Execution Copy
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CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor,
DLJ MORTGAGE CAPITAL, INC.,
Seller,
XXXXX FARGO BANK, N.A.,
Master Servicer, Servicer, Back-Up Servicer and Trust Administrator,
SELECT PORTFOLIO SERVICING, INC.,
Servicer,
WILSHIRE CREDIT CORPORATION
Special Servicer,
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
DATED AS OF OCTOBER 1, 2004
relating to
ADJUSTABLE RATE MORTGAGE TRUST 2004-3
ADJUSTABLE RATE MORTGAGE-BACKED PASS-THROUGH CERTIFICATES,
SERIES 2004-3
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Table of Contents
Page
ARTICLE I DEFINITIONS........................................................5
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.....45
SECTION 2.01. Conveyance of Trust Fund..................................45
SECTION 2.02. Acceptance by the Trustee.................................48
SECTION 2.03. Representations and Warranties of the Seller,
Master Servicer and Servicers.............................50
SECTION 2.04. Representations and Warranties of the Depositor as
to the Mortgage Loans.....................................52
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions.............................................52
SECTION 2.06. Issuance of Certificates..................................53
SECTION 2.07. REMIC Provisions..........................................53
SECTION 2.08. Covenants of the Master Servicer and each Servicer........58
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................59
SECTION 3.01. Servicers to Service Mortgage Loans.......................59
SECTION 3.02. Subservicing; Enforcement of the Obligations of
Subservicers..............................................61
SECTION 3.03. Master Servicing by Master Servicer.......................63
SECTION 3.04. Trustee to Act as Master Servicer or Servicer.............63
SECTION 3.05. Collection of Mortgage Loans; Collection Accounts;
Certificate Account.......................................64
SECTION 3.06. Establishment of and Deposits to Escrow Accounts;
Permitted Withdrawals from Escrow Accounts;
Payments of Taxes, Insurance and Other Charges............67
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Non-Designated Mortgage Loans;
Inspections...............................................68
SECTION 3.08. Permitted Withdrawals from the Collection Accounts
and Certificate Account...................................69
SECTION 3.09. Maintenance of Hazard Insurance; Mortgage
Impairment Insurance and Mortgage Guaranty
Insurance Policy; Claims; Restoration of Mortgaged
Property..................................................70
SECTION 3.10. Enforcement of Due on Sale Clauses; Assumption
Agreements................................................73
SECTION 3.11. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans......................75
SECTION 3.12. Trustee and Trust Administrator to Cooperate;
Release of Mortgage Files.................................78
SECTION 3.13. Documents, Records and Funds in Possession of a
Servicer to be Held for the Trust.........................79
SECTION 3.14. Servicing Fee.............................................79
SECTION 3.15. Access to Certain Documentation...........................80
SECTION 3.16. Annual Statement as to Compliance.........................80
SECTION 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements...........................81
SECTION 3.18. Maintenance of Fidelity Bond and Errors and
Omissions Insurance.......................................82
SECTION 3.19. Special Serviced Mortgage Loans...........................83
SECTION 3.20. Indemnification of Servicers and Master Servicer..........83
SECTION 3.21. Notification of Adjustments...............................84
SECTION 3.22. Designated Mortgage Loans.................................84
ARTICLE IV PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS....................85
SECTION 4.01. Priorities of Distribution................................85
SECTION 4.02. Allocation of Losses......................................89
SECTION 4.03. Recoveries................................................89
SECTION 4.04. Reserved..................................................90
SECTION 4.05. Monthly Statements to Certificateholders..................90
SECTION 4.06. Servicer to Cooperate.....................................91
SECTION 4.07. Cross-Collateralization; Adjustments to Available
Funds.....................................................91
SECTION 4.08. Basis Risk Reserve Fund...................................92
ARTICLE V ADVANCES BY THE MASTER SERVICER AND SERVICERS.....................94
SECTION 5.01. Advances by the Master Servicer and Servicers.............94
ARTICLE VI THE CERTIFICATES.................................................95
SECTION 6.01. The Certificates..........................................95
SECTION 6.02. Registration of Transfer and Exchange of
Certificates..............................................96
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates........100
SECTION 6.04. Persons Deemed Owners....................................101
SECTION 6.05. Access to List of Certificateholders' Names and
Addresses................................................101
SECTION 6.06. Maintenance of Office or Agency..........................101
SECTION 6.07. Book Entry Certificates..................................101
SECTION 6.08. Notices to Clearing Agency...............................102
SECTION 6.09. Definitive Certificates..................................102
ARTICLE VII THE DEPOSITOR, THE SELLER, THE MASTER SERVICER, THE
SERVICERS AND THE SPECIAL SERVICER............................104
SECTION 7.01. Liabilities of the Seller, the Depositor, the
Master Servicer, the Back-Up Servicer, the
Servicers and the Special Servicer.......................104
SECTION 7.02. Merger or Consolidation of the Seller, the
Depositor, the Back-Up Servicer, the Master
Servicer, the Servicers or the Special Servicer..........104
SECTION 7.03. Limitation on Liability of the Seller, the
Depositor, the Master Servicer, the Back-Up
Servicer, the Servicers, the Special Servicer and
Others...................................................105
SECTION 7.04. Master Servicer and Servicer Not to Resign;
Transfer of Servicing....................................106
SECTION 7.05. Master Servicer, Seller and Servicers May Own
Certificates.............................................106
SECTION 7.06. Termination of Duties of the Back-Up Servicer............106
ARTICLE VIII DEFAULT.......................................................108
SECTION 8.01. Events of Default........................................108
SECTION 8.02. Master Servicer or Trust Administrator to Act;
Appointment of Successor.................................111
SECTION 8.03. Notification to Certificateholders.......................113
SECTION 8.04. Waiver of Events of Default..............................113
ARTICLE IX CONCERNING THE TRUSTEE..........................................113
SECTION 9.01. Duties of Trustee........................................113
SECTION 9.02. Certain Matters Affecting the Trustee....................115
SECTION 9.03. Trustee Not Liable for Certificates or Mortgage
Loans....................................................116
SECTION 9.04. Trustee May Own Certificates.............................116
SECTION 9.05. Trustee's Fees and Expenses..............................116
SECTION 9.06. Eligibility Requirements for Trustee.....................117
SECTION 9.07. Resignation and Removal of Trustee.......................117
SECTION 9.08. Successor Trustee........................................118
SECTION 9.09. Merger or Consolidation of Trustee.......................118
SECTION 9.10. Appointment of Co Trustee or Separate Trustee............119
SECTION 9.11. Office of the Trustee....................................120
ARTICLE X CONCERNING THE TRUST ADMINISTRATOR...............................121
SECTION 10.01. Duties of Trust Administrator............................121
SECTION 10.02. Certain Matters Affecting the Trust Administrator........122
SECTION 10.03. Trust Administrator Not Liable for Certificates or
Mortgage Loans...........................................124
SECTION 10.04. Trust Administrator May Own Certificates.................124
SECTION 10.05. Trust Administrator's Fees and Expenses..................124
SECTION 10.06. Eligibility Requirements for Trust Administrator.........125
SECTION 10.07. Resignation and Removal of Trust Administrator...........125
SECTION 10.08. Successor Trust Administrator............................126
SECTION 10.09. Merger or Consolidation of Trust Administrator...........127
SECTION 10.10. Appointment of Co-Trust Administrator or Separate
Trust Administrator......................................127
SECTION 10.11. Office of the Trust Administrator........................128
SECTION 10.12. Tax Return...............................................128
SECTION 10.13. Commission Reporting.....................................128
SECTION 10.14. Determination of Certificate Index.......................131
ARTICLE XI TERMINATION.....................................................132
SECTION 11.01. Termination upon Liquidation or Purchase of all
Mortgage Loans...........................................132
SECTION 11.02. Procedure Upon Optional Termination......................133
SECTION 11.03. Additional Termination Requirements......................134
ARTICLE XII MISCELLANEOUS PROVISIONS.......................................135
SECTION 12.01. Amendment................................................135
SECTION 12.02. Recordation of Agreement; Counterparts...................137
SECTION 12.03. Governing Law............................................137
SECTION 12.04. Intention of Parties.....................................137
SECTION 12.05. Notices..................................................138
SECTION 12.06. Severability of Provisions...............................139
SECTION 12.07. Limitation on Rights of Certificateholders...............139
SECTION 12.08. Certificates Nonassessable and Fully Paid................140
SECTION 12.09. Protection of Assets.....................................140
SECTION 12.10. Non-Solicitation.........................................140
ARTICLE XIII SPS AND THE MASTER SERVICER...................................141
SECTION 13.01. Reports and Notices......................................141
SECTION 13.02. Master Servicer's Oversight With Respect to the
SPS Mortgage Loans.......................................142
SECTION 13.03. Termination..............................................142
SECTION 13.04. Liability and Indemnification............................142
SECTION 13.05. Confidentiality..........................................142
EXHIBITS
Exhibit A: Form of Class A Certificate..............................A-1
Exhibit B: Form of Class C-M Certificate............................B-1
Exhibit C: Form of Class C-B Certificate............................C-1
Exhibit D: Form of Class AR Certificate.............................D-1
Exhibit E: Form of Class AR-L Certificate...........................E-1
Exhibit F: Form of Class X Certificate .............................F-1
Exhibit G: Form of Servicer Information.............................G-1
Exhibit H: Form of Trust Receipt and Initial Certification..........H-1
Exhibit I: Form of Trust Receipt and Final Certification............I-1
Exhibit J: Form of Request for Release..............................J-1
Exhibit K: Form of Transferor Certificate...........................K-1
Exhibit L-1: Form of Investment Letter..............................L-1-1
Exhibit L-2: Form of Rule 144A Letter...............................L-2-1
Exhibit M: Form of Investor Transfer Affidavit and Agreement........M-1
Exhibit N: Form of Transfer Certificate.............................N-1
Exhibit O: Form of SPS Mortgage Loans Report........................O-1
Exhibit P: Form of Foreclosure Settlement Statement...............P-1-1
Exhibit Q: Form of Monthly Statement to Certificateholders..........Q-1
Exhibit R: Form of Depositor Certification.............................
Exhibit S: Form of Trust Administrator Certification................S-1
Exhibit T-1: Form of Master Servicer Certification..................T-1-1
Exhibit T-2: Form of Servicer Certification.........................T-2-1
SCHEDULES
Schedule I: Mortgage Loan Schedule...................................I-1
Schedule IIA: Representations and Warranties of Seller - DLJMC.......IIA-1
Schedule IIB: Representations and Warranties of Master Servicer -
Xxxxx Fargo............................................IIB-1
Schedule IIC: Representations and Warranties of Servicer - SPS.......IIC-1
Schedule IID: Representations and Warranties of Servicer - Xxxxx
Fargo..................................................IID-1
Schedule IIE: Representations and Warranties of Special Servicer
- Wilshire.............................................IIE-1
Schedule III: Representations and Warranties of DLJMC - Mortgage
Loans..................................................III-1
APPENDICES
Appendix A: Calculation of Class Y Principal Reduction Amounts Appendix A-1
-110-
-1-
THIS POOLING AND SERVICING AGREEMENT, dated as of October 1,
2004, is hereby executed by and among CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., a Delaware corporation, as depositor (the "Depositor"), DLJ
MORTGAGE CAPITAL, INC. ("DLJMC"), a Delaware corporation, in its capacity as
a seller (a "Seller"), XXXXX FARGO BANK, N.A., a national banking
association, in its capacity as Master Servicer (the "Master Servicer"), as a
servicer (a "Servicer"), as Back-Up Servicer (the "Back-Up Servicer") and as
Trust Administrator (the "Trust Administrator"), SELECT PORTFOLIO SERVICING,
INC. ("SPS"), a Utah corporation, in its capacity as a servicer (in such
capacity, a "Servicer"), WILSHIRE CREDIT CORPORATION, a Nevada corporation,
in its capacity as special servicer (the "Special Servicer"), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee"). Capitalized terms used in this Agreement and not otherwise
defined will have the meanings assigned to them in Article I below.
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The Trust Fund
(exclusive of the assets held in the Basis Risk Reserve Fund) for federal
income tax purposes shall consist of three REMICs (referred to as "REMIC I,"
"REMIC II" and "REMIC III").
REMIC I
As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and
certain other related assets (exclusive of the assets held in the Basis Risk
Reserve Fund) subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool
of assets will be designated as "REMIC I." The Class AR-L Certificates will
represent the sole Class of "residual interests" in REMIC I for purposes of
the REMIC Provisions (as defined herein) under federal income tax law. The
following table irrevocably sets forth the designation, remittance rate (the
"Uncertificated REMIC I Pass-Through Rate") and initial Uncertificated
Principal Balance for each of the "regular interests" in REMIC I (the
"REMIC I Regular Interests") and the Class AR-L Certificates. The "latest
possible maturity date" (determined solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC I Regular
Interest shall be the Maturity Date. None of the REMIC I Regular Interests
will be certificated.
Class
Designation for
each REMIC I
Regular Uncertificated Initial
Interest and REMIC I Uncertificated
the Class AR-L Type of Pass-Through Principal
Certificates Interest Rate Balance Final Maturity Date*
Class Y-1 Regular Variable(1) $ 29,054.77 February 2035
Class Y-2 Regular Variable(2) $58,113,274.46 February 2035
Class Z-1 Regular Variable(1) $92,952.36 February 2035
Class Z-2 Regular Variable(2) $185,811,758.14 February 2035
Class AR-L Residual Variable(1) $50.00 February 2035
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* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Loan Group
matures. For federal income tax purposes, for each Class of REMIC I
Regular and Residual Interests, the "latest possible maturity date" shall
be the Final Maturity Date.
(1) Interest distributed to the REMIC I Regular Interests Y-1 and Z-1
and the Class AR-L Certificates on each Distribution Date will have
accrued at the weighted average of the Net Mortgage Rates for the Group 1
Loans on the applicable Uncertificated Principal Balance outstanding
immediately before such Distribution Date.
(2) Interest distributed to the REMIC I Regular Interests Y-2 and Z-2
on each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 2 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
REMIC II
As provided herein, the Trust Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC I Regular
Interests and certain other related assets (exclusive of the assets held in
the Basis Risk Reserve Fund) subject to this Agreement as a real estate
mortgage investment conduit (a "REMIC") for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC II." Component I
of the Class AR Certificates will represent the sole Class of "residual
interests" in REMIC II for purposes of the REMIC Provisions (as defined
herein) under federal income tax law. The following table irrevocably sets
forth the designation, remittance rate (the "Uncertificated REMIC II
Pass-Through Rate") and initial Uncertificated Principal Balance for each of
the "regular interests" in REMIC II (the "REMIC II Regular Interests") and
Component I of the Class AR Certificates. The "latest possible maturity
date" (determined solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii)) for each REMIC II Regular Interest shall be the
Maturity Date. None of the REMIC II Regular Interests will be certificated.
Class
Designation for
each REMIC II
Regular
Interest and Uncertificated Initial
Component I of REMIC II Uncertificated
the Class AR Type of Pass-Through Principal
Certificates Interest Rate Balance Final Maturity Date*
Class 1-A-1L Regular Variable(1) $52,330,000.00 February 2035
Class 2-A-1L Regular Variable(2) $167,130,000.00 February 2035
Class C-M-1L Regular Variable(3) $6,830,000.00 February 2035
Class C-B-1L Regular Variable(3) $4,760,000.00 February 2035
Class C-B-2L Regular Variable(3) $4,270,000.00 February 2035
Class C-B-3L Regular Variable(3) $3,050,000.00 February 2035
Class C-B-4L Regular Variable(3) $1,830,000.00 February 2035
Class C-B-5L Regular Variable(3) $2,080,000.00 February 2035
Class C-B-6L Regular Variable(3) $1,586,989.73 February 2035
Component I of
the Class AR Residual Variable(1) $50.00 February 2035
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* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Loan Group
matures. For federal income tax purposes, for each Class of REMIC II
Regular and Residual Interests, the "latest possible maturity date" shall
be the Final Maturity Date.
(1) Interest distributed to the REMIC II Regular Interests 1-A-1L on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 1 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(2) Interest distributed to the REMIC II Regular Interests 1-A-2L on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 2 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(3) Interest distributed to the REMIC II Regular Interests
Class X-X-0X, X-X-0X, X-X-0X, X-X-0X, X-X-0X, X-X-0X and C-B-6L on each
Distribution Date will have accrued at the weighted average of (a) the
weighted average of the Net Mortgage Rates for the Group 1 Loans, and (b)
the weighted average of the Net Mortgage Rates for the Group 2 Loans
weighted on the basis of the related Subordinate Balances, on the
applicable Uncertificated Principal Balance outstanding immediately before
such Distribution Date.
REMIC III
As provided herein, the Trust Administrator will elect to treat
the segregated pool of assets consisting of the REMIC II Regular Interests as
a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as REMIC III. Component II of the Class AR Certificates
will represent the sole Class of "residual interests" in REMIC III for
purposes of the REMIC Provisions under federal income tax law. The following
table irrevocably sets forth the designation, Pass-Through Rate, aggregate
Initial Certificate Principal Balance, certain features, Final Scheduled
Distribution Date and initial ratings for each Class of Certificates
comprising the interests representing "regular interests" in REMIC III and
Component II of the Class AR Certificates. The "latest possible maturity
date" (determined solely for purposes of satisfying Treasury Regulation
Section 1.860G-1(a)(4)(iii)) for each Class of REMIC III Regular Certificates
shall be the Maturity Date.
Integral
Class Multiples
Principal Pass-Through Minimum in Excess
Class Balance Rate (per annum) Denomination of Minimum
Class 1-A-1 $52,330,000.00 Variable(1) $25,000 $1
Class 2-A-1 $167,130,000.00 Variable(2) $25,000 $1
Class X (3) Variable (4) $100,000 $1
Class C-M $6,830,000.00 Variable(5) $25,000 $1
Class C-B-1 $4,760,000.00 Variable(6) $25,000 $1
Class C-B-2 $4,270,000.00 Variable(7) $25,000 $1
Class C-B-3 $3,050,000.00 Variable(8) $25,000 $1
Class C-B-4 $1,830,000.00 Variable(9) $25,000 $1
Class C-B-5 $2,080,000.00 Variable(9) $25,000 $1
Class C-B-6 $1,586,989.73 Variable(9) $25,000 $1
Component II of
Class AR(10) $0.00 N/A (11) N/A
_______________
(1) The Pass-Through Rate for the November 2004 Distribution Date for the
Class 1-A-1 Certificates is 2.3100% per annum. After such Distribution
Date, the Pass-Through Rate for the Class 1-A-1 Certificates shall be a
per annum rate equal to the least of (a) the sum of the applicable
Certificate Index and the applicable Certificate Margin for such
Distribution Date, (b) the applicable Group 1 Net Funds Rate and (c)
11.50%.
(2) The Pass-Through Rate for the November 2004 Distribution Date for the
Class 2-A-1 Certificates is 2.5900% per annum. After such Distribution
Date, the Pass-Through Rate for the Class 2-A-1 Certificates shall be a
per annum rate equal to the least of (a) the sum of the applicable
Certificate Index and the applicable Certificate Margin for such
Distribution Date, (b) the applicable Group 2 Net Funds Rate and (c)
11.50%.
(3) These certificates will not receive any distributions of principal, but
will accrue interest on the Class X Notional Amount.
(4) The Pass-Through Rate on the Class X Certificates for each Distribution
Date shall be a per annum rate equal to, with respect to (a) Component
1X thereof, the excess, if any, of (i) the Net WAC Rate for the Group 1
Loans over (ii) the Pass-Through Rate on such Distribution Date for the
Class 1-A-1 Certificates prior to giving effect to distributions on
such Distribution Date, (b) Component 2X thereof, the excess, if any,
of (i) the Net WAC Rate for the Group 2 Loans over (ii) the
Pass-Through Rate on such Distribution Date for the Class 2-A-1
Certificates prior to giving effect to distributions on such
Distribution Date, and (c) Component 3X thereof, the excess, if any, of
(i) the Subordinate Component Net Funds Rate on such Distribution Date
over (ii) the weighted average of the Pass-Through Rates on such
Distribution Date for the Subordinate LIBOR Certificates prior to
giving effect to distributions on such Distribution Date.
(5) The Pass-Through Rate for the November 2004 Distribution Date for the
Class C-M Certificates is 2.500% per annum. After such Distribution
Date, the Pass-Through Rate for the Class C-M Certificates shall be a
per annum rate equal to the least of (a) the sum of the applicable
Certificate Index and the applicable Certificate Margin for such
Distribution Date, (b) the applicable Subordinate Component Net Funds
Rate and (c) 11.50%.
(6) The Pass-Through Rate for the November 2004 Distribution Date for the
Class C-B-1 Certificates is 2.600% per annum. After such Distribution
Date, the Pass-Through Rate for the Class C-B-1 Certificates shall be a
per annum rate equal to the least of (a) the sum of the applicable
Certificate Index and the applicable Certificate Margin for such
Distribution Date, (b) the applicable Subordinate Component Net Funds
Rate and (c) 11.50%.
(7) The Pass-Through Rate for the November 2004 Distribution Date for the
Class C-B-2 Certificates is 3.250% per annum. After such Distribution
Date, the Pass-Through Rate for the Class C-B-2 Certificates shall be a
per annum rate equal to the least of (a) the sum of the applicable
Certificate Index and the applicable Certificate Margin for such
Distribution Date, (b) the applicable Subordinate Component Net Funds
Rate and (c) 11.50%.
(8) The Pass-Through Rate for the November 2004 Distribution Date for the
Class C-B-3 Certificates is 3.700% per annum. After such Distribution
Date, the Pass-Through Rate for the Class C-B-3 Certificates shall be a
per annum rate equal to the least of (a) the sum of the applicable
Certificate Index and the applicable Certificate Margin for such
Distribution Date, (b) the applicable Subordinate Component Net Funds
Rate and (c) 11.50%.
(9) The Pass-Through Rate for the November 2004 Distribution Date for the
Class C B-4, Class C-B-5 and Class C-B-6 Certificates is 3.6732% per
annum. After such Distribution Date, the Pass-Through Rate for each of
the Class C-B-4, Class C-B-5 and Class C-B-6 Certificates shall be a
per annum rate equal to the Subordinate Component Net Funds Rate.
(10) The Class AR Certificates are not themselves issued by REMIC III,
instead, the Class AR Certificates will represent ownership of two
REMIC residual interests - Component I of the Class AR (which is the
residual interest in REMIC II) and Component II of the Class AR (which
is the residual interest in REMIC III).
(11) The Class AR Certificates are issued in minimum Percentage Interests of
20%.
For the avoidance of doubt, the Trust Administrator shall account
for any interest amount due to a Certificateholder in excess of the interest
rate on the REMIC regular interest issued by REMIC III corresponding to such
Certificate as part of the payment made by the Basis Risk Reserve Fund for
such Certificate (i.e., distributed to the Class X Certificates, as
applicable, to the extent it is entitled to funds from the REMIC) and then
paid outside of the REMIC pursuant to a separate contractual right to such
Certificateholder.
The foregoing REMIC structure is intended to cause all of the
cash from the Mortgage Loans to flow through to REMIC III as cash flow on a
REMIC regular interest, without creating any shortfall-actual or potential
(other than for credit losses) to any REMIC regular interest. To the extent
that the structure is believed to diverge from such intention the Trust
Administrator shall resolve ambiguities to accomplish such result and shall
to the extent necessary rectify any drafting errors or seek clarification to
the structure without Certificateholder approval (but with guidance of
counsel) to accomplish such intention.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates. All Classes of Certificates other than the Physical
Certificates.
Class A Certificates.... The Group 1 Certificates and the Class 2-A-1
Certificates.
Class C-B Certificates.. The Class C-B-1, Class C-B-2, Class C-B-3,
Class C-B-4, Class C-B-5 and Class C-B-6
Certificates.
ERISA-Restricted Residual Certificates and Private Certificates; and
Certificates............ any Certificates that do not satisfy the applicable
ratings requirement under the Underwriter's
Exemption.
Group 1 Certificates.... The Class 1-A-1, Class AR and Class AR-L
Certificates.
LIBOR Certificates...... The One-Month LIBOR Certificates and Class 2-A-1
Certificates.
Offered Certificates.... All Classes of Certificates other than the Private
Certificates.
One-Month LIBOR The Class 1-A-1, Class C-M, Class C-B-1,
Certificates............ Class C-B-2 and Class C-B-3 Certificates.
Physical Certificates... The Class AR, Class AR-L and the Private
Certificates.
Private Certificates.... The Class C-B-4, Class C-B-5 and Class C-B-6
Certificates.
Rating Agencies......... Xxxxx'x and S&P.
Regular Certificates.... All Classes of Certificates other than the Residual
Certificates.
Residual Certificates... The Class AR and Class AR-L Certificates.
Senior Certificates..... The Class A and Class X Certificates.
Subordinate Certificates The Class C-M and Class C-B Certificates.
Subordinate LIBOR The Class C-M, Class C-B-1, Class C-B-2 and
Certificates............ Class C-B-3 Certificates.
All covenants and agreements made by the Depositor herein are for
the benefit and security of the Certificateholders. The Depositor is
entering into this Agreement, and the Trustee is accepting the trusts created
hereby and thereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged. The principal balance of the
Mortgage Loans as of the Cut-off Date is $244,047,089.73.
The parties hereto intend to effect an absolute sale and
assignment of the Mortgage Loans to the Trustee for the benefit of
Certificateholders under this Agreement. However, the Depositor and each
Seller will hereunder absolutely assign and, as a precautionary matter grant
a security interest, in and to its rights, if any, in the related Mortgage
Loans to the Trustee on behalf of Certificateholders to ensure that the
interest of the Certificateholders hereunder in the Mortgage Loans is fully
protected.
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the
Depositor, the Seller, the Master Servicer, the Servicers, the Special
Servicer, the Trustee and the Trust Administrator agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1933 Act: The Securities Act of 1933, as amended.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Accrual Period: For any interest bearing Class of Certificates,
other than the LIBOR Certificates, and any Distribution Date, the calendar
month immediately preceding the related Distribution Date. With respect to
the LIBOR Certificates and the Distribution Date in November 2004, the period
commencing on the Closing Date and ending on November 24, 2004, and with
respect to any subsequent Distribution Date, the period commencing on the
25th day of the calendar month immediately preceding the month in which such
Distribution Date occurs and ending on the 24th day of the month in which
such Distribution Date occurs.
Advance: With respect to any Non-Designated Mortgage Loan, the
payment required to be made by a Servicer or the Master Servicer, as
applicable, with respect to any Distribution Date pursuant to Section 5.01.
With respect to any IndyMac Serviced Mortgage Loan, the payment
required to be made by (i) IndyMac on the Remittance Date (as defined in the
IndyMac Servicing Agreement) relating to any Distribution Date pursuant to
Section 5.03 of the IndyMac Servicing Agreement or (ii) the Master Servicer
with respect to any Distribution Date pursuant to Section 3.22(b) of this
Agreement.
Adverse REMIC Event: As defined in Section 2.07(f).
Adjustment Date: With respect to each Mortgage Loan, each
adjustment date on which the Mortgage Rate thereon changes pursuant to the
related Mortgage Note. The first Adjustment Date following the Cut off Date
as to each such Mortgage Loan is set forth in the Mortgage Loan Schedule.
Aggregate Loan Balance: As of any date of determination, shall
be equal to the aggregate Stated Principal Balance of all of the Mortgage
Loans as of the first day of such month.
Aggregate Loan Group Balance: As to any Loan Group, and as of
any date of determination, shall be equal to the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group as of the first day
of such month.
Aggregate Subordinate Percentage: For any Distribution Date, the
aggregate Class Principal Balance of the Subordinate Certificates immediately
prior to that Distribution Date divided by the Aggregate Loan Balance for
that Distribution Date.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Allocation Fraction: For Component 3X, any Distribution Date and
either Loan Group, a fraction equal to (x) the related Subordinate Component
Balance over (y) the aggregate Class Principal Balance of the Subordinate
Certificates immediately prior to such Distribution Date.
Ancillary Income: All income derived from the Non-Designated
Mortgage Loans, other than Servicing Fees and Master Servicing Fees,
including but not limited to, late charges, Prepayment Penalties, fees
received with respect to checks or bank drafts returned by the related bank
for non-sufficient funds, assumption fees, optional insurance administrative
fees and all other incidental fees and charges.
Appraised Value: The appraised value of the Mortgaged Property
based upon the appraisal made for the originator at the time of the
origination of the related Mortgage Loan or the sales price of the Mortgaged
Property at the time of such origination, whichever is less, or (i) with
respect to any Mortgage Loan that represents a refinancing other than a
Streamlined Mortgage Loan, the lower of the appraised value at origination or
the appraised value of the Mortgaged Property based upon the appraisal made
at the time of such refinancing and (ii) with respect to any Streamlined
Mortgage Loan, the appraised value of the Mortgaged Property based upon the
appraisal made in connection with the origination of the mortgage loan being
refinanced.
Assignment and Assumption Agreement: That certain assignment and
assumption agreement dated as of October 1, 2004, by and between DLJ Mortgage
Capital, Inc., as assignor, and the Depositor, as assignee, relating to the
Mortgage Loans.
Assignment of Proprietary Lease: With respect to a Cooperative
Loan, the assignment or mortgage of the related Proprietary Lease from the
Mortgagor to the originator of the Cooperative Loan.
Available Distribution Amount: With respect to any Distribution
Date and each Loan Group the sum of: (i) all amounts in respect of
Scheduled Payments (net of the related Expense Fees) due on the related Due
Date and received prior to the related Determination Date on the related
Mortgage Loans, together with any Advances in respect thereof; (ii) all
Insurance Proceeds (to the extent not applied to the restoration of the
Mortgaged Property or released to the Mortgagor in accordance with the
applicable Servicer's Accepted Servicing Standards), all Liquidation Proceeds
received during the calendar month preceding the month of that Distribution
Date on the related Mortgage Loans, in each case net of unreimbursed
Liquidation Expenses incurred with respect to such Mortgage Loans; (iii) all
Principal Prepayments received during the related Prepayment Period on the
related Mortgage Loans, excluding Prepayment Penalties; (iv) amounts received
with respect to such Distribution Date as the Substitution Adjustment Amount
or Purchase Price in respect of a Mortgage Loan in the related Loan Group
repurchased by the related Seller, purchased by a Holder of a Subordinate
Certificate pursuant to Section 3.11(f) or purchased by the Special Servicer
pursuant to Section 3.11(g) as of such Distribution Date, in the case of
clauses (i) through (iv) above reduced by amounts in reimbursement for
Advances previously made and other amounts as to which the Trustee, the Trust
Administrator, a Servicer or the Master Servicer is entitled to be reimbursed
pursuant to Section 3.08 in respect of the related Mortgage Loans or
otherwise; (v) any amounts payable as Compensating Interest Payments by a
Servicer with respect to the related Mortgage Loans on such Distribution
Date; and (vi) all Recoveries, if any; (vii) the portion of the Mortgage Loan
Purchase Price related to such Loan Group paid in connection with an Optional
Termination up to the amount of the Par Value for such Loan Group.
Back-Up Servicer: Xxxxx Fargo Bank, National Association, acting
in its capacity as back-up servicer for the SPS Serviced Loans hereunder, or
its successors in interest, as applicable.
Bankruptcy Code: The United States Bankruptcy Code, as amended
from time to time (11 U.S.C. §§ 101 et seq.).
Bankruptcy Coverage Termination Date: The point in time at which
the Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Loan Group, Realized Losses
on the Mortgage Loans in that Loan Group incurred as a result of a Deficient
Valuation or Debt Service Reduction.
Bankruptcy Loss Coverage Amount: As of any Determination Date,
the Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Loss
Coverage Amount as reduced by (i) the aggregate amount of Bankruptcy Losses
allocated to the Subordinate Certificates since the Cut off Date and (ii) any
permissible reductions in the Bankruptcy Loss Coverage Amount as evidenced by
a letter of each Rating Agency to the Trust Administrator to the effect that
any such reduction will not result in a downgrading, or otherwise adversely
affect, of the then current ratings assigned to such Classes of Certificates
rated by it.
Basis Risk Shortfall: For any Class of LIBOR Certificates and
any Distribution Date, the sum of (i) the excess, if any, of (a) the related
Current Interest calculated on the basis of the least of (x) the applicable
Certificate Index plus the applicable Certificate Margin, (y) the Maximum
Interest Rate and (z) 11.50% over (b) the related Current Interest for the
applicable Distribution Date, (ii) any amount described in clause (i)
remaining unpaid from prior Distribution Dates, and (iii) interest on the
amount in clause (ii) for the related Accrual Period calculated at a per
annum rate equal to the least of (x) the applicable Certificate Index plus
the applicable Certificate Margin, (y) the applicable Maximum Interest Rate
and (z) 11.50%.
Basis Risk Reserve Fund: The separate Eligible Account created
and initially maintained by the Trust Administrator pursuant to Section 4.08
in the name of the Trust Administrator, as agent for the Trustee, for the
benefit of the LIBOR Certificates and designated "Xxxxx Fargo Bank, N.A. in
trust for registered holders of Adjustable Rate Mortgage Trust 2004-3,
Adjustable Rate Mortgage-Backed Pass Through Certificates, Series 2004-3,
Class 1-A-1, Class 2-A-1, Class C-M, Class C-B-1, Class C-B-2, and
Class C-B-3." Funds in the Basis Risk Reserve Fund shall be held in trust
for the Certificateholders for the uses and purposes set forth in this
Agreement.
Beneficial Holder: A Person holding a beneficial interest in any
Certificate through a Participant or an Indirect Participant or a Person
holding a beneficial interest in any Definitive Certificate.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Book-Entry Form: Any Certificate held through the facilities of
the Depository.
Business Day: Any day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in New York or the state in which
the office of the Master Servicer or any Servicer or the Corporate Trust
Office of the Trustee or Trust Administrator are located are authorized or
obligated by law or executive order to be closed.
Carryforward Interest: For any Class of LIBOR Certificates and
any Distribution Date, the sum of (1) the amount, if any, by which (x) the
sum of (A) Current Interest for such Class for the immediately preceding
Distribution Date and (B) any unpaid Carryforward Interest for such Class
from previous Distribution Dates exceeds (y) the amount paid in respect of
interest on such Class on such immediately preceding Distribution Date, and
(2) interest on such amount for the related Accrual Period at the applicable
Pass-Through Rate.
Cash Remittance Date: With respect to any Distribution Date and
(A) SPS, the 7th calendar day preceding such Distribution Date, or if such
7th calendar day is not a Business Day, the Business Day immediately
preceding such 7th calendar day, (B) Xxxxx Fargo, the 18th calendar day of
the month in which the Distribution Date occurs, or if such 18th calendar day
is not a Business Day, the Business Day immediately following such 18th
calendar day and (C) IndyMac, the 18th calendar day of the month in which the
Distribution Date occurs, or if such 18th calendar day is not a Business Day
(as defined in the IndyMac Servicing Agreement), the Business Day immediately
following such 18th calendar day.
Certificate: Any Certificates executed and authenticated by the
Trust Administrator on behalf of the Trustee for the benefit of the
Certificateholders in substantially the form or forms attached as Exhibits A
through F hereto.
Certificate Account: The separate Eligible Account created and
maintained with the Trust Administrator, or any other bank or trust company
acceptable to the Rating Agencies which is incorporated under the laws of the
United States or any state thereof pursuant to Section 3.05, which account
shall bear a designation clearly indicating that the funds deposited therein
are held in trust for the benefit of the Trust Administrator, as agent for
the Trustee, on behalf of the Certificateholders or any other account serving
a similar function acceptable to the Rating Agencies. Funds in the
Certificate Account may (i) be held uninvested without liability for interest
or compensation thereon or (ii) be invested at the direction of the Trust
Administrator in Eligible Investments and reinvestment earnings thereon (net
of investment losses) shall be paid to the Trust Administrator. Funds
deposited in the Certificate Account (exclusive of the amounts permitted to
be withdrawn pursuant to Section 3.08(b)) shall be held in trust for the
Certificateholders.
Certificate Balance: With respect to any Certificate at any
date, the maximum dollar amount of principal to which the Holder thereof is
then entitled hereunder, such amount being equal to the Denomination thereof
(i) minus all distributions of principal and allocations of Realized Losses,
including Excess Losses, previously made or allocated with respect thereto
and, in the case of any Subordinate Certificates, reduced by any such amounts
allocated to such Class on prior Distribution Dates pursuant to Section 4.02
and (ii) plus the amount of any increase to the Certificate Balance of such
Certificate pursuant to Section 4.03.
Certificate Group: Any of Certificate Group 1 or Certificate
Group 2, as applicable.
Certificate Group 1: Any of the Certificates with a Class
designation beginning with "1" and relating to Loan Group 1.
Certificate Group 2: Any of the Certificates with a Class
designation beginning with "2" and relating to Loan Group 2.
Certificate Index: With respect to each Distribution Date and the
One-Month LIBOR Certificates, the rate for one month United States dollar
deposits quoted on Telerate Page 3750 as of 11:00 A.M., London time, on the
related Interest Determination Date relating to each Class of One-Month LIBOR
Certificates. If such rate does not appear on such page (or such other page
as may replace that page on that service, or if such service is no longer
offered, such other service for displaying one month LIBOR or comparable
rates as may be reasonably selected by the Trust Administrator after
consultation with DLJMC), the rate will be the related Reference Bank Rate.
If no such quotations can be obtained and no related Reference Bank Rate is
available, the Certificate Index with respect to the One-Month LIBOR
Certificates will be the Certificate Index applicable to such Certificates on
the preceding Distribution Date. With respect to each Distribution Date and
the Class 2-A-1 Certificates, the rate for six month United States dollar
deposits quoted on Telerate Page 3750 as of 11:00 A.M., London time, on the
related Interest Determination Date relating to Class 2-A-1 Certificates. If
such rate does not appear on such page (or such other page as may replace
that page on that service, or if such service is no longer offered, such
other service for displaying six month LIBOR or comparable rates as may be
reasonably selected by the Trust Administrator after consultation with
DLJMC), the rate will be the related Reference Bank Rate. If no such
quotations can be obtained and no related Reference Bank Rate is available,
the Certificate Index with respect to the Class 2-A-1 Certificates will be
the Certificate Index applicable to such Certificates on the preceding
Distribution Date.
On the Interest Determination Date immediately preceding each
Distribution Date, the Trust Administrator shall determine each Certificate
Index for the Accrual Period commencing on such Distribution Date and inform
the Master Servicer and each Servicer of such rate.
Certificate Margin: As to each Class of LIBOR Certificates, the
applicable amount set forth below:
Class Certificate Margin
(1) (2)
1-A-1 0.360% 0.720%
2-A-1 0.370% 0.740%
C-M 0.550% 0.825%
C-B-1 0.650% 0.975%
C-B-2 1.300% 1.950%
C-B-3 1.750% 2.625%
___________
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(1) On and prior to the first Distribution Date on which
the Optional Termination may occur.
(2) After the first Distribution Date on which the Optional
Termination may occur.
Certificate Register: The register maintained pursuant to
Section 6.02(a) hereof.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register.
Class: All Certificates bearing the same class designation as
set forth in the Preliminary Statement.
Class 1X Required Reserve Fund Deposit: For each Distribution
Date, an amount equal to the lesser of (i) the amount of accrued interest
payable on Component 1X at the Component 1X Pass-Through Rate for such
Distribution Date and (ii) the amount required to bring the balance on
deposit in the Basis Risk Reserve Fund up to an amount equal to the sum of
(a) the Basis Risk Shortfall with respect to the Class 1-A-1 Certificates
remaining for such Distribution Date and (b) $5,000 before giving effect to
any amount required to be deposited in the Basis Risk Reserve Fund pursuant
to the definitions of Class 2X Required Reserve Fund Deposit or Class 3X
Required Reserve Fund Deposit.
Class 2X Required Reserve Fund Deposit: For each Distribution
Date, an amount equal to the lesser of (i) the amount of accrued interest
payable on Component 2X at the Component 2X Pass-Through Rate for such
Distribution Date and (ii) the amount required to bring the balance on
deposit in the Basis Risk Reserve Fund up to an amount equal to the sum of
(a) the Basis Risk Shortfall with respect to the Class 2-A-1 Certificates
remaining for such Distribution Date and (b) $5,000 before giving effect to
any amount required to be deposited in the Basis Risk Reserve Fund pursuant
to the definitions of Class 1X Required Reserve Fund Deposit or Class 3X
Required Reserve Fund Deposit.
Class 3X Required Reserve Fund Deposit: For each Distribution
Date, an amount equal to the lesser of (i) the amount of accrued interest
payable on Component 3X at the Component 3X Pass-Through Rate for such
Distribution Date and (ii) the amount required to bring the balance on
deposit in the Basis Risk Reserve Fund up to an amount equal to the sum of
(a) the Basis Risk Shortfall with respect to the Subordinate LIBOR
Certificates remaining for such Distribution Date and (b) $5,000 before
giving effect to any amount required to be deposited in the Basis Risk
Reserve Fund pursuant to the definitions of Class 1X Required Reserve Fund
Deposit or Class 2X Required Reserve Fund Deposit.
Class A Certificates: As specified in the Preliminary Statement.
Class C-B Certificates: As specified in the Preliminary
Statement.
Class Interest Shortfall: As to any Distribution Date and Class
of Group 1 Certificates, Class 2-A-1 Certificates and Subordinate
Certificates, the amount by which the amount described in clause (A)(i) of
the definition of Interest Distribution Amount for such Class, exceeds the
amount of interest actually distributed on such Class on such Distribution
Date. As to any Distribution Date and the Class X Certificates and
(i) Component 1X, the amount by which the amount described in clause (B)(i)
of the definition of Interest Distribution Amount for such Component, exceeds
the amount of interest actually distributed on such Class on such
Distribution Date, (ii) Component 2X, the amount by which the amount
described in clause (C)(i) of the definition of Interest Distribution Amount
for such Class, exceeds the amount of interest actually distributed on such
Component on such Distribution Date and (iii) Component 3X, the amount by
which the amount described in clause (D)(i) of the definition of Interest
Distribution Amount for such Class, exceeds the amount of interest actually
distributed on such Component on such Distribution Date.
Class Principal Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Unpaid Interest Amounts: As to any Distribution Date and
Class of interest bearing Group 1 Certificates, Class 2-A-1 Certificates and
Subordinate Certificates, the amount by which the aggregate Class Interest
Shortfalls for such Class on prior Distribution Dates exceeds the amount
distributed on such Class on prior Distribution Dates pursuant to clause
(A)(ii) of the definition of Interest Distribution Amount. As to any
Distribution Date and the Class X Certificates and (i) Component 1X, the
amount by which the amount described in clause (B)(ii) of the definition of
Interest Distribution Amount for such Component, exceeds the amount of
interest actually distributed on such Component on such Distribution Date,
(ii) Component 2X, the amount by which the amount described in clause (C)(ii)
of the definition of Interest Distribution Amount for such Class, exceeds the
amount of interest actually distributed on such Component on such
Distribution Date and (iii) Component 3X, the amount by which the amount
described in clause (D)(ii) of the definition of Interest Distribution Amount
for such Class, exceeds the amount of interest actually distributed on such
Component on such Distribution Date.
Class X Notional Amount: For any Distribution Date, a notional
amount equal to the aggregate of the Component 1X, Component 2X and Component
3X immediately prior to that Distribution Date.
Class Y Principal Reduction Amounts: For any Distribution Date,
the amounts by which the Uncertificated Principal Balances of the Class Y
Regular Interests will be reduced on such Distribution Date by the allocation
of Realized Losses and the distribution of principal, determined as described
in Appendix A.
Class Y Regular Interests: The Class Y-1 and Class Y-2 Regular
Interests.
Class Y-1 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class Y-1 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses
allocated to the Class Y-1 Regular Interest on such Distribution Date.
Class Y-1 Principal Reduction Amount: The Class Y Principal
Reduction Amount for the Class Y-1 Regular Interest as determined pursuant to
the provisions of the Appendix A.
Class Y-1 Regular Interest: The uncertificated undivided
beneficial interest in REMIC I which constitutes a REMIC I Regular Interest
and is entitled to distributions as set forth herein.
Class Y-2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class Y-2 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses
allocated to the Class Y-2 Regular Interest on such Distribution Date.
Class Y-2 Principal Reduction Amount: The Class Y Principal
Reduction Amount for the Class Y-2 Regular Interest as determined pursuant to
the provisions of the Appendix A.
Class Y-2 Regular Interest: The uncertificated undivided
beneficial interest in REMIC I which constitutes a REMIC I Regular Interest
and is entitled to distributions as set forth herein.
Class Z Principal Reduction Amounts: For any Distribution Date,
the amounts by which the Uncertificated Principal Balances of the Class Z
Regular Interests will be reduced on such Distribution Date by the allocation
of Realized Losses and the distribution of principal, which shall be in each
case the excess of (A) the sum of (x) the excess of the REMIC I Available
Distribution Amount for the related Group (i.e. the "related Group" for the
Class Z-1 Regular Interest is the Group 1 Loans and the "related Group" for
the Class Z-2 Regular Interest is the Group 2 Loans,) over the sum of the
amounts thereof distributable (i) in respect of interest on such Class Z
Regular Interest and the related Class Y Regular Interest, (ii) to such
Class Z Regular Interest and the related Class Y Regular Interest pursuant to
clause (c)(ii) of the definition of "REMIC I Distribution Amount" and (iii)
in the case of the Group 1 Loans, to the Class AR-L Certificates and (y) the
amount of Realized Losses allocable to principal for the related Group over
(B) the Class Y Principal Reduction Amount for the related Group.
Class Z Regular Interests: The Class Z-1 and Class Z-2 Regular
Interests.
Class Z-1 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class Z-1 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses
allocated to the Class Z-1 Regular Interest on such Distribution Date.
Class Z-1 Principal Reduction Amount: The Class Z Principal
Reduction Amount for the Class Z-1 Regular Interest as determined pursuant to
the provisions of the Appendix A.
Class Z-1 Regular Interest: The uncertificated undivided
beneficial interest in REMIC I which constitutes a REMIC I Regular Interest
and is entitled to distributions as set forth herein.
Class Z-2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class Z-2 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses
allocated to the Class Z-2 Regular Interest on such Distribution Date.
Class Z-2 Principal Reduction Amount: The Class Z Principal
Reduction Amount for the Class Z-2 Regular Interest as determined pursuant to
the provisions of the Appendix A.
Class Z-2 Regular Interest: The uncertificated undivided
beneficial interest in REMIC I which constitutes a REMIC I Regular Interest
and is entitled to distributions as set forth herein.
Clearing Agency: An organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended, which initially shall be DTC, the nominee of which is CEDE & Co., as
the registered Holder of the Book Entry Certificates. The Clearing Agency
shall at all times be a "clearing corporation" as defined in Section 8
102(a)(5) of the Uniform Commercial Code of the State of New York.
Closing Date: October 28, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Collection Account: The accounts established and maintained by a
Servicer in accordance with Section 3.05.
Collection Period: With respect to each Distribution Date, the
period commencing on the second day of the month preceding the month of the
Distribution Date and ending on the first day of the month of the
Distribution Date.
Commencement of Foreclosure: The first official action required
under local law to commence foreclosure proceedings or to schedule a
trustee's sale under a deed of trust, including: (i) in the case of a
mortgage, any filing or service of process necessary to commence an action to
foreclose; or (ii) in the case of a deed of trust, the posting, publishing,
filing or delivery of a notice of sale.
Compensating Interest Payment: For any Distribution Date and the
SPS Serviced Mortgage Loans, the lesser of (i) the aggregate Servicing Fee
payable to SPS in respect of the SPS Serviced Mortgage Loans for such
Distribution Date and (ii) the aggregate Prepayment Interest Shortfall
allocable to Payoffs and Curtailments with respect to the SPS Serviced
Mortgage Loans.
For any Distribution Date and the Xxxxx Fargo Serviced Mortgage
Loans, the lesser of (i) one twelfth (1/12) of a percentage (which ranges
from 0.25% to 0.375%) of the aggregate Stated Principal Balance of the Xxxxx
Fargo Serviced Mortgage Loans, as of the Due Date in the month of such
Distribution Date, and (ii) the aggregate Prepayment Interest Shortfall
allocable to Payoffs and Curtailments with respect to the Xxxxx Fargo
Serviced Mortgage Loans.
For any Distribution Date and the IndyMac Serviced Mortgage
Loans, the excess of (i) the Compensating Interest (as defined in the IndyMac
Servicing Agreement) required to be remitted by IndyMac on the Remittance
Date (as defined in the IndyMac Servicing Agreement) relating to such
Distribution Date over (ii) the amount of the Compensating Interest (as
defined in the IndyMac Servicing Agreement) actually remitted by IndyMac on
the Remittance Date (as defined in the IndyMac Servicing Agreement) relating
to such Distribution Date.
For any Distribution Date and the Master Servicer, the
Compensating Interest Payment shall be equal to:
(a) with respect to the SPS Serviced Mortgage Loans, the excess of (i) the
Compensating Interest Payment required to be remitted by SPS for such
Distribution Date over (ii) the amount of the Compensating Interest
Payment actually remitted by SPS for such Distribution Date;
(b) with respect to the IndyMac Serviced Mortgage Loans, the excess of (i)
the Compensating Interest Payment required to be remitted by IndyMac
for such Distribution Date over (ii) the amount of the Compensating
Interest Payment actually remitted by IndyMac for such Distribution
Date; and
(c) with respect to the Xxxxx Fargo Serviced Mortgage Loans, the excess of
(i) the Compensating Interest required to be remitted by Xxxxx Fargo
for such Distribution Date over (ii) the amount of the Compensating
Interest actually remitted by Xxxxx Fargo for such Distribution Date.
Component 1X: With respect to the Class X Certificates and any
Distribution Date, a notional amount equal to the Class Principal Balance of
the Class 1-A-1 Certificates immediately prior to that Distribution Date.
Component 1X Pass-Through Rate: With respect to Component 1X and
any Distribution Date after the first Distribution Date, a per annum rate
equal to the excess, if any, of (i) the Net WAC Rate for the Group 1 Loans
over (ii) the Pass-Through Rate on that distribution date for the Class
1-A-1 Certificates prior to giving effect to distributions on that
Distribution Date.
Component 2X: With respect to the Class X Certificates and any
Distribution Date, a notional amount equal to the Class Principal Balance of
the Class 2-A-1 Certificates immediately prior to that Distribution Date.
Component 2X Pass-Through Rate: With respect to Component 2X and
any Distribution Date after the first Distribution Date, a per annum rate
equal to the excess, if any, of (i) the Net WAC Rate for the Group 2 Loans
over (ii) the Pass-Through Rate on that distribution date for the Class
2-A-1 Certificates prior to giving effect to distributions on that
Distribution Date.
Component 3X: With respect to the Class X Certificates and any
Distribution Date, a notional amount equal to the aggregate of the Class
Principal Balances of the Subordinate LIBOR Certificates immediately prior to
that Distribution Date.
Component 3X Pass-Through Rate: With respect to Component 3X
Certificates and any Distribution Date after the first Distribution Date, a
per annum rate equal to the excess, the excess, if any, of (i) the
Subordinate Component Net Funds Rate for that Distribution Date, over (ii)
the weighted average of the Pass-Through Rates on the Subordinate LIBOR
Certificates, prior to giving effect to distributions on that distribution
date.
Cooperative Corporation: With respect to any Cooperative Loan,
the cooperative apartment corporation that holds legal title to the related
Cooperative Property and grants occupancy rights to units therein to
stockholders through Proprietary Leases or similar arrangements.
Cooperative Lien Search: A search for (a) federal tax liens,
mechanics' liens, lis pendens, judgments of record or otherwise against (i)
the Cooperative Corporation and (ii) the seller of the Cooperative Unit, (b)
filings of Financing Statements and (c) the deed of the Cooperative Property
into the Cooperative Corporation.
Cooperative Loan: A Mortgage Loan that is secured by a first lien
on and a perfected security interest in Cooperative Shares and the related
Proprietary Lease granting exclusive rights to occupy the related Cooperative
Unit in the building owned by the related Cooperative Corporation.
Cooperative Property: With respect to any Cooperative Loan, all
real property and improvements thereto and rights therein and thereto owned
by a Cooperative Corporation including without limitation the land, separate
dwelling units and all common elements.
Cooperative Shares: With respect to any Cooperative Loan, the
shares of stock issued by a Cooperative Corporation and allocated to a
Cooperative Unit and represented by stock certificates.
Cooperative Unit: With respect to any Cooperative Loan, a
specific unit in a Cooperative Property.
Corporate Trust Office: With respect to the Trustee, the
designated office of the Trustee at which at any particular time its
corporate trust business with respect to this Agreement shall be
administered, which office at the date of the execution of this Agreement is
located at 00 Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention:
Corporate Trust - Structured Finance. With respect to the Trust
Administrator, the designated office of the Trust Administrator at which at
any particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of the execution of
this Agreement is located at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, XX 00000,
Attention: CSFB ARMT 2004-3, except for purposes of Section 6.06 and
certificate transfer purposes, such term shall mean the office or agency of
the Trust Administrator located at Xxxxx Fargo Bank, N.A., 6th Avenue and
Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: CSFB ARMT 2004-3.
Credit Support Depletion Date: The first Distribution Date on
which the aggregate Class Principal Balances of the Subordinate Certificates
has been or will be reduced to zero.
Current Interest: With respect to the Class 1-A-1, Class 2-A-1,
Class C-M, Class C-B-1, Class C-B-2 or Class C-B-3 Certificates and any
Distribution Date, the amount of interest accruing at the applicable
Pass-Through Rate on the related Class Principal Balance of such Class during
the related Accrual Period, subject to reduction for any Net Interest
Shortfalls allocated to such Class for such Distribution Date pursuant to
Section 4.01(I)(B).
Curtailment: Any payment of principal on a Mortgage Loan, made
by or on behalf of the related Mortgagor, other than a Scheduled Payment, a
prepaid Scheduled Payment or a Payoff, which is applied to reduce the
outstanding Stated Principal Balance of the Mortgage Loan.
Custodial Agreement: An agreement, dated as of the date hereof,
among a custodian, the Trustee and the Trust Administrator, pursuant to which
such custodian agrees to hold any of the documents or instruments referred to
in Section 2.01 of this Agreement as agent for the Trustee. As of the date
hereof, the Custodian shall act pursuant to the LaSalle Custodial Agreement.
Custodian: A custodian which is appointed pursuant to a
Custodial Agreement. Any Custodian so appointed shall act as agent on behalf
of the Trustee, and shall be compensated by the Trust Administrator or as
otherwise specified therein. Initially, LaSalle shall serve as Custodian for
all of the Mortgage Loans.
Cut-off Date: October 1, 2004.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date.
Data Remittance Date: With respect to any Distribution Date, the
10th calendar day of the month in which such Distribution Date occurs, or if
such 10th day is not a Business Day, the Business Day immediately following
such 10th day.
Debt Service Reduction: With respect to a Mortgage Loan in
either Loan Group, a reduction by a court of competent jurisdiction in a
proceeding under the Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan which became final and non appealable, except such a reduction
resulting from a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
became the subject of a Debt Service Reduction.
Deficient Valuation: With respect to any Mortgage Loan in either
Loan Group, 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, or that results in a permanent forgiveness of principal, which
valuation in either case results from a proceeding under the Bankruptcy Code.
Definitive Certificate: As defined in Section 6.07.
Deleted Mortgage Loan: As defined in Section 2.03.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the "Initial Notional Amount of this Certificate" or, if
neither of the foregoing, the Percentage Interest appearing on the face
thereof.
Deposit Amount: As defined in Section 4.10(e) or Section 4.11(e)
herein, as applicable.
Depositor: Credit Suisse First Boston Mortgage Securities Corp.,
a Delaware corporation, or its successor in interest.
Depository Agreement: The Letter of Representation dated as of
the Closing Date by and among DTC, the Depositor and the Trust Administrator
for the benefit of the Trustee.
Designated Mortgage Loans: The IndyMac Mortgage Loans, unless
any such Mortgage Loan is no longer serviced by IndyMac under the IndyMac
Servicing Agreement.
Designated Servicer: IndyMac.
Designated Servicing Agreement: The IndyMac Servicing Agreement.
Determination Date: With respect to each Distribution Date and
(i) each Servicer (other than Xxxxx Fargo), the 10th day of the calendar
month in which such Distribution Date occurs or, if such 10th day is not a
Business Day, the Business Day immediately succeeding such Business Day and
(ii) Xxxxx Fargo, the Business Day immediately preceding the related Cash
Remittance Date.
Disqualified Organization: Any organization defined as a
"disqualified organization" under Section 860E(e)(5) of the Code, which
includes 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 Code) which is exempt from the tax imposed by Chapter 1 of
the Code (including 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, (v) an "electing large
partnership" within the meaning of Section 775 of the Code, and (vi) any
other Person so designated by the Trust Administrator based upon an Opinion
of Counsel that the holding of an Ownership Interest in a Class AR or
Class AR-L Certificate by such Person may cause the REMIC 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 AR or Class AR-L 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.
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 November 2004.
DLJMC: DLJ Mortgage Capital, Inc., a Delaware corporation, and
its successors and assigns.
DTC: The Depository Trust Company.
Due Date: With respect to each Mortgage Loan and any Distribution
Date, the date on which Scheduled Payments on such Mortgage Loan are due
which is either the first day of the month of such Distribution Date, or if
Scheduled Payments on such Mortgage Loan are due on a day other than the
first day of the month, the date in the calendar month immediately preceding
the Distribution Date on which such Scheduled Payments are due, exclusive of
any days of grace.
Eligible Account: Either (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company
acceptable to the Rating Agencies or (ii) an account or accounts the deposits
in which are insured by the FDIC to the limits established by such
corporation, provided that any such deposits not so insured shall be
maintained in an account at a depository institution or trust company whose
commercial paper or other short term debt obligations (or, in the case of a
depository institution or trust company which is the principal subsidiary of
a holding company, the commercial paper or other short term debt obligations
of such holding company) have been rated by each Rating Agency in its highest
short term rating category, or (iii) a segregated trust account or accounts
(which shall be a "special deposit account") maintained with the Trustee, the
Trust Administrator or any other federal or state chartered depository
institution or trust company, acting in its fiduciary capacity, in a manner
acceptable to the Trustee, the Trust Administrator and the Rating Agencies.
Eligible Accounts may bear interest.
Eligible Institution: An institution having the highest short
term debt rating, and one of the two highest long term debt ratings of the
Rating Agencies or the approval of the Rating Agencies.
Eligible Investments: Any one or more of the obligations and
securities listed below:
1. direct obligations of, and obligations fully guaranteed by, the United
States of America, or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith
and credit of the United States of America; or obligations fully
guaranteed by, the United States of America; the FHLMC, FNMA, the
Federal Home Loan Banks or any agency or instrumentality of the United
States of America rated AA (or the equivalent) or higher by the Rating
Agencies;
2. federal funds, demand and time deposits in, certificates of deposits
of, or bankers' acceptances issued by, any depository institution or
trust company incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, so long as at
the time of such investment or contractual commitment providing for
such investment the commercial paper or other short term debt
obligations of such depository institution or trust company (or, in the
case of a depository institution or trust company which is the
principal subsidiary of a holding company, the commercial paper or
other short term debt obligations of such holding company) are rated in
one of two of the highest ratings by each of the Rating Agencies, and
the long term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the long term
debt obligations of such holding company) are rated in one of two of
the highest ratings, by each of the Rating Agencies;
3. repurchase obligations with a term not to exceed 30 days with respect
to any security described in clause (i) above and entered into with a
depository institution or trust company (acting as a principal) in the
highest rated category by the Rating Agencies; provided, however, that
collateral transferred pursuant to such repurchase obligation must be
of the type described in clause (i) above and must (A) be valued daily
at current market price plus accrued interest, (B) pursuant to such
valuation, be equal, at all times, to 105% of the cash transferred by
the Trustee or the Trust Administrator in exchange for such collateral,
and (C) be delivered to the Trustee or the Trust Administrator or, if
the Trustee or the Trust Administrator, as applicable, is supplying the
collateral, an agent for the Trustee or the Trust Administrator, in
such a manner as to accomplish perfection of a security interest in the
collateral by possession of certificated securities;
4. securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which has a long term unsecured debt rating in the
highest available rating category of each of the Rating Agencies at the
time of such investment;
5. commercial paper having an original maturity of less than 365 days and
issued by an institution having a short term unsecured debt rating in
the highest available rating category of each of the Rating Agencies at
the time of such investment;
6. a guaranteed investment contract approved by each of the Rating
Agencies and issued by an insurance company or other corporation having
a long term unsecured debt rating in the highest available rating
category of each of the Rating Agencies at the time of such investment;
7. money market funds (which may be 12b 1 funds as contemplated under the
rules promulgated by the Securities and Exchange Commission under the
Investment Company Act of 1940) having ratings in the highest available
rating category of Xxxxx'x and one of the two highest available rating
categories of S&P at the time of such investment (any such money market
funds which provide for demand withdrawals being conclusively deemed to
satisfy any maturity requirements for Eligible Investments set forth
herein) including money market funds of the Master Servicer, a
Servicer, the Trustee or the Trust Administrator and any such funds
that are managed by the Master Servicer, a Servicer, the Trustee or the
Trust Administrator or their respective Affiliates or for the Master
Servicer, a Servicer, the Trustee or the Trust Administrator or any
Affiliate of such Person acts as advisor, as long as such money market
funds satisfy the criteria of this subparagraph (7); and
8. such other investments the investment in which will not, as evidenced
by a letter from each of the Rating Agencies, result in the downgrading
or withdrawal of the Ratings of the Certificates;
provided, however, that no such instrument shall be an Eligible
Investment if such instrument evidences either (i) a right to receive only
interest payments with respect to the obligations underlying such instrument,
or (ii) both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with
respect to such instrument provide a yield to maturity of greater than 120%
of the yield to maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements (without regard
to the ratings requirements) of an Underwriter's Exemption.
ERISA Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The separate account or accounts created and
maintained by a Servicer pursuant to Section 3.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, mortgage insurance premiums, fire and
hazard insurance premiums, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage, applicable law or
any other related document.
Event of Default: As defined in Section 8.01 hereof.
Excess Loss: The amount of any (i) Fraud Loss in excess of the
Fraud Loss Coverage Amount on a Mortgage Loan realized after the Fraud Loss
Coverage Termination Date, (ii) Special Hazard Loss in excess of the Special
Hazard Loss Coverage Amount on a Mortgage Loan realized after the Special
Hazard Coverage Termination Date or (iii) Bankruptcy Loss in excess of the
Bankruptcy Loss Coverage Amount on a Mortgage Loan realized after the
Bankruptcy Coverage Termination Date.
Expense Fee Rate: As to each Mortgage Loan, the sum of the
related Servicing Fee Rate, the Trust Administrator Fee Rate, if applicable,
and the rate at which the premium on a Lender Paid Mortgage Guaranty
Insurance Policy is calculated, if applicable.
Expense Fees: As to each Mortgage Loan and Distribution Date,
the sum of the related Servicing Fee, the Trust Administrator Fee, if
applicable, and any premium on any Lender Paid Mortgage Guaranty Insurance
Policy, if applicable.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Financing Statement: A financing statement in the form of a
UCC-1 or UCC-3, as applicable, filed pursuant to the Uniform Commercial Code
to perfect a security interest in the Cooperative Shares and Pledge
Instruments.
FNMA: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss
has occurred.
Fraud Loss Coverage Amount: The aggregate amount of Fraud Losses
that are allocated solely to the Subordinate Certificates, as of the Closing
Date, $$7,321,413, subject to reduction from time to time by the amount of
Fraud Losses allocated to the Subordinate Certificates. In addition, (a) on
each anniversary prior to the first anniversary of the Cut-off Date, the
Fraud Loss Coverage Amount will be reduced to an amount equal to the lesser
of (A) 3.0% of the current aggregate principal balance of the aggregate
Stated Principal Balance of the Mortgage Loans and (B) the excess of the
Fraud Loss Coverage Amount as of the Cut-off Date over the cumulative amount
of Fraud Losses allocated to the Subordinate Certificates since the Cut-off
Date; (b) on each anniversary after the first anniversary but prior to third
anniversary of the cut-off date, the Fraud Loss Coverage Amount will be
reduced to an amount equal to the lesser of (A) 2.0% of the current aggregate
Stated Principal Balance of the Mortgage Loans and (B) the excess of the
Fraud Loss Coverage Amount as of the preceding anniversary of the Cut-off
Date over the cumulative amount of Fraud Losses allocated to the Subordinate
Certificates since such preceding anniversary, (c) on each anniversary after
the second anniversary prior to the fifth anniversary of the Cut-off Date,
the Fraud Loss Coverage Amount will be reduced to an amount equal to the
lesser of (A) 1.0% of the current aggregate Stated Principal Balance of the
Mortgage Loans and (B) the excess of the Fraud Loss Coverage Amount as of the
preceding anniversary of the cut-off date over the cumulative amount of Fraud
Losses allocated to the Subordinate Certificates since such preceding
anniversary, and (d) on the fifth anniversary of the Cut off Date, zero. The
Fraud Loss Coverage Amount may be reduced below the amount set forth above
for any Distribution Date with the consent of the Rating Agencies as
evidenced by a letter of each Rating Agency to the Trust Administrator to the
effect that any such reduction will not result in a downgrading of the
current ratings assigned to such Classes of Certificates rated by it.
Fraud Loss Coverage Termination Date: The point in time at which
the applicable Fraud Loss Coverage Amount is reduced to zero.
Fraud Losses: Realized Losses on the Liquidated Mortgage Loans
as to which a loss is sustained by reason of a default arising from fraud,
dishonesty or misrepresentation in connection with the related Mortgage Loan,
including a loss by reason of the denial of coverage under any related
Mortgage Guaranty Insurance Policy because of such fraud, dishonesty or
misrepresentation.
Gross Margin: With respect to any Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note and the Mortgage
Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Rate for such Mortgage Loan.
Group: When used with respect to the Mortgage Loans, any of Loan
Group 1 and Loan Group 2 or with respect to the Certificates, the Class or
Classes of Certificates that relate to the corresponding Group or Groups.
Group 1: With respect to the Mortgage Loans, the pool of
adjustable rate Mortgage Loans identified in the related Mortgage Loan
Schedule as having been assigned to Group 1 or with respect to the
Certificates, the Class 1-A-1, Class AR and Class AR-L Certificates.
Group 1 Net Funds Rate: For any Distribution Date and the
Class 1-A-1 Certificates, will be a per annum rate equal to (a) a fraction,
expressed as a percentage, the numerator of which is the product of (1) the
Group 1 Optimal Interest Remittance Amount for Loan Group 1 for such date and
(2) 12, and the denominator of which is the Aggregate Loan Group Balance of
Loan Group 1 (excluding any such Mortgage Loans that were subject to a
Payoff, the principal of which was distributed on the Distribution Date
preceding the current Distribution Date) for the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the
Aggregate Loan Group Balance of Loan Group 1 as of the Cut-off Date,
multiplied by (b) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Accrual
Period.
Group 1 Senior Liquidation Amount: As to any Distribution Date,
the aggregate, for each Mortgage Loan in Loan Group 1 which became a
Liquidated Mortgage Loan during the prior calendar month, of the lesser of
(i) the Group 1 Senior Percentage of the Stated Principal Balance of such
Mortgage Loan and (ii) the applicable Senior Prepayment Percentage of the
Liquidation Principal with respect to such Mortgage Loan.
Group 1 Senior Percentage: As to any Distribution Date, the
percentage equivalent of a fraction the numerator of which is the aggregate
of the Class Principal Balances of the Class 1-A-1, Class AR and Class AR-L
Certificates immediately prior to such Distribution Date and the denominator
of which is the aggregate of the Stated Principal Balances of the Mortgage
Loans in Loan Group 1, as of the first day of the related Collection Period
(excluding any such Mortgage Loans that were subject to a Payoff, the
principal of which was distributed on the Distribution Date preceding the
current Distribution Date); provided, however, in no event will the Group 1
Senior Percentage exceed 100%.
Group 1 Senior Principal Distribution Amount: As to any
Distribution Date, the sum of (i) the Group 1 Senior Percentage of the
Principal Payment Amount for Loan Group 1, (ii) the applicable Senior
Prepayment Percentage of the Principal Prepayment Amount for Loan Group 1,
and (iii) the Group 1 Senior Liquidation Amount.
Group 1 Subordinate Percentage: For any Distribution Date, the
excess of 100% over the Group 1 Senior Percentage.
Group 2: With respect to the Mortgage Loans, the pool of
adjustable rate Mortgage Loans identified in the related Mortgage Loan
Schedule as having been assigned to Group 2 or with respect to the
Certificates, the Class 2-A-1 Certificates.
Group 2 Net Funds Rate: For any Distribution Date and the
Class 2-A-1 Certificates, will be a per annum rate equal to (a) a fraction,
expressed as a percentage, the numerator of which is the product of (1) the
Group 2 Optimal Interest Remittance Amount for Loan Group 2 for such date and
(2) 12, and the denominator of which is the Aggregate Loan Group Balance of
Loan Group 2 (excluding any such Mortgage Loans that were subject to a
Payoff, the principal of which was distributed on the Distribution Date
preceding the current Distribution Date) for the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the
Aggregate Loan Group Balance of Loan Group 1 as of the Cut-off Date,
multiplied by (b) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Accrual
Period.
Group 2 Senior Liquidation Amount: As to any Distribution Date,
the aggregate, for each Mortgage Loan in Loan Group 2 which became a
Liquidated Mortgage Loan during the prior calendar month, of the lesser of
(i) the Group 2 Senior Percentage of the Stated Principal Balance of such
Mortgage Loan and (ii) the applicable Senior Prepayment Percentage of the
Liquidation Principal with respect to such Mortgage Loan.
Group 2 Senior Percentage: As to any Distribution Date, the
percentage equivalent of a fraction the numerator of which is the Class
Principal Balance of the Class 2-A-1 Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate of the Stated
Principal Balances of the Mortgage Loans in Loan Group 2, as of the first day
of the related Collection Period (excluding any such Mortgage Loans that were
subject to a Payoff, the principal of which was distributed on the
Distribution Date preceding the current Distribution Date); provided,
however, in no event will the Group 2 Senior Percentage exceed 100%.
Group 2 Senior Principal Distribution Amount: As to any
Distribution Date, the sum of (i) the Group 2 Senior Percentage of the
Principal Payment Amount for Loan Group 2, (ii) the applicable Senior
Prepayment Percentage of the Principal Prepayment Amount for Loan Group 2,
and (iii) the Group 2 Senior Liquidation Amount.
Group 2 Subordinate Percentage: For any Distribution Date, the
excess of 100% over the Group 2 Senior Percentage.
Group Optimal Interest Remittance Amount: For any Distribution
Date and Loan Group 1 and Loan Group 2, the excess of (i) the product of (1)
(x) the weighted average of the Net Mortgage Rates of the Mortgage Loans in
such Loan Group as of the first day of the related Collection Period divided
by (y) 12 and (2) the applicable Aggregate Loan Group Balance for such Loan
Group for the immediately preceding Distribution Date (excluding any such
Mortgage Loans that were subject to a Payoff, the principal of which was
distributed on the Distribution Date preceding the current Distribution
Date), over (ii) any expenses that reduce the Interest Remittance Amount that
did not arise as a result of a default or delinquency of the Mortgage Loans
in such Loan Group or were not taken into account in computing the Expense
Fee Rate.
Index: With respect to any Mortgage Loan and each related
Adjustment Date, the index as specified in the related Mortgage Note.
Indirect Participants: Entities, such as banks, brokers, dealers
and trust companies, that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly.
IndyMac: IndyMac Bank, F.S.B., and its successors and assigns.
IndyMac Serviced Mortgage Loans: The Mortgage Loans identified
as such on the Mortgage Loan Schedule, for which IndyMac is the applicable
Servicer.
IndyMac Servicing Agreement: That certain Reconstituted
Servicing Agreement dated as of October 1, 2004 among DLJMC, IndyMac and the
Master Servicer, and acknowledged by the Trustee and the Trust Administrator.
Initial Bankruptcy Loss Coverage Amount: $100,000.
Initial Class Principal Balance: As set forth in the Preliminary
Statement.
Insurance Policy: With respect to any Mortgage Loan included in
the Trust Fund, any Mortgage Guaranty Insurance Policy, any standard hazard
insurance policy, flood insurance policy or title insurance policy, including
all riders and endorsements thereto in effect, including any replacement
policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds of any primary mortgage guaranty
insurance policies, including, without limitation, any other Insurance
Policies with respect to the Mortgage Loans, 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 related Servicer's or Designated
Servicer's normal servicing procedures.
Interest Determination Date: With respect to the LIBOR
Certificates and for each Accrual Period, the second LIBOR Business Day
preceding the commencement of such Accrual Period.
Interest Distribution Amount: With respect to any Distribution
Date and (A) the Group 1 Certificates, Class 2-A-1 Certificates and
Subordinate Certificates, the sum of (i) one month's interest accrued during
the related Accrual Period at the applicable Pass-Through Rate for such Class
on the related Class Principal Balance, subject to reduction pursuant to
Section 4.01(I)(B), and (ii) any Class Unpaid Interest Amounts for such Class
and Distribution Date, (B) with respect to the Class X Certificates and
Component 1X, the sum of (i) one month's interest accrued during the related
Accrual Period equal to the product of the applicable Component 1X
Pass-Through Rate and Component 1X for such Distribution Date and, with
respect to the first Distribution Date only, calculated on the basis of the
Component 1X Pass-Through Rate being multiplied by a fraction, the numerator
which is 27 and the denominator which is 30, subject to reduction pursuant to
Section 4.01(I)(B), and (ii) any Class Unpaid Interest Amounts for such Class
and Distribution Date, (C) with respect to the Class X Certificates and
Component 2X, the sum of (i) one month's interest accrued during the related
Accrual Period the product of the applicable Component 2X Pass-Through Rate
and Component 2X for such Distribution Date and, with respect to the first
Distribution Date only, calculated on the basis of the Component 2X
Pass-Through Rate being multiplied by a fraction, the numerator which is 27
and the denominator which is 30, subject to reduction pursuant to Section
4.01(I)(B), and (ii) any Class Unpaid Interest Amounts for such Class and
Distribution Date, and (D) with respect to the Class X Certificates and
Component 3X, one month's interest accrued during the related Accrual Period
equal to the sum of (I) the sum of (x) the product of (a) the related
Allocation Fraction for the Group 1 Loans and (b) the product of the
applicable Component 3X Pass-Through Rate and Component 3X for such
Distribution Date for such Component and, with respect to the first
Distribution Date only, calculated on the basis of the Class 3X Pass-Through
Rate being multiplied by a fraction, the numerator which is 27 and the
denominator which is 30, subject to reduction pursuant to Section 4.01(I)(B),
and (y) any Class Unpaid Interest Amounts for such Class and Distribution
Date and (II) the sum of (x) the product of (a) the related Allocation
Fraction for the Group 2 Loans and (b) the product of the applicable
Component 3X Pass-Through Rate and Component 3X for such Distribution Date
for such Component and, with respect to the first Distribution Date only,
calculated on the basis of the Class 3X Pass-Through Rate being multiplied by
a fraction, the numerator which is 27 and the denominator which is 360,
subject to reduction pursuant to Section 4.01(I)(B), and (y) any Class Unpaid
Interest Amounts for such Component and Distribution Date.
LaSalle: LaSalle Bank, National Association.
LaSalle Bank Custodial Agreement: That certain Custodial
Agreement dated as of October 1, 2004 among LaSalle, the Trustee and the
Trust Administrator.
Lender Paid Mortgage Guaranty Insurance Policy: Any lender paid
Mortgage Guaranty Insurance Policy.
LIBOR Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of New York
or in the City of London, England are required or authorized by law to be
closed.
LIBOR Certificates: As specified in the Preliminary Statement.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a defaulted Mortgage Loan (including any REO Property) which was liquidated
in the calendar month preceding the month of such Distribution Date and as to
which a Servicer, has determined (with respect to the Non-Designated Mortgage
Loans, in accordance with this Agreement, or with respect to the Designated
Mortgage Loans, in accordance with the Designated Servicing Agreement) that
it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan, including the final disposition of the
related REO Property, whether from Insurance Proceeds, Liquidation Proceeds
or otherwise.
Liquidation Expenses: Customary and reasonable "out of pocket"
expenses incurred by a Servicer (or the related Sub-Servicer) in connection
with the liquidation of any defaulted Mortgage Loan and not recovered by the
related Servicer (or the related Sub-Servicer) under a Mortgage Guaranty
Insurance Policy for reasons other than such Servicer's failure to comply
with Section 3.09 hereof, such expenses including, without limitation, legal
fees and expenses, any unreimbursed amount expended by a Servicer pursuant to
Section 3.11 hereof respecting the related Mortgage and any related and
unreimbursed expenditures for real estate property taxes or for property
restoration or preservation to the extent not previously reimbursed under any
hazard insurance policy for reasons other than such Servicer's failure to
comply with Section 3.11 hereof.
Liquidation Principal: As to any Distribution Date and a Loan
Group, the principal portion of Liquidation Proceeds received with respect to
each Mortgage Loan in that Loan Group, but not in excess of the principal
balance of such Mortgage Loan, which became a Liquidated Mortgage Loan (but
not in excess of the principal balance thereof) during the preceding calendar
month.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise
or amounts received in connection with any condemnation or partial release of
a Mortgaged Property related to a Mortgage Loan and any other proceeds
received in connection with an REO Property other than Recoveries.
Loan Group: Any of Loan Group 1 or Loan Group 2, as applicable.
Loan Group 1: All Mortgage Loans identified as Loan Group 1
Mortgage Loans on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Loan Group 2
Mortgage Loans on the Mortgage Loan Schedule.
Loan-to-Value Ratio: As of any date, the fraction, expressed as
a percentage, the numerator of which is the Stated Principal Balance of the
related Mortgage Loan at the date of determination and the denominator of
which is the Appraised Value of the Mortgaged Property.
Loss and Delinquency Test: With respect to the SPS Mortgage
Loans, SPS will fail the Loss and Delinquency Test on any date of
determination as to which (i) the aggregate outstanding principal balance of
the SPS Mortgage Loans delinquent 60 days or more (including all related REO
Properties and related Mortgage Loans in foreclosure) (averaged over the
preceding six month period), as a percentage of the aggregate principal
balance of the SPS Mortgage Loans as of the first day of the month of such
determination is equal to or greater than 50% or (ii) cumulative Realized
Losses for the SPS Mortgage Loans exceed (a) with respect to any month prior
to the third anniversary of the first Distribution Date, 20% of the aggregate
principal balance of the SPS Mortgage Loans as of the Closing Date (the
"Original SPS Mortgage Loan Principal Balance"), (b) with respect to any
month on or after the third anniversary but prior to the eighth anniversary
of the first Distribution Date, 30% of the Original SPS Mortgage Loan
Principal Balance, (c) with respect to any month on or after the eighth
anniversary but prior to the ninth anniversary of the first Distribution
Date, 35% of the Original SPS Mortgage Loan Principal Balance, (d) with
respect to any month on or after the ninth anniversary but prior to the tenth
anniversary of the first Distribution Date, 40% of the Original SPS Mortgage
Loan Principal Balance, (e) with respect to any month on or after the tenth
anniversary but prior to the eleventh anniversary of the first Distribution
Date, 45% of the Original SPS Principal Balance and (f) with respect to any
month on or after the eleventh anniversary of the first Distribution Date,
50% of the Original SPS Mortgage Loan Principal Balance. For purposes of
this definition, the term "Realized Losses" shall not include Debt Service
Reductions or Deficient Valuations.
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Master Servicer: Xxxxx Fargo.
Maximum Interest Rate: With respect to each Group 1 Certificates
and Class 2-A-1 Certificate and the related Loan Group, an annual rate equal
to the weighted average of the Maximum Mortgage Rates of the Mortgage Loans
in the related Loan Group minus the weighted average Expense Fee Rate of the
Mortgage Loans in the related Loan Group. With respect to the Subordinate
LIBOR Certificates, an annual rate equal to the weighted average of the
weighted average of the Maximum Mortgage Rates of the Group 1 Loans, minus
the weighted average Expense Fee Rate of the Group 1 Loans and the weighted
average of the Maximum Mortgage Rates of the Group 2 Loans, minus the
weighted average Expense Fee Rate of the Group 2 Loans, weighted by the
applicable Subordinate Component Balance.
Maximum Mortgage Rate: With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the maximum Mortgage
Rate thereunder.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware,
or any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS System.
MERS® System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The mortgage identification number for any MERS Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the minimum Mortgage
Rate thereunder.
MOM Loan: Any Mortgage Loan as to which MERS is acting as
mortgagee, solely as nominee fro the originator of such Mortgage Loan and its
successors and assigns.
Moody's: Xxxxx'x Investors Service, Inc. or any successor
thereto.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of
trust or other instrument creating a first lien on a fee simple or leasehold
estate securing a Mortgage Note.
Mortgage File: For each Mortgage Loan, the Trustee Mortgage File
and the Servicer Mortgage File.
Mortgage Guaranty Insurance Policy: Each policy of primary
mortgage guaranty insurance or any replacement policy therefore with respect
to any Mortgage Loan.
Mortgage Loans: Such of the mortgage loans and cooperative loans
(if any) transferred and assigned to the Trustee pursuant to the provisions
hereof as from time to time are held as a part of the Trust Fund (including
any REO Property), the mortgage loans so held being identified in the
Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of
title of the related Mortgaged Property. With respect to each Mortgage Loan
that is a Cooperative Loan, if any, "Mortgage Loan" shall include, but not be
limited to, the related Mortgage Note, Security Agreement, Assignment of
Proprietary Lease, Recognition Agreement, Cooperative Shares and Proprietary
Lease and, with respect to each Mortgage Loan other than a Cooperative Loan,
"Mortgage Loan" shall include, but not be limited to the related Mortgages
and the related Mortgage Notes.
Mortgage Loan Purchase Price: The price, calculated as set forth
in Section 11.01, to be paid in connection with the purchase of the Mortgage
Loans pursuant to an Optional Termination of the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to time amended by the related Seller to reflect the addition of Qualified
Substitute Mortgage Loans and the purchase of Mortgage Loans pursuant to
Section 2.02 or 2.03) transferred to the Trustee as part of the Trust Fund
and from time to time subject to this Agreement, attached hereto as Schedule
I, setting forth the following information with respect to each Mortgage Loan
and applicable Servicer by Loan Group:
1. the Mortgage Loan identifying number;
2. the Mortgagor's name;
3. the street address of the Mortgaged Property including the state and
zip code;
4. a code indicating the type of Mortgaged Property (detached single
family dwelling, PUD, condominium unit, two- to four-unit
residential property or Cooperative Unit) and the occupancy
status.
5. the original months to maturity or the remaining months to maturity
from the Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual
amortization schedule;
6. the Loan-to-Value Ratio at origination;
7. the Mortgage Rate as of the Cut off Date;
8. the stated maturity date;
9. the amount of the Scheduled Payment as of the Cut-off Date;
10. the original principal amount of the Mortgage Loan;
11. the principal balance of the Mortgage Loan as of the close of business
on the Cut-off Date, after deduction of payments of
principal due on or before the Cut-off Date whether or not
collected;
12. a code indicating the purpose of the Mortgage Loan (i.e., purchase,
rate and term refinance, equity take out refinance);
13. whether such Mortgage Loan has a Prepayment Penalty;
14. reserved;
15. the Expense Fee Rate as of the Cut-off Date;
16. the related Servicing Fee Rate (which may be disclosed on the Mortgage
Loan Schedule in two parts identified as the master
servicing fee and servicing fee or in two parts identified
as the "Lender Fee" and the "Mgmt Fee");
17. [Reserved];
18. whether such Mortgage Loan is a SPS Serviced Mortgage Loan, an IndyMac
Serviced Mortgage Loan or a Xxxxx Fargo Serviced Mortgage
Loan;
19. the Index that is associated with such Mortgage Loan, if applicable;
20. the Gross Margin, if applicable;
21. the Periodic Rate Cap, if applicable;
22. the Minimum Mortgage Rate, if applicable;
23. the Maximum Mortgage Rate, if applicable;
24. the first Adjustment Date after the Cut-off Date, if applicable;
25. a code indicating whether the Mortgage Loan is a MERS Mortgage Loan
and, if so, its corresponding MIN;
26. the Custodian for such Mortgage Loan; and
With respect to the Mortgage Loans in the aggregate, each
Mortgage Loan Schedule shall set forth the following information, as of the
Cut-off Date:
1. the number of Mortgage Loans;
2. the current aggregate principal balance of the Mortgage Loans as of the
close of business on the Cut-off Date, after deduction of
payments of principal due on or before the Cut-off Date
whether or not collected; and
3. the weighted average Mortgage Rate of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note.
Mortgaged Property: The underlying real property securing a
Mortgage Loan or, with respect to a Cooperative Loan, the related Cooperative
Shares and Proprietary Lease.
Mortgagor: The obligor on a Mortgage Note.
Net Interest Shortfalls: For any Distribution Date and the
Mortgage Loans, the sum of (A) the amount of interest which would otherwise
have been received for a Mortgage Loan in the related Loan Group during the
prior calendar month that was the subject of (x) a Relief Act Reduction or
(y) a Special Hazard Loss, Fraud Loss or Bankruptcy Loss, after the
exhaustion of the respective amounts of coverage provided by the Subordinate
Certificates for those types of losses; and (B) any related Net Prepayment
Interest Shortfalls.
Net Liquidation Proceeds: With respect to any Liquidated
Mortgage Loan, the excess of the related Liquidation Proceeds over the sum of
Liquidation Expenses, Expense Fees and unreimbursed Advances and Servicing
Advances.
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate for such Mortgage Loan less the
related Expense Fee Rate.
Net Prepayment Interest Shortfalls: As to any Distribution Date,
the amount by which the aggregate of Prepayment Interest Shortfalls during
the related Prepayment Period exceeds the Compensating Interest Payment for
such Distribution Date.
Net Realized Losses: For any Class of Certificates, the excess of
(i) the amount of unreimbursed Realized Losses previously allocated to that
Class over (ii) the sum of (a) the amount of any increases to the Class
Principal Balance of that Class pursuant to Section 4.03 due to Recoveries
and (b) amounts previously distributed to such Class pursuant to
Section 4.01(I)(A)(c)(xvi).
Net Recovery Realized Losses: For any Class of Certificates and
any Distribution Date, the excess of Net Realized Losses for such
Distribution Date over the amount distributed pursuant to
Section 4.01(I)(A)(i)(xiv) on that Distribution Date.
Net WAC Rate: As to any Distribution Date and Loan Group, a rate
equal to the weighted average of the Net Mortgage Rates on the Mortgage Loans
in such Loan Group as of the second preceding Due Date (excluding any such
Mortgage Loans that were subject to a Payoff, the principal of which was
distributed on the Distribution Date preceding the current Distribution Date)
after giving effect to payments due on such Due Date, whether or not
received, weighted on the basis of the Stated Principal Balances as of such
date. In addition, for any purpose for which the Net WAC Rate is calculated,
the interest rate on the Mortgage Loans shall be appropriately adjusted to
account for the difference between any counting convention used with respect
to the Mortgage Loans and any counting convention used with respect to a
REMIC regular interest.
Non-Designated Mortgage Loans: The Mortgage Loans that are not
Designated Mortgage Loans.
Nonrecoverable Advance: Any portion of an Advance or Servicing
Advance previously made or proposed to be made by the Master Servicer or a
Servicer that, in the good faith judgment of the Master Servicer or a
Servicer, will not be ultimately recoverable by the Master Servicer or a
Servicer from the related Mortgagor, related Liquidation Proceeds or
otherwise from proceeds or collections on the related Mortgage Loan.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of
the Board, any Vice Chairman of the Board, the President, an Executive Vice
President, Senior Vice President, a Vice President, or other authorized
officer, the Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant Secretaries of the Depositor, the Seller, the Master Servicer, the
Servicers, the Special Servicer, a Sub-Servicer, the Trustee or the Trust
Administrator, as the case may be, and delivered to the Depositor, the
Seller, the Master Servicer, the Special Servicer, the Servicers, the Trustee
or the Trust Administrator, as required by this Agreement.
One-Month LIBOR Certificates: As set forth in the Preliminary
Statement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor, the Master Servicer or a Servicer, including
in-house counsel, reasonably acceptable to the Trustee and the Trust
Administrator. With respect to the definition of Eligible Account in this
Article I and Sections 2.05 and 7.04 hereof and any opinion dealing with the
qualification of each REMIC created hereunder or compliance with the REMIC
Provisions, such counsel must (i) in fact be independent of the Depositor,
the Master Servicer and such Servicer, (ii) not have any direct financial
interest in the Depositor, the Master Servicer or such Servicer or in any
affiliate of either of them and (iii) not be connected with the Depositor,
the Master Servicer or such Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar
functions; provided that with respect to Xxxxx Fargo Bank, N.A. as Servicer,
such counsel may be in-house counsel for Xxxxx Fargo Bank, N.A. as Servicer.
Optimal Interest Remittance Amount: For any Distribution Date and
either Loan Group, will be equal to the excess of (i) the product of (1) (x)
the weighted average Net Mortgage Rates of the Mortgage Loans in the related
Loan Group as of the first day of the related Collection Period divided by
(y) 12 and (2) the applicable Aggregate Loan Group Balance for the
immediately preceding distribution date, over (ii) any expenses that reduce
the interest collections for that Loan Group that did not arise as a result
of a default or delinquency of the applicable Mortgage Loans or were not
taken into account in computing the Expense Fee Rate.
Optional Termination: The purchase of the Mortgage Loans
pursuant to Section 11.01.
Optional Termination Date: The date fixed by a Terminating
Entity for the purchase of the Mortgage Loans pursuant to Section 11.01.
OTS: The Office of Thrift Supervision.
Outsourcer: As defined in Section 3.02.
Overcollateralized Group: As defined in Section 4.07(b).
Participant: A broker, dealer, bank, other financial institution
or other Person for whom DTC effects book entry transfers and pledges of
securities deposited with DTC.
Par-Value: As defined in Section 11.01.
Pass-Through Entity: (a) a regulated investment company
described in Section 851 of the Code, a real estate investment trust
described in Section 856 of the Code, a common trust fund or an organization
described in Section 1381(a) of the Code, (b) any partnership, trust or
estate or (c) any person holding a Class A Certificate as nominee for another
person.
Pass-Through Rate: For any interest bearing Class of
Certificates, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement. Interest on the Certificates, other
than the LIBOR Certificates, will be computed on the basis of a 360 day year
comprised of twelve 30 day months. Interest on the LIBOR Certificates will
be computed on the basis of a 360-day year and the actual number of days
elapsed in the related Accrual Period (or with respect to the first
Distribution Date and the LIBOR Certificates, a fraction whose numerator is
27 and whose denominator is 360).
Payahead: Any Scheduled Payment intended by the related
Mortgagor to be applied in a Collection Period subsequent to the Collection
Period in which such payment was received.
Payoff: Any payment of principal on a Mortgage Loan equal to the
entire outstanding Stated Principal Balance of such Mortgage Loan, if
received in advance of the last scheduled Due Date for such Mortgage Loan and
accompanied by an amount of interest equal to accrued unpaid interest on the
Mortgage Loan to the date of such payment in full.
Payoff Interest: For any Distribution Date with respect to each
SPS Serviced Mortgage Loan for which a Payoff was received on or after the
first calendar day of the month of such Distribution Date and before the 15th
calendar day of such month, an amount of interest thereon at the applicable
Net Mortgage Rate from the first day of such month through the day of receipt
thereof.
Percentage Interest: As to any Certificate, either the percentage
set forth on the face thereof or equal to the percentage obtained by dividing
the Denomination of such Certificate by the aggregate of the Denominations of
all Certificates of the same Class.
Person: Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Physical Certificates: As set forth in the Preliminary Statement.
Pledge Instruments: With respect to each Cooperative Loan, the
Stock Power, the Assignment of Proprietary Lease and the Security Agreement.
Prepayment Interest Shortfall: As to any Mortgage Loan,
Distribution Date and Principal Prepayment (other than a Payoff on a Xxxxx
Fargo Serviced Mortgage Loan or a SPS Serviced Mortgage Loan received during
the period from and including the first day to and including the 14th day of
the month of such Distribution Date) received during the related Prepayment
Period, the difference between (i) one full month's interest at the
applicable Mortgage Rate (giving effect to any applicable Relief Act
Reduction, Debt Service Reduction and Deficient Valuation), as reduced by the
Servicing Fee Rate, if applicable, on the outstanding principal balance of
such Mortgage Loan immediately prior to such prepayment or, if such Principal
Prepayment is a Curtailment, the principal amount of such Curtailment and
(ii) the amount of interest actually received with respect to such Mortgage
Loan in connection with such Principal Prepayment, net of the Servicing Fee,
if applicable.
Prepayment Penalty: With respect to any Mortgage Loan, any
penalty, fee or premium required to be paid if the Mortgagor prepays such
Mortgage Loan as provided in the related Mortgage Note or Mortgage.
Prepayment Period: With respect to each Distribution Date and
each Payoff with respect to a Xxxxx Fargo Serviced Mortgage Loan or SPS
Serviced Mortgage Loan, the related "Prepayment Period" will commence on the
15th day of the month preceding the month in which the related Distribution
Date occurs (or, in the case of the first Distribution Date, commencing on
the Cut-off Date) and will end on the 14th day of the month in which such
Distribution Date occurs. With respect to each Distribution Date and each
Payoff with respect to any Mortgage Loan serviced by IndyMac, and all
Curtailments, the related "Prepayment Period" will be the calendar month
preceding the month in which the related Distribution Date occurs.
Principal Payment Amount: For any Distribution Date and either
Loan Group, the sum of (i) the principal portion of the Scheduled Payments on
the Mortgage Loans in such Loan Group due on the related Due Date, (ii) the
principal portion of repurchase proceeds received with respect to any
Mortgage Loan in such Loan Group which was repurchased as permitted or
required by this Agreement during the calendar month preceding the month of
such Distribution Date and (iii) any other unscheduled payments of principal
which were received on the Mortgage Loans in such Loan Group during the
related calendar month preceding the month of such Distribution Date, other
than Principal Prepayments or Liquidation Principal.
Principal Prepayment: Any payment of principal on a Mortgage
Loan which constitutes a Payoff or Curtailment.
Principal Prepayment Amount: For any Distribution Date and
either Loan Group, the sum of (i) all Principal Prepayments relating to the
Mortgage Loans in such Loan Group which were received during the related
Prepayment Period and (ii) all Recoveries received during the calendar month
preceding the month of that distribution date.
Principal Transfer Amount: For any Distribution Date and each
Undercollateralized Group, the excess, if any, of the aggregate Class
Principal Balance of the Class A Certificates related to such
Undercollateralized Group over the aggregate Stated Principal Balance of the
Mortgage Loans in such Group.
Private Certificates: As set forth in the Preliminary Statement.
Proprietary Lease: The lease on a Cooperative Unit evidencing
the possessory interest of the owner of the Cooperative Shares in such
Cooperative Unit.
Pro Rata Share: As to any Distribution Date and the Class C-M,
Class C-B-1, Class C-B-2, Class C-B-3, Class C-B-4, Class C-B-5 and
Class C-B-6 Certificates, the portion of the Subordinate Principal
Distribution Amount allocable to such Class, equal to the product of the
Subordinate Principal Distribution Amount on such Distribution Date and a
fraction, the numerator of which is the related Class Principal Balance of
such Class and the denominator of which is the aggregate of the Class
Principal Balances of the Subordinate Certificates.
Prospectus: The Prospectus, dated June 25, 2004, relating to the
offering by the Depositor from time to time of its Mortgage-Backed Pass
Through Certificates (Issuable in Series) in the form in which it was or will
be filed with the Securities and Exchange Commission pursuant to Rule 424(b)
under the 1933 Act with respect to the offer and sale of the offered
certificates.
Prospectus Supplement: The Prospectus Supplement, dated
October 25, 2004, relating to the offering of the Offered Certificates in the
form in which it was or will be filed with the Securities and Exchange
Commission pursuant to Rule 424(b) under the 1933 Act with respect to the
offer and sale of the offered certificates.
PUD: Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
purchased by a Seller pursuant to Section 2.02 or 2.03, purchased by a holder
of certain Certificates pursuant to Section 3.11(f), or purchased at the
option of the Special Servicer pursuant to Section 3.11(g), the sum of (i)
100% of the Stated Principal Balance of the Mortgage Loan as of the first day
of the month of such purchase, (ii) accrued and unpaid interest on the
Mortgage Loan at the applicable Mortgage Rate (reduced by the related
Servicing Fee Rate, if the purchaser is also the Servicer thereof) from the
first day of the month of such purchase to the first day of the month
immediately following the month of such purchase, (iii) in the case of a
Mortgage Loan purchased by a Seller, the amount of any unreimbursed Advances
and Servicing Advances made by a Servicer, if such Servicer is not the
related Seller, with respect to such Mortgage Loan or, in the case of a
Mortgage Loan purchased by the Special Servicer, any unreimbursed Advances
and Servicing Advances payable to any Servicer (other than the Servicer or
Special Servicer, as the case may be, which is purchasing such Mortgage
Loans) and (iv) with respect to any purchase by a Seller pursuant to
Section 2.03, any costs and damages actually incurred and paid by or on
behalf of the Trust in connection with any breach of the representation and
warranty set forth in Schedule III(viii) as a result of a violation of a
predatory or abusive lending law applicable to such Mortgage Loan. With
respect to any Mortgage Loan required or allowed to be purchased, the Special
Servicer, the Certificateholder or the related Seller, as applicable, shall
deliver to the Trustee and the Trust Administrator an Officer's Certificate
as to the calculation of the Purchase Price.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of
business and each state having jurisdiction over such insurer in connection
with the insurance policy issued by such insurer, duly authorized and
licensed in such states to transact a mortgage guaranty insurance business in
such states and to write the insurance provided by the insurance policy
issued by it, approved as a FNMA or FHLMC approved mortgage insurer or
having a claims paying ability rating of at least "AA" or equivalent rating
by a nationally recognized statistical rating organization. Any replacement
insurer with respect to a Mortgage Loan must have at least as high a claims
paying ability rating as the insurer it replaces had on the Closing Date.
Qualified Substitute Mortgage Loan: One or more mortgage Loans
substituted by a Seller for one or more Deleted Mortgage Loans which must, on
the date of such substitution, as confirmed in a Request for Release,
substantially in the form of Exhibit J, individually or in the aggregate and
on a weighted average basis, as applicable (i) have a Stated Principal
Balance, after deduction of the principal portion of the Scheduled Payment
due in the month of substitution, not in excess of, and not more than 10%
less than the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Loan to Value
Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a remaining
term to maturity not more than one year greater than or less than that of the
Deleted Mortgage Loan; provided that the remaining term to maturity of any
such Mortgage Loan shall be no greater than the last maturing Mortgage Loan
immediately prior to any substitution; (v) have a Maximum Mortgage Rate and
Minimum Mortgage Rate not less than the respective such rates for the Deleted
Mortgage Loan, have a Gross Margin equal to or greater than the Deleted
Mortgage Loan and have the same Index as the Deleted Mortgage Loan; (vi) not
be a Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative Loan
and (vii) comply with each representation and warranty set forth in
Section 2.03(b).
Rating Agencies: Xxxxx'x and S&P, or any successor to either of
them.
Ratings: As of any date of determination, the ratings, if any,
of the Certificates as assigned by the Rating Agencies.
Realized Loss: With respect to any Mortgage Loan, (1) with
respect to each Liquidated Mortgage Loan, an amount (not less than zero or
more than the Stated Principal Balance of the Mortgage Loan) as of the date
of such liquidation, equal to (i) the Stated Principal Balance of the
Liquidated Mortgage Loan as of the date of such liquidation, plus (ii)
interest at the applicable Net Mortgage Rate from the related Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the related Due Date in the month in which
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan from time to time, minus (iii) the
Net Liquidation Proceeds, if any, received during the month in which such
liquidation occurred, to the extent applied as recoveries of interest at the
Net Mortgage Rate and to principal of the Liquidated Mortgage Loan; (2) for
any Mortgage Loan subject to a Deficient Valuation, the excess of the Stated
Principal Balance of that Mortgage Loan over the principal amount as reduced
in connection with the proceedings resulting in the Deficient Valuation; or
(3) for any Debt Service Reduction Mortgage Loan, the present value of all
monthly Debt Service Reductions on the Mortgage Loan, assuming that the
mortgagor pays each Scheduled Payment on the applicable Due Date and that no
Principal Prepayments are received on the Mortgage Loan, discounted at the
applicable Mortgage Rate.
Realized Losses on the Mortgage Loans shall be allocated to the
REMIC I Regular Interests as follows: (1) the interest portion of Realized
Losses and Net Interest Shortfalls on the Group 1 Loans, if any, shall be
allocated between the Class Y-1 and Class Z-1 Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction
thereof; and (2) the interest portion of Realized Losses and Net Interest
Shortfalls on the Group 2 Loans, if any, shall be allocated between the Class
Y-2 and Class Z-2 Regular Interests pro rata according to the amount of
interest accrued but unpaid thereon, in reduction thereof. Any interest
portion of such Realized Losses in excess of the amount allocated pursuant to
the preceding sentence shall be treated as a principal portion of Realized
Losses not attributable to any specific Mortgage Loan in such Group and
allocated pursuant to the succeeding sentences. The principal portion of
Realized Losses with respect to the Mortgage Loans shall be allocated to the
REMIC I Regular Interests as follows: (1) the principal portion of Realized
Losses on the Group 1 Loans shall be allocated, first, to the Class Y-1
Regular Interest to the extent of the Class Y-1 Principal Reduction Amount in
reduction of the Uncertificated Principal Balance of such Regular Interest
and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to the Class Z-1 Regular Interest in
reduction of the Uncertificated Principal Balance thereof; and (2) the
principal portion of Realized Losses on the Group 2 Loans shall be allocated,
first, to the Class Y-2 Regular Interest to the extent of the Class Y-2
Principal Reduction Amount in reduction of the Uncertificated Principal
Balance of such Regular Interest and, second, the remainder, if any, of such
principal portion of such Realized Losses shall be allocated to the Class Z-2
Regular Interest in reduction of the Uncertificated Principal Balance
thereof. For any Distribution Date, reductions in the Uncertificated
Principal Balances of the Class Y and Class Z Regular Interest pursuant to
this definition of Realized Loss shall be determined, and shall be deemed to
occur, prior to any reductions of such Uncertificated Principal Balances by
distributions on such Distribution Date.
Recognition Agreement: An Agreement among a Cooperative
Corporation, a lender and a Mortgagor with respect to a Cooperative Loan
whereby such parties (i) acknowledge that such lender may make, or intends to
make, such Cooperative Loan, (ii) make certain agreements with respect to
such Cooperative Loan.
Record Date: With respect to any Distribution Date and the
Certificates other than the LIBOR Certificates held in Book-Entry Form, the
close of business on the last Business Day of the month preceding the month
in which the applicable Distribution Date occurs. With respect to the LIBOR
Certificates that are not Physical Certificates and any Distribution Date,
the close of business on the Business Day immediately preceding such
Distribution Date; provided, however, that following the date on which
Definitive Certificates for a Class of LIBOR Certificates are available
pursuant to Section 6.09, the Record Date shall be the close of business on
the last Business Day of the calendar month immediately preceding the month
of such Distribution Date.
Recovery: With respect to any Distribution Date and Mortgage
Loan that became a Liquidated Mortgage Loan in a month preceding the month
prior to the Distribution Date, an amount received in respect of principal on
such mortgage loan which has previously been allocated as a Realized Loss or
Applied Loss Amount to a class or classes of certificates, net of
reimbursable expenses.
Reference Bank Rate: As to any Accrual Period relating to the
LIBOR Certificates as follows: the arithmetic mean (rounded upwards, if
necessary, to the nearest one sixteenth of a percent) of the offered rates
for United States dollar deposits for one month, with respect to the
One-Month LIBOR Certificates, and six months, with respect to the Class 2-A-1
Certificates, which are offered by the Reference Banks as of 11:00 A.M.,
London time, on the Interest Determination Date prior to the first day of
such Accrual Period to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Class
Principal Balance of the One-Month LIBOR Certificates or a period of six
months in amounts approximately equal to the aggregate Class Principal
Balance of the Class 2-A-1 Certificates, as applicable; provided that at
least two such Reference Banks provide such related rate. If fewer than two
related offered rates appear, the Reference Bank Rate will be the arithmetic
mean of the related rates quoted by one or more major banks in New York City,
selected by the Trust Administrator after consultation with DLJMC, as of
11:00 A.M., New York City time, on such date for loans in U.S. Dollars to
leading European banks for a period of one month or six months, as
applicable, in amounts approximately equal to the aggregate Class Principal
Balance of the One-Month LIBOR Certificates or Class 2-A-1 Certificates, as
applicable. If no such related quotations can be obtained, the Reference
Bank Rate shall be the related Reference Bank Rate applicable to the
preceding Accrual Period.
Reference Banks: Three major banks that are engaged in the
London interbank market, selected by the Trust Administrator after
consultation with DLJMC.
Registration Statement: That certain registration statement on
Form S-3, as amended (Registration No. 333-115435), relating to the offering
by the Depositor from time to time of its Mortgage-Backed Pass Through
Certificates (Issuable in Series) as heretofore declared effective by the
Securities and Exchange Commission.
Regular Certificates: All of the Certificates other than the
Class AR and Class AR-L Certificates.
Related Classes: REMIC II Regular Interests and Certificates
shall be treated as Related Classes as set forth in the following table:
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REMIC II Regular Interest Related Classes of Certificates
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1-A-1L 1-A-1, X
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2-A-1L 2-A-1, X
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C-ML C-M, X
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C-B-1L C-B-1; X
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C-B-2L C-B-2; X
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C-B-3L C-B-3; X
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C-B-4L C-B-4; X
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C-B-5L C-B-5; X
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C-B-6L C-B-6; X
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Relief Act: The Servicemembers Civil Relief Act, as amended, and
any similar state statute.
Relief Act Reductions: With respect to any Distribution Date and
any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month that
may be attributable to a prior month, if applicable, as a result of the
application of the Relief Act, the amount, if any, by which (i) interest
collected on such Mortgage Loan during the most recently ended calendar month
is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
REMIC: A "real estate mortgage investment conduit," within the
meaning of Section 860D of the Code. Reference herein to REMIC refers to
each REMIC created by the Preliminary Statement.
REMIC Election: An election, for federal income tax purposes, to
treat certain assets as a REMIC.
REMIC I Available Distribution Amount: For each Loan Group for
any Distribution Date, the available funds for such Loan Group.
REMIC I Distribution Amount: For any Distribution Date, the REMIC
I Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and the Class AR-L Certificates in the following amounts and
priority:
(a) To the extent of the REMIC I Available Distribution Amount
for Loan Group 1:
(i) first, to Class Y-1 and Class Z-1 Regular Interests
and the Class AR-L Certificates, concurrently, the Uncertificated
Interest for such Classes remaining unpaid from previous Distribution
Dates, pro rata according to their respective shares of such unpaid
amounts;
(ii) second, to the Class Y-1 and Class Z-1 Regular
Interests and the Class AR-L Certificates, concurrently, the
Uncertificated Interest for such Classes for the current Distribution
Date, pro rata according to their respective Uncertificated Interest;
(iii) third, to the Class AR-L Certificates, until the
Uncertificated Principal Balance thereof has been reduced to zero; and
(iv) fourth, to the Class Y-1 and Class Z-1 Regular
Interests, the Class Y-1 Principal Distribution Amount and the Class
Z-1 Principal Distribution Amount, respectively.
(b) To the extent of the REMIC I Available Distribution Amount
for Loan Group 2:
(i) first, to the Class Y-2 and Class Z-2 Regular
Interests, concurrently, the Uncertificated Interest for such Classes
remaining unpaid from previous Distribution Dates, pro rata according
to their respective shares of such unpaid amounts;
(ii) second, to the Class Y-2 and Class Z-2 Regular
Interests, concurrently, the Uncertificated Interest for such Classes
for the current Distribution Date, pro rata according to their
respective Uncertificated Interest; and
(iii) third, to the Class Y-2 and Class Z-2 Regular
Interests, the Class Y-2 Principal Distribution Amount and the Class
Z-2 Principal Distribution Amount, respectively.
(i) To the extent of the REMIC I Available Distribution Amounts
for such Distribution Date remaining after payment of the amounts pursuant to
paragraphs (a) and (b) of this definition of "REMIC I Distribution Amount":
(i) first, to each Class of Class Y and Class Z Regular
Interests, pro rata according to the amount of unreimbursed Realized
Losses allocable to principal previously allocated to each such Class;
provided, however, that any amounts distributed pursuant to this
paragraph (d)(i) of this definition of "REMIC I Distribution Amount"
shall not cause a reduction in the Uncertificated Principal Balances of
any of the Class Y and Class Z Regular Interests; and
(ii) second, to the Class AR-L Certificates, the Residual
Distribution Amount for the Class AR-L Certificates for such
Distribution Date.
REMIC I Realized Losses: For any Distribution Date, Realized
Losses for the related Collection Period shall be allocated to the REMIC I
Regular Interests as provided in the definition of Realized Loss.
REMIC II Available Distribution Amount: The amount distributed
from REMIC I to REMIC II pursuant to Section 4.01(II)(a) which shall be
treated as related to Group 1 to the extent such distribution is in respect
of the Class Y-1 or Z-1 REMIC I Regular Interests and shall be treated as
related to Group 2 to the extent such distribution is in respect of the Class
Y-2 or Z-2 REMIC I Regular Interests
REMIC II Realized Losses: For any Distribution Date, Realized
Losses for the related Due Period shall be allocated, as follows: Realized
Losses shall be allocated to each class of REMIC II Regular Interests in the
same amount, and with the same character, as Realized Losses are allocated to
the Related Classes of Certificates except that .Realized Losses allocated to
the Class X Certificates to the extent that such losses are attributable to
Group 1 Loans shall be allocated to the Class 1-A-1L REMIC II Regular
Interest and to the extent that such losses are attributable to Group 2 Loans
shall be allocated to the Class 2-A-1L REMIC II Regular Interest.
REMIC Provisions: The provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code,
and related provisions and regulations promulgated thereunder, as the
foregoing may be in effect from time to time.
REMIC Regular Interest: Any of the REMIC I Regular Interests,
REMIC II Regular Interests, REMIC III Regular Interests and REMIC IV Regular
Interests.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Required Insurance Policy: With respect to any Non-Designated
Mortgage Loan, any insurance policy that is required to be maintained from
time to time under this Agreement in respect of such Mortgage Loan or the
related Mortgaged Property.
Residual Certificates: The Class AR and Class AR-L Certificates.
Responsible Officer: When used with respect to the Trustee or
the Trust Administrator, shall mean any officer within the corporate trust
department of the Trustee or the Trust Administrator, respectively, including
any Assistant Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, any Trust Officer or any other officer of
the Trustee or the Trust Administrator 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.
Rolling Three Month Delinquency Rate: For any Distribution Date
will be the fraction, expressed as a percentage, equal to the average of the
Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates) immediately preceding months.
Rule 144A: Rule 144A under the 1933 Act, as in effect from time
to time.
S&P: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such
Mortgage Loan pursuant to the terms of the related Mortgage Note.
Security Agreement: With respect to a Cooperative Loan, the
agreement or mortgage creating a security interest in favor of the originator
of the Cooperative Loan in the related Cooperative Shares.
Seller: DLJMC.
Senior Certificates: As specified in the Preliminary Statement.
Senior Liquidation Amount: The Group 1 Senior Liquidation Amount
or the Group 2 Senior Liquidation Amount, as applicable.
Senior Percentage: The Group 1 Senior Percentage or Group 2
Senior Percentage, as applicable.
Senior Prepayment Percentage: The Senior Prepayment Percentage
for any Distribution Date occurring during the ten years beginning on the
first Distribution Date for each Loan Group will equal 100%. The Senior
Prepayment Percentage for any Distribution Date occurring on or after the
tenth anniversary of the first Distribution Date for each such Loan Group
will be as follows: for any Distribution Date in the first year thereafter,
the related Senior Percentage plus 70% of the related Subordinate Percentage
for such Distribution Date; for any Distribution Date in the second year
thereafter, the related Senior Percentage plus 60% of the related Subordinate
Percentage for such Distribution Date; for any Distribution Date in the third
year thereafter, the related Senior Percentage plus 40% of the related
Subordinate Percentage for such Distribution Date; for any Distribution Date
in the fourth year thereafter, the related Senior Percentage plus 20% of the
related Subordinate Percentage for such Distribution Date; and for any
Distribution Date thereafter, the related Senior Percentage for such
Distribution Date.
Notwithstanding the foregoing, on any Distribution Date and with
respect to either Loan Group if the Senior Percentage exceeds the initial
related Senior Percentage, the Senior Prepayment Percentage for each Group
for that Distribution Date will equal 100%, (ii) if on or before the
Distribution Date in October 2007, the Aggregate Subordinate Percentage is
greater than or equal to twice the Aggregate Subordinate Percentage as of the
Closing Date, in which case the Senior Prepayment Percentage for each Group
will equal the related Senior Percentage, plus 50% of the related Subordinate
Percentage for that Distribution Date, and if after the Distribution Date in
October 2007, the Aggregate Subordinate Percentage is greater than or equal
to twice the Group Subordinate Percentage as of the Closing Date, then the
Senior Prepayment Percentage for each such Loan Group for such Distribution
Date will equal the related Senior Percentage).
Notwithstanding the foregoing, the Senior Prepayment Percentage
for any of Loan Group 1 or Loan Group 2 shall equal 100% for any Distribution
Date as to which (i) the outstanding principal balance of the Mortgage Loans
in the related Loan Group, delinquent 60 days or more (including all REO
Properties and Mortgage Loans in foreclosure) (averaged over the preceding
six month period), as a percentage of the related aggregate Subordinate
Component Balance as of such Distribution Date is equal to or greater than
50% or (ii) cumulative Realized Losses for the Mortgage Loans in the related
Loan Group exceed (a) with respect to any Distribution Date prior to the
third anniversary of the first Distribution Date, 20% of the related
aggregate Subordinate Component Balance as of the Closing Date (the "Original
Subordinate Principal Balance"), (b) with respect to any Distribution Date on
or after the third anniversary but prior to the eleventh anniversary of the
first Distribution Date, 30% of the related Original Subordinate Principal
Balance, (c) with respect to any Distribution Date on or after the eleventh
anniversary but prior to the twelfth anniversary of the first Distribution
Date, 35% of the related Original Subordinate Principal Balance, (d) with
respect to any Distribution Date on or after the twelfth anniversary but
prior to the thirteenth anniversary of the first Distribution Date, 40% of
the related Original Subordinate Principal Balance, (e) with respect to any
Distribution Date on or after the thirteenth anniversary but prior to the
fourteenth anniversary of the first Distribution Date, 45% of the related
Original Subordinate Principal Balance and (f) with respect to any
Distribution Date on or after the fourteenth anniversary of the first
Distribution Date, 50% of the Original Subordinate Principal Balance.
If the Senior Prepayment Percentage for one Loan Group equals
100% due to the limitations set forth above, then the Senior Prepayment
Percentage for the other Loan Group will equal 100%.
If on any Distribution Date the allocation to a Class of Senior
Certificates then entitled to distributions of Principal Prepayments and
other amounts in the percentage required above would reduce the outstanding
Class Principal Balance of that Class below zero, the distribution to that
Class of Senior Certificates of the Senior Prepayment Percentage of those
amounts for such Distribution Date shall be limited to the percentage
necessary to reduce the related Class Principal Balance to zero.
Senior Principal Distribution Amount: The Group 1 Senior
Principal Distribution Amount and Group 2 Senior Principal Distribution
Amount, as applicable.
Servicer Employee: As defined in Section 3.18.
Servicer Letter Agreement: With respect to each Servicer, the
letter agreement, dated as of the Closing Date, between such Servicer and
DLJMC regarding surviving provisions such Servicer's mortgage loan purchase
and servicing agreement with DLJMC.
Servicer Mortgage File: All documents pertaining to a Mortgage
Loan not required to be included in the Trustee Mortgage File and held by the
Master Servicer or the related Servicer or any Sub-Servicer.
Servicers: SPS, IndyMac, Xxxxx Fargo and Wilshire to the extent
it has taken over the servicing of one or more Mortgage Loans pursuant to
Section 3.19 and, in each case, any successor in interest thereto or any
successor servicer appointed as provided herein.
Servicing Advance: With respect to the Non-Designated Mortgage
Loans, all customary, reasonable and necessary "out of pocket" costs and
expenses incurred in the performance by a Servicer of its servicing
obligations related to such Mortgage Loans, including, but not limited to,
the cost (including reasonable attorneys' fees and disbursements) of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii)
compliance with the obligations under Section 3.11 and any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of any REO Property (including default management and similar
services, appraisal services and real estate broker services), (iv) any
expenses incurred by a Servicer in connection with obtaining an environmental
inspection or review pursuant to the second paragraph of Section 3.11(a), (v)
compliance with the obligations under Section 3.09, (vi) locating any
documents missing from the Trustee's Mortgage File and (vii) obtaining broker
price opinions. In no event will any Servicer be required to make any
Servicing Advance which would constitute a Nonrecoverable Advance.
With respect to the Designated Mortgage Loans, Servicing Advance
shall have the meaning assigned to such term in the Designated Servicing
Agreement.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the Due Date in the
month of such Distribution Date (prior to giving effect to any Scheduled
Payments due on such Mortgage Loan on such Due Date), subject to reduction as
provided in Section 3.14.
Servicing Fee Rate: As to each Mortgage Loan, the per annum rate
set forth on the related Mortgage Loan Schedule.
Servicing Officer: Any officer of a Servicer involved in, or
responsible for, the administration and servicing of the related Mortgage
Loans whose name and specimen signature appear on a list of servicing
officers furnished to the Trustee and the Trust Administrator by a Servicer
on the Closing Date pursuant to this Agreement, as such list may from time to
time be amended and delivered to the Trustee and Trust Administrator.
Special Hazard Loss: A Realized Loss (or portion thereof) with
respect to a Mortgage Loan arising from any direct physical loss or damage to
a Mortgaged Property which is not covered by a standard hazard maintenance
policy with extended coverage or by a flood insurance policy, if applicable
(or which would not have been covered by such a policy had such a policy been
maintained), which is caused by or results from any cause except: (i) wear
and tear, deterioration, rust or corrosion, mold, wet or dry rot, inherent
vice or latent defect, animals, birds, vermin, insects; (ii) settling,
subsidence, cracking, shrinkage, bulging or expansion of pavements,
foundations, walls, floors, roofs or ceilings; (iii) errors in design, faulty
workmanship or faulty materials, unless the collapse of the property or part
thereof ensues and then only for the ensuing loss; (iv) nuclear or chemical
reaction or nuclear radiation or radioactive or chemical contamination, all
whether controlled or uncontrolled, and whether such loss be direct or
indirect, proximate or remote; (v) hostile or warlike action in time of peace
or war, including action in hindering, combating or defending against an
actual, impending or expected attack (a) by any government of sovereign
power, de jure or de facto, or by any authority maintaining or using
military, naval or air forces, (b) by military, naval or air forces, or (c)
by an agent of any such government, power, authority or forces; (vi) any
weapon of war employing atomic fission or radioactive force whether in time
of peace or war; or (vii) insurrection, rebellion, revolution, civil war,
usurped power or action taken by governmental authority in hindering,
combating or defending against such 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.
Special Hazard Loss Coverage Amount: With respect to the
Subordinate Certificates, as of the Closing Date, $2,440,471 subject in each
case to reduction from time to time, to be an amount equal on any
Distribution Date to the lesser of (a) the greatest of (i) 1% of the sum of
the aggregate Stated Principal Balances of the Mortgage Loans, (ii) twice the
principal balance of the largest Mortgage Loan and (iii) the aggregate Stated
Principal Balances of the Mortgage Loans secured by Mortgaged Properties
located in the single California postal zip code area having the highest
aggregate principal balance of any such zip code area and (b) the Special
Hazard Loss Coverage Amount as of the Closing Date less the amount, if any,
of losses attributable to Special Hazard Losses allocated to the Subordinate
Certificates since the Closing Date. All Stated Principal Balances for the
purpose of this definition will be calculated as of the first day of the
month preceding such Distribution Date after giving effect to scheduled
installments of principal and interest on the Mortgage Loans then due,
whether or not paid. The Special Hazard Loss Coverage Amount may be reduced
below the amount set forth above for any Distribution Date with the consent
of the Rating Agencies as evidenced by a letter of each Rating Agency to the
Trust Administrator to the effect that any such reduction will not result in
a downgrading of the current ratings assigned to such Classes of Certificates
rated by it.
Special Hazard Loss Coverage Termination Date: The date on which
the Special Hazard Loss Coverage Amount is reduced to zero.
Special Servicer: Wilshire Credit Corporation, and its successors
and permitted assigns.
Special Serviced Mortgage Loan: The Mortgage Loans for which the
Special Servicer acts as servicer pursuant to Section 3.19.
SPS: Select Portfolio Servicing, Inc., a Utah corporation, and
its successors and assigns.
SPS Mortgage Loans: Any SPS Serviced Mortgage Loans for which
SPS has not entered into a subservicing arrangement for such Mortgage Loan
pursuant to Section 3.02 hereof.
SPS Serviced Mortgage Loans: The Mortgage Loans identified as
such on the Mortgage Loan Schedule for which SPS is the applicable Servicer.
Standard Hazard Policy: Each standard hazard insurance policy or
replacement therefore referred to in Section 3.09.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous
Curtailments and Liquidation Proceeds allocable to principal (other than with
respect to any Liquidated Mortgage Loan) and to the payment of principal due
on such Due Date and irrespective of any delinquency in payment by the
related Mortgagor.
Stock Power: With respect to a Cooperative Loan, an assignment
of the stock certificate or an assignment of the Cooperative Shares issued by
the Cooperative Corporation.
Streamlined Mortgage Loan: A Mortgage Loan originated in
connection with the refinance of a mortgage loan pursuant to the related
Seller's streamlined documentation program then in effect.
Subordinate Certificates: As specified in the Preliminary
Statement.
Subordinate Component Balance: For either Loan Group, as of any
date of determination, the then outstanding aggregate Stated Principal
Balance of the Mortgage Loans in that Loan Group, minus the sum of the then
outstanding aggregate Class Principal Balance of the related Classes of
Class A Certificates.
Subordinate Component Net Funds Rate: With respect to any
Distribution Date, a per annum rate equal to the quotient, expressed as a
percentage of (a) the sum of (i) the product of (x) the Group 1 Net Funds
Rate for that Distribution Date and (y) the Subordinate Component Balance for
Loan Group 1 immediately prior to such Distribution Date, and (ii) the
product of (x) the Group 2 Net Funds Rate for that Distribution Date and (y)
the Subordinate Component Balance for Loan Group 2 immediately prior to such
Distribution Date, divided by (b) the aggregate Class Principal Balance of
the Subordinate Certificates immediately prior to such Distribution Date.
Subordinate LIBOR Certificates: As set forth in the Preliminary
Statement.
Subordinate Liquidation Amount: For any Distribution Date and
any Loan, the excess, if any, of the aggregate Liquidation Principal of all
Mortgage Loans in that Loan Group which became Liquidated Mortgage Loans
during the calendar month preceding the Distribution Date over the Group 1
Senior Liquidation Amount or Group 2 Senior Liquidation Amount, as
applicable, for such Distribution Date.
Subordinate Percentage: As to any Distribution Date and either
Loan, the excess of 100% over the related Senior Percentage for that
Distribution Date.
Subordinate Prepayment Percentage: As to any Distribution Date
and with respect to either Loan Group, 100% minus the related Senior
Prepayment Percentage for such Distribution Date; provided, however, that if
the aggregate Class Principal Balance of the Senior Certificates related to
such Loan Group has been reduced to zero, then the Subordinate Prepayment
Percentage for such Loan Group will equal 100%.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date, the sum of the following amounts for either Loan Group:
(i) the related Subordinate Percentage of the related Principal Payment
Amount, (ii) the related Subordinate Prepayment Percentage of the related
Principal Prepayment Amount, and (iii) the related Subordinate Liquidation
Amount; less the amount of certain cross-collateralization payments as made
pursuant to Section 4.07.
Subordination Level: As to any Distribution Date and any Class
of Subordinate Certificates, the percentage obtained by dividing the sum of
the Class Principal Balances of all Classes of Subordinate Certificates which
are subordinate in right of payment to such Class by the sum of the Class
Principal Balances of the Group 1 Certificates, Class 2-A-1 Certificates and
Subordinate Certificates, in each case immediately prior to such Distribution
Date.
Substitution Adjustment Amount: As defined in Section 2.03.
Sub-Servicer: Any other entity with respect to any
Non-Designated Mortgage Loan under any Sub Servicing Agreement applicable to
such Mortgage Loan and any successors and assigns under such Sub Servicing
Agreement.
Sub-Servicing Agreement: Any servicing agreement between a
Servicer and a Sub-Servicer pursuant to which a Servicer delegates any of its
servicing responsibilities with respect to any of the Non-Designated Mortgage
Loans.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation § 1.860F 4(d) and
temporary Treasury regulation § 301.6231(a)(7)1T. Initially, the Tax Matters
Person shall be the Trust Administrator.
Telerate Page 3750: The display designated as page 3750 on
Bridge Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).
Terminating Entity: SPS or the entity or entities designated
pursuant to Section 7.04(b) of the Agreement.
Transferring Servicer: As defined in Section 3.19 hereof.
Transferee Affidavit and Agreement: As defined in
Section 6.02(g)(i)(B).
Trust: The trust created pursuant to this Agreement.
Trust Administrator: Xxxxx Fargo Bank, N.A., a national banking
association, not in its individual capacity, but solely in its capacity as
Trust Administrator for the benefit of the Certificateholders under this
Agreement, and any successor thereto, as provided herein.
Trust Administrator Fee: As specified in Section 10.05.
Trust Administrator Fee Rate: As to each Mortgage Loan, a per
annum rate equal to 0.00%.
Trust Fund: The corpus of the trust created by this Agreement
consisting of (a) the Mortgage Loans listed in the Mortgage Loan Schedule,
including all interest and principal received or receivable by the Depositor
on or with respect to the Mortgage Loans after the Cut off Date, but not
including payments of principal and interest due and payable on the Mortgage
Loans on or before the Cut off Date, together with the Mortgage Files
relating to the Mortgage Loans, (b) REO Property, (c) the Collection Account,
the Certificate Account, the Basis Risk Reserve Fund and all amounts
deposited therein pursuant to the applicable provisions of this Agreement,
(d) any insurance policies with respect to the Mortgage Loans, (e) the
Depositor's rights under the Assignment and Assumption Agreement, and (f) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid property.
Trust Receipt and Final Certification: As defined in
Section 2.02(a).
Trust Receipt and Initial Certification: As defined in
Section 2.02(a).
Trustee: U.S. Bank National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, as provided herein.
Trustee Mortgage File: The mortgage documents listed in
Section 2.01 hereof pertaining to a particular Mortgage Loan and any
additional documents required to be added to the Trustee Mortgage File
pursuant to this Agreement.
Uncertificated Accrued Interest: With respect to any
Uncertificated Regular Interest for any Distribution Date, one month's
interest at the related Uncertificated Pass-Through Rate for such
Distribution Date, accrued on the Uncertificated Principal Balance or
Uncertificated Notional Amount, as applicable, immediately prior to such
Distribution Date. Uncertificated Accrued Interest for the Uncertificated
Regular Interests shall accrue on the basis of a 360-day year consisting of
twelve 30-day months. For purposes of calculating the amount of
Uncertificated Accrued Interest for the REMIC I Regular Interests for any
Distribution Date, any Prepayment Interest Shortfalls (to the extent not
covered by Compensating Interest) relating to the Mortgage Loans for any
Distribution Date shall be allocated among the REMIC I Regular Interests, pro
rata, based on, and to the extent of, Uncertificated Accrued Interest, as
calculated without application of this sentence. For purposes of calculating
the amount of Uncertificated Accrued Interest for the REMIC II Regular
Interests for any Distribution Date, any Prepayment Interest Shortfalls (to
the extent not covered by Compensating Interest) relating to the Mortgage
Loans for any Distribution Date shall be allocated to the REMIC II Regular
Interests and to the extent that such Prepayment Interest Shortfalls are
allocated to the Related Classes of Certificates except that Prepayment
Interest Shortfalls allocated to the Class X Certificates, to the extent such
Shortfalls are attributable to Group 1 Loans, shall be allocated among Class
1-A-1L, Class C-ML and Class C-XX XXXXX XX Regular Interest pro-rata
according to the extent that interest accrued on the Class X Certificate
before reduction by such Shortfalls derived from such Class of REMIC II
Regular Interest and, to the extent such Shortfalls are attributable to
Group 2 Loans, shall be allocated among Class 2-A-1L, Class C-ML and
Class C-XX XXXXX XX Regular Interest pro-rata according to the extent that
interest accrued on the Class X Certificate before reduction by such
Shortfalls derived from such Class of REMIC II Regular Interest.
Undercollateralized Group: As defined in Section 4.07(b).
Underwriter's Exemption: Prohibited Transaction Exemption
2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or
any substantially similar administrative exemption granted by the U.S.
Department of Labor.
U.S. Bank: U.S. Bank National Association.
U.S. Person: A citizen or resident of the United States, a
corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes created or organized in, or under
the laws of, the United States, any State thereof or the District of
Columbia, or an estate whose income from sources without the United States is
includable 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, any trust treated as a United States Person under Code
Section 7701(a)(30).
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this
Agreement, 99% of all Voting Rights shall be allocated among the Class A
Certificates (other than the Residual Certificates), Class C-M Certificates
and Class C-B Certificates. The portion of such 99% Voting Rights allocated
to each of the Class A Certificates (other than the Residual Certificates),
Class C-M Certificates and Class C-B Certificates shall be based on the
fraction, expressed as a percentage, the numerator of which is the aggregate
Class Principal Balance then outstanding and the denominator of which is the
Class Principal Balance of all Classes then outstanding. The Class X
Certificates shall be allocated 1% of the Voting Rights. Voting Rights shall
be allocated among the Certificates within each such Class in proportion to
their respective outstanding Class Principal Balances or percentage of the
Class X Notional Amount, as applicable. The Class AR and Class AR-L
Certificates shall have no Voting Rights.
Xxxxx Fargo: Xxxxx Fargo Bank, X.X.
Xxxxx Fargo Serviced Mortgage Loans: The Mortgage Loans
identified as such on the Mortgage Loan Schedule, for which Xxxxx Fargo is
the applicable Servicer.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Trust Fund.
(a) The Depositor does hereby establish the Trust and sells, transfers,
assigns, delivers, sets over and otherwise conveys to the Trustee in trust
for the benefit of the Certificateholders, without recourse, the Depositor's
right, title and interest in and to (a) the Mortgage Loans listed in the
Mortgage Loan Schedule, including all interest and principal received or
receivable by the Depositor on or with respect to the Mortgage Loans after
the Cut-off Date, but not including payments of principal and interest due
and payable on the Mortgage Loans on or before the Cut-off Date, together
with the Mortgage Files relating to the Mortgage Loans, (b) REO Property, (c)
the Collection Account, the Certificate Account, the Basis Risk Reserve Fund
and all amounts deposited therein pursuant to the applicable provisions of
this Agreement, (d) any insurance policies with respect to the Mortgage
Loans, (e) the Depositor's rights under the Assignment and Assumption
Agreement and (f) all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or other liquid property.
(b) In connection with the transfer and assignment set forth in clause (a)
above, the Depositor has delivered or caused to be delivered to a Custodian
for the benefit of the Certificateholders, the documents and instruments with
respect to each Mortgage Loan as assigned:
(i) (A) the original Mortgage Note bearing all intervening endorsements and
including any riders to the Mortgage Note, endorsed "Pay to the order of
________________, without recourse" and signed in the name of the last named
endorsee by an authorized officer or (B) with respect to any Lost Mortgage
Note, a lost note affidavit and indemnity from the related Seller stating
that the original Mortgage Note was lost or destroyed, (together with a copy
of such Mortgage Note, if available) and indemnifying the Trust Fund against
any loss, cost or liability resulting from the failure to deliver the
original Mortgage Note;
(ii) the original of any guarantee executed in connection with the Mortgage
Note (if any);
(iii) for each Mortgage Loan that is not a MERS Mortgage Loan, the original
Mortgage, with evidence of recording thereon, or copies certified by the
related recording office or if the original Mortgage has not yet been
returned from the recording office, a copy certified by or on behalf of the
related Seller indicating that such Mortgage has been delivered for recording
(the return directions for the original Mortgage should indicate, when
recorded, mail to the related Seller) and in the case of each MERS Mortgage
Loan, the original Mortgage, noting the presence of the MIN of the related
Mortgage Loan and either language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a MOM
Loan at origination, the original Mortgage and the assignment thereof to
MERS, with evidence of recording indicated thereon or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, (or, if an original of any of these documents has not
been returned from the recording office, a copy thereof certified by or on
behalf of the related Seller, the original to be delivered to the Seller
forthwith after return from such recording office) with evidence of recording
thereon, if any;
(v) for each Mortgage Loan that is not a MERS Mortgage Loan, the original
Assignment of Mortgage as appropriate, in recordable form, for each Mortgage
Loan from the last assignee assigned in blank;
(vi) for each Mortgage Loan that was not a MERS Mortgage Loan at its
origination, the originals of any intervening recorded Assignments of
Mortgage, showing a complete chain of assignment from origination to the last
assignee, including warehousing assignments, with evidence of recording
thereon (or, if an original intervening Assignment of Mortgage has not been
returned from the recording office, a copy thereof certified by or on behalf
of the related Seller, the original to be delivered to the Custodian
forthwith after return from such recording office);
(vii) the original mortgage title insurance policy, or copy of title
commitment (or in appropriate jurisdictions, attorney's opinion of title and
abstract of title); and
(viii) with respect to a Cooperative Loan, if any, the originals of the
following documents or instruments:
(A) the Cooperative Shares, together with the Stock Power in blank;
(B) the executed Security Agreement;
(C) the executed Proprietary Lease and the Assignment of Proprietary Lease
to the originator of the Cooperative Loan;
(D) the executed Recognition Agreement;
(E) Copies of the original UCC financing statement, and any continuation
statements, filed by the originator of such Cooperative Loan as secured
party, each with evidence of recording thereof, evidencing the interest of
the originator under the Security Agreement and the Assignment of Proprietary
Lease;
(F) Copies of the filed UCC assignments or amendments of the security
interest referenced in clause (E) above showing an unbroken chain of title
from the originator to the Trust, each with evidence of recording thereof,
evidencing the interest of the assignee under the Security Agreement and the
Assignment of Proprietary Lease;
(G) An executed assignment of the interest of the originator in the
Security Agreement, the Assignment of Proprietary Lease and the Recognition
Agreement, showing an unbroken chain of title from the originator to the
Trust; and
(H) For any Cooperative Loan that has been modified or amended, the
original instrument or instruments effecting such modification or amendment.
In addition, in connection with the assignment of any MERS
Mortgage Loan, the related Seller agrees that it will cause, at the related
Seller's expense, the MERS® System to indicate that such Mortgage Loans have
been assigned by the related Seller to the Trustee in accordance with this
Agreement for the benefit of the Certificateholders by including (or
deleting, in the case of Mortgage Loans which are repurchased or substituted
in accordance with this Agreement) the information required by the MERS®
System to (a) identify the Trustee and (b) identify the series of the
Certificates issued in connection with such Mortgage Loans. The Trustee
shall confirm, or cause the Custodian to confirm, on the Final Certification
of the Custodian that such assignment has occurred. The related Seller
further agrees that it will not, and will not permit a Servicer to, and each
related Servicer agrees that it will not, alter the information referenced in
this paragraph with respect to any Mortgage Loan during the term of this
Agreement unless and until such Mortgage Loan is repurchased or substituted
in accordance with the terms of this Agreement.
In the event the Depositor delivers to the Custodian certified
copies of any document or instrument set forth in 2.01(b) because of a delay
caused by the public recording office in returning any recorded document, the
Depositor shall deliver or cause to be delivered to the Custodian, within 60
days of the Closing Date, an Officer's Certificate which shall (i) identify
the recorded document, (ii) state that the recorded document has not been
delivered to the Custodian due solely to a delay caused by the public
recording office, and (iii) state the amount of time generally required by
the applicable recording office to record and return a document submitted for
recordation.
In the event that in connection with any Mortgage Loan the
Depositor cannot deliver (a) for a Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, (b) all interim recorded assignments or
(c) the lender's title policy (together with all riders thereto) satisfying
the requirements set forth above, concurrently with the execution and
delivery hereof because such document or documents have not been returned
from the applicable public recording office in the case of clause (a) or (b)
above, or because the title policy has not been delivered to the related
Seller or the Depositor by the applicable title insurer in the case of clause
(c) above, the Depositor shall promptly deliver to the Custodian, in the case
of clause (a) or (b) above, such original Mortgage or such interim
assignment, as the case may be, with evidence of recording indicated thereon
upon receipt thereof from the public recording office, or a copy thereof,
certified, if appropriate, by the relevant recording office and, in the case
of clause (c) above, any title policy upon receipt from the applicable title
insurer.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, DLJMC
shall, at its expense, (i) affix or cause to be affixed the Trustee's name to
each Assignment of Mortgage, as the assignee thereof, (ii) cause such
assignment to be in proper form for recording in the appropriate public
office for real property records within thirty (30) days after receipt
thereof and (iii) cause to be delivered for recording in the appropriate
public office for real property records the assignments of the Mortgages to
the Trustee, except that, with respect to any assignment of a Mortgage as to
which DLJMC has not received the information required to prepare such
assignment in recordable form, DLJMC's obligation to do so and to deliver the
same for such recording shall be as soon as practicable after receipt of such
information and in any event within thirty (30) days after the receipt
thereof, and DLJMC need not cause to be recorded any assignment which relates
to a Mortgage Loan in any jurisdiction under the laws of which, as evidenced
by an Opinion of Counsel delivered by the Depositor (at the Depositor's
expense) to the Trustee, the Trust Administrator and DLJMC, acceptable to the
Rating Agencies, the recordation of such assignment is not necessary to
protect the Trustee's and the Certificateholders' interest in the related
Mortgage Loan.
If any original Mortgage Note referred to in Section 2.01(b)(i)
above cannot be located, the obligations of the Depositor to deliver such
documents shall be deemed to be satisfied upon delivery to the Custodian of a
photocopy of such Mortgage Note, if available, with a lost note affidavit and
indemnity. If any of the original Mortgage Notes for which a lost note
affidavit and indemnity was delivered to the Custodian is subsequently
located, such original Mortgage Note shall be delivered to the Custodian
within three Business Days.
(c) The Trustee is authorized to enter into one or more Custodial
Agreements, at the direction of the Depositor, for the purpose of having a
Custodian maintain custody of the documents and instruments referred to in
this Section 2.01, and any documents delivered thereunder shall be delivered
to the Custodian and any Officer's Certificates delivered with respect
thereto shall be delivered to the Trustee, the Trust Administrator and the
Custodian.
(d) It is the express intent of the parties to this Agreement that the
conveyance of the Mortgage Loans by the Depositor to the Trustee as provided
in this Section 2.01 be, and be construed as, a sale of the Mortgage Loans by
the Depositor to the Trustee. It is, further, not the intention of the
parties to this Agreement that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor. However, in the event that, notwithstanding the
intent of the parties to this Agreement, the Mortgage Loans are held to be
the property of the Depositor, or if any for any other reason this Agreement
is held or deemed to create a security interest in the Mortgage Loans then
(a) this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (b) the
conveyance provided for in this Section 2.01 shall be deemed to be a grant by
the Depositor to the Trustee for the benefit of the Certificateholders of a
security interest in all of the Depositor's right, title and interest in and
to the Mortgage Loans and all amounts payable to the holders of the Mortgage
Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including without limitation all
amounts, other than investment earnings, from time to time held or invested
in the Certificate Account, whether in the form of cash, instruments,
securities or other property; (c) the possession by the Trustee or any
Custodian of such items of property and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "in possession by the secured party" for purposes of perfecting
the security interest pursuant to Section 9 313 of the New York Uniform
Commercial Code; and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as
applicable) of the Trustee for the benefit of the Certificateholders for the
purpose of perfecting such security interest under applicable law (except
that nothing in this clause (d) shall cause any person to be deemed to be an
agent of the Trustee for any purpose other than for perfection of such
security interests unless, and then only to the extent, expressly appointed
and authorized by the Trustee in writing). The Depositor and the Trustee,
upon directions from the Depositor, shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement.
(e) Except as specifically set forth in this Agreement or by separate
written agreement among the related parties hereto, the Depositor, each
Seller, each Servicer and the Master Servicer agree that the provisions of
this Agreement shall supercede any provisions in any existing mortgage loan
purchase agreement or servicing agreement with respect to the Mortgage Loans
for which the Depositor, a Seller, a Servicer or the Master Servicer may be a
party.
SECTION 2.02. Acceptance by the Trustee.
(a) Pursuant to Section 4 of the LaSalle Custodial Agreement, the Custodian
agrees to execute and deliver on the Closing Date to the Depositor, the
Trustee and the Trust Administrator a Trust Receipt and Initial Certification
in the form annexed hereto as Exhibit H. Based on its review and
examination, and only as to the documents identified in such Trust Receipt
and Initial Certification, the Custodian acknowledges that such documents
appear regular on their face and relate to such Mortgage Loan. The Custodian
shall be under no duty or obligation to inspect, review or examine said
documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable or appropriate for the represented purpose or
that they have actually been recorded in the real estate records or that they
are other than what they purport to be on their face.
Pursuant to Section 6 of the LaSalle Custodial Agreement, not
later than 90 days after the Closing Date, the Custodian shall deliver to the
Depositor, the Trustee and the Trust Administrator a Trust Receipt and Final
Certification in the form annexed hereto as Exhibit I, with any applicable
exceptions noted thereon.
Based solely upon the Trust Receipt and Initial Certification
received from the Custodian, and subject to the provisions of Section 2.01
and any exceptions noted on the exception report described in the next
paragraph below, the Trustee acknowledges receipt of the documents referred
to in Section 2.01 above and declares that it holds and will hold such
documents and the other documents delivered to it constituting the Mortgage
File, and that it holds or will hold all such assets and such other assets
included in the definition of the Trust Fund in trust for the exclusive use
and benefit of all present and future Certificateholders.
If, in the course of such review, the Custodian finds any
document constituting a part of a Mortgage File which does not meet the
requirements of Section 2.01, the Custodian shall list such as an exception
in the Trust Receipt and Final Certification pursuant to Section 6 of the
LaSalle Custodial Agreement; provided, however, that the Custodian shall not
make any determination as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or is sufficient to effect the assignment of
and transfer to the assignee thereof under the mortgage to which the
assignment relates.
With respect to each Mortgage Loan for which it is the Seller,
each Seller shall promptly correct or cure such defect within 90 days from
the date it was so notified of such defect and, if the Seller does not
correct or cure such defect within such period and such defect materially and
adversely affects the interests of Certificateholders in the related Mortgage
Loan, the Seller shall either (a) substitute for the related Mortgage Loan a
Qualified Substitute Mortgage Loan, which substitution shall be accomplished
in the manner and subject to the conditions set forth in Section 2.03, or
(b) repurchase such Mortgage Loan within 90 days from the date that the
related Seller was notified of such defect in writing at the Purchase Price
of such Mortgage Loan; or such longer period not to exceed 720 days from the
Closing Date if the substitution or repurchase of a Mortgage Loan pursuant to
this provision is required by reason of a delay in delivery of any documents
by the appropriate recording office or title insurer, as applicable;
provided, however, that a Seller shall have no liability for recording any
Assignment of Mortgage in favor of the Trustee or for the Custodian's failure
to record such Assignment of Mortgage, and provided, further, that no Seller
shall be obligated to repurchase or cure any Mortgage Loan solely as a result
of the Custodian's failure to record such Assignment of Mortgage. The Trust
Administrator shall direct the Custodian to deliver to each Rating Agency
written notice within 270 days from the Closing Date indicating each Mortgage
Loan (a) for which a mortgage or assignment of mortgage required to be
recorded hereunder has not been returned by the appropriate recording office
or (b) as to which there is a dispute as to location or status of such
Mortgage Loan. Such notice shall be delivered every 90 days thereafter until
the related Mortgage Loan is returned to the Custodian. Any such
substitution pursuant to (a) above or purchase pursuant to (b) above shall
not be effected prior to the delivery to the Trustee and the Trust
Administrator of the Opinion of Counsel required by Section 2.05 hereof, if
any, and any substitution pursuant to (a) above shall not be effected prior
to the additional delivery to the Trustee or the Trust Administrator of a
Request for Release substantially in the form of Exhibit J. No substitution
is permitted to be made in any calendar month after the Determination Date
for such month. The Purchase Price for any such Mortgage Loan shall be
deposited by the related Seller in the related Collection Account on or prior
to the Business Day immediately preceding such Distribution Date in the month
following the month during which the Seller became obligated hereunder to
repurchase or replace such Mortgage Loan and, upon receipt of such deposit
and certification with respect thereto in the form of Exhibit J hereto, the
Custodian shall release the related Mortgage File to the related Seller and
shall execute and deliver at such entity's request such instruments of
transfer or assignment prepared by such entity, in each case without
recourse, as shall be necessary to vest in such entity, or a designee, the
Trustee's interest in any Mortgage Loan released pursuant hereto.
If pursuant to the preceding paragraph the related Seller
repurchases a Mortgage Loan that is a MERS Mortgage Loan, the related
Servicer shall, at the related Seller's expense, either (i) cause MERS to
execute and deliver an Assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the related Seller and shall cause such Mortgage to
be removed from registration on the MERS® System in accordance with MERS'
rules and regulations or (ii) cause MERS to designate on the MERS® System the
related Seller as the beneficial holder of such Mortgage Loan.
(b) It is understood and agreed that the obligation of each Seller to cure,
substitute for or to repurchase any Mortgage Loan which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee, the Trust Administrator, the Depositor and
any Certificateholder against the Seller.
SECTION 2.03. Representations and Warranties of the Seller, Master
Servicer and Servicers.
(a) Each of DLJMC, in its capacity as Seller, Xxxxx Fargo, in its capacity
as Master Servicer, SPS, in its capacity as Servicer, Xxxxx Fargo, in its
capacity as Servicer and Wilshire, in its capacity as Special Servicer hereby
makes the representations and warranties applicable to it set forth in
Schedule IIA, IIB, IIC, IID or IIE, as applicable hereto, and by this
reference incorporated herein, to the Depositor, the Trustee and the Trust
Administrator, as of the Closing Date, or if so specified therein, as of the
Cut off Date or such other date as may be specified. In addition, SPS, in
its capacity as Servicer, Xxxxx Fargo, in its capacity as Servicer and
Wilshire, in its capacity as Special Servicer makes the representations and
warranties applicable to it set forth in Schedule IIC, IID and IIE hereto,
respectively, and by this reference incorporated herein, to the Master
Servicer as of the Closing Date, or if so specified therein, as of the Cut
off Date or such other date as may be specified.
(b) DLJMC, in its capacity as Seller, hereby makes the representations and
warranties set forth in Schedule III and by this reference incorporated
herein, to the Depositor, the Trustee and the Trust Administrator, as of the
Closing Date, or if so specified therein, as of the Cut off Date or such
other date as may be specified.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt notice thereof to
the other parties; provided that, if applicable, any breach of the
representations and warranties set forth in Schedule III(xix), III(xxii),
III(xxiv), III(xxvii), III(xxviii) and III(xxxii) shall be deemed to
materially and adversely affect the interests of the Certificateholders in
that Mortgage Loan. Each Seller hereby covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party of a
breach of any representation or warranty made by it pursuant to
Section 2.03(b) which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan sold by the Seller to the Trust, it
shall cure such breach in all material respects, and if such breach is not so
cured, shall, (i) if such 90 day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted
Mortgage Loan") from the Trust Fund and substitute in its place a Qualified
Substitute Mortgage Loan, in the manner and subject to the conditions set
forth in this Section; or (ii) repurchase the affected Mortgage Loan or
Mortgage Loans at the Purchase Price in the manner set forth below; provided,
however, that any such substitution pursuant to (i) above shall not be
effected prior to the delivery to the Trustee and the Trust Administrator of
the Opinion of Counsel required by Section 2.05 hereof, if any, and any such
substitution pursuant to (i) above shall not be effected prior to the
additional delivery to the Trustee or the Trust Administrator of a Request
for Release substantially in the form of Exhibit J relating to the Deleted
Mortgage Loan and the Mortgage File for any such Qualified Substitute
Mortgage Loan. The related Seller shall promptly reimburse the Trustee, the
Trust Administrator, the Special Servicer and the related Servicer (if such
Servicer is not the Seller of such Mortgage Loan) for any actual out of
pocket expenses reasonably incurred by the Trustee, the Trust Administrator,
the Special Servicer and the related Servicer (if such Servicer is not the
Seller of such Mortgage Loan) in respect of enforcing the remedies for such
breach. With respect to any representation and warranties described in this
Section which are made to the best of a Seller's knowledge if it is
discovered by any of the Depositor, the Master Servicer, the Seller, any
Servicer, the Special Servicer, the Trustee or the Trust Administrator that
the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interests of the Certificateholders therein, notwithstanding the
related Seller's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Qualified Substitute Mortgage Loan or Loans,
the related Seller shall deliver to the Custodian for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by
Section 2.01(b), with the Mortgage Note endorsed and the Mortgage assigned as
required by Section 2.01. No substitution is permitted to be made in any
calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Qualified Substitute Mortgage Loans in the month
of substitution shall not be part of the Trust Fund and will be retained by
the Seller on the next succeeding Distribution Date. For the month of
substitution, distributions to Certificateholders will include the monthly
payment due on any Deleted Mortgage Loan for such month and thereafter the
related Seller shall be entitled to retain all amounts received in respect of
such Deleted Mortgage Loan. The related Seller shall amend the Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the removal of
such Deleted Mortgage Loan and the substitution of the Qualified Substitute
Mortgage Loan or Loans and the related Seller shall deliver the amended
Mortgage Loan Schedule to the Trustee, the Servicers and the Trust
Administrator. Upon such substitution, the Qualified Substitute Mortgage
Loan or Loans shall be subject to the terms of this Agreement in all
respects, and the related Seller shall be deemed to have made with respect to
such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to
Section 2.03(b) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Collection Account of the amount required
to be deposited therein in connection with such substitution as described in
the following paragraph, the Trustee shall instruct the Custodian to release
the Mortgage File held for the benefit of the Certificateholders relating to
such Deleted Mortgage Loan to the Seller and the Trustee shall execute and
deliver at the related Seller's direction such instruments of transfer or
assignment prepared by the Seller, in each case without recourse, as shall be
necessary to vest title in the Seller, or its designee, the Trustee's
interest in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03.
For any month in which a Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer shall determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion
of the monthly payments due in the month of substitution). The amount of
such shortage (the "Substitution Adjustment Amount") plus an amount equal to
the aggregate of any unreimbursed Advances, Servicing Advances and unpaid
Servicing Fees with respect to such Deleted Mortgage Loans shall be deposited
in the related Collection Account by the related Seller on or before the
Business Day immediately preceding the Distribution Date in the month
succeeding the calendar month during which the related Mortgage Loan became
required to be repurchased or replaced hereunder.
One or more mortgage loans may be substituted for one or more
Deleted Mortgage Loans. The determination of whether a mortgage loan is a
Qualified Substitute Mortgage Loan may be satisfied on an individual basis.
Alternatively, if more than one mortgage loan is to be substituted for one or
more Deleted Mortgage Loans, the characteristics of such mortgage loans and
Deleted Mortgage Loans shall be aggregated or calculated on a weighted
average basis, as applicable, in determining whether such mortgage loans are
Qualified Substitute Mortgage Loans.
In the event that a Seller shall be required to repurchase a
Mortgage Loan pursuant to this Agreement, the Purchase Price therefor shall
be deposited in the Collection Account on or before the Business Day
immediately preceding the Distribution Date in the month following the month
during which the Seller became obligated hereunder to repurchase or replace
such Mortgage Loan and upon such deposit of the Purchase Price, the delivery
of the Opinion of Counsel if required by Section 2.05 and receipt of a
Request for Release in the form of Exhibit J hereto, the Custodian shall
release the related Mortgage File held for the benefit of the
Certificateholders to such Person, and the Trustee shall execute and deliver
at such Person's direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, as shall be necessary
to transfer title from the Trustee. It is understood and agreed that the
obligation under this Agreement of any Person to cure, repurchase or
substitute any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against such Persons respecting
such breach available to Certificateholders, the Depositor, the Trustee or
the Trust Administrator on their behalf.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Trustee, the Trust Administrator or the Custodian for the benefit of the
Certificateholders.
SECTION 2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect to the Mortgage Loans that, as of the Closing Date, assuming good
title has been conveyed to the Depositor, the Depositor had good title to the
Mortgage Loans and Mortgage Notes, and did not encumber the Mortgage Loans
during its period of ownership thereof, other than as contemplated by the
Agreement.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the
Mortgage Files to the Custodian.
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 shall be made more than 90 days after
the Closing Date unless the related Seller delivers to the Trustee and the
Trust Administrator an Opinion of Counsel, which Opinion of Counsel shall not
be at the expense of any of the Trustee, the Trust Administrator or the Trust
Fund, addressed to the Trustee and the Trust Administrator, to the effect
that such substitution will not (i) result in the imposition of the tax on
"prohibited transactions" on the Trust Fund or contributions after the
Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively, or (ii) cause each REMIC created hereunder to fail to qualify
as a REMIC at any time that any Certificates are outstanding.
SECTION 2.06. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans together with the assignment to it of all other assets included in the
Trust Fund, receipt of which, subject to the provisions of Section 2.02(a),
is hereby acknowledged. Concurrently with such assignment and delivery and
in exchange therefor, the Trust Administrator, pursuant to the written
request of the Depositor executed by an officer of the Depositor, has
executed the Certificates and caused them to be authenticated and delivered
to or upon the order of the Depositor in authorized denominations which
evidence ownership of the Trust Fund. The rights of the Holders of such
Certificates to receive distributions from the Trust Fund and all ownership
interests of the Holders of the Certificates in such distributions shall be
as set forth in this Agreement.
SECTION 2.07. REMIC Provisions.
(a) The Depositor hereby elects and authorizes the Trust Administrator to
treat the Trust Fund as the number of separate REMICs specified in the
Preliminary Statement (each, a "REMIC") under the Code and, if necessary,
under applicable state law and apply such Preliminary Statement in
determining the rights of the Interests in REMICs thereby created. Each such
election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return (x)
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued and (y) for the taxable year ending on the last day
of the calendar year in which Certificates are first sold to a third party.
The Closing Date is hereby designated as the "startup day" of each REMIC
created hereunder within the meaning of Section 860G(a)(9) of the Code. The
"regular interests" (within the meaning of Section 860G of the Code) in each
REMIC shall consist of the regular interests with the terms set forth for
each REMIC in the Preliminary Statement and the Class AR and Class AR-L
Certificates shall represent the beneficial ownership of the "residual
interest" in each REMIC created hereunder. Neither the Depositor nor the
Trust Administrator nor the Trustee shall permit the creation of any
"interests" (within the meaning of Section 860G of the Code) in any REMIC
other than as set forth in the Preliminary Statement.
(b) The Trust Administrator as the holder of the Tax Matters Certificate,
shall act as the "tax matters person" (within the meaning of the REMIC
Provisions) for each REMIC created hereunder, in the manner provided under
Treasury regulations section 1.860F 4(d) and temporary Treasury regulations
section 301.6231(a)(7) 1T. In the event that for any reason, the Trust
Administrator is not recognized as the tax matters person then the Trust
Administrator shall act as agent for the Class AR and the Class AR-L
Certificateholder as tax matters person. By its acceptance of a Class AR or
Class AR-L Certificate, each Holder thereof shall have agreed to such
appointment and shall have consented to the appointment of the Trust
Administrator as its agent to act on behalf of each REMIC created hereunder
pursuant to the specific duties outlined herein.
(c) A Holder of the Class AR or Class AR-L Certificates, by the purchase of
such Certificates, shall be deemed to have agreed to timely pay, upon demand
by the Trust Administrator, the amount of any minimum California state
franchise taxes due with respect to each REMIC created hereunder under
Sections 23151(a) and 23153(a) of the California Revenue and Taxation Code.
Notwithstanding the foregoing, the Trust Administrator shall be authorized to
retain the amount of such tax from amounts otherwise distributable to such
Holder in the event such Holder does not promptly pay such amount upon demand
by the Trust Administrator. In the event that any other federal, state or
local tax is imposed, including without limitation taxes imposed on a
"prohibited transaction" of a REMIC as defined in Section 860F of the Code,
such tax shall be charged against amounts otherwise available for
distribution to the applicable Holder of a Class AR or Class AR-L Certificate
and then against amounts otherwise available for distribution to the Holders
of Regular Certificates in accordance with the provisions set forth in
Section 4.01. The Trust Administrator or the Trustee shall promptly deposit
in the Certificate Account any amount of "prohibited transaction" tax that
results from a breach of the Trust Administrator's or the Trustee's duties,
respectively, under this Agreement. The Master Servicer or the related
Servicer shall promptly deposit in the Certificate Account any amount of
"prohibited transaction" tax that results from a breach of the Master
Servicer's or such Servicer's duties, respectively, under this Agreement.
(d) The Trust Administrator shall act as attorney in fact and as the tax
matters person of each REMIC created hereunder and in such capacity the Trust
Administrator shall: (i) prepare, sign and file, or cause to be prepared,
signed and filed, federal and state tax returns using a calendar year as the
taxable year for each REMIC created hereunder when and as required by the
REMIC Provisions and other applicable federal income tax laws as the direct
representative of each such REMIC in compliance with the Code and shall
provide copies of such returns as required by the Code; (ii) make an
election, on behalf of each REMIC created hereunder, to be treated as a REMIC
on the federal tax return of such REMIC for its first taxable year, in
accordance with the REMIC Provisions; and (iii) prepare and forward, or cause
to be prepared and forwarded, to the Certificateholders and to any
governmental taxing authority all information reports as and when required to
be provided to them in accordance with the REMIC Provisions. The expenses of
preparing and filing such returns shall be borne by the Trust Administrator.
The Depositor, the Master Servicer and the related Servicer shall provide on
a prompt and timely basis to the Trust Administrator or its designee such
information with respect to each REMIC created hereunder as is in their
possession and reasonably required or requested by the Trust Administrator to
enable it to perform its obligations under this subsection.
In its capacity as attorney in fact and as the tax matters
person, the Trust Administrator shall also: (A) act on behalf of each REMIC
created hereunder in relation to any tax matter or controversy involving the
Trust Fund, (B) represent the Trust Fund in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto and (C) cause to be paid solely from the
sources provided herein the amount of any taxes imposed on each REMIC created
hereunder when and as the same shall be due and payable (but such obligation
shall not prevent the Trust Administrator or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trust Administrator from withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings).
(e) The Trust Administrator shall provide (i) to any transferor of a
Class AR or Class AR-L Certificate such information as is necessary for the
application of any tax relating to the transfer of a Class AR or Class AR-L
Certificate to any Person who is not a permitted transferee, (ii) to the
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 and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of each REMIC created hereunder.
(f) The Trustee, to the extent directed by the Trust Administrator, the
Depositor and the Holder of the Class AR or Class AR-L Certificates shall
take any action or cause the Trust Fund to take any action necessary to
create or maintain the status of each REMIC created hereunder as a REMIC
under the REMIC Provisions and shall assist each other as necessary to create
or maintain such status. Neither the Trustee, to the extent directed or (in
the case of a failure to act) not directed by the Trust Administrator, nor
the Holder of the Class AR or Class AR-L Certificates shall take any action,
cause the Trust Fund to take any action or fail to take (or fail to cause the
Trust Fund to take) any action that, under the REMIC Provisions, if taken or
not taken, as the case may be, could (i) endanger the status of each REMIC
created hereunder as a REMIC or (ii) result in the imposition of a tax upon a
REMIC (including, but not limited to, the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions
set forth in Section 860G(d) of the Code) (either such event, an "Adverse
REMIC Event") unless the Trustee and the Trust Administrator have received an
Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such status or
result in the imposition of such a tax.
The Trustee and the Trust Administrator shall not take or fail to
take any action (whether or not authorized hereunder) as to which the Master
Servicer, a Servicer or the Depositor has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action. In addition, prior to taking any
action with respect to a REMIC or their assets, or causing any REMIC created
hereunder to take any action, which is not expressly permitted under the
terms of this Agreement, the Trustee and the Trust Administrator will consult
with the Master Servicer, the Servicers and the Depositor or their designees,
in writing, with respect to whether such action could cause an Adverse REMIC
Event to occur with respect to any REMIC created hereunder and the Trustee
and the Trust Administrator shall not take any such action or cause that
REMIC to take any such action as to which the Master Servicer, any Servicer
or the Depositor has advised it in writing that an Adverse REMIC Event could
occur.
In addition, prior to taking any action with respect to any REMIC
created hereunder or the assets therein, or causing any REMIC created
hereunder to take any action, which is not expressly permitted under the
terms of this Agreement, the Holder of the Class AR or Class AR-L
Certificates will consult with the Trust Administrator or its designee, in
writing, with respect to whether such action could cause an Adverse REMIC
Event to occur with respect to any REMIC created hereunder, and no such
Person shall take any action or cause the Trust Fund to take any such action
as to which the Trust Administrator has advised it in writing that an Adverse
REMIC Event could occur. The Trustee and the Trust Administrator may consult
with counsel to make such written advice, and the cost of same shall be borne
by the party seeking to take action not permitted by this Agreement.
At all times as may be required by the Code, the Trust
Administrator will, to the extent within its control and the scope of its
duties more specifically set forth herein, maintain substantially all of the
assets of each REMIC created hereunder as "qualified 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
any REMIC created hereunder, as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of such REMIC, as defined in
Section 860G(c) of the Code, on any contributions to a REMIC 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 related Servicer, if such Servicer
has in its sole discretion determined to indemnify the Trust Fund against
such tax or if such tax arises out of or results from a breach of such
Servicer's duties under (x) Section 2.07(j) of this Agreement to not enter
into any arrangement by which a REMIC would receive a fee or other
compensation for services or to permit such REMIC to receive any income from
assets other than "qualified mortgages" or "permitted investments," (y)
Section 3.01 of this Agreement to not make or permit any modification, waiver
or amendment of any Mortgage Loan which would cause any REMIC created
hereunder to fail to qualify as a REMIC or result in the imposition of any
tax under Section 860F(a) or Section 860G(d) of the Code or (z)
Section 3.11(c) of this Agreement to not cause any REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or to subject any REMIC created hereunder to the imposition of any
federal, state or local income taxes on the income earned from such Mortgaged
Property under Section 860G(c) of the Code of otherwise, (ii) to the Master
Servicer, if such tax arises out of or results from a breach by the Master
Servicer of any of its obligations under this Agreement or if the Master
Servicer has in its sole discretion determined to indemnify the Trust Fund
against such tax, (iii) to the Trust Administrator, if such tax arises out of
or results from a breach by the Trust Administrator of any of its obligations
under this Article II, (iv) to the Trustee, if such tax arises out of or
results from a breach by the Trustee of any of its obligations under this
Article II or (v) otherwise against amounts on deposit in the Collection
Account as provided by Section 3.08 and on the Distribution Date(s) following
such reimbursement the aggregate of such taxes shall be allocated in
reduction of the Interest Distribution Amount on each Class entitled thereto
in the same manner as if such taxes constituted a Prepayment Interest
Shortfall.
In accordance with Section 2.07(c), the related Servicer, the
Master Servicer, the Trustee or the Trust Administrator, as applicable, shall
promptly deposit in the Certificate Account or Collection Account, as
applicable, any amount of such tax.
For purposes of this Section 2.07(g), a tax is imposed following
the final and unappealable determination under the Code of the amount of such
tax and written notice thereof by the Tax Matters Person to the party to be
charged.
The failure of the Master Servicer or the related Servicer to
promptly deposit in the Certificate Account or Collection Account, as
applicable, any amount of such tax shall be an Event of Default, as provided
in Section 8.01(b).
(h) The Trust Administrator shall, for federal income tax purposes,
maintain books and records with respect to each REMIC created hereunder on a
calendar year and on an accrual basis or as otherwise may be required by the
REMIC Provisions.
(i) Following the Startup Day, none of any Servicer, the Trustee (which
will act only at the direction of the Trust Administrator or as otherwise
specifically provided in this Agreement) or the Trust Administrator shall
accept any contributions of assets to any REMIC created hereunder unless
(subject to Section 2.05) such Servicer, the Trustee or the Trust
Administrator shall have received an Opinion of Counsel (at the expense of
the party seeking to make such contribution) to the effect that the inclusion
of such assets in a REMIC will not cause that REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding, or subject that
REMIC to any tax under the REMIC Provisions or other applicable provisions of
federal, state and local law or ordinances.
(j) None of any Servicer, the Trustee (which will act only at the direction
of the Trust Administrator or as otherwise specifically provided in this
Agreement) or the Trust Administrator shall (subject to Section 2.05) enter
into any arrangement by which a REMIC will receive a fee or other
compensation for services nor permit such 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.
(k) Within 30 days after the Closing Date, the Trust Administrator shall
apply to the Internal Revenue Service for an employer identification number
for each REMIC created hereunder by means of a Form SS-4 or other acceptable
means and prepare and file with the Internal Revenue Service Form 8811,
"Information Return for Real Estate Mortgage Investment Conduits (REMIC) and
Issuers of Collateralized Debt Obligations" for each REMIC created hereunder.
(l) None of the Trustee (which will act only at the direction of the Trust
Administrator or as otherwise specifically provided in this Agreement), the
Trust Administrator, the Master Servicer or any Servicer shall sell, dispose
of or substitute for any of the Mortgage Loans (except in connection with (i)
the default, imminent default or 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 any REMIC created
hereunder, (iii) the termination of any REMIC created hereunder pursuant to
Article X of this Agreement or (iv) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement) nor acquire any assets for a REMIC, nor
sell or dispose of any investments in the Collection Account or the
Certificate Account for gain nor accept any contributions to a REMIC after
the Closing Date (a) unless it has received an Opinion of Counsel that such
sale, disposition, substitution or acquisition will not affect adversely the
status of any REMIC created hereunder as a REMIC or (b) unless the Master
Servicer or such Servicer has determined in its sole discretion to indemnify
the Trust Fund against such tax.
(m) In order to enable the Trust Administrator to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided to the
Trust Administrator, within ten days after the Closing Date, all information
or data the Trust Administrator determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of the Certificates and the Mortgage Loans and the Trust Administrator shall
be entitled to rely upon any and all such information and data in the
performance of its duties set forth herein. Thereafter, the Master Servicer
shall provide, promptly upon request therefor, any such additional
information or data that the Trustee or the Trust Administrator may from time
to time reasonably request in order to enable the Trustee and the Trust
Administrator to perform their duties as set forth herein and the Trustee and
the Trust Administrator shall be entitled to rely upon any and all such
information and data in the performance of its duties set forth herein.
DLJMC shall indemnify the Trust Administrator and hold it harmless for any
loss, liability, damage, claim or expense of the Trust Administrator arising
from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trust Administrator on a timely basis.
The Master Servicer shall indemnify the Trustee and the Trust Administrator
and hold it harmless for any loss, liability, damage, claim or expense of the
Trustee and the Trust Administrator arising from any failure of the Master
Servicer to provide, or to cause to be provided, accurate information or data
required to be provided by the Master Servicer to the Trustee and the Trust
Administrator on a timely basis; provided, however, that if any Servicer
shall fail to provide such information to the Master Servicer upon timely
request for such information by the Master Servicer, that Servicer shall
indemnify the Master Servicer, the Trustee and the Trust Administrator and
hold it harmless for any loss, liability, damage, claim or expense of the
Master Servicer, the Trustee and the Trust Administrator arising from any
failure of that Servicer to provide, or to cause to be provided, the
information referred to above on a timely basis. The indemnification
provisions hereunder shall survive the termination of this Agreement and
shall extend to any co-trustee and co-Trust Administrator appointed pursuant
to this Agreement.
(n) The Trust Administrator shall treat the Basis Risk Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation 1.860G 2(h)
that is owned by the Holders of the Class X Certificates and that is not an
asset of any REMIC created hereunder. The Trust Administrator shall account
for the rights of the Holders of the LIBOR Certificates to receive payments
from the Basis Risk Reserve Fund as rights in an interest rate cap contract
written by the Class X Certificateholders in favor of the Holders of the
LIBOR Certificates and not as an obligation of REMIC III, whose obligation to
pay such Certificates will be subject to a cap equal to the Group 1 Net Funds
Rate and shall account for such rights as property held separate and apart
from the regular interests as required by Treasury regulation section
1.860G-2(i). Any amounts transferred to the Basis Risk Reserve Fund by
REMIC III shall be treated as a distribution to the Class X Certificates. In
addition, the Class X Certificateholders shall be deemed to have entered into
a contractual arrangement with the Class AR and Class AR-L Certificateholders
whereby the Class AR and Class AR-L Certificateholders agree to pay to the
Class X Certificateholders on each Distribution Date amounts that would, in
the absence of such contractual agreement, be distributable with respect to
the residual interest in REMIC III pursuant to Section 4.08(b) and (e) (which
amounts are expected to be zero). Thus the Holders of the LIBOR Certificates
shall be treated as representing ownership of not only REMIC III regular
interests, but also ownership of an interest in an interest rate cap
contract. Each Class X Certificate shall represent an obligation under an
interest rate cap contract. For purposes of determining the issue price of
REMIC III regular interests, the Trust Administrator shall assume that the
interest rate cap contract has a value of $5,000.
SECTION 2.08. Covenants of the Master Servicer and each Servicer.
The Master Servicer and each Servicer, severally and not jointly,
hereby covenants to the Depositor, the Trustee and the Trust Administrator as
follows:
(a) Such Servicer or the Master Servicer shall comply in the performance of
its obligations under this Agreement with all reasonable rules and
requirements of the insurer under each Mortgage Guaranty Insurance Policy; and
(b) No written information, certificate of an officer, statement furnished
in writing or written report delivered to the Depositor, any affiliate of the
Depositor, the Trustee or the Trust Administrator and prepared by the Master
Servicer or such Servicer pursuant to this Agreement will contain any untrue
statement of a material fact.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicers to Service Mortgage Loans.
For and on behalf of the Certificateholders, as independent
contractors of the Trust, (i) each Servicer, severally and not jointly, shall
service and administer the related Non-Designated Mortgage Loans in
accordance with the terms of this Agreement and with Accepted Servicing
Practices, (ii) the Master Servicer shall, in accordance with Section 3.03 of
this Agreement, master service and administer the Non-Designated Mortgage
Loans by overseeing and enforcing the servicing of the Non-Designated
Mortgage Loans by the related Servicer according to the terms of this
Agreement and (iii) the Master Servicer shall, in accordance with the
Section 3.22 of this Agreement, master service and administer the Designated
Mortgage Loans by overseeing and enforcing the servicing of the Designated
Mortgage Loans by the Designated Servicer according to the terms of the
Designated Servicing Agreement. The obligations of each of SPS and Xxxxx
Fargo hereunder to service and administer the Mortgage Loans shall be limited
to the SPS Serviced Mortgage Loans and Xxxxx Fargo Serviced Mortgage Loans,
respectively; and with respect to the duties and obligations of each
Servicer, references herein to related "Mortgage Loans" shall be limited to
the SPS Serviced Mortgage Loans (and the related proceeds thereof and related
REO Properties) in the case of SPS, and the Xxxxx Fargo Serviced Mortgage
Loans (and the related proceeds thereof and related REO Properties) in the
case of Xxxxx Fargo; and in no event shall any Servicer have any
responsibility or liability with respect to any of the other Mortgage Loans.
The Master Servicer is obligated to master service and administer the
Non-Designated Mortgage Loans. In connection with such servicing and
administration of the Non-Designated Mortgage Loans, the Master Servicer and
each Servicer shall have full power and authority, acting alone and/or
through Subservicers as provided in Section 3.02 hereof, to do or cause to be
done any and all things that it may deem necessary or desirable in connection
with such servicing and administration, including but not limited to, the
power and authority, subject to the terms hereof (i) to execute and deliver,
on behalf of the Certificateholders and the Trust, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages (but only in the manner provided in this Agreement), (iii) to
collect any Insurance Proceeds and other Liquidation Proceeds, and (iv) to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that neither the Master
Servicer nor a Servicer shall take any action that is inconsistent with or
prejudices the interests of the Trust Fund or the Certificateholders in any
Mortgage Loan or the rights and interests of the Depositor, the Trustee, the
Trust Administrator or the Certificateholders under this Agreement. The
Master Servicer and each Servicer shall represent and protect the interests
of the Trust Fund in the same manner as it protects its own interests in
mortgage loans in its own portfolio in any claim, proceeding or litigation
regarding a Mortgage Loan, and shall not make or permit any modification,
waiver or amendment of any Mortgage Loan that would cause any REMIC created
hereunder to fail to qualify as a REMIC or result in the imposition of any
tax under Section 860F(a) or Section 860G(d) of the Code. Without limiting
the generality of the foregoing, the Master Servicer and each Servicer, in
its own name or in the name of the Depositor and the Trust, is hereby
authorized and empowered by the Depositor, the Trust and the Trust
Administrator, when the Master Servicer or such Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of
the Trust, the Trustee, the Trust Administrator, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with respect
to the Mortgaged Properties held for the benefit of the Certificateholders.
The Master Servicer and each Servicer shall prepare and deliver to the
Depositor and/or the Trustee and/or the Trust Administrator such documents
requiring execution and delivery by either or both of them as are necessary
or appropriate to enable the Master Servicer or such Servicer to master
service and administer or service and administer the Mortgage Loans, as
applicable, to the extent that the Master Servicer or such Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee
or the Trust Administrator shall execute such documents and deliver them to
the Master Servicer or such Servicer.
In accordance with the standards of the first paragraph of this
Section 3.01 and unless determined in good faith to be a Nonrecoverable
Advance, each 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 related to the Non-Designated Mortgage Loans,
which advances constitute Servicing Advances and shall be reimbursable in the
first instance from related collections from the Mortgagors pursuant to
Section 3.06, and further as provided in Section 3.08. In no event will any
Servicer be required to make any Servicing Advance which would constitute a
Nonrecoverable Advance. The costs incurred by a Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties related to the Non-Designated Mortgage Loans and related insurance
premiums shall not, for the purpose of calculating monthly distributions to
the Certificateholders, be added to the Stated Principal Balances of the
related Non-Designated Mortgage Loans, notwithstanding that the terms of such
Non-Designated Mortgage Loans so permit.
Each Servicer hereby acknowledges that, to the extent such
Servicer has previously serviced some or all of the Non-Designated Mortgage
Loans pursuant to another servicing agreement, the provisions contained in
this Agreement shall supersede the provisions contained in such other
servicing agreement from and after the Closing Date, except as specifically
provided in the related Servicer Letter Agreement. In addition, the Master
Servicer hereby acknowledges that, to the extent the Master Servicer or the
Designated Servicer has previously serviced some or all of the Designated
Mortgage Loans pursuant to another servicing agreement, the provisions
contained in the Designated Servicing Agreement shall supersede the
provisions contained in such other servicing agreement from and after the
Closing Date.
Notwithstanding anything to the contrary in this Agreement, with
respect to any action which according to the terms of this Agreement is to be
performed by the Master Servicer and the applicable Servicer, the related
Servicer shall have an obligation to perform such action, and the Master
Servicer in its capacity as successor servicer shall also have an obligation
to perform such action, but only if the related Servicer fails to do so.
Notwithstanding anything in this Agreement to the contrary, the
purchase of any Xxxxx Fargo Serviced Mortgage Loan by any Person shall be
subject to the rights of Xxxxx Fargo to continue servicing such Xxxxx Fargo
Serviced Mortgage Loan for the same servicing fee substantially in accordance
with the terms of this Agreement.
With respect to each Mortgage Loan, the related Servicer will
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company, on a monthly basis.
Each Servicer is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name or in the
name of any Subservicer, when a Servicer or any Subservicer, as the case may
be, believes it appropriate in its best judgment to register any related
Mortgage Loan on the MERS® System, or cause the removal from the registration
of such Mortgage Loan on the MERS® System, to execute and deliver, on behalf
of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with respect to
such assignment or re-recording of a Mortgage in the name of MERS, solely as
nominee for the Trustee and its successors and assigns.
SECTION 3.02. Subservicing; Enforcement of the Obligations of
Subservicers.
(a) The Non-Designated Mortgage Loans may be subserviced by a Subservicer
on behalf of the related Servicer in accordance with the servicing provisions
of this Agreement, provided that the Subservicer is a FNMA-approved lender or
a FHLMC seller/servicer in good standing. With respect to the Non-Designated
Mortgage Loans, each Servicer may perform any of its servicing
responsibilities hereunder or may cause the Subservicer to perform any such
servicing responsibilities on its behalf, but the use by such Servicer of the
Subservicer shall not release such Servicer from any of its obligations
hereunder and such Servicer shall remain responsible hereunder for all acts
and omissions of the Subservicer as fully as if such acts and omissions were
those of such Servicer. With respect to the Non-Designated Mortgage Loans,
each Servicer shall pay all fees and expenses of any Subservicer engaged by
such Servicer from its own funds.
Notwithstanding the foregoing, with respect to the Non-Designated
Mortgage Loans, each Servicer shall be entitled to outsource one or more
separate servicing functions to a Person (each, an "Outsourcer") that does
not meet the eligibility requirements for a Subservicer, so long as such
outsourcing does not constitute the delegation of such Servicer's obligation
to perform all or substantially all of the servicing of the related
Non-Designated Mortgage Loans to such Outsourcer. In such event, the use by
a Servicer of any such Outsourcer shall not release the related Servicer from
any of its obligations hereunder and such Servicer shall remain responsible
hereunder for all acts and omissions of such Outsourcer as fully as if such
acts and omissions were those of such Servicer, and such Servicer shall pay
all fees and expenses of the Outsourcer from such Servicer's own funds.
Each Servicer may in connection with its duties as Servicer
hereunder enter into transactions with any of its Affiliates relating to the
Non-Designated Mortgage Loans; provided that (a) such Servicer acts (i) in
accordance with Accepted Servicing Practices and the terms of this Agreement,
and (ii) in the ordinary course of business of such Servicer; and (b) the
terms of such transaction are no less favorable to such Servicer than it
would obtain in a comparable arm's-length transaction with a Person that is
not an Affiliate of such Servicer. Notwithstanding the preceding sentence,
any such transaction between a Servicer and any of its Affiliates shall not
release such Servicer from any of its obligations hereunder and such Servicer
shall remain responsible hereunder for all acts and omissions of such
Affiliate with respect to such Mortgage Loans serviced by it as fully as if
such acts and omissions were those of such Servicer. Any fees and expenses
relating to such transaction between such Servicer and its Affiliate that are
not otherwise reimbursable to such Servicer pursuant to this Agreement shall
be borne by the parties thereto and shall not be an expense or fee of the
Trust, the Depositor, the Trustee, the Trust Administrator, the Seller or the
Master Servicer.
(b) With respect to any Non-Designated Mortgage Loans, at the cost and
expense of a Servicer, without any right of reimbursement from the Depositor,
the Trustee, the Trust Administrator or the applicable Collection Account,
such Servicer shall be entitled to terminate the rights and responsibilities
of its Subservicer and arrange for any servicing responsibilities to be
performed by a successor Subservicer meeting the requirements set forth in
Section 3.02(a), provided, however, that nothing contained herein shall be
deemed to prevent or prohibit such Servicer, at such Servicer's option, from
electing to service the related Non-Designated Mortgage Loans itself. In the
event that a Servicer's responsibilities and duties under this Agreement are
terminated pursuant to Section 8.01, and if requested to do so by the Trustee
or Trust Administrator or such Servicer shall, at its own cost and expense
terminate the rights and responsibilities of its Subservicer as soon as is
reasonably possible. Each Servicer shall pay all fees, expenses or penalties
necessary in order to terminate the rights and responsibilities of its
Subservicer from such Servicer's own funds without any right of reimbursement
from the Depositor, Trustee, Trust Administrator, or the applicable
Collection Account.
(c) Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and its Subservicer or a
Servicer and its Outsourcer, or any reference herein to actions taken through
the Subservicer, the Outsourcer, or otherwise, the related Servicer shall not
be relieved of its obligations to the Depositor, the Trust, Trustee, the
Trust Administrator or Certificateholders and shall be obligated to the same
extent and under the same terms and conditions as if it alone were servicing
and administering the related Non-Designated Mortgage Loans. Each Servicer
shall be entitled to enter into an agreement with its Subservicer and
Outsourcer for indemnification of such Servicer by such Subservicer or
Outsourcer, as applicable, and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
For purposes of this Agreement, a Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
related Non-Designated Mortgage Loans that are received by a related
Subservicer regardless of whether such payments are remitted by the
Subservicer to such Servicer.
Any Subservicing Agreement and any other transactions or services
relating to the Non-Designated Mortgage Loans involving a Subservicer shall
be deemed to be between the Subservicer, and the related Servicer alone, and
the Depositor, the Trustee, the Trust Administrator, the Master Servicer, the
other Servicers and the Special Servicer shall have no obligations, duties or
liabilities with respect to a Subservicer including no obligation, duty or
liability of the Depositor, Trustee, the Trust Administrator, the Master
Servicer, the Special Servicer or other Servicers to pay a Subservicer's fees
and expenses.
(d) SPS is hereby authorized to enter into a financing or other facility
(any such arrangement, a "Facility") under which (i) SPS assigns or pledges
to another person (a "Lender") (A) SPS's rights under this Agreement to be
reimbursed for any Advances or Servicing Advances, and (B) any and all rights
of SPS under this Agreement resulting from SPS's performance of its
obligations under this Agreement, including, without limitation, any
Servicing Fees, interest income, Ancillary Income, and other payments
received by SPS for servicing the SPS Serviced Mortgage Loans and (ii) the
Lender agrees to fund some or all Advances and/or Servicing Advances required
to be made by SPS pursuant to this Agreement. No consent of the Trustee,
Trust Administrator, Certificateholders or any other party is required before
SPS may enter into a Facility; provided, however, that the consent of the
Trust Administrator shall be required before SPS may cause to be outstanding
at one time more than one Facility. Notwithstanding the existence of any
Facility, SPS shall remain obligated pursuant to this Agreement to make
Advances and Servicing Advances pursuant to and as required by this
Agreement, and to perform all duties and obligations of SPS under this
Agreement and shall not be relieved of such obligations by virtue of such
Facility.
(e) The Special Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, a "Facility") under which (i) the
Special Servicer assigns or pledges to another person (a "Lender") (A) the
Special Servicer's rights under this Agreement to be reimbursed for any
Advances or Servicing Advances, and (B) any and all rights of the Special
Servicer under this Agreement resulting from the Special Servicer's
performance of its obligations under this Agreement, including, without
limitation, any Servicing Fees, interest income, Ancillary Income, and other
payments received by the Special Servicer for servicing the Mortgage Loans
and (ii) the Lender agrees to fund some or all Advances and/or Servicing
Advances required to be made by the Special Servicer pursuant to this
Agreement. No consent of the Trustee, Trust Administrator,
Certificateholders or any other party is required before the Special Servicer
may enter into a Facility; provided, however, that the consent of the Trust
Administrator shall be required before the Special Servicer may cause to be
outstanding at one time more than one Facility. Notwithstanding the
existence of any Facility, the Special Servicer shall remain obligated
pursuant to this Agreement to make Advances and Servicing Advances pursuant
to and as required by this Agreement, and to perform all duties and
obligations of the Special Servicer under this Agreement and shall not be
relieved of such obligations by virtue of such Facility.
SECTION 3.03. Master Servicing by Master Servicer.
For and on behalf of the Certificateholders, the Master Servicer
shall oversee and enforce the obligation of Xxxxx Fargo and SPS to service
and administer the Xxxxx Fargo Serviced Mortgage Loans and SPS Serviced
Mortgage Loans, respectively, in accordance with the terms of this Agreement
and shall have full power and authority to do any and all things which it may
deem necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with this Agreement and with customary and
usual standards of practice of prudent mortgage loan master servicers.
Furthermore, the Master Servicer shall oversee and consult with Xxxxx Fargo
and SPS as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by Xxxxx Fargo and
SPS and shall cause each of Xxxxx Fargo and SPS to perform and observe the
covenants, obligations and conditions to be performed or observed by such
Servicer under this Agreement.
With respect to any Distribution Date, no later than the related
Cash Remittance Date, the Master Servicer shall remit to the Trust
Administrator for deposit in the Certificate Account the amount of the
Compensating Interest Payment for the Master Servicer, with respect to the
Xxxxx Fargo Serviced Mortgage Loans, SPS Serviced Mortgage Loans and the
Designated Mortgage Loans, for the related Prepayment Period to the extent
Xxxxx Fargo, SPS or the Designated Servicer default in their obligation to
make such Compensating Interest Payment pursuant to Section 3.05. The
aggregate of such deposits shall be made from the Master Servicer's own
funds, without reimbursement therefor.
SECTION 3.04. Trustee to Act as Master Servicer or Servicer.
In the event that (A) the Master Servicer shall for any reason no
longer be Master Servicer hereunder or (B) any Servicer shall for any reason
no longer be a Servicer hereunder and, with respect to any Servicer, the
Master Servicer shall for any reason no longer be Master Servicer hereunder
(including, in each case, by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Master Servicer or such Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer or such
Servicer pursuant to Section 3.09 hereof or any acts or omissions of the
related predecessor of the Master Servicer or such Servicer hereunder, (ii)
obligated to make Advances if it is prohibited from doing so by applicable
law, (iii) obligated to effectuate repurchases or substitutions of Mortgage
Loans hereunder including, but not limited to, repurchases or substitutions
of Mortgage Loans pursuant to Section 2.02 or 2.03 hereof or (iv) deemed to
have made any representations and warranties of the Master Servicer or such
Servicer hereunder). Any such assumption shall be subject to Section 8.02
hereof.
Each Servicer shall, upon request of the Trust Administrator, but
at the expense of such Servicer, deliver to the assuming party all documents
and records relating to each Subservicing Agreement or substitute
Subservicing Agreement and the Mortgage Loans then being serviced thereunder
and hereunder by such Servicer and an accounting of amounts collected or held
by it and otherwise use its best efforts to effect the orderly and efficient
transfer of the Subservicing Agreement or substitute Subservicing Agreement
to the assuming party.
SECTION 3.05. Collection of Mortgage Loans; Collection Accounts;
Certificate Account.
(a) Continuously from the date hereof until the principal and interest on
all Non-Designated Mortgage Loans have been paid in full or such
Non-Designated Mortgage Loans have become Liquidated Mortgage Loans, each
Servicer shall proceed in accordance with Accepted Servicing Practices to
collect all payments due under each of the related Non-Designated Mortgage
Loans when the same shall become due and payable to the extent consistent
with this Agreement and the terms and provisions of any related Mortgage
Guaranty Insurance Policy and shall take special care with respect to the
Non-Designated Mortgage Loans for which a Servicer collects escrow payments
in ascertaining and estimating Escrow Payments and all other charges that
will become due and payable with respect to the Non-Designated Mortgage Loans
and the related Mortgaged Properties, to the end that the installments
payable by the related Mortgagors will be sufficient to pay such charges as
and when they become due and payable. Consistent with the foregoing, in
connection with Non-Designated Mortgage Loans which it is directly servicing,
each Servicer may in its discretion (i) waive any late payment charge or any
prepayment charge or penalty interest in connection with the prepayment of a
Non-Designated Mortgage Loan and (ii) extend the Due Dates for payments due
on a Mortgage Note for a period not greater than 180 days; provided, however,
that no such Servicer can extend the maturity of any such Non-Designated
Mortgage Loan past the date on which the final payment is due on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any such
arrangement, the related Servicer shall make Advances on the related
Non-Designated Mortgage Loans in accordance with the provisions of
Section 5.01 during the scheduled period in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. No Servicer shall be required to institute or join in
litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required is prohibited by applicable law.
(b) Each Servicer shall segregate and hold all funds collected and received
pursuant to a Non-Designated Mortgage Loan separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Collection Accounts, in the form of time deposit or demand accounts, titled
"[Servicer's name], in trust for the Holders of Adjustable Rate Mortgage
Trust 2004-3, Adjustable Rate Mortgage-Backed Pass-Through Certificates,
Series 2004-3" or, if established and maintained by a Subservicer on behalf
of a Servicer, "[Subservicer's name], in trust for [Servicer's name]" or
"[Subservicer's name], as agent, trustee and/or bailee of principal and
interest custodial account for [Servicer's name], its successors and assigns,
for various owners of interest in [Servicer's name] mortgage-backed pools.
In the event that a Subservicer employs a subservicer, the Collection Account
shall be titled "[name of Subservicer's subservicer], in trust for
[Subservicer's name]." Each Collection Account maintained by each Servicer
(other than Xxxxx Fargo), shall be an Eligible Account acceptable to the
Depositor and the Trust Administrator. Each Collection Account maintained by
Xxxxx Fargo shall be an Eligible Account. Funds deposited in a Collection
Account may be drawn on by the related Servicer in accordance with
Section 3.08. Any funds deposited in a Collection Account shall either be
invested in Eligible Investments or at all times be fully insured to the full
extent permitted under applicable law.
(c) Each Servicer shall deposit in the applicable Collection Account on a
daily basis, unless otherwise indicated, and retain therein, the following
collections remitted by Subservicers or payments received by such Servicer
and payments made by such Servicer subsequent to the Cut-off Date, other than
payments of principal and interest due on or before the Cut-off Date:
(i) all payments on account of principal on the related Non-Designated
Mortgage Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the related Non-Designated
Mortgage Loans adjusted to the per annum rate equal to the Mortgage
Rate reduced by the sum of the related Expense Fee Rate, as applicable;
(iii) all Liquidation Proceeds on the related Non-Designated Mortgage Loans;
(iv) all Insurance Proceeds on the related Non-Designated Mortgage Loans
including amounts required to be deposited pursuant to Section 3.09
(other than proceeds to be held in the Escrow Account and applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 3.09);
(v) all Advances made by such Servicer pursuant to Section 5.01;
(vi) no later than the withdrawal from the Collection Account pursuant to
Section 3.08(a)(viii) each month, the applicable amount of the
Compensating Interest Payment for such Servicer for the related
Prepayment Period. The aggregate of such deposits shall be made from
such Servicer's own funds, without reimbursement therefore;
(vii) any amounts required to be deposited by such Servicer in respect of net
monthly income from REO Property related to any Non-Designated Mortgage
Loan pursuant to Section 3.11; and
(viii) any other amounts required to be deposited hereunder.
The foregoing requirements for deposit into each Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, with respect to the Non-Designated
Mortgage Loans, Ancillary Income need not be deposited by such Servicer into
such Collection Account. In addition, notwithstanding the provisions of this
Section 3.05, each Servicer may deduct from amounts received by it, prior to
deposit into the applicable Collection Account, any portion of any Scheduled
Payment representing (i) the applicable Servicing Fee and (ii) with respect
to each Non-Designated Mortgage Loan covered by a Lender Paid Mortgage
Guaranty Insurance Policy, any amounts required to effect timely payment of
the premiums on such Mortgage Guaranty Insurance Policy pursuant to
Section 3.09(c). In the event that a Servicer shall remit any amount not
required to be remitted, it may at any time withdraw or direct the
institution maintaining the related Collection Account to withdraw such
amount from such Collection Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the Trustee or such other institution
maintaining such Collection Account which describes the amounts deposited in
error in such Collection Account. Each Servicer shall maintain adequate
records with respect to all withdrawals made by it pursuant to this Section.
All funds deposited in a Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08(a).
(d) On or prior to the Closing Date, the Trust Administrator shall
establish and maintain, on behalf of the Certificateholders, the Certificate
Account. The Trust Administrator shall, promptly upon receipt, deposit in
the Certificate Account and retain therein the following:
(i) the aggregate amount remitted by each Servicer of Non-Designated
Mortgage Loans to the Trust Administrator pursuant to
Section 3.08(a)(viii) and (b) the aggregate amount remitted by the
Designated Servicer to the Master Servicer or Trust Administrator
pursuant to the Designated Servicing Agreement;
(ii) any amount deposited by the Trust Administrator pursuant to
Section 3.05(e) in connection with any losses on Eligible Investments;
and
(iii) all Compensating Interest Payments remitted by the Master Servicer to
the Trust Administrator pursuant to Section 3.03 and Section 3.22(b);
(iv) all Advances remitted by the Master Servicer to the Trust Administrator
pursuant to Section 5.01 and Section 3.22(b); and
(v) any other amounts deposited hereunder which are required to be
deposited in the Certificate Account.
In the event that the Master Servicer or a Servicer shall remit
to the Trust Administrator any amount not required to be remitted, the Master
Servicer or such Servicer, as applicable, may at any time direct the Trust
Administrator to withdraw such amount from the Certificate Account, any
provision herein to the contrary notwithstanding. Such direction may be
accomplished by delivering an Officer's Certificate to the Trust
Administrator which describes the amounts deposited in error in the
Certificate Account. All funds deposited in the Certificate Account shall be
held by the Trust Administrator in trust for the Certificate holders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.08(b). In no event shall the Trust Administrator incur liability
for withdrawals from the Certificate Account at the direction of the Master
Servicer or any Servicer.
(e) Each institution at which a Collection Account or the Certificate
Account is maintained shall either hold such funds on deposit uninvested or
shall invest the funds therein as directed in writing by the related Servicer
or the Trust Administrator, respectively, in Eligible Investments, which
shall mature not later than (i) in the case of a Collection Account, the Cash
Remittance Date and (ii) in the case of the Certificate Account, the Business
Day immediately preceding the Distribution Date, or on the Distribution Date,
with respect to Eligible Investments invested with an affiliate of the Trust
Administrator, and, in each case, shall not be sold or disposed or prior to
its maturity. All income and gain net of any losses realized from any such
balances or investment of funds on deposit in a Collection Account shall be
for the benefit of the related Servicer as servicing compensation and shall
be remitted to it monthly as provided herein. The amount of any realized
losses in a Collection Account incurred in any such account in respect of any
such investments shall promptly be deposited by the related Servicer in the
related Collection Account. Neither the Trustee nor the Trust Administrator
shall be liable for the amount of any loss incurred in respect of any
investment or lack of investment of funds held in a Collection Account and
made in accordance with this Section 3.05. All income and gain net of any
losses realized from any such investment of funds on deposit in the
Certificate Account shall be for the benefit of the Trust Administrator as
compensation and shall be remitted to it monthly as provided herein. The
amount of any realized losses in the Certificate Account incurred in any such
account in respect of any such investments shall promptly be deposited by the
Trust Administrator in the Certificate Account.
(f) Each Servicer, other than Xxxxx Fargo, shall give notice to the
Trustee, the Trust Administrator, each related Seller, each Rating Agency,
and the Depositor of any proposed change of the location of the related
Collection Account prior to any change thereof. Xxxxx Fargo shall give
notice to the Depositor of any proposed change of the location of the related
Collection Account prior to any change thereof and, upon receipt of such
notice, the Depositor shall give notice to the Trustee, the Trust
Administrator, each related Seller and each Rating Agency. The Trust
Administrator shall give notice to the Master Servicer and each Servicer,
each Seller, each Rating Agency, the Trustee and the Depositor of any
proposed change of the location of the Certificate Account prior to any
change thereof.
SECTION 3.06. Establishment of and Deposits to Escrow Accounts; Permitted
Withdrawals from Escrow Accounts; Payments of
Taxes, Insurance and Other Charges.
(a) To the extent required by the related Mortgage Note and not violative
of applicable law, the applicable Servicer shall segregate and hold all funds
collected and received pursuant to a Non-Designated Mortgage Loan
constituting Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Escrow Accounts,
in the form of time deposit or demand accounts, titled, in the case of
Servicers other than SPS and Xxxxx Fargo, "Adjustable Rate Mortgage Trust
2004-3, Adjustable Rate Mortgage-Backed Pass Through Certificates, Series
2004-3," in the case of Xxxxx Fargo, "Xxxxx Fargo Bank, N.A., as Servicer for
Adjustable Rate Mortgage Trust 2004-3, Adjustable Rate Mortgage-Backed Pass
Through Certificates, Series 2004-3," in the case of SPS, "SPS Capital
Corp., as Servicer for Adjustable Rate Mortgage Trust 2004-3, Adjustable Rate
Mortgage-Backed Pass Through Certificates, Series 2004-3" or, if established
and maintained by a Subservicer on behalf of a Servicer, "[Subservicer's
name], in trust for [Servicer's name]" or "[Subservicer's name], as agent,
trustee and/or bailee of taxes and insurance custodial account for
[Servicer's name], its successors and assigns, for various owners of interest
in [Servicer's name] mortgage backed pools. In the event that a Subservicer
employs a subservicer, the Escrow Accounts shall be titled "[name of
Subservicer's subservicer] in trust for [Subservicer's name]. The Escrow
Accounts shall be Eligible Accounts. Funds deposited in the Escrow Account
may be drawn on by the related Servicer in accordance with Section 3.06(d).
(b) Each Servicer shall deposit or cause to be deposited in its Escrow
Account or Accounts on a daily basis within two Business Days of receipt and
retain therein:
(i) all Escrow Payments collected on account of the related Non-Designated
Mortgage Loans, for the purpose of effecting timely payment of any such
items as required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds which are to be applied to
the restoration or repair of any Mortgaged Property related to a
Non-Designated Mortgage Loan.
(c) Each Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06(d). Each Servicer shall be entitled to retain any interest paid
on funds deposited in the related Escrow Account by the depository
institution, other than interest on escrowed funds required by law to be paid
to the Mortgagor. To the extent required by law, the applicable Servicer
shall pay interest on escrowed funds to the Mortgagor notwithstanding that
the Escrow Account may be non interest bearing or that interest paid thereon
is insufficient for such purposes.
(d) Withdrawals from the Escrow Account or Accounts may be made or caused
to be made by the related Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments, water
rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage;
(ii) to reimburse such Servicer for any Servicing Advances made by the such
Servicer with respect to a related Non-Designated Mortgage Loan, but
only from amounts received on the related Non-Designated Mortgage Loan
which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Non-Designated Mortgage
Loan;
(iv) for transfer to the related Collection Account to reduce the principal
balance of the related Non-Designated Mortgage Loan in accordance with
the terms of the related Mortgage and Mortgage Note;
(v) for application to restore or repair of the Mortgaged Property related
to a Non-Designated Mortgage Loan in accordance with the procedures
outlined in Section 3.09(e);
(vi) to pay to the related Servicer, or any Mortgagor related to a
Non-Designated Mortgage Loan to the extent required by law, any
interest paid on the funds deposited in such Escrow Account;
(vii) to clear and terminate such Escrow Account on the termination of this
Agreement; and
(viii) to remove funds inadvertently placed in the Escrow account by the
related Servicer.
(e) With respect to each Non-Designated Mortgage Loan, the applicable
Servicer shall maintain accurate records reflecting the status of ground
rents and taxes and any other item which may become a lien senior to the lien
of the related Mortgage and the status of Mortgage Guaranty Insurance Policy
premiums, and fire and hazard insurance coverage and shall obtain, from time
to time, all bills for the payment of such charges (including renewal
premiums) and shall effect or cause to be effected payment thereof prior to
the applicable penalty or termination date.
SECTION 3.07. Access to Certain Documentation and Information Regarding
the Non-Designated Mortgage Loans; Inspections.
(a) The Master Servicer and each Servicer shall afford the Depositor, the
Trustee and the Trust Administrator reasonable access to all records and
documentation regarding the Non-Designated Mortgage Loans and all accounts,
insurance information and other matters relating to this Agreement, such
access being afforded without charge, but only upon reasonable written
request and during normal business hours at the office designated by the
Master Servicer or such Servicer. In addition, each Servicer shall afford
the Master Servicer reasonable access to all records and documentation
regarding the Non-Designated Mortgage Loans and all accounts, insurance
information and other matters relating to this Agreement, such access being
afforded without charge, but only upon reasonable written request and during
normal business hours at the office designated by such Servicer. In
addition, each Servicer shall provide to the Special Servicer reasonable
access to all records and documentation regarding the Non-Designated Mortgage
Loans serviced by it that become Special Serviced Mortgage Loans.
(b) Each Servicer, separately with respect to the Non-Designated Mortgage
Loans each directly services, shall inspect the related Mortgaged Properties
as often as deemed necessary by such Servicer in such party's sole
discretion, to assure itself that the value of such Mortgaged Property is
being preserved. In addition, if any Non-Designated Mortgage Loan is more
than 60 days delinquent, such Servicer, as applicable, shall conduct
subsequent inspections in accordance with Accepted Servicing Practices or as
may be required by the primary mortgage guaranty insurer. Each Servicer
shall keep a written or electronic report of each such inspection.
SECTION 3.08. Permitted Withdrawals from the Collection Accounts and
Certificate Account.
(a) Each Servicer may from time to time make withdrawals from the related
Collection Account for the following purposes:
(i) to pay to such Servicer (to the extent not previously retained by such
Servicer) the servicing compensation to which it is entitled pursuant
to Section 3.14, and to pay to such Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in
or credited to such Collection Account;
(ii) to reimburse such Servicer for unreimbursed Advances made by it, such
right of reimbursement pursuant to this subclause (ii) being limited to
amounts received on the Non-Designated Mortgage Loan(s) in respect of
which any such Advance was made (including without limitation, late
recoveries of payments, Liquidation Proceeds and Insurance Proceeds to
the extent received by such Servicer);
(iii) to reimburse such Servicer for any Nonrecoverable Advance previously
made or any amount expended pursuant to Section 3.11(a);
(iv) to reimburse such Servicer for (A) unreimbursed Servicing Advances or
such Servicer's right to reimbursement pursuant to this clause (A) with
respect to any Non-Designated Mortgage Loan being limited to amounts
received on such Non-Designated Mortgage Loan which represent late
payments of principal and/or interest (including, without limitation,
Liquidation Proceeds and Insurance Proceeds with respect to such
Mortgage Loan) respecting which any such advance was made and (B) for
unpaid Servicing Fees as provided in Section 3.11 hereof;
(v) to pay to the purchaser, with respect to each Non-Designated Mortgage
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received thereon
after the date of such purchase;
(vi) to make any payments required to be made pursuant to Section 2.07(g);
(vii) to withdraw any amount deposited in such Collection Account and not
required to be deposited therein;
(viii) with respect to the Non-Designated Mortgage Loans, on the Cash
Remittance Date, to withdraw an amount equal to the portion of, the
Available Distribution Amount applicable to the Mortgage Loans serviced
by such Servicer, who will remit the aggregate of such amounts to the
Trust Administrator for deposit in the Certificate Account;
(ix) with respect to each Non-Designated Mortgage Loan covered by a Lender
Paid Mortgage Guarantee Insurance Policy, to effect timely payment of
the related premiums on such Mortgage Guarantee Insurance Policy, as
applicable, pursuant to Section 3.09(c), to the extent not deducted by
such Servicer prior to deposit into the applicable Collection Account
pursuant to Section 3.05(c); and
(x) to clear and terminate such Collection Account upon termination of this
Agreement pursuant to Section 11.01 hereof.
Each Servicer shall keep and maintain separate accounting, on a
Non-Designated Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the related Collection Account pursuant to
such subclauses (i), (ii), (iv) and (v). Prior to making any withdrawal from
a Collection Account pursuant to subclause (iii) for reimbursement of a
Nonrecoverable Advance, the related Servicer shall deliver to the Trust
Administrator a certificate of a Servicing Officer indicating the amount of
any previous Advance or Servicing Advance determined by such Servicer to be a
Nonrecoverable Advance and identifying the related Non-Designated Mortgage
Loans(s), and their respective portions of such Nonrecoverable Advance. In
connection with the payment of a Purchase Price, if a Servicer is not
required to remit unreimbursed Advances and Servicing Advances as specified
in the definition of Purchase Price, such Servicer shall be deemed to have
been reimbursed for such amount.
(b) The Trust Administrator shall withdraw funds from the Certificate
Account for distributions to Certificateholders, in the manner specified in
this Agreement (and to withhold from the amounts so withdrawn, the amount of
any taxes that it is authorized to withhold pursuant to Section 2.07). In
addition, the Trust Administrator may from time to time make withdrawals from
the Certificate Account for the following purposes:
(i) to pay to itself any investment income earned for the related
Distribution Date, and to pay to itself or the Master Servicer any
other amounts to which it or the Master Servicer is entitled to
reimbursement or payment under the terms of this Agreement;
(ii) to withdraw and return to the Master Servicer or the applicable
Servicer for deposit to the applicable Collection Account any amount
deposited in the Certificate Account and not required to be deposited
therein; and
(iii) to clear and terminate the Certificate Account upon termination of the
Agreement pursuant to Section 11.01 hereof.
SECTION 3.09. Maintenance of Hazard Insurance; Mortgage Impairment
Insurance and Mortgage Guaranty Insurance
Policy; Claims; Restoration of Mortgaged
Property.
(a) Each Servicer shall cause to be maintained for each related
Non-Designated Mortgage Loan hazard insurance such that all buildings upon
the related Mortgaged Property are insured by a generally acceptable insurer
rated either: "V" or better in the current Best's Key Rating Guide ("Best's")
or acceptable to FNMA or FHLMC against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) the replacement value of the improvements securing such
Non-Designated Mortgage Loan and (ii) the greater of (A) the outstanding
principal balance of such Non-Designated Mortgage Loan and (B) an amount such
that the proceeds of such policy shall be sufficient to prevent the Mortgagor
and/or the mortgagee from becoming a co insurer.
If upon origination of the Non-Designated Mortgage Loan, the
related Mortgaged Property was located in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available), the related
Servicer shall cause a flood insurance policy to be maintained with respect
to such Non-Designated Mortgage Loan. Such policy shall meet the
requirements of the current guidelines of the Federal Insurance
Administration and be in an amount representing coverage equal to the lesser
of (i) the minimum amount required, under the terms of coverage, to
compensate for any damage or loss on a replacement cost basis (or the unpaid
principal balance of the mortgage if replacement cost coverage is not
available for the type of building insured) and (ii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973,
as amended.
If a Mortgage related to a Non-Designated Mortgage Loan is
secured by a unit in a condominium project, the related Servicer shall verify
that the coverage required of the owner's association, including hazard,
flood, liability, and fidelity coverage, is being maintained in accordance
with the requirements of the related Servicer for mortgage loans that it
services on its own account.
Each Servicer shall cause to be maintained on each Mortgaged
Property related to a Non-Designated Mortgage Loan such other additional
special hazard insurance as may be required pursuant to such applicable laws
and regulations as shall at any time be in force and as shall require such
additional insurance, or pursuant to the requirements of any Mortgage
Guaranty Insurance Policy insurer, or as may be required to conform with
Accepted Servicing Practices to the extent permitted by the Mortgage Note,
the Mortgage or applicable law provided that the related Servicer shall not
be required to bear the cost of such insurance.
All policies required hereunder shall name the related Servicer
as loss payee and shall be endorsed with standard or union mortgagee clauses,
without contribution, which shall provide for prior written notice of any
cancellation, reduction in amount or material change in coverage.
Each Servicer shall not interfere with the Mortgagor's freedom of
choice at the origination of such Non-Designated Mortgage Loan in selecting
either his insurance carrier or agent, provided, however, that such Servicer
shall not accept any such insurance policies from insurance companies unless
such companies are rated: B:III or better in Best's or acceptable to FNMA or
FHLMC and are licensed to do business in the jurisdiction in which the
Mortgaged Property is located. The related Servicer shall determine that such
policies provide sufficient risk coverage and amounts, that they insure the
property owner, and that they properly describe the property address.
Pursuant to Section 3.05, any amounts collected by a Servicer
under any such policies (other than amounts to be deposited in the related
Escrow Account and applied to the restoration or repair of the related
Mortgaged Property, or property acquired in liquidation of the Non-Designated
Mortgage Loan, or to be released to the Mortgagor, in accordance with such
Servicer's normal servicing procedures) shall be deposited in the related
Collection Account (subject to withdrawal pursuant to Section 3.08(a)).
Any cost incurred by a Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to the
Certificateholders or remittances to the Trust Administrator for their
benefit, be added to the principal balance of the Non-Designated Mortgage
Loan, notwithstanding that the terms of the Non-Designated Mortgage Loan so
permit. Such costs shall constitute a Servicing Advance and will be
reimbursable to the related Servicer to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor related to a Non-Designated
Mortgage Loan or maintained on property acquired in respect of a Mortgage
related to a Non-Designated 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.
(b) In the event that a Servicer shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the related Non-Designated Mortgage Loans, then, to the
extent such policy provides coverage in an amount equal to the amount
required pursuant to Section 3.09(a) and otherwise complies with all other
requirements of Section 3.09(a), it shall conclusively be deemed to have
satisfied its obligations as set forth in Section 3.09(a). Any amounts
collected by a Servicer under any such policy relating to a Non-Designated
Mortgage Loan shall be deposited in the related Collection Account subject to
withdrawal pursuant to Section 3.08(a). Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with Section 3.09(a),
and there shall have been a loss which would have been covered by such
policy, the related Servicer shall deposit in the related Collection Account
at the time of such loss the amount not otherwise payable under the blanket
policy because of such deductible clause, such amount to be deposited from
such Servicer's funds, without reimbursement therefor. Upon request of the
Trust Administrator, a Servicer shall cause to be delivered to the Trust
Administrator a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to the Trust
Administrator. In connection with its activities as Servicer of the related
Non-Designated Mortgage Loans, such Servicer agrees to present, on behalf of
itself, the Depositor, and the Trust Administrator for the benefit of the
Certificateholders, claims under any such blanket policy.
(c) With respect to each Non-Designated Mortgage Loan with a Loan-to-Value
Ratio in excess of 80% which the related Seller represented to be covered by
a Mortgage Guaranty Insurance Policy as of the Cut-off Date, the related
Servicer shall, without any cost to the Depositor or Trust Administrator,
maintain or cause the Mortgagor to maintain in full force and effect a
Mortgage Guaranty Insurance Policy insuring that portion of the
Non-Designated Mortgage Loan in excess of 75% of value, and shall pay or
shall cause the Mortgagor to pay, the premium thereon on a timely basis,
until the loan-to-value ratio of such Non-Designated Mortgage Loan is reduced
to 80%, based on either (i) a current appraisal of the Mortgaged Property or
(ii) the appraisal of the Mortgaged Property obtained at the time the
Non-Designated Mortgage Loan was originated. In the event that such Mortgage
Guaranty Insurance Policy shall be terminated prior to the loan-to-value
ratio of such Non-Designated Mortgage Loan being reduced to 80%, the related
Servicer shall obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such
terminated Mortgage Guaranty Insurance Policy. If the insurer shall cease to
be a Qualified Insurer, the related Servicer shall determine whether
recoveries under the Mortgage Guaranty Insurance Policy are jeopardized for
reasons related to the financial condition of such insurer, it being
understood that such Servicer shall in no event have any responsibility or
liability for any failure to recover under the Mortgage Guaranty Insurance
Policy for such reason. If the related Servicer determines that recoveries
are so jeopardized, it shall notify the Mortgagor, if required, and obtain
from another Qualified Insurer a replacement insurance policy. The related
Servicer shall not take any action which would result in noncoverage under
any applicable Mortgage Guaranty Insurance Policy of any loss which, but for
the actions of such Servicer would have been covered thereunder. In
connection with any assumption or substitution agreement entered into or to
be entered into pursuant to Section 3.10, each Servicer shall promptly notify
the insurer under the related Mortgage Guaranty Insurance Policy, if any, of
such assumption or substitution of liability in accordance with the terms of
such Mortgage Guaranty Insurance Policy and shall take all actions which may
be required by such insurer as a condition to the continuation of coverage
under such Mortgage Guaranty Insurance Policy provided that such required
actions are in compliance with all applicable law. If such Mortgage Guaranty
Insurance Policy is terminated as a result of such assumption or substitution
of liability, the related Servicer shall obtain a replacement Mortgage
Guaranty Insurance Policy as provided above; provided that under applicable
law and the terms of the related Mortgage Note and Mortgage the cost of such
policy may be charged to the successor Mortgagor.
With respect to each Non-Designated Mortgage Loan covered by a
Lender Paid Mortgage Guaranty Insurance Policy, the applicable Servicer
agrees to effect timely payment of the premiums on such Mortgage Guaranty
Insurance Policy from amounts on deposit in the Collection Account, or
deducted by such Servicer prior to deposit into the applicable Collection
Account or pursuant to Section 3.05(c) with respect to such Non-Designated
Mortgage Loan. If amounts on deposit in the Collection Account, or deducted
by such Servicer prior to deposit into the applicable Collection Account
pursuant to Section 3.05(c) with respect to such Non-Designated Mortgage
Loan, are not sufficient to pay the premiums on such Mortgage Guaranty
Insurance Policy, the applicable Servicer agrees to effect timely payment of
such premiums, and such costs shall be recoverable by such Servicer from the
related Liquidation Proceeds or otherwise as a Servicing Advance pursuant to
Section 3.08(a). With respect to each Non-Designated Mortgage Loan covered
by a Mortgage Guaranty Insurance Policy that is not Lender Paid, the Servicer
agrees to effect timely payment of the premiums on such Mortgage Guaranty
Insurance Policy, and such costs not otherwise recoverable from the Mortgagor
shall be recoverable by such Servicer from the related Liquidation Proceeds
or otherwise as a Servicing Advance pursuant to Section 3.08(a).
(d) In connection with its activities as servicer, each Servicer agrees to
prepare and present, on behalf of itself, the Depositor, the Trust, the
Trustee, the Trust Administrator and the Certificateholders, claims to the
insurer under any Mortgage Guaranty Insurance Policy related to a
Non-Designated Mortgage Loan in a timely fashion in accordance with the terms
of such Mortgage Guaranty Insurance Policy and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Mortgage
Guaranty Insurance Policy respecting defaulted Non-Designated Mortgage Loans.
Pursuant to Section 3.05, any amounts collected by a Servicer under any
Mortgage Guaranty Insurance Policy shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.08.
(e) With respect to any Non-Designated Mortgage Loan, each Servicer need
not obtain the approval of the Trustee or the Trust Administrator prior to
releasing any Insurance Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. At a minimum, each Servicer
shall comply with the following conditions in connection with any such
release of Insurance Proceeds:
(i) such Servicer shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with
respect thereto;
(ii) such Servicer shall take all steps necessary to preserve the priority
of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens; and
(iii) pending repairs or restoration, such Servicer shall place the Insurance
Proceeds in the related Escrow Account.
(f) With respect to any Non-Designated Mortgage Loan, if the Trust
Administrator is named as an additional loss payee, the related Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim
in the name of the Trustee or the Trust Administrator.
SECTION 3.10. Enforcement of Due on Sale Clauses; Assumption Agreements.
(a) With respect to a Non-Designated Mortgage Loan, each Servicer shall use
its best efforts to enforce any "due-on-sale" provision contained in any
related Mortgage or Mortgage Note and to deny assumption by the person to
whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the related Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Non-Designated Mortgage Loan under the
"due-on-sale" clause applicable thereto, provided, however, that such
Servicer shall not exercise such rights if prohibited by law from doing so or
if the exercise of such rights would impair or threaten to impair any
recovery under the related Mortgage Guaranty Insurance Policy, if any.
(b) With respect to a Non-Designated Mortgage Loan, if a Servicer
reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, such Servicer shall enter into (i) an assumption and
modification agreement with the person to whom such property has been
conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event
such Servicer is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note, a substitution of liability
agreement with the purchaser of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note. Notwithstanding the foregoing, a Servicer shall not be deemed
to be in default under this Section by reason of any transfer or assumption
which such Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever. In connection with any such
assumption, no material term of the Mortgage Note, including without
limitation, the Mortgage Rate borne by the related Mortgage Note, the term of
the Non-Designated Mortgage Loan or the outstanding principal amount of the
Non-Designated Mortgage Loan shall be changed.
(c) To the extent that any Non-Designated Mortgage Loan is assumable, the
related Servicer shall inquire diligently into the creditworthiness of the
proposed transferee, and shall use the underwriting criteria for approving
the credit of the proposed transferee which are used by FNMA with respect to
underwriting mortgage loans of the same type as the Non-Designated Mortgage
Loans. If the credit of the proposed transferee does not meet such
underwriting criteria, the related Servicer diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law,
accelerate the maturity of the Non-Designated Mortgage Loan.
(d) With respect to a Non-Designated Mortgage Loan, subject to each
Servicer's duty to enforce any due-on-sale clause to the extent set forth in
this Section 3.10, in any case in which the related Mortgaged Property has
been conveyed to a Person by the related Mortgagor, and such Person is to
enter into an assumption agreement or modification agreement or supplement to
the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Non-Designated Mortgage Loan, such Servicer
shall prepare and deliver or cause to be prepared and delivered to the
Trustee for signature and shall direct, in writing, the Trustee to execute
the assumption agreement with the Person to whom the Mortgaged Property is to
be conveyed and such modification agreement or supplement to the Mortgage
Note or Mortgage or other instruments as are reasonable or necessary to carry
out the terms of the Mortgage Note or Mortgage or otherwise to comply with
any applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. In connection with any such assumption, no material
term of the Mortgage Note may be changed. Together with each such
substitution, assumption or other agreement or instrument delivered to the
Trustee for execution by it, the related Servicer shall deliver an Officer's
Certificate signed by a Servicing Officer stating that the requirements of
this subsection have been met in connection therewith. The related Servicer
shall notify the Trustee and the Trust Administrator that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee and the Trust Administrator a copy of such substitution or assumption
agreement, and shall forward the original to the Custodian which shall be
added to the related Mortgage File and shall, for all purposes, be considered
a part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. Any fee collected by a Servicer for
entering into an assumption or substitution of liability agreement will be
retained by such Servicer as additional servicing compensation.
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.
(a) Each Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
related Non-Designated Mortgage Loans as come into and continue in default
and as to which no satisfactory arrangements can be made for collection of
delinquent payments. In connection with such foreclosure or other
conversion, each Servicer shall take such action as (i) such Servicer would
take under similar circumstances with respect to a similar mortgage loan held
for its own account for investment, (ii) shall be consistent with Accepted
Servicing Practices, (iii) such Servicer shall determine consistently with
Accepted Servicing Practices to be in the best interest of the Trust and
Certificateholders, and (iv) is consistent with the requirements of the
insurer under any Required Insurance Policy; provided, however, that such
Servicer shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the related Non-Designated Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds. Any funds expended by any
Servicer pursuant to this Section 3.11(a) shall be reimbursable in full
pursuant to Section 3.08(a)(iii). The related Servicer shall be responsible
for all other costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof from
the Liquidation Proceeds with respect to the related Mortgaged Property or
otherwise as a Servicing Advance in accordance with Section 3.08(a).
With respect to any Non-Designated Mortgage Loans,
notwithstanding anything to the contrary contained in this Agreement, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure,
in the event the related Servicer has reasonable cause to believe that the
related Mortgaged Property is contaminated by hazardous or toxic substances
or wastes, or if the Trust Administrator otherwise requests, an environmental
inspection or review of such Mortgaged Property conducted by a qualified
inspector shall be arranged for by such Servicer. Upon completion of the
inspection, the related Servicer shall promptly provide the Trust
Administrator with a written report of environmental inspection.
In the event the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes, the related Servicer shall not proceed with foreclosure or acceptance
of a deed in lieu of foreclosure if the estimated costs of the environmental
clean up, as estimated in the environmental inspection report, together with
the Servicing Advances and Advances made by such Servicer and the estimated
costs of foreclosure or acceptance of a deed in lieu of foreclosure exceeds
the estimated value of the Mortgaged Property. If however, the aggregate of
such clean up and foreclosure costs, Advances and Servicing Advances are less
than or equal to the estimated value of the Mortgaged Property, then the
related Servicer may, in its reasonable judgment and in accordance with
Accepted Servicing Practices, choose to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure and such Servicer shall be
reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean up costs, as applicable, from the related Liquidation Proceeds, or if
the Liquidation Proceeds are insufficient to reimburse fully such Servicer,
such Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.08(a) hereof. In the event the
related Servicer does not proceed with foreclosure or acceptance of a deed in
lieu of foreclosure pursuant to the first sentence of this paragraph, such
Servicer shall be reimbursed for all Advances and Servicing Advances made
with respect to the related Mortgaged Property from the related Collection
Account pursuant to Section 3.08(a) hereof, and such Servicer shall have no
further obligation to service such Non-Designated Mortgage Loan under the
provisions of this Agreement.
(b) With respect to any REO Property related to a Non-Designated Mortgage
Loan, subject to applicable law, the deed or certificate of sale shall be
taken in the name of the Trustee for the benefit of the Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's name
shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The related Servicer shall
ensure that the title to such REO Property references this Agreement and the
Trustee capacity hereunder. Pursuant to its efforts to sell such REO
Property, the related Servicer shall in accordance with Accepted Servicing
Practices manage, conserve, protect and operate each REO Property for the
purpose of its prompt disposition and sale. The related Servicer, either
itself or through an agent selected by such Servicer, shall manage, conserve,
protect and operate the REO Property in the same manner that it manages,
conserves, protects and operates other foreclosed property for its own
account, and in the same manner that similar property in the same locality as
the REO Property is managed. Upon request, the related Servicer shall furnish
to the Trust Administrator on or before each Distribution Date a statement
with respect to any REO Property covering the operation of such REO Property
for the previous calendar month and such Servicer's efforts in connection
with the sale of such REO Property and any rental of such REO Property
incidental to the sale thereof for the previous calendar month. That
statement shall be accompanied by such other information as the Trust
Administrator shall reasonably request and which is necessary to enable the
Trust Administrator to comply with the reporting requirements of the REMIC
Provisions. The net monthly rental income, if any, from such REO Property
shall be deposited in the related Collection Account no later than the close
of business on each Determination Date. The related Servicer shall perform
the tax reporting and withholding required by Sections 1445 and 6050J of the
Code with respect to foreclosures and abandonments, the tax reporting
required by Section 6050H of the Code with respect to the receipt of mortgage
interest from individuals and any tax reporting required by Section 6050P of
the Code with respect to the cancellation of indebtedness by certain
financial entities, by preparing such tax and information returns as may be
required, in the form required, and delivering the same to the Trust
Administrator for filing.
To the extent consistent with Accepted Servicing Practices, the
related Servicer shall also maintain on each REO Property related to a
Non-Designated Mortgage Loan fire and hazard insurance with extended coverage
in an amount which is equal to the outstanding principal balance of the
related Non-Designated Mortgage Loan (as reduced by any amount applied as a
reduction of principal at the time of acquisition of the REO Property),
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
(c) In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the related Servicer shall dispose of such Mortgaged Property
prior to three years after the end of the calendar year of its acquisition by
the Trust Fund unless (i) the Trustee and the Trust Administrator shall have
been supplied with an Opinion of Counsel to the effect that the holding by
the Trust Fund of such Mortgaged Property subsequent to such three-year
period will not result in the imposition of taxes on "prohibited
transactions" of any REMIC hereunder as defined in section 860F of the Code
or cause any REMIC hereunder to fail to qualify as a REMIC at any time that
any Certificates are outstanding, in which case the Trust Fund may continue
to hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel) or (ii) the applicable Servicer shall have applied for,
prior to the expiration of such three-year period, an extension of such
three-year period in the manner contemplated by Section 856(e)(3) of the
Code, in which case the three-year period shall be extended by the applicable
extension period. Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or
on behalf of the Trust Fund in such a manner or pursuant to any terms that
would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code or (ii)
subject any REMIC hereunder to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under
Section 860G(c) of the Code or otherwise, unless the related Servicer has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of whose
obligors is not a United States Person, as that term is defined in
Section 7701(a)(30) of the Code, in connection with any foreclosure or
acquisition of a deed in lieu of foreclosure (together, "foreclosure") in
respect of such Mortgage Loan, the related Servicer will cause compliance
with the provisions of Treasury Regulation Section 1.1445-2(d)(3) (or any
successor thereto) necessary to assure that no withholding tax obligation
arises with respect to the proceeds of such foreclosure except to the extent,
if any, that proceeds of such foreclosure are required to be remitted to the
obligors on such Mortgage Loan.
(d) The decision of a Servicer to foreclose on a defaulted Non-Designated
Mortgage Loan shall be subject to a determination by such Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO
Properties, net of reimbursement to such Servicer for expenses incurred
(including any property or other taxes) in connection with such management
and net of applicable accrued and unpaid Servicing Fees, and unreimbursed
Advances and Servicing Advances, shall be applied to the payment of principal
of and interest on the related defaulted Non-Designated Mortgage Loans (with
interest accruing as though such Non-Designated Mortgage Loans were still
current) and all such income shall be deemed, for all purposes in this
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the related Collection Account.
To the extent the net income received during any calendar month is in excess
of the amount attributable to amortizing principal and accrued interest at
the related Mortgage Rate on the related Non-Designated Mortgage Loan for
such calendar month, such excess shall be considered to be a partial
prepayment of principal of the related Non-Designated Mortgage Loan.
(e) The proceeds from any liquidation of a Non-Designated Mortgage Loan, as
well as any income from a related REO Property, will be applied in the
following order of priority: first, to reimburse the related Servicer for any
related unreimbursed Servicing Advances and Servicing Fees; second, to
reimburse such Servicer for any unreimbursed Advances; third, to reimburse
the related Collection Account for any Nonrecoverable Advances (or portions
thereof) that were previously withdrawn by such Servicer pursuant to
Section 3.08(a)(iii) that related to such Non-Designated Mortgage Loan;
fourth, to accrued and unpaid interest (to the extent no Advance has been
made for such amount or any such Advance has been reimbursed) on the
Non-Designated Mortgage Loan or related REO Property, at the per annum rate
equal to the related Mortgage Rate reduced by the related Servicing Fee Rate,
and any primary mortgage guaranty insurance fee rate, if applicable, to the
Due Date occurring in the month in which such amounts are required to be
distributed; and fifth, as a recovery of principal of the Mortgage Loan.
Excess proceeds, if any, from the liquidation of a Liquidated Mortgage Loan
("Excess Proceeds") that is a Non-Designated Mortgage Loan will be retained
by the related Servicer as additional servicing compensation pursuant to
Section 3.14.
(f) Each Servicer of the Non-Designated Mortgage Loans may (but is not
obligated to) enter into a special servicing agreement with an unaffiliated
holder of a 100% Percentage Interest of the most junior class of Subordinate
Certificates, subject to each Rating Agency's acknowledgment that the Ratings
of the Certificates in effect immediately prior to the entering into such
agreement would not be qualified, downgraded or withdrawn and the
Certificates would not be placed on credit review status (except for possible
upgrading) as a result of such agreement. Any such agreement may contain
provisions whereby such Holder may (i) instruct the related Servicer to
commence or delay foreclosure proceedings with respect to delinquent
Non-Designated Mortgage Loans and will contain provisions for the deposit of
cash with such Servicer by the holder that would be available for
distribution to Certificateholders if Liquidation Proceeds are less than they
otherwise may have been had such Servicer acted in accordance with its normal
procedures, (ii) purchase delinquent Non-Designated Mortgage Loans from the
Trust Fund immediately prior to the commencement of foreclosure proceedings
at a price equal to the Purchase Price, and/or (iii) assume all of the
servicing rights and obligations with respect to delinquent Non-Designated
Mortgage Loans so long as such Holder (A) meets the requirements for a
Subservicer set forth in Section 3.02(a), (B) will service such
Non-Designated Mortgage Loans in accordance with this Agreement and (C) the
related Servicer has the right to transfer such servicing rights without the
payment of any compensation to a subservicer.
(g) The Special Servicer, at its option, may (but is not obligated to)
purchase from the Trust Fund, (a) any Mortgage Loan that is delinquent in
payment 90 or more days or (b) any related Mortgage Loan with respect to
which there has been initiated legal action or other proceedings for the
foreclosure of the related Mortgaged Property either judicially or
non-judicially, in each case, provided that the applicable Servicer has the
right to transfer the related servicing rights without the payment of any
compensation to a subservicer. Any such purchase shall be made by the
Special Servicer with its own funds at a price equal to the Purchase Price
for such Mortgage Loan. The applicable Servicer shall be entitled to
reimbursement from the Special Servicer for all expenses incurred by it in
connection with the transfer of any Mortgage Loan to the Special Servicer
pursuant to this Section 3.11(g).
SECTION 3.12. Trustee and Trust Administrator to Cooperate; Release of
Mortgage Files.
Upon the payment in full of any Non-Designated Mortgage Loan, or
the receipt by a Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, such Servicer will
immediately notify the Custodian by delivering, or causing to be delivered a
"Request for Release" substantially in the form of Exhibit J. Upon receipt
of such request, the Custodian shall within three Business Days release the
related Mortgage File to the related Servicer, and the Trustee shall within
three Business Days of such Servicer's direction execute and deliver to such
Servicer the deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage in each case provided by
such Servicer, and the Custodian shall deliver the Mortgage Note with written
evidence of cancellation thereon. Expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
related Mortgagor. From time to time and as shall be appropriate for the
servicing or foreclosure of any Non-Designated Mortgage Loan, including for
such purpose, collection under any policy of flood insurance, any fidelity
bond or errors or omissions policy, or for the purposes of effecting a
partial release of any Mortgaged Property from the lien of the Mortgage or
the making of any corrections to the Mortgage Note or the Mortgage or any of
the other documents included in the Mortgage File, the Custodian within three
Business Days of delivery to the Custodian of a Request for Release in the
form of Exhibit J signed by a Servicing Officer, release the Mortgage File to
the related Servicer. Subject to the further limitations set forth below,
the related Servicer shall cause the Mortgage File or documents so released
to be returned to the Custodian on its behalf, when the need therefor by such
Servicer no longer exists, unless the Non-Designated Mortgage Loan is
liquidated and the proceeds thereof are deposited in the related Collection
Account, in which case such Servicer shall deliver to the Trustee, or the
Custodian a Request for Release in the form of Exhibit J, signed by a
Servicing Officer. Each Servicer is also authorized to cause the removal
from the registration on the MERS® System of such Mortgage and to execute and
deliver, on behalf of the Trustee and the Certificateholders or any of them,
any and all instruments of satisfaction or cancellation or of partial or full
release, including an assignment of such loan to the Trustee.
If a Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property related to a Non-Designated
Mortgage Loan as authorized by this Agreement, such Servicer shall deliver or
cause to be delivered to the Trustee, for signature, as appropriate, any
court pleadings, requests for trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by
the Mortgage Note or the Mortgage or otherwise available at law or in equity.
SECTION 3.13. Documents, Records and Funds in Possession of a Servicer to
be Held for the Trust.
Notwithstanding any other provisions of this Agreement, each
Servicer shall transmit to the Custodian, as required by this Agreement all
documents and instruments in respect of a Non-Designated Mortgage Loan coming
into the possession of the related Servicer from time to time required to be
delivered to the Trustee, or the Custodian on its behalf, pursuant to the
terms hereof and shall account fully to the Trust Administrator for any funds
received by such Servicer or which otherwise are collected by such Servicer
as Liquidation Proceeds or Insurance Proceeds in respect of any
Non-Designated Mortgage Loan. All Mortgage Files and funds collected or held
by, or under the control of, a Servicer in respect of any Non-Designated
Mortgage Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds, including but not limited to, any
funds on deposit in a Collection Account, shall be held by the related
Servicer for and on behalf of the Trust, the Trustee or the Trust
Administrator and shall be and remain the sole and exclusive property of the
Trust, subject to the applicable provisions of this Agreement. Each Servicer
also agrees that it shall not create, incur or subject any Mortgage File or
any funds that are deposited in the related Collection Account, Certificate
Account or any related Escrow Account, or any funds that otherwise are or may
become due or payable to the Trust, the Trustee or the Trust Administrator
for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, or assert
by legal action or otherwise any claim or right of setoff against any
Mortgage File or any funds collected on, or in connection with, a
Non-Designated Mortgage Loan, except, however, that such Servicer shall be
entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to such Servicer under this Agreement.
SECTION 3.14. Servicing Fee.
(a) As compensation for its services hereunder, each Servicer shall be
entitled to withdraw from the applicable Collection Account or to retain from
interest payments on the related Non-Designated Mortgage Loans, the amount of
its Servicing Fee, for each Mortgage Loan serviced by it, less any amounts in
respect of its Servicing Fee, as applicable, payable by such Servicer
pursuant to Section 3.05(c)(vi). The Servicing Fee is limited to, and payable
solely from, the interest portion of such Scheduled Payments collected by the
related Servicer or as otherwise provided in Section 3.08(a). In connection
with the servicing of any Special Serviced Mortgage Loan, the Special
Servicer shall receive the Servicing Fee for such Special Serviced Mortgage
Loan as its compensation and Ancillary Income with respect to Special
Serviced Mortgage Loans.
(b) With respect to each Non-Designated Mortgage Loan, additional servicing
compensation in the form of Ancillary Income and Excess Proceeds shall be
retained by the related Servicer, and additional servicing compensation in
the form of Payoff Interest not required to make payments in respect of
Compensating Interest Payments shall be retained by SPS. Each Servicer shall
be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including the payment of any expenses
incurred in connection with any Subservicing Agreement entered into pursuant
to Section 3.02 and the payment of any premiums for insurance required
pursuant to Section 3.18) and shall not be entitled to reimbursement thereof
except as specifically provided for in this Agreement.
(c) The Master Servicer shall be compensated by the Trust Administrator as
separately agreed. The Master Servicer and any director, officer, employee
or agent of the Master Servicer shall be indemnified by DLJMC (or if DLJMC
shall fail to do so, by the Trust) and held harmless against any loss,
liability or expense (including reasonable attorney's fees and expenses)
incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Certificates or (c) the performance of any of the Master
Servicer's duties hereunder, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of any of the Master Servicer's duties hereunder or incurred by
reason of any action of the Master Servicer taken at the direction of the
Certificateholders; provided, however, that the sum of (x) such indemnity
amounts payable by DLJMC or the Trust to the Master Servicer pursuant to this
Section 3.14(c) and (y) the indemnity amounts payable by DLJMC or the Trust
to the Trust Administrator pursuant to Section 10.05, shall not exceed
$200,000 per year; provided, further, that any amounts not payable by DLJMC
or the Trust to the Master Servicer due to the preceding proviso shall be
payable by DLJMC (or if DLJMC fails to do so, by the Trust) in any succeeding
year, subject to the aggregate $200,000 per annum limitation imposed by the
preceding proviso. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Master Servicer hereunder.
SECTION 3.15. Access to Certain Documentation.
The Master Servicer and each Servicer shall provide to the OTS
and the FDIC and to comparable regulatory authorities supervising Holders of
Subordinate Certificates and the examiners and supervisory agents of the OTS,
the FDIC and such other authorities, access to the documentation regarding
the related Non-Designated Mortgage Loans required by applicable regulations
of the OTS and the FDIC. Such access shall be afforded without charge, but
only upon reasonable and prior written request and during normal business
hours at the offices designated by the Master Servicer or such Servicer.
Nothing in this Section shall limit the obligation of the Master Servicer or
any Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer
or such Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section. Nothing in
this Section 3.15 shall require the Master Servicer or any Servicer to
collect, create, collate or otherwise generate any information that it does
not generate in its usual course of business.
SECTION 3.16. Annual Statement as to Compliance.
Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b)
with respect to any calendar year during which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and
the rules and regulations of the Commission, 15 calendar days before each
date on which the Depositor's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of
the Commission (or if such day is not a Business Day, the immediately
preceding Business Day), each Servicer shall deliver to the Master Servicer
an Officer's Certificate stating, as to the signer thereof, that (i) a review
of the activities of such Servicer during the preceding calendar year and of
the performance of such Servicer under this Agreement has been made under
such officer's supervision, and (ii) to the best of such officer's knowledge,
based on such review, such Servicer has fulfilled all its obligations under
this Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof and the action being taken by
such Servicer to cure such default. Upon each receipt of such Officer's
Certificate from any Servicer, the Master Servicer shall promptly deliver a
copy of such Officer's Certificate to the Depositor, the Rating Agencies, the
Trustee and the Trust Administrator.
Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b)
with respect to any calendar year during which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and
the rules and regulations of the Commission, 15 calendar days before each
date on which the Depositor's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of
the Commission (or if such day is not a Business Day, the immediately
preceding Business Day), the Master Servicer shall deliver to the Depositor,
the Rating Agencies, the Trustee and the Trust Administrator an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of
the performance of the Master Servicer under this Agreement has been made
under such officer's supervision, and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof and the
action being taken by the Master Servicer to cure such default.
SECTION 3.17. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b)
with respect to any calendar year during which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and
the rules and regulations of the Commission, 15 calendar days before each
date on which the Depositor's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of
the Commission (or if such day is not a Business Day, the immediately
preceding Business Day), the Master Servicer at its expense shall cause a
nationally or regionally recognized firm of independent public accountants
(who may also render other services to the Master Servicer or any affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Trust Administrator and the
Depositor, in the form of Exhibit T-1.
Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b)
with respect to any calendar year during which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and
the rules and regulations of the Commission, 15 calendar days before each
date on which the Depositor's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of
the Commission (or if such day is not a Business Day, the immediately
preceding Business Day), each Servicer (other than Xxxxx Fargo) at its
expense shall cause a nationally or regionally recognized firm of independent
public accountants (who may also render other services to such Servicer, the
Seller or any affiliate thereof) which is a member of the American Institute
of Certified Public Accountants to furnish a statement to the Trust
Administrator, the Master Servicer and the Depositor, to the effect that with
respect to each Servicer (other than Xxxxx Fargo), such firm has examined
certain documents and records relating to the servicing of mortgage loans
which such Servicer is servicing which may include the related Mortgage Loans
or similar mortgage loans, and that, on the basis of such examination,
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Guide for HUD Approved Title II
Approved Mortgagees and Loan Correspondent Programs, nothing has come to
their attention which would indicate that such servicing has not been
conducted in compliance with Accepted Servicing Practices, except for (a)
such exceptions as such firm shall believe to be immaterial, and (b) such
other exceptions as shall be set forth in such statement. In addition each
Servicer shall disclose to such firm all significant deficiencies relating to
such Servicer's compliance with the minimum servicing standards set forth in
this Agreement. In rendering such statement, such firm may rely, as to
matters relating to direct servicing of mortgage loans by Subservicers, upon
comparable statements for examinations conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Guide for HUD Approved Title II Approved Mortgagees and Loan Correspondent
Programs (rendered within one year of such statement) of independent public
accountants with respect to the related Subservicer.
Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b)
with respect to any calendar year during which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and
the rules and regulations of the Commission, 15 calendar days before each
date on which the Depositor's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of
the Commission (or if such day is not a Business Day, the immediately
preceding Business Day), Xxxxx Fargo, at its expense, shall cause a
nationally or regionally recognized firm of independent public accountants
(who may also render other services to Xxxxx Fargo, the Seller or any
affiliate thereof) which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Depositor, and the Depositor
shall send copies of such statement to each of the Trust Administrator and
the Master Servicer, to the effect that such firm has examined certain
documents and records relating to the servicing of mortgage loans which Xxxxx
Fargo is servicing, which may include the related Mortgage Loans or similar
mortgage loans, and that, on the basis of such examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Guide for HUD Approved Title II Approved
Mortgagees and Loan Correspondent Programs, nothing has come to their
attention which would indicate that such servicing has not been conducted in
compliance with Accepted Servicing Practices, except for (a) such exceptions
as such firm shall believe to be immaterial, and (b) such other exceptions as
shall be set forth in such statement. In addition, Xxxxx Fargo shall
disclose to such firm all significant deficiencies relating to Xxxxx Fargo's
compliance with the minimum servicing standards set forth in this Agreement.
In rendering such statement, such firm may rely, as to matters relating to
direct servicing of mortgage loans by Subservicers, upon comparable
statements for examinations conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Guide
for HUD Approved Title II Approved Mortgagees and Loan Correspondent Programs
(rendered within one year of such statement) of independent public
accountants with respect to the related Subservicer.
Copies of such statements shall be provided by the Trust
Administrator to any Certificateholder upon request at the Master Servicer's
or the related Servicer's expense, provided such statement is delivered by
the Master Servicer or such Servicer to the Trust Administrator.
SECTION 3.18. Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
Each Servicer shall maintain with responsible companies, at its
own expense, a blanket Fidelity Bond and an Errors and Omissions Insurance
Policy, with broad coverage on all officers, employees or other persons
acting in any capacity requiring such persons to handle funds, money,
documents or papers relating to the related Mortgage Loans ("Servicer
Employees"). Any such Fidelity Bond and Errors and Omissions Insurance Policy
shall be in the form of the Mortgage Banker's Blanket Bond and shall protect
and insure the related Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such Servicer
Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy also
shall protect and insure each Servicer against losses in connection with the
release or satisfaction of a related Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Section 3.18 requiring such Fidelity Bond and Errors and Omissions Insurance
Policy shall diminish or relieve a Servicer from its duties and obligations
as set forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts
acceptable to FNMA unless the related Servicer has obtained a waiver of such
requirement. Upon the request of the Trust Administrator, the related
Servicer shall cause to be delivered to the Trust Administrator a certificate
of insurance of the insurer and the surety including a statement from the
surety and the insurer that such fidelity bond and insurance policy shall in
no event be terminated or materially modified without 30 days' prior written
notice to the Trust Administrator.
The Master Servicer shall maintain insurance in such amounts
generally acceptable for entities serving as master servicer.
SECTION 3.19. Special Serviced Mortgage Loans.
If directed by the Special Servicer and solely at the Special
Servicer's option, a Servicer (a "Transferring Servicer") shall transfer the
servicing of any Mortgage Loan serviced by the Transferring Servicer 90 days
or more delinquent (determined as of the close of business of the last day of
the month preceding the related Data Remittance Date) to the Special
Servicer. The Special Servicer shall thereupon assume all of the rights and
obligations of the Transferring Servicer hereunder arising thereafter and the
Transferring Servicer shall have no further rights or obligations hereunder
with respect to such Mortgage Loan (except that the Special Servicer shall
not be (i) liable for losses of the Transferring Servicer pursuant to
Section 3.09 hereof or for any acts or omissions of the Transferring Servicer
hereunder prior to the servicing transfer date, (ii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder including, but not
limited to, repurchases or substitutions of Mortgage Loans pursuant to
Section 2.02 or 2.03 hereof or (iii) deemed to have made any representations
and warranties of a Transferring Servicer hereunder). Notwithstanding the
preceding sentence, the Special Servicer shall service all Special Serviced
Mortgage Loans in accordance with the servicing standards applicable to SPS
as if SPS were the Transferring Servicer; provided, however, that the
obligations of SPS set forth in Section 8.01(h), Section 8.01(i) and Article
XIII of this Agreement shall not be applicable to the Special Servicer. Upon
the transfer of the servicing of any such Mortgage Loan to the Special
Servicer, the Special Servicer shall be entitled to the related Servicing Fee
and other compensation accruing after the servicing transfer date with
respect to such Mortgage Loans pursuant to Section 3.14.
In connection with the transfer of the servicing of any Mortgage
Loan to the Special Servicer, the Transferring Servicer shall, at the Special
Servicer's expense, deliver to the Special Servicer all documents and records
relating to such Mortgage Loans and an accounting of amounts collected or
held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the servicing to the Special Servicer. On the
servicing transfer date, the Special Servicer shall reimburse the
Transferring Servicer for all unreimbursed Advances, Servicing Advances and
Servicing Fees, as applicable, relating to the Mortgage Loans for which the
servicing is being transferred. The Special Servicer shall be entitled to be
reimbursed pursuant to Section 3.08 or otherwise pursuant to this Agreement
for all such Advances, Servicing Advances and Servicing Fees, as applicable,
paid by the Transferring Servicer pursuant to this Section 3.19. In
addition, the Special Servicer shall notify the Master Servicer of such
transfer and the effective date of such transfer, and amend the Mortgage Loan
Schedule to reflect that such Mortgage Loans are Special Serviced Mortgage
Loans.
SECTION 3.20. Indemnification of Servicers and Master Servicer.
Each Servicer agrees to indemnify and hold the Master Servicer
harmless from and against any and all losses, claims, expenses, costs or
liabilities (including attorneys fees and court costs) incurred by the Master
Servicer as a result of or in connection with the failure by such Servicer to
perform the obligations or responsibilities imposed upon or undertaken by
such Servicer under this Agreement.
The Master Servicer agrees to indemnify and hold each Servicer
harmless from and against any and all losses, claims, expenses, costs or
liabilities (including attorneys fees and court costs) incurred by such
Servicer as a result of or in connection with the failure by the Master
Servicer to perform the obligations or responsibilities imposed upon or
undertaken by the Master Servicer under this Agreement.
SECTION 3.21. Notification of Adjustments.
With respect to each Mortgage Loan, the related Servicer shall
adjust the Mortgage Rate on the related Adjustment Date in compliance with
the requirements of applicable law and the related Mortgage and Mortgage
Note. The related Servicer shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Rate adjustments. Upon the
discovery by the related Servicer or the receipt of notice from the Trust
Administrator that such Servicer has failed to adjust a Mortgage Rate in
accordance with the terms of the related Mortgage Note, such Servicer shall
immediately deposit in the Certificate Account from its own funds the amount
of any interest loss or deferral caused the Trust Administrator thereby.
SECTION 3.22. Designated Mortgage Loans.
(a) For and on behalf of the Certificateholders, the Master Servicer shall
oversee and enforce the obligation of IndyMac to service and administer the
Designated Mortgage Loans in accordance with the terms of the IndyMac
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such
master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with this
Agreement and with customary and usual standards of practice of prudent
mortgage loan master servicers. Furthermore, the Master Servicer shall
oversee and consult with the Designated Servicer as necessary from
time-to-time to carry out the Master Servicer's obligations hereunder, and
shall receive, review and evaluate all reports, information and other data
provided to the Master Servicer by the Designated Servicer.
The Master Servicer shall terminate the rights and obligations of
IndyMac under the IndyMac Servicing Agreement, upon the failure of IndyMac to
perform any of its obligations under the IndyMac Servicing Agreement, which
failure results in an event of default as provided in Section 8.01 of the
IndyMac Servicing Agreement. In the event IndyMac is terminated pursuant to
the preceding sentence, the Master Servicer shall notify the Depositor and
the Trust Administrator and shall either (a) select and engage a successor
servicer of the related Mortgage Loans or (b) act as successor servicer of
the related Mortgage Loans. In either case, the IndyMac Loans shall be
serviced by the successor to the IndyMac pursuant to the servicing provisions
of this Agreement, and the Designed Mortgage Loans shall be deemed as
"Non-Designated Mortgage Loans" under this Agreement; provided, however, it
is understood and acknowledged by the parties hereto that there will be a
period of transition (not to exceed 90 days) before the actual servicing
functions can be fully transferred to a successor of IndyMac. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of the IndyMac Agreement 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, provided that the
Master Servicer shall not be required to prosecute or defend any legal action
except to the extent that the Master Servicer shall have received reasonable
indemnity for its costs and expenses in pursuing such action.
To the extent that the costs and expenses of the Master Servicer
related to any termination of IndyMac, appointment of a successor to IndyMac
or the transfer and assumption of servicing by the Master Servicer with
respect to the IndyMac Servicing Agreement (including, without limitation,
(i) all legal costs and expenses and all due diligence costs and expenses
associated with an evaluation of the potential termination of IndyMac as a
result of an event of default by the Designated Servicer and (ii) all costs
and expenses associated with the complete transfer of servicing, including
all servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor
servicer to correct any errors or insufficiencies in the servicing data or
otherwise to enable the successor servicer to service the Mortgage Loans in
accordance with this Agreement) are not fully reimbursed by the terminated
Designated Servicer, the Master Servicer shall be entitled to reimbursement
of such costs and expenses from the Trust.
(b) Each month, if IndyMac fails to make a required Advance by the date
such Advance is required to be made under the IndyMac Servicing Agreement,
the Master Servicer shall on the Cash Remittance Date deposit in the amount
of any required Advance in the Certificate Account.
(c) Each month, the Master Servicer shall make Compensating Interest
Payments with respect to the Designated Mortgage Loans to the extent provided
in Section 3.03.
ARTICLE IV
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Priorities of Distribution.
(I) (A) On each Distribution Date, the Trust Administrator
shall determine the amounts to be distributed to each Class of
Certificates as follows:
(a) with respect to the Group 1 Certificates, from the Available
Distribution Amount relating to Loan Group 1:
(i) first, concurrently, to the Group 1 Certificates and Class X
Certificates an amount allocable to interest equal to the related
Interest Distribution Amount for such Distribution Date (with
respect to the Class X Certificates, the related Interest
Distribution Amount shall be the portion of the Interest
Distribution Amount described in clauses (B) and (D)(I) of the
definition thereof), any shortfall being allocated pro rata
between such Classes based on the Interest Distribution Amount
that would have been distributed pursuant to this clause in the
absence of such shortfall; provided, however, that,
notwithstanding the foregoing, the Interest Distribution Amount
to be distributed to the Class X Certificates will be reduced to
the extent of the Required Reserve Fund Deposit for such
Distribution Date pursuant, and in the amount set forth in,
Section 4.08(b); and
(ii) second, on each Distribution Date, from the Available Distribution
Amount for Loan Group 1 remaining after giving effect to the
distributions pursuant to Section 4.01(I)(A)(a)(i) above, the
Group 1 Senior Principal Distribution Amount, as principal,
sequentially, as follows:
(A) first, to the Class AR and Class AR-L Certificates, pro rata based on
their respective Class Principal Balances, until their
respective Class Principal Balances are reduced to zero; and
(B) second, to the Class 1-A-1 Certificates, until the Class Principal
Balance thereof is reduced to zero.
(b) with respect to the Class 2-A-1 Certificates, and from the Available
Distribution Amount relating to Loan Group 2:
(i) first, concurrently, to the Class 2-A-1 Certificates and Class X
Certificates an amount allocable to interest equal to the related
Interest Distribution Amount for such Distribution Date (with
respect to the Class X Certificates, the related Interest
Distribution Amount shall be the portion of the Interest
Distribution Amount described in clauses (C) and (D)(II) of the
definition thereof), any shortfall being allocated pro rata
between such Classes based on the Interest Distribution Amount
that would have been distributed pursuant to this clause in the
absence of such shortfall; provided, however, that,
notwithstanding the foregoing, the Interest Distribution Amount
to be distributed to the Class X Certificates will be reduced to
the extent of the Required Reserve Fund Deposit for such
Distribution Date pursuant, and in the amount set forth in,
Section 4.08(b); and
(ii) second, on each Distribution Date, from the Available Distribution
Amount for Loan Group 2 remaining after giving effect to the
distributions pursuant to Section 4.01(I)(A)(b)(i) above, the
Group 2 Senior Principal Distribution Amount as principal to the
Class 2-A-1 Certificates, until the Class Principal Balance
thereof is reduced to zero.
(c) with respect to the Subordinate and Class AR-L Certificates, from the
Available Distribution Amount remaining after the distributions
pursuant to Sections 4.01(I)(A)(a) and (b) above, subject to Sections
4.01(I)(C) below, and further subject to any payments to the Group 1
Certificates and the Class 2-A-1 Certificates as described in
Section 4.07, to the following Classes in the following order of
priority:
(i) first, to the Class C-M Certificates, an amount allocable to interest
equal to the Interest Distribution Amount for such Class for such
Distribution Date;
(ii) second, to the Class C-M Certificates, an amount allocable to principal
equal to its Pro Rata Share for such Distribution Date, until the
Class Principal Balance thereof is reduced to zero;
(iii) third, to the Class C-B-1 Certificates, an amount allocable to interest
equal to the Interest Distribution Amount for such Class for such
Distribution Date;
(iv) fourth, to the Class C-B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date,
until the Class Principal Balance thereof is reduced to zero;
(v) fifth, to the Class C-B-2 Certificates, an amount allocable to interest
equal to the Interest Distribution Amount for such Class for such
Distribution Date;
(vi) sixth, to the Class C-B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date,
until the Class Principal Balance thereof is reduced to zero;
(vii) seventh, to the Class C-B-3 Certificates, an amount allocable to
interest equal to the Interest Distribution Amount for such Class
for such Distribution Date;
(viii) eighth, to the Class C-B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date,
until the Class Principal Balance thereof is reduced to zero;
(ix) ninth, to the Class C-B-4 Certificates, an amount allocable to interest
equal to the Interest Distribution Amount for such Class for such
Distribution Date;
(x) tenth, to the Class C-B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date,
until the Class Principal Balance thereof is reduced to zero;
(xi) eleventh, to the Class C-B-5 Certificates, an amount allocable to
interest equal to the Interest Distribution Amount for such Class
for such Distribution Date;
(xii) twelfth, to the Class C-B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date,
until the Class Principal Balance thereof is reduced to zero;
(xiii) thirteenth, to the Class C-B-6 Certificates, an amount allocable
to interest equal to the Interest Distribution Amount for such
Class for such Distribution Date;
(xiv) fourteenth, to the Class C-B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date,
until the Class Principal Balance thereof is reduced to zero;
(xv) fifteenth, to the Class 1-A-1 Certificates, any amounts withdrawn from
the Basis Risk Reserve Fund for distribution to the Class 1-A-1
Certificates pursuant to Section 4.08(b); to the Class 2-A-1
Certificates, any amounts withdrawn from the Basis Risk Reserve
Fund for distribution to the Class 2-A-1 Certificates pursuant to
Section 4.08(b); and to the Subordinate LIBOR Certificates, any
amounts withdrawn from the Basis Risk Reserve Fund for
distribution to the Subordinate Certificates pursuant to, and in
the order of priority set forth in, Section 4.08(b);
(xvi) sixteenth, to the Class C-M, Class C-B-1, Class C-B-2, Class C-B-3,
Class C-B-4, Class C-B-5 and Class C-B-6 Certificates, in that
order, up to an amount of Net Realized Losses for such Class, if
any; provided, however, that any distribution pursuant to this
Section 4.01(I)(A)(i)(xvi) shall not result in a further
reduction of the Class Principal Balance of any of the
Subordinate Certificates; and
(xvii) seventeenth, to the Class AR-L Certificates, any remaining
Available Distribution Amount (to the extent such amount is held
by REMIC I), or to the Class AR Certificates (to the extent such
amount is held by REMIC II or REMIC III).
(B) On each Distribution Date, the amount referred to in clause (A)(i) and
(B)(i)of the definition of Interest Distribution Amount for such
Distribution Date for each Class of Certificates shall be reduced by the
Trust Administrator as described below by (i) Net Prepayment Interest
Shortfalls for Mortgage Loans in the related Loan Group for such
Distribution Date; and (ii) (A) after the Special Hazard Coverage
Termination Date, with respect to each Group 1 and Group 2 Mortgage Loan,
as applicable, that was the subject of Special Hazard Loss during the
prior calendar month, the excess of one month's interest at the related
Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as
of the Due Date in such month over the amount of Liquidation Proceeds
applied as interest on such Mortgage Loan with respect to such month, (B)
after the Bankruptcy Coverage Termination Date, with respect to each
Group 1 and Group 2 Mortgage Loan, as applicable, that became subject to a
Bankruptcy Loss during the prior calendar month, the interest portion of
the related Debt Service Reduction or Deficient Valuation, (C) each Relief
Act Reduction for any Group 1 and Group 2 Mortgage Loan, as applicable,
incurred during the prior calendar month and (D) after the Fraud Loss
Coverage Termination Date, with respect to each Group 1 and Group 2
Mortgage Loan, as applicable, that became a Fraud Loan during the prior
calendar month the excess of one month's interest at the related Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as of
the Due Date in such month over the amount of Liquidation Proceeds applied
as interest on such Mortgage Loan with respect to such month. Net
Interest Shortfalls relating to the Group 1 Loans will be allocated to (i)
the related Senior Percentage of all such reductions with respect to
Group 1 Loans will be allocated the Group 1 Certificates and the Class X
Certificates, pro rata, in proportion (a) to the amount of interest
payable on the Class 1-A-1 and Residual Certificates absent such
reductions, and (b) to the amount of interest payable from the Group 1
Loans on Component 3X absent such reductions plus the amount of interest
payable on the Component 1X Component absent such reductions and (ii) the
remainder to the Subordinate Certificates, on a pro rata basis, based upon
the amounts of interest payable on the Subordinate Certificates absent
these reductions, in each case in reduction of accrued interest thereon.
Net Interest Shortfalls relating to the Group 2 Loans will be allocated to
(i) the related Senior Percentage of all such reductions with respect to
Group 2 Loans will be allocated the Class 2-A-1 Certificates and the Class
X Certificates, pro rata, in proportion (a) to the amount of interest
payable on the Class 2-A-1 Certificates absent such reductions, and (b) to
the amount of interest payable from the Group 2 Loans on Component 3X
absent such reductions plus the amount of interest payable on the
Component 2X Component absent such reductions and (ii) the remainder to
the Subordinate Certificates, on a pro rata basis, based upon the amounts
of interest payable on the Subordinate Certificates absent these
reductions, in each case in reduction of accrued interest thereon.
(C) The Trust Administrator shall distribute the Mortgage Loan Purchase
Price of the Optional Termination in excess of the Par Value to the holder
of the Class AR-L Certificate.
(II) Prior to the distributions described in Sections 4.01(I),
the following distributions shall be made:
(a) On each Distribution Date, the REMIC I Available Distribution Amount
shall be distributed from REMIC I to REMIC II in respect of the REMIC I
Regular Interests and to the Class AR-L Certificates in the order and
priority set forth in the definition of REMIC I Distribution Amount.
(b) On each Distribution Date, the REMIC II Available Distribution Amount
shall be distributed from REMIC II to REMIC III in respect of the REMIC
II Regular Interests and to the Class AR Certificates in the order and
priority set forth in the definition of REMIC II Distribution Amount.
(c) Notwithstanding the distributions on the REMIC Regular Interests
described in this Section 4.01(II), distribution of funds from the
Certificate Account shall be made only in accordance with Sections
4.01(I).
SECTION 4.02. Allocation of Losses.
(a) Realized Losses on the Mortgage Loans in each Loan Group incurred
during a calendar month shall be allocated by the Trust Administrator to the
Classes of Certificates on the Distribution Date in the next calendar month
as follows:
(i) any Realized Loss, other than an Excess Loss, shall be allocated first,
to the Class C-B Certificates, in decreasing order of their
alphanumerical Class designations (beginning with the Class C-B-6
Certificates), until the respective Class Principal Balance of each
such Class is reduced to zero, second to the Class C-M Certificates,
until the Class Principal Balance thereof is reduced to zero and third,
to the Senior Certificates of the related Certificate Group, pro rata,
on the basis of their respective Class Principal Balances; and
(ii) Excess Losses representing principal for Mortgage Loans will be
allocated pro rata among all Certificates (other than the Class X
Certificates), based on their respective Class Principal Balances.
(b) On each Distribution Date, if the aggregate Class Principal Balance of
all of the Certificates exceeds the aggregate Stated Principal Balance of the
Mortgage Loans (after giving effect to distributions of principal and the
allocation of all losses to such Certificates on such Distribution Date),
such excess will be deemed a principal loss and will be allocated by the
Trust Administrator to the most junior Class of Class C-B Certificates then
outstanding and then to the Class C-M Certificates.
(c) Any Realized Loss allocated to a Class of Certificates or any reduction
in the Class Principal Balance of a Class of Certificates pursuant to
Section 4.02(A)(b) shall be allocated by the Trust Administrator among the
Certificates of such Class in proportion to their respective Certificate
Balances.
(d) Any allocation by the Trust Administrator of Realized Losses to a
Certificate or any reduction in the Certificate Balance of a Certificate
pursuant to Section 4.02(A)(b) shall be accomplished by reducing the
Certificate Balance thereof, immediately following the distributions made on
the related Distribution Date in accordance with the definition of
"Certificate Balance."
(e) All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the REMIC I Regular Interests and REMIC II Regular
Interests as provided in the definitions of REMIC I Realized Losses and REMIC
II Realized Losses.
SECTION 4.03. Recoveries.
(a) With respect to any Class of Certificates to which a Realized Loss has
been allocated (including any such Class for which the related Class
Principal Balance has been reduced to zero), the Class Principal Balance of
such Class will be increased, up to the amount of related Recoveries for such
Distribution Date as follows:
(i) first, the Class Principal Balance of the each Class of Senior
Certificates related to the Loan Group from which the Recovery was
collected, will be increased pro rata, up to the amount of Net Recovery
Realized Losses for each such Class,
(ii) second, the Class Principal Balance of the Class C-M Certificates will
be increased, up to the amount of Net Recovery Realized Losses for such
Class; and
(iii) third, the Class Principal Balance of each Class of Class C-B
Certificates will be increased in order of seniority, up to the amount
of Net Recovery Realized Losses for each such Class; or
(b) Any increase to the Class Principal Balance of a Class of Certificates
shall increase the Certificate Balance of the related Class pro rata in
accordance with each Certificate Percentage Interest.
SECTION 4.04. Reserved.
SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trust Administrator shall
prepare and cause to be made available to each Certificateholder, the Master
Servicer, each Servicer, the Trustee, the Depositor, and each Rating Agency,
a statement setting forth with respect to the related distribution the items
listed in Exhibit Q.
The Trust Administrator's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer
and each Servicer, which shall be provided as required in Section 4.06.
On each Distribution Date, the Trust Administrator shall provide
Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each
Class of Offered Certificates as of such Distribution Date, using a format
and media mutually acceptable to the Trust Administrator and Bloomberg. In
connection with providing the information specified in this Section 4.05 to
Bloomberg, the Trust Administrator and any director, officer, employee or
agent of the Trust Administrator shall be indemnified and held harmless by
DLJMC, to the extent, in the manner and subject to the limitations provided
in Section 9.05. The Trust Administrator will also make the monthly
statements to Certificateholders available each month to each party referred
to in Section 4.05(a) via the Trust Administrator's website. The Trust
Administrator's website can be accessed at xxxx://xxx.xxxxxxx.xxx or at such
other site as the Trust Administrator may designate from time to time.
Persons that are unable to use the above website are entitled to have a paper
copy mailed to them via first class mail by calling the Trust Administrator
at 000-000-0000. The Trust Administrator shall have the right to change the
way the reports referred to in this Section are distributed in order to make
such distribution more convenient and/or more accessible to the above parties
and to the Certificateholders. The Trust Administrator shall provide timely
and adequate notification to all above parties and to the Certificateholders
regarding any such change. The Trust Administrator may fully rely upon and
shall have no liability with respect to information provided by the Master
Servicer or any Servicer.
(b) Upon request, within a reasonable period of time after the end of each
calendar year, the Trust Administrator shall cause to be furnished to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in items (i)(c), (i)(d),
(i)(g), (i)(j), (i)(k), (ii)(c), (ii)(d), (ii)(g), (ii)(j), (v)(a), (v)(b),
(v)(l), (v)(m) and (v)(n) of Exhibit Q aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trust Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trust Administrator pursuant to any requirements of the Code
as from time to time in effect.
SECTION 4.06. Servicer to Cooperate.
Each Servicer shall provide to the Master Servicer the
information set forth in Exhibit G, and any other information the Master
Servicer requires, in such form as the Master Servicer shall reasonably
request, or in such form as may be mutually agreed upon between such Servicer
and the Master Servicer, with respect to each Mortgage Loan serviced by such
Servicer no later than (i) with respect to a Servicer other than Xxxxx Fargo,
twelve noon on the Data Remittance Date, and (ii) with respect to Xxxxx
Fargo, on the Data Remittance Date, to enable the Master Servicer to provide
such information to the Trust Administrator.
The Master Servicer, with respect to the Mortgage Loans shall
provide to the Trust Administrator the information set forth in Exhibit G in
such form as the Trust Administrator shall reasonably request no later than
twelve noon on the Data Remittance Date to enable the Trust Administrator to
calculate the amounts to be distributed to each Class of Certificates and
otherwise perform its distribution, accounting and reporting requirements
hereunder.
SECTION 4.07. Cross-Collateralization; Adjustments to Available Funds.
(a) On each Distribution Date prior to the Credit Support Depletion Date,
but after the date on which the aggregate Class Principal Balance of the
Group 1 Certificates or the Class 2-A-1 Certificates has been reduced to
zero, the Trust Administrator shall distribute the principal portion of the
Available Distribution Amount on the Mortgage Loans relating to such Senior
Certificates that will have been paid in full, to the holders of the Senior
Certificates of the other Certificate Group. Such amount will be allocated
to the other Group and paid to the Senior Certificates in such Group in the
same priority as such Certificates would receive other distributions of
principal pursuant to Section 4.01(I)(A); provided, however, that the Trust
Administrator shall not make such distribution on such Distribution Date if
(a) the Subordinate Percentage for such Distribution Date is greater than or
equal to 200% of the Subordinate Percentage as of the Closing Date and (b)
the average outstanding principal balance of the Mortgage Loans in each Loan
Group delinquent 60 days or more over the last six months, as a percentage of
the related Subordinate Component Balance, is less than 50%.
(b) If on any Distribution Date the aggregate Class Principal Balance of
the Group 1 Certificates or the Class 2-A-1 Certificates is greater than the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group (an "Undercollateralized Group"), then the Trust Administrator shall
reduce the Available Distribution Amount of the other Loan Group if it is not
undercollateralized (an "Overcollateralized Group"), as follows:
(1) to add to the Available Distribution Amount of the Undercollateralized
Group) an amount equal to the lesser of (a) one month's interest on the
Principal Transfer Amount of the Undercollateralized Group at the Net
WAC Rate applicable to the Undercollateralized Group(s) and
(b) Available Distribution Amount of the Overcollateralized Groups
remaining after making interest distributions to the Senior
Certificates of the Overcollateralized Group on such Distribution Date
pursuant to Section 4.01; and
(2) to the Senior Certificates of the Undercollateralized Group, to the
extent of the principal portion of Available Distribution Amount of the
Overcollateralized Group remaining after making interest and principal
distributions to the Senior Certificates of the Overcollateralized
Group on such Distribution Date pursuant to Section 4.01, until the
Class Principal Balance of the Senior Certificates of such
Undercollateralized Group equals the aggregate Stated Principal Balance
of the Mortgage Loans in the related Loan Group. Payments shall be
made to the Senior Certificates in each Group in the same priority as
such Certificates would receive other distributions of principal
pursuant to Section 4.01(I)(A).
SECTION 4.08. Basis Risk Reserve Fund.
(a) On the Closing Date, the Trust Administrator shall establish and
maintain in its name, in trust for the benefit of the Holders of the
Certificates, the Basis Risk Reserve Fund. The Basis Risk Reserve Fund shall
be an Eligible Account, and funds on deposit therein shall be held separate
and apart from, and shall not be commingled with, any other moneys, including
without limitation, other moneys held by the Trust Administrator pursuant to
this Agreement.
(b) On the Closing Date, amount equal to the $5,000.00 will be deposited by
the Depositor in the Basis Risk Reserve Fund. Amounts on deposit in the
Basis Risk Reserve Fund can be withdrawn by the Trust Administrator in
connection with any Distribution Date to fund the amounts required to be
distributed to holders of the LIBOR Certificates , pro rata, in respect of
any Basis Risk Shortfall for such Certificates pursuant to
Section 4.01(I)(A)(c)(xv); provided, however, if on any Distribution Date a
related Basis Risk Shortfall exists, the Trust Administrator shall transfer
from the Certificate Account to the Basis Risk Reserve Fund pursuant to
Section 4.01(I)(A)(a)(i) and Section 4.01(I)(A)(b)(i), (i) the Class 1X
Required Reserve Fund Deposit for such Distribution Date for payment of such
remaining related Basis Risk Shortfall to the Class 1-A-1 Certificates
pursuant to Section 4.01(I)(A)(c)(xv), (ii) the Class 2X Required Reserve
Fund Deposit for such Distribution Date for payment of such remaining related
Basis Risk Shortfall to the Class 2-A-1 Certificates pursuant to
Section 4.01(I)(A)(c)(xv) and (iii) the Class 3X Required Reserve Fund
Deposit for such Distribution Date for payment of such remaining related
Basis Risk Shortfall to the LIBOR Certificates pursuant to
Section 4.01(I)(A)(c)(xv); provided, further, that amounts withdrawn from the
Basis Risk Reserve Fund to pay Basis Risk Shortfall to the LIBOR Certificates
shall first reduce the amount on deposit therein prior to reducing any Class
1X Required Reserve Fund Deposit, Class 2X Required Reserve Fund Deposit or
Class 3X Required Reserve Fund Deposit for such Distribution Date. Basis
Risk Shortfalls payable to the Subordinate LIBOR Certificates shall be paid,
sequentially to the Class C-M, Class C-B-1, Class C-B-2 and Class C-B-3
Certificates, in each case up to an amount equal to any Basis Risk Shortfalls
with respect to such Class. On any Distribution Date, any amounts on deposit
in the Basis Risk Reserve Fund in excess of $5,000.00 shall be distributed to
the Class -X Certificateholders.
(c) Funds in the Basis Risk Reserve Fund may be invested in Eligible
Investments by the Trust Administrator at the direction of the holders of the
Class X Certificateholders. Any net investment earnings on such amounts
shall be payable to the Class X Certificateholders. The Class X
Certificateholders shall evidence ownership of the Basis Risk Reserve Fund
for federal tax purposes and the Class X Certificateholders shall direct the
Trust Administrator in writing as to the investment of amounts therein. In
the absence of such written direction, all funds in the Class Basis Risk
Reserve Fund shall be invested by the Trust Administrator in the Xxxxx Fargo
Prime Money Market Fund. The Trust Administrator shall have no liability for
losses on investments in Eligible Investments made pursuant to this
Section 4.09(c) (other than as obligor on any such investments). Upon
termination of the Trust Fund, any amounts remaining in the Basis Risk
Reserve Fund shall be distributed to the Class X Certificateholders.
(d) If the Trust Administrator shall deposit in the Basis Risk Reserve Fund
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Basis Risk Reserve Fund, any provision herein to the
contrary notwithstanding.
(e) On the Distribution Date immediately after the Distribution Date on
which the Class Principal Balance of the LIBOR Certificates equals zero, any
amounts on deposit in the Basis Risk Reserve Fund not payable on such
Certificates shall be distributed to the Holders of the Class X Certificates.
ARTICLE V
ADVANCES BY THE MASTER SERVICER AND SERVICERS
SECTION 5.01. Advances by the Master Servicer and Servicers.
With respect to the Non-Designated Mortgage Loans, each Servicer
shall deposit in the related Collection Account as Advances an amount equal
to all Scheduled Payments (with interest at the Mortgage Rate less the
Servicing Fee Rate) which were due on such Non-Designated Mortgage Loans
serviced by it during the applicable Collection Period and which were
delinquent at the close of business on the immediately preceding
Determination Date. Each Servicer's obligation to make such Advances as to
any related Non-Designated Mortgage Loan will continue through the last
Scheduled Payment due prior to the payment in full of such Non-Designated
Mortgage Loan, or through the date that the related Mortgaged Property has,
in the judgment of the related Servicer, been completely liquidated. Each
Servicer shall not be required to advance shortfalls of principal or interest
resulting from the application of the Relief Act.
With respect to any Non-Designated Mortgage Loan, to the extent
required by Accepted Servicing Practices, the Master Servicer and each
Servicer shall be obligated to make Advances in accordance with the
provisions of this Agreement; provided, however, that such obligation with
respect to any related Non-Designated Mortgage Loan shall cease if the Master
Servicer or a Servicer determines, in its reasonable opinion, that Advances
with respect to such Non-Designated Mortgage Loan are Nonrecoverable
Advances. In the event that the Master Servicer or such Servicer determines
that any such Advances are Nonrecoverable Advances, the Master Servicer or
such Servicer shall provide the Trust Administrator with a certificate signed
by a Servicing Officer evidencing such determination.
With respect to any Non-Designated Mortgage Loan, if the amount
of Advances received from a Servicer is less than the amount required to be
advanced by such Servicer, the Master Servicer shall be obligated to make a
payment in an amount equal to such deficiency, subject to any determination
by the Master Servicer that any portion of the amount required to be advanced
is a Nonrecoverable Advance.
With respect to any of the Non-Designated Mortgage Loans, if an
Advance is required to be made hereunder by a Servicer, such Servicer shall
on the Cash Remittance Date either (i) deposit in the Collection Account from
its own funds an amount equal to such Advance, (ii) cause to be made an
appropriate entry in the records of the Collection Account that funds in such
account being held for future distribution or withdrawal have been, as
permitted by this Section 5.01, used by such Servicer to make such Advance or
(iii) make Advances in the form of any combination of clauses (i) and (ii)
aggregating the amount of such Advance. Any such funds being held in a
Collection Account for future distribution and so used shall be replaced by
such Servicer from its own funds by deposit in such Collection Account on or
before any future Distribution Date in which such funds would be due.
With respect to the Designated Mortgage Loans, the Master
Servicer shall make Advances as required by Section 3.22(b) of this Agreement.
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. The Certificates.
The Certificates shall be in substantially the forms set forth in
Exhibits A, B, C, D, E and F hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement or as may in the reasonable judgment of the Trust
Administrator or the Depositor be necessary, appropriate or convenient to
comply, or facilitate compliance, with applicable laws, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of
any securities exchange on which any of the Certificates may be listed, or as
may, consistently herewith, be determined by the officers executing such
Certificates, as evidenced by their execution thereof.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trust Administrator shall make
distributions to each Certificateholder of record on the preceding Record
Date either (x) by wire transfer in immediately available funds to the
account of such holder at a bank or other entity having appropriate
facilities therefore, if (i) such Holder has so notified the Trust
Administrator at least five Business Days prior to the related Record Date
and (ii) such Holder shall hold (A) a Class X Certificate, (B) 100% of the
Class Principal Balance of any Class of Certificates or (c) Certificates of
any Class with aggregate principal Denominations of not less than $1,000,000
or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The definitive Certificates shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or
may be produced in any other manner permitted by the rules of any securities
exchange on which any of the Certificates may be listed, all as determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be
in excess of the applicable minimum denomination) and aggregate denominations
per Class set forth in the Preliminary Statement.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trust Administrator by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures were affixed, authorized to sign on
behalf of the Trust Administrator shall bind the Trust Administrator,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or
did not hold such offices at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication executed by the Trust Administrator by manual signature, and
such certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication.
SECTION 6.02. Registration of Transfer and Exchange of Certificates.
(a) The Trust Administrator shall maintain, or cause to be maintained, a
Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Trust Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein
provided. Upon surrender for registration of transfer of any Certificate,
the Trust Administrator shall execute, authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Certificates in
like aggregate interest and of the same Class. Component 1X, Component 2X
and Component 3X are not separately transferable.
(b) At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of authorized denominations and the same aggregate
interest in the Trust Fund and of the same Class, upon surrender of the
Certificates to be exchanged at the office or agency of the Trust
Administrator set forth in Section 6.06. Whenever any Certificates are so
surrendered for exchange, the Trust Administrator shall execute, authenticate
and deliver the Certificates which the Certificateholder making the exchange
is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trust Administrator duly
executed by the Holder thereof or his attorney duly authorized in writing.
(c) No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
(d) All Certificates surrendered for registration of transfer and exchange
shall be canceled and subsequently destroyed by the Trust Administrator in
accordance with the Trust Administrator's customary procedures.
(e) No transfer of any Private Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under 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. Except in connection with any transfer of a
Private Certificate by the Depositor to any affiliate, in the event that a
transfer is to be made in reliance upon an exemption from the 1933 Act and
such laws, in order to assure compliance with the 1933 Act and such laws, the
Certificateholder desiring to effect such transfer and such
Certificateholder's prospective transferee shall each certify to the Trust
Administrator in writing the facts surrounding the transfer in substantially
the form set forth in Exhibit K (the "Transferor Certificate") and (i)
deliver a letter in substantially the form of either (A) Exhibit L-1 (the
"Investment Letter"), provided that all of the Private Certificates of a
Class shall be transferred to one investor or the Depositor otherwise
consents to such transfer, or (B) Exhibit L-2 (the "Rule 144A Letter") or
(ii) there shall be delivered to the Trust Administrator at the expense of
the transferor an Opinion of Counsel that such transfer may be made pursuant
to an exemption from the 1933 Act. The Depositor shall provide to any Holder
of a Private Certificate and any prospective transferee designated by any
such Holder, information regarding the related Certificates and the Mortgage
Loans and such other information as shall be necessary to satisfy the
condition to eligibility set forth in Rule 144A(d)(4) for transfer of any
such Certificate without registration thereof under the 1933 Act pursuant to
the registration exemption provided by Rule 144A. The Trust Administrator
shall cooperate with the Depositor in providing the Rule 144A information
referenced in the preceding sentence, including providing to the Depositor
such information regarding the Certificates, the Mortgage Loans and other
matters regarding the Trust Fund as the Depositor shall reasonably request to
meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trust Administrator, the Depositor, each Seller, the Master
Servicer, each Servicer and the Special 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.
(f) No transfer of an ERISA-Restricted Certificate (except for the Residual
Certificates) shall be made unless the Trust Administrator shall have
received in accordance with Exhibit X-0, Xxxxxxx X-0 or Exhibit M, as
applicable, either (i) a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trust Administrator, to the effect that such transferee is not an employee
benefit plan or arrangement subject to Section 406 of ERISA or Section 4975
of the Code, or a person using the assets of any such plan or arrangement,
which representation letter shall not be an expense of the Trustee, the Trust
Administrator or the Trust Fund, (ii) if the purchaser is an insurance
company and the Certificate has been the subject of an ERISA-Qualifying
Underwriting, a representation that the purchaser is an insurance company
which is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and
III of PTCE 95-60 or (iii) in the case of any such Certificate presented for
registration in the name of an employee benefit plan or arrangement subject
to Section 406 of ERISA or Section 4975 of the Code (or comparable provisions
of any subsequent enactments), or a person using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trust Administrator to the
effect that the purchase or holding of such Certificate will not result in
prohibited transactions under Section 406 of ERISA and/or Section 4975 of the
Code and will not subject the Depositor, the Trustee, the Trust
Administrator, the Master Servicer or any other Servicer to any obligation in
addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of such parties or the Trust Fund. No transfer of a
Residual Certificate shall be made unless the Trust Administrator shall have
received, in accordance with Exhibit M, a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trust Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of
ERISA or Section 4975 of the Code, or a person using the assets of any such
plan or arrangement, which representation letter shall not be an expense of
the Trustee, the Trust Administrator or the Trust Fund. In the event the
representations referred to in this Section 6.02(f) are not furnished, such
representations shall be deemed to have been made to the trustee by the
transferee's acceptance of such ERISA-Restricted Certificate by any
beneficial owner who purchases an interest in such Certificate in book-entry
form. In the event that a representation is violated, or any attempt to
transfer an ERISA-Restricted Certificate to a plan or arrangement or person
using a plan's or arrangement's assets is attempted without the delivery to
the Trust Administrator of the Opinion of Counsel described above, the
attempted transfer or acquisition of such Certificate shall be void and of no
effect.
(g) Additional restrictions on transfers of the Class AR and Class AR-L
Certificates are set forth below:
(i) Each Person who has or who acquires any ownership interest in a
Class AR or Class AR-L 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 Trust
Administrator 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 such sale. The rights of each Person acquiring any
ownership interest in a Class AR or Class AR-L Certificate are
expressly subject to the following provisions:
(A) Each Person holding or acquiring any ownership interest in a Class AR
or Class AR-L Certificate shall be other than a Disqualified
Organization and shall promptly notify the Trust Administrator of
any change or impending change in its status as other than a
Disqualified Organization.
(B) In connection with any proposed transfer of any ownership interest in a
Class AR or Class AR-L Certificate to a U.S. Person, the Trust
Administrator shall require delivery to it, and shall not register
the transfer of a Class AR or Class AR-L Certificate until its
receipt of (1) an affidavit and agreement (a "Transferee Affidavit
and Agreement" attached hereto as Exhibit M) from the proposed
transferee, in form and substance satisfactory to the Trust
Administrator, representing and warranting, among other things, that
it is not a non U.S. Person, that such transferee is other than a
Disqualified Organization, that it is not acquiring its ownership
interest in a Class AR or Class AR-L Certificate that is the subject
of the proposed Transfer as a nominee, trustee or agent for any
Person who is not other than a Disqualified Organization, that for
so long as it retains its ownership interest in a Class AR or
Class AR-L Certificate, it will endeavor to remain other than a
Disqualified Organization, and that it has reviewed the provisions
of this Section 6.02(g) and agrees to be bound by them, and (2) a
certificate, attached hereto as Exhibit N, from the Holder wishing
to transfer a Class AR or Class AR-L Certificate, in form and
substance satisfactory to the Trust Administrator, representing and
warranting, among other things, that no purpose of the proposed
transfer is to allow such Holder to impede the assessment or
collection of tax.
(C) Notwithstanding the delivery of a Transferee Affidavit and Agreement by
a proposed transferee under clause (B) above, if the Trust
Administrator has actual knowledge that the proposed transferee is
not other than a Disqualified Organization, no transfer of an
ownership interest in a Class AR or Class AR-L Certificate to such
proposed transferee shall be effected.
(D) Each Person holding or acquiring any ownership interest in a Class AR
or Class AR-L Certificate agrees, by holding or acquiring such
ownership interest, to require a Transferee Affidavit and Agreement
from the other Person to whom such Person attempts to transfer its
ownership interest and to provide a certificate to the Trust
Administrator in the form attached hereto as Exhibit N.
(ii) The Trust Administrator shall register the transfer of any Class AR or
Class AR-L Certificate only if it shall have received the Transferee
Affidavit and Agreement, a certificate of the Holder requesting such
transfer in the form attached hereto as Exhibit N and all of such other
documents as shall have been reasonably required by the Trust
Administrator as a condition to such registration.
(iii) (A) If any Disqualified Organization shall become a Holder of a
Class AR or Class AR-L Certificate, then the last preceding Holder
that was other than a Disqualified Organization 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 Class AR or Class AR-L Certificate. If any non
U.S. Person shall become a Holder of a Class AR or Class AR-L
Certificate, then the last preceding Holder that is a U.S. Person
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of
registration of the transfer to such non U.S. Person of such
Class AR or Class AR-L Certificate. If a transfer of a Class AR or
Class AR-L Certificate is disregarded pursuant to the provisions of
Treasury Regulations Section 1.860E 1 or Section 1.860G 3, then the
last preceding Holder that was other than a Disqualified
Organization 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 Class AR or Class AR-L
Certificate. The Trust Administrator shall be under no liability to
any Person for any registration of transfer of a Class AR or
Class AR-L Certificate that is in fact not permitted by this
Section 6.02(g) 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 of a Class AR or Class AR-L Certificate
shall become a Holder of a Class AR or Class AR-L Certificate in
violation of the restrictions in this Section 6.02(g) and to the
extent that the retroactive restoration of the rights of the Holder
of such Class AR or Class AR-L Certificate as described in clause
(iii)(A) above shall be invalid, illegal or unenforceable, then the
Depositor shall have the right, without notice to the Holder or any
prior Holder of such Class AR or Class AR-L Certificate, to sell
such Class AR or Class AR-L Certificate to a purchaser selected by
the Depositor on such terms as the Depositor may choose. Such
purported transferee shall promptly endorse and deliver a Class AR
or Class AR-L Certificate in accordance with the instructions of the
Depositor. Such purchaser may be the Depositor itself or any
affiliate of the Depositor. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Depositor
or its affiliates), expenses and taxes due, if any, shall be
remitted by the Depositor 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 Depositor, and the
Depositor shall not be liable to any Person having an ownership
interest or a purported ownership interest in a Class AR or
Class AR-L Certificate as a result of its exercise of such
discretion.
(iv) The Master Servicer and each Servicer, on behalf of the Trust
Administrator, shall make available, upon written request from the
Trust Administrator, all information reasonably available to it that is
necessary to compute any tax imposed (A) as a result of the transfer of
an ownership interest in a Class AR or Class AR-L Certificate to any
Person who is not other than a Disqualified Organization, including the
information regarding "excess inclusions" of such Residual Certificate
required to be provided to the Internal Revenue Service and certain
Persons as described in Treasury Regulation Section 1.860D 1(b)(5), and
(B) as a result of any regulated investment company, real estate
investment trust, common trust fund, partnership, trust, estate or
organizations described in Section 1381 of the Code having as among its
record holders at any time any Person who is not other than a
Disqualified Organization. Reasonable compensation for providing such
information may be required by the Master Servicer or the related
Servicer from such Person.
(v) The provisions of this Section 6.02(g) set forth prior to this
Section (v) may be modified, added to or eliminated by the Depositor,
provided that there shall have been delivered to the Trust
Administrator the following:
(A) written notification from each Rating Agency to the effect that the
modification, addition to or elimination of such provisions will not
cause such Rating Agency to downgrade its then current rating of the
Certificates; and
(B) a certificate of the Depositor stating that the Depositor has received
an Opinion of Counsel, in form and substance satisfactory to the
Depositor, to the effect that such modification, addition to or
elimination of such provisions will not cause the Trust Fund to
cease to qualify as a REMIC and will not create a risk that (i) the
Trust Fund may be subject to an entity level tax caused by the
transfer of a Class AR or Class AR-L Certificate to a Person which
is not other than a Disqualified Organization or (2) a
Certificateholder or another Person will be subject to a REMIC
related tax caused by the transfer of applicable Class AR or
Class AR-L Certificate to a Person which is not other than a
Disqualified Organization.
(vi) The following legend shall appear on each Class AR or Class AR-L
Certificate:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER
AFFIDAVIT TO THE DEPOSITOR AND THE TRUST ADMINISTRATOR THAT (1)
SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE 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, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF
THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A),
(B), OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION
AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT
SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR
OTHER DISPOSITION OF THIS [CLASS AR][CLASS AR-L] 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 THE [CLASS AR][CLASS AR-L] CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
(h) The Trust Administrator shall have no liability to the Trust Fund
arising from a transfer of any such Certificate in reliance upon a
certification, ruling or Opinion of Counsel described in this Section 6.02;
provided, however, that the Trust Administrator shall not register the
transfer of any Class AR or Class AR-L Certificate if it has actual knowledge
that the proposed transferee does not meet the qualifications of a permitted
Holder of a Class AR or Class AR-L Certificate as set forth in this
Section 6.02.
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trust
Administrator, or the Trust Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b)
there is delivered to each Servicer, the Trustee and the Trust Administrator
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Trustee and the Trust
Administrator that such Certificate has been acquired by a bona fide
purchaser, the Trust Administrator shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and interest in the Trust Fund.
In connection with the issuance of any new Certificate under this
Section 6.03, the Trust Administrator may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses
of the Trust Administrator) connected therewith. Any replacement Certificate
issued pursuant to this Section 6.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be
found at any time.
SECTION 6.04. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of
transfer, each Servicer, the Trust Administrator, and any agent of the Master
Servicer or any Servicer, the Trust Administrator may treat the person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for
all other purposes whatsoever, and none of the Master Servicer or the
Servicers, the Trust Administrator, nor any agent of the Master Servicer or a
Servicer or the Trust Administrator shall be affected by any notice to the
contrary.
SECTION 6.05. Access to List of Certificateholders' Names and Addresses.
(a) If three or more Certificateholders (i) request in writing from the
Trust Administrator a list of the names and addresses of Certificateholders,
(ii) state that such Certificateholders desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and (iii) provide a copy of the communication which such
Certificateholders propose to transmit, then the Trust Administrator shall,
within ten Business Days after the receipt of such request, afford such
Certificateholders access during normal business hours to a current list of
the Certificateholders. The expense of providing any such information
requested by a Certificateholder shall be borne by the Certificateholders
requesting such information and shall not be borne by the Trust Administrator
or the Trustee. Every Certificateholder, by receiving and holding a
Certificate, agrees that the Trustee and the Trust Administrator shall not be
held accountable by reason of the disclosure of any such information as to
the list of the Certificateholders hereunder, regardless of the source from
which such information was derived.
(b) The Master Servicer and each Servicer, so long as it is a servicer
hereunder, DLJMC and the Depositor shall have unlimited access to a list of
the names and addresses of the Certificateholders which list shall be
provided by the Trust Administrator promptly upon request.
SECTION 6.06. Maintenance of Office or Agency.
The Trust Administrator will maintain or cause to be maintained
at its expense an office or offices or agency or agencies in Minneapolis,
Minnesota where Certificates may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Trust Administrator
in respect of the Certificates and this Agreement may be served. The Trust
Administrator initially designates its Corporate Trust Office as its office
for such purpose. The Trust Administrator will give prompt written notice to
the Certificateholders of any change in the location of any such office or
agency.
SECTION 6.07. Book Entry Certificates.
Notwithstanding the foregoing, the Book-Entry Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates, to be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Depositor. The
Book-Entry Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of DTC, as the initial
Clearing Agency, and no Beneficial Holder will receive a definitive
certificate representing such Beneficial Holder's interest in the
Certificates, except as provided in Section 6.09. Unless and until
definitive, fully registered Certificates ("Definitive Certificates") have
been issued to the Beneficial Holders pursuant to Section 6.09:
(a) the provisions of this Section 6.07 shall be in full force and effect
with respect to the Book-Entry Certificates;
(b) the Depositor and the Trust Administrator may deal with the Clearing
Agency for all purposes with respect to the Book-Entry Certificates
(including the making of distributions on such Certificates) as the sole
Holder of such Certificates;
(c) to the extent that the provisions of this Section 6.07 conflict with
any other provisions of this Agreement, the provisions of this Section 6.07
shall control; and
(d) the rights of the Beneficial Holders of the Book-Entry Certificates
shall be exercised only through the Clearing Agency and the Participants and
shall be limited to those established by law and agreements between such
Beneficial Holders and the Clearing Agency and/or the Participants. Pursuant
to the Depository Agreement, unless and until Definitive Certificates are
issued pursuant to Section 6.09, the initial Clearing Agency will make
book-entry transfers among the Participants and receive and transmit
distributions of principal and interest on the related Book-Entry
Certificates to such Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
the Book-Entry Certificates evidencing a specified percentage of the
aggregate unpaid principal amount of such Certificates, such direction or
consent may be given by the Clearing Agency at the direction of Beneficial
Holders owning such Certificates evidencing the requisite percentage of
principal amount of such Certificates. The Clearing Agency may take
conflicting actions with respect to the Book-Entry Certificates to the extent
that such actions are taken on behalf of the Beneficial Holders.
SECTION 6.08. Notices to Clearing Agency.
Whenever notice or other communication to the Holders of
Book-Entry Certificates is required under this Agreement, unless and until
Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 6.09, the Trust Administrator shall
give all such notices and communications specified herein to be given to
Holders of the Book-Entry Certificates to the Clearing Agency which shall
give such notices and communications to the related Participants in
accordance with its applicable rules, regulations and procedures.
SECTION 6.09. Definitive Certificates.
If (a) the Depositor advises the Trust Administrator in writing
that the Clearing Agency is no longer willing or able to properly discharge
its responsibilities under the Depository Agreement with respect to the
Certificates and the Trust Administrator or the Depositor is unable to locate
a qualified successor, (b) the Depositor, with the consent of the applicable
Participants, advises the Trust Administrator in writing that it elects to
terminate the book-entry system with respect to the Book-Entry Certificates
through the Clearing Agency or (c) after the occurrence of an Event of
Default, Holders of Book-Entry Certificates evidencing not less than 66-2/3%
of the aggregate Class Principal Balance of the Book-Entry Certificates
advise the Trust Administrator in writing that the continuation of a
book-entry system with respect to the such Certificates through the Clearing
Agency is no longer in the best interests of the Holders of such Certificates
with respect to the Book-Entry Certificates and the applicable Participants
consent, the Trust Administrator shall notify all Holders of such
Certificates of the occurrence of any such event and the availability of
Definitive Certificates. Upon surrender to the Trust Administrator of the
such Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trust
Administrator shall authenticate and deliver the Definitive Certificates.
Neither the Depositor nor the Trust Administrator shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or
to be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trust Administrator, to the extent applicable with respect
to such Definitive Certificates, and the Trust Administrator shall recognize
the Holders of Definitive Certificates as Certificateholders hereunder.
ARTICLE VII
THE DEPOSITOR, THE SELLER, THE MASTER
SERVICER, THE SERVICERS AND THE SPECIAL SERVICER
SECTION 7.01. Liabilities of the Seller, the Depositor, the Master
Servicer, the Back-Up Servicer, the Servicers
and the Special Servicer.
The Depositor, each Seller, the Master Servicer, the Back-Up
Servicer, each Servicer and the Special Servicer shall be liable under this
Agreement to any other party to this Agreement, including the liability of
each Servicer to the Master Servicer in accordance herewith only to the
extent of the obligations specifically and respectively imposed upon and
undertaken by them herein.
SECTION 7.02. Merger or Consolidation of the Seller, the Depositor, the
Back-Up Servicer, the Master Servicer, the
Servicers or the Special Servicer.
Subject to the immediately succeeding paragraph, the Depositor,
each Seller, the Master Servicer, the Back-Up Servicer, each Servicer and the
Special Servicer will each do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and
franchises (charter and statutory) and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor, the Seller, the Master
Servicer, the Back-Up Servicer, any Servicer or the Special Servicer may be
merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Seller, the Master Servicer, the
Back-Up Servicer, any Servicer or the Special Servicer shall be a party, or
any Person succeeding to the business of the Depositor, the Seller, the
Back-Up Servicer or any Servicer, shall be the successor of the Depositor,
the Seller, the Back-Up Servicer or such Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that except in connection with a
transfer of servicing pursuant to Section 7.04(c) hereof, the successor or
surviving Person to the Master Servicer, the Back-Up Servicer, any such
Servicer or the Special Servicer shall be qualified to sell mortgage loans
to, and to service mortgage loans on behalf of, FNMA or FHLMC.
Notwithstanding anything else in this Section 7.02 or in
Section 7.04 hereof to the contrary, the Master Servicer or a Servicer may
assign its rights and delegate its duties and obligations under this
Agreement; provided, however, that the Master Servicer or such Servicer gives
the Depositor, the Trustee and the Trust Administrator notice of such
assignment; and provided further, (a) except in connection with a transfer of
servicing pursuant to Section 7.04(c) hereof, that such purchaser or
transferee accepting such assignment and delegation shall be an institution
that is a FNMA and FHLMC approved seller/servicer in good standing, which has
a net worth of at least $15,000,000, and which is willing to service the
Mortgage Loans and (b) such purchaser or transferee executes and delivers to
the Depositor, the Trustee and the Trust Administrator an agreement accepting
such delegation and assignment, which contains an assumption by such Person
of the rights, powers, duties, responsibilities, obligations and liabilities
of the Master Servicer, the Back-Up Servicer or such Servicer, with like
effect as if originally named as a party to this Agreement; and provided
further, except in respect of any transfer of servicing pursuant to
Section 7.04(c) hereof, that each of the Rating Agencies acknowledge that its
rating of the Certificates in effect immediately prior to such assignment
will not be qualified or reduced as a result of such assignment and
delegation. In the case of any such assignment and delegation, the Master
Servicer, the Back-Up Servicer or such Servicer shall be released from its
obligations under this Agreement (except as provided above), except that the
Master Servicer, Back-Up Servicer or the related Servicer shall remain liable
for all liabilities and obligations incurred by it as the Master Servicer,
Back-Up Servicer or Servicer hereunder prior to the satisfaction of the
conditions to such assignment and delegation set forth in the preceding
sentence.
SECTION 7.03. Limitation on Liability of the Seller, the Depositor, the
Master Servicer, the Back-Up Servicer, the
Servicers, the Special Servicer and Others.
None of the Depositor, the Master Servicer, the Back-Up Servicer,
any Servicer, the Seller, the Special Servicer, nor any of the directors,
officers, employees or agents of the Depositor, the Master Servicer, the
Back-Up Servicer, any Servicer, the Seller or the Special Servicer shall be
under any liability to the Certificateholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Master Servicer, the Back-Up Servicer,
any Servicer, the Seller or the Special Servicer against any breach of
representations or warranties made by it herein or protect the Depositor, the
Master Servicer, the Back-Up Servicer, any Servicer, the Seller or the
Special Servicer or any such director, officer, employee or agent from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Depositor, the
Master Servicer, the Back-Up Servicer, any Servicer, the Seller and the
Special Servicer and any director, officer, employee or agent of the
Depositor, the Master Servicer, the Back-Up Servicer, any Servicer, the
Seller or the Special 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, the Back-Up
Servicer, any Servicer, the Seller and the Special Servicer and any director,
officer, employee or agent of the Depositor, the Master Servicer, the Back-Up
Servicer, any Servicer, the Seller or the Special Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability
or expense incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Master
Servicer, the Back-Up Servicer, any Servicer, the Seller or the Special
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to their respective duties hereunder and
which in its opinion may involve it in any expense or liability; provided,
however, that the Depositor, the Master Servicer, the Back-Up Servicer, any
Servicer, the Seller or the Special Servicer may in its discretion undertake
any such action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of
the Trustee, the Trust Administrator and the Certificateholders hereunder;
provided, however, that in the event the related Servicer agrees, at the
request of the Seller, to act on behalf of the Seller in any dispute or
litigation that is not incidental to such Servicer's duties hereunder and
that relates to the origination of a Mortgage Loan, the Seller shall pay all
expenses associated with the management and defense of such claim. Anything
in this Agreement to the contrary notwithstanding, in no event shall the
Master Servicer, the Back-Up Servicer, any Servicer or the Special Servicer
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Master
Servicer, the Back-Up Servicer, the related Servicer or the Special Servicer
has been advised of the likelihood of such loss or damage and regardless of
the form of action.
SECTION 7.04. Master Servicer and Servicer Not to Resign; Transfer of
Servicing.
(a) Neither the Master Servicer nor any Servicer shall resign from the
obligations and duties hereby imposed on it except (i) upon appointment of a
successor master servicer or successor servicer and receipt by the Trustee
and the Trust Administrator of a letter from each Rating Agency that such a
resignation and appointment will not result in a downgrading of the rating of
any of the Certificates related to the applicable Mortgage Loans, or (ii)
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination under clause (ii) permitting the
resignation of the Master Servicer or a Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee and the Trust
Administrator. No such resignation shall become effective until the
successor master servicer or successor servicer shall have assumed the Master
Servicer or such Servicer's, as applicable, responsibilities, duties,
liabilities and obligations hereunder in accordance with Section 8.02 hereof.
(b) Notwithstanding the foregoing, at DLJMC's request, so long as it is the
owner of the related servicing rights, the Master Servicer or SPS shall
resign, upon the selection and appointment of a successor master servicer or
servicer, as applicable; provided that DLJMC delivers to the Trustee and the
Trust Administrator the letter required in Section 7.04(a)(i) above.
Notwithstanding the foregoing, in the event that the Master Servicer is
appointed as the successor servicer to SPS, the requirements of Section
7.04(a)(i) shall be waived. In connection with the foregoing, unless
otherwise directed by DLJMC in writing on or prior to December 1, 2004, DLJMC
hereby directs SPS to resign as Servicer hereunder and appoints the Master
Servicer to service the SPS Serviced Mortgage Loans, effective as of January
1, 2005. In connection with its resignation, SPS hereby agrees to deliver to
the Master Servicer on the date of its resignation a schedule setting forth
all of the SPS Mortgage Loans as of such date. The Master Servicer agrees
that, as of January 1, 2005, it will service the SPS Serviced Mortgage Loans,
and that such loans shall constitute Xxxxx Fargo Serviced Mortgage Loans, in
accordance with the terms of this Agreement. If the Master Servicer resigns
pursuant to this Section 7.04(b), DLJMC shall pay the Master Servicer an
amount equal to the product of (a) the Stated Principal Balance of all of the
Mortgage Loans then outstanding and (b) 0.02%. In connection with any
resignation of SPS pursuant to this Section 7.04(b), DLJ Mortgage Capital,
Inc. may designate one or more Servicers (which may be SPS's successor
servicer) to act as the Terminating Entity under this Agreement.
(c) [Reserved].
(d) Notwithstanding the foregoing, if the Trust Administrator shall for any
reason no longer be Trust Administrator hereunder, at DLJMC's request, the
Master Servicer shall resign, upon the selection and appointment of a
successor master servicer; provided that DLJMC delivers to the Trustee and
the Trust Administrator the letter required in Section 7.04(a)(i) above.
(e) Notwithstanding the foregoing, at DLJMC's request, the Special Servicer
shall resign, upon the selection and appointment of a successor special
servicer by DLJMC; provided that DLJMC delivers to the Trustee and the Trust
Administrator the letter required in Section 7.04(a)(i) above.
SECTION 7.05. Master Servicer, Seller and Servicers May Own Certificates.
Each of the Master Servicer, each Seller, the Special Servicer
and each Servicer in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Master Servicer, a Seller, the Special Servicer or a Servicer.
SECTION 7.06. Termination of Duties of the Back-Up Servicer.
The rights and obligations of the Back-Up Servicer under this
Agreement shall terminate upon the earlier of (i) the appointment of the
Back-Up Servicer (or its affiliate) as successor Servicer to SPS and (ii) the
termination of Xxxxx Fargo as Back-Up Servicer by the Seller. The Seller may
remove Xxxxx Fargo as Back-Up Servicer at any time.
ARTICLE VIII
DEFAULT
SECTION 8.01. Events of Default.
"Event of Default," wherever used herein, and as to the Master
Servicer or any Servicer, means any one of the following events (whatever
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) any failure by the Master Servicer or a Servicer to remit to the
Certificateholders or to the Trust Administrator any payment other than an
Advance required to be made by the Master Servicer or such Servicer under the
terms of this Agreement, which failure shall continue unremedied for a period
of (i) with respect to the Master Servicer or a Servicer other than Xxxxx
Fargo, one Business Day and (ii) with respect to Xxxxx Fargo, two Business
Days, after the date upon which written notice of such failure shall have
been given to the Master Servicer or such Servicer by the Trust Administrator
or the Depositor or to the Master Servicer or the related Servicer and the
Trust Administrator by the Holders of Certificates having not less than 25%
of the Voting Rights evidenced by the Certificates; or
(b) any failure by the Master Servicer or a Servicer to observe or perform
in any material respect any other of the covenants or agreements on the part
of the Master Servicer or a Servicer contained in this Agreement (except as
set forth in (c) and (g) below) which failure (i) materially affects the
rights of the Certificateholders and (ii) shall continue unremedied for a
period of 60 days after the date on which written notice of such failure
shall have been given to the Master Servicer or such Servicer by the Trust
Administrator or the Depositor, or to the Master Servicer or a Servicer and
the Trust Administrator by the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates; or
(c) if a representation or warranty set forth in Section 2.03 hereof made
solely in its capacity as the Master Servicer or a Servicer shall prove to be
materially incorrect as of the time made in any respect that materially and
adversely affects interests of the Certificateholders, and the circumstances
or condition in respect of which such representation or warranty was
incorrect shall not have been eliminated or cured within 90 days after the
date on which written notice thereof shall have been given to the Master
Servicer or the related Servicer and the related Seller by the Trust
Administrator for the benefit of the Certificateholders or by the Depositor;
or
(d) a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, 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 or a
Servicer and such decree or order shall have remained in force undischarged
or unstayed for a period of 60 days; or
(e) the Master Servicer or a 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 such Servicer or all or substantially all
of the property of the Master Servicer or such Servicer; or
(f) the Master Servicer or a Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable insolvency
or reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(g) any failure of the Master Servicer or a Servicer to make any Advance in
the manner and at the time required to be made from its own funds pursuant to
Section 5.01 of this Agreement and after receipt of written notice from the
Trust Administrator of such failure, which failure continues unremedied (i)
with respect to the Master Servicer or a Servicer, other than Xxxxx Fargo,
after 2 p.m., New York City time, on the Business Day immediately following
the Master Servicer's or such Servicer's receipt of such notice and (ii) with
respect to Xxxxx Fargo, on the second Business Day immediately following
Xxxxx Fargo's receipt of such notice; or
(h) notwithstanding anything to the contrary in Section 8.01(b) and with
respect to SPS, (i) (A) any failure by SPS to comply with Section 13.01(a),
which failure shall continue unremedied for a period of 30 days after the
date on which written notice of such failure shall have been given to SPS by
the Master Servicer and (B) the Master Servicer shall have delivered written
notice to the Trust Administrator and Depositor that such failure has not
been remedied after such 30 day period, or (ii) the Master Servicer has
concluded in a written report to the Trust Administrator, based solely on the
reports required to be delivered to the Master Servicer by SPS pursuant to
Section 13.01(a), either (1) that SPS is not servicing the SPS Mortgage Loans
in accordance with Accepted Servicing Practices or (2) that SPS has failed
the Loss and Delinquency Test; or
(i) with respect to SPS and after the Closing Date, (1) any reduction or
withdrawal of the ratings of SPS as a servicer of subprime mortgage loans by
one or more of the Rating Agencies that maintains a servicer rating system
and a Rating on the Certificates to "below average" or below, except for any
downgrade by Fitch to "below average" or below within nine months of the
Cut-off Date, it being understood that the existence of any such rating as of
the Closing Date shall not constitute an Event of Default hereunder or (2)
any reduction or withdrawal of the Ratings of any Class of Certificates
attributable solely to SPS or the servicing of the SPS Mortgage Loans by SPS
or (3) any placement by a Rating Agency of any Class of Certificates on
credit watch with negative implications attributable solely to SPS or the
servicing of the SPS Mortgage Loans by SPS; or
(j) (a) either (i) the servicer rankings or ratings for a Servicer, other
than SPS, are downgraded two or more levels below the level in effect on the
Closing Date by one or more of the Rating Agencies rating the Certificates or
(ii) the servicer rankings or ratings for a Servicer, other than SPS, are
downgraded to "below average" status by one or more of the Rating Agencies
rating the Certificates or (b) one or more classes of the Certificates are
downgraded or placed on negative watch due in whole or in part to the
performance or servicing of a Servicer, other than SPS; or
(k) (a) either the master servicer rankings or ratings for the Master
Servicer are downgraded two or more levels below the level in effect on the
Closing date by one or more of the Rating Agencies rating the Certificates or
(ii) the Master Servicer rankings or ratings for the Master Servicer, are
downgraded to "below average" status by one or more of the Rating Agencies
rating the Certificates or (b) one or more classes of the Certificates are
downgraded or placed on negative watch due in whole or in part to the
performance or master servicing of the Master Servicer.
If an Event of Default due to the actions or inaction of the
Master Servicer or a Servicer described in clauses (a) through (f) 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, (i) the Trust Administrator
shall at the direction of the Trustee or the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the
Certificates, by notice in writing to the Master Servicer or such Servicer
(with a copy to the Rating Agencies), terminate all of the rights and
obligations of the Master Servicer or such Servicer under this Agreement
(other than rights to reimbursement for Advances and Servicing Advances
previously made, as provided in Section 3.08) and (ii) the Master Servicer
may, if such Event of Default is due to the actions or inactions of a
Servicer by notice in writing to such Servicer (with a copy to the Rating
Agencies), terminate all of the rights and obligations of such Servicer under
this Agreement (other than rights to reimbursement for Advances and Servicing
Advances previously made, as provided in Section 3.08).
If an Event of Default described in clause (g) shall occur, (i)
if the Master Servicer has failed to make any Advance, the Trustee, and (ii)
if any Servicer has failed to make any Advance, the Master Servicer, shall
prior to the next Distribution Date, immediately make such Advance and
terminate the rights and obligations of the Master Servicer or applicable
Servicer, as applicable, hereunder and succeed to the rights and obligations
of the Master Servicer or such Servicer, as applicable, hereunder pursuant to
Section 8.02, including the obligation to make Advances on such succeeding
Distribution Date pursuant to the terms hereof. No Event of Default with
respect to the Master Servicer or a Servicer shall affect the rights or
duties of any other Servicer or constitute an Event of Default as to any
other Servicer.
If an Event of Default set forth in clause (h)(ii) above shall
occur, the Trust Administrator shall furnish the Certificateholders the
Master Servicer's written report as to SPS' servicing performance in the next
monthly statement to Certificateholders distributed pursuant to
Section 4.05. If an Event of Default set forth in clause (h) or (i) shall
occur, the Trust Administrator or the Depositor (after consulting with the
Trust Administrator), may, or at the direction of Certificateholders
evidencing not less than 51% or more of the Voting Rights evidenced by the
Certificates, the Trust Administrator shall, by written notice to the
Servicer (with a copy to each Rating Agency), terminate all of the rights and
obligations of SPS as Servicer under this Agreement. With respect to an
Event of Default set forth in clauses (h) or (i) above and upon any
termination of SPS as Servicer pursuant to this paragraph, DLJMC, in
accordance with Section 7.04(b), shall appoint a successor servicer,
irrespective of DLJMC's ownership of the related servicing rights. Any such
servicing transfer as a result of an Event of Default set forth in clause (h)
or (i) shall be accomplished in 60 days from the date the Trust Administrator
delivers the Master Servicer's report to Certificateholders or from the date
SPS received such notice of termination.
If an Event of Default described in clause (h) or (i)(3) occurs,
DLJMC shall reimburse SPS for all unreimbursed Advances and Servicing
Advances made by SPS on the date the servicing is transferred to the
successor servicer hereunder and DLJMC shall be entitled to reimbursement by
the successor servicer of any such amounts as and to the extent such amounts
are received by the successor servicer under the terms of this Agreement.
If an Event of Default described in clause (i) or (j) occurs, the
Master Servicer or the Back-Up Servicer solely with respect to clause (i)
shall at the direction of DLJMC, by notice in writing to such Servicer,
terminate all of the rights and obligations of such Servicer, under this
Agreement (other than rights to reimbursement for Advances and Servicing
Advances previously made, as provided in Section 3.08) and shall appoint as
successor Servicer the entity selected by DLJMC in accordance with
Section 8.02; provided DLJMC shall first furnish to the Master Servicer or
the Back-Up Servicer a letter from each Rating Agency that the appointment of
such successor will not result in a downgrading of the rating of any of the
Certificates.
If an Event of Default described in clause (k) occurs, the
Trustee shall at the direction of DLJMC, by notice in writing to the Master
Servicer, terminate all of the rights and obligations of the Master Servicer
under this Agreement (other than rights to reimbursement for Advances
previously made, as provided in Section 3.08) and shall appoint as successor
Master Servicer the entity selected by DLJMC in accordance with Section 8.02;
provided DLJMC shall first furnish to the Trustee a letter from each Rating
Agency that the appointment of such successor will not result in a
downgrading of the rating of any of the Certificates.
No Event of Default with respect to the Servicer shall affect the
rights or duties of the Master Servicer or constitute an Event of Default as
to the Master Servicer.
SECTION 8.02. Master Servicer or Trust Administrator to Act; Appointment
of Successor.
On and after the time the Master Servicer or a Servicer receives
a notice of termination pursuant to Section 8.01 hereof or resigns pursuant
to Section 7.04 hereof, subject to the provisions of Section 3.04 hereof, the
Trustee (in the case of the Master Servicer), the Back-Up Servicer (in the
case of SPS), or the Master Servicer (in the case of a Servicer), shall be
the successor in all respects to the Master Servicer or such Servicer, as
applicable, in its capacity as servicer under this Agreement and with respect
to the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on
the Master Servicer or such Servicer, as applicable, by the terms and
provisions hereof; provided that the Trustee, the Trust Administrator, the
Master Servicer or the Back-Up Servicer, as applicable, shall not be deemed
to have made any representation or warranty as to any Mortgage Loan made by
the Master Servicer or any Servicer, as applicable, and shall not effect any
repurchases or substitutions of any Mortgage Loan; provided further, that it
is understood and acknowledged by the parties hereto that there will be a
full period of transition (not to exceed ninety (90) days) before the actual
servicing functions of any Servicer can be fully transferred to Xxxxx Fargo
as successor Servicer; provided further, that during such period of
transition Xxxxx Fargo, as successor Servicer, shall continue to make all
required Compensating Interest Payments and Advances. As compensation
therefor, the Trustee, the Trust Administrator, the Back-Up Servicer or the
Master Servicer, as applicable, shall be entitled to all funds relating to
the Mortgage Loans that the Master Servicer or related Servicer (the
"Replaced Servicer") would have been entitled to charge to the related
Collection Account if the Replaced Servicer had continued to act hereunder
(except that the Replaced Servicer shall retain the right to be reimbursed
for advances (including, without limitation, Advances and Servicing Advances)
theretofore made by the Replaced Servicer with respect to which it would be
entitled to be reimbursed as provided in Section 3.08 if it had not been so
terminated or resigned). Notwithstanding the foregoing, if the Trustee, the
Trust Administrator, the Back-Up Servicer or the Master Servicer, as
applicable, has become the successor to a Replaced Servicer, in accordance
with this Section 8.02, the Trustee, the Trust Administrator, the Back-Up
Servicer or the Master Servicer, as applicable, may, if it shall be unwilling
to so act, or shall, if it is unable to so act, appoint, or petition a court
of competent jurisdiction to appoint, any established mortgage loan servicing
institution, the appointment of which does not adversely affect the then
current rating of the Certificates, as the successor to the Master Servicer,
the Back-Up Servicer or a Servicer, as applicable, hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer, the Back-Up Servicer or such Servicer, as applicable,
provided that such successor to the Master Servicer, the Back-Up Servicer or
the Servicer, as applicable, shall not be deemed to have made any
representation or warranty as to any Mortgage Loan made by the Master
Servicer or the related Servicer, as applicable. Pending appointment of a
successor to the Master Servicer, the Back-Up Servicer or a Servicer, as
applicable, hereunder, the Trustee, the Trust Administrator or the Master
Servicer, as applicable, unless such party is prohibited by law from so
acting, shall act in such capacity as provided herein. In connection with
such appointment and assumption, the Trustee, the Trust Administrator, the
Master Servicer or the Back-Up Servicer, as applicable, 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 Replaced
Servicer, hereunder. The Trustee, the Trust Administrator or the Master
Servicer, as applicable, and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. None of the Trustee, the Trust Administrator, the Master
Servicer nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by the failure of a
Replaced Servicer to deliver, or any delay in delivering, cash, documents or
records to it.
A Replaced Servicer that has been terminated shall, at the
request of the Trustee, the Trust Administrator, the Master Servicer or the
Back-Up Servicer, as applicable, but at the expense of such Replaced Servicer
deliver to the assuming party all documents and records relating to the
applicable Mortgage Loans and an accounting of amounts collected and held by
it and otherwise use commercially reasonable efforts to effect the orderly
and efficient transfer and assignment of such servicing, but only to the
extent of the Mortgage Loans serviced thereunder, to the assuming party.
Notwithstanding anything to the contrary contained herein, the termination of
a Servicer under this Agreement shall not extend to any Sub-Servicer meeting
the requirements of Section 3.02(a) and otherwise servicing the related
Mortgage Loans in accordance with the servicing provisions of this Agreement.
The Master Servicer, the Back-Up Servicer and each Servicer shall
cooperate with the Trustee and the Trust Administrator and any successor
servicer in effecting the termination of a Replaced Servicer's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by such Servicer to the applicable Collection
Account or thereafter received with respect to the Mortgage Loans.
None of the Trustee, the Trust Administrator nor any other
successor servicer shall be deemed to be in default hereunder by reason of
any failure to make, or any delay in making, any distribution hereunder or
any portion thereof caused by (a) the failure of the Master Servicer, the
Back-Up Servicer or any Servicer to (i) deliver, or any delay in delivering,
cash, documents or records to it, or (ii) cooperate as required by this
Agreement, or (b) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer, the Back-Up Servicer or the related
Servicer.
Any successor to a Servicer as servicer shall during the term of
its service as servicer maintain in force the policy or policies that such
Servicer is required to maintain pursuant to Section 3.09(b) hereof.
If a Servicer that has been terminated fails to pay all costs
related to the transition of servicing to the successor Servicer, the
successor Servicer shall be entitled to reimbursement of those amounts from
the Trust.
In connection with the termination or resignation of a Servicer
hereunder, either (i) the successor Servicer, including the Trust
Administrator or Master Servicer if either of such parties is acting as
successor Servicer or Back-Up Servicer, shall represent and warrant that it
or an affiliate is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the related Mortgage Loans that are
registered with MERS, or (ii) the Replaced Servicer, at its sole expense,
shall cooperate with the successor Servicer either (x) in causing MERS to
execute and deliver an Assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the Trustee and to execute and deliver such other
notices, documents and other instruments as may be necessary or desirable to
effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS® System to the successor Servicer or (y) in causing MERS to
designate on the MERS® System the successor Servicer as the servicer of such
Mortgage Loan (at the cost and expense of the successor Servicer to the
extent such costs relate to the qualification of such successor Servicer as a
member of MERS, otherwise at the cost and expense of the Replaced Servicer).
The Replaced Servicer shall file or cause to be filed any such assignment in
the appropriate recording office. The successor Servicer shall cause such
assignment to be delivered to the Trustee promptly upon receipt of the
original with evidence of recording thereon or a copy certified by the public
recording office in which such assignment was recorded.
SECTION 8.03. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to the Master
Servicer or any Servicer, the Trust Administrator shall give prompt written
notice thereof to the Seller, and the Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies,
or, as applicable, the Master Servicer shall give prompt written notice
thereof to the Trust Administrator.
(b) Within two Business Days after the occurrence of any Event of Default,
the Trust Administrator shall transmit by mail to the Seller and all
Certificateholders, and the Rating Agencies notice of each such Event of
Default hereunder known to the Trust Administrator, unless such Event of
Default shall have been cured or waived.
SECTION 8.04. 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
any default or Event of Default; provided, however, that (a) a default or
Event of Default under clause (g) of Section 8.01 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 8.04 shall affect the Holders of
Certificates in the manner set forth in Section 12.01(b)(i), (ii) or (iii).
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 cured and
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.
ARTICLE IX
CONCERNING THE TRUSTEE
SECTION 9.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default that may have occurred,
undertakes with respect to the Trust Fund to perform such duties and only
such duties as are specifically set forth in this Agreement. In case an
Event of Default of which a Responsible Officer of the Trustee shall have
actual knowledge has occurred and remains uncured, the Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the
same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs. Any permissive right of the Trustee set forth 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 that 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. The Trustee
shall have no duty to recompute, recalculate or verify the accuracy of any
resolution, certificate, statement, opinion, report, document, order or other
instrument so furnished to the Trustee. If any such instrument is found not
to conform in any material respect to the requirements of this Agreement, the
Trustee shall notify the Certificateholders of such instrument in the event
that the Trustee, after so requesting, does not receive a satisfactorily
corrected instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct, its negligent failure to perform its
obligations in compliance with this Agreement, or any liability which would
be imposed by reason of its willful misfeasance or bad faith; provided,
however, that:
(a) prior to the occurrence of an Event of Default of which a Responsible
Officer of the Trustee shall have actual knowledge, and after the curing or
of all such Events of Default that 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 personally liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Agreement which it reasonably
believed in good faith to be genuine and to have been duly executed by the
proper authorities respecting any matters arising hereunder;
(b) 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 the Trustee was negligent in ascertaining or investigating
the pertinent facts;
(c) 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
this Agreement at the direction of the Holders of Certificates evidencing
greater than 50% of the Voting Rights allocated to each Class of Certificates
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement;
(d) no provision of this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it; and
(e) the Trustee shall have no responsibility for any act or omission of the
Trust Administrator or LaSalle, it being understood and agreed that the
Trustee, Trust Administrator and LaSalle are independent contractors and not
agents, partners or joint venturers.
The Trustee shall not be deemed to have knowledge of any Event of
Default or event which, with notice or lapse of time, or both, would become
an Event of Default, unless a Responsible Officer of the Trustee shall have
received written notice thereof from a Servicer, the Depositor or a
Certificateholder, or a Responsible Officer of the Trustee has actual notice
thereof, and in the absence of such notice no provision hereof requiring the
taking of any action or the assumption of any duties or responsibility by the
Trustee following the occurrence of any Event of Default or event which, with
notice or lapse of time or both, would become an Event of Default, shall be
effective as to the Trustee.
The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which
may be alleged to have been delivered to or served upon it by the parties as
a consequence of the assignment of any Mortgage Loan hereunder; provided,
however, that the Trustee shall use its best efforts to remit to the Master
Servicer or the related Servicer upon receipt of any such complaint, claim,
demand, notice or other document (i) which is delivered to the Corporate
Trust Office of the Trustee, (ii) of which a Responsible Officer has actual
knowledge, and (iii) which contains information sufficient to permit the
Trustee to make a determination that the real property to which such document
relates is a Mortgaged Property.
SECTION 9.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 9.01:
(i) the Trustee may request and rely upon and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors, Servicing Officers or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) the Trustee may consult with counsel, financial advisors or accountants
and any advice of such Persons or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default of which
a Responsible Officer of the Trustee shall have actual knowledge (which
has not been cured or waived), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs;
(iv) 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;
(v) prior to the occurrence of an Event of Default hereunder and after the
curing or waiver of all Events of Default that 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 so to do by
Holders of Certificates evidencing greater than 50% of the Voting
Rights allocated to each Class of Certificates; 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 investigation shall be paid (A) by the
Master Servicer or by the applicable Servicer in the event that such
investigation relates to an Event of Default by the Master Servicer or
by such Servicer, respectively, if an Event of Default by the Master
Servicer or by such Servicer shall have occurred and is continuing, and
(B) otherwise by the Certificateholders requesting the investigation;
(vi) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any such agent or attorney appointed with
due care;
(vii) the Trustee shall not be required to expend its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such liability is
not assured to it;
(viii) the Trustee shall not be liable for any loss on any investment of
funds pursuant to this Agreement; and
(ix) the right of the Trustee to perform any discretionary act enumerated in
this Agreement shall not be construed as a duty, and the Trustee shall
not be answerable for other than its negligence or willful misconduct
in the performance of such act.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial
or other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
SECTION 9.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer or a Servicer, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Agreement,
the Certificates or of any Mortgage Loan or related document or of MERS or
the MERS® System. The Trustee shall not be accountable for the use or
application by the Depositor, the Seller, the Master Servicer or any
Servicers of any funds paid to the Depositor or the Master Servicer or any
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Certificate Account by the Depositor, the Seller or the Master Servicer
or the Servicers. The Trustee shall not be responsible for the legality or
validity of this Agreement or the validity, priority, perfection or
sufficiency of the security for the Certificates issued or intended to be
issued hereunder. The Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to record this Agreement.
SECTION 9.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates and may transact business with the other
parties hereto and with their Affiliates, with the same rights as it would
have if it were not the Trustee.
SECTION 9.05. Trustee's Fees and Expenses.
The Trustee shall be compensated by the Trust Administrator as
separately agreed. The Trustee and any director, officer, employee or agent
of the Trustee shall be indemnified by DLJMC and held harmless (up to a
maximum of $150,000) against any loss, liability or expense (including
reasonable attorney's fees and expenses) (i) incurred in connection with any
claim or legal action relating to (a) this Agreement, (b) the Certificates,
or (c) the performance of any of the Trustee's duties hereunder, other than
any loss, liability or expense incurred by reason of willful misconduct, bad
faith or negligence in the performance of any of the Trustee's duties
hereunder or incurred by reason of any action of the Trustee taken at the
direction of the Certificateholders and (ii) resulting from any error in any
tax or information return prepared by the Master Servicer or a Servicer.
Such indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee hereunder. Without limiting the
foregoing, the Depositor covenants and agrees, except as otherwise agreed
upon in writing by the Depositor and the Trustee, and except for any such
expense, disbursement or advance as may arise from the Trustee's negligence,
bad faith or willful misconduct, to pay or reimburse the Trustee, for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement with
respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance
of the Certificates, (B) the reasonable compensation, expenses and
disbursements of any accountant, engineer or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage such
persons to perform acts or services hereunder and (C) printing and engraving
expenses in connection with preparing any Definitive Certificates. Except as
otherwise provided herein, the Trustee shall not be entitled to payment or
reimbursement for any routine ongoing expenses incurred by the Trustee in the
ordinary course of its duties as Trustee hereunder or for any other
expenses. Anything in this Agreement to the contrary notwithstanding, in no
event shall the Trustee be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Trustee has been advised of the likelihood of such loss or damage
and regardless of the form of action.
SECTION 9.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of any state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having ratings on its long term debt obligations at the time of
such appointment in at least the third highest rating category by both
Xxxxx'x and S&P or such lower ratings as will not cause Xxxxx'x or S&P to
lower their then current ratings of the Class A Certificates (other than the
Residual Certificates), having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section 9.06 the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 9.06, the Trustee shall resign immediately in the manner and
with the effect specified in Section 9.07 hereof.
SECTION 9.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by (a) giving written notice of resignation to the
Depositor, DLJMC, the Trust Administrator, the Master Servicer, the Special
Servicer and the Servicers and by mailing notice of resignation by first
class mail, postage prepaid, to the Certificateholders at their addresses
appearing on the Certificate Register, and to the Rating Agencies, not less
than 60 days before the date specified in such notice when, subject to
Section 9.08, such resignation is to take effect, and (b) acceptance by a
successor trustee in accordance with Section 9.08 meeting the qualifications
set forth in Section 9.06.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.06 hereof and shall fail to
resign after written request thereto by the Depositor, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation
or liquidation or if the Trustee breaches any of its obligations or
representations hereunder, then the Depositor may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee and one copy to the
successor trustee. The Trustee may also be removed at any time by the
Holders of Certificates evidencing not less than 50% of the Voting Rights
evidenced by the Certificates. Notice of any removal of the Trustee and
acceptance of appointment by the successor trustee shall be given to the
Rating Agencies by the Depositor.
If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation or receipt of a notice of removal, the resigning Trustee may, at
the Trust Fund's expense, petition any court of competent jurisdiction for
the appointment of a successor trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.07
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 9.08 hereof.
SECTION 9.08. Successor Trustee.
Any successor trustee appointed as provided in Section 9.07
hereof shall execute, acknowledge and deliver to the Depositor 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 Depositor, upon receipt of all
amounts due it hereunder, 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 9.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 9.06 hereof and its
acceptance shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee as provided
in this Section 9.08, the Depositor 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 Depositor 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 Depositor.
SECTION 9.09. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted or
with which it may be consolidated or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Person succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such Person shall be eligible under the
provisions of Section 9.06 hereof without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 9.10. Appointment of Co Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Fund or property securing any Mortgage Note
may at the time be located, the Master Servicer and the Trustee acting
jointly shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Fund, and to vest in such Person or
Persons, in such capacity and for the benefit of the applicable
Certificateholders, such title to the Trust Fund, or any part thereof, and,
subject to the other provisions of this Section 9.10, such powers, duties,
obligations, rights and trusts as the Master Servicer and the Trustee may
consider necessary or desirable. If the Master Servicer shall not have
joined in such appointment within fifteen days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and
be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 9.06
and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 9.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(a) all rights, powers, duties and obligations conferred or imposed upon
the Trustee, except for any obligation of the Trustee under this Agreement to
advance funds on behalf of the Master Servicer or a Servicer, shall be
conferred or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without
the Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed by
the Trustee (whether as Trustee hereunder or as successor to the Master
Servicer or a Servicer), 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 singly by
such separate trustee or co-trustee, but solely at the direction of the
Trustee;
(b) no trustee hereunder shall be held personally liable by reason of any
act or omission of any other trustee hereunder; and
(c) the Master Servicer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article IX. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy thereof given to the Master Servicer or the
Servicers and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. The Trust Administrator shall
not be responsible for all action or inaction of any separate trustee or
co-trustee. If any separate trustee or co-trustee shall die, become incapable
of acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Trustee, to the
extent permitted by law, without the appointment of a new or successor
trustee.
SECTION 9.11. Office of the Trustee.
The office of the Trustee for purposes of receipt of notices and
demands is the Corporate Trust Office.
ARTICLE X
CONCERNING THE TRUST ADMINISTRATOR
SECTION 10.01. Duties of Trust Administrator.
The Trust Administrator, prior to the occurrence of an Event of
Default of which a Responsible Officer of the Trust Administrator shall have
actual knowledge and after the curing or waiver of all Events of Default that
may have occurred, undertakes with respect to the Trust Fund to perform such
duties and only such duties as are specifically set forth in this Agreement.
In case an Event of Default of which a Responsible Officer of the Trust
Administrator shall have actual knowledge has occurred and remains uncured,
the Trust Administrator shall exercise such of the rights and powers vested
in it by this Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs. Any permissive right of the
Trust Administrator set forth in this Agreement shall not be construed as a
duty.
The Trust Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trust Administrator that 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. The Trust Administrator shall have no duty to recompute,
recalculate or verify the accuracy of any resolution, certificate, statement,
opinion, report, document, order or other instrument so furnished to the
Trust Administrator. If any such instrument is found not to conform in any
material respect to the requirements of this Agreement, the Trust
Administrator shall notify the Certificateholders of such instrument in the
event that the Trust Administrator, after so requesting, does not receive a
satisfactorily corrected instrument.
No provision of this Agreement shall be construed to relieve the
Trust Administrator from liability for its own negligent action, its own
negligent failure to act or its own misconduct, its negligent failure to
perform its obligations in compliance with this Agreement, or any liability
which would be imposed by reason of its willful misfeasance or bad faith;
provided, however, that:
(a) prior to the occurrence of an Event of Default of which a Responsible
Officer of the Trust Administrator shall have actual knowledge, and after the
curing or of all such Events of Default that may have occurred, the duties
and obligations of the Trust Administrator shall be determined solely by the
express provisions of this Agreement, the Trust Administrator shall not be
personally liable except for the performance of such duties and obligations
as are specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trust Administrator
and the Trust Administrator 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 Trust Administrator and conforming
to the requirements of this Agreement which it reasonably believed in good
faith to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trust Administrator shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Trust Administrator, unless the Trust Administrator was negligent in
ascertaining or investigating the pertinent facts;
(c) the Trust Administrator 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 this Agreement or at the direction of the Holders of
Certificates evidencing greater than 50% of the Voting Rights allocated to
each Class of Certificates relating to the time, method and place of
conducting any proceeding for any remedy available to the Trust
Administrator, or exercising any trust or power conferred upon the Trust
Administrator, under this Agreement; and
(d) no provision of this Agreement shall require the Trust Administrator to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
The Trust Administrator shall have no duty (A) to see to any
recording, filing or depositing of this Agreement or any agreement referred
to herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording, filing
or depositing or to any rerecording, refiling or redepositing of any thereof,
(B) to see to any insurance, or (C) to see to the payment or discharge of any
tax, assessment or other governmental charge or any lien or encumbrance of
any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Certificate Account.
Except with respect to an Event of Default described in clause
(a) of Section 8.01, the Trust Administrator shall not be deemed to have
knowledge of any Event of Default or event which, with notice or lapse of
time, or both, would become an Event of Default, unless a Responsible Officer
of the Trust Administrator shall have received written notice thereof from
the Master Servicer or a Servicer, the Depositor, or a Certificateholder, or
a Responsible Officer of the Trust Administrator has actual notice thereof,
and in the absence of such notice no provision hereof requiring the taking of
any action or the assumption of any duties or responsibility by the Trust
Administrator following the occurrence of any Event of Default or event
which, with notice or lapse of time or both, would become an Event of
Default, shall be effective as to the Trust Administrator.
The Trust Administrator shall have no duty hereunder with respect
to any complaint, claim, demand, notice or other document it may receive or
which may be alleged to have been delivered to or served upon it by the
parties as a consequence of the assignment of any Mortgage Loan hereunder;
provided, however, that the Trust Administrator shall use its best efforts to
remit to the Master Servicer or the Servicer upon receipt of any such
complaint, claim, demand, notice or other document (i) which is delivered to
the Corporate Trust Office of the Trust Administrator, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains
information sufficient to permit the Trust Administrator to make a
determination that the real property to which such document relates is a
Mortgaged Property.
SECTION 10.02. Certain Matters Affecting the Trust Administrator.
(a) Except as otherwise provided in Section 10.01:
(i) the Trust Administrator may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors, Servicing Officers or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trust Administrator may consult with counsel, financial advisors or
accountants and any advice of such Persons or opinion of counsel shall
be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion of counsel;
(iii) the Trust Administrator shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation 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 Trust Administrator reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; nothing contained herein shall, however,
relieve the Trust Administrator of the obligation, upon the occurrence
of an Event of Default of which a Responsible Officer of the Trust
Administrator shall have actual knowledge (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(iv) the Trust Administrator 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;
(v) prior to the occurrence of an Event of Default hereunder and after the
curing or waiver of all Events of Default that may have occurred, the
Trust Administrator shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by Holders of Certificates evidencing greater than 50% of the Voting
Rights allocated to each Class of Certificates; provided, however, that
if the payment within a reasonable time to the Trust Administrator of
the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trust
Administrator, not reasonably assured to the Trust Administrator by the
security afforded to it by the terms of this Agreement, the Trust
Administrator may require reasonable indemnity against such expense or
liability as a condition to taking any such action; the reasonable
expense of every such investigation shall be paid (A) by the Master
Servicer or by the applicable Servicer in the event that such
investigation relates to an Event of Default by the Master Servicer or
by such Servicer, respectively, if an Event of Default by the Master
Servicer or such Servicer shall have occurred and is continuing, and
(B) otherwise by the Certificateholders requesting the investigation;
(vi) the Trust Administrator may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trust Administrator shall not be
responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care;
(vii) the Trust Administrator shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any of
its duties hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
liability is not assured to it;
(viii) the Trust Administrator shall not be liable for any loss on any
investment of funds pursuant to this Agreement except as provided in
Section 3.05(e);
(ix) the right of the Trust Administrator to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trust Administrator shall not be answerable for other than its
negligence or willful misconduct in the performance of such act; and
(x) The Trust Administrator shall not be required to give any bond or
surety in respect of the execution of the Trust Fund created hereby or
the powers granted hereunder.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trust Administrator, may be enforced by it
without the possession of any of the Certificates, or the production thereof
at the trial or other proceeding relating thereto, and any such suit, action
or proceeding instituted by the Trust Administrator shall be brought in its
name for the benefit of all the Holders of such Certificates, subject to the
provisions of this Agreement.
SECTION 10.03. Trust Administrator Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer or a Servicer, as the case may be, and
the Trust Administrator assumes no responsibility for their correctness. The
Trust Administrator makes no representations as to the validity or
sufficiency of this Agreement, the Certificates or of any Mortgage Loan or
related document. The Trust Administrator shall not be accountable for the
use or application by the Depositor, the Seller, the Master Servicer or the
Servicers of any funds paid to the Depositor or the Master Servicer or any
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Certificate Account by the Depositor, the Seller or the Master Servicer
or the Servicers. The Trust Administrator shall not be responsible for the
legality or validity of this Agreement or the validity, priority, perfection
or sufficiency of the security for the Certificates issued or intended to be
issued hereunder. The Trust Administrator shall have no responsibility for
filing any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection for any security
interest or lien granted to it hereunder or to record this Agreement.
SECTION 10.04. Trust Administrator May Own Certificates.
The Trust Administrator in its individual or any other capacity
may become the owner or pledgee of Certificates with the same rights as it
would have if it were not the Trust Administrator.
SECTION 10.05. Trust Administrator's Fees and Expenses.
As compensation for its services hereunder, the Trust
Administrator shall be entitled to the investment income or other benefit
derived from balances in the Certificate Account pursuant to Section 3.05(e)
(the "Trust Administrator Fee"). The Trust Administrator and any director,
officer, employee or agent of the Trust Administrator shall be indemnified by
DLJMC (or if DLJMC shall fail to do so, by the Trust) and held harmless
against any loss, liability or expense (including reasonable attorney's fees
and expenses) (i) incurred in connection with any claim or legal action
relating to (a) this Agreement, (b) the Certificates, (c) the Custodial
Agreement, or (d) the performance of any of the Trust Administrator's duties
hereunder or under the Custodial Agreement, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Trust Administrator's duties hereunder or
incurred by reason of any action of the Trust Administrator taken at the
direction of the Certificateholders and (ii) resulting from any error in any
tax or information return prepared by the Master Servicer or a Servicer;
provided however, that the sum of (x) such indemnity amounts payable by DLJMC
or the Trust to the Trust Administrator pursuant to this Section 10.05 and
(y) the indemnity amounts payable by DLJMC or the Trust to the Master
Servicer pursuant to Section 3.14(c), shall not exceed $200,000 per year;
provided, further, that any amounts not payable by DLJMC or the Trust to the
Trust Administrator due to the preceding proviso shall be payable by DLJMC
(or if DLJMC fails to do so, by the Trust) in any succeeding year, subject to
the aggregate $200,000 per annum limitation imposed by the preceding
proviso. Such indemnity shall survive the termination of this Agreement or
the resignation or removal of the Trust Administrator hereunder. Without
limiting the foregoing, DLJMC (or if DLJMC fails to do so, the Trust) shall,
except as otherwise agreed upon in writing by DLJMC and the Trust
Administrator, and except for any such expense, disbursement or advance as
may arise from the Trust Administrator's negligence, bad faith or willful
misconduct, pay or reimburse the Trust Administrator (up to a maximum of
$150,000), for all reasonable expenses, disbursements and advances incurred
or made by the Trust Administrator in accordance with any of the provisions
of this Agreement with respect to: (A) the reasonable compensation and the
expenses and disbursements of its counsel not associated with the closing of
the issuance of the Certificates, (B) the reasonable compensation, expenses
and disbursements of any accountant, engineer or appraiser that is not
regularly employed by the Trust Administrator, to the extent that the Trust
Administrator must engage such persons to perform acts or services hereunder
and (C) printing and engraving expenses in connection with preparing any
Definitive Certificates. In addition, DLJMC (or if DLJMC fails to do so, the
Trust) shall pay or reimburse the Trust Administrator for recertification
fees required to be paid by the Trust Administrator pursuant to a Custodial
Agreement. Except as otherwise provided herein, the Trust Administrator
shall not be entitled to payment or reimbursement for any routine ongoing
expenses incurred by the Trust Administrator in the ordinary course of its
duties as Trust Administrator, Registrar, Tax Matters Person or Paying Agent
hereunder. Anything in this Agreement to the contrary notwithstanding, in no
event shall the Trust Administrator be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trust Administrator has been advised of
the likelihood of such loss or damage and regardless of the form of action.
SECTION 10.06. Eligibility Requirements for Trust Administrator.
The Trust Administrator hereunder shall at all times be (a) an
institution the deposits of which are fully insured by the FDIC and (b) a
corporation or banking association organized and doing business under the
laws of any state or the United States of America, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of
at least $50,000,000 and subject to supervision or examination by federal or
state authority and (c) with respect to every successor Trust Administrator
hereunder an institution the long-term unsecured debt obligations of which
are rated at least Baa3 or better by Xxxxx'x and BBB or better by S&P unless
the failure of the Trust Administrator's long-term unsecured debt obligations
to have such ratings would not result in the lowering of the ratings
originally assigned to any Class of Certificates. If such corporation or
banking association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 10.06 the combined
capital and surplus of such corporation or association shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trust Administrator shall
cease to be eligible in accordance with the provisions of this Section 10.06,
the Trust Administrator shall resign immediately in the manner and with the
effect specified in Section 10.07 hereof.
SECTION 10.07. Resignation and Removal of Trust Administrator.
The Trust Administrator may at any time resign and be discharged
from the trusts hereby created by (a) giving written notice of resignation to
the Depositor, the Seller, the Trustee, the Master Servicer, the Special
Servicer and the Servicers and by mailing notice of resignation by first
class mail, postage prepaid, to the Certificateholders at their addresses
appearing on the Certificate Register, and to the Rating Agencies, not less
than 60 days before the date specified in such notice when, subject to
Section 10.08, such resignation is to take effect, and (b) acceptance by a
successor trust administrator in accordance with Section 10.08 meeting the
qualifications set forth in Section 10.06.
If at any time the Trust Administrator shall cease to be eligible
in accordance with the provisions of Section 10.06 hereof and shall fail to
resign after written request thereto by the Depositor, or if at any time the
Trust Administrator shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trust Administrator or of its
property shall be appointed, or any public officer shall take charge or
control of the Trust Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation or if the Trust
Administrator breaches any of its obligations or representations hereunder,
then the Depositor may remove the Trust Administrator and appoint a successor
trust administrator by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trust Administrator and one copy to the
successor trust administrator. The Trust Administrator may also be removed
at any time by the Trustee or the Holders of Certificates evidencing not less
than 50% of the Voting Rights evidenced by the Certificates. Notice of any
removal of the Trust Administrator and acceptance of appointment by the
successor trust administrator shall be given to the Rating Agencies by the
Depositor.
If no successor trust administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice
of resignation or receipt of a notice of removal, the resigning Trust
Administrator may, at the Trust Fund's expense, petition any court of
competent jurisdiction for the appointment of a successor trust administrator.
Notwithstanding the foregoing, if the Master Servicer shall for
any reason no longer be Master Servicer hereunder, at DLJMC's request, the
Trust Administrator shall resign, upon the selection and appointment of a
successor trust administrator meeting the qualifications set forth in
Section 10.06.
Any resignation or removal of the Trust Administrator and
appointment of a successor trust administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance of
appointment by the successor trust administrator as provided in Section 10.08
hereof.
SECTION 10.08. Successor Trust Administrator.
Any successor trust administrator appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Depositor
and to its predecessor trust administrator an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trust administrator shall become effective and such successor
trust administrator, 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
Trust Administrator herein. The Depositor, upon receipt of all amounts due
it hereunder, and the predecessor trust administrator 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
trust administrator all such rights, powers, duties, and obligations.
No successor trust administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor trust administrator shall be eligible under the provisions of
Section 10.06 hereof and its acceptance shall not adversely affect the then
current rating of the Certificates.
Upon acceptance of appointment by a successor trust administrator
as provided in this Section 10.08, the Depositor shall mail notice of the
succession of such trust administrator hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor trust administrator, the successor trust
administrator shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 10.09. Merger or Consolidation of Trust Administrator.
Any Person into which the Trust Administrator may be merged or
converted or with which it may be consolidated or any Person resulting from
any merger, conversion or consolidation to which the Trust Administrator
shall be a party, or any Person succeeding to the business of the Trust
Administrator, shall be the successor of the Trust Administrator hereunder,
provided that such Person shall be eligible under the provisions of
Section 10.06 hereof without the execution or filing of any paper or further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 10.10. Appointment of Co-Trust Administrator or Separate Trust
Administrator.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust Fund or property securing any Mortgage Note
may at the time be located, the Master Servicer and the Trust Administrator
acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trust
Administrator to act as co-trust administrator or co-trust administrators
jointly with the Trust Administrator, or separate trust administrator or
separate trust administrators, of all or any part of the Trust Fund, and to
vest in such Person or Persons, in such capacity and for the benefit of the
applicable Certificateholders, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section 10.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trust Administrator may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within fifteen days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trust Administrator alone shall
have the power to make such appointment. No co-trust administrator or
separate trust administrator hereunder shall be required to meet the terms of
eligibility as a successor trust administrator under Section 10.06 and no
notice to Certificateholders of the appointment of any co-trust administrator
or separate trust administrator shall be required under Section 10.08.
Every separate trust administrator and co-trust administrator
shall, to the extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or imposed upon
the Trust Administrator, except for any obligation of the Trust Administrator
under this Agreement to advance funds on behalf of the Master Servicer or the
Servicer, shall be conferred or imposed upon and exercised or performed by
the Trust Administrator and such separate trust administrator or co-trust
administrator jointly (it being understood that such separate trust
administrator or co-trust administrator is not authorized to act separately
without the Trust Administrator joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed by the Trust Administrator (whether as Trust
Administrator hereunder or as successor to the Master Servicer or the
Servicer), the Trust Administrator 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 singly by
such separate trust administrator or co-trust administrator, but solely at
the direction of the Trust Administrator;
(b) no trust administrator hereunder shall be held personally liable by
reason of any act or omission of any other trust administrator hereunder; and
(c) the Master Servicer and the Trust Administrator acting jointly may at
any time accept the resignation of or remove any separate trust administrator
or co-trust administrator.
Any notice, request or other writing given to the Trust
Administrator shall be deemed to have been given to each of the then separate
trust administrators and co-trust administrators, as effectively as if given
to each of them. Every instrument appointing any separate trust
administrator or co-trust administrator shall refer to this Agreement and the
conditions of this Article X. Each separate trust administrator and co-trust
administrator, 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 Trust Administrator 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 Trust
Administrator. Every such instrument shall be filed with the Trust
Administrator and a copy thereof given to the Master Servicer or the
Servicers and the Depositor.
Any separate trust administrator or co-trust administrator may,
at any time, constitute the Trust Administrator, 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. The Trust Administrator shall not be responsible for
any action or inaction of any separate Trust Administrator or Co-Trust
Administrator. If any separate trust administrator or co-trust administrator
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 Trust Administrator, to the extent permitted by law, without
the appointment of a new or successor trust administrator.
SECTION 10.11. Office of the Trust Administrator.
The office of the Trust Administrator for purposes of receipt of
notices and demands is the Corporate Trust Office.
SECTION 10.12. Tax Return.
The Master Servicer and each Servicer, upon request, will furnish
the Trust Administrator with all such information related to the Mortgage
Loans in the possession of the Master Servicer or such Servicer as may be
reasonably required in connection with the preparation by the Trust
Administrator of all tax and information returns of the Trust Fund, and the
Trust Administrator shall sign such returns. The Master Servicer and each
Servicer, severally and not jointly, shall indemnify the Trust Administrator
for all reasonable costs, including legal fees and expenses, related to
errors in such tax returns due to errors only in such information provided by
the Master Servicer or by such Servicer.
SECTION 10.13. Commission Reporting.
(a) The Trust Administrator, each Servicer and the Master Servicer shall
reasonably cooperate with the Depositor in connection with the Trust's
satisfying the reporting requirements under the Exchange Act. The Trust
Administrator shall prepare on behalf of the Depositor any Forms 8-K and 10-K
customary for similar securities as required by the Exchange Act and the
rules and regulations of the Commission thereunder, and the Depositor shall
sign and the Trust Administrator shall file (via XXXXX) such Forms on behalf
of the Depositor. The Depositor hereby grants to the Trust Administrator a
limited power of attorney to execute and file each such document on behalf of
the Depositor. Such power of attorney shall continue until the earlier of
(i) receipt by the Trust Administrator from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust.
(b) Each Form 8-K shall be filed by the Trust Administrator within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior
to March 31st of the calendar year following the calendar year during which
the Closing Date occurs (or such earlier date as may be required by the
Exchange Act and the rules and regulations of the Commission), the Trust
Administrator shall file a Form 10-K, in substance as required by applicable
law or applicable Commission staff's interpretations. Such Form 10-K shall
include as exhibits, each Servicer's and the Master Servicer's annual
statement of compliance described under Section 3.16 and the accountant's
report described under Section 3.17, in each case to the extent they have
been timely delivered to the Trust Administrator. If they are not so timely
delivered, the Trust Administrator shall file an amended Form 10-K including
such documents as exhibits promptly after they are delivered to the Trust
Administrator. The Trust Administrator shall have no liability with respect
to any failure to properly or timely prepare or file such periodic reports
resulting from or relating to the Trust Administrator's inability or failure
to obtain any information not resulting from its own negligence or willful
misconduct. The Form 10-K shall also include a certification in the form
attached hereto as Exhibit R (the "Depositor Certification"), which shall be
signed by the senior officer of the Depositor in charge of securitization.
The Trust Administrator shall have no responsibility to file any items other
than those specified in this Section 10.13.
(c) Not later than 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission (or, if
such day is not a Business Day, the immediately preceding Business Day), the
Trust Administrator shall sign a certification in the form attached hereto as
Exhibit S (the "Trust Administrator Certification") for the benefit of the
Depositor and its officers, directors and affiliates regarding certain
aspects of items 1 through 3 of the Depositor Certification. In addition,
the Trust Administrator shall, subject to the provisions of Sections 10.01
and 10.02 hereof, indemnify and hold harmless the Depositor and each Person,
if any, who "controls" the Depositor within the meaning of the 1933 Act and
its officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the Trust Administrator's obligations under this
Section 10.13 or any inaccuracy made in the Trust Administrator
Certification. If the indemnification provided for in this Section 10.13(c)
is unavailable or insufficient to hold harmless such Persons, then the Trust
Administrator shall contribute to the amount paid or payable by such Persons
as a result of the losses, claims, damages or liabilities of such Persons in
such proportion as is appropriate to reflect the relative fault of the
Depositor on the one hand and the Trust Administrator on the other. The
Trust Administrator acknowledges that the Depositor is relying on the Trust
Administrator's performance of its obligations under this Section 10.13 in
order to perform its obligations under Section 10.13(b) above.
(d) (i) Not later than 15 calendar days before the date on which
the Depositor's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission (or, if such day is not a Business Day, the immediately
preceding Business Day), the Master Servicer will deliver to the
Depositor and the Trust Administrator an Officer's Certificate for the
prior calendar year in substantially the form of Exhibit T-1 to this
Agreement. The Master Servicer agrees to indemnify and hold harmless
each of the Depositor, the Trust Administrator and each Person, if any,
who "controls" the Depositor or the Trust Administrator within the
meaning of the 1933 Act and their respective officers and directors
against any and all losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, fees and expenses
that such Person may sustain arising out of third party claims based on
(i) the failure of the Master Servicer to deliver or cause to be
delivered when required any Officer's Certificate required pursuant to
this Section 10.13(d)(i), or (ii) any material misstatement or omission
contained in any Officer's Certificate provided pursuant to this
Section 10.13(d)(i). If an event occurs that would otherwise result in
an indemnification obligation under clauses (i) or (ii) above, but the
indemnification provided for in this Section 10.13(d)(i) by the Master
Servicer is unavailable or insufficient to hold harmless such Persons,
then the Master Servicer shall contribute to the amount paid or payable
by such Persons as a result of the losses, claims, damages or
liabilities of such Persons in such proportion as is appropriate to
reflect the relative fault of the Depositor or Trust Administrator on
the one hand and the Master Servicer on the other. The Master Servicer
acknowledges that the Depositor and the Trust Administrator are relying
on the Master Servicer's performance of its obligations under this
Agreement in order to perform their respective obligations under this
Section 10.13.
(ii) Not later than 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission (or if such day is not a Business Day, the immediately
preceding Business Day), each Servicer, with respect to the Mortgage
Loans serviced by such Servicer, will deliver to the Depositor, the
Trust Administrator and the Master Servicer an Officer's Certificate
for the prior calendar year in substantially the form of Exhibit T-2 to
this Agreement. Each Servicer agrees to indemnify and hold harmless
each of the Depositor, the Trust Administrator, the Master Servicer and
each Person, if any, who "controls" the Depositor, the Trust
Administrator and the Master Servicer within the meaning of the 1933
Act and their respective officers and directors against any and all
losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, fees and expenses that such Person may
sustain arising out of third party claims based on (i) the failure of
such Servicer to deliver or cause to be delivered when required any
Officer's Certificate required pursuant to this Section 10.13(d)(ii),
or (ii) any material misstatement or omission contained in any
Officer's Certificate provided pursuant to this Section 10.13(d)(ii).
If an event occurs that would otherwise result in an indemnification
obligation under clauses (i) or (ii) above, but the indemnification
provided for in this Section 10.13(d)(ii) by such Servicer is
unavailable or insufficient to hold harmless such Persons, then such
Servicer shall contribute to the amount paid or payable by such Persons
as a result of the losses, claims, damages or liabilities of such
Persons in such proportion as is appropriate to reflect the relative
fault of the Depositor, Trust Administrator or the Master Servicer on
the one hand and such Servicer on the other. Each Servicer
acknowledges that the Depositor, the Trust Administrator and the Master
Servicer are relying on such Servicer's performance of its obligations
under this Agreement in order to perform their respective obligations
under this Section 10.13.
(e) Upon any filing with the Commission, the Trust Administrator shall
promptly deliver to the Depositor a copy of any executed report, statement or
information.
(f) If the Commission issues additional interpretative guidance or
promulgates additional rules or regulations, or if other changes in
applicable law occur, that would require the reporting arrangements, or the
allocation of responsibilities with respect thereto, described in this
Section 10.13, to be conducted differently than as described, the Depositor,
each Servicer, the Master Servicer and the Trust Administrator will
reasonably cooperate to amend the provisions of this Section 10.13 in order
to comply with such amended reporting requirements and such amendment of this
Section 10.13. Any such amendment shall be made in accordance with
Section 12.01 without the consent of the Certificateholders, and may result
in a change in the reports filed by the Trust Administrator on behalf of the
Trust under the Exchange Act. Notwithstanding the foregoing, the Depositor,
each Servicer, the Master Servicer and the Trust Administrator shall not be
obligated to enter into any amendment pursuant to this Section 10.13 that
adversely affects its obligations and immunities under this Agreement.
(g) Prior to January 31 of the first year in which the Trust Administrator
is able to do so under applicable law, the Trust Administrator shall file a
Form 15D Suspension Notification with respect to the Trust.
SECTION 10.14. Determination of Certificate Index.
On each Interest Determination Date, the Trust Administrator
shall determine each Certificate Index for the Accrual Period and inform the
Master Servicer and each Servicer of such rate and such rate shall be final
and binding, absent a manifest error of the Trust Administrator.
ARTICLE XI
TERMINATION
SECTION 11.01. Termination upon Liquidation or Purchase of all Mortgage
Loans.
The obligations and responsibilities of the Master Servicer, the
Special Servicer or the Servicers, the Back-Up Servicer, the Seller, the
Depositor, the Trustee and the Trust Administrator created hereby with
respect to the related Group or Groups created hereby shall terminate upon
the earlier of:
(a) the purchase by the Terminating Entity, at its election, of all
Mortgage Loans in such Loan Groups and all property acquired in respect
of any remaining Mortgage Loan in such Loan Groups, which purchase
right the Terminating Entity may exercise at its sole and exclusive
election as of any Distribution Date (such applicable Distribution Date
with respect to such Mortgage Loans being herein referred to as the
"Optional Termination Date") on or after the date on which the
aggregate Principal Balance of the Mortgage Loans in such Loan Groups,
at the time of the purchase is less than or equal to 10% of the
aggregate Principal Balance of the Mortgage Loans in such Loan Groups
as of the Cut-off Date; and
(b) the later of (i) twelve months after the maturity of the last Mortgage
Loan remaining in the Trust Fund, (ii) the liquidation (or any advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and
the disposition of all REO Property and (iii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to this Agreement.
In no event shall the trust created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor
of the descendants of Xx. Xxxxxx X. Xxxxxxx, former Ambassador of the United
States to Great Britain, living on the date of execution of this Agreement or
(ii) the Distribution Date in February 2037.
The Mortgage Loan Purchase Price for any such Optional
Termination shall be equal to the greater of (a) the sum of (i) 100% of the
Stated Principal Balance of each Mortgage Loan in the applicable Loan Group
(other than in respect of REO Property) plus accrued and unpaid interest
thereon from the date to which such interest was paid or advanced at the
applicable Mortgage Rate, to but not including the Due Date in the month of
the final Distribution Date (or the Net Mortgage Rate with respect to any
Mortgage Loan currently serviced by the entity exercising such Optional
Termination) and (ii) with respect to any REO Property, the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Depositor
at the expense of the Depositor and (y) the Stated Principal Balance of each
Mortgage Loan related to any REO Property, in each case and (iii) any
remaining unreimbursed Advances, Servicing Advances and unpaid Servicing Fees
(other than any unreimbursed Advances and Servicing Advances and unpaid
Servicing Fees, if any, due to the Terminating Entity) and other amounts
payable to the Trustee and Trust Administrator (the sum of (i), (ii) and
(iii), collectively, the "Par Value") and (b) the Fair Market Value of all of
the property of the Trust.
The "Fair Market Value" shall be the fair market value of all of
the property of the Trust, as agreed upon between the Terminating Entity and
a majority of the holders of the Class AR-L Certificates; provided, however,
that if the Terminating Entity and a majority of the holders of the
Class AR-L Certificates do not agree upon the fair market value of all the
property of the Trust, the Terminating Entity, or an agent appointed by the
Terminating Entity, shall solicit bids for all of the property of the Trust
until it has received three bids, and the Fair Market Value shall be equal to
the highest of such three bids.
SECTION 11.02. Procedure Upon Optional Termination.
(a) In case of any Optional Termination pursuant to Section 11.01, the
Terminating Entity shall, at least twenty days prior to the date notice is to
be mailed to the affected Certificateholders notify the Trustee and Trust
Administrator of such Optional Termination Date and of the applicable
purchase price of the Mortgage Loans to be purchased. The Trust
Administrator shall give notice to the Rating Agencies and the Servicers of
election to purchase the Mortgage Loans pursuant to Section 11.01 hereof and
of the Optional Termination Date.
(b) Any purchase of the Mortgage Loans by the Terminating Entity shall be
made on an Optional Termination Date by deposit of the applicable purchase
price into the Certificate Account, as applicable, before the Distribution
Date on which such purchase is effected. Upon receipt by the Trust
Administrator of an Officer's Certificate of the Terminating Entity
certifying as to the deposit of such purchase price into the Certificate
Account, the Trust Administrator and each co-Trust Administrator and separate
Trust Administrator, if any, then acting as such under this Agreement, shall,
upon request and at the expense of the Terminating Entity execute and deliver
all such instruments of transfer or assignment, in each case without
recourse, as shall be reasonably requested by the Terminating Entity to vest
title in the Terminating Entity in the Mortgage Loans so purchased and shall
transfer or deliver to the Terminating Entity the purchased Mortgage Loans.
Any distributions on the Mortgage Loans which have been subject to an
Optional Termination received by the Trust Administrator subsequent to (or
with respect to any period subsequent to) the Optional Termination Date shall
be promptly remitted by it to the Terminating Entity.
(c) Notice of the Distribution Date on which the Trust Administrator
anticipates that the final distribution shall be made (whether upon Optional
Termination or otherwise), shall be given promptly by the Trust Administrator
by first class mail to Holders of the affected Certificates. Such notice
shall be mailed no earlier than the 15th day and not later than the 10th day
preceding the Optional Termination Date or date of final distribution, as the
case may be. Such notice shall specify (i) the Distribution Date upon which
final distribution on the affected Certificates will be made upon
presentation and surrender of such Certificates at the office or agency
therein designated, (ii) the amount of such final distribution and (iii) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, such distribution being made only upon presentation and surrender
of such Certificates at the office or agency maintained for such purposes
(the address of which shall be set forth in such notice).
(d) In the event that any Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trust Administrator shall give a
second written notice to the remaining such Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Trust
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of
the funds and other assets which remain subject to the Trust Fund.
(e) Notwithstanding anything to the contrary herein, the occurrence of an
Optional Termination shall be subject to, and shall in no way adversely
affect the right of Xxxxx Fargo to continue servicing and collecting its
Servicing Fee for any Xxxxx Fargo Serviced Mortgage Loan that remains
outstanding at the time of such Optional Termination.
SECTION 11.03. Additional Termination Requirements.
(a) In the event the Terminating Entity exercises its purchase option (x)
pursuant to Section 11.01(A)(i) or (y) pursuant to Section 11.01(A)(ii) the
related subsidiary REMIC shall be terminated in accordance with the following
additional requirements, unless the Trustee and the Trust Administrator have
received an Opinion of Counsel to the effect that the failure to comply with
the requirements of this Section will not (i) result in the imposition of
taxes on a "prohibited transaction" of any REMIC created hereunder, as
described in Section 860F of the Code, or (ii) cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) within 90 days prior to the final Distribution Date set forth in the
notice given by Terminating Entity under Section 11.02, the Holder of
the Class AR or Class AR-L Certificates shall adopt a plan of complete
liquidation of REMIC I or REMIC II, as applicable; and
(ii) at or after the time of adoption of any such plan of complete
liquidation for REMIC I or REMIC II, as applicable, at or prior to the
final Distribution Date, the Trustee shall sell all of the assets of
REMIC I or REMIC II, as applicable, to the Depositor for cash.
(b) Upon the exercise of an Optional Termination by Terminating Entity in
respect of REMIC I or REMIC II, as applicable, pursuant to paragraph (a) of
this Section, followed by the exercise of an Optional Termination in respect
of the other subsidiary REMIC (the "Second Subsidiary REMIC") pursuant to
Section 11.01, each remaining REMIC shall be terminated in accordance with
the following additional requirements, unless the Trustee and the Trust
Administrator have received an Opinion of Counsel to the effect that the
failure to comply with the requirements of this Section will not (i) result
in the imposition of taxes on a "prohibited transaction" of a REMIC, as
described in Section 860F of the Code, or (ii) cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) concurrently with the adoption of the plan of complete liquidation of
the Second Subsidiary REMIC, as set forth in paragraph (a) of this
Section, the Holder of the Class AR or Class AR-L Certificates, as
applicable, shall adopt a plan of complete liquidation of each
remaining REMIC; and
(ii) at or after the time of adoption of any such plan of complete
liquidation for each such remaining REMIC, at or prior to the final
Distribution Date of the Second Subsidiary REMIC to be terminated, the
Trustee shall sell all of the assets of each such remaining REMIC to
the Depositor for cash.
(c) By its acceptance of a Class AR or Class AR-L Certificate, the Holder
thereof hereby agrees to adopt such a plan of complete liquidation and to
take such other action in connection therewith as may be reasonably required
to liquidate and otherwise terminate any REMIC created pursuant to this
Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. Amendment.
(a) This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Servicers, the Back-Up Servicer, the Special Servicer,
the Seller, the Trust Administrator and the Trustee, without the consent of
any of the Certificateholders,
(i) to cure any error or ambiguity,
(ii) to correct or supplement any provisions herein that may be inconsistent
with any other provisions herein or in the Prospectus Supplement,
(iii) to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or desirable to maintain the qualification of the
Trust Fund as a REMIC at all times that any Certificate is outstanding
or to avoid or minimize the risk of the imposition of any federal
income tax on the Trust Fund pursuant to the Code that would be a claim
against the Trust Fund, provided that the Trustee has received an
Opinion of Counsel to the effect that (A) such action is necessary or
desirable to maintain such qualification or to avoid or minimize the
risk of the imposition of any such federal income tax and (B) such
action will not adversely affect the status of the Trust Fund as a
REMIC or adversely affect in any material respect the interests of any
Certificateholder,
(iv) in connection with the appointment of a successor servicer, to modify,
eliminate or add to any of the servicing provisions, provided the
Rating Agencies confirm the rating of the Certificates, or
(v) to make any other provisions with respect to matters or questions
arising under this Agreement that are not materially inconsistent with
the provisions of this Agreement, provided that such action shall not
adversely affect in any material respect the interests of any
Certificateholder or cause an Adverse REMIC Event. Any Amendment
pursuant to Section 12.01(a)(v) shall not be deemed to adversely affect
in any material respect the interests of any Certificateholder if a
letter is obtained from each Rating Agency stating that such amendment
would not result in the downgrading or withdrawal of the respective
ratings then assigned to the Certificates.
(b) Except as provided in Section 12.01(c), this Agreement may be amended
from time to time by the Depositor, the Master Servicer, the Servicers, the
Back-Up Servicer, the Special Servicer, the Seller, the Trust Administrator
and the Trustee with the consent of the Holders of Certificates evidencing,
in the aggregate, not less than 66 2/3% of the Voting Rights of all the
Certificates for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying
in any manner the rights of the Holders of the Certificates; provided,
however, that no such amendment may (i) reduce in any manner the amount of,
delay the timing of or change the manner in which payments received on or
with respect to Mortgage Loans are required to be distributed with respect to
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of a
Class of Certificates in a manner other than as set forth in (i) above
without the consent of the Holders of Certificates evidencing not less than
66 2/3% of the Voting Rights of such Class, (iii) reduce the aforesaid
percentages of Voting Rights, the holders of which are required to consent to
any such amendment without the consent of 100% of the Holders of Certificates
of the Class affected thereby, (iv) change the percentage of the Stated
Principal Balance of the Mortgage Loans specified in Section 11.01(a)
relating to optional termination of the Trust Fund or (v) modify the
provisions of this Section 12.01.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trust Administrator may prescribe.
(c) This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Special Servicer, the Servicers, the Back-Up Servicer,
the Trust Administrator and the Trustee for the purpose of making one or more
REMIC elections with respect to one or more Classes of Certificates delivered
to the Trustee and issuing one or more additional classes of certificates
representing interests in the Classes of Certificates delivered to the
Trustee; provided, however, such amendment shall require the consent of 100%
of the Holders of the Certificates of the Class or Classes delivered to the
Trust Administrator and such amendment shall not cause an Adverse REMIC Event.
(d) Promptly after the execution of any amendment to this Agreement, the
Trust Administrator shall furnish written notification of the substance of
such amendment to each Certificateholder, and the Rating Agencies.
(e) Prior to the execution of any amendment to this Agreement, each of the
Trustee and the Trust Administrator shall receive and be entitled to
conclusively rely on an Opinion of Counsel (at the expense of the Person
seeking such amendment) stating that the execution of such amendment is
authorized and permitted by this Agreement. The Trustee and the Trust
Administrator may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's or the Trust Administrator's own
rights, duties or immunities under this Agreement.
(f) The Master Servicer and the Trust Administrator may consent to any
amendment of the IndyMac Servicing Agreement to make any other provisions
with respect to matters or questions arising under the Indy Mac Servicing
Agreement or this Agreement that are not materially inconsistent with the
provisions of the IndyMac Servicing Agreement and this Agreement, provided
that such action shall not adversely affect in any material respect the
interests of any Certificateholder or cause an Adverse REMIC Event. Any
amendment pursuant to this Section 12.01(f) shall not be deemed to adversely
affect in any material respect the interests of any Certificateholders if a
letter is obtained from each Rating Agency stating that such amendment would
not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates.
(g) Neither the Master Servicer nor the Trust Administrator shall consent
to any amendment of the IndyMac Servicing Agreement which shall adversely
affect in any material respect the interests of the Holders of a Class of
Certificates without the consent of the Holders of Certificates evidencing
not less than 66-2/3% of the Voting Rights of such Class.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment
of the IndyMac Servicing Agreement, 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
Trust Administrator may prescribe.
Promptly after the execution of any amendment to the IndyMac
Agreement pursuant to this Section 12.01(f) or (g), the Trust Administrator
shall furnish, upon written notice of such amendment, written notification of
the substance of such amendment to each Certificateholder, and the Rating
Agencies.
SECTION 12.02. Recordation of Agreement; Counterparts.
(a) This Agreement (other than Schedule I) is subject to recordation in all
appropriate public offices for real property records in all the counties or
other comparable jurisdictions in which any or all of the Mortgaged
Properties are situated, and in any other appropriate public recording office
or elsewhere. Such recordation, if any, shall be effected by the Depositor
at its expense, but only upon direction by the Trustee (acting at the
direction of the holders of Certificates evidencing a majority of the
aggregate Class Principal Balance) accompanied by an Opinion of Counsel (at
the Depositor's expense) to the effect that non-recordation materially and
adversely affects the interests of the Certificateholders.
(b) 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 12.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12.04. Intention of Parties.
(a) It is the express intent of the Depositor, the Seller, the Master
Servicer, the Special Servicer, the Servicers, the Trust Administrator and
the Trustee that (i) the conveyance by DLJMC of the Mortgage Loans to the
Depositor pursuant to the Assignment and Assumption Agreement and (v) the
conveyance by the Depositor to the Trustee as provided for in Section 2.01 of
each of the Seller's and Depositor's right, title and interest in and to the
Mortgage Loans be, and be construed as, an absolute sale and assignment by
DLJMC to the Depositor and by the Depositor to the Trustee of the Mortgage
Loans for the benefit of the Certificateholders. Further, it is not intended
that any conveyance be deemed to be a pledge of the Mortgage Loans by DLJMC
to the Depositor or by the Depositor to the Trustee to secure a debt or other
obligation. However, in the event that the Mortgage Loans are held to be
property of DLJMC or the Depositor, as applicable, or if for any reason the
Assignment and Assumption Agreement or this Agreement is held or deemed to
create a security interest in the Mortgage Loans, then it is intended that
(i) 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; (ii) the
conveyances provided for in Section 2.01 shall be deemed to be a grant by the
Seller and the Depositor to the Trustee on behalf of the Certificateholders,
to secure payment in full of the Secured Obligations (as defined below), of a
security interest in all of the Seller's and the Depositor's right (including
the power to convey title thereto), title and interest, whether now owned or
hereafter acquired, in and to the Mortgage Loans, including the Mortgage
Notes, the Mortgages, any related insurance policies and all other documents
in the related Mortgage Files, and all accounts, contract rights, general
intangibles, chattel paper, instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices of credit and
uncertificated securities consisting of, arising from or relating to (A) the
Mortgage Loans, including with respect to each Mortgage Loan, the Mortgage
Note and related Mortgage, and all other documents in the related Trustee
Mortgage Files, and including any Qualified Substitute Mortgage Loans; (B)
pool insurance policies, hazard insurance policies and any bankruptcy bond
relating to the foregoing, if applicable; (C) the Certificate Account; (D)
the Collection Account; (E) all amounts payable after the Cut-off Date to the
holders of the Mortgage Loans in accordance with the terms thereof; (F) all
income, payments, proceeds and products of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts from time to time held or
invested in the Certificate Account, whether in the form of cash,
instruments, securities or other property; and (G) all cash and non-cash
proceeds of any of the foregoing; (iii) the possession by the Trustee or any
other agent of the Trustee of Mortgage Notes or such other items of property
as constitute instruments, money, documents, advices of credit, letters of
credit, goods, certificated securities or chattel paper shall be deemed to be
a "possession by the secured party," or possession by a purchaser or a person
designated by him or her, for purposes of perfecting the security interest
pursuant to the Uniform Commercial Code (including, without limitation,
Sections 9-313, 8-313 or 8-321 thereof); and (iv) 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,
securities intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
"Secured Obligations" means (i) the rights of each Certificateholder to be
paid any amount owed to it under this Agreement and (ii) all other
obligations of the Seller and the Depositor under this Agreement and the
Assignment and Assumption Agreement.
(b) The Seller and the Depositor, and, at the Depositor's direction, the
Master Servicer or the Servicers, the Trustee and the Trust Administrator,
shall, to the extent consistent with this Agreement, take such reasonable
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans and the other property
described above, such security interest would be deemed to be a perfected
security interest of first priority as applicable. The Depositor shall
prepare and file, at the related Servicer's expense, all filings necessary to
maintain the effectiveness of any original filings necessary under the
Uniform Commercial Code as in effect in any jurisdiction to perfect the
Trustee's security interest in or lien on the Mortgage Loans, including
without limitation (i) continuation statements, and (ii) such other
statements as may be occasioned by any transfer of any interest of the Master
Servicer or any Servicer or the Depositor in any Mortgage Loan.
SECTION 12.05. Notices.
In addition to other notices provided under this Agreement, the
Trust Administrator shall notify the Rating Agencies and the Back-Up Servicer
in writing: (a) of any substitution of any Mortgage Loan; (b) of any payment
or draw on any insurance policy applicable to the Mortgage Loans; (c) of the
final payment of any amounts owing to a Class of Certificates; (d) any Event
of Default under this Agreement; and (e) in the event any Mortgage Loan is
purchased in accordance with this Agreement.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when received (i) in the case of
the Depositor, Credit Suisse First Boston Mortgage Securities Corp., 00
Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx X. Xxxxxxx (with a copy to DLJ Mortgage Acceptance Corp., 00
Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxxxxxx); (ii) in the case of the Trustee, the Corporate Trust Office,
Attention: Xxxxxxx X. Xxxxxxxx, or such other address as may hereafter be
furnished to the Depositor in writing by the Trustee; (iii) in the case of
DLJMC, 00 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxx Xxxxxx (with a copy to DLJ Mortgage Acceptance Corp., 00 Xxxxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxxx), or such
other address as may be hereafter furnished to the Depositor and the Trustee
by DLJMC in writing; (iv) in the case of Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxxx Xxxxxxxxx; (v)
in the case of Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; (vi)
in the case of SPS, 0000 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000,
Attention: Xxxxx Xxxxxxx, with a copy to 0000 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, Attention: General Counsel; (vii) in the case of Xxxxx
Fargo, as Master Servicer, Corporate Trust Office, 0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, XX 00000, Attention: CSFB ARMT 2004-3 or such other address as may
be hereafter furnished to the Depositor or the Trustee in writing by Xxxxx
Fargo; and (viii) in the case of Xxxxx Fargo, with respect to servicing
issues, Xxxxx Xxxxx Xxxx, X.X., 0 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000-0000,
Attention: Xxxx X. Xxxxx, MAC-X2401-042, Fax: (000) 000-0000, and with
respect to all other issues, Xxxxx Fargo Bank, N.A., 0000 Xxx Xxxxxxx Xxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxx, MAC-X3902-02X, Fax:
(000) 000-0000, in each case with a copy to Xxxxx Fargo Bank, N.A., 1 Home
Campus, Xxx Xxxxxx, Xxxx 00000- 0001, Attention: General Counsel,
MAC-X2401-06T, or such other address as may be hereafter furnished in writing
by Xxxxx Fargo. Notices to Certificateholders shall be deemed given when
mailed, first class postage prepaid.
SECTION 12.06. 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 12.07. 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 representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to
this Agreement, unless such Holder previously shall have given to the Trust
Administrator a written notice of an Event of Default and of the continuance
thereof, as provided herein, and unless the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the
Certificates shall also have made written request upon the Trust
Administrator to institute such action, suit or proceeding in its own name as
Trust Administrator hereunder and shall have offered to the Trust
Administrator such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trust
Administrator, for 60 days after its receipt of such notice, request and
offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trust Administrator, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to
any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 12.07, each and every Certificateholder and the Trust
Administrator shall be entitled to such relief as can be given either at law
or in equity.
SECTION 12.08. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trust Administrator pursuant to this Agreement,
are and shall be deemed fully paid.
SECTION 12.09. Protection of Assets.
Except for transactions and activities entered into in connection
with the securitization that is the subject of this agreement, the trust
created by this agreement is not authorized and has no power to:
(i) borrow money or issue debt;
(ii) merge with another entity, reorganize, liquidate or sell assets; or
(iii) engage in any business or activities.
Each party to this agreement agrees that it will not file an
involuntary bankruptcy petition against the Trust Fund or initiate any other
form of insolvency proceeding until 366 days after the Certificates have been
paid.
SECTION 12.10. Non-Solicitation.
From and after the date of this Agreement, each of the Depositor,
the Seller, the Master Servicer, the Servicers, the Trust Administrator and
the Trustee agrees that it will not take any action or permit or cause any
action to be taken by any of its agents or affiliates, or by any independent
contractors on any such party's behalf, to personally, by telephone, by mail,
or electronically by e-mail or through the Interest or otherwise, solicit the
borrower or obligor under any Mortgage Loan to refinance the Mortgage Loan,
in whole or in part. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Depositor, the Seller, the Master
Servicer, any Servicer, the Trust Administrator or the Trustee or any
affiliate of any such party that originates mortgage loans in the normal
course, which are directed to the general public at large, or segments
thereof, including, without limitation, mass mailings based on commercially
acquired mailing lists or newspaper, radio and television advertisements
shall not constitute solicitation under this Section 12.10, provided, that no
segment of the general public shall consist primarily of the borrowers or
obligors under the Mortgage Loans. None of the Depositor, a Seller, the
Master Servicer, a Servicer, the Trust Administrator or the Trustee shall
permit the sale of the name of any Mortgagor or any list of names that
consist primarily of the Mortgages to any Person.
ARTICLE XIII
SPS AND THE MASTER SERVICER
SECTION 13.01. Reports and Notices.
(a) SPS shall provide the Master Servicer the following notices and reports
in a timely manner and such notices and reports shall be prepared using the
same methodology and calculations used in its standard servicing reports to
the Master Servicer. SPS shall send all such notices and reports to the
Master Servicer in a format used for its standard servicing reports. SPS
agrees to provide the Master Servicer with read-only access to those portions
of its default management and servicing platform that relate to the SPS
Mortgage Loans.
(i) All SPS Mortgage Loans - On each Data Remittance Date, commencing in
November 2004, SPS shall provide the Master Servicer a report of each
SPS Mortgage Loan indicating the information contained in Exhibit O for
the period relating to the related Distribution Date.
(ii) Liquidated Mortgage Loans - On each Data Remittance Date SPS shall
provide the Master Servicer with a report listing each SPS Mortgage
Loan that has liquidated or been satisfied in full indicating the
information, or information substantially similar to the information,
contained in Exhibit O together with all supporting documentation for
the prior calendar month.
(iii) Mortgage Guaranty Insurance Policy Claims - Where applicable, SPS shall
provide the Master Servicer with copies of all claims filed under any
Mortgage Guaranty Insurance Policy and the actual amount paid, together
with the explanation of benefits ("EOB") for each claim filed under any
Mortgage Guaranty Insurance Policy in respect of a SPS Mortgage Loan.
SPS shall remit the related Insurance Proceeds within five (5) Business
Days after their receipt, submit to the Master Servicer a foreclosure
settlement statement substantially in the form attached hereto as
Exhibit P and agrees not to deduct any related expenses prior to the
Master Servicer's approval of the related foreclosure settlement
statement.
(iv) Loss and Delinquency Test - SPS shall provide the Master Servicer with
all information required for calculating the Loss and Delinquency Test,
including but not limited to:
(A) Loan level and aggregate Stated Principal Balance of all SPS Mortgage
Loans 61-90 days delinquent including any loan(s) delinquent on a
bankruptcy plan;
(B) Loan level and aggregate Stated Principal Balance of all SPS Mortgage
Loans 91 days and greater (that are not in foreclosure) including
any loan(s) delinquent on a bankruptcy plan;
(C) Loan level and aggregate Stated Principal Balance of all SPS Mortgage
Loans that are active foreclosures;
(D) Loan level and aggregate Stated Principal Balance of all SPS Mortgage
Loans that are active REOs; and
(E) Due dates for all SPS Mortgage Loans reported under the categories
listed above in (A) through (D).
(b) SPS shall make its servicing personnel available during normal business
hours to respond, either orally or in writing by facsimile transmission,
express mail, or electronic mail, to reasonable inquiries transmitted by the
Master Servicer with respect to any SPS Mortgage Loan provided that SPS shall
only be required to provide information that is readily accessible and
available to its servicing personnel.
SECTION 13.02. Master Servicer's Oversight With Respect to the SPS
Mortgage Loans.
(a) The Master Servicer shall be permitted to provide SPS with advice,
reports and recommendations regarding SPS' collection efforts and the
management of specific SPS Mortgage Loans, which advice may be made in
writing, in the form of electronic mail or verbally. Such advice shall be
based on an evaluation of the information provided pursuant to
Section 13.01(a). The advice may include comparable analysis of the
performance of the SPS Mortgage Loans with similar mortgage loans serviced by
other mortgage loan servicers. Such advice may also take the form of
benchmark comparisons that identify and interpret SPS' strengths and
weaknesses relative to similar, unidentified servicers in the industry.
(b) Each party to the Agreement acknowledges that the Master Servicer's
advice is made in the form of recommendations, and that the Master Servicer
does not have the right to direct SPS in performing its duties under this
Agreement. SPS may, after review and analysis of any recommendation of the
Master Servicer accept or reject such advice, in SPS' sole discretion,
subject to the duties and obligations of SPS set forth in this Agreement.
SECTION 13.03. Termination.
The rights and obligations of the Master Servicer under Sections
13.01 and 13.02 of this Agreement shall terminate upon the earlier of (i) the
appointment of a successor Servicer to SPS hereunder for all the SPS Mortgage
Loans or (ii) the receipt by SPS of a rating of "above average" (or its
equivalent) or better as a servicer of subprime mortgage loans by each Rating
Agency that maintains a servicer rating system and a Rating on the
Certificates.
SECTION 13.04. Liability and Indemnification.
Neither the Master Servicer, nor any of its respective directors,
officers, employees, or agents shall be under any liability for any action
taken or for refraining from the taking of any action in good faith pursuant
to Sections 13.01 and 13.02 of this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Master Servicer
or any such other Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of disregard of obligations and duties
hereunder. The Master Servicer and any director, officer, employee, or agent
thereof shall be entitled to rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder.
SECTION 13.05. Confidentiality.
The Master Servicer agrees that all material, nonpublic
information supplied to it by or on behalf of SPS relating to the SPS
Serviced Mortgage Loans or details of SPS' operations or SPS' proprietary
systems shall be treated confidentially except as otherwise provided by the
terms of this Agreement or as required by law; it being understood that the
provision of any such information by the Master Servicer to any party shall
not cause such information to be considered public for purposes of this
Section 13.05. The Master Servicer shall indemnify SPS against any loss,
liability, claims, charges, damages, fines, penalties, judgments, actions,
suits, costs and such other expenses incurred by SPS as a result of a breach
by the Master Servicer of its obligations under this Section 13.05.
IN WITNESS WHEREOF, the Depositor, the Seller, the Master
Servicer, the Servicers, the Back-Up Servicer, the Special Servicer, the
Trustee and the Trust Administrator have caused their names to be signed
hereto by their respective officers thereunto duly authorized all as of the
first day of October, 2004.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., as Depositor
By: ___________________________________
Name:
Title:
DLJ MORTGAGE CAPITAL, INC., as Seller
By: ___________________________________
Name:
Title:
XXXXX FARGO BANK,
N.A.,
as Trust Administrator
By: ___________________________________
Name:
Title:
XXXXX FARGO BANK,
N.A.,
as Master Servicer
By: ___________________________________
Name:
Title:
XXXXX FARGO BANK,
N.A.,
as a Servicer
By: ___________________________________
Name:
Title:
XXXXX FARGO BANK,
N.A.,
as Backup Servicer
By: ___________________________________
Name:
Title:
SELECT PORTFOLIO SERVICING,
INC., as a Servicer
By: ___________________________________
Name:
Title:
U.S. BANK NATIONAL
ASSOCIATION, as
Trustee
By: ___________________________________
Name:
Title:
WILSHIRE CREDIT
CORPORATION,
as Special Servicer
By: ___________________________________
Name:
Title:
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this __ day of October, 2004, before me, personally appeared Xxxx X.
Xxxxxx, known to me to be a Vice President of Credit Suisse First Boston
Mortgage Securities Corp., one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf
of said corporation, and acknowledged to me that such corporation executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the __ day of October, 2004, before me, personally appeared Xxxxx X. Xxxx,
known to me to be a Vice President of DLJ Mortgage Capital, Inc., one of the
corporations that executed the within instrument and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the _____ day of October, 2004 before me, a Notary Public in and for said
State, personally appeared ____________________, known to me to be a
__________________ of U.S. Bank National Association, the national banking
association that executed the within instrument and also known to me to be
the person who executed it on behalf of said national banking association,
and acknowledged to me that such national banking association executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
STATE OF _____________)
: ss.:
COUNTY OF _____________)
On the _____ day of October, 2004 before me, a Notary Public in and for said
State, personally appeared ____________________, known to me to be a
__________________ of SPS, the Utah corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such limited partnership
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
STATE OF _____________)
: ss.:
COUNTY OF _____________)
On the _____ day of October, 2004 before me, a Notary Public in and for said
State, personally appeared ____________________, known to me to be a
__________________ of Wilshire Credit Corporation, the __________ corporation
that executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
STATE OF )
: ss.:
COUNTY OF )
On the _____ day of October, 2004 before me, a Notary Public in and for said
State, personally appeared ____________________, known to me to be a
__________________ of Xxxxx Fargo Bank, N.A., the national banking
association that executed the within instrument and also known to me to be
the person who executed it on behalf of said national banking association,
and acknowledged to me that such banking corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
STATE OF )
: ss.:
COUNTY OF )
On the _____ day of October, 2004 before me, a Notary Public in and for said
State, personally appeared ____________________, known to me to be a
__________________ of Xxxxx Fargo Bank, N.A., the national banking
association that executed the within instrument and also known to me to be
the person who executed it on behalf of said national banking association,
and acknowledged to me that such banking corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
STATE OF )
: ss.:
COUNTY OF )
On the _____ day of October, 2004 before me, a Notary Public in and for said
State, personally appeared ____________________, known to me to be a
__________________ of Xxxxx Fargo Bank, N.A., the national banking
association that executed the within instrument and also known to me to be
the person who executed it on behalf of said national banking association,
and acknowledged to me that such banking corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
STATE OF )
: ss.:
COUNTY OF )
On the _____ day of October, 2004 before me, a Notary Public in and for said
State, personally appeared ____________________, known to me to be a
__________________ of Xxxxx Fargo Bank, N.A., the national banking
association that executed the within instrument and also known to me to be
the person who executed it on behalf of said national banking association,
and acknowledged to me that such banking corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written.
Notary Public
[NOTARIAL SEAL]
