificate Account on the related
Certificate Account Deposit Date in accordance with Section 3.25(c). The
distribution of any amount in accordance with this Section 4.01(g) shall not
have the effect of reducing the Certificate Principal Balance of any Class R
Certificate to which such distribution is allocated.
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date the Trustee shall forward or cause
to be forwarded by mail to each Holder of a Certificate and to the Depositor and
the Master Servicer a statement as to such distribution setting forth:
(i) (a) the amount of such distribution to the
Certificateholders of each Class applied to reduce the Certificate
Principal Balance thereof, (b) the aggregate amount included therein
representing Principal Prepayments, and (c) the Senior Prepayment
Percentage and the Class B Prepayment Percentage applicable to such
distribution;
(ii) the amount of such distribution to the
Certificateholders of each Class allocable to interest, and the Class
SB Accrual Amount and Class R Accrual Amount for such Distribution
Date;
(iii) the amount of related servicing compensation
received by or on behalf of the Master Servicer and any Sub-Servicers
with respect to such Distribution Date and such other customary
information as the Master Servicer deems necessary or
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desirable and supplies to the Trustee, or which a Certificateholder
reasonably requests, to enable Certificateholders to prepare their tax
returns;
(iv) the aggregate amount of Advances included in such
distribution on such Distribution Date;
(v) the number and aggregate Stated Principal Balance
of the Mortgage Loans at the close of business on such Distribution
Date;
(vi) the Certificate Principal Balance of a Single
Certificate of such Class, the aggregate Certificate Principal Balance
of the Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates and the Class R Certificates, respectively, and the Senior
Percentage, Class A-1 Percentage, Class A-2 Percentage, Class B
Percentage and Class R Percentage, after giving effect to the amounts
distributed on such Distribution Date separately identifying any
reduction thereof due to Realized Losses other than pursuant to an
actual distribution of principal;
(vii) the number and aggregate Stated Principal Balance
of Mortgage Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90
days, (c) delinquent 91 days or more;
(viii) the number and aggregate Stated Principal Balance
of Mortgage Loans as to which foreclosure proceedings have been
commenced in each case as of the related Determination Date and which
are (a) delinquent 31 to 60 days, (b) delinquent 61 to 90 days, (c)
delinquent 91 days or more;
(ix) the number and aggregate Stated Principal Balance
of Mortgage Loans as to which bankruptcy proceedings have been
commenced in each case as of the related Determination Date and which
are (a) delinquent 31 to 60 days, (b) delinquent 61 to 90 days, (c)
delinquent 91 days or more;
(x) with respect to any Mortgage Loan that became a REO
Property during the preceding calendar month, the loan number and
Stated Principal Balance of such Mortgage Loan as of the close of
business on the Distribution Date in such month and the date of
acquisition thereof;
(xi) the book value of any REO Property as of the close
of business on the last Business Day of the calendar month preceding
the Distribution Date;
(xii) the Pass-Through Rate in effect for the preceding
calendar month with respect to the Class SA Certificates, the Class A-1
Certificates, the Class A-2 Certificates, the Class B Certificates and
the Class R Certificates;
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(xiii) the aggregate Accrued Certificate Interest
remaining unpaid, if any, for each Class of Certificates, after giving
effect to the distribution made on such Distribution Date;
(xiv) the Special Hazard Amount, Fraud Loss Amount and
Bankruptcy Amount remaining available immediately after such
Distribution Date;
(xv) the aggregate Realized Losses incurred since the
Cut-off Date;
(xvi) the aggregate Realized Losses allocated on such
Distribution Date; and
(xvii) the amount of any Excess Proceeds distributed to
each class of Certificates.
In the case of information furnished pursuant to subclauses
(i)-(iii) above, the amounts shall also be expressed as a dollar amount per
Single Certificate.
On each Distribution Date the Trustee shall prepare and
forward, to each Holder of a Class R Certificate a statement setting forth the
amounts actually distributed with respect to the Class R Certificates on such
Distribution Date.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall prepare and forward, to each Person who at any
time during the calendar year was a Holder of a Senior Certificate, a Class B
Certificate, a Class SB Certificate or a Residual Certificate a statement
containing the information set forth in subclauses (i) - (iii) above, aggregated
for such calendar year or applicable portion thereof during which such person
was a Certificateholder. Such obligation of the Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code and regulations
thereunder as from time to time are in force.
SECTION 4.03. Remittance Reports; Advances by the
Master Servicer.
(a) On the second Business Day following each Determination
Date, the Master Servicer shall deliver to the Trustee a report, prepared as of
the close of business on the Determination Date (the "Determination Date
Report"), in the form of an electromagnetic tape or disk. The Determination Date
Report and any written information supplemental thereto shall include such
information with respect to the Mortgage Loans that is reasonably available to
the Master Servicer and that is required by the Trustee for purposes of making
the calculations referred to in the following paragraph, as set forth in written
specifications or guidelines issued by the Trustee from time to time. Not later
than 10:00 A.M. Los Angeles time on the Business Day preceding each Certificate
Account Deposit Date, the Trustee shall furnish by telecopy to the Master
Servicer a statement (the information in such statement to be made available to
Certificateholders or the Depositor by the Master Servicer on request) setting
forth (i) the
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Available Distribution Amount and (ii) the amounts required to be withdrawn from
the Custodial Account and deposited into the Certificate Account on the
immediately succeeding Certificate Account Deposit Date pursuant to clause (iii)
of Section 4.01(a). The Trustee shall have no obligation to recompute,
recalculate or verify any information provided to it by the Master Servicer. The
determination by the Trustee of such amounts shall, in the absence of obvious
error, be presumptively deemed to be correct for all purposes hereunder.
(b) Prior to the close of business on the Business Day
preceding each Certificate Account Deposit Date, the Trustee shall notify the
Master Servicer of the aggregate amount of Advances required to be made for the
related Distribution Date, which shall be in an aggregate amount equal to the
aggregate amount of Monthly Payments (net of the related Servicing Fees), less
the amount of any related Debt Service Reductions or reductions in the amount of
interest collectable from the Mortgagor pursuant to the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended, on the Outstanding Mortgage Loans as of
the related Due Date, which Monthly Payments were delinquent as of the close of
business as of the related Determination Date; provided that no Advance shall be
made if it would be a Nonrecoverable Advance. On or before 2:00 P.M. Los Angeles
time on each Certificate Account Deposit Date, the Master Servicer shall either
(i) deposit in the Certificate Account from its own funds, or funds received
therefor from the Sub-Servicers, an amount equal to the Advances to be made by
the Master Servicer in respect of the related Distribution Date, (ii) withdraw
from amounts on deposit in the Custodial Account and deposit in the Certificate
Account all or a portion of the amounts held for future distribution in
discharge of any such Advance, or (iii) make advances in the form of any
combination of (i) and (ii) aggregating the amount of such Advances. Any portion
of the amounts held for future distribution so used shall be replaced by the
Master Servicer by deposit in the Certificate Account on or before 11:00 A.M.
Los Angeles time on any future Certificate Account Deposit Date to the extent
that funds attributable to the Mortgage Loans that are available in the
Custodial Account for deposit in the Certificate Account on such Certificate
Account Deposit Date shall be less than payments to Certificateholders required
to be made on the following Distribution Date. The amount of any reimbursement
pursuant to any clause under Section 4.01(b), in respect of outstanding Advances
on any Distribution Date shall be allocated to specific Monthly Payments due but
delinquent for previous Due Periods, which allocation shall be made, to the
extent practicable, to Monthly Payments which have been delinquent for the
longest period of time. Such allocations shall be conclusive for purposes of
reimbursement to the Master Servicer from recoveries on related Mortgage Loans
pursuant to Section 3.11. The determination by the Master Servicer that it has
made a Nonrecoverable Advance or that any proposed Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by a certificate of a
Servicing Officer delivered to the Seller and the Trustee. The Trustee shall
deposit all funds it receives pursuant to this Section 4.03 into the Certificate
Account.
(c) In the event that the Master Servicer determines as of the
Business Day preceding any Certificate Account Deposit Date that it will be
unable to deposit in the Certificate Account an amount equal to the aggregate of
the Advances required to be made for the immediately succeeding Distribution
Date in the amount determined by the Trustee pursuant to
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paragraph (b) above, it shall give notice to the Trustee of its inability to
advance (such notice may be given by telecopy), not later than 3:00 P.M., Los
Angeles time, on such Business Day, specifying the portion of such amount that
it will be unable to deposit. Not later than 5:30 P.M., Los Angeles time, on the
Certificate Account Deposit Date, unless by such time the Master Servicer shall
have directly or indirectly deposited in the Certificate Account the entire
amount of the Advances required to be made for the related Distribution Date,
pursuant to Section 7.01, the Trustee shall (a) terminate all of the rights and
obligations of the Master Servicer under this Agreement in accordance with
Section 7.01 and (b) assume the rights and obligations of the Master Servicer
hereunder, including the obligation to deposit in the Certificate Account an
amount equal to the Advances for the immediately succeeding Distribution Date;
provided, however, that the Trustee's obligation to advance such amounts shall
be as of the related Distribution Date.
SECTION 4.04. Allocation of Realized Losses.
Prior to each Distribution Date, the Master Servicer shall
determine the total amount of Realized Losses, if any, that resulted from any
Cash Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officers' Certificate by the Master Servicer.
Realized Losses shall be allocated among the various Classes of Certificates as
determined by the Trustee in accordance with the following provisions. All
Realized Losses other than Excess Special Hazard Losses, Extraordinary Losses,
Excess Bankruptcy Losses or Excess Fraud Losses, shall be allocated first to the
Class R Certificates, then to the Class SB Certificates (to the extent of the
interest portions of such Realized Losses), then to the Class B Certificates,
then to the Class A-2 Certificates, in each case (other than for the Class SB
Certificates) until the Certificate Principal Balance thereof has been reduced
to zero, and, thereafter, the principal portion of any Realized Losses on the
Mortgage Loans will be allocated to the Class A-1 Certificates and the interest
portion thereof to the Class SA Certificates and Class A-1 Certificates on a pro
rata basis. Notwithstanding the foregoing, such Realized Losses on the Mortgage
Loans will not be allocated to any of the Senior Certificates or the Class B
Certificates on any Distribution Date to the extent that such Realized Losses
are less than the sum of (i) the Available Distribution Amount on such
Distribution Date after the distribution made pursuant to Section 4.01(b)(vii)
and (ii) the Certificate Principal Balance of the Class R Certificates
immediately prior to such Distribution Date. Any Excess Special Hazard Losses,
Excess Bankruptcy Losses, Excess Fraud Losses and Extraordinary Losses on the
Mortgage Loans will be allocated to the Class SA Certificates, the Class A-1
Certificates, the Class A-2 Certificates, the Class B Certificates, the Class SB
Certificates and the Class R Certificates on a pro rata basis, as and to the
extent described below. Notwithstanding the foregoing, any such Realized Losses
on the Mortgage Loans will not be allocated to any of the Senior Certificates or
Class B Certificates on any Distribution Date to the extent that such Realized
Losses together with any other Realized Losses are less than the sum of (i) the
portion of the Available Distribution Amount on such Distribution Date remaining
after the distribution made pursuant to Section 4.01(b)(vii) and (ii) the
Certificate Principal Balance of the Class R Certificates immediately prior to
such Distribution Date. As used herein, an allocation of a Realized Loss
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on a "pro rata basis" among two or more specified Classes of Certificates means
an allocation on a pro rata basis, without priority among the various Classes so
specified, to each such Class of Certificates on the basis of the then
outstanding Certificate Principal Balances thereof in the case of the principal
portion of a Realized Loss or based on the Accrued Certificate Interest thereon
in the case of an interest portion of a Realized Loss. Any allocation of the
principal portion of Realized Losses (other than Debt Service Reductions) to a
Certificate (except as follows) shall be made by reducing the Certificate
Principal Balance thereof by the amount so allocated, which allocation shall be
deemed to have occurred at the close of business on such Distribution Date. Any
allocation of the principal portion of Realized Losses (other than Debt Service
Reductions) to the most subordinate Class of Certificates outstanding, shall be
made by operation of the definition of "Certificate Principal Balance," and by
operation of the provisions of Section 4.01(b). Allocations of the interest
portions of Realized Losses shall be made by operation of the definition of
"Accrued Certificate Interest" and by operation of the provisions of Section
4.01(b). Allocations of the principal portion of Debt Service Reductions shall
be made by operation of the provisions of Section 4.01(b). All Realized Losses
and all other losses allocated to a Class of Certificates hereunder will be
allocated among the Certificates of such Class in proportion to the Percentage
Interests evidenced thereby. For purposes of the foregoing, the Trustee shall
maintain records relating to the Bankruptcy Amount, Fraud Loss Amount and
Special Hazard Amount as in effect from time to time.
SECTION 4.05. Information Reports to be Filed by
the Master Servicer.
The Master Servicer or Sub-Servicers shall file information
returns with respect to the receipt of mortgage interest received in a trade or
business, reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively, and
promptly deliver upon such filing to the Trustee an Officer's Certificate
stating that such reports have been filed. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by such Sections
6050H, 6050J and 6050P of the Code.
SECTION 4.06. Compliance with Withholding
Requirements.
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount on the
Mortgage Loans, and payments of interest or discount on amounts invested by the
Trustee as agent for Certificateholders pursuant to an election made under
Section 4.01 hereof, that the Trustee reasonably believes are applicable under
the Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Trustee withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee shall, together with
its monthly report to such Certificateholders pursuant to Section 4.02 hereof,
indicate such amount withheld.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates will be substantially in the respective
forms annexed hereto as Exhibits A, B-1, B-2 and B-3. The Certificates will be
issuable in registered form only. Except as provided in Section 5.01(b), the
Class SA Certificates and the Class A-1 Certificates shall be issuable in
denominations evidencing initial Certificate Principal Balances or Notional
Amounts, as applicable, of not less than $1.00 and integral multiples of $1.00
in excess thereof. The Class A-2 Certificates and Class B Certificates shall be
issuable in denominations evidencing initial Certificate Principal Balances of
not less than $25,000 and integral multiples of $1,000 in excess thereof, except
that one Certificate of each such Class of Certificates may be issued in an
amount evidencing the sum of the authorized minimum denomination thereof and the
remainder of the aggregate initial Certificate Principal Balance of such Class.
The Class SB Certificates will be issuable in denominations evidencing initial
Notional Amounts of not less than $250,000 and integral multiples of $1,000 in
excess thereof, except that one Certificate of the Class SB Certificates may be
issued in an amount evidencing the sum of the authorized minimum denomination
thereof and the remainder of the aggregate initial Notional Amount of such
Class. The Residual Certificates will be issuable in denominations of any
Percentage Interest representing 5.00% and multiples of 0.01% in excess thereof;
provided, however, that one Class R Certificate may be issued to the "tax
matters person" pursuant to Article X, in a minimum denomination representing a
Percentage Interest of not less than 0.01%.
Upon original issue, the Certificates shall, upon the written
request of the Depositor executed by an officer of the Depositor, be executed
and delivered by the Trustee, authenticated by the Trustee and delivered to or
upon the order of the Depositor upon receipt by the Trustee of the documents
specified in Section 2.01. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee in its capacity as trustee
hereunder by a Responsible Officer. Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates issued on the Closing Date shall be dated the Closing Date and any
Certificates delivered thereafter shall be dated the date of their
authentication.
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(b) The Class SA Certificates and the Class A-1 Certificates
shall initially be issued as one or more Certificates registered in the name of
the Depository or its nominee and, except as provided below, registration of
such Certificates may not be transferred by the Trustee except to another
Depository that agrees to hold such Certificates for the respective Certificate
Owners with Ownership Interests therein. The Certificate Owners shall hold their
respective Ownership Interests in and to each of the Class SA Certificates and
the Class A-1 Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to Definitive Certificates
in respect of such Ownership Interests. All transfers by Certificate Owners of
their respective Ownership Interests in the 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 transfer the Ownership Interests only in the 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.
The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the respective Classes of
Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes
of Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect to
the respective Classes of Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book-Entry Certificates with respect to any particular
matter shall not be deemed inconsistent if they are made with respect to
different Certificate Owners. The Trustee shall utilize the next available
record date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor or (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall, at the Depositor's expense, issue the Definitive
Certificates. The Definitive Certificates shall be issuable in denominations
evidencing initial Certificate Principal Balances or Notional Amounts, as
applicable, of $1,000 and integral multiples of $1.00 in excess thereof, except
that any such Definitive Certificate that was represented by a Book-Entry
Certificate evidencing an initial Certificate Principal Balance or Notional
Amount of less than $1,000 immediately prior to the issuance of such Definitive
Certificate shall be issued in a denomination, the initial Certificate Principal
Balance or Notional Amount, as the case may be
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evidenced by such Book-Entry Certificate. Neither the Depositor, the Master
Servicer nor the Trustee shall be liable for any actions taken by the Depository
or its nominee, including, without limitation, any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Depository in
connection with the issuance of the Definitive Certificates pursuant to this
Section 5.01 shall be deemed to be imposed upon and performed by the Trustee,
and the Trustee and the Master Servicer shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
SECTION 5.02. Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided.
(b) Except as provided in Section 5.02(c), no transfer, sale,
pledge or other disposition of a Class SB Certificate or a Class R Certificate
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), and any applicable state securities laws or is made in accordance
with said Act and laws. In the event that a transfer of a Class SB Certificate
or a Class R Certificate is to be made under this Section 5.02(b), (i) the
Depositor may direct the Trustee to require an Opinion of Counsel acceptable to
and in form and substance satisfactory to the Trustee and the Depositor that
such transfer shall be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Depositor or the Master Servicer, provided that such Opinion
of Counsel will not be required in connection with the initial transfer of any
such Certificate by the Depositor or any affiliate thereof, to a non-affiliate
of the Depositor and (ii) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit G-1 hereto, and the
Trustee shall require the transferor to execute a representation letter,
substantially in the form of Exhibit G-2 hereto, each acceptable to and in form
and substance satisfactory to the Depositor and the Trustee certifying to the
Depositor and the Trustee the facts surrounding such transfer, which
representation letters shall not be an expense of the Trustee, the Depositor or
the Master Servicer; provided however that such representation letters will not
be required in connection with any transfer of any such Certificate by the
Depositor to an affiliate of the Depositor and the Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee,
shall be a written representation) from the Depositor of the status of such
transferee as an affiliate of the Depositor. Any such Certificateholder desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor and the Master Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such applicable
federal and state laws.
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(c) Transfers of Class SB and Class R Certificates may be made
in accordance with this Section 5.02(c) if the prospective transferee of such a
Certificate provides the Trustee and the Depositor with an investment letter
substantially in the form of Exhibit H attached hereto, which investment letter
shall not be an expense of the Trustee, the Depositor or the Master Servicer,
and which investment letter states that, among other things, such transferee is
a "qualified institutional buyer" as defined under Rule 144A. Such transfers
shall be deemed to have complied with the requirements of Section 5.02(b)
hereof; provided, however, that no Transfer of any of the Class SB and Class R
Certificates may be made pursuant to this Section 5.02(c) by the Depositor. Any
such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositor and the Master Servicer against
any liability that may result if the transfer is not so exempt or is not made in
accordance with such applicable federal and state laws.
(d) The Trustee shall require an Opinion of Counsel from a
prospective transferee prior to the transfer of any Class A-2 Certificate, Class
B Certificate, Class SB Certificate or Class R Certificate to any employee
benefit plan or other retirement arrangement, including individual retirement
accounts and Xxxxx plans, that is subject to Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of
the Code (any of the foregoing, a "Plan"), to a trustee or other Person acting
on behalf of any Plan, or to any other person who is using "plan assets" of any
Plan to effect such acquisition (including any insurance company using funds in
its general or separate accounts that may constitute "plan assets"). Such
Opinion of Counsel must establish to the satisfaction of the Depositor and the
Trustee that such disposition will not violate the prohibited transaction
provisions of Section 406 of ERISA and Section 4975 of the Code. Neither the
Depositor, the Master Servicer nor the Trustee will be required to obtain such
Opinion of Counsel on behalf of any prospective transferee. In the case of any
transfer of the foregoing Certificates to an insurance company, in lieu of such
Opinion of Counsel, the Trustee shall require a certification in the form of
Exhibit G-5 (or in such other form as shall be mutually agreed upon by the
Depositor and the Trustee) substantially to the effect that all funds used by
such transferee to purchase such Certificates will be funds held by it in its
general account which it reasonably believes do not constitute "plan assets" of
any Plan (as defined above); provided however that such certification will not
be required in connection with any transfer of any such Certificate by the
Depositor to an affiliate of the Depositor and the Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee,
shall be a written representation) from the Depositor of the status of such
transferee as an affiliate of the Depositor. The permission of any transfer in
violation of the restriction on transfer set forth in this paragraph shall not
constitute a default or an Event of Default.
(e) (i) 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 to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of transfer and to do all other
things necessary in connection with any
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such sale. The rights of each Person acquiring any Ownership Interest in a Class
R Certificate are expressly subject to the following provisions:
(A) 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.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of any Residual Certificate
until its receipt of (I) an affidavit and agreement (a "Transfer
Affidavit and Agreement" in the form attached hereto as Exhibit G-3)
from the proposed Transferee, in form and substance satisfactory to the
Master Servicer and the Trustee representing and warranting, among
other things, that it is a Permitted Transferee, that it is not
acquiring its Ownership Interest in the Residual Certificate that is
the subject of the proposed Transfer as a nominee, trustee or agent for
any Person who is not a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Residual Certificate, it will
endeavor to remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 5.02 and agrees to be bound by them, and
(II) a certificate, in the form attached hereto as Exhibit G-4, from
the Holder wishing to transfer the Residual Certificate, in form and
substance satisfactory to the Master Servicer and the Trustee
representing and warranting, among other things, that no purpose of the
proposed Transfer is to impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee assigned to this transaction has
actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall agree (x) to require a Transfer Affidavit
and Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Residual Certificate and (y) not
to transfer its Ownership Interest unless it provides a certificate to
the Trustee in the form attached hereto as Exhibit G-4.
(E) Each Person holding or acquiring an Ownership Interest in
a Residual Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary Treasury
Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it is "a pass-through
interest holder", or is holding an Ownership Interest in a Residual
Certificate on behalf of a "pass-through interest holder."
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(ii) The Trustee will register the Transfer of any Residual
Certificate only if it shall have received the Transfer Affidavit and Agreement
in the form attached hereto as Exhibit G-3, a certificate of the Holder
requesting such transfer in the form attached hereto as Exhibit G-4 and all of
such other documents as shall have been reasonably required by the Trustee as a
condition to such registration. Transfers of the Residual Certificates to
Non-United States Persons and Disqualified Organizations are prohibited.
(iii) (A) If any Disqualified Organization shall become a
Holder of a Residual Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of
such Residual Certificate. If a Non-United States Person shall become a Holder
of a Residual Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Residual Certificate. If a transfer of a Residual Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Residual Certificate that is in fact not permitted
by this Section 5.02 or for making any payments due on such Certificate to the
holder thereof or for taking any other action with respect to such holder under
the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder
of a Residual Certificate in violation of the restrictions in this Section 5.02
and to the extent that the retroactive restoration of the rights of the Holder
of such Residual Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Trustee shall have the right,
without notice to the holder or any prior holder of such Residual Certificate,
to sell such Residual Certificate to a purchaser selected by the Trustee on such
terms as the Trustee may choose. Such purported Transferee shall promptly
endorse and deliver each Residual Certificate in accordance with the
instructions of the Trustee. Such purchaser may be the Trustee itself. The
proceeds of such sale, net of the commissions (which may include commissions
payable to the Trustee), expenses and taxes due, if any, will be remitted by the
Trustee to such purported Transferee. The terms and conditions of any sale under
this clause (iii)(B) shall be determined in the sole discretion of the Trustee,
and the Trustee shall not be liable to any Person having an Ownership Interest
in a Residual Certificate as a result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions, all information
necessary to compute any tax imposed (A) as a result of the transfer of an
ownership interest in a Residual Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of such
Class R Certificates required to be provided to the Internal Revenue Service and
certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E- 2(a)(5), and (B) as a result of any regulated investment company, real
estate investment trust,
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common trust fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a Residual
Certificate having as among its record holders at any time any Person who is a
Disqualified Organization. The Trustee may charge and shall be entitled to
reasonable compensation for providing such information as may be required from
those Persons which may have had a tax imposed upon them as specified in clauses
(A) and (B) of this paragraph for providing such information.
(f) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest. Every Certificate surrendered for transfer shall be
accompanied by notification of the account of the designated transferee or
transferees for the purpose of receiving distributions pursuant to Section 4.01
by wire transfer, if any such transferee desires and is eligible for
distribution by wire transfer.
(g) At the option of the Certificateholders, Certificates may
be exchanged for other Certificates of authorized denominations of the same
Class of a like aggregate Percentage Interest, upon surrender of the
Certificates to be exchanged at the office 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
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(h) No service charge shall be made to the Certificateholders
for any transfer or exchange of Certificates, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
(i) All Certificates surrendered for transfer and exchange
shall be canceled and retained by the Trustee in accordance with the Trustee's
standard procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Certificate, and (ii) there is delivered to the Trustee such
security or indemnity as may be required by it to save 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, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class and initial Certificate
Principal Balance. Upon the issuance of any new Certificate under this Section,
the Trustee may require the payment of a sum sufficient to cover any tax or
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other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Depositor, the Master Servicer, the Trustee and any agent
of any of them may treat the Person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and for all other purposes whatsoever, and neither the
Depositor, the Master Servicer, the Trustee nor any agent of any of them shall
be affected by notice to the contrary.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the Master Servicer.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor and the Master Servicer herein.
SECTION 6.02. Merger, Consolidation or Conversion
of the Depositor or the Master
Servicer.
The Depositor and the Master Servicer each will keep in full
effect its existence, rights and franchises as a corporation under the laws of
the state of its incorporation, and each will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
Any Person into which the Depositor may be merged,
consolidated or converted, or any corporation resulting from any merger or
consolidation to which the Depositor shall be a party, or any Person succeeding
to the business of the Depositor, shall be the successor of the Depositor
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Any Person into which the Master Servicer may be merged,
consolidated or converted, or any corporation resulting from any merger or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor of the
Master Servicer hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however, that
the successor or surviving Person to the Master Servicer must meet the criteria
set forth in Section 7.02 for a successor Master Servicer and shall be qualified
to sell mortgage loans to and service mortgage loans for FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the
Depositor, the Master Servicer and
Others.
Neither the Depositor, the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made
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herein, or against any specific liability imposed on the Master Servicer
pursuant to Section 3.01 or any other Section hereof; and provided further that
this provision shall not protect the Depositor, the Master Servicer or any such
person, against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Master Servicer and any director, officer, employee or agent of the
Depositor or the Master Servicer may rely in good faith on any document of any
kind PRIMA FACIE properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor, the Master Servicer and any director,
officer, employee or agent of the Depositor or the Master Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement
or the Certificates, other than any loss, liability or expense related to Master
Servicer's servicing obligations with respect to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or related to the Master Servicer's
obligations under Section 3.01, or any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. Neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its respective duties under this Agreement and which in its
opinion may involve it in any expense or liability; provided, however, that the
Depositor or the Master Servicer may in its sole discretion undertake any such
action which it may deem necessary or desirable with respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Depositor and the
Master Servicer shall be entitled to be reimbursed therefor from the Certificate
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of Certificateholders to receive any amount in the Certificate
Account.
SECTION 6.04. Limitation on Resignation of the
Master Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (a) upon the (i) appointment by the Depositor
of the Trustee or a successor servicer that is reasonably acceptable to the
Trustee and that meets the criteria set forth in Section 7.02 for a successor
Master Servicer and (ii) receipt by the Trustee of a letter from the Rating
Agency that such a resignation and appointment will not, in and of itself,
result in a downgrading of the Certificates or (b) upon a determination that its
duties hereunder are no longer permissible under applicable law and the
satisfaction of the conditions specified in clause (a)(i) above. Any such
determination permitting the resignation of the Master 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 Master Servicer's responsibilities, duties,
liabilities and obligations hereunder.
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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 Master Servicer to remit to the Trustee
for distribution to the Certificateholders any payment (other than an
Advance) required to be made under the terms of the Certificates or
this Agreement which continues unremedied for a period of five days
after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by
the Depositor (with a copy to the Trustee) or the Trustee, or to the
Master Servicer, the Depositor and the Trustee by the Holders of
Certificates entitled to at least 25% of the Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer contained in the
Certificates or in this Agreement (including any breach of the Master
Servicer's representations and warranties pursuant to Section 2.03(a)
which materially and adversely affects the interests of the
Certificateholders) which continues unremedied for a period of 30 days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by
the Depositor (with a copy to the Trustee) or the Trustee, or to the
Master Servicer, the Depositor and the Trustee by the Holders of
Certificates entitled to at least 25% of the Voting Rights; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in an involuntary case under any present
or future federal or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer and such
decree or order shall have remained in force undischarged or unstayed
for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Master Servicer or of or relating to all or
substantially all of its property; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of or otherwise voluntarily commence a case or proceeding
under any applicable bankruptcy, insolvency,
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reorganization or other similar statute, make an assignment for the
benefit of its credi- tors, or voluntarily suspend payment of its
obligations; or
(vi) the Master Servicer shall fail to deposit in the Certificate
Account on any Certificate Account Deposit Date an amount equal to any
required Advance.
If an Event of Default described in clauses (i) - (v) 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 Depositor or the Trustee may, and at the
direction of the Holders of Certificates entitled to at least 51% of the Voting
Rights, the Trustee shall, by notice to the Master Servicer (and to the
Depositor if given by the Trustee or to the Trustee if given by the Depositor)
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder. If an Event of Default described in clause (vi)
hereof shall occur, the Trustee shall, by notice to the Master Servicer and the
Depositor, terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that if the Trustee determines
that the failure by the Master Servicer to make any required Advance was due to
circumstances beyond its control, and the required Advance was otherwise made,
the Trustee shall not terminate the Master Servicer. On or after the receipt by
the Master Servicer of such notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates (other
than as a holder thereof) or the Mortgage Loans or otherwise, shall pass to and
be vested in the Trustee pursuant to and under this Section, and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee or its appointed agent for administration by it of
all cash amounts which shall at the time be deposited by the Master Servicer or
should have been deposited to the Custodial Account, the Excess Proceeds Account
or the Certificate Account or thereafter be received with respect to the
Mortgage Loans. The Trustee shall not be deemed to have breached any obligation
hereunder as a result of a failure to make or delay in making any distribution
as and when required hereunder caused by the failure of the Master Servicer to
remit any amounts received on it or to deliver any documents held by it with
respect to the Mortgage Loans. For purposes of this Section 7.01, the Trustee
shall not be deemed to have knowledge of an Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Division has actual knowledge thereof or unless notice of any
event which is in fact such an Event of Default is received by the Trustee and
such notice references the Certificates, the Trust Fund or this Agreement. The
Master Servicer shall promptly notify the Depositor and the Trustee of any event
that, with notice, the passage of time or both, would constitute an Event of
Default and of any event that is in fact an Event of Default.
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Notwithstanding any termination of the activities of
Temple-Inland Mortgage Corporation ("TIMC") in its capacity as Master Servicer
hereunder, TIMC shall be entitled to receive, out of any Late Collection of a
Monthly Payment on a Mortgage Loan which was due prior to the notice terminating
TIMC's rights and obligations as Master Servicer hereunder and received after
such notice, that portion to which TIMC would have been entitled pursuant to
Sections 3.11(ii), (iii), (iv), (v) and (viii) and Section 4.01(b)(v) as well as
its Servicing Fee in respect thereof, and any other amounts payable to TIMC
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.
SECTION 7.02. Trustee to Act; Appointment of
Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, the Trustee or its appointed agent shall
be the successor in all respects to the Master Servicer in its capacity as
Master Servicer under this Agreement and the transactions set forth or provided
for herein and shall be subject thereafter to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer including the
obligation to make Advances which have been or will be required to be made
(except for the responsibilities, duties and liabilities contained in Section
2.03 and its obligations to deposit amounts in respect of losses pursuant to
Sections 3.12 and 4.01(c)) by the terms and provisions hereof; and provided
further, that any failure to perform such duties or responsibilities caused by
the Master Servicer's failure to provide information required by Section 4.03
shall not be considered a default by the Trustee hereunder. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans which the Master Servicer would have been entitled to charge to the
Custodial Account and the Certificate Account if the Master Servicer had
continued to act hereunder. Notwithstanding the above, the Trustee may, if it
shall be unwilling to so act, or shall, if it is unable to so act (exclusive of
the obligations set forth in Section 4.03) or if the Holders of Certificates
entitled to at least 51% of the Voting Rights so request in writing to the
Trustee, appoint, or petition a court of competent jurisdiction to appoint, any
mortgage loan servicing institution (acceptable to the Rating Agencies) having a
net worth of not less than $10,000,000 (or other amount acceptable to the Rating
Agencies) as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer hereunder.
The Seller, the Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Any successor, including the Trustee, to the Master Servicer
shall maintain in force during its term as master servicer hereunder policies
and fidelity bonds to the same extent as the Master Servicer is so required
pursuant to Section 3.18.
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SECTION 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to
the Master Servicer, the Trustee shall give prompt notice thereof to
Certificateholders.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Holders of Certificates
notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived.
SECTION 7.04. Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder, may waive such
default or Event of Default; PROVIDED, HOWEVER, that (a) a default or Event of
Default under clause (i) of Section 7.01 may be waived only by all of the
Holders of Certificates affected by such default or Event of Default and (b) no
waiver pursuant to this Section 7.04 shall affect the Holders of Certificates in
the manner set forth in the third paragraph of Section 11.01. Upon any such
waiver of a default or Event of Default by the Holders representing the
requisite percentage of Voting Rights of Certificates affected by such default
or Event of Default, such default or Event of Default shall cease to exist and
shall be deemed to have been remedied for every purpose hereunder. No such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon except to the extent expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default occurs and is continuing, 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 man would exercise or use under the circumstances in the conduct of his
own affairs. Any permissive right of the Trustee enumerated in this Agreement
shall not be construed as a duty.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take action as it deems appropriate to have the instrument
corrected.
The Trustee shall sign on behalf of the Trust Fund any tax
return that the Trustee is required to sign pursuant to applicable federal,
state or local tax laws.
The Trustee covenants and agrees that it shall perform its
obligations hereunder in a manner so as to maintain the status of the Trust Fund
as a REMIC under the REMIC Provisions and to prevent the imposition of any
federal, state or local income, prohibited transaction, contribution or other
tax on the Trust Fund to the extent that maintaining such status and avoiding
such taxes are reasonably within the control of the Trustee and are reasonably
within the scope of its duties under this Agreement.
The Trustee shall cooperate to the extent practicable, with
the Depositor in the preparation of any information, for the Holder of any
Certificate, which the Depositor in its sole discretion deems necessary and
appropriate for purposes of satisfying applicable information reporting
requirements under Rule 144A or otherwise.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and
after the curing of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement,
the Trustee shall not be liable except for the performance of
such
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duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, in the absence of
bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of
Holders of Certificates entitled to at least 25% of the Voting
Rights 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.
SECTION 8.02. Certain Matters Affecting the
Trustee.
Except as otherwise provided in Section 8.01:
(a) The Trustee may request and 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 reasonably believed by it to be genuine and
to have been signed or presented by the proper party or
parties;
(b) The Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance
therewith;
(c) The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Agreement or to make any investigation of matters arising
hereunder or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon
the occurrence of an Event of Default (which has not been
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cured), to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs;
(d) The Trustee shall not be personally 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;
(e) Prior to the occurrence of an Event of Default
hereunder and after the curing of all Events of Default which
may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so
by Holders of Certificates entitled to at least 25% of the
Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to
it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expense or liability as a
condition to taking any such action. The reasonable expense of
every such reasonable examination shall be paid by the Master
Servicer or, if paid by the Trustee, shall be repaid by the
Master Servicer upon demand; and
(f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys.
SECTION 8.03. Trustee Not Liable for Certificates
or Mortgage Loans.
The recitals contained herein and in the Certificates, other
than the signature of the Trustee on the Certificates and the certificate of
authentication, shall be taken as the statements of the Depositor or the Master
Servicer, as the case may be, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document, other than the signature of the Trustee on
the Certificates and the Certificate of Authentication. The Trustee shall not be
accountable for the use or application by the Depositor or the Master Servicer
of any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid to the Seller in respect of the Mortgage
Loans or deposited in or withdrawn from the Custodial Account, the Excess
Proceeds Account or the Certificate Account or any other account by or on behalf
of the Depositor or the Master Servicer, other than any funds held by or on
behalf of the Trustee in accordance with Section 3.10.
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SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights it would have if it
were not Trustee.
SECTION 8.05. Master Servicer to Pay Trustee's
Fees.
The Master Servicer covenants and agrees to pay to the Trustee
or any co-trustee appointed pursuant to Section 8.10 from time to time, and the
Trustee and such co-trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee or any co-trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder or of the Trustee or any
co-trustee. Except as otherwise provided in this Agreement, the Trustee or any
co-trustee and any director, officer, employee or agent of the Trustee or any
co-trustee shall be indemnified by the Trust Fund and held harmless against any
claim, loss, liability or expense incurred in connection with any Event of
Default, any breach of this Agreement, any claim or legal action, including any
pending or threatened claim or legal action relating to the acceptance or
administration of its trusts hereunder or the Certificates, other than any
claim, loss, liability or expense incurred in connection with a breach
constituting willful misfeasance, bad faith or negligence of the Trustee or any
co-trustee in the performance of its duties hereunder or by reason of reckless
disregard of its obligations and duties hereunder. The provisions of this
Section 8.05 shall survive the termination of this Agreement.
SECTION 8.06. Eligibility Requirements for
Trustee.
The Trustee hereunder shall at all times be a corporation or a
national banking association organized and doing business under the laws of any
state or the United States of America or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. In addition, the Trustee shall at all times be
acceptable to the Rating Agency rating the Certificates. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07. The corporation or national banking association serving as Trustee
may have normal banking and trust relationships with the Seller and its
affiliates or the Master Servicer and its affiliates; provided, however, that
such corporation cannot be an affiliate of the Master Servicer other than the
Trustee in its role as successor to the Master Servicer.
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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 notice thereof to the Depositor, the Master
Servicer and to all Certificateholders; provided, that such resignation shall
not be effective until a successor trustee is appointed and accepts appointment
in accordance with the following provisions. Upon receiving such notice of
resignation, the Master Servicer shall promptly appoint a successor trustee who
meets the eligibility requirements of Section 8.06 by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor. If no successor
trustee shall have been so appointed and have accepted appointment within 60
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee; provided, however, that the resigning Trustee shall not resign and be
discharged from the trusts hereby created until such time as the Rating Agency
rating the Certificates approves the 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 therefor by the Master Servicer, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged 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 if
the rating of the long-term debt obligations of the Trustee is not acceptable to
the Rating Agency in respect of mortgage pass-through certificates having a
rating equal to the then current rating on the Certificates, then the Master
Servicer may remove the Trustee and appoint a successor trustee who meets the
eligibility requirements of Section 8.06 by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor trustee. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.
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 instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders and the Master Servicer
by the Depositor.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
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SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Master Servicer and to its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Master Servicer and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee as
provided in this Section, the Master Servicer shall mail notice of the
succession of such trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register. If the Master Servicer fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Master Servicer.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be eligible
under the provisions of Section 8.06, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or
Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the Depositor 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, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and
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trusts as the Depositor and the Trustee may consider necessary or desirable. If
the Depositor shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in 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
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to 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, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article 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.
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.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or
Liquidation of All Mortgage Loans.
Subject to Section 9.02, the respective obligations and
responsibilities of the Depositor, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Master Servicer of all Mortgage
Loans and each REO Property in respect thereof remaining in the Trust Fund at a
price equal to (a) 100% of the unpaid principal balance of each Mortgage Loan
(other than one as to which a REO Property was acquired) on the day of
repurchase together with accrued interest on such unpaid principal balance at
the Net Mortgage Rate to the first day of the month in which the proceeds of
such repurchase are to be distributed, plus (b) the appraised value of any REO
Property (but not more than the unpaid principal balance of the related Mortgage
Loan, together with accrued interest on that balance at the Net Mortgage Rate to
the first day of the month of repurchase), less the good faith estimate of the
Master Servicer of liquidation expenses to be incurred in connection with its
disposal thereof, such appraisal to be conducted by an appraiser mutually agreed
upon by the Master Servicer and the Trustee; and (ii) the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund (or the disposition of all REO Property in respect
thereof); provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof. In the case of any
repurchase by the Master Servicer pursuant to clause (i), the Master Servicer
shall include in such repurchase price the amount of any Advances that will be
reimbursed to the Master Servicer pursuant to Section 3.11(iii) and the Master
Servicer shall exercise reasonable efforts to cooperate fully with the Trustee
in effecting such repurchase and the transfer of the Mortgage Loans and related
Mortgage Files and related records to the Master Servicer.
The right of the Master Servicer to repurchase all Mortgage
Loans pursuant to (i) above shall be conditioned upon the aggregate Stated
Principal Balance of such Mortgage Loans at the time of any such repurchase
aggregating an amount equal to or less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date. If such right is exercised,
the Master Servicer upon such repurchase shall provide to the Trustee, the
certification required by Section 3.16.
Notice of any termination, specifying the Distribution Date
upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final
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distribution and cancellation, shall be given promptly by the Master Servicer by
letter to the Trustee and the Certificateholders mailed (a) in the event such
notice is given in connection with the Master Servicer's election to repurchase,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which final payment of the
Certificates will be made upon presentation and surrender of Certificates at the
office of the Certificate Registrar therein designated, (ii) the amount of any
such final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Certificate Registrar
therein specified. In the event such notice is given in connection with the
Master Servicer's election to repurchase, the Master Servicer shall deliver to
the Trustee for deposit in the Certificate Account on the Business Day
immediately preceding the Distribution Date specified in such notice an amount
equal to the above-described repurchase price payable out of its own funds. Upon
presentation and surrender of the Certificates by the Certificateholders, the
Trustee shall distribute to the Certificateholders (i) the amount otherwise
distributable on such Distribution Date, if not in connection with the Master
Servicer's election to repurchase, or (ii) if the Master Servicer elected to so
repurchase, an amount determined as follows: with respect to each Class A-1
Certificate, Class A-2 Certificate and Class B Certificate, the outstanding
Certificate Principal Balance thereof, plus one month's interest thereon at the
applicable Pass-Through Rate and any previously unpaid Accrued Certificate
Interest; with respect to each Class SA Certificate, one month's interest at the
applicable Pass-Through Rate based upon the Notional Amount and any previously
unpaid Accrued Certificate Interest; with respect to each Class SB Certificate,
the Outstanding Class SB Unpaid Interest Amount for such Distribution Date plus
one month's interest at the applicable Pass-Through Rate based upon the Notional
Amount and any previously unpaid Accrued Certificate Interest; and with respect
to each Class R Certificate, the Percentage Interest evidenced thereby
multiplied by the difference, if any, between the above described repurchase
price and the aggregate amount to be distributed to the Class SA
Certificateholders, the Class A-1 Certificateholders, the Class A-2
Certificateholders, the Class B Certificateholders and the Class SB
Certificateholders. Upon certification to the Trustee by a Servicing Officer,
following such final deposit, the Trustee shall promptly release the Mortgage
Files as directed by the Master Servicer for the remaining Mortgage Loans, and
the Trustee shall execute all assignments, endorsements and other instruments
required by the Master Servicer as being necessary to effectuate such transfer.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the time
specified in the above-mentioned notice, the Trustee shall give a second 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 of the Certificates shall not have been
surrendered for cancellation, the Trustee shall take reasonable steps as
directed by the Depositor, or appoint an agent to take reasonable steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain subject hereto. If, within nine months after the second
notice, all of the Certificates shall
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not have been surrendered for cancellation, the Class R Certificateholders shall
be entitled to all unclaimed funds and other assets which remain subject hereto.
SECTION 9.02. Additional Termination Requirements.
(a) In the event the Master Servicer repurchases the Mortgage
Loans as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Master
Servicer, at its own expense, obtains for the Trustee an Opinion of Counsel to
the effect that the failure of the Trust Fund to comply with the requirements of
this Section 9.02 will not (i) result in the imposition of taxes on the net
income derived from "prohibited transactions" of the Trust Fund as defined in
Section 860F of the Code or (ii) cause the Trust Fund to fail to qualify as a
REMIC under the REMIC Provisions at any time that any Certificates are
outstanding:
(i) The Trustee shall establish a 90-day liquidation period for
the Trust Fund and specify the first day of such period in a statement
attached to the Trust Fund's final Tax Return pursuant to Treasury
Regulation Section 1.860F-1. The Trustee shall satisfy all the
requirements of a qualified liquidation under Section 860F of the Code
and any regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Master Servicer;
(ii) During such 90-day liquidation period, and at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of the Trust Fund for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Class R Certificates all
cash on hand in the Trust Fund (other than cash retained to meet
claims), and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Class R Certificates, the
Holders thereof hereby agree to authorize the Trustee to specify the 90-day
liquidation period for the Trust Fund, which authorization shall be binding upon
all successor Class R Certificateholders.
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ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee shall make an election to treat the Trust Fund
as a REMIC under the Code and, if necessary, under applicable state law. Such
election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
purposes of the REMIC election in respect of the Trust Fund, the Class SA, Class
A-1, Class A-2, Class B and Class SB Certificates shall be designated as the
"regular interests" and the Class R Certificates shall be designated as the sole
Class of "residual interest" in the REMIC. The Trustee shall not permit the
creation of any "interests" in the Trust Fund (within the meaning of Section
860G of the Code) other than the interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day"
the REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect thereto that involved the
Internal Revenue Service or state tax authorities), other than the expense of
obtaining any tax related Opinion of Counsel not obtained in connection with
such an audit and other than taxes, in either case except as specified herein;
provided, however, that if such audit resulted from the negligence of the Master
Servicer or the Depositor, then the Master Servicer or the Depositor, as the
case may be, shall pay such expenses. The Trustee shall hold a Class R
Certificate representing a 0.01% Percentage Interest of all Class R Certificates
and shall be designated as the tax matters person of the Trust Fund in the
manner provided under Treasury Regulations Section 1.860F-4(d) and Temporary
Treasury Regulations Section 301.6231(a)(7)-1T. The Trustee, as tax matters
person, shall (i) act on behalf of the Trust Fund in relation to any tax matter
or controversy involving the Trust Fund and (ii) represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. To the extent authorized
under the Code and the regulations promulgated thereunder, each Holder of a
Class R Certificate, hereby irrevocably appoints and authorizes the Trustee to
be its attorney-in-fact for purposes of signing any Tax Returns required to be
filed on behalf of the Trust Fund.
(d) The Trustee shall prepare or cause to be prepared, sign
and file all of the Tax Returns in respect of the Trust Fund created hereunder,
other than Tax Returns required to be filed by the Master Servicer pursuant to
Section 4.05. The expenses of preparing and filing such returns shall be borne
by the Trustee without any right of reimbursement therefor.
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(e) The Trustee shall perform on behalf of the Trust Fund all
reporting and other tax compliance duties that are the responsibility of the
Trust Fund under the Code, REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other such
compliance guidance, the Trustee shall provide (i) to any Transferor of a Class
R Certificate such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
Disqualified Organization, (ii) to Certificateholders such information or
reports as are required by the Code or the REMIC Provisions including reports
relating to interest, original issue discount and market discount or premium
(using the Prepayment Assumption) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of the Trust Fund. In addition, 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 reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) The Trustee shall take such action and shall cause the
Trust Fund created hereunder to take such action as shall be necessary to create
or maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist the Trustee, to the extent reasonably requested by
it). The Trustee shall not take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of the Trust Fund as a REMIC or (ii) result in the imposition of a
tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee received an Opinion of
Counsel (at the expense of the party seeking to take such action but in no event
shall such Opinion of Counsel be an expense of the Trustee) to the effect that
the contemplated action will not, with respect to the Trust Fund created
hereunder, endanger such status or result in the imposition of such a tax. The
Master Servicer shall not take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel (which such Opinion of Counsel shall not be
an expense of the Trustee) to the effect that an Adverse REMIC Event could occur
with respect to such action. In addition, prior to taking any action which is
not expressly permitted under the terms of this Agreement, the Master Servicer
will consult with the Trustee or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
the Trust Fund, and the Master Servicer shall not take any such action or cause
the Trust Fund to take any such action as to which the Trustee has advised it in
writing that an Adverse REMIC Event could occur. The Trustee may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement (but in no
event shall such cost be an expense of the Trustee). At all times as may be
required by the Code, the Trustee will ensure that substantially all of the
assets of the Trust Fund will consist of "qualified
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mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund created hereunder as defined in Section
860F(a)(2) of the Code, on "net income from foreclosure property" of the Trust
Fund as defined in Section 860G(c) of the Code, on any contributions to the
Trust Fund after the Startup Day therefor pursuant to Section 860G(d) of the
Code, or any other tax is imposed by the Code or any applicable provisions of
state or local tax laws, such tax shall be charged (i) to the Trustee pursuant
to Section 10.03 hereof, if such tax arises out of or results from a breach by
the Trustee of any of its obligations under this Article X, (ii) to the Master
Servicer pursuant to Section 10.03 hereof, if such tax arises out of or results
from a breach by the Master Servicer of any of its obligations under Article III
or this Article X, or otherwise (iii) against amounts on deposit in the
Certificate Account and shall be paid by withdrawal therefrom.
(h) On or before April 15 of each calendar year, commencing
April 15, 1996, the Trustee shall deliver to the Master Servicer and each Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article X.
(i) The Master Servicer and the Trustee shall, for federal
income tax purposes, maintain books and records with respect to the Trust Fund
on a calendar year and on an accrual basis.
(j) Following the Startup Day therefor, the Trustee shall not
accept any contributions of assets to the Trust Fund unless it shall have
received an Opinion of Counsel (which such Opinion of Counsel shall not be an
expense of the Trustee) to the effect that the inclusion of such assets in the
Trust Fund will not cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject the Trust Fund to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which the Trust Fund will receive a fee or other
compensation for services nor permit the REMIC 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.
(l) Solely for purposes of satisfying Section
1.860G-1(a)(4)(iii) of the Treasury Regulations, the "latest possible maturity
date" by which the Certificate Principal Balances of each Class of Certificates
representing a regular interest in the Trust Fund would be reduced to zero is
March 25, 2026, which is the Distribution Date immediately following the latest
scheduled maturity of any Mortgage Loan.
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(m) Within 30 days after the Closing Date, the Trustee shall
prepare and file with Internal Revenue Service Form 8811, "Information Return
for Real Estate Mortgage Investment Conduits (REMICs) and Issuers of
Collateralized Debt Obligations" for the Trust Fund.
SECTION 10.02. Prohibited Transactions and
Activities.
Neither the Depositor, the Master Servicer nor the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans, except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of the Trust Fund pursuant to Article IX of this Agreement or (iv) a
purchase of Mortgage Loans pursuant to Article II or III of this Agreement, nor
acquire any assets for the Trust Fund, nor sell or dispose of any investments in
the Custodial Account, the Excess Proceeds Account or the Certificate Account
for gain, nor accept any contributions to the Trust Fund after the Closing Date
unless it has received an Opinion of Counsel (at the expense of the party
seeking to cause such sale, disposition, substitution or acquisition but in no
event shall such Opinion of Counsel be an expense of the Trustee) that such
sale, disposition, substitution or acquisition will not (a) affect adversely the
status of the Trust Fund as a REMIC or (b) cause the Trust Fund to be subject to
a tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.
SECTION 10.03. Master Servicer and Trustee
Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in this Article X.
(b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs (including, without
limitation, any reasonable attorneys' fees) imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in this Article X or in Article III with respect
to compliance with the REMIC Provisions, including without limitation, any
penalties arising from the Trustee's execution of Tax Returns prepared by the
Master Servicer that contain errors or omissions.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein, (iii) to amend this Agreement in any respect subject to the
provisions below, or (iv) if such amendment, as evidenced by an Opinion of
Counsel (provided by the Person requesting such amendment) delivered to the
Trustee, is reasonably necessary to comply with any requirements imposed by the
Code or any successor or amendatory statute or any temporary or final
regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any
proposed such action which, if made effective, would apply retroactively to the
Trust Fund at least from the effective date of such amendment; provided that
such action (except any amendment described in (iv) above) shall not, as
evidenced by an Opinion of Counsel (provided by the Person requesting such
amendment) delivered to the Trustee, adversely affect in any material respect
the interests of any Certificateholder (other than Certificateholders who shall
consent to such amendment).
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of Certificates entitled to at least 66-2/3% of the Voting Rights 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 received on
Mortgage Loans which are 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 in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66-2/3% of the Voting Rights of
such Class, or (iii) reduce the aforesaid percentage of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Seller or the Master Servicer or any affiliate thereof shall be entitled to
Voting Rights with respect to matters described in (i), (ii) and (iii) of this
paragraph.
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 (provided by the Person requesting
such amendment) to the effect that such amendment will not result in the
imposition of any tax on the Trust Fund pursuant to the REMIC Provisions
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or cause the Trust Fund to fail to qualify as a REMIC at any time that any of
the Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee
shall furnish a statement describing the amendment to each Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 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.
Prior to executing any amendment pursuant to this Section, the
Trustee shall be entitled to receive an Opinion of Counsel (provided by the
Person requesting such amendment) to the effect that such amendment is
authorized or permitted by this Agreement. The cost of an Opinion of Counsel
delivered pursuant to this Section 11.01 shall be an expense of the party
requesting such amendment, but in any case shall not be an expense of the
Trustee.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement;
Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer and at the expense of the Depositor on direction
by the Trustee, but only upon direction accompanied by an Opinion of Counsel to
the effect that such recordation materially and beneficially affects the
interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of
Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
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No Certificateholder shall have any right to vote (except as
expressly provided for 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 of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a notice of an Event of
Default, or of a default by the Seller or the Trustee in the performance of any
obligation hereunder, and of the continuance thereof, as hereinbefore provided,
and unless also the Holders of Certificates entitled to at least 25% of the
Voting Rights shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, 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 is understood and intended, and 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 of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Certificateholders. For the protection
and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
SECTION 11.05. Notices.
All demands, notices and direction hereunder shall be in
writing and shall be deemed effective upon receipt when delivered to (a) in the
case of the Depositor, 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: N. Xxxxx XxXxxxx, or such other address as may hereafter be furnished
to the Trustee and the Master Servicer in writing by the Depositor, (b) in the
case of the Trustee, Xxxx Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
DLJ/Quality Series 1996-QE3, or such other address as may hereafter be furnished
to the Master Servicer and the Depositor in writing by the Trustee, (c) in the
case of the Master
-100-
Servicer, Temple-Inland Mortgage Corporation, 000 Xxxxxxxx Xxxxxx #000, Xxxxxx,
Xxxxx 00000 Attention: Xxxxxxx Xxxxx, or such other address as may hereafter be
furnished to the Depositor and the Trustee in writing and (d) in the case of the
Seller, Quality Mortgage USA, Inc., 00000 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx
00000, Attention: President, or such other address as may hereafter be furnished
to the Trustee, the Master Servicer and the Depositor in writing. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
SECTION 11.06. 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 11.07. Successors and Assigns; Third Party
Beneficiary.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the Trustee and
the Certificateholders. The parties hereto agree that the Seller is the intended
third party beneficiary of Sections 3.07, 3.10 and 3.22 hereof, and that the
Seller may enforce such provisions to the same extent as if the Seller were a
party to this Agreement.
SECTION 11.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.09. Notice to Rating Agencies and
Certificateholder.
The Trustee shall use its best efforts to promptly provide
notice to the Rating Agency referred to below with respect to each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of the Master Servicer or
the Trustee;
4. The repurchase of Mortgage Loans pursuant to Section 2.03;
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5. The final payment to Certificateholders; and
6. Any change in the location of the Custodial Account, the
Excess Proceeds Account or the Certificate Account.
In addition, the Trustee shall promptly furnish to the Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section
4.02; and
2. Each annual independent public accountants' servicing
report described in Section 3.20.
Any such notice pursuant to this Section 11.09 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
(i) in the case of Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Residential Pass-Through Monitoring or (ii) in the
case of Duff & Xxxxxx Credit Rating Co., 00 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: MBS Monitoring, or such other address as
either Rating Agency may designate in writing to the parties thereto.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized all as of the day and year first above written.
DLJ MORTGAGE ACCEPTANCE CORP.,
Depositor
By:/s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Vice President
TEMPLE-INLAND MORTGAGE
CORPORATION,
Master Servicer
By:/s/ Xxx Xxxx
Name: Xxx Xxxx
Title: EVP/CFO
BANKERS TRUST COMPANY,
Trustee
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Assistant Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 5th day of March, 1996 before me, a notary public in
and for said State, personally appeared Xxxx Xxxxxxxx, known to me to be a Vice
President of DLJ Mortgage Acceptance Corp., a corporation that executed the
within instrument, and also known to me to be the person who executed the within
instrument on behalf of said corporation as a duly authorized officer of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxx Deki
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF XXXXXX )
On the 5th day of March, 1996 before me, a notary public in
and for said State, personally appeared Xxx Xxxx, known to me to be a EVP/CFO of
Temple-Inland Mortgage Corporation, a corporation that executed the within
instrument, and also known to me to be the person who executed the within
instrument on behalf of said corporation as a duly authorized officer of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxx
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 5th day of March, 1996 before me, a notary public in
and for said State, personally appeared Xxxx X. Xxxxxx, known to me to be a
Assistant Vice President of Bankers Trust Company, a corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation as a duly authorized officer of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxx Deki
Notary Public
[Notarial Seal]
EXHIBIT A
FORM OF SENIOR 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 (THE "CODE")) CREATED BY THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN (THE "AGREEMENT").
[THIS CLASS A-2 CERTIFICATE IS SUBORDINATE TO THE CLASS SA
CERTIFICATES AND THE CLASS A-1 CERTIFICATES OF THE SAME SERIES TO
THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT.]
[NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN, OR
PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING ANY
INSURANCE COMPANY UNDER THE CIRCUMSTANCES DESCRIBED IN THE AGREEMENT), SUBJECT
TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, UNLESS THE TRANSFEREE PROVIDES
AN OPINION OF COUNSEL OR CERTIFICATION OF FACTS (UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR
THE CERTIFICATE REGISTRAR, THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED
TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE.]
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF
PREPAYMENT, USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES, EQUAL TO A CONSTANT PREPAYMENT RATE OF __% PER ANNUM (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$____ OF OID PER [$100,000] [$1,000] OF INITIAL [NOTIONAL AMOUNT] [CERTIFICATE
PRINCIPAL BALANCE], THE YIELD TO MATURITY IS ___ AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $___ PER [$100,000]
[$1,000] OF INITIAL [NOTIONAL AMOUNT] [CERTIFICATE PRINCIPAL BALANCE], COMPUTED
USING THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT RATES BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.]
-2-
Series 0000-XX0 Xxxxxxxxx Initial [Notional Amount]
[Certificate Principal Balance] of
the Class [SA][A-1][A-2]
Certificates:
---------
Class [SA][A-1][A-2] Initial [Notional Amount]
[Certificate Principal Balance] of
this Certificate: $_________________
[Variable][Adjustable] Initial Pass-Through Rate:
Pass-Through Rate __________
Date of Pooling and Servicing
Agreement and Cut-off Date:
February 1, 1996 Issue Date:
March __, 1996
First Distribution Date:
March 25, 1996
Master Servicer: Trustee:
Temple-Inland Mortgage Bankers Trust Company
Corporation
No. ___ CUSIP: _________________
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1996-QE3, CLASS [SA][A-1][A-2]
evidencing a beneficial ownership interest in a trust fund
consisting primarily of a pool of conventional adjustable rate
fully amortizing one- to four-family first lien residential
mortgage loans sold by
DLJ MORTGAGE ACCEPTANCE CORP.
This certifies that _______________ is the registered owner of
the Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all of the Class [SA][A-1][A-2] Certificates in the Trust
Fund (as defined herein) established under a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among DLJ Mortgage Acceptance Corp.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), Temple-Inland Mortgage Corporation (the "Master Servicer")
and Bankers Trust Company (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. The Percentage Interest evidenced
hereby is equal to the initial [Notional Amount] [Certificate Principal Balance]
of this Certificate divided by the aggregate initial [Notional Amount]
[Certificate Principal Balance] of all of the Class [SA][A- 1][A-2] Certificates
as specified above. The Certificates of the Series specified above
(collectively, the "Certificates") evidence in the aggregate the entire
beneficial ownership interest
-3-
in a segregated pool of assets created pursuant to the Agreement comprised of
conventional, adjustable-rate, fully amortizing, one- to four-family,
residential first lien mortgage loans (the "Mortgage Loans"), or interests
therein, and certain other assets as described herein. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
The Trustee shall distribute or cause to be distributed on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on (i) with respect to any Distribution
Date other than the First Distribution Date, the last Business Day of the month
immediately preceding the month of such distribution and (ii) with respect to
the First Distribution Date the Issue Date (with respect to (i) and (ii), the
"Record Date"), from the Available Distribution Amount an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class [SA][A-1][A-2] Certificates
on such Distribution Date pursuant to the Agreement. [The Notional Amount of the
Class SA Certificates as of any date of determination will be determined
pursuant to the Agreement. The Class SA Certificates have no Certificate
Principal Balance.] Reference is hereby made to the further provisions of this
Certificate and the Agreement set forth herein, which further provisions shall
for all purposes have the same effect as though fully set forth at this place.
All distributions will be made or caused to be made by the
Trustee either by check mailed to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register or (ii) at the
request of the Person entitled thereto if such Person shall have so notified the
Trustee in writing by 5 Business Days prior to the applicable Record Date and
such Certificateholder is the registered holder of Certificates the aggregate
Initial Certificate Principal Balance of which is not less than $2,500,000 (or,
with respect to the Class SA Certificates and the Class SB Certificates, is the
registered holder of an aggregate initial Notional Amount of not less than
$10,000,000 of the Class SA Certificates and the Class SB Certificates), in
immediately available funds by wire transfer to the account of such Person.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Master Servicer of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Trustee. [The Certificate Principal Balance hereof will be reduced
to the extent of distributions allocable to principal and the principal portions
of any Realized Losses allocable hereto.]
This Certificate is one of a duly authorized issue of
Certificates of the series and class specified on the face hereof. The
Certificates in the aggregate represent the entire beneficial ownership interest
in: (i) the Mortgage Loans (exclusive of payments of principal and interest due
on or before the Cut-off Date) as from time to time are subject to the Agreement
and all payments under and proceeds of the Mortgage Loans, together with all
documents included in the related Mortgage File; (ii) such funds or assets as
from time to time are
-4-
deposited in the Custodial Account, the Excess Proceeds Account or the
Certificate Account; (iii) any REO Property; (iv) the Primary Hazard Insurance
Policies, if any, and all other insurance policies with respect to the Mortgage
Loans required to be maintained pursuant to the Agreement; and (v) the
Depositor's interest in respect of the representations and warranties made by
the Seller in each Mortgage Loan Purchase Agreement and the Seller's Warranty
Certificate (all of the foregoing being hereinafter collectively called the
"Trust Fund").
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Master Servicer, the Trustee or any Sub-Servicer
and are not insured or guaranteed by any governmental agency or instrumentality
or by any other person or entity. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans, all
as more specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Custodial Account or the Certificate Account may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement to
the Master Servicer of advances made, or certain expenses incurred, by it, by
the Depositor, by the Trustee or by any Sub-Servicer.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66-2/3% of the Voting Rights. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office, duly endorsed by, or accompanied by
an assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
initial [Notional Amount] [Certificate Principal Balance] will be issued to the
designated transferee or transferees.
[No transfer of any Class A-2 Certificate shall be made to any
employee benefit plan or other retirement arrangement, including individual
retirement accounts and Xxxxx plans, that is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"; any of foregoing, a "Plan"),
to any Person acting on behalf of a Plan, or to any other person who is using
"plan assets" to effect such acquisition (including any insurance company using
funds in its general or separate accounts that may constitute "plan assets"),
unless the prospective transferee of a Certificateholder desiring to transfer
its Certificates provides to the Trustee or the Certificate Registrar an Opinion
of Counsel (or, in the limited circumstances described in
-5-
the Agreement, a certification of facts) which establishes to the satisfaction
of the Depositor and the Trustee or the Certificate Registrar that such
disposition will not violate the prohibited transaction provisions of Section
406 of ERISA and Section 4975 of the Internal Revenue Code of 1986, as amended.
In the case of any transfer of the foregoing Certificates to an insurance
company, in lieu of such Opinion of Counsel, the Trustee shall require a
certification in the form of Exhibit G-5 to the Agreement.]
The Certificates are issuable in fully registered form only,
without coupons, and in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate initial [Notional Amount]
[Certificate Principal Balance], 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 that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer and the Trustee and any
agent of the Depositor, the Master Servicer or the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Depositor, the Master Servicer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the purchase by the
Master Servicer of all Mortgage Loans and each REO Property in respect thereof,
or (ii) the final payment on, or other liquidation (or any advance with respect
thereto) of, the last Mortgage Loan remaining in the Trust Fund (or the
disposition of all REO Property in respect thereof). The Agreement permits, but
does not require, the Master Servicer to purchase from the Trust Fund all
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of the Master
Servicer's right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than or equal to 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be.
IN WITNESS WHEREOF, the Trustee in its capacity as trustee
under the Agreement has caused this Certificate to be duly executed.
Dated: March ___, 1996 BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class [SA][A-1][A-2] Certificates referred
to in the within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
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Social Security or other identifying number of assignee:
(Please print or typewrite name and address including postal zip code of
assignee)
the beneficial interest evidenced by the within Class [SA][A-1][A-2] Certificate
and hereby authorizes the registration of transfer of such interest to the
above-named assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Class [SA][A-1][A-2]
Certificate of a like initial [Notional Amount] [Certificate Principal Balance]
to the above-named assignee and deliver such Certificate to the following
address:
------------------------------------------------------------------------------
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Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
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.
EXHIBIT B-1
FORM OF CLASS [B-1][B-2] 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 (THE "CODE")) CREATED BY THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN (THE "AGREEMENT").
THIS CLASS [B-1][B-2] CERTIFICATE IS SUBORDINATE TO THE CLASS SA CERTIFICATES,
THE CLASS A-1 CERTIFICATES[,] [AND] THE CLASS A-2 CERTIFICATES [AND THE CLASS
B-1 CERTIFICATES] OF THE SAME SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE
AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN, OR
PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING ANY
INSURANCE COMPANY UNDER THE CIRCUMSTANCES DESCRIBED IN THE AGREEMENT), SUBJECT
TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, UNLESS THE TRANSFEREE PROVIDES
AN OPINION OF COUNSEL OR CERTIFICATION OF FACTS (UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR
THE CERTIFICATE REGISTRAR, THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED
TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF
PREPAYMENT, USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES, EQUAL TO A CONSTANT PREPAYMENT RATE OF __% PER ANNUM (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$___ OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO
MATURITY IS ___ % AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL
PERIOD IS NO MORE THAN $___ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
COMPUTED USING THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
LOANS WILL PREPAY AT RATES BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.]
Series 0000-XX0 Xxxxxxxxx Initial Certificate
Principal Balance of the Class
[B-1][B-2] Certificates: $______
Class [B-1][B-2] Initial Certificate Principal
Balance of this Certificate:
$_______
Adjustable Pass-Through Initial Pass-Through Rate: __%
Rate
Date of Pooling and Servicing
Agreement and Cut-off Date:
February 1, 1996 Issue Date:
March ___, 1996
First Distribution Date:
March 25, 1996
Master Servicer: Trustee:
Temple-Inland Mortgage Bankers Trust Company
Corporation
No. ___ CUSIP: __________
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1996-QE3, Class [B-1][B-2]
evidencing a beneficial ownership interest in a trust fund consisting
primarily of a pool of conventional adjustable rate fully amortizing
one- to four-family first lien residential mortgage loans sold by
DLJ MORTGAGE ACCEPTANCE CORP.
This certifies that _______________ is the registered owner of
the Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all of the Class [B-1][B-2] Certificates in the Trust Fund
(as defined herein) established under a Pooling and Servicing Agreement, dated
as specified above (the "Agreement"), among DLJ Mortgage Acceptance Corp.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), Temple-Inland Mortgage Corporation (the "Master Servicer")
and Bankers Trust Company (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. The Percentage Interest evidenced
hereby is equal to the initial Certificate Principal Balance of this Certificate
divided by the aggregate initial Certificate Principal Balance of all of the
Class [B-1][B-2] Certificates as specified above. The Certificates of the Series
specified above (collectively, the "Certificates") evidence in the aggregate the
entire beneficial ownership interest in a segregated pool of assets created
pursuant to the Agreement comprised of conventional, adjustable-rate, fully
amortizing, one- to four-family, residential first lien mortgage loans (the
"Mortgage Loans"), or interests therein, and certain other assets as described
herein. To the extent not defined herein, the capitalized terms used herein have
the
-2-
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
The Trustee shall distribute or cause to be distributed on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on (i) with respect to any Distribution
Date other than the First Distribution Date, the last Business Day of the month
immediately preceding the month of such distribution and (ii) with respect to
the First Distribution Date the Issue Date (with respect to (i) and (ii), the
"Record Date"), from the Available Distribution Amount an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class [B-1][B-2] Certificates on
such Distribution Date pursuant to the Agreement. Reference is hereby made to
the further provisions of this Certificate and the Agreement set forth herein,
which further provisions shall for all purposes have the same effect as though
fully set forth at this place.
All distributions will be made or caused to be made by the
Trustee either (i) by check mailed to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register or
(ii) at the request of the Person entitled thereto if such Person shall have so
notified the Trustee in writing by 5 Business Days prior to the applicable
Record Date and such Certificateholder is the registered holder of Certificates
the aggregate Initial Certificate Principal Balance of which is not less than
$2,500,000 (or, with respect to the Class SA Certificates and the Class SB
Certificates, is the registered holder of an aggregate initial Notional Amount
of not less than $10,000,000 of the Class SA Certificates and the Class SB
Certificates), in immediately available funds by wire transfer to the account of
such Person. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Master Servicer of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee. The Certificate Principal Balance
hereof will be reduced to the extent of distributions allocable to principal and
the principal portions of any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of
Certificates of the series and class specified on the face hereof. The
Certificates in the aggregate represent the entire beneficial ownership interest
in: (i) the Mortgage Loans (exclusive of payments of principal and interest due
on or before the Cut-off Date) as from time to time are subject to the Agreement
and all payments under and proceeds of the Mortgage Loans, together with all
documents included in the related Mortgage File; (ii) such funds or assets as
from time to time are deposited in the Custodial Account, the Excess Proceeds
Account or the Certificate Account; (iii) any REO Property; (iv) the Primary
Hazard Insurance Policies, if any, and all other insurance policies with respect
to the Mortgage Loans required to be maintained pursuant to the Agreement; and
(v) the Depositor's interest in respect of the representations and warranties
made by the Seller in each Mortgage Loan Purchase Agreement and the Seller's
Warranty Certificate (all of the foregoing being hereinafter collectively called
the "Trust Fund").
-3-
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Master Servicer, the Trustee or any Sub-Servicer
and are not insured or guaranteed by any governmental agency or instrumentality
or by any other person or entity. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans, all
as more specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Custodial Account or the Certificate Account may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement to
the Master Servicer of advances made, or certain expenses incurred, by it, by
the Depositor, by the Trustee or by any Sub-Servicer.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66-2/3% of the Voting Rights. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
initial Certificate Principal Balance will be issued to the designated
transferee or transferees.
No transfer of any Class [B-1][B-2] Certificate shall be made
to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and Xxxxx plans, that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"; any of foregoing, a
"Plan"), to any Person acting on behalf of a Plan, or to any other person who is
using "plan assets" to effect such acquisition (including any insurance company
using funds in its general or separate accounts that may constitute "plan
assets"), unless the prospective transferee of a Certificateholder desiring to
transfer its Certificates provides to the Trustee or the Certificate Registrar
an Opinion of Counsel (or, in the limited circumstances described in the
Agreement, a certification of facts) which establishes to the satisfaction of
the Depositor and the Trustee or the Certificate Registrar that such disposition
will not violate the prohibited transaction provisions of Section 406 of ERISA
and Section 4975 of the Internal Revenue Code of 1986, as amended. In the case
of any transfer of the foregoing Certificates to an insurance company, in lieu
of such Opinion of Counsel, the Trustee shall require a certification in the
form of Exhibit G-5 to the Agreement.
-4-
The Certificates are issuable in fully registered form only,
without coupons, and in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate initial Certificate
Principal Balance, 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 that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer and the Trustee and any
agent of the Depositor, the Master Servicer or the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Depositor, the Master Servicer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the purchase by the
Master Servicer of all Mortgage Loans and each REO Property in respect thereof,
or (ii) the final payment on, or other liquidation (or any advance with respect
thereto) of, the last Mortgage Loan remaining in the Trust Fund (or the
disposition of all REO Property in respect thereof). The Agreement permits, but
does not require, the Master Servicer to purchase from the Trust Fund all
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of the Master
Servicer's right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than or equal to 5% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be.
IN WITNESS WHEREOF, the Trustee in its capacity as trustee
under the Agreement has caused this Certificate to be duly executed.
Dated: March ___, 1996
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class [B-1][B-2] Certificates referred to in
the within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Social Security or other identifying number of assignee:
(Please print or typewrite name and address including postal zip code of
assignee)
the beneficial interest evidenced by the within Class [B-1][B-2] Certificate and
hereby authorizes the registration of transfer of such interest to the
above-named assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Class [B-1][B-2]
Certificate of a like initial Certificate Principal Balance to the above-named
assignee and deliver such Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------.
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
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.
EXHIBIT B-2
FORM OF CLASS SB 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 (THE "CODE")) CREATED BY THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN (THE "AGREEMENT").
THIS CLASS SB CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND WHICH IS IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
THIS CLASS SB CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND THE
CLASS B CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED HEREIN AND IN
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN, OR
PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING ANY
INSURANCE COMPANY UNDER THE CIRCUMSTANCES DESCRIBED IN THE AGREEMENT), SUBJECT
TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, UNLESS THE TRANSFEREE PROVIDES
AN OPINION OF COUNSEL OR CERTIFICATION OF FACTS (UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR
THE CERTIFICATE REGISTRAR, THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED
TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF
PREPAYMENT, USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES, EQUAL TO A CONSTANT PREPAYMENT RATE OF __% PER ANNUM (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$____ OF OID PER $100,000 OF INITIAL NOTIONAL AMOUNT, THE YIELD TO MATURITY IS
___% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $___ PER $100,000 OF INITIAL NOTIONAL AMOUNT, COMPUTED USING THE EXACT
METHOD. NO REPRESENTATION IS
-2-
MADE THAT THE MORTGAGE LOANS WILL PREPAY AT RATES BASED ON THE PREPAYMENT
ASSUMPTION OR AT ANY OTHER RATE.]
-3-
Series 0000-XX0 Xxxxxxxxx Initial Notional Amount of
the Class SB Certificates: _______
Class SB Initial Notional Amount of this
Certificate: $_______________
Adjustable Pass-Through Rate Initial Pass-Through Rate: ______
Date of Pooling and Servicing
Agreement and Cut-off Date:
February 1, 1996 Issue Date:
March ___, 1996
First Distribution Date:
March 25, 1996
Master Servicer: Trustee:
Temple-Inland Mortgage Bankers Trust Company
Corporation
No. ___ CUSIP: ____
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1996-QE3, CLASS SB
evidencing a beneficial ownership interest in a trust fund consisting
primarily of a pool of conventional adjustable rate fully amortizing
one- to four-family first lien residential mortgage loans sold by
DLJ MORTGAGE ACCEPTANCE CORP.
This certifies that _______________ is the registered owner of
the Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all of the Class SB Certificates in the Trust Fund (as
defined herein) established under a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among DLJ Mortgage Acceptance Corp.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), Temple-Inland Mortgage Corporation (the "Master Servicer")
and Bankers Trust Company (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. The Percentage Interest evidenced
hereby is equal to the initial Notional Amount of this Certificate divided by
the aggregate initial Notional Amount of all of the Class SB Certificates as
specified above. The Certificates of the Series specified above (collectively,
the "Certificates") evidence in the aggregate the entire beneficial ownership
interest in a segregated pool of assets created pursuant to the Agreement
comprised of conventional,
-4-
adjustable-rate, fully amortizing one- to four-family, residential first lien
mortgage loans (the "Mortgage Loans") or interests therein, and certain other
assets as described herein. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
The Trustee shall distribute or cause to be distributed on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on (i) with respect to any Distribution
Date other than the First Distribution Date, the last Business Day of the month
immediately preceding the month of such distribution and (ii) with respect to
the First Distribution Date the Issue Date (with respect to (i) and (ii), the
"Record Date"), from the Available Distribution Amount an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class SB Certificates on such
Distribution Date pursuant to the Agreement. The Notional Amount of the Class SB
Certificates as of any date of determination will be determined pursuant to the
Agreement. The Class SB Certificates have no Certificate Principal Balance.
Reference is hereby made to the further provisions of this Certificate and the
Agreement set forth herein, which further provisions shall for all purposes have
the same effect as though fully set forth at this place.
All distributions will be made or caused to be made by the
Trustee either (i) by check mailed to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register or
(ii) at the request of the Person entitled thereto if such Person shall have so
notified the Trustee in writing by 5 Business Days prior to the applicable
Record Date and such Certificateholder is the registered holder of Certificates
the aggregate Initial Certificate Principal Balance of which is not less than
$2,500,000 (or, with respect to the Class SA Certificates and the Class SB
Certificates, is the registered holder of an aggregate initial Notional Amount
of not less than $10,000,000 of the Class SA Certificates and the Class SB
Certificates), in immediately available funds by wire transfer to the account of
such Person. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Master Servicer of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee.
This Certificate is one of a duly authorized issue of
Certificates of the series and class specified on the face hereof. The
Certificates in the aggregate represent the entire beneficial ownership interest
in: (i) the Mortgage Loans (exclusive of payments of principal and interest due
on or before the Cut-off Date) as from time to time are subject to the Agreement
and all payments under and proceeds of the Mortgage Loans, together with all
documents included in the related Mortgage File; (ii) such funds or assets as
from time to time are deposited in the Custodial Account, the Excess Proceeds
Account or the Certificate Account; (iii) any REO Property; (iv) the Primary
Hazard Insurance Policies, if any, and all other insurance policies with respect
to the Mortgage Loans required to be maintained pursuant to the
-5-
Agreement; and (v) the Depositor's interest in respect of the representations
and warranties made by the Seller in each Mortgage Loan Purchase Agreement and
the Seller's Warranty Certificate (all of the foregoing being hereinafter
collectively called the "Trust Fund").
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Master Servicer, the Trustee or any Sub-Servicer
and are not insured or guaranteed by any governmental agency or instrumentality
or by any other person or entity. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans, all
as more specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Custodial Account or the Certificate Account may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement to
the Master Servicer of advances made, or certain expenses incurred, by it, by
the Depositor, by the Trustee or by any Sub-Servicer.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66-2/3% of the Voting Rights. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
initial Notional Amount will be issued to the designated transferee or
transferees.
No transfer of any Class SB Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and effective registration
or qualification under applicable state securities laws, or is made in a
transaction which does not require such registration or qualification. In the
event that a transfer is to be made without such registration or qualification,
(a) the Trustee and the Depositor shall require the transferee to execute an
investment letter in substantially the form attached as either Exhibit G-1 or
Exhibit H, as applicable, to the Agreement, which investment letter shall not be
an expense of the Depositor, the Master Servicer or the Trustee and (b) in the
event that such a transfer is not being made pursuant to Rule 144A under the
1933 Act, the Depositor may direct the Trustee to require an Opinion of Counsel
satisfactory to the Depositor and the Trustee that such transfer may be made
without such registration or qualification, which
-6-
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Master Servicer. Neither the Depositor nor the Trustee is obligated to register
or qualify any of the Certificates under the 1933 Act or any other securities
law or to take any action not otherwise required under the Agreement to permit
the transfer of such Certificates without registration or qualification. Any
such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Depositor, the Trustee and the Master 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 any Class SB Certificate shall be made to any
employee benefit plan or other retirement arrangement, including individual
retirement accounts and Xxxxx plans, that is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"; any of foregoing, a "Plan"),
to any Person acting on behalf of a Plan, or to any other person who is using
"plan assets" to effect such acquisition (including any insurance company using
funds in its general or separate accounts that may constitute "plan assets"),
unless the prospective transferee of a Certificateholder desiring to transfer
its Certificates provides to the Trustee or the Certificate Registrar an Opinion
of Counsel (or, in the limited circumstances described in the Agreement, a
certification of facts) which establishes to the satisfaction of the Depositor
and the Trustee or the Certificate Registrar that such disposition will not
violate the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Internal Revenue Code of 1986, as amended. In the case of
any transfer of the foregoing Certificates to an insurance company, in lieu of
such Opinion of Counsel, the Trustee shall require a certification in the form
of Exhibit G-5 to the Agreement.
The Certificates are issuable in fully registered form only,
without coupons, and in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate initial Notional Amount,
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 that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer and the Trustee and any
agent of the Depositor, the Master Servicer or the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Depositor, the Master Servicer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the purchase by the
Master Servicer of all Mortgage Loans and each REO Property in respect thereof,
or (ii) the final payment on, or other liquidation (or any advance with respect
thereto) of, the last Mortgage Loan remaining in the Trust Fund (or the
disposition of all REO Property in respect thereof). The Agreement permits, but
does not require, the Master Servicer to
-7-
purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of the Master Servicer's right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 5% of the aggregate Stated Principal Balance of the Mortgage Loans
at the Cut-off Date.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be.
IN WITNESS WHEREOF, the Trustee in its capacity as trustee
under the Agreement has caused this Certificate to be duly executed.
Dated: March ___, 1996
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class SB Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Social Security or other identifying number of assignee:
(Please print or typewrite name and address including postal zip code of
assignee)
the beneficial interest evidenced by the within Class SB Certificate and hereby
authorizes the registration of transfer of such interest to the above-named
assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Class SB Certificate
of a like initial Notional Amount to the above-named assignee and deliver such
Certificate to the following address:
------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------.
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
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
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.
EXHIBIT B-4
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE HAS BEEN DESIGNATED BY THE DEPOSITOR REFERRED TO BELOW AS A
"RESIDUAL INTEREST" IN THE "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" CREATED BY
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN (THE "AGREEMENT")
PURSUANT TO THE RELATED PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986 (THE
"CODE").
THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND WHICH IS IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS B
CERTIFICATES AND THE CLASS SB CERTIFICATES OF THE SAME SERIES TO THE EXTENT
DESCRIBED HEREIN AND IN THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN, OR
PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING ANY
INSURANCE COMPANY UNDER THE CIRCUMSTANCES DESCRIBED IN THE AGREEMENT), SUBJECT
TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, UNLESS THE TRANSFEREE PROVIDES
AN OPINION OF COUNSEL OR CERTIFICATION OF FACTS (UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR
THE CERTIFICATE REGISTRAR, THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED
TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE.
THE CLASS R CERTIFICATE WILL NOT BE ENTITLED TO RECEIVE DISTRIBUTIONS IN RESPECT
OF INTEREST OR PRINCIPAL THEREON UNTIL THE RELATED ACCRETION TERMINATION DATE,
AS DESCRIBED HEREIN AND IN THE AGREEMENT.
THIS CERTIFICATE AND THE AGREEMENT MAY BE AMENDED WITHOUT THE CONSENT OF THE
HOLDER HEREOF, AND IN A MANNER THAT MAY ADVERSELY AFFECT THE INTERESTS OF THE
HOLDER HEREOF, IF NECESSARY TO PREVENT THE DISQUALIFICATION OF THE TRUST FUND AS
A REMIC.
-2-
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES AN AFFIDAVIT TO THE MASTER SERVICER AND THE
TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY
WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO TAX AND, EXCEPT
FOR THE FEDERAL HOME LOAN MORTGAGE CORPORATION, A MAJORITY OF ITS BOARD OF
DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT), (B) ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (C) ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS'
COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX
IMPOSED BY CHAPTER 1 OF THE CODE (UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D) A
RURAL ELECTRIC AND TELEPHONE COOPERATIVE DESCRIBED IN SECTION 1381(A)(2)(C) OF
THE CODE OR (E) ANY OTHER PERSON SO DESIGNATED BY THE TRUSTEE BASED ON AN
OPINION OF COUNSEL (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B),
(C), (D) OR (E) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"),
OR (2) AN AGENT OF A DISQUALIFIED ORGANIZATION. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE, BY
ACCEPTANCE OF THIS CERTIFICATE, SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
IF ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE IS MADE TO ANY
OF CERTAIN "PASS-THROUGH ENTITIES" DESCRIBED IN SECTION 860E(E)(6) OF THE CODE,
AND A DISQUALIFIED ORGANIZATION IS THE RECORD HOLDER OF AN INTEREST IN SUCH
ENTITY, THEN A TAX MAY BE IMPOSED ON SUCH ENTITY.
NO TRANSFER OF THE CERTIFICATE MAY BE MADE TO A PERSON THAT IS NOT A UNITED
STATES PERSON (AS DEFINED IN THE AGREEMENT).
-3-
Series 0000-XX0 Xxxxxxxxx Initial Certificate
Principal Balance: $_____
Adjustable Pass-Through
Rate: __%
Class R Initial Certificate Principal
Balance of this Certificate: __%
Date of Pooling and Servicing Issue Date: March ___, 1996
Agreement and Cut-off Date:
February 1, 1996
Master Servicer: First Distribution Date:
Temple-Inland Mortgage Corporation March 25, 1996
Trustee:
Bankers Trust Company
No. _____ CUSIP:
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1996-QE3, CLASS R
evidencing a residual interest with respect to a trust fund
consisting primarily of a pool of conventional adjustable rate
fully amortizing one- to four-family first lien residential
mortgage loans sold by
DLJ MORTGAGE ACCEPTANCE CORP.
This certifies that _______________ is the registered owner of
the Percentage Interest evidenced by this Certificate in that certain beneficial
ownership interest evidenced by all of the Class R Certificates in the Trust
Fund (as defined herein) established under a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among DLJ Mortgage Acceptance Corp.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), Temple-Inland Mortgage Corporation (the "Master Servicer")
and Bankers Trust Company (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. The Certificates of the Series
specified above (collectively, the "Certificates") evidence in the aggregate the
entire beneficial ownership interest in a segregated pool of assets created
pursuant to the Agreement comprised of conventional, adjustable-rate, fully
amortizing, one- to four-family, residential first lien mortgage loans (the
"Mortgage Loans"), or interests therein, and certain other assets as described
herein. To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
-4-
The Trustee shall distribute or cause to be distributed on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on (i) with respect to any Distribution
Date other than the First Distribution Date, the last Business Day of the month
immediately preceding the month of such distribution and (ii) with respect to
the First Distribution Date the Issue Date (with respect to (i) and (ii), the
"Record Date"), from the Available Distribution Amount an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class R Certificates on such
Distribution Date pursuant to the Agreement. Reference is hereby made to the
further provisions of this Certificate and the Agreement set forth herein, which
further provisions shall for all purposes have the same effect as though fully
set forth at this place.
On each Distribution Date preceding the related Accretion
Termination Date and, as and to the extent provided in the Agreement, on such
Accretion Termination Date, Accrued Certificate Interest on the Class R
Certificates for such Distribution Date and the Outstanding Class SB Unpaid
Interest Amount will Be added to the Certificate Principal Balance of the Class
R Certificates.
All distributions will be made or caused to be made by the
Trustee either (i) by check mailed to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register or
(ii) at the request of the Person entitled thereto if such Person shall have so
notified the Trustee in writing by 5 Business Days prior to the applicable
Record Date and such Certificateholder is the registered holder of Certificates
the aggregate Initial Certificate Principal Balance of which is not less than
$2,500,000 (or, with respect to the Class SA Certificates and the Class SB
Certificates, is the registered holder of an aggregate initial Notional Amount
of not less than $10,000,000 of the Class SA Certificates and the Class SB
Certificates), in immediately available funds by wire transfer to the account of
such Person. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Master Servicer of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee. The Certificate Principal Balance
hereof will be reduced to the extent of distributions allocable to principal,
the principal portions of any Realized Losses allocable hereto and distributions
allocable to the Outstanding Class SB Unpaid Interest Amount.
This Certificate is one of a duly authorized issue of
Certificates of the series and class specified on the face hereof. The
Certificates in the aggregate represent the entire beneficial ownership interest
in: (i) the Mortgage Loans (exclusive of payments of principal and interest due
on or before the Cut-off Date) as from time to time are subject to the Agreement
and all payments under and proceeds of the Mortgage Loans, together with all
documents included in the related Mortgage File; (ii) such funds or assets as
from time to time are deposited in the Custodial Account, the Excess Proceeds
Account or the Certificate Account; (iii) any REO Property; (iv) the Primary
Hazard Insurance Policies, if any, and all other insurance policies with respect
to the Mortgage Loans required to be maintained pursuant to the Agreement; and
(v) the Depositor's interest in respect of the representations and warranties
made
-5-
by the Seller in each Mortgage Loan Purchase Agreement and the Seller's Warranty
Certificate (all of the foregoing being hereinafter collectively called the
"Trust Fund").
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Master Servicer, the Trustee or any Sub-Servicer
and are not insured or guaranteed by any governmental agency or instrumentality
or by any other person or entity. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans, all
as more specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Custodial Account or the Certificate Account may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement to
the Master Servicer of advances made, or certain expenses incurred, by it, by
the Depositor, by the Trustee or by any Sub-Servicer.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66-2/3% of the Voting Rights. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
No transfer of any Class R Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and effective registration
or qualification under applicable state securities laws, or is made in a
transaction which does not require such registration or qualification. In the
event that a transfer is to be made without such registration or qualification,
(a) the Trustee and the Depositor shall require the transferee to execute an
investment letter in substantially the form attached as either Exhibit G-1 or
Exhibit H, as applicable to the Agreement, which investment letter shall not be
an expense of the Depositor, the Master Servicer or the trustee and (b) in the
event that such a transfer is not being made pursuant to Rule 144A under the
1933 Act, the Depositor may direct the Trustee to require an Opinion of Counsel
satisfactory to the Depositor and the Trustee that such transfer may be made
without such registration or qualification, which Opinion of Counsel shall not
be an expense of the Depositor, the Trustee or the Master Servicer.
-6-
Neither the Depositor nor the Trustee is obligated to register or qualify any of
the Certificates under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Depositor, the Trustee and the Master 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 any Class R this Certificate shall be made to
any employee benefit plan or other retirement arrangement, including individual
retirement accounts and Xxxxx plans, that is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"; any of foregoing, a "Plan"),
to any Person acting on behalf of a Plan, or to any other person who is using
"plan assets" to effect such acquisition (including any insurance company using
funds in its general or separate accounts that may constitute "plan assets"),
unless the prospective transferee of a Certificateholder desiring to transfer
its Certificates provides to the Trustee or the Certificate Registrar an Opinion
of Counsel (or, in the limited circumstances described in the Agreement, a
certification of facts) which establishes to the satisfaction of the Depositor
and the Trustee or the Certificate Registrar that such disposition will not
violate the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Internal Revenue Code of 1986, as amended. In the case of
any transfer of the foregoing Certificates to an insurance company, in lieu of
such Opinion of Counsel, the Trustee shall require a certification in the form
of Exhibit G-5 to the Agreement.
The Certificates are issuable in fully registered form only,
without coupons, and in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer and the Trustee and any
agent of the Depositor, the Master Servicer or the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Depositor, the Master Servicer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the purchase by the
Master Servicer of all Mortgage Loans and each REO Property in respect thereof,
or (ii) the final payment on, or other liquidation (or any advance with respect
thereto) of, the last Mortgage Loan remaining in the Trust Fund (or the
disposition of all REO Property in respect thereof). The Agreement permits, but
does not require, the Master Servicer to purchase from the Trust Fund all
Mortgage Loans and all property acquired in respect of any
-7-
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of the Master Servicer's right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than or equal
to 5% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be.
IN WITNESS WHEREOF, the Trustee in its capacity as trustee
under the Agreement has caused this Certificate to be duly executed.
Dated: March ___, 1996
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
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Social Security or other identifying number of assignee:
(Please print or typewrite name and address including postal zip code of
assignee)
the beneficial interest evidenced by the within Class R Certificate and hereby
authorizes the registration of transfer of such interest to the above-named
assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Class R Certificate of
a like Percentage Interest to the above-named assignee and deliver such
Certificate to the following address:
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Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
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.
EXHIBIT C
FORM OF TRUSTEE INITIAL CERTIFICATION
[Closing Date]
[Master Servicer]
[Depositor]
-------------------------
-------------------------
Re: Pooling and Servicing Agreement, dated as of
February 1, 1996, among DLJ Mortgage
Acceptance Corp., Temple-Inland Mortgage
Corporation and Bankers Trust Company, DLJ
Mortgage Acceptance Corp. Mortgage
Pass-Through Certificates, Series 0000-XX0
Xxxxxxxxx:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto) it has reviewed
the Mortgage File and the Mortgage Loan Schedule and has determined that: (i)
all documents required to be included in the Mortgage File are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; and (iii) based on examination by
it, and only as to such documents, the information set forth in items (i) -
(vii), (x), (xii), (xiii), (xx) and (xxi) of the definition or description of
"Mortgage Loan Schedule" is correct.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representation that any documents specified in clause (vi) of Section
2.01 should be included in any Mortgage File. The Trustee makes no
representations as to and shall not be responsible to verify: (i) the validity,
legality, sufficiency, enforceability, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan, or (iii) the existence of any assumption, modification, written assurance
or substitution agreement with respect to any Mortgage File if no such documents
appear in the Mortgage File delivered to the Trustee.
-2-
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
BANKERS TRUST COMPANY
By:
Name:
Title:
EXHIBIT D
FORM OF TRUSTEE FINAL CERTIFICATION
[date]
[Master Servicer]
[Depositor]
-------------------------
-------------------------
Re: Pooling and Servicing Agreement, dated as of
February 1, 1996 among DLJ Mortgage
Acceptance Corp., Temple-Inland Mortgage
Corporation and Bankers Trust Company, DLJ
Mortgage Acceptance Corp. Mortgage
Pass-Through Certificates, Series 0000-XX0
Xxxxxxxxx:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto) it has received
the documents set forth in Section 2.01.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representation that any documents specified in clause (vi) of Section
2.01 should be included in any Mortgage File. The Trustee makes no
representations as to and shall not be responsible to verify: (i) the validity,
legality, sufficiency, enforceability, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) the existence of any assumption, modification, written assurance
or substitution agreement with respect to any Mortgage File if no such documents
appear in the Mortgage File delivered to the Trustee.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
BANKERS TRUST COMPANY
By:
Name:
Title:
EXHIBIT E
[RESERVED]
EXHIBIT F-1
REQUEST FOR RELEASE
(for Trustee)
LOAN INFORMATION
Name of Mortgagor: _____________________________
Master Servicer
Loan No.: _____________________________
TRUSTEE
Name: _____________________________
Address: _____________________________
_____________________________
Trustee
Mortgage File No.: _____________________________
REQUEST FOR REQUESTING DOCUMENTS (check one):
1. Mortgage Loan Liquidated.
(The Master Servicer hereby certifies that all proceeds
of foreclosure, insurance or other liquidation have been
finally received and deposited into the Custodial Account
to the extent required pursuant to the Pooling and
Servicing Agreement.)
2. Mortgage Loan in Foreclosure.
3. Mortgage Loan Repurchased Pursuant to Section 9.01 of the Pooling
and Servicing Agreement.
4. Mortgage Loan Repurchased Pursuant to Article II of the Pooling
and Servicing Agreement.
(The Master Servicer hereby certifies that the repurchase
price has been deposited into the Custodial Account
pursuant to the Pooling and Servicing Agreement.)
5. Other (explain).
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-2-
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The undersigned Master Servicer hereby acknowledges that it has
received from _____________________________________, as Trustee for the Holders
of Mortgage PassThrough Certificates, Series 1996-QE3, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of February 1, 1996 (the "Pooling and Servicing
Agreement"), among DLJ Mortgage Acceptance Corp., Temple-Inland Mortgage
Corporation and the Trustee.
( ) Promissory Note dated _______________, 19__, in the original
principal sum of $__________, made by _____________________,
payable to, or endorsed to the order of, the Trustee.
( ) Mortgage recorded on _____________________ as instrument no.
____________________ in the County Recorder's Office of the County
of _________________, State of __________________ in
book/reel/docket _________________ of official records at
page/image _____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of __________________ in book/reel/docket
_________________ of official records at page/image
______________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded
on ___________________ as instrument no. _________ in the County
Recorder's Office of the County of __________, State of
_______________ in book/reel/docket ____________ of official
records at page/image ____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ---------------------------------------------
( ) ---------------------------------------------
( ) ---------------------------------------------
( ) ---------------------------------------------
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
-3-
(1) The Master 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) The Master 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 Master Servicer assert or seek to
assert any claims or rights of setoff to or against the Documents
or any proceeds thereof.
(3) The Master Servicer shall return each and every
Document previously requested from the Mortgage File to the
Trustee 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 Custodial 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 the
Master Servicer shall at all times be earmarked for the account of
the Trustee, and the Master Servicer shall keep the Documents and
any proceeds separate and distinct from all other property in the
Master Servicer's possession, custody or control.
Temple-Inland Mortgage Corporation
By:
Its:
Date: _____________________, 19__
EXHIBIT F-2
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1996-QE3
______________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER: _______________ BORROWER'S NAME:_____________
COUNTY:_____________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE CUSTODIAL ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
___________ ______________________ DATED:______________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
EXHIBIT G-1
FORM OF INVESTOR REPRESENTATION LETTER
, 19
[Depositor]
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: DLJ/Quality Series 1996-QE3
Re: DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates
Series 1996-QE3, Class __
Dear Sirs:
_______________ (the "Purchaser") intends to purchase from
_______________ (the "Seller") $__________ Initial Certificate Principal Balance
of Mortgage Pass-Through Certificates, Series 1996-QE3, Class (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of February 1, 1996 among DLJ
Mortgage Acceptance Corp., as seller (the "Company"), Temple-Inland Mortgage
Corporation, as master servicer, and Bankers Trust Company, as trustee (the
"Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Company and the
Trustee that:
1. The Purchaser understands that (a) the
Certificates have not been and will not be registered or
qualified under the Securities Act of 1933, as amended (the
"Act") or any state securities law, (b) the Company is not
required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and
qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to
the foregoing effect.
2. The Purchaser is acquiring the Certificates for
its own account for investment only and not with a view to or
for sale in connection with any distribution thereof in any
manner that would violate the Act or any applicable state
securities laws.
-2-
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such
matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor"
within the meaning of Rule 501(a) promulgated pursuant to the
Act.
4. The Purchaser has been furnished with, and has had
an opportunity to review (a) a copy of the Private Placement
Memorandum dated February 28, 1996 relating to the
Certificates, (b) a copy of the Pooling and Servicing
Agreement and (c) such other information concerning the
Certificates, the Mortgage Loans and the Company as has been
requested by the Purchaser from the Company or the Seller and
is relevant to the Purchaser's decision to purchase the
Certificates. The Purchaser has had any questions arising from
such review answered by the Company or the Seller to the
satisfaction of the Purchaser. If the Purchaser did not
purchase the Certificates from the Seller in connection with
the initial distribution of the Certificates and was provided
with a copy of the Private Placement Memorandum (the
"Memorandum") relating to the original sale (the "Original
Sale") of the Certificates by the Company, the Purchaser
acknowledges that such Memorandum was provided to it by the
Seller, that the Memorandum was prepared by the Company solely
for use in connection with the Original Sale and the Company
did not participate in or facilitate in any way the purchase
of the Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and
not to the Company with respect to any damage, liability,
claim or expense arising out of, resulting from or in
connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any information,
development or event arising after the date of the Memorandum.
5. The Purchaser has not and will not, nor has it
authorized or will it authorize, any person to (a) offer,
pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any
offer to buy or to accept a pledge, disposition or other
transfer of any Certificate, any interest in any Certificate
or any other similar security from any person in any manner,
(c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any
other manner or (e) take any other action, that (as to any of
(a) through (e) above) would constitute a distribution of any
Certificate under the Act, that would render the disposition
of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or
qualification pursuant thereto. The Purchaser will not sell or
otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing
Agreement.
-3-
[6. *The Purchaser is not any employee benefit plan
subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the Internal Revenue Code of
1986, (the "Code"), nor a Person acting, directly or
indirectly, on behalf of any such plan, and understands that
registration of transfer of any Certificate to any such
employee benefit plan, or to any person acting on behalf of
such plan, will not be made unless such employee benefit plan
delivers an opinion of its counsel, addressed and satisfactory
to the Trustee, the Company and the Master Servicer, to the
effect that the purchase and holding of a Certificate by or on
behalf of such employee benefit plan would not result in the
assets of the Trust Estate being deemed to be "plan assets"
and subject to the fiduciary responsibility provisions of
ERISA or the prohibited transaction provisions of the Code (or
comparable provisions of any subsequent enactments), would not
constitute or result in a prohibited transaction under Section
406 of ERISA or Section 4975 of the Code, and would not
subject the Company, the Master Servicer or the Trustee to any
obligation or liability (including liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in
the Pooling and Servicing Agreement or any other liability.
The Purchaser understands that under current law such an
opinion cannot be rendered.]
Very truly yours,
By:
Name:
Title:
* In the case of a transfer of the Class SB and Class R Certificates to
an insurance company, the above paragraph 6 shall be deleted and a
certification in the form of Exhibit G-5 shall be executed.
EXHIBIT G-2
Form of Transferor Representation Letter
, 19
[Depositor]
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: DLJ/Quality Series 1996-QE3
Re: DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates
Series 1996-QE3, Class __
Dear Sirs:
In connection with the sale by _______________ (the "Seller")
to _______________ (the "Purchaser") of $__________ Initial Certificate
Principal Balance of Mortgage Pass-Through Certificates, Series 1996-QE3, Class
(the "Certificates"), issued pursuant to the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of February 1, 1996 among DLJ
Mortgage Acceptance Corp., as seller (the "Company"), Temple-Inland Mortgage
Corporation, as master servicer, and Bankers Trust Company, as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act in any manner set forth in the foregoing sentence with
-2-
respect to any Certificate. The Seller has not and will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
Very truly yours,
(Seller)
By:
Name:
Title:
EXHIBIT G-3
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
___________________, being first duly sworn, deposes,
represents and warrants:
1. That he is [Title of Officer] of [Name of Owner], a
[savings institution] [corporation] duly organized and existing under the laws
of [the State of ___________] [the United States], (the "Owner"), (record or
beneficial owner of the Class R Certificates on behalf of which he makes this
affidavit and agreement). This Class R Certificate was issued pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") dated as
of February 1, 1996 among DLJ Mortgage Acceptance Corp., as depositor,
Temple-Inland Mortgage Corporation, as master servicer (the "Master Servicer"),
and Bankers Trust Company, as trustee (the "Trustee").
2. That the Owner (i) is and will be a "Permitted Transferee"
as of ________, 199__ and (ii) is acquiring the Class R Certificates for its own
account or for the account of another Owner from which it has received an
affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
Non-United States Person. For this purpose, a "disqualified organization" means
any of the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the FHLMC, a majority
of its board of directors is not selected by such governmental unit), (ii) a
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Internal Revenue
Code of 1986) (the "Code") which is exempt from the tax imposed by Chapter 1 of
the Code (unless such organization is subject to the tax imposed by Section 511
of the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code and (v)
any other Person so designated based upon an Opinion of Counsel that the holding
of an Ownership Interest in a Class R Certificate by such Person may cause the
Trust Fund or any Person having an Ownership Interest in any Class of
Certificates, other than such Person, to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Class R Certificate to such Person. The terms
"United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
3. That the Owner is aware (i) of the tax that would be
imposed on transfers of the Class R Certificates to disqualified organizations
under the Code that applies to all
-2-
transfers of the Class R Certificates after March 31, 1988; (ii) that such tax
would be on the transferor, or, if such transfer is through an agent (which
person includes a broker, nominee or middleman) for a disqualified organization
Transferee, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false and; (iv) that the Class R Certificates may be "noneconomic
residual interests" within the meaning of Treasury Regulation Section
1.860E-1(c)(2) 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 is to enable the
transferor to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a
"pass-through entity" holding the Class R Certificates if at any time during the
taxable year of the pass-through entity a non-Permitted Transferee is the record
holder of an interest in such entity. For this purpose, a "pass through entity"
includes a regulated investment company, a real estate investment trust or
common trust fund, a partnership, trust or estate, and certain cooperatives.
5. That the Owner is aware that the Trustee will not register
the transfer of any Class R Certificates unless the transferee, or the
transferee's agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by Owners that are Permitted Transferees.
7. That the Owner's taxpayer identification number is
__________.
8. That the Owner has reviewed the restrictions set forth on
the face of the Class R Certificates and the provisions of Section 5.02 of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(and, in particular, the Owner is aware that such Section authorizes the Trustee
to deliver payments to a person other than the Owner and negotiate a mandatory
sale by the Trustee in the event that the Owner holds such Certificate in
violation of Section 5.02); and that the Owner expressly agrees to be bound by
and to comply with such restrictions and provisions.
9. That the Owner is not acquiring and will not transfer the
Class R Certificates in order to impede the assessment or collection of any tax.
10. That the Owner anticipates that it will, so long as it
holds the Class R Certificates, have sufficient assets to pay any taxes owed by
the holder of such Class R Certificates.
-3-
11. That the Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.
12. That the Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by it so long as any
of the Certificates remain outstanding. In this regard, the Owner hereby
represents to and for the benefit of the Person from whom it acquired the Class
R Certificates that the Owner intends to pay taxes associated with holding the
Class R Certificates as they become due, fully understanding that it may incur
tax liabilities in excess of any cash flows generated by the Class R
Certificates.
13. That the Owner is not acquiring the Class R Certificates
with the intent to transfer the Class R Certificates to any person or entity
that will not have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.
14. That Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificates were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.
15. That Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding, for so long as the Class
R Certificates remain outstanding and; (iii) is not a "Permitted Transferee".
16. That the Owner is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed
on its behalf, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this ____ day of ____________,
____.
[NAME OF OWNER]
By:
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of
Officer], known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and acknowledged to me
that such person executed the same as such person's free act and deed and the
free act and deed of the Owner.
Subscribed and sworn before me this ___ day of _____________,
19__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission
expires the ____
day of _______,
19__.
EXHIBIT G-4
Form of Transferor Certificates
___________________, 19__
[Depositor]
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: DLJ/Quality Series 1996-QE3
Re: DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates
Series 1996-QE3, Class R
Dear Sirs:
This letter is delivered to you in connection with the sale by
___________________________ (the "Seller") to _____________________________ (the
"Purchaser") of a ___% Percentage Interest in the Mortgage Pass-Through
Certificates, Series 1996-QE3, Class R (the "Certificates"), issued pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of February 1, 1996, among DLJ Mortgage Acceptance Corp.,
as seller (the "Company"), Temple-Inland Mortgage Corporation, as master
servicer, and Bankers Trust Company, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meaning set forth in the Pooling
and Servicing Agreement. The Seller hereby certifies, represents and warrants
to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the sale of the
Certificates by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to
the Trustee and the Master Servicer a transfer affidavit and agreement in the
form attached to the Pooling and Servicing Agreement as Exhibit G-3. The Seller
does not know or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Seller has determined that the Purchaser has
historically paid its debts as they have become due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Seller understands that the transfer of the
Certificates may not be respected for
-2-
United States income tax purposes (and the Seller may continue to be liable for
United States income taxes associated therewith) unless the Seller has conducted
such an investigation.
4. The Seller has no actual knowledge that the proposed
Transferee is a Disqualified Organization, an agent of a Disqualified
Organization or a Non-United States Person.
Very truly yours,
(Seller)
By:
Name:
Title:
EXHIBIT G-5
FORM OF INVESTOR REPRESENTATION LETTER FOR INSURANCE COMPANIES
________, 199__
[Depositor]
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: DLJ/Quality Series 1996-QE3
Re: DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates
Series 1996-QE3, Class __
Dear Sirs:
_______________ (the "Purchaser") intends to purchase from
__________ (the "Seller") $____________ Initial Certificate Principal Balance of
Mortgage Pass-Through Certificates, Series 1996-QE3, Class __ (the
"Certificate"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of February 1, 1996, among DLJ
Mortgage Acceptance Corp., as seller (the "Company"), Temple-Inland Mortgage
Corporation, as master servicer, and Bankers Trust Company, as trustee (the
"Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Company and the
Trustee that:
1. The Certificates purchased pursuant hereto will
not be transferred to any employee benefit plan or other
retirement arrangement including individual retirement
accounts and Xxxxx plans that is subject to Section 406 of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986
(the "Code") (any of the foregoing, a "Plan").
-2-
2. The Purchaser is an insurance company and the
source of funds used to purchase the Certificates is an
"insurance company general account" (as such term is defined
in Prohibited Transaction Class Exemption 95-60 issued by the
U.S. Department of Labor ("PTCE 95-60") and there is no plan
with respect to which the amount of such general account's
reserves and liabilities for the contract(s) held by or on
behalf of such Plan and all other plans maintained by the same
employer (or affiliate thereof as defined in PTCE 95-60) or by
the same employee organization, exceed 10% of the total of all
reserves and liabilities of such general account (as such
amounts are determined under PTCE 95-60) as of the date of
acquisition of such Certificates.
Very truly yours,
By:
Name:
Title:
EXHIBIT H
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates
Series 1996-QE3, Class ___, No. ___
The undersigned seller, as registered holder (the
"Transferor"), intends to transfer the Rule 144A Securities described above to
the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities 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, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with,
the Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of
the Pooling and Servicing Agreement as follows:
a. The Buyer understands that the Rule 144A
Securities have not been registered under the 1933 Act or the
securities laws of any state.
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Rule 144A
Securities.
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Transferor, the Trustee or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf
has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest
-2-
in the Rule 144A Securities or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached
or negotiated with respect to the Rule 144A Securities, any interest in
the Rule 144A Securities 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 Rule 144A Securities under the
1933 Act or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it authorized
or will it authorize any person to act, in such manner with respect to
the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the account of other qualified
institutional buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) 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 (ii) pursuant to another exemption from
registration under the 1933 Act.
3. The Buyer warrants and represents to, and covenants with,
the Transferor, the Servicer and the Depositor that either (1) the Buyer is not
an employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer's
purchase of the Rule 144A Securities will not result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code.
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
Print Name of Transferor Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
Date: Date:
ANNEX 1 TO EXHIBIT H
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
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 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $______________________1 in securities (except for 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) 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.
___ 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
statement, 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.
___ 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.
-2-
___ 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 ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The 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. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
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, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R.
10 plans.
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) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) 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. 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
-3-
enterprise and the Buyer is not itself a reporting company under the Securities
Exchange Act of 1934.
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.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. 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 Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
ANNEX 2 TO EXHIBIT H
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
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 ("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, 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.
____ 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) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made are relying and will continue
to rely on the statements made
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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. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Print Name of Buyer
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
EXHIBIT I
MORTGAGE LOAN SCHEDULE
EXHIBIT J
SELLER REPRESENTATIONS AND WARRANTIES
Seller's Representations Assigned by Depositor to Trustee
Representations and Warranties. Pursuant to the Mortgage Loan
Purchase Agreement, the Seller has made certain representations and warranties
to the Depositor. The Seller shall confirm such representations and warranties
and shall deliver a Seller's Warranty Certificate and an Officers' Certificate
on the Closing Date (i) reaffirming such representations and warranties and (ii)
specifically restating and reaffirming the following representations and
warranties as of such date. The following representations are, pursuant to the
Pooling and Servicing Agreement, assigned by the Depositor to the Trustee for
the benefit of the Certificateholders, together with the related repurchase
rights specified in the Mortgage Loan Purchase Agreement. Pursuant to the
Mortgage Loan Purchase Agreement, the Seller's Warranty Certificate and related
Officer's Certificate, the Seller affirms each such representation and warranty
and agrees, consents to and acknowledges the assignment thereof to the Trustee.
All capitalized terms herein shall have the meanings assigned in the Pooling and
Servicing Agreement and the Seller's Warranty Certificate, as applicable.
The Seller hereby represents and warrants to the Depositor and
Trustee, as to each Mortgage Loan, that as of the Closing Date or as of such
other date specifically provided herein:
[TO BE DUPED FROM THE SELLER'S WARRANTY CERTIFICATE]
EXHIBIT K
Form of Notice Under Section 3.24
________, 1996
[Trustee]
Re: MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 0000-XX0
Xxxxxxxx to Section 3.24 of the Pooling and Servicing Agreement, dated
as of February 1, 1996, relating to the Certificates referenced above, the
undersigned does hereby notify you that:
(a) The prepayment assumption used in pricing the Certificates was a
Constant Prepayment Rate ("CPR") of __% per annum.
(b) With respect to each Class of the captioned Certificates, set forth
below is (i), the first price, as a percentage of the Certificate Principal
Balance of each Class of Certificates, at which 10% of the aggregate Certificate
Principal Balance of each such Class of Certificates was first sold at a single
price, if applicable, or (ii) if more than 10% of a Class of Certificates have
been sold but no single price is paid for at least 10% of the aggregate
Certificate Principal Balance of such Class of Certificates, then the weighted
average price at which the Certificates of such Class were sold expressed as a
percentage of the Certificate Principal Balance of such Class of Certificates,
(iii) if less than 10% of the aggregate Certificate Principal Balance of a Class
of Certificates has been sold, the purchase price for each such Class of
Certificates paid by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (the
"Underwriter") expressed as a percentage of the Certificate Principal Balance of
such Class of Certificates calculated by: (1) estimating the fair market value
of each such Class of Certificates as of February 28, 1996; (2) adding such
estimated fair market value to the aggregate purchase prices of each Class of
Certificates described in clause (i) or (ii) above; (3) dividing each of the
fair market values determined in clause (1) by the sum obtained in clause (2);
(4) multiplying the quotient obtained for each Class of Certificates in clause
(3) by the purchase price paid by the Underwriter for all the Certificates
purchased by it; and (5) for each Class of Certificates, dividing the product
obtained from such Class of Certificates in clause (4) by the initial Principal
Balance of such
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Class of Certificates or (iv) the fair market value (but not less than zero) as
of the Closing Date of each Certificate of each Class of Certificates retained
by the Depositor or an affiliate corporation, or delivered to the seller:
Class SA:
Class A-1:
Class A-2:
Class B-1:
Class B-2:
Class SB:
Class R:
The prices and values set forth above do not include accrued interest
with respect to periods before the closing.
DLJ MORTGAGE ACCEPTANCE CORP.
By:
Name:
Title:
