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,
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.,
Seller and Servicer,
SELECT PORTFOLIO SERVICING, INC.,
GREENPOINT MORTGAGE FUNDING, INC.,
Servicers,
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 2004-2
ADJUSTABLE RATE MORTGAGE-BACKED PASS-THROUGH CERTIFICATES,
SERIES 2004-2
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................12
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.....79
SECTION 2.01. Conveyance of Trust Fund..................................79
SECTION 2.02. Acceptance by the Trustee.................................85
SECTION 2.03. Representations and Warranties of the Sellers,
Master Servicer and Servicers.............................87
SECTION 2.04. Representations and Warranties of the Depositor
as to the Mortgage Loans..................................89
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions......................... 89
SECTION 2.06. Issuance of Certificates..................................90
SECTION 2.07. REMIC Provisions..........................................90
SECTION 2.08. Covenants of the Master Servicer and each Servicer........96
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................97
SECTION 3.01. Servicers to Service Mortgage Loans.......................97
SECTION 3.02. Subservicing; Enforcement of the Obligations
of Subservicers...........................................99
SECTION 3.03. Master Servicing by Master Servicer......................101
SECTION 3.04. Trustee to Act as Master Servicer or Servicer............102
SECTION 3.05. Collection of Mortgage Loans; Collection Accounts;
Certificate Account......................................102
SECTION 3.06. Establishment of and Deposits to Escrow Accounts;
Permitted Withdrawals from Escrow Accounts; Payments
of Taxes, Insurance and Other Charges....................106
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Non-Designated Mortgage Loans; Inspections.107
SECTION 3.08. Permitted Withdrawals from the Collection Accounts and
Certificate Account......................................108
SECTION 3.09. Maintenance of Hazard Insurance; Mortgage Impairment
Insurance and Mortgage Guaranty Insurance Policy;
Claims; Restoration of Mortgaged Property................109
SECTION 3.10. Enforcement of Due on Sale Clauses; Assumption
Agreements...............................................113
SECTION 3.11. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans.....................114
SECTION 3.12. Trustee and Trust Administrator to Cooperate; Release of
Mortgage Files...........................................117
SECTION 3.13. Documents, Records and Funds in Possession of a
Servicer to be Held for the Trust........................118
SECTION 3.14. Servicing Fee............................................118
SECTION 3.15. Access to Certain Documentation..........................119
SECTION 3.16. Annual Statement as to Compliance........................119
SECTION 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements..........................120
SECTION 3.18. Maintenance of Fidelity Bond and Errors and
Omissions Insurance......................................122
SECTION 3.19. Special Serviced Mortgage Loans..........................122
SECTION 3.20. Indemnification of Servicers and Master Servicer.........123
SECTION 3.21. Notification of Adjustments..............................123
SECTION 3.22. Designated Mortgage Loans................................123
ARTICLE IV PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS...................125
SECTION 4.01. Priorities of Distribution...............................125
SECTION 4.02. Allocation of Losses.....................................138
SECTION 4.03. Recoveries...............................................139
SECTION 4.04. Reserved.................................................139
SECTION 4.05. Monthly Statements to Certificateholders.................140
SECTION 4.06. Servicer to Cooperate....................................140
SECTION 4.07. Cross-Collateralization; Adjustments to Available Funds..141
SECTION 4.08. Group 7 Basis Risk Reserve Fund..........................142
SECTION 4.09. Class C-B-1 Basis Risk Reserve Fund......................143
SECTION 4.10. Class 7-A-3 Interest Rate Cap Account....................144
SECTION 4.11. Class 7-A-4 Interest Rate Cap Account....................145
SECTION 4.12. Class 7-M-4 Interest Rate Cap Account....................147
ARTICLE V ADVANCES BY THE MASTER SERVICER AND SERVICERS....................149
SECTION 5.01. Advances by the Master Servicer and Servicers............149
ARTICLE VI THE CERTIFICATES................................................150
SECTION 6.01. The Certificates.........................................150
SECTION 6.02. Registration of Transfer and Exchange of Certificates....151
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates........155
SECTION 6.04. Persons Deemed Owners....................................156
SECTION 6.05. Access to List of Certificateholders'
Names and Addresses......................................156
SECTION 6.06. Maintenance of Office or Agency..........................156
SECTION 6.07. Book Entry Certificates..................................156
SECTION 6.08. Notices to Clearing Agency...............................157
SECTION 6.09. Definitive Certificates..................................157
ARTICLE VII THE DEPOSITOR, THE SELLERS, THE MASTER SERVICER,
THE SERVICERS AND THE SPECIAL SERVICER...................159
SECTION 7.01. Liabilities of the Sellers, the Depositor, the Master
Servicer, the Back-Up Servicer, the Servicers and the
Special Servicer.........................................159
SECTION 7.02. Merger or Consolidation of the Sellers, the Depositor,
the Back-Up Servicer, the Master Servicer,
the Servicers or the Special Servicer....................159
SECTION 7.03. Limitation on Liability of the Sellers, the Depositor,
the Master Servicer, the Back-Up Servicer,
the Servicers, the Special Servicer and Others...........160
SECTION 7.04. Master Servicer and Servicer Not to Resign;
Transfer of Servicing....................................161
SECTION 7.05. Master Servicer, Seller and Servicers
May Own Certificates.....................................162
SECTION 7.06. Termination of Duties of the Back-Up Servicer............162
ARTICLE VIII DEFAULT.......................................................163
SECTION 8.01. Events of Default........................................163
SECTION 8.02. Master Servicer or Trust Administrator to Act;
Appointment of Successor.................................166
SECTION 8.03. Notification to Certificateholders.......................168
SECTION 8.04. Waiver of Events of Default..............................168
ARTICLE IX CONCERNING THE TRUSTEE..........................................168
SECTION 9.01. Duties of Trustee........................................168
SECTION 9.02. Certain Matters Affecting the Trustee....................170
SECTION 9.03. Trustee Not Liable for Certificates or Mortgage Loans....171
SECTION 9.04. Trustee May Own Certificates.............................171
SECTION 9.05. Trustee's Fees and Expenses..............................171
SECTION 9.06. Eligibility Requirements for Trustee.....................172
SECTION 9.07. Resignation and Removal of Trustee.......................172
SECTION 9.08. Successor Trustee........................................173
SECTION 9.09. Merger or Consolidation of Trustee.......................173
SECTION 9.10. Appointment of Co Trustee or Separate Trustee............174
SECTION 9.11. Office of the Trustee....................................175
ARTICLE X CONCERNING THE TRUST ADMINISTRATOR...............................176
SECTION 10.01. Duties of Trust Administrator............................176
SECTION 10.02. Certain Matters Affecting the Trust Administrator........177
SECTION 10.03. Trust Administrator Not Liable for Certificates
or Mortgage Loans........................................179
SECTION 10.04. Trust Administrator May Own Certificates.................179
SECTION 10.05. Trust Administrator's Fees and Expenses..................179
SECTION 10.06. Eligibility Requirements for Trust Administrator.........180
SECTION 10.07. Resignation and Removal of Trust Administrator...........180
SECTION 10.08. Successor Trust Administrator............................181
SECTION 10.09. Merger or Consolidation of Trust Administrator...........182
SECTION 10.10. Appointment of Co-Trust Administrator or Separate Trust
Administrator............................................182
SECTION 10.11. Office of the Trust Administrator........................183
SECTION 10.12. Tax Return...............................................183
SECTION 10.13. Commission Reporting.....................................183
SECTION 10.14. Determination of Certificate Index.......................186
ARTICLE XI TERMINATION.....................................................187
SECTION 11.01. Termination upon Liquidation or Purchase
of all Mortgage Loans.................................187
SECTION 11.02. Procedure Upon Optional Termination......................188
SECTION 11.03. Additional Termination Requirements......................189
ARTICLE XII MISCELLANEOUS PROVISIONS.......................................191
SECTION 12.01. Amendment................................................191
SECTION 12.02. Recordation of Agreement; Counterparts...................193
SECTION 12.03. Governing Law............................................193
SECTION 12.04. Intention of Parties.....................................193
SECTION 12.05. Notices..................................................194
SECTION 12.06. Severability of Provisions...............................195
SECTION 12.07. Limitation on Rights of Certificateholders...............195
SECTION 12.08. Certificates Nonassessable and Fully Paid................196
SECTION 12.09. Protection of Assets.....................................196
SECTION 12.10. Non-Solicitation.........................................196
ARTICLE XIII SPS AND THE MASTER SERVICER...................................198
SECTION 13.01. Reports and Notices......................................198
SECTION 13.02. Master Servicer's Oversight With Respect to the
SPS Mortgage Loans.......................................199
SECTION 13.03. Termination..............................................199
SECTION 13.04. Liability and Indemnification............................199
SECTION 13.05. Confidentiality..........................................199
EXHIBITS
Exhibit A: Form of Class A Certificate..............................A-1
Exhibit B: Form of Class 7-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 7-X Certificate............................F-1
Exhibit G: Form of Class C-B-1X Certificate.........................G-1
Exhibit H: Form of Servicer Information.............................H-1
Exhibit I-1: Form of Trust Receipt and Initial Certification........I-1-1
Exhibit I-2: Form of Trust Receipt and Subsequent Certification.....I-2-1
Exhibit J: Form of Trust Receipt and Final Certification............J-1
Exhibit K: Form of Request for Release..............................K-1
Exhibit L: Form of Transferor Certificate...........................L-1
Exhibit M-1: Form of Investment Letter..............................M-1-1
Exhibit M-2: Form of Rule 144A Letter...............................M-2-1
Exhibit N: Form of Investor Transfer Affidavit and Agreement........N-1
Exhibit O: Form of Transfer Certificate.............................O-1
Exhibit P: Form of SPS Mortgage Loans Report......................P-1-1
Exhibit Q: Form of Foreclosure Settlement Statement.................Q-1
Exhibit R: Form of Subsequent Transfer Agreement....................R-1
Exhibit S: Form of Monthly Statement to Certificateholders..........S-1
Exhibit T: Form of Depositor Certification .........................T-1
Exhibit U: Form of Trust Administrator Certification ...............U-1
Exhibit V-1: Form of Master Servicer Certification .................V-1-1
Exhibit V-2: Form of Servicer Certification ........................V-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 Seller
and Servicer - WMMSC...................................IIC-1
Schedule IID: Representations and Warranties of Servicer - SPS.......IID-1
Schedule IIE: Representations and Warranties of Servicer -
GreenPoint.............................................IIE-1
Schedule IIF: Representations and Warranties of Servicer -
Xxxxx Fargo............................................IIF-1
Schedule IIG: Representations and Warranties of Special Servicer -
Wilshire...............................................IIG-1
Schedule IIIA: Representations and Warranties of DLJMC -
DLJMC Mortgage Loans..................................IIIA-1
Schedule IIIB: Representations and Warranties of WMMSC -
WMMSC Mortgage Loans...................................IIB-1
Schedule IV: Eligible Servicing Transfer Loans.......................IV-1
APPENDICES
Appendix A: Calculation of Class Y Principal Reduction Amounts Appendix A-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"), WASHINGTON MUTUAL MORTGAGE
SECURITIES CORP. ("WMMSC"), a Delaware corporation, in its capacity as a servicer (in such
capacity, a "Servicer") and in its capacity as a seller (in such capacity, a "Seller"),
XXXXX FARGO BANK, N.A., a national banking association, in its capacity as master servicer
(in such capacity, the "Master Servicer"), in its capacity as a servicer (in such capacity,
a "Servicer"), in its capacity as back-up servicer (in such capacity, the "Back-Up
Servicer") and in its capacity as trust administrator (in such capacity, the "Trust
Administrator"), SELECT PORTFOLIO SERVICING, INC. ("SPS"), a Utah corporation, in its
capacity as a servicer (in such capacity, a "Servicer"), GREENPOINT MORTGAGE FUNDING, INC.,
a New York corporation, as a servicer (a "Servicer"), WILSHIRE CREDIT CORPORATION, a Nevada
corporation, 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 Class C-B-1,
Class 7-A-3, Class 7-A-4 and Class 7-M-4 Interest Rate Cap Agreements and assets held in
the Basis Risk Reserve Funds, the Class C-B-1, Class 7-A-3, Class 7-A-4 and Class 7-M-4
Interest Rate Cap Accounts, the Prefunding Account and the Capitalized Interest Account)
for federal income tax purposes shall consist of four REMICs (referred to as "REMIC I,"
"REMIC II," "REMIC III" and "REMIC IV").
REMIC I
As provided herein, the Trust Administrator will make an election to treat the
segregated pool of assets consisting of the Group 1, Group 2, Group 3, Group 4, Group 5 and
Group 6 Mortgage Loans and certain other related assets (exclusive of the Class C-B-1,
Class 7-A-3, Class 7-A-4 and Class 7-M-4 Interest Rate Cap Agreements and assets held in
the Basis Risk Reserve Funds, the Class C-B-1, Class 7-A-3, Class 7-A-4 and Class 7-M-4
Interest Rate Cap Accounts, the Prefunding Account and the Capitalized Interest Account)
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." Component I of 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 Component I of 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
Interest and Uncertificated Initial
Component I of 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) $25,800.90 February 2035
Class Y-2 Regular Variable(2) $30,884.43 February 2035
Class Y-3 Regular Variable(3) $48,435.20 February 2035
Class Y-4 Regular Variable(4) $19,253.65 February 2035
Class Y-5 Regular Variable(5) $60,257.57 February 2035
Class Y-6 Regular Variable(6) $97,019.16 February 2035
Class Z-1 Regular Variable(1) $51,588,143.95 February 2035
Class Z-2 Regular Variable(2) $61,752,519.12 February 2035
Class Z-3 Regular Variable(3) $96,821,970.75 February 2035
Class Z-4 Regular Variable(4) $38,488,056.21 February 2035
Class Z-5 Regular Variable(5) $120,483,271.77 February 2035
Class Z-6 Regular Variable(6) $193,941,310.03 February 2035
Component I of
the Class AR-L Residual Variable(1) $50.00 February 2035
-----------------
* 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 Component I of 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.
(3) Interest distributed to the REMIC I Regular Interests Y-3 and Z-3
on each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 3 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(4) Interest distributed to the REMIC I Regular Interests Y-4 and Z-4
on each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 4 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(5) Interest distributed to the REMIC I Regular Interests Y-5 and Z-5
on each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 5 Loans less 0.020% on the applicable
Uncertificated Principal Balance outstanding immediately before such
Distribution Date.
(6) Interest distributed to the REMIC I Regular Interests Y-6 and Z-6
on each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 6 Loans less 0.020% 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 Group 7 Mortgage Loans, the Group 5 Excess
Interest Amount, the Group 6 Excess Interest Amount and certain other related assets
(exclusive of the Class C-B-1, Class 7-A-3, Class 7-A-4 and Class 7-M-4 Interest Rate Cap
Agreements and assets held in the Basis Risk Reserve Funds, the Class C-B-1, Class 7-A-3,
Class 7-A-4 and Class 7-M-4 Interest Rate Cap Accounts, the Prefunding Account and the
Capitalized Interest Account) 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 II of the Class AR-L 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"). 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 Uncertificated Initial
and Component II REMIC II Uncertificated
of the Class AR-L Type of Pass-Through Principal
Certificates Interest Rate Balance Final Maturity Date*
Class Y-7A Regular Variable(1) $53,851.07 February 2035
Class Y-7B Regular Variable(2) $170,967.44 February 2035
Class Z-7A Regular Variable(1) $107,648,294.67 February 2035
Class Z-7B Regular Variable(2) $342,302,100.50 February 2035
Class LT-IO Regular Variable(3) $0.00 February 2035
Component II of
the Class AR-L Regular N/A $0.00 February 2035
-------------------
(1) Interest distributed to the REMIC II Regular Interests Y-7A and
Z-7A on each Distribution Date will have accrued at the weighted average
of the Net Mortgage Rates for the Group 7A Loans on the applicable
Uncertificated Principal Balance outstanding immediately before such
Distribution Date.
(2) Interest distributed to the REMIC II Regular Interests Y-7B and
Z-7B on each Distribution Date will have accrued at the weighted average
of the Net Mortgage Rates for the Group 7B Loans on the applicable
Uncertificated Principal Balance outstanding immediately before such
Distribution Date.
(3) Interest distributed to the REMIC II Regular Interest LT-IO on
each Distribution Date will be equal to the sum of the Group 5 Excess
Interest Amount and the Group 6 Excess Interest Amount for such
Distribution Date.
REMIC III
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
the REMIC II Regular Interests and certain other related assets (exclusive of
the Class C-B-1, Class 7-A-3, Class 7-A-4 and Class 7-M-4 Interest Rate Cap
Agreements and assets held in the Basis Risk Reserve Funds, the Class C-B-1,
Class 7-A-3, Class 7-A-4 and Class 7-M-4 Interest Rate Cap Accounts, the
Prefunding Account and the Capitalized Interest Account) 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 III." Component I of the Class AR Certificates will represent the sole
Class of "residual interests" in REMIC III 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 III Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC III (the "REMIC III 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 III Regular Interest shall be the
Maturity Date. None of the REMIC III Regular Interests will be certificated.
Class
Designation for
each REMIC III
Regular
Interest and Uncertificated Initial
Component I of REMIC III Uncertificated
the Class AR Type of Pass-Through Principal
Certificates Interest Rate Balance Final Maturity Date*
Class 1-A-1L Regular Variable(1) $47,485,000.00 February 2035
Class 2-A-1L Regular Variable(2) $25,000,000.00 February 2035
Class 2-A-2L Regular Variable(2) $31,840,000.00 February 2035
Class 3-A-1L Regular Variable(3) $89,120,000.00 February 2035
Class 4-A-1L Regular Variable(4) $21,705,000.00 February 2035
Class 4-A-2L Regular Variable(4) $7,720,000.00 February 2035
Class 4-A-3L Regular Variable(4) $6,000,000.00 February 2035
Class 5-A-1L Regular Variable(5) $110,900,000.00 February 2035
Class 6-A-1L Regular Variable(6) $178,510,000.00 February 2035
Class C-B-1L Regular Variable(7) $26,760,000.00 February 2035
Class C-B-2L Regular Variable(7) $8,170,000.00 February 2035
Class C-B-3L Regular Variable(7) $3,380,000.00 February 2035
Class C-B-4L Regular Variable(7) $2,250,000.00 February 2035
Class C-B-5L Regular Variable(7) $2,820,000.00 February 2035
Class C-B-6L Regular Variable(7) $1,696,872.74 February 2035
Class LT-1 Regular Variable(8) $107,628,953.06 February 2035
Class LT-2 Regular Variable(8) $2,198.82 February 2035
Class LT-3 Regular 0.00% $8,571.39 February 2035
Class LT-4 Regular Variable(9) $8,571.39 February 2035
Class LT-Y7A Regular Variable(10) $53,851.07 February 2035
Class LT-Y7B Regular Variable(11) $170,967.44 February 2035
Class LT-5 Regular Variable(12) $342,240,306.94 February 2035
Class LT-6 Regular Variable(12) $6,701.06 February 2035
Class LT-7 Regular 0.00% $27,546.25 February 2035
Class LT-8 Regular Variable(13) $27,546.25 February 2035
Class IOL Regular Variable(14) $0.00 February 2035
Component I of
the Class AR Residual Variable(1) $50.00 February 2035
-----------------
* 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 III
Regular and Residual Interests, the "latest possible maturity date" shall
be the Final Maturity Date.
(1) Interest distributed to the REMIC III 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 III 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 III Regular Interests 1-A-3L on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 3 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(4) Interest distributed to the REMIC III Regular Interests 1-A-4L on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 4 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(5) Interest distributed to the REMIC III Regular Interests 1-A-5L on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 5 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(6) Interest distributed to the REMIC III Regular Interests 1-A-6L on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 6 Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(7) Interest distributed to the REMIC III Regular Xxxxxxxxx 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, (b) the weighted average of the
Net Mortgage Rates for the Group 2 Loans, (c) the weighted average of the
Net Mortgage Rates for the Group 3 Loans, (d) the weighted average of the
Net Mortgage Rates for the Group 4 Loans, (e) the weighted average of the
Net Mortgage Rates for the Group 5 Loans, and (f) the weighted average of
the Net Mortgage Rates for the Group 6 Loans, weighted on the basis of the
Subordinate Component Balances of the respective Loan Groups, on the
applicable Uncertificated Principal Balance outstanding immediately before
such Distribution Date, which is equal to the weighted average of the
interest rates on the Class Y-1, Class Y-2, Class Y-3, Class Y-4, Class
Y-5 and Class Y-6 REMIC I Regular Interests weighted on the basis of their
respective principal balances
(8) Interest distributed to the REMIC III Regular Interests LT-1 and
LT-2 on each Distribution Date will have accrued at the weighted average of
the Net Mortgage Rates for the Group 7A Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date
(9) Interest distributed to the REMIC III Regular Interests LT-4 on
each Distribution Date will have accrued at twice the weighted average of
the Net Mortgage Rates for the Group 7A Loans on the applicable
Uncertificated Principal Balance outstanding immediately before such
Distribution Date.
(10) Interest distributed to the REMIC III Regular Interests LT-Y7A on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 7A Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(11) Interest distributed to the REMIC III Regular Interests LT-Y7B on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 7B Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(12) Interest distributed to the REMIC III Regular Interests LT-5 and LT-6 on
each Distribution Date will have accrued at the weighted average of the
Net Mortgage Rates for the Group 7B Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(13) Interest distributed to the REMIC III Regular Interests LT-8 on
each Distribution Date will have accrued at twice the weighted average of
the Net Mortgage Rates for the Group 7B Loans on the applicable
Uncertificated Principal Balance outstanding immediately before such
Distribution Date.
(14) Interest distributed to the REMIC III Regular Interest IOL on
each Distribution Date will be equal to the sum of the Group 5 Excess
Interest Amount and the Group 6 Excess Interest Amount for such
Distribution Date.
REMIC IV
As provided herein, the Trust Administrator will elect to treat the
segregated pool of assets consisting of the REMIC III Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as REMIC IV. Component II of the Class AR Certificates will
represent the sole Class of "residual interests" in REMIC IV 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 IV 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 IV 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 $47,485,000.00 Variable(1) $25,000 $1
Class 2-A-1 $25,000,000.00 Variable(2) $25,000 $1
Class 2-A-X (3) Variable(4) $100,000 $1
Class 2-A-2 $31,840,000.00 Variable(5) $25,000 $1
Class 3-A-1 $89,120,000.00 Variable(6) $25,000 $1
Class 3-A-X (7) Variable(8) $100,000 $1
Class 4-A-1 $21,705,000.00 Variable (9) $25,000 $1
Class 4-A-2 $7,720,000.00 Variable (10) $25,000 $1
Class 4-A-3 $6,000,000.00 Variable (11) $25,000 $1
Class 4-A-X (12) Variable(13) $100,000 $1
Class 5-A-1 $110,900,000.00 Variable (14) $25,000 $1
Class 6-A-1 $178,510,000.00 Variable (15) $25,000 $1
Class 7-A-1-1 $80,600,000.00 Variable (16) $25,000 $1
Class 7-A-1-2 $20,200,000.00 Variable (17) $25,000 $1
Class 7-A-2 $25,000,000.00 Variable (18) $25,000 $1
Class 7-A-3 $205,000,000.00 Variable (19) $25,000 $1
Class 7-A-4 $61,000,000.00 Variable (20) $25,000 $1
Class 7-A-5 $18,060,000.00 Variable (21) $25,000 $1
Class 7-A-6 $11,500,000.00 Variable (22) $25,000 $1
Class 7-M-1 $13,280,000.00 Variable(23) $25,000 $1
Class 7-M-2 $8,780,000.00 Variable(24) $25,000 $1
Class 7-M-3 $4,500,000.00 Variable(25) $25,000 $1
Class 7-M-4 $2,255,000.00 Variable(26) $25,000 $1
Class C-B-1 $26,760,000.00 Variable(27) $25,000 $1
Class C-B-2 $8,170,000.00 Variable(28) $25,000 $1
Class C-B-3 $3,380,000.00 Variable(28) $25,000 $1
Class C-B-4 $2,250,000.00 Variable(28) $25,000 $1
Class C-B-5 $2,820,000.00 Variable(28) $25,000 $1
Class C-B-6 $1,696,872.74 Variable(28) $25,000 $1
Class C-B-1X Notional (29) Variable (30) $100,000 $1
Class 7-X (31) Variable (32) (33) N/A
Component II of
Class AR(34) $0.00 N/A (35) N/A
_______________
(1) The Pass-Through Rate for the November 2004 Distribution Date for the Class 1-A-1
Certificates is 4.8578% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 1 for that Distribution Date.
(2) The Pass-Through Rate for the November 2004 Distribution Date for the Class 2-A-1
Certificates is 3.5218% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 2 for that Distribution Date, less the Pass-Through Rate for the Class
2-A-X Certificates for that Distribution Date.
(3) These certificates will not receive any distributions of principal, but will accrue
interest on the Class 2-A-X Notional Amount. The initial Class 2-A-X Notional Amount
will be approximately $25,000,000.
(4) The Pass-Through Rate on the Class 2-A-X Certificates for each Distribution Date to
and including the August 2007 Distribution Date will equal approximately 0.9660% per
annum. After the August 2007 Distribution Date, the Pass-Through Rate for the Class
2-A-X Certificates will equal approximately 0.2680% per annum. The Class 2-A-X
Certificate will represent ownership of two REMIC IV Regular Interests each having a
notional balance equal to the Class Principal Balance of the Class 2-A-1 Certificates
one of which has an interest rate of 0.6800% for each Distribution Date on or before
the Distribution Date in June of 2007 and of 0.00% thereafter and the other of which
has an interest rate of 0.2680%.
(5) The Pass-Through Rate for the November 2004 Distribution Date for the Class 2-A-2
Certificates is 4.4878% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 2 for that Distribution Date.
(6) The Pass-Through Rate for the November 2004 Distribution Date for the Class 3-A-1
Certificates is 4.1215% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 3 for that Distribution Date, less the Pass-Through Rate for the Class
3-A-X Certificates for that Distribution Date.
(7) These certificates will not receive any distributions of principal, but will accrue
interest on the Class 3-A-X Notional Amount. The initial Class 3-A-X Notional Amount
will be approximately $89,120,000.
(8) The Pass-Through Rate on the Class 3-A-X Certificates for each Distribution Date to
and including the August 2009 Distribution Date will equal approximately 1.2064% per
annum. After the August 2009 Distribution Date, the Pass-Through Rate for the Class
3-A-X Certificates will equal approximately 0.2260% per annum. The Class 3-A-X
Certificate will represent ownership of two REMIC IV Regular Interests each having a
notional balance equal to the Class Principal Balance of the Class 3-A-1 Certificates
one of which has an interest rate of 0.9804% for each Distribution Date on or before
the Distribution Date in June of 2007 and of 0.00% thereafter and the other of which
has an interest rate of 0.2260%.
(9) The Pass-Through Rate for the November 2004 Distribution Date for the Class 4-A-1
Certificates is 5.3917% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 4 for that Distribution Date.
(10) The Pass-Through Rate for the November 2004 Distribution Date for the Class 4-A-2
Certificates is 5.3917% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 4 for that Distribution Date.
(11) The Pass-Through Rate for the November 2004 Distribution Date for the Class 4-A-3
Certificates is 4.7205% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 4 for that Distribution Date, less the Pass-Through Rate for the Class
4-A-X Certificates for that Distribution Date.
(12) These certificates will not receive any distributions of principal, but will accrue
interest on the Class 4-A-X Notional Amount. The initial Class 4-A-X Notional Amount
will be approximately $6,000,000.
(13) The Pass-Through Rate on the Class 4-A-X Certificates for each Distribution Date to
and including the September 2011 Distribution Date will equal approximately 0.6712%
per annum. After the September 2011 Distribution Date, the Pass-Through Rate for the
Class 4-A-X Certificates will equal approximately 0.2885% per annum. The Class 4-A-X
Certificate will represent ownership of two REMIC IV Regular Interests each having a
notional balance equal to the Class Principal Balance of the Class 4-A-1 Certificates
one of which has an interest rate of 0.3827% for each Distribution Date on or before
the Distribution Date in June of 2007 and of 0.00% thereafter and the other of which
has an interest rate of 0.2885%.
(14) The Pass-Through Rate for the November 2004 Distribution Date for the Class 5-A-1
Certificates is 4.7969% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 5 for that Distribution Date.
(15) The Pass-Through Rate for the November 2004 Distribution Date for the Class 6-A-1
Certificates is 5.2885% per annum. After such Distribution Date, the Pass-Through
Rate for these Certificates shall be a per annum rate equal to the Net WAC Rate for
Loan Group 6 for that Distribution Date.
(16) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-A-1-1
Certificates is 2.350% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-A-1-1 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 7A Net Funds Cap and
(c) 11.00%.
(17) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-A-1-2
Certificates is 2.450% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-A-1-2 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 Group 7A Net Funds Cap and
(c) 11.00%.
(18) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-A-2
Certificates is 2.370% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-A-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 Group 7B Net Funds Cap and (c) 11.00%.
(19) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-A-3
Certificates is 2.350% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-A-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 Group 7B Net Funds Cap and (c) 11.00%.
(20) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-A-4
Certificates is 2.320% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-A-4 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 7B Net Funds Cap and (c) 11.00%.
(21) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-A-5
Certificates is 2.170% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-A-5 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 7B Net Funds Cap and (c) 11.00%.
(22) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-A-6
Certificates is 2.520% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-A-6 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 7B Net Funds Cap and (c) 11.00%.
(23) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-M-1
Certificates is 2.610% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-M-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 7 Subordinate Net Funds Cap and
(c) 11.00%.
(24) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-M-2
Certificates is 3.250% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-M-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 Group 7 Subordinate Net Funds Cap and
(c) 11.00%.
(25) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-M-3
Certificates is 3.800% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-M-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 Group 7 Subordinate Net Funds Cap and
(c) 11.00%.
(26) The Pass-Through Rate for the November 2004 Distribution Date for the Class 7-M-4
Certificates is 4.150% per annum. After such Distribution Date, the Pass-Through
Rate for the Class 7-M-4 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 7 Subordinate Net Funds Cap and
(c) 11.00%.
(27) 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 Class C-B-1 Cap Rate and (c) 11.00%.
(28) The Pass-Through Rate for the November 2004 Distribution Date for the Class C-B-2,
Class C-B-3, Class C-B-4, Class C-B-5 and Class C-B-6 Certificates is 5.0699 % per
annum. After such Distribution Date, the Pass-Through Rate for each of the
Class C-B-2, Class C-B-3, Class C-B-4, Class C-B-5 and Class C-B-6 Certificates shall
be a per annum rate equal to the quotient, expressed as a percentage of (a) the sum
of (i) the product of (x) the Net WAC Rate of Loan Group 1 for that Distribution Date
and (y) the Subordinate Component Balance for Loan Group 1 immediately prior to such
Distribution Date, (ii) the product of (x) the Net WAC Rate of Loan Group 2 for that
Distribution Date and (y) the Subordinate Component Balance for Loan Group 2
immediately prior to such Distribution Date, (iii) the product of (x) the Net WAC
Rate of Loan Group 3 for that Distribution Date and (y) the Subordinate
Component Balance for Loan Group 3 immediately prior to such Distribution Date, (iv)
the product of (x) the Net WAC Rate pf Loan Group 4 for that Distribution Date and
(y) the Subordinate Component Balance for Loan Group 4 immediately prior to such
Distribution Date, (v) the product of (x) the Net WAC Rate of Loan Group 5 for that
Distribution Date and (y) the Subordinate Component Balance for Loan Group 5
immediately prior to such Distribution Date, and (vi) the product of (x) the Net WAC
Rate of Loan Group 6 for that Distribution Date and (y) the Subordinate
Component Balance for Loan Group 6 immediately prior to such Distribution Date,
divided by (b) the aggregate of the Subordinate Component Balances for Loan Group 1,
Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan Group 6 immediately
prior to such Distribution Date.
(29) The Class C-B-1X Certificates accrue interest on the Class C-B-1X Notional Amount.
(30) The Pass-Through Rate for the November 2004 Distribution Date for the Class C-B-1X
Certificates is 2.6432% per annum. After such Distribution Date, the per annum
Pass-Through Rate on these Certificates shall equal the product of (a) the excess, if
any, of (x) the Class C-B-1 Cap Rate over (y) the Pass-Through Rate on the
Class C-B-1 Certificates for that Distribution Date and (b) a fraction, the numerator
of which is the actual number of days in the related accrual period and the
denominator of which is 30. Payments into the Class C-B-1 Basis Risk Reserve Fund
shall be deemed to have first been distributed from REMIC IV to the holders of the
Class C-B-1X Certificates in respect of the Class C-B-1X REMIC IV Regular Interest
and then paid by such holders into the Class C-B-1 Basis Risk Reserve Fund.
(31) The Class 7-X Certificates will not accrue interest on their Class Principal
Balance. With the exception of the first Distribution Date (as provided in footnote
32 below), the Class 7-X Certificates accrue interest on the Class 7-X Notional
Amount.
(32) The Class 7-X Certificates will be comprised of two REMIC IV regular interests, a
principal only regular interest designated 7-X-PO and an interest only regular
interest designated 7-X-IO, which will be entitled to distributions as set forth
herein. The rights of the Holder of the Class 7-X Certificates to payments from the
Group 7 Basis Risk Reserve Fund shall be outside and apart from its rights under the
REMIC IV Regular Interests 7-X-IO and 7-X-PO. On each Distribution Date, the
Class 7-X Certificates shall be entitled to the Class 7-X Distributable Amount. With
respect to any Distribution Date after the first distribution date, interest accrued
on the Class 7-X Certificates during the related Accrual Period shall equal interest
at the related Pass-Through Rate on the Class 7-X Notional Amount immediately prior
to such Distribution Date, in each case reduced by any interest shortfalls with
respect to the Mortgage Loans in the related Loan Group including Prepayment Interest
Shortfalls to the extent not covered by Compensating Interest. The Pass-Through Rate
for the Class 7-X Certificates or the REMIC IV Regular Interest 7-X-IO for any
Distribution Date shall equal a per annum rate equal to the percentage equivalent of
a fraction, the numerator of which is the product of (a) 30 and (b) the sum of the
amounts calculated pursuant to clauses (i) through (vi) below, and the denominator of
which is the product of (a) the actual number of days in the related Accrual Period
and (b) the aggregate principal balance of the REMIC III Regular Xxxxxxxxx XX0, XX0,
XX0, XX0, XX0, XX0, XX0, XX0, XX-X0X and LT-Y7B. For purposes of calculating the
Pass-Through Rate for the Class 7-X Certificates, the numerator is equal to the sum
of the following components:
(i) the Uncertificated Pass-Through Rate for REMIC III Regular Interests LT1
and LT-Y7A minus the Marker Rate, applied to a notional amount equal to
the aggregate Uncertificated Principal Balance of REMIC III Regular
Interests LT1 and LT-Y7A;
(ii) the Uncertificated Pass-Through Rate for REMIC III Regular Interest LT2
minus the Marker Rate, applied to a notional amount equal to the
Uncertificated Principal Balance of REMIC III Regular Interest LT2;
(iii) the Uncertificated Pass-Through Rate for REMIC III Regular Interest LT4
minus twice the Marker Rate, applied to a notional amount equal to the
Uncertificated Principal Balance of REMIC III Regular Interest LT4;
(iv) the Uncertificated Pass-Through Rate for REMIC III Regular Interests LT5
and LT-Y7B minus the Marker Rate, applied to a notional amount equal to
the aggregate Uncertificated Principal Balance of REMIC III Regular
Interests LT1 and LT-Y7B;
(v) the Uncertificated Pass-Through Rate for REMIC III Regular Interest LT6
minus the Marker Rate, applied to a notional amount equal to the
Uncertificated Principal Balance of REMIC III Regular Interest LT2; and
(vi) the Uncertificated Pass-Through Rate for REMIC III Regular Interest LT8
minus twice the Marker Rate, applied to a notional amount equal to the
Uncertificated Principal Balance of REMIC III Regular Interest LT4.
Accrued interest on the Class 7-X Certificates shall accrue on the basis of a 360-day
year and the actual number of days in the related Accrual Period. Payments into the
Basis Risk Reserve Fund from the Group 7 Available Distribution Amount shall be
deemed to have first been distributed from REMIC IV to the holders of the Class 7-X
Certificates in respect of the Class 7-X-IO REMIC IV Regular Interest and then paid
by such holders into the Basis Risk Reserve Fund.
(33) The Class 7-X Certificates will be issued in certificated, fully-registered form in
minimum denominations of 20% of the Percentage Interest therein and increments of 10%
in excess thereof.
(34) The Class AR Certificates are not themselves issued by REMIC IV, 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 III) and
Component II of the Class AR (which is the residual interest in REMIC IV).
(35) 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 IV 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 7-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 IV 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, Group 2, Group 3, Group 4, Group 5,
Group 6, Group 7A and Group 7B 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.
Class M Certificates.... The Class 7-M-1, Class 7-M-2, Class 7-M-3 and
Class 7-M-4 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 and Residual Certificates.
Group 2 Certificates.... The Class 2-A-1, Class 2-A-X and Class 2-A-2
Certificates.
Group 3 Certificates.... The Class 3-A-1 and Class 3-A-X Certificates.
Group 4 Certificates.... The Class 4-A-1, Class 4-A-2, Class 4-A-3 and Class
4-A-X Certificates.
Group 5 Certificates.... The Class 5-A-1 Certificates.
Group 6 Certificates.... The Class 6-A-1 Certificates.
Group 7 Certificates.... The Group 7A, Group 7B, Class 7-X and Class M
Certificates.
Group 7A Certificates... The Class 7-A-1-1 and Class 7-A-1-2 Certificates.
Group 7B Certificates... The Class 7-A-2, Class 7-A-3, Class 7-A-4,
Class 7-A-5 and Class 7-A-6 Certificates.
LIBOR Certificates...... The Group 7A, Group 7B, Class M and Class C-B-1
Certificates.
Notional Amount The Class 2-A-X, Class 3-A-X, Class 4-A-X, Class
Certificates............ C-B-1X and Class 7-X Certificates.
Offered Certificates.... All Classes of Certificates other than the Private
Certificates.
Private Certificates.... The Class C-B-4, Class C-B-5, Class C-B-6 and
Class 7-X Certificates.
Physical Certificates... The Residual Certificates and the Private
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 Certificates.
Subordinate Certificates The Class M, Group C-B and Class 7-X 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 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
Sellers, 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 and with respect to the LIBOR Certificates, the period beginning
on the immediately preceding Distribution Date (or the Closing Date, in the case of the
first Accrual Period) and ending on the day immediately preceding such Distribution Date.
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 National City Serviced Mortgage Loan, the payment required
to be made by (i) National City pursuant to Section 5.03 of the National City Servicing
Agreement or (ii) the Master Servicer with respect to any Distribution Date pursuant to
Section 3.22(b) of this Agreement.
With respect to any Wachovia Serviced Mortgage Loan, the payment required to be
made by (i) Wachovia with respect to any Distribution Date pursuant to Section 5.03 of the
Wachovia 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 Group 7 Collateral Balance: As to any date of determination will be
equal to the sum of the Aggregate Group 7 Collateral Balance and the amount, if any, then
on deposit in the Prefunding Account.
Aggregate Group 7 Loan Balance: As to any date of determination will be equal
to the aggregate of the Stated Principal Balances of the Mortgage Loans in Loan Group 7A
and Loan Group 7B, unless otherwise specified, as of the first day of such month.
Aggregate Loan Group Balance: As to any Loan Group, and as of any date of
determination, will 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 Subsequent Transfer Amount: With respect to any Subsequent Transfer
Date, the aggregate Stated Principal Balances as of the applicable Cut-off Date of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, as listed on the
revised Mortgage Loan Schedule delivered pursuant to Section 2.01(e); provided, however,
that such amount shall not exceed the amount on deposit in the Prefunding Account.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
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.
Applied Loss Amount: As to any Distribution Date, with respect to the Group 7
Certificates, the excess, if any, of (i) the aggregate Class Principal Balances of the
Group 7 Certificates (other than the related Notional Amount Certificates), after giving
effect to all Realized Losses with respect to the Mortgage Loans in Loan Group 7 during the
Collection Period for such Distribution Date and payments of principal on such Distribution
Date over (ii) the Aggregate Group 7 Collateral Balance for such Distribution Date.
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
of Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6 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 Class C-B 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) 11.00% 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) 11.00%.
Basis Risk Reserve Fund: Either the Class C-B-1 Basis Risk Reserve Fund or the
Group 7 Basis Risk Reserve Fund, as applicable.
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.
Capitalized Interest Account: The separate Eligible Account designated as such
and created and maintained by the Trust Administrator pursuant to Section 3.05(h) hereof.
The Capitalized Interest Account shall be treated as an "outside reserve fund" under
applicable Treasury regulations and shall not be part of any REMIC. Except as provided in
Section 3.05(h) hereof, any investment earnings on the Capitalized Interest Account shall
be treated as owned by the Depositor and will be taxable to the Depositor.
Capitalized Interest Deposit: $169,208.88.
Capitalized Interest Requirement: With respect to the November 2004, December
2004 and January 2005 Distribution Dates, an amount equal to 30 days of interest (based on
a 360-day year) accruing at the Capitalized Interest Requirement Rate on the Prefunded
Amount outstanding at the end of the related Collection Period. If REMIC II is unable to
pay the REMIC II Interests in respect of Group 7 their stated pass-through rates due to an
insufficiency in the Capitalized Interest Requirement, the Depositor will contribute any
amounts to REMIC II necessary to pay the REMIC II Interests their stated pass-through rates.
Capitalized Interest Requirement Rate: With respect to the November 2004,
December 2004 and January 2005 Distribution Dates, a per annum rate equal to the excess of
(a) the sum of (i) the Certificate Index for such Distribution Date, (ii) the weighted
average of the Certificate Margins of the Group 7 Certificates for such Distribution Date,
(iii) the weighted average of the Expense Fee Rates of the Group 7 Mortgage Loans for such
Distribution Date and (iv) with respect to the November 2004 Distribution Date, 0.35%, with
respect to the December 2004 Distribution Date, 0.70% and with respect to the January 2005
Distribution Date, 1.00%, over (b) 0.75%.
Carryforward Interest: For any Class of LIBOR Certificates (other than the
Class C-B-1 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) WMMSC, by
12:00 noon New York City time on the Business Day immediately preceding such Distribution
Date, (C) GreenPoint, the 7th calendar day preceding such Distribution Date, or if such 7th
calendar day is not a Business Day, the Business Day immediately following such 7th
calendar day, (D) 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 (E) the Designated Servicers, 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.
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 G 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 or Applied Loss Amounts, as
applicable, 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.
With respect to each Class 7-X Certificate, on any date of determination, an
amount equal to the Percentage Interest evidenced by such Certificate multiplied by an
amount equal to (i) the excess, if any, of (A) the then aggregate Stated Principal Balance
of the Group 7 Loans over (B) the then aggregate Class Principal Balance of the Group 7A,
Group 7B and Class M Certificates then outstanding, which represents the sum of (i) the
initial principal balance of the REMIC IV Regular Interest 7-X-PO, as reduced by Realized
Losses allocated thereto and payments deemed made thereon, and (ii) accrued and unpaid
interest on the REMIC IV Regular Interest 7-X-IO, as reduced by Realized Losses allocated
thereto.
Certificate Group: Any of Certificate Group 1, Certificate Group 2,
Certificate Group 3, Certificate Group 4, Certificate Group 5, Certificate Group 6 or
Certificate Group 7, 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 Group 3: Any of the Certificates with a Class designation
beginning with "3" and relating to Loan Group 3.
Certificate Group 4: Any of the Certificates with a Class designation beginning
with "4" and relating to Loan Group 4.
Certificate Group 5: Any of the Certificates with a Class designation beginning
with "5" and relating to Loan Group 5.
Certificate Group 6: Any of the Certificates with a Class designation
beginning with "6" and relating to Loan Group 6.
Certificate Group 7: Any of the Certificates with a Class designation
beginning with "7" and relating to Loan Group 7.
Certificate Index: With respect to each Distribution Date and the 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 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 LIBOR
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)
7-A-1-1 0.400% 0.800%
7-A-1-2 0.500% 1.000%
7-A-2 0.420% 0.840%
7-A-3 0.400% 0.800%
7-A-4 0.370% 0.740%
7-A-5 0.220% 0.440%
7-A-6 0.570% 1.140%
7-M-1 0.660% 1.160%
7-M-2 1.300% 1.800%
7-M-3 1.850% 2.350%
7-M-4 2.200% 2.700%
C-B-1 0.650% 1.150%
___________
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(1) On and prior to the first Distribution Date on which the Optional
Termination for Loan Group 7 may occur.
(2) After the first Distribution Date on which the Optional Termination
for Loan Group 7 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 C-B Credit Support Depletion Date: The first Distribution Date on which
the aggregate Class Principal Balance of the Class C-B Certificates has been or will be
reduced to zero.
Class 2-A-X Notional Amount: For any Distribution Date, the Class Principal
Balance of the Class 2-A-1 Certificates immediately prior to that Distribution Date.
Class 3-A-X Notional Amount: For any Distribution Date, the Class Principal
Balance of the Class 3-A-1 Certificates immediately prior to that Distribution Date.
Class 4-A-X Notional Amount: For any Distribution Date, the Class Principal
Balance of the Class 4-A-3 Certificates immediately prior to that Distribution Date.
Class 7 Certificates: As specified in the Preliminary Statement.
Class 7-A-3 Interest Rate Cap Account: The separate Eligible Account created
and initially maintained by the Trust Administrator pursuant to Section 4.10 in the name of
the Trust Administrator for the benefit of the Certificateholders and designated "Xxxxx
Fargo Bank, N.A. in trust for registered holders of Adjustable Rate Mortgage Trust 2004-2,
Adjustable Rate Mortgage-Backed Pass Through Certificates, Series 2004-2, Group 7
Certificates" Funds in the Class 7-A-3 Interest Rate Cap Account shall be held in trust
for the Certificateholders for the uses and purposes set forth in this Agreement. The
Class 7-A-3 Interest Rate Cap Account will not be an asset of any REMIC. Ownership of the
Class 7-A-3 Interest Rate Cap Account is evidenced by the Class 7-X Certificates.
Class 7-A-3 Interest Rate Cap Agreement: The interest rate cap agreement
relating to the Group 7 Certificates consisting of the ISDA Master Agreement and the
Schedule dated as of the Closing Date and the Confirmation thereto, between the Trustee on
behalf of the Trust and the Class 7-A-3 Interest Rate Cap Counterparty, as such agreement
may be amended and supplemented in accordance with its terms and any replacement
Class 7-A-3 Interest Rate Cap Agreement acceptable to the Depositor and the Trustee.
Class 7-A-3 Interest Rate Cap Agreement Notional Amount: The relevant notional
amount for a Class 7-A-3 Interest Rate Cap Agreement Payment Date pursuant to the terms of
the Class 7-A-3 Interest Rate Cap Agreement.
Class 7-A-3 Interest Rate Cap Agreement Payment Date: With respect to the
Class 7-A-3 Interest Rate Cap Agreement, the 25th day of each month, beginning in
November 2004, to and including the related Termination Date, subject to the modified
following business day convention (within the meaning of the 2000 ISDA Definitions). After
the related Termination Date, no payments shall be made under the related Class 7-A-3
Interest Rate Cap Agreement.
Class 7-A-3 Interest Rate Cap Counterparty: Credit Suisse First Boston
International, or any successor in interest thereto under the Class 7-A-3 Interest Rate Cap
Agreement.
Class 7-A-4 Interest Rate Cap Account: The separate Eligible Account created
and initially maintained by the Trust Administrator pursuant to Section 4.10 in the name of
the Trust Administrator for the benefit of the Certificateholders and designated "Xxxxx
Fargo Bank, N.A. in trust for registered holders of Adjustable Rate Mortgage Trust 2004-2,
Adjustable Rate Mortgage-Backed Pass Through Certificates, Series 2004-2, Group 7
Certificates" Funds in the Class 7-A-4 Interest Rate Cap Account shall be held in trust
for the Certificateholders for the uses and purposes set forth in this Agreement. The
Class 7-A-4 Interest Rate Cap Account will not be an asset of any REMIC. Ownership of the
Class 7-A-4 Interest Rate Cap Account is evidenced by the Class 7-X Certificates.
Class 7-A-4 Interest Rate Cap Agreement: The interest rate cap agreement
relating to the Group 7 Certificates consisting of the ISDA Master Agreement and the
Schedule dated as of the Closing Date and the Confirmation thereto, between the Trustee on
behalf of the Trust and the Class 7-A-4 Interest Rate Cap Counterparty, as such agreement
may be amended and supplemented in accordance with its terms and any replacement
Class 7-A-4 Interest Rate Cap Agreement acceptable to the Depositor and the Trustee.
Class 7-A-4 Interest Rate Cap Agreement Notional Amount: The relevant notional
amount for a Class 7-A-4 Interest Rate Cap Agreement Payment Date pursuant to the terms of
the Class 7-A-4 Interest Rate Cap Agreement.
Class 7-A-4 Interest Rate Cap Agreement Payment Date: With respect to the
Class 7-A-4 Interest Rate Cap Agreement, the 25th day of each month, beginning in
November 2004, to and including the related Termination Date, subject to the modified
following business day convention (within the meaning of the 2000 ISDA Definitions). After
the related Termination Date, no payments shall be made under the related Class 7-A-4
Interest Rate Cap Agreement.
Class 7-A-4 Interest Rate Cap Counterparty: Credit Suisse First Boston
International, or any successor in interest thereto under the Class 7-A-4 Interest Rate Cap
Agreement.
Class 7-M-1 Principal Payment Amount: For any Distribution Date on or after
the Stepdown Date and as long as a Trigger Event has not occurred with respect to such
Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate
Class Principal Balance of the Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2, Class 7-A-3,
Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates, in each case, after giving effect to
payments on such Distribution Date and (ii) the Class Principal Balance of the Class 7-M-1
Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 92.00% and (ii) the Aggregate Group 7 Collateral Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Group 7 Collateral
Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Group 7 Collateral
Balance as of the Cut-off Date.
Class 7-M-2 Principal Payment Amount: For any Distribution Date on or after
the Stepdown Date and as long as a Trigger Event has not occurred with respect to such
Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate
Class Principal Balance of the Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2, Class 7-A-3,
Class 7-A-4, Class 7-A-5, Class 7-A-6 and Class 7-M-1 Certificates, in each case, after
giving effect to payments on such Distribution Date and (ii) the Class Principal Balance of
the Class 7-M-2 Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 95.90% and (ii) the Aggregate Group 7 Collateral Balance
for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Group 7
Collateral Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Group 7
Collateral Balance as of the Cut-off Date.
Class 7-M-3 Principal Payment Amount: For any Distribution Date on or after
the Stepdown Date and as long as a Trigger Event has not occurred with respect to such
Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate
Class Principal Balance of the Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2, Class 7-A-3,
Class 7-A-4, Class 7-A-5, Class 7-A-6, Class 7-M-1 and Class 7-M-2 Certificates, in each
case, after giving effect to payments on such Distribution Date and (ii) the Class
Principal Balance of the Class 7-M-3 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 97.90% and (ii) the Aggregate Group 7
Collateral Balance for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Group 7 Collateral Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Group 7 Collateral Balance as of the Cut off Date.
Class 7-M-4 Interest Rate Cap Account: The separate Eligible Account created
and initially maintained by the Trust Administrator pursuant to Section 4.10 in the name of
the Trust Administrator for the benefit of the Certificateholders and designated "Xxxxx
Fargo Bank, N.A. in trust for registered holders of Adjustable Rate Mortgage Trust 2004-2,
Adjustable Rate Mortgage-Backed Pass Through Certificates, Series 2004-2, Group 7
Certificates" Funds in the Class 7-M-4 Interest Rate Cap Account shall be held in trust
for the Certificateholders for the uses and purposes set forth in this Agreement. The
Class 7-M-4 Interest Rate Cap Account will not be an asset of any REMIC. Ownership of the
Class 7-M-4 Interest Rate Cap Account is evidenced by the Class 7-X Certificates.
Class 7-M-4 Interest Rate Cap Agreement: The interest rate cap agreement
relating to the Group 7 Certificates consisting of the ISDA Master Agreement and the
Schedule dated as of the Closing Date and the Confirmation thereto, between the Trustee on
behalf of the Trust and the Class 7-M-4 Interest Rate Cap Counterparty, as such agreement
may be amended and supplemented in accordance with its terms and any replacement
Class 7-M-4 Interest Rate Cap Agreement acceptable to the Depositor and the Trustee.
Class 7-M-4 Interest Rate Cap Agreement Notional Amount: The relevant notional
amount for a Class 7-M-4 Interest Rate Cap Agreement Payment Date pursuant to the terms of
the Class 7-M-4 Interest Rate Cap Agreement.
Class 7-M-4 Interest Rate Cap Agreement Payment Date: With respect to the
Class 7-M-4 Interest Rate Cap Agreement, the 25th day of each month, beginning in
November 2004, to and including the related Termination Date, subject to the modified
following business day convention (within the meaning of the 2000 ISDA Definitions). After
the related Termination Date, no payments shall be made under the related Class 7-M-4
Interest Rate Cap Agreement.
Class 7-M-4 Interest Rate Cap Counterparty: Credit Suisse First Boston
International, or any successor in interest thereto under the Class 7-M-4 Interest Rate Cap
Agreement.
Class 7-M-4 Principal Payment Amount: For any Distribution Date on or after
the Stepdown Date and as long as a Trigger Event has not occurred with respect to such
Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate
Class Principal Balance of the Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2, Class 7-A-3,
Class 7-A-4, Class 7-A-5, Class 7-A-6, Class 7-M-1, Class 7-M-2 and Class 7-M-3
Certificates, in each case, after giving effect to payments on such Distribution Date and
(ii) the Class Principal Balance of the Class 7-M-4 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 98.90% and (ii) the
Aggregate Group 7 Collateral Balance for such Distribution Date and (B) the amount, if any,
by which (i) the Aggregate Group 7 Collateral Balance for such Distribution Date exceeds
(ii) 0.50% of the Aggregate Group 7 Collateral Balance as of the Cut off Date.
Class 7-X Distributable Amount: On the first Distribution Date, the Class 7-X
Distributable Amount shall be equal to the excess of (a) the interest accruing on the
Group 7 Mortgage Loans (disregarding for purposes of determining this rate any prepayments
during the first Accrual Period and continuing to treat such Mortgage Loans as outstanding)
over (b) the Current Interest due on the Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2,
Class 7-A-3, Class 7-A-4, Class 7-A-5, Class 7-A-6, Class 7-M-1, Class 7-M-2, Class 7-M-3
and Class 7-M-4 Certificates on such Distribution Date. With respect to any Distribution
Date after the first Distribution Date and the Class 7-X Certificates, to the extent of any
Monthly Excess Cashflow remaining on such Distribution Date after the distribution of
amounts pursuant to Section 4.01(II)(d)(i)-(xi), the sum of (a) the amount of interest
accrued during the related Accrual Period on the Class 7-X Certificates (as described in
the Preliminary Statement) and (b) the Overcollateralization Release Amount, if any, for
such Distribution Date.
Class 7-X Notional Amount: With respect to the Class 7-X Certificates or
REMIC IV Regular Interest 7-X-IO and any Distribution Date, the aggregate of the
Uncertificated Principal Balances of the REMIC III Regular Xxxxxxxxx XX0, XX0, XX0, XX0,
XX0, XX0, XX0, XX0, XX-X0X and LT-Y7B immediately prior to such Distribution Date, (which
for clarification is equal to the aggregate Stated Principal Balances of the Mortgage Loans
in Loan Group 7 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)).
Class A Certificates: As specified in the Preliminary Statement.
Class C-B Certificates: As specified in the Preliminary Statement.
Class C-B-1 Basis Risk Reserve Fund: The separate Eligible Account created and
initially maintained by the Trust Administrator pursuant to Section 4.09 in the name of the
Trust Administrator, as agent for the Trustee, for the benefit of the Class C-B-1
Certificateholders and designated "Xxxxx Fargo Bank, N.A. in trust for registered holders
of Adjustable Rate Mortgage Trust 2004-2, Adjustable Rate Mortgage-Backed Pass Through
Certificates, Series 2004-2, Class C-B-1." Funds in the Class C-B-1 Basis Risk Reserve
Fund shall be held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Class C-B-1 Cap Rate: For any Distribution Date and the Class C-B-1
Certificates, will be equal to the product of (a) the Pass-Through Rate applicable to the
other Classes of Class C-B Certificates for that Distribution Date and (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.
Class C-B-1 Interest Rate Cap Agreement: The interest rate cap agreement
relating to the Class C-B-1 Certificates consisting of the ISDA Master Agreement and the
Schedule dated as of the Closing Date and the Confirmation thereto, between the Trustee on
behalf of the Trust and the Class C-B-1 Interest Rate Cap Counterparty, as such agreement
may be amended and supplemented in accordance with its terms and any replacement
Class C-B-1 Interest Rate Cap Agreement acceptable to the Depositor and the Trustee.
Class C-B-1 Interest Rate Cap Agreement Notional Amount: The relevant notional
amount for a Class C-B-1 Interest Rate Cap Agreement Payment Date pursuant to the terms of
the Class C-B-1 Interest Rate Cap Agreement.
Class C-B-1 Interest Rate Cap Agreement Payment Date: With respect to the
Class C-B-1 Interest Rate Cap Agreement, the 25th day of each month, beginning in
November 2004, to and including the related Termination Date, subject to the modified
following business day convention (within the meaning of the 2000 ISDA Definitions). After
the related Termination Date, no payments shall be made under the related Class C-B-1
Interest Rate Cap Agreement.
Class C-B-1 Interest Rate Cap Counterparty: Credit Suisse First Boston
International, or any successor in interest thereto under the Class C-B-1 Interest Rate Cap
Agreement.
Class C-B-1 Required Basis Risk Reserve Fund Amount: For any Distribution
Date, $5,000.
Class C-B-1X Notional Amount: For any Distribution Date, the Class Principal
Balance of the Class C-B-1 Certificates immediately prior to that Distribution Date.
Class C-B-1X Required Reserve Fund Deposit: For any Distribution Date, an
amount equal to the lesser of (i) the amount of accrued interest payable to the
Class C-B-1X Certificates pursuant to Section 4.01(I)(A)(i)(i) for such Distribution Date
and (ii) the amount required to bring the balance on deposit in the Class C-B-1 Basis Risk
Reserve Fund up to an amount equal to the sum of (a) the Basis Risk Shortfall with respect
to the Class C-B-1 Certificates remaining for such Distribution Date after giving effect to
amounts, if any, payable under the Class C-B-1 Interest Rate Cap Agreement for such
Distribution Date and (b) $5,000.
Class Interest Shortfall: As to any Distribution Date and Class of Group 1,
Group 2, Group 3, Group 4, Group 5, Group 6 and Class C-B Certificates, the amount by which
the amount described in clause (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.
Class LT-IO Regular Interest: The uncertificated undivided beneficial interest
in REMIC II which constitutes a REMIC II Regular Interest and is entitled to distributions
as set forth herein.
Class M Certificates: As specified in the Preliminary Statement.
Class Notional Amount: The Class 2-A-X Notional Amount, Class 3-A-X Notional
Amount, Class 4-A-X Notional Amount, Class C-B-1X Notional Amount or Class 7-X Notional
Amount, as applicable.
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, Group 2, Group 3, Group 4, Group 5, Group 6 and Class C-B
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 (ii) of the definition of Interest Distribution Amount.
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, Class Y-2, Class Y-3, Class Y-4,
Class Y-5, Class Y-6, Class Y-7A and Class Y-7B 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 Y-3 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-3 Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the Class Y-3 Regular Interest on
such Distribution Date.
Class Y-3 Principal Reduction Amount: The Class Y Principal Reduction Amount
for the Class Y-3 Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Y-3 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-4 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-4 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-4 Principal Reduction Amount: The Class Y Principal Reduction Amount
for the Class Y-4 Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Y-4 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-5 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-5 Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the Class Y-5 Regular Interest on
such Distribution Date.
Class Y-5 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-5 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-6 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-6 Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the Class Y-6 Regular Interest on
such Distribution Date.
Class Y-6 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-6 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-7A Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-7A Principal Reduction Amount for such Distribution Date
over the principal portion of Realized Losses allocated to the Class Y-7A Regular Interest
on such Distribution Date.
Class Y-7A Principal Reduction Amount: The Class Y Principal Reduction Amount
for the Class Y-7A Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Y-7A Regular Interest: The uncertificated undivided beneficial interest
in REMIC II which constitutes a REMIC II Regular Interest and is entitled to distributions
as set forth herein.
Class Y-7B Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-7B Principal Reduction Amount for such Distribution Date
over the principal portion of Realized Losses allocated to the Class Y-7B Regular Interest
on such Distribution Date.
Class Y-7B Principal Reduction Amount: The Class Y Principal Reduction Amount
for the Class Y-7B Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Y-7B Regular Interest: The uncertificated undivided beneficial interest
in REMIC II which constitutes a REMIC II 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 or REMIC II Available Distribution Amount for the related Group (i.e. the
"related Group" for the Class Z-1 Regular Interest is the Group 1 Loans, the "related
Group" for the Class Z-2 Regular Interest is the Group 2 Loans, the "related Group" for the
Class Z-3 Regular Interest is the Group 3 Loans, the "related Group" for the Class Z-4
Regular Interest is the Group 4 Loans, the "related Group" for the Class Z-5 Regular
Interest is the Group 5 Loans, the "related Group" for the Class Z-6 Regular Interest is
the Group 6 Loans, the "related Group" for the Class Z-7A Regular Interest is the Group 7A
Loans and the "related Group" for the Class Z-7B Regular Interest is the Group 7B 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 (g)(i) of the
definition of "REMIC I Distribution Amount" or clause (d)(i) of the definition of "REMIC II
Distribution Amount," as applicable, 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, Class Z-2, Class Z-3, Class Z-4,
Class Z-5, Class Z-6, Class Z-7A and Class Z-7B 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.
Class Z-3 Principal Distribution Amount: For any Distribution Date, the excess,
if any, of the Class Z-3 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the Class Z-3 Regular Interest on such
Distribution Date .
Class Z-3 Principal Reduction Amount: The Class Z Principal Reduction Amount
for the Class Z-3 Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Z-3 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-4 Principal Distribution Amount: For any Distribution Date, the excess,
if any, of the Class Z-4 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the Class Z-4 Regular Interest on such
Distribution Date.
Class Z-4 Principal Reduction Amount: The Class Z Principal Reduction Amount
for the Class Z-4 Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Z-4 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-5 Principal Distribution Amount: For any Distribution Date, the excess,
if any, of the Class Z-5 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the Class Z-5 Regular Interest on such
Distribution Date.
Class Z-5 Principal Reduction Amount: The Class Z Principal Reduction Amount
for the Class Z-5 Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Z-5 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-6 Principal Distribution Amount: For any Distribution Date, the excess,
if any, of the Class Z-6 Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the Class Z-6 Regular Interest on such
Distribution Date.
Class Z-6 Principal Reduction Amount: The Class Z Principal Reduction Amount
for the Class Z-6 Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Z-6 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-7A Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-7A Principal Reduction Amount for such Distribution Date
over the principal portion of Realized Losses allocated to the Class Z-7A Regular Interest
on such Distribution Date.
Class Z-7A Principal Reduction Amount: The Class Z Principal Reduction Amount
for the Class Z-7A Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Z-7A Regular Interest: The uncertificated undivided beneficial interest
in REMIC II which constitutes a REMIC II Regular Interest and is entitled to distributions
as set forth herein.
Class Z-7B Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-7B Principal Reduction Amount for such Distribution Date
over the principal portion of Realized Losses allocated to the Class Z-7B Regular Interest
on such Distribution Date.
Class Z-7B Principal Reduction Amount: The Class Z Principal Reduction Amount
for the Class Z-7B Regular Interest as determined pursuant to the provisions of the
Appendix A.
Class Z-7B Regular Interest: The uncertificated undivided beneficial interest
in REMIC II which constitutes a REMIC II 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 WMMSC Serviced Mortgage Loans, the lesser of
(i) the sum of (a) one twelfth (1/12) of 0.04% of the aggregate Stated Principal Balance of
the WMMSC Serviced Mortgage Loans, as of the Due Date in the month of such Distribution
Date, (b) Payoff Earnings in respect of the WMMSC Serviced Mortgage Loans for such
Distribution Date and (c) aggregate Payoff Interest in respect of the WMMSC Serviced
Mortgage Loans for such Distribution Date, (ii) the aggregate Prepayment Interest Shortfall
allocable to Payoffs for the WMMSC Serviced Mortgage Loans and (iii) 1/12th of 0.125% of
the aggregate Stated Principal Balance of the WMMSC Serviced Mortgage Loans, as of the Due
Date in the month of such Distribution Date.
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 GreenPoint Serviced Mortgage Loans, the
lesser of (i) the aggregate Servicing Fee payable to GreenPoint in respect of the
GreenPoint Serviced Mortgage Loans for such Distribution Date, and (ii) the aggregate
Prepayment Interest Shortfall allocable to Payoffs and Curtailments with respect to the
GreenPoint Serviced Mortgage Loans.
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 GreenPoint Serviced Mortgage Loans, the excess of (i) the
Compensating Interest Payment required to be remitted by GreenPoint for such
Distribution Date over (ii) the amount of the Compensating Interest Payment actually
remitted by GreenPoint for such Distribution Date;
(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;
(d) with respect to the National City Serviced Mortgage Loans, the excess of (i) the
Compensating Interest (as defined in the National City Servicing Agreement) required
to be remitted by National City on the Monthly Remittance Date (as defined in the
National City Servicing Agreement) relating to such Distribution Date over (ii) the
amount of Compensating Interest (as defined in the National City Servicing Agreement)
actually remitted by National City on the Monthly Remittance Date (as defined in the
National City Servicing Agreement) relating to such Distribution Date; and
(e) with respect to the Wachovia Serviced Mortgage Loans, the excess of (i) the
Compensating Interest (as defined in the Wachovia Servicing Agreement) required to be
remitted by Wachovia on the Monthly Remittance Date (as defined in the Wachovia
Servicing Agreement) relating to such Distribution Date over (ii) the amount of
Compensating Interest (as defined in the Wachovia Servicing Agreement) actually
remitted by Wachovia on the Monthly Remittance Date (as defined in the Wachovia
Servicing Agreement) relating to such 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 2004-2, 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 2004-2.
Counterparty: The Class C-B-1 Interest Rate Cap Counterparty, Class 7-A-3
Interest Rate Cap Counterparty or Class 7-A-4 Interest Rate Cap Counterparty, as applicable.
Counterparty Rating Agency Downgrade: As defined in Section 4.09(f) herein.
Current Interest: For any Class of Group 7 Certificates, other than the
Class 7-X Certificates, and 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; provided, that as to each Class of Group 7 Certificates the
Current Interest shall be reduced by a pro rata portion of any Interest Shortfalls to the
extent not covered by Monthly Excess Interest.
With respect to the Class C-B-1 Certificates and any Distribution Date, the
amount of interest accruing at the applicable Pass-Through Rate on the Class Principal
Balance of the Class C-B-1 Certificates during the related Accrual Period; subject to
reduction for any Net Interest Shortfalls for such Distribution Date.
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: For any Initial Mortgage Loan, the Initial Cut-off Date. For
any Subsequent Mortgage Loan, the applicable Subsequent Cut-off Date.
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 and (A)
GreenPoint, Xxxxx Fargo or SPS, 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 or (B) WMMSC, no later than twelve noon, five Business
Days before the related Distribution Date.
Debt Service Reduction: With respect to a Mortgage Loan in Loan Group 1, Loan
Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6, 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 Loan Group 1, Loan
Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6, 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.
Deferred Amount: For any Class of Group 7 Subordinate Certificates (other than
the Class 7-X Certificates) and Distribution Date, will equal the amount by which (x) the
aggregate of the Applied Loss Amounts previously applied in reduction of the Class
Principal Balance thereof exceeds (y) the sum of (i) the aggregate of amounts previously
paid in reimbursement thereof and (ii) amounts added to the Class Principal Balances
thereof pursuant to Section 4.03(a)(ii) on all prior Distribution Dates, including such
Distribution Date.
Definitive Certificate: As defined in Section 6.07.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Rate: With respect to any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the aggregate outstanding principal
balance of all Mortgage Loans in Loan Group 7 60 or more days delinquent (including all
foreclosures and REO Properties) as of the close of business on the last day of such month,
and the denominator of which is the Aggregate Group 7 Collateral Balance as of the close of
business on the last day of such month.
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 National City Serviced Mortgage Loans, unless
any such Mortgage Loan is no longer serviced by National City under the National City
Servicing Agreement and the Wachovia Serviced Mortgage Loans, unless any such Mortgage Loan
is no longer serviced by Wachovia under the Wachovia Servicing Agreement.
Designated Servicer: Each of National City and Wachovia, as applicable.
Designated Servicing Agreements: Each of the National City Servicing Agreement
and the Wachovia Servicing Agreement, as applicable.
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.
DLJMC Mortgage Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule for which DLJMC is the applicable Seller.
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.
Eligible Servicing Transfer Loans: Any Mortgage Loan set forth on Schedule IV
hereto for which servicing may be transferred to WMMSC pursuant to Section 7.04 hereof.
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 Interest Amount: The Group 5 Excess Interest Amount and Group 6 Excess
Interest Amount, as applicable.
Excess Interest Rate: The Group 5 Excess Interest Rate and Group 6 Excess
Interest Rate, as applicable.
Excess Loss: The amount of any (i) Fraud Loss in excess of the Fraud Loss
Coverage Amount on a Mortgage Loan in Loan Group 1, Loan Group 2, Loan Group 3, Loan
Group 4, Loan Group 5 or Loan Group 6 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 in Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or
Loan Group 6 realized after the Special Hazard Coverage Termination Date or (iii)
Bankruptcy Loss in excess of the Bankruptcy Loss Coverage Amount on a Mortgage Loan in Loan
Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5, Loan or Loan Group 6
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 in Loan Group 1, Loan Group 2, Loan
Group 3, Loan Group 4, Loan Group 5 or Loan Group 6 as to which a Fraud Loss has occurred.
Fraud Loss Coverage Amount: The aggregate amount of Fraud Losses that are
allocated solely to the Class C-B Certificates, as of the Closing Date, $11,267,140,
subject to reduction from time to time by the amount of Fraud Losses allocated to the
Class C-B Certificates. In addition, (a) on each 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) 1.00% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5, and
Loan Group 6 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 on the Mortgage
Loans in Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan
Group 6 allocated to the Class C-B Certificates since such preceding anniversary or the
Cut-off Date, and (b) 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 in Loan
Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan Group 6 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.
GreenPoint: GreenPoint Mortgage Funding, Inc., a New York corporation, and its
successors and assigns.
GreenPoint Serviced Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule, for which GreenPoint is the applicable Servicer.
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, Loan
Group 2, Loan Group 3, Loan Group 4, Loan Group 5, Loan Group 6, Loan Group 7A or Loan
Group 7B, or with respect to the Certificates, the Class or Classes of Certificates that
relate to the corresponding Group or Groups.
Group C-B Percentage: With respect to any Distribution Date, the aggregate
Class Principal Balance of the Class C-B Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of the Loan Group 1,
Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan Group 6 Mortgage Loans, 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).
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 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, Class 2-A-2 and Class 2-A-X
Certificates.
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 aggregate Class Principal Balance of
the Class 2-A-1 and Class 2-A-2 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 3: 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 3 or with respect to the Certificates, the Class 3-A-1 and Class 3-A-X Certificates.
Group 3 Senior Liquidation Amount: As to any Distribution Date, the aggregate,
for each Mortgage Loan in Loan Group 3 which became a Liquidated Mortgage Loan during the
prior calendar month, of the lesser of (i) the Group 3 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 3 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
3-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 3, 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 3
Senior Percentage exceed 100%.
Group 3 Senior Principal Distribution Amount: As to any Distribution Date, the
sum of (i) the Group 3 Senior Percentage of the Principal Payment Amount for Loan Group 3,
(ii) the applicable Senior Prepayment Percentage of the Principal Prepayment Amount for
Loan Group 3, and (iii) the Group 3 Senior Liquidation Amount.
Group 3 Subordinate Percentage: For any Distribution Date, the excess of 100%
over the Group 3 Senior Percentage.
Group 4: 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 4 or with respect to the Certificates, the Class 4-A-1, Class 4-A-2, Class 4-A-3 and
Class 4-A-X Certificates.
Group 4 Senior Liquidation Amount: As to any Distribution Date, the aggregate,
for each Mortgage Loan in Loan Group 4 which became a Liquidated Mortgage Loan during the
prior calendar month, of the lesser of (i) the Group 4 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 4 Senior Percentage: As to any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the aggregate Class Principal Balance of
the Class 4-A-1, Class 4-A-2 and Class 4-A-3 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 4, 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 4 Senior Percentage
exceed 100%.
Group 4 Senior Principal Distribution Amount: As to any Distribution Date, the
sum of (i) the Group 4 Senior Percentage of the Principal Payment Amount for Loan Group 4,
(ii) the applicable Senior Prepayment Percentage of the Principal Prepayment Amount for
Loan Group 4, and (iii) the Group 4 Senior Liquidation Amount.
Group 4 Subordinate Percentage: For any Distribution Date, the excess of 100%
over the Group 4 Senior Percentage.
Group 5: 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 5 or with respect to the Certificates, the Class 5-A-1 Certificates.
Group 5 Excess Interest Amount: For any Distribution Date, the amount equal to
(i) the product of the Group 5 Excess Interest Rate and the Stated Principal Balance of the
Mortgage Loans in Loan Group 5 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 Scheduled
Payments for such Due Date, whether or not received, or for the initial Distribution Date,
the Cut-off Date, divided by (ii) 12, subject to reduction pursuant to Section 4.01(I)(B).
Group 5 Excess Interest Rate: For any Distribution Date, a per annum rate
equal to 0.020%.
Group 5 Senior Liquidation Amount: As to any Distribution Date, the aggregate,
for each Mortgage Loan in Loan Group 5 which became a Liquidated Mortgage Loan during the
prior calendar month, of the lesser of (i) the Group 5 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 5 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
5-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 5, 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 5
Senior Percentage exceed 100%.
Group 5 Senior Principal Distribution Amount: As to any Distribution Date, the
sum of (i) the Group 5 Senior Percentage of the Principal Payment Amount for Loan Group 5,
(ii) the applicable Senior Prepayment Percentage of the Principal Prepayment Amount for
Loan Group 5, and (iii) the Group 5 Senior Liquidation Amount.
Group 5 Subordinate Percentage: For any Distribution Date, the excess of 100%
over the Group 5 Senior Percentage.
Group 6: 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 6 or with respect to the Certificates, the Class 6-A-1 Certificates.
Group 6 Excess Interest Amount: For any Distribution Date, the amount equal to
(i) the product of the Group 6 Excess Interest Rate and the Stated Principal Balance of the
Mortgage Loans in Loan Group 6 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 Scheduled
Payments for such Due Date, whether or not received, or for the initial Distribution Date,
the Cut-off Date, divided by (ii) 12, subject to reduction pursuant to Section 4.01(I)(B).
Group 6 Excess Interest Rate: For any Distribution Date, a per annum rate
equal to 0.020%.
Group 6 Senior Liquidation Amount: As to any Distribution Date, the aggregate,
for each Mortgage Loan in Loan Group 6 which became a Liquidated Mortgage Loan during the
prior calendar month, of the lesser of (i) the Group 6 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 6 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
6-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 6, 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 6
Senior Percentage exceed 100%.
Group 6 Senior Principal Distribution Amount: As to any Distribution Date, the
sum of (i) the Group 6 Senior Percentage of the Principal Payment Amount for Loan Group 6,
(ii) the applicable Senior Prepayment Percentage of the Principal Prepayment Amount for
Loan Group 6, and (iii) the Group 6 Senior Liquidation Amount.
Group 6 Subordinate Percentage: For any Distribution Date, the excess of 100%
over the Group 6 Senior Percentage.
Group 7: 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 7A and Group 7B or with respect to the Certificates, the Group 7 Certificates.
Group 7 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 Group 7
Certificateholders and designated "Xxxxx Fargo Bank, N.A. in trust for registered holders
of Adjustable Rate Mortgage Trust 2004-2, Adjustable Rate Mortgage Pass-Through
Certificates, Series 2004-2, Group 7 Certificates." Funds in the Group 7 Basis Risk
Reserve Fund shall be held in trust for the Certificateholders for the uses and purposes
set forth in this Agreement.
Group 7 Certificates: The Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2,
Class 7-A-3, Class 7-A-4, Class 7-A-5, Class 7-A-6, Class 7-M-1, Class 7-M-2, Class 7-M-3,
Class 7-M-4 and Class 7-X Certificates.
Group 7 Credit Support Depletion Date: The first Distribution Date on which
the aggregate Class Principal Balance of the Group 7 Subordinate Certificates has been or
will be reduced to zero.
Group 7 Optimal Interest Remittance Amount: For any Distribution Date and Loan
Group 7A and Loan Group 7B, 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.
Group 7 Required Basis Risk Reserve Fund Amount: For any Distribution Date,
$5,000.
Group 7 Required Basis Risk Reserve Fund Deposit: For any Distribution Date, an
amount equal to the lesser of (i) the amount of accrued interest payable to the Group 7
Certificates for such Distribution Date and (ii) the amount required to bring the balance
on deposit in the Group 7 Basis Risk Reserve Fund up to an amount equal to the sum of (a)
the Basis Risk Shortfall with respect to the Group 7 Certificates remaining for such
Distribution Date after giving effect to amounts, if any, payable under the Class 7-A-3
Interest Rate Cap Agreement, Class 7-A-4 Interest Rate Cap Agreement and Class 7-M-4
Interest Rate Cap Agreement for such Distribution Date and (b) $5,000.
Group 7 Senior Certificates: The Group 7A Senior Certificates, Group 7B Senior
Certificates and Group 7C Senior Certificates.
Group 7 Senior Enhancement Percentage: For any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is the sum of the aggregate
Class Principal Balance of the Class 7-M-1, Class 7-M-2, Class 7-M-3 and Class 7-M-4
Certificates and the Overcollateralization Amount (which, for purposes of this definition
only, shall not be less than zero), in each case after giving effect to payments on such
Distribution Date (assuming no Trigger Event has occurred), and the denominator of which is
the Aggregate Group 7 Collateral Balance for such Distribution Date.
Group 7 Senior Principal Payment Amount: For any Distribution Date on or after
the Stepdown Date and as long as a Trigger Event has not occurred with respect to such
Distribution Date, will be the amount, if any, by which (x) the aggregate Class Principal
Balance of the Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2, Class 7-A-3, Class 7-A-4,
Class 7-A-5 and Class 7-A-6 Certificates, immediately prior to such Distribution Date
exceeds (y) the lesser of (A) the product of (i) 86.10% and (ii) the Aggregate Group 7
Collateral Balance for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Group 7 Collateral Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Group 7 Collateral Balance as of the Cut off Date.
Group 7 Subordinate Certificates: The Class 7-M-1, Class 7-M-2, Class 7-M-3,
Class 7-M-4 and Class 7-X Certificates.
Group 7 Subordinate Net Funds Cap: For any Distribution Date and the
Class 7-M-1, Class 7-M-2, Class 7-M-3 and Class 7-M-4 Certificates, will be a per annum
rate equal to a weighted average of (i) the Group 7A Net Funds Cap and (ii) the Group 7B
Net Funds Cap, in each case, for such Distribution Date, weighted on the basis of the
Subordinate Group 7A Balance and Subordinate Group 7B Balance, respectively.
Group 7A Allocation Amount: For any Distribution Date, the product of the
Group 7 Senior Principal Payment Amount for that Distribution Date and a fraction the
numerator of which is the Principal Remittance Amount for Loan Group 7A and the denominator
of which is the Principal Remittance Amount for Loan Group 7A and Loan Group 7B, in each
case for that Distribution Date. For purposes of this definition, the Principal Remittance
Amount will be calculated net of subclause (6) of the definition thereof.
Group 7A Excess Interest Amount: For any Distribution Date, the product of the
amount of Monthly Excess Interest required to be distributed on that Distribution Date
pursuant to Section 4.01(II)(d)(i)(A)(1)(a) and a fraction the numerator of which is the
Principal Remittance Amount for Loan Group 7A and the denominator of which is the Principal
Remittance Amount for Loan Group 7A and Loan Group 7B, in each case for that Distribution
Date.
Group 7A Net Funds Cap: For any Distribution Date and the Class 7-A-1-1 and
Class 7-A-1-2 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 7 Optimal Interest
Remittance Amount for Loan Group 7A for such date and (2) 12, and the denominator of which
is the Aggregate Loan Group Balance of Loan Group 7A (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 7A 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 7A Senior Certificates: The Class 7-A-1-1 and Class 7-A-1-2 Certificates.
Group 7B Allocation Amount: For any Distribution Date, the product of the
Group 7 Senior Principal Payment Amount for that Distribution Date and a fraction the
numerator of which is the Principal Remittance Amount for Loan Group 7B and the denominator
of which is the Principal Remittance Amount for Loan Group 7A and Loan Group 7B, in each
case for that Distribution Date. For purposes of this definition, the Principal Remittance
Amount will be calculated net of subclause (6) of the definition thereof.
Group 7B Net Funds Cap: For any Distribution Date and the Class 7-A-2,
Class 7-A-3, Class 7-A-4, Class 7-A-5 and Class 7-A-6 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 7 Optimal Interest Remittance Amount for Loan Group 7B for such
date and (2) 12, and the denominator of which is the Aggregate Loan Group Balance of Loan
Group 7B (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 7B 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 7B Senior Certificates: The Class 7-A-2, Class 7-A-3, Class 7-A-4,
Class 7-A-5 and Class 7-A-6 Certificates.
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.
Initial Bankruptcy Loss Coverage Amount: $216,853.
Initial Class Principal Balance: As set forth in the Preliminary Statement.
Initial Cut-off Date: October 1, 2004.
Initial Mortgage Loan: The initial Mortgage Loans conveyed by the Depositor to
the Trust Fund pursuant to Section 2.01 hereof on the Closing Date, which are listed on the
Mortgage Loan Schedule on such date.
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
interest bearing Class of Group 1, Group 2, Group 3, Group 4, Group 5, Group 6 and
Class C-B 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 or Class Notional Amount, as applicable, subject to reduction pursuant to
Section 4.01(I)(B), and (ii) any Class Unpaid Interest Amounts for such Class and
Distribution Date.
Interest Rate Cap Agreement: Any of the Class C-B-1 Interest Rate Cap
Agreement, Class 7-A-3 Interest Rate Cap Agreement, Class 7-A-4 Interest Rate Cap Agreement
or Class 7-M-4 Interest Rate Cap Agreement, as applicable.
Interest Remittance Amount: For any Distribution Date and the Mortgage Loans
in either Loan Group 7A or Loan Group 7B, an amount equal to the sum of (1) all interest
collected (other than Payaheads) or advanced in respect of Scheduled Payments on the
Mortgage Loans in such Loan Group during the related Collection Period, the interest
portion of Payaheads previously received on the Mortgage Loans in the related Loan Group
and intended for application in the related Collection Period and interest portion of all
Payoffs (net of Payoff Interest for such Distribution Date) and Curtailments received on
the Mortgage Loans in such Loan Group during the related Prepayment Period, less (x) the
applicable Expense Fees with respect to such Mortgage Loans and (y) unreimbursed Advances
and other amounts due to the Master Servicer, the applicable Servicer, the Back-Up Servicer
and the Trust Administrator with respect to such Mortgage Loans, to the extent allocable to
interest, (2) all Compensating Interest Payments paid by a Servicer with respect to the
Mortgage Loans in such Loan Group with respect to the related Prepayment Period, (3) the
portion of any Substitution Adjustment Amount and Purchase Price paid with respect to the
Mortgage Loans in such Loan Group during the related Collection Period, in each case
allocable to interest and the proceeds of any purchase of such Mortgage Loans by the
Terminating Entity pursuant to Section 11.01 in an amount not exceeding the interest
portion of the Par Value with respect to such Mortgage Loans, (4) all Net Liquidation
Proceeds and recoveries (net of unreimbursed Advances, Servicing Advances and expenses, to
the extent allocable to interest, and unpaid Expense Fees), if any, collected with respect
to the Mortgage Loans in such Loan Group during the related Collection Period, to the
extent allocable to interest, (5) a pro rata portion of the sum of (a) the Group 5 Excess
Interest Amount and (b) the Group 6 Excess Interest Amount for such Distribution Date (the
Group 5 Excess Interest Amount and Group 6 Excess Interest Amount will be allocated among
the Interest Remittance Amount for each of Loan Group 7A and Loan Group 7B pro rata based
upon each such Loan Group's Interest Remittance Amount without giving effect to this clause
(5)) and (6) with respect to the Interest Remittance Amount for Loan Group 7B, any amounts
withdrawn from the Capitalized Interest Account to pay interest on any Class of Group 7B
Certificates with respect to such Payment Date.
Interest Shortfall: For any Distribution Date and the Mortgage Loans in Loan
Group 7, an amount equal to the aggregate shortfall, if any, in collections of interest
(adjusted to the related Net Mortgage Rate) on Mortgage Loans in Loan Group 7 resulting
from (a) Principal Prepayments received during the related Prepayment Period after giving
effect to the Compensating Interest Payment for such Distribution Date and (b) interest
payments on certain of the Mortgage Loans in Loan Group 7 being limited pursuant to the
provisions of the Relief Act.
Investment Account: The commingled account (which shall be commingled only
with investment accounts related to series of pass-through certificates with a class of
certificates which has a rating equal to the highest of the Ratings of the Certificates)
maintained by WMMSC in the trust department of the Investment Depository pursuant to
Section 3.05. The Investment Account shall be an Eligible Account.
Investment Depository: U.S. Bank National Association or another bank or trust
company designated from time to time by WMMSC. The Investment Depository shall at all
times be an Eligible Institution.
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 related 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, Loan Group 2, Loan Group 3, Loan Group 4,
Loan Group 5, Loan Group 6, Loan Group 7A or Loan Group 7B, as applicable. Loan Group 1,
Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan Group 6 together will
constitute one sub-trust and Loan Group 7A and Loan Group 7B together will constitute
another sub-trust.
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 Group 3: All Mortgage Loans identified as Loan Group 3 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 4: All Mortgage Loans identified as Loan Group 4 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 5: All Mortgage Loans identified as Loan Group 5 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 6: All Mortgage Loans identified as Loan Group 6 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 7: All Mortgage Loans identified as Loan Group 7A Mortgage Loans
and Loan Group 7B Mortgage Loans on the Mortgage Loan Schedule.
Loan Group 7A: All Mortgage Loans identified as Loan Group 7A Mortgage Loans
on the Mortgage Loan Schedule.
Loan Group 7B: All Mortgage Loans identified as Loan Group 7B 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.
Marker Rate: With respect to the Class 7-X Certificates and the REMIC III
Regular Interests LT1, LT2, LT3, LT4 and LT-Y7A and any Distribution Date, a per annum rate
equal to two (2) times the weighted average of the Uncertificated REMIC III Pass-Through
Rates for REMIC III Regular Interest LT2 and REMIC III Regular Interest LT3 and with
respect to the Class 7-X Certificates and the REMIC III Regular Interests LT5, LT6, LT7,
LT8 and LT-Y7B and any Distribution Date, a per annum rate equal to two (2) times the
weighted average of the Uncertificated REMIC III Pass-Through Rates for REMIC III Regular
Interest LT6 and REMIC III Regular Interest LT7.
Master Servicer: Xxxxx Fargo.
Maximum Interest Rate: With respect to the Class 7-A-1-1, Class 7-A-1-2,
Class 7-A-2, Class 7-A-3, Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates and any
Distribution Date, 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 Class 7-M-1,
Class 7-M-2, Class 7-M-3 and Class 7-M-4 Certificates and any Distribution Date, an annual
rate equal to the weighted average of the Maximum Mortgage Rates of the Mortgage Loans in
Loan Group 7A and Loan Group 7B minus the weighted average Expense Fee Rate of the Mortgage
Loans in Loan Group 7A and Loan Group 7B. With respect to the Class C-B-1 Certificates and
any Distribution Date, an annual rate equal to the weighted average of the Maximum Mortgage
Rates of the Mortgage Loans in Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan
Group 5 and Loan Group 6, minus the weighted average Expense Fee Rate of the Mortgage Loans
in such Loan Groups.
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.
Monthly Excess Cashflow: For any Distribution Date, an amount equal to the sum
of the Monthly Excess Interest, Overcollateralization Release Amount, if any, for such date
and any Principal Payment Amount remaining after the application of items (i) through (v)
in the distribution thereof pursuant to Section 4.01(II)(a), (b) or (c), as applicable.
Monthly Excess Interest: For any Distribution Date, any Interest Remittance
Amount remaining after the application of items (i) through (v) in the distribution
thereof, pursuant to Section 4.01(II)(a).
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. whether such Mortgage Loan is a DLJMC Mortgage Loan or a WMMSC Mortgage Loan;
18. whether such Mortgage Loan is a SPS Serviced Mortgage Loan, a GreenPoint Serviced
Mortgage Loan, a WMMSC Serviced Mortgage Loan, a Xxxxx Fargo Serviced
Mortgage Loan, a National City Serviced Mortgage Loan or a Wachovia
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.
National City: National City Mortgage Co., and its successors and assigns.
National City Serviced Mortgage Loans: The Mortgage Loans identified as such
on the Mortgage Loan Schedule, for which National City is the applicable Servicer.
National City Servicing Agreement: That certain Reconstituted Servicing
Agreement dated as of October 1, 2004 among DLJMC, National City and the Master Servicer,
and acknowledged by the Trustee and the Trust Administrator.
Net Excess Spread: With respect to any Distribution Date and Loan Group 7, a
fraction, expressed as a percentage, the numerator of which is equal to the excess of (x)
the Aggregate Group 7 Collateral Balance for the immediately preceding Distribution Date
for that Loan Group, multiplied by the product of (A) the Net WAC Rate for Loan Group 7A
and Loan Group 7B and (B) the actual number of days elapsed in the related Accrual Period
divided by 360 over (y) the aggregate Current Interest for Loan Group 7 for such
Distribution Date, and the denominator of which is an amount equal to the Aggregate Group 7
Collateral Balance for the immediately preceding Distribution Date, multiplied by the
actual number of days elapsed in the related Accrual Period divided by 360.
Net Funds Cap: Any of the Group 7A Net Funds Cap, the Group 7B Net Funds Cap
or the Group 7 Subordinate Net Funds Cap, as applicable.
Net Interest Shortfalls: For any Distribution Date and the Group 1, Group 2,
Group 3, Group 4, Group 5 and Group 6 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 Class C-B 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, other than the Group 7
Certificates, and any Distribution Date, 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)(i)(xiv).
Net Recovery Realized Losses: For any Class of Certificates, other than the
Group 7 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
reduced by, in the case of Group 5 and Group 6, the Group 5 Excess Interest Rate and the
Group 6 Excess Interest Rate, respectively. 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.
Notional Amount Certificates: As specified in the Preliminary Statement.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the Board, 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 Sellers, 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 Sellers, the
Master Servicer, the Special Servicer, the Servicers, the Trustee or the Trust
Administrator, as required by this Agreement.
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.
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.
Overcollateralization Amount: For any Distribution Date, an amount equal to
the amount, if any, by which (x) the Aggregate Group 7 Collateral Balance for such
Distribution Date exceeds (y) the aggregate Class Principal Balance of the Group 7
Certificates after giving effect to payments on such Distribution Date.
Overcollateralization Deficiency: For any Distribution Date, the amount, if
any, by which (x) the Targeted Overcollateralization Amount for such Distribution Date
exceeds (y) the Overcollateralization Amount for such Distribution Date, calculated for
this purpose after giving effect to the reduction on such Distribution Date of the
aggregate Class Principal Balance of the Group 7 Certificates resulting from the payment of
the Principal Payment Amount on such Distribution Date but prior to allocation of any
Applied Loss Amount on the Group 7 Certificates on such Distribution Date.
Overcollateralization Release Amount: For any Distribution Date, an amount
equal to the lesser of (x) the Principal Remittance Amount for Loan Group 7A and Loan
Group 7B for such Distribution Date and (y) the amount, if any, by which (1) the
Overcollateralization Amount for such date, calculated for this purpose on the basis of the
assumption that 100% of the aggregate of the Principal Remittance Amount for Loan Group 7A
and Loan Group 7B for such date is applied on such date in reduction of the aggregate of
the Class Principal Balances of the Group 7 Certificates, exceeds (2) the Targeted
Overcollateralization Amount for such date.
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 and the Class 7-X Certificates (to the extent it is entitled to interest from
Loan Group 7) will be computed on the basis of a 360-day year and the actual number of days
elapsed in the related Accrual Period.
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 Earnings: For any Distribution Date, with respect to a WMMSC Serviced
Mortgage Loan, on which Payoff was received by WMMSC during the related Prepayment Period,
the aggregate of the interest earned by WMMSC from investment of each such Payoff from the
date of receipt of such Payoff until the Business Day immediately preceding the related
Distribution Date (net of investment losses).
Payoff Interest: For any Distribution Date with respect to each WMMSC 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; to the extent (together with Payoff Earnings and the
portion of the aggregate Servicing Fee described in clause (i) of the definition of
Compensating Interest Payment payable by WMMSC) not required to be distributed as a
Compensating Interest Payment on such Distribution Date, Payoff Interest shall be payable
to WMMSC as additional servicing compensation.
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.
Prefunded Amount: The amount deposited in the Prefunding Account on the
Closing Date, which shall equal approximately $20,144,857.70.
Prefunding Account: The separate Eligible Account created and maintained by
the Trust Administrator pursuant to Section 3.05(g) in the name of the Trust Administrator
for the benefit of the Certificateholders and designated "Xxxxx Fargo Bank, N.A., in trust
for registered holders of Adjustable Rate Mortgage Trust 2004-2 Adjustable Rate
Mortgage-Backed Pass-Through Certificates, Series 2004-2." Funds in the Prefunding Account
shall be held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement and shall not be a part of any REMIC created hereunder; provided, however,
that any investment income earned from Permitted Investments made with funds in the
Prefunding Account shall be for the account of the Depositor.
Prefunding Period: The period from the Closing Date until the earliest of
(i) the date on which the amount on deposit in the Prefunding Account is reduced to zero,
or (ii) an Event of Default occurs or (iii) December 31, 2004.
Prepayment Interest Shortfall: As to any Mortgage Loan, Distribution Date and
Principal Prepayment (other than a Payoff on a WMMSC Serviced Mortgage Loan, 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 WMMSC Serviced Mortgage Loan, 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 GreenPoint,
and all Curtailments, the related "Prepayment Period" will be the calendar month preceding
the month in which the related Distribution Date occurs. With respect to each Distribution
Date and each Payoff with respect to any Mortgage Loan serviced by a Designated Servicer,
the related "Prepayment Period" will be the period set forth in the related Designated
Servicing Agreement.
Principal Payment Amount: For any Distribution Date and Loan Group 1, Loan
Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6, 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.
For any Distribution Date and Loan Group 7, (a) an amount equal to the
Principal Remittance Amount for Loan Group 7A and Loan Group 7B for such date minus the
Overcollateralization Release Amount, if any, for such date, and (b) with respect to Loan
Group 7B and the Distribution Date in December 2004, plus the amount remaining, if any, in
the Prefunding Account at the end of the Prefunding Period net of investment income.
Principal Prepayment: Any payment of principal on a Mortgage Loan which
constitutes a Payoff or Curtailment.
Principal Prepayment Amount: For any Distribution Date and Loan Group 1, Loan
Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6, 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 Remittance Amount: For any Distribution Date and either Loan Group 7A
or Loan Group 7B, an amount equal to the sum of (1) all principal collected (other than
Payaheads) or advanced in respect of Scheduled Payments on the Mortgage Loans in such Loan
Group during the related Collection Period (less unreimbursed Advances, Servicing Advances
and other amounts due to the Servicers, the Trustee, the Master Servicer and the Trust
Administrator with respect to the Mortgage Loans in such Loan Group, to the extent
allocable to principal) and the principal portion of Payaheads previously received on the
Mortgage Loans in such Loan Group and intended for application in the related Collection
Period, (2) all Principal Prepayments received on the Mortgage Loans in such Loan Group
during the related Prepayment Period, (3) the Purchase Price of each Mortgage Loan in such
Loan Group that was repurchased by a Seller or purchased by the Special Servicer pursuant
to Section 3.11(g) or the holder of the Subordinate Certificates pursuant to
Section 3.11(f), during the related Collection Period and the principal proceeds of any
purchase of Mortgage Loans in such Loan Group by the Terminating Entity pursuant to
Section 11.01 in an amount not exceeding the principal portion of the Par Value with
respect to such Mortgage Loans, (4) the portion of any Substitution Adjustment Amount paid
with respect to any Deleted Mortgage Loans in such Loan Group during the related Collection
Period allocable to principal, (5) all Net Liquidation Proceeds (net of unreimbursed
Advances, Servicing Advances and other expenses, to the extent allocable to principal) and
any other Recoveries collected with respect to the Mortgage Loans in such Loan Group during
the related Collection Period, to the extent allocable to principal, (6) amounts, if any,
withdrawn from the Class 7-A-3 Interest Rate Cap Account, Class 7-A-4 Interest Rate Cap
Account and Class 7-M-4 Interest Rate Cap Account to cover Realized Losses on the Group 7
Mortgage Loans incurred during the related Collection Period, and (7) with respect to the
Group 7B Certificates and the Distribution Date in January 2005, the amount remaining, if
any, in the Prefunding Account at the end of the Prefunding Period, exclusive of any
investment income thereon.
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-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 Class C-B 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 26, 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 IIIA(viii) and Schedule IIIB(viii), as applicable, 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 K, 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 Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6
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; (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; (3)
the interest portion of Realized Losses and Net Interest Shortfalls on the Group 3 Loans,
if any, shall be allocated between the Class Y-3 and Class Z-3 Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction thereof; (4)
the interest portion of Realized Losses and Net Interest Shortfalls on the Group 4 Loans,
if any, shall be allocated between the Class Y-4 and Class Z-4 Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction thereof; (5)
the interest portion of Realized Losses and Net Interest Shortfalls on the Group 5 Loans,
if any, shall be allocated between the Class Y-5 and Class Z-5 Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction thereof and
(6) the interest portion of Realized Losses and Net Interest Shortfalls on the Group 6
Loans, if any, shall be allocated between the Class Y-6 and Class Z-6 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
Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6 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; (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;
(3) the principal portion of Realized Losses on the Group 3 Loans shall be allocated,
first, to the Class Y-3 Regular Interest to the extent of the Class Y-3 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-3 Regular Interest in reduction of the Uncertificated Principal
Balance thereof; (4) the principal portion of Realized Losses on the Group 4 Loans shall be
allocated, first, to the Class Y-4 Regular Interest to the extent of the Class Y-4
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-4 Regular Interest in reduction of the
Uncertificated Principal Balance thereof; (5) the principal portion of Realized Losses on
the Group 5 Loans shall be allocated, first, to the Class Y-5 Regular Interest to the
extent of the Class Y-5 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-5 Regular
Interest in reduction of the Uncertificated Principal Balance thereof; and (6) the
principal portion of Realized Losses on the Group 6 Loans shall be allocated, first, to the
Class Y-6 Regular Interest to the extent of the Class Y-6 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-6 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. Realized Losses on the
Group 7A and Group 7B Mortgage Loans shall be allocated to the REMIC II Regular Interests
as follows: (1) the interest portion of Realized Losses and Net Interest Shortfalls on the
Group 7A Loans, if any, shall be allocated between the Class Y-7A and Class Z-7A 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 7A Loans, if any, shall be allocated between the Class Y-7B and
Class Z-7B 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 Group 7A and Group 7B Mortgage Loans shall be allocated
to the REMIC II Regular Interests as follows: (1) the principal portion of Realized Losses
on the Group 7A Loans shall be allocated, first, to the Class Y-7A Regular Interest to the
extent of the Class Y-7A 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-7A Regular
Interest in reduction of the Uncertificated Principal Balance thereof and (2) the principal
portion of Realized Losses on the Group 7B Loans shall be allocated, first, to the Class
Y-7B Regular Interest to the extent of the Class Y-7B 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-7B 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.
Realized Losses allocated to the Class 7-X Certificates shall be allocated
first to the REMIC IV Regular Interest 7-X-IO in reduction of the accrued but unpaid
interest thereon until such accrued and unpaid interest shall have been reduced to zero and
then to the REMIC IV Regular Interest 7-X-PO in reduction of the principal balance thereof.
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 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 LIBOR Certificates; provided that at
least two such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean of the rates quoted by one or more
major banks in New York City, selected by the 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 in amounts approximately equal to the
aggregate Class Principal Balance of the LIBOR Certificates. If no such quotations can be
obtained, the Reference Bank Rate shall be the 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 Certificates: The following table sets forth certain of the REMIC III
Regular Interests and the Classes of Certificates that are related to each of them:
REMIC III Regular Interest Related Certificates
1-A-1L 0-X-0
0-X-0X 0-X-0, 0-X-X
0-X-0X 0-X-0
0-X-0X 3-A-1, 3-A-X
4-A-1L 0-X-0
0-X-0X 0-X-0
0-X-0X 0-X-0, 0-X-X
5-A-1L 5-A-1
6-A-1L 6-A-1
C-B-1L C-B-1, C-B-1X
C-B-2L X-X-0
X-X-0X X-X-0
X-X-0X X-X-0
X-X-0X C-B-5
C-B-6L C-B-6
IOL 7-X
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 of Loan Group 1, Loan Group 2,
Loan Group 3, Loan Group 4, Loan Group 5 and Loan Group 6, for any Distribution Date, the
Available Distribution Amount for such Loan Group, in the case of Loan Groups 5 and 6,
exclusive of the Group 5 Excess Interest Amount and the Group 6 Excess Interest Amount.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I Available
Distribution Amounts shall be deemed distributed to REMIC III, as the holder of the REMIC I
Regular Interests, and to Holders of the Class AR L Certificates in respect of Component I
thereof, pursuant to Section 4.01(III)(a), 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 Component I
of 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
Component I of 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 Component I of 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.
(c) To the extent of the REMIC I Available Distribution Amount for Loan
Group 3:
(i) first, to the Class Y-3 and Class Z-3 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-3 and Class Z-3 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-3 and Class Z-3 Regular Interests, the Class
Y-3 Principal Distribution Amount and the Class Z-3 Principal Distribution Amount,
respectively.
(d) To the extent of the REMIC I Available Distribution Amount for Loan
Group 4:
(i) first, to the Class Y-4 and Class Z-4 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-4 and Class Z-4 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-4 and Class Z-4 Regular Interests, the Class
Y-4 Principal Distribution Amount and the Class Z-4 Principal Distribution Amount,
respectively.
(e) To the extent of the REMIC I Available Distribution Amount for Loan
Group 5:
(i) first, to the Class Y-5 and Class Z-5 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-5 and Class Z-5 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-5 and Class Z-5 Regular Interests, the Class
Y-5 Principal Distribution Amount and the Class Z-5 Principal Distribution Amount,
respectively.
(f) To the extent of the REMIC I Available Distribution Amount for Loan
Group 6:
(i) first, to the Class Y-6 and Class Z-6 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-6 and Class Z-6 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-6 and Class Z-6 Regular Interests, the Class
Y-6 Principal Distribution Amount and the Class Z-6 Principal Distribution Amount,
respectively.
(g) To the extent of the REMIC I Available Distribution Amounts for such
Distribution Date remaining after payment of the amounts pursuant to paragraphs (a), (b),
(c), (d), (e) and (f) 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 (g)(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 Component I of the Class AR-L Certificates, the
Residual Distribution Amount for Component I of the Class AR-L Certificates for such
Distribution Date.
REMIC I Realized Losses: For any Distribution Date, Realized Losses on the
Group 1, Group 2, Group 3, Group 4, Group 5 or Group 6 Mortgage Loans for the related
Collection Period shall be allocated to the REMIC I Regular Interests in reduction of
interest accrued thereon and the principal balances thereof in accordance with the
provisions of the definition of Realized Loss.
REMIC II Available Distribution Amount: For each of Loan Group 7A and Loan
Group 7B for any Distribution Date, the Available Distribution Amount for such Loan Group.
REMIC II Distribution Amount: For any Distribution Date, the REMIC II Available
Distribution Amounts shall be deemed distributed to REMIC III, as the holder of the REMIC
II Regular Interests, and to Holders of the Class AR-L Certificates in respect of Component
II thereof, pursuant to Section 4.01(III)(b), in the following amounts and priority:
(a) To the extent of the REMIC II Available Distribution Amount for Loan
Group 7A:
(i) first, to Class Y-7A and Class Z-7A Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Regular Interests
remaining unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(ii) second, to the Class Y-7A and Class Z-7A Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Regular Interests for the
current Distribution Date, pro rata according to their respective Uncertificated
Accrued Interest; and
(iii) third, to the Class Y-7A and Class Z-7A Regular Interests, the
Class Y-7A Principal Distribution Amount and the Class Z-7A Principal Distribution
Amount, respectively;
(b) to the extent of the REMIC II Available Distribution Amount for Loan
Group 7B:
(i) first, to the Class Y-7B and Class Z-7B Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Regular Interests
remaining unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(ii) second, to the Class Y-7B and Class Z-7B Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Regular Interests for the
current Distribution Date, pro rata according to their respective Uncertificated
Accrued Interest; and
(iii) third, to the Class Y-7B and Class Z-7B Regular Interests, the
Class Y-7B Principal Distribution Amount and the Class Z-7B Principal Distribution
Amount, respectively;
(c) to the extent of the REMIC II Available Distribution Amounts for
such Distribution Date remaining after payment of the amounts pursuant to paragraphs
(a) and (b) of this definition of "REMIC II Distribution Amount", to the Class LT-IO
Regular Interest, the Group 5 Excess Interest Amount and the Group 6 Excess Interest
Amount.
(d) To the extent of the REMIC II Available Distribution Amounts for
such Distribution Date remaining after payment of the amounts pursuant to paragraphs
(a), (b) and (c) of this definition of "REMIC II Distribution Amount":
(i) first, to each of the 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 Regular Interests; provided,
however, that any amounts distributed pursuant to this paragraph (d)(i) of this
definition of "REMIC II 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 in respect of
Component II thereof, the Residual Distribution Amount for Component I of the
Class AR-L Certificates for such Distribution Date.
REMIC II Realized Losses: For any Distribution Date, Realized Losses on the
Group 7 Mortgage Loans for the related Collection Period shall be allocated to the REMIC II
Regular Interests Y-7A, Y-7B, Z-7A and Z-7B as provided in the definition of Realized Loss
in reduction of the principal balances thereof and accrued and unpaid interest thereon
until such principal balances and accrued and unpaid interest shall have been reduced to
zero.
REMIC III Principal Reduction Amounts: For any Distribution Date, the amounts
by which the principal balances of the REMIC III Regular Xxxxxxxxx XX0, XX0, XX0, XX0, XX0,
XX0, XX0, XX0, XX-X0X and LT-Y7B, respectively, will be reduced on such Distribution Date
by the allocation of Realized Losses and the distribution of principal, determined as
follows:
For purposes of the succeeding formulas the following symbols shall have the meanings
set forth below:
Y1 = the aggregate principal balance of the REMIC III Regular Interests LT1 and
LT-Y7A after distributions on the prior Distribution Date.
Y2 = the principal balance of the REMIC III Regular Interest LT2 after distributions
on the prior Distribution Date.
Y3 = the principal balance of the REMIC III Regular Interest LT3 after distributions
on the prior Distribution Date.
Y4 = the principal balance of the REMIC III Regular Interest LT4 after distributions
on the prior Distribution Date (note: Y3 = Y4).
ΔY1 = the combined REMIC III Regular Interests LT1 and LT-Y7A Principal Reduction
Amount.
ΔY2 = the REMIC III Regular Interest LT2 Principal Reduction Amount.
ΔY3 = the REMIC III Regular Interest LT3 Principal Reduction Amount.
ΔY4 = the REMIC III Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of the REMIC III Regular Interests LT1, LT2,
LT3 , LT4 and LT-Y7A after distributions and the allocation of Realized Losses on the prior
Distribution Date.
P1 = the aggregate principal balance of the REMIC III Regular Interests LT1, LT2,
LT3 , LT4 and LT-Y7A after distributions and the allocation of Realized Losses to be made
on such Distribution Date.
ΔP = P0 - P1 = the aggregate of the REMIC III Regular Interests LT1, LT2, LT3 , LT4
and LT-Y7A Principal Reduction Amounts.
= the aggregate of the principal portions of Realized Losses to be
allocated to, and the principal distributions to be made on, the Group I Certificates on
such Distribution Date (including distributions of accrued and unpaid interest on the Class
SB-I Certificates for prior Distribution Dates).
R0 = the Group 7A Net WAC Cap Rate (stated as a monthly rate) after giving effect to
amounts distributed and Realized Losses allocated on the prior Distribution Date.
R1 = the Group 7A Net WAC Cap Rate (stated as a monthly rate) after giving effect to
amounts to be distributed and Realized Losses to be allocated on such Distribution Date.
α = (Y2 + Y3)/P0. The initial value of α on the Closing Date for use on the first
Distribution Date shall be 0.0001.
γ0 = the lesser of (A) the sum of (1) for all Classes of Group 7A Certificates of
the product for each Class of (i) the monthly interest rate (as limited by the Net Funds
Cap, if applicable) for such Class applicable for distributions to be made on such
Distribution Date and (ii) the aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on the prior Distribution Date, (2) for
all Classes of Class M Certificates of the product for each Class of (i) the monthly
interest rate (as limited by the Net Funds Cap, if applicable) for such Class applicable
for distributions to be made on such Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class multiplied by a fraction whose numerator is the principal
balance of the REMIC II Regular Interest Y7A and whose denominator is the sum of the
principal balances of the REMIC I Regular Interests Y7A and Y7B after distributions and the
allocation of Realized Losses on the prior Distribution Date and (3) the amount, if any, by
which the sum of the amounts in clauses (A)(1), (2) and (3) of the definition of Γ0
exceeds S0 * Q0 and (B) R0*P0.
γ1 = the lesser of (A) the sum of (1) for all Classes of Group 7A Certificates of
the product for each Class of (i) the monthly interest rate (as limited by the Net Funds
Cap, if applicable) for such Class applicable for distributions to be made on the next
succeeding Distribution Date and (ii) the aggregate Certificate Principal Balance for such
Class after distributions and the allocation of Realized Losses to be made on such
Distribution Date, (2) for all Classes of Class M Certificates of the product for each
Class of (i) the monthly interest rate (as limited by the Net Funds Cap, if applicable) for
such Class applicable for distributions to be made on the next succeeding Distribution Date
and (ii) the aggregate Certificate Principal Balance for such Class multiplied by a
fraction whose numerator is the principal balance of the REMIC II Regular Interest Y7A and
whose denominator is the sum of the principal balances of the REMIC II Regular Interests
Y7A and Y7B after distributions and the allocation of Realized Losses to be made on such
Distribution Date and (3) the amount, if any, by which the sum of the amounts in clauses
(A)(1), (2) and (3) of the definition of Γ1 exceeds S1 * Q1 and (B) R1*P1.
Then, based on the foregoing definitions:
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4;
ΔY2 = (α/2){( γ0R1 - γ1R0)/R0R1};
ΔY3 = αΔP - ΔY2; and
ΔY4 = ΔY3.
if both ΔY2 and ΔY3, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY2, as so determined, is negative, then
ΔY2 = 0;
ΔY3 = α{γ1R0P0 - γ0R1P1}/{γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
(2) If ΔY3, as so determined, is negative, then
ΔY3 = 0;
ΔY2 = α{γ1R0P0 - γ0R1P1}/{2R1R0P1 - γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
The Principal Reduction Amount ΔY1 shall be allocated, first, to the REMIC III Regular
Interest LT-Y7A to the extent of the Principal Reduction Amount for the REMIC II Regular
Interest Y7A and, second, any remainder shall be allocated to the REMIC III Regular
Interest LT1.
For purposes of the succeeding formulas the following symbols shall have the
meanings set forth below:
Y5 = the aggregate principal balance of the REMIC III Regular Interests LT5 and
LT-Y7B after distributions on the prior Distribution Date.
Y6 = the principal balance of the REMIC III Regular Interest LT6 after distributions
on the prior Distribution Date.
Y7 = the principal balance of the REMIC III Regular Interest LT7 after distributions
on the prior Distribution Date.
Y8 = the principal balance of the REMIC III Regular Interest LT8 after distributions
on the prior Distribution Date (note: Y7 = Y8).
ΔY5 = the combined REMIC III Regular Interest LT5 and LT-Y7B Principal Reduction
Amount.
ΔY6 = the REMIC II Regular Interest LT6 Principal Reduction Amount.
ΔY7 = the REMIC II Regular Interest LT7 Principal Reduction Amount.
ΔY8 = the REMIC II Regular Interest LT8 Principal Reduction Amount.
Q0 = the aggregate principal balance of the REMIC III Regular Interests LT5, LT6,
LT7, LT8 and LT-Y7B after distributions and the allocation of Realized Losses on the prior
Distribution Date.
Q1 = the aggregate principal balance of the REMIC III Regular Interests LT5, LT6,
LT7, LT8 and LT-Y7B after distributions and the allocation of Realized Losses to be made on
such Distribution Date.
ΔQ = Q0 - Q1 = the aggregate of the REMIC III Regular Interests LT5, LT6, LT7, LT8
and LT-7B Principal Reduction Amounts.
= the aggregate of the principal portions of Realized Losses to be
allocated to, and the principal distributions to be made on, the Group 7B Certificates and
the Group 7B portion of the Class 7-M Certificates on such Distribution Date (including
distributions of accrued and unpaid interest on the Class 7-X Certificates for prior
Distribution Dates to the extend attributable to interest accrued in respect of Group 7B).
S0 = the Group 7B REMIC Net WAC Rate (stated as a monthly rate) after giving effect
to amounts distributed and Realized Losses allocated on the prior Distribution Date.
S1 = the Group 7B REMIC Net WAC Rate (stated as a monthly rate) after giving effect
to amounts to be distributed and Realized Losses to be allocated on such Distribution Date.
β = (Y6 + Y7)/Q0. The initial value of β on the Closing Date for use on the first
Distribution Date shall be 0.0001.
Γ0 = the lesser of (A) the sum of (1) for all Classes of Group 7B Certificates of
the product for each Class of (i) the monthly interest rate (as limited by the Net Funds
Cap, if applicable) for such Class applicable for distributions to be made on such
Distribution Date and (ii) the aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on the prior Distribution Date, (2) for
all Classes of Class M Certificates of the product for each Class of (i) the monthly
interest rate (as limited by the Net Funds Cap, if applicable) for such Class applicable
for distributions to be made on such Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class multiplied by a fraction whose numerator is the principal
balance of the REMIC II Regular Xxxxxxxx X0X and whose denominator is the sum of the
principal balances of the REMIC I Regular Interests Y7A and Y7B after distributions and the
allocation of Realized Losses on the prior Distribution Date and (3) the amount, if any, by
which the sum of the amounts in clauses (A)(1), (2) and (3) of the definition of γ0
exceeds R0 * P0 and (B) S0*Q0.
Γ1 = the lesser of (A) the sum of (1) for all Classes of Group 7B Certificates of
the product for each Class of (i) the monthly interest rate (as limited by the Net Funds
Cap, if applicable) for such Class applicable for distributions to be made on the next
succeeding Distribution Date and (ii) the aggregate Certificate Principal Balance for such
Class after distributions and the allocation of Realized Losses to be made on such
Distribution Date, (2) for all Classes of Class M Certificates of the product for each
Class of (i) the monthly interest rate (as limited by the Net Funds Cap, if applicable) for
such Class applicable for distributions to be made on the next succeeding Distribution Date
and (ii) the aggregate Certificate Principal Balance for such Class multiplied by a
fraction whose numerator is the principal balance of the REMIC II Regular Xxxxxxxx X0X and
whose denominator is the sum of the principal balances of the REMIC II Regular Interests
Y7A and Y7B after distributions and the allocation of Realized Losses to be made on such
Distribution Date and (3) the amount, if any, by which the sum of the amounts in clauses
(A)(1), (2) and (3) of the definition of γ1 exceeds R1 * P1 and (B) S1*Q1.
Then, based on the foregoing definitions:
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8;
ΔY6 = (β/2){(Γ0S1 - Γ1S0)/S0S1};
ΔY7 = βΔQ - ΔY6; and
ΔY8 = ΔY7.
if both ΔY6 and ΔY7, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY6, as so determined, is negative, then
ΔY6 = 0;
ΔY7 = β{Γ1S0Q0 - Γ0S1Q1}/{Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
(2) If ΔY7, as so determined, is negative, then
ΔY7 = 0;
ΔY6 = β{Γ1S0Q0 - Γ0S1Q1}/{2S1S0Q1 - Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
The Principal Reduction Amount ΔY5 shall be allocated, first, to the REMIC III Regular
Interest LT-Y7B to the extent of the Principal Reduction Amount for the REMIC II Regular
Xxxxxxxx X0X and, second, any remainder shall be allocated to the REMIC III Regular
Interest LT5.
REMIC III Realized Losses: For any Distribution Date, Realized Losses on the
Mortgage Loans for the related Due Period shall be allocated, as follows: Realized Losses
on the Group 1, Group 2, Group 3, Group 4, Group 5 or Group 6 Mortgage Loans for the
related Collection Period shall be allocated to the REMIC III Regular Interests (other than
the REMIC III Regular Xxxxxxxx XX0, XX0, XX0, XX0, XX0, XX0, XX0, XX0, XX-X0X and LT-Y7B)
as follows: Realized Losses shall be allocated to each such Class of REMIC III Regular
Interests to the extent that such Realized Losses are allocated to the Related Class or
Classes of Certificates. Realized Losses so allocated shall be deemed to be applied to
reduce the principal balance of, or accrued interest on, such REMIC III Regular Interest to
the same extent that they reduced the principal balance of, or accrued interest on, the
Related Classes of Certificates. Realized Losses on the Group 7A Mortgage Loans for the
related Collection Period shall be allocated to the REMIC III Regular Interests LT1, LT2,
LT3, LT4 and LT-Y7A, in reduction of the principal balances thereof and interest accrued
thereon, as follows: (i) the interest portion of Realized Losses, if any, shall be
allocated pro rata to accrued interest on the REMIC III Regular Interests LT1, LT2, LT3,
LT4 and LT-Y7A, to the extent of such accrued interest, and (ii) any remaining interest
portions of Realized Losses and any principal portions of Realized Losses shall be treated
as principal portions of Realized Losses and allocated (i) to the REMIC III Regular
Interest LT2, REMIC III Regular Interest LT3, REMIC III Regular Interest LT4 and REMIC III
Regular Interest LT-Y7A, pro rata according to their respective Principal Reduction
Amounts, provided that such allocation to each of the REMIC III Regular Interest LT2,
REMIC III Regular Interest LT3, REMIC III Regular Interest LT4 and REMIC III Regular
Interest LT-Y7A shall not exceed their respective Principal Reduction Amounts for such
Distribution Date, and (ii) any Realized Losses not allocated to any of REMIC III Regular
Interest LT3, REMIC III Regular Interest LT4 and REMIC III Regular Interest LT-Y7A pursuant
to the proviso of clause (i) above shall be allocated to the REMIC III Regular Interest
LT1, until the principal balance thereof shall have been reduced to zero. Any Realized
Losses on the Group 7A Mortgage Loans remaining after the allocations made in the preceding
sentences shall be allocated among the Class LT2, Class LT3 and Class LT4 REMIC III Regular
Interests pro-rata according to their respective principal balances as reduced by the
allocations in the preceding sentence until such principal balances shall have been reduced
to zero. Realized Losses on the Group 7B Mortgage Loans for the related Collection Period
shall be allocated to the REMIC III Regular Interests LT5, LT6, LT7, LT8 and LT-Y7B, in
reduction of the principal balances thereof and interest accrued thereon, as follows: (i)
the interest portion of Realized Losses, if any, shall be allocated pro rata to accrued
interest on the REMIC III Regular Interests LT5, LT6, LT7, LT8 and LT-Y7B to the extent of
such accrued interest, and (ii) any remaining interest portions of Realized Losses and any
principal portions of Realized Losses shall be treated as principal portions of Realized
Losses and allocated (i) to the REMIC III Regular Interest LT6, REMIC III Regular Interest
LT7, REMIC III Regular Interest LT8 and REMIC III Regular Interest LT-Y7B, pro rata
according to their respective Principal Reduction Amounts, provided that such allocation to
each of the REMIC III Regular Interest LT6, REMIC III Regular Interest LT7, REMIC III
Regular Interest LT8 and REMIC III Regular Interest LT-Y7B shall not exceed their
respective Principal Reduction Amounts for such Distribution Date, and (ii) any Realized
Losses not allocated to any of REMIC III Regular Interest LT6, REMIC III Regular Interest
LT7, REMIC III Regular Interest LT8 or REMIC III Regular Interest LT-Y7B pursuant to the
proviso of clause (i) above shall be allocated to the REMIC III Regular Interest LT1, until
the principal balance thereof shall have been reduced to zero. Any Realized Losses on the
Group 7B Mortgage Loans remaining after the allocations made in the preceding sentences
shall be allocated among the Class LT2, Class LT3 and Class LT4 REMIC III Regular Interests
pro-rata according to their respective principal balances as reduced by the allocations in
the preceding sentence until such principal balances shall have been reduced to zero.
REMIC III Regular Interest LT1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT1 Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the
REMIC III Regular Interest LT1 on such Distribution Date.
REMIC III Regular Interest LT2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT2 Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the
REMIC III Regular Interest LT2 on such Distribution Date.
REMIC III Regular Interest LT3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT3 Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the
REMIC III Regular Interest LT3 on such Distribution Date.
REMIC III Regular Interest LT4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT4 Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the
REMIC III Regular Interest LT4 on such Distribution Date.
REMIC III Regular Interest LT5 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT5 Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the REMIC
III Regular Interest LT5 on such Distribution Date.
REMIC III Regular Interest LT6 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT6 Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the REMIC
III Regular Interest LT6 on such Distribution Date.
REMIC III Regular Interest LT7 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT7 Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the REMIC
III Regular Interest LT7 on such Distribution Date.
REMIC III Regular Interest LT8 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT8 Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the REMIC
III Regular Interest LT8 on such Distribution Date.
REMIC III Regular Interest LT-Y7A Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT-Y7A Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the REMIC
III Regular Interest LT-Y7A on such Distribution Date.
REMIC III Regular Interest LT-Y7B Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT-Y7B Principal
Reduction Amount for such Distribution Date over the Realized Losses allocated to the REMIC
III Regular Interest LT-Y7B on such Distribution Date.
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 or WMMSC, as applicable.
Senior Certificates: As specified in the Preliminary Statement.
Senior Liquidation Amount: The Group 1 Senior Liquidation Amount, the Group 2
Senior Liquidation Amount, the Group 3 Senior Liquidation Amount, the Group 4 Senior
Liquidation Amount, the Group 5 Senior Liquidation Amount or the Group 6 Liquidation
Amount, as applicable.
Senior Percentage: The Group 1 Senior Percentage, Group 2 Senior Percentage,
Group 3 Senior Percentage, Group 4 Senior Percentage, Group 5 Senior Percentage or Group 6
Senior Percentage, as applicable.
Senior Prepayment Percentage: The Senior Prepayment Percentage for any
Distribution Date occurring during the seven years beginning on the first Distribution Date
for each of Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan
Group 6 will equal 100%. The Senior Prepayment Percentage for any Distribution Date
occurring on or after the seventh 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
Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6 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 Group C-B Percentage is greater than or equal to
twice the Group C-B 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 Group C-B Percentage is greater than or equal to twice the Group C-B
Percentage as of the Closing Date, then the Senior Prepayment Percentage for each such
Group for such Distribution Date will equal the related Senior Percentage).
Notwithstanding the foregoing, the Senior Prepayment Percentage for any of Loan
Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6 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 eighth 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 eighth anniversary but prior to the ninth 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 ninth anniversary but prior to the tenth
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 tenth
anniversary but prior to the eleventh 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 eleventh 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
Groups 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, Group 2 Senior Principal Distribution Amount, Group 3 Senior Principal
Distribution Amount, Group 4 Senior Principal Distribution Amount, Group 5 Senior Principal
Distribution Amount and Group 6 Senior Principal Distribution Amount, as applicable.
Servicers: SPS, GreenPoint, Xxxxx Fargo, WMMSC 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.
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.
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 related 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 Event of Default: An Event of Default under Section 8.01(b) which
arises solely from the cumulative effect of a breach or breaches by WMMSC of its agreements
as set forth in clauses (i)(x) through (z), inclusive, of the first paragraph of
Section 2.07(g).
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 Class C-B
Certificates, as of the Closing Date, $5,633,570 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 Group 1,
Group 2, Group 3, Group 4, Group 5 and Group 6 Mortgage Loans, (ii) twice the principal
balance of the largest Mortgage Loan in Loan Group 1, Loan Group 2, Loan Group 3, Loan
Group 4, Loan Group 5 and Loan Group 6 and (iii) the aggregate Stated Principal Balances of
the Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6 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 Class C-B 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.
Stepdown Date: The date occurring on the later of (x) the Distribution Date in
November 2007 and (y) the first Distribution Date on which the Group 7 Senior Enhancement
Percentage (calculated for this purpose after giving effect to payments or other recoveries
in respect of the Mortgage Loans in Loan Group 7 during the related Collection Period but
before giving effect to payments on the Group 7 Certificates on such Distribution Date) is
greater than or equal to 13.90%.
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 any of Loan Group 1, Loan Group 2, Loan
Group 3, Loan Group 4, Loan Group 5 and Loan Group 6, 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 Group 7A Balance: For any Distribution Date will be the Aggregate
Loan Group Balance for Loan Group 7A as of the first day of the related Collection Period
less the aggregate Class Principal Balance of the Class 7-A-1-1 and Class 7-A-1-2
Certificates.
Subordinate Group 7B Balance: For any Distribution Date will be the Aggregate
Loan Group Balance for Loan Group 7B as of the first day of the related Collection Period
less the aggregate Class Principal Balances of the Class 7-A-2, Class 7-A-3, Class 7-A-4,
Class 7-A-5 and Class 7-A-6 Certificates.
Subordinate Liquidation Amount: For any Distribution Date and any of Loan
Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6 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, Group 2 Senior Liquidation Amount, Group 3
Senior Liquidation Amount, Group 4 Senior Liquidation Amount, Group 5 Senior Liquidation
Amount or Group 6 Senior Liquidation Amount, as applicable, for such Distribution Date.
Subordinate Percentage: As to any Distribution Date and Loan Group 1, Loan
Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6, 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 Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan
Group 6, 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 each of Loan Group 1, Loan Group 2, Loan
Group 3, Loan Group 4, Loan Group 5 or Loan Group 6: (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 Class C-B
Certificates, the percentage obtained by dividing the sum of the Class Principal Balances
of all Classes of Class C-B Certificates which are subordinate in right of payment to such
Class by the sum of the Class Principal Balances of the Group 1, Group 2, Group 3, Group 4,
Group 5, Group 6 and Class C-B Certificates, in each case immediately prior to such
Distribution Date.
Subsequent Cut-off Date: With respect to any Subsequent Mortgage Loan, the
first day of the month on which such Mortgage Loan is transferred to the Trust.
Subsequent Mortgage Loan: Any Mortgage Loan other than an Initial Mortgage
Loan conveyed to the Trust Fund pursuant to Section 2.01 hereof and to a Subsequent
Transfer Agreement, which Mortgage Loan shall be listed on the revised Mortgage Loan
Schedule delivered pursuant to this Agreement and on Schedule A to such Subsequent Transfer
Agreement. When used with respect to a single Subsequent Transfer Date, Subsequent
Mortgage Loan shall mean a Subsequent Mortgage Loan conveyed to the Trust on that
Subsequent Transfer Date.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement substantially
in the form of Exhibit R hereto, executed and delivered by and among the Depositor, DLJMC
and the Trustee and acknowledged by WMMSC as provided in Section 2.01 hereof.
Subsequent Transfer Date: For any Subsequent Transfer Agreement, the date the
related Subsequent Mortgage Loans are transferred to the Trust pursuant to the related
Subsequent Transfer Agreement.
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.
Targeted Overcollateralization Amount: For any Distribution Date prior to the
Stepdown Date, 0.55% of the Aggregate Loan Group 7 Balance as of the Cut-off Date; with
respect to any Distribution Date on or after the Stepdown Date and with respect to which a
Trigger Event is not in effect, the greater of (a) 1.10% of the Aggregate Loan Group 7
Balance for such Distribution Date, or (b) 0.50% of the Aggregate Group 7 Collateral
Balance as of the Cut off Date; with respect to any Distribution Date on or after the
Stepdown Date with respect to which a Trigger Event has occurred and is continuing, the
Targeted Overcollateralization Amount for the Distribution Date immediately preceding such
Distribution Date.
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.
Termination Date: With regard to the Class C-B-1 Interest Rate Cap Agreement,
the Class C-B-1 Interest Rate Cap Agreement Payment Date in October 2009. With regard to
the Class 7-A-3 Interest Rate Cap Agreement, the Class 7-A-3 Interest Rate Cap Agreement
Payment Date in August 2007. With regard to the Class 7-A-4 Interest Rate Cap Agreement,
the Class 7-A-4 Interest Rate Cap Agreement Payment Date in September 2009. With regard to
the Class 7-M-4 Interest Rate Cap Agreement, the Class 7-M-4 Interest Rate Cap Agreement
Payment Date in August 2008.
Transferring Servicer: As defined in Section 3.19 hereof.
Transferee Affidavit and Agreement: As defined in Section 6.02(g)(i)(B).
Trigger Event: A Trigger Event will occur for any Distribution Date if either
(i) the Rolling Three Month Delinquency Rate as of the last day of the related Collection
Period equals or exceeds 36.00% of the Group 7 Senior Enhancement Percentage for such
Distribution Date or (ii) the cumulative Realized Losses as a percentage of the Aggregate
Group 7 Collateral Balance on the Closing Date for such Distribution Date is greater than
the percentage set forth in the following table:
Range of Distribution Dates Cumulative Loss Percentage
November 2007 - October 2008 1.00%*
November 2008 - October 2009 1.25%*
November 2009 - October 2010 1.75%*
November 2010 and thereafter 2.00%*
* The cumulative loss percentages set forth above are applicable to the
first Distribution Date in the corresponding range of Distribution
Dates. The cumulative loss percentage for each succeeding Distribution
Date in a range increases incrementally by 1/12 of the positive
difference between the percentage applicable to the first Distribution
Date in that range and the percentage applicable to the first
Distribution Date in the succeeding range.
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 Prefunding Account, the Capitalized Interest Account, the Basis
Risk Reserve Funds 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, (f) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid
property and (g) the Trust's rights under the Interest Rate Cap Agreements.
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 Group 1, Group 2, Group 3,
Group 4, Group 5 and Group 6, 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 Y-7A and Z-7A for any Distribution Date, any Prepayment Interest
Shortfalls (to the extent not covered by Compensating Interest) relating to the Group 7A
Mortgage Loans for any Distribution Date shall be allocated to REMIC II Regular Interests
Y-7A and Z-7A, pro rata according to the Uncertificated Accrued Interest thereon calculated
without reference to this sentence of the definition of Uncertificated Accrued Interest.
For purposes of calculating the amount of Uncertificated Accrued Interest for the REMIC II
Regular Interests Y-7B and Z-7B for any Distribution Date, any Prepayment Interest
Shortfalls (to the extent not covered by Compensating Interest) relating to the Group 7B
Mortgage Loans for any Distribution Date shall be allocated to the REMIC II Regular
Interests Y-7B and Z-7B pro-rata according to the Uncertificated Accrued Interest thereon
calculated without reference to this sentence of the definition of Uncertificated Accrued
Interest. For purposes of calculating the amount of Uncertificated Accrued Interest for
the REMIC III Regular Interests for any Distribution Date, any Prepayment Interest
Shortfalls (to the extent not covered by Compensating Interest) relating to the Group 1,
Group 2, Group 3, Group 4, Group 5 and Group 6 Mortgage Loans for any Distribution Date
shall be allocated among the REMIC III Regular Interests (other than the XX0, XX0, XX0,
XX0, XX0, XX0, XX0, XX0, XX-X0X and LT-Y7B), pro rata, based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application of this sentence, any
Prepayment Interest Shortfalls (to the extent not covered by Compensating Interest)
relating to the Group 7A Mortgage Loans for any Distribution Date shall be allocated among
REMIC III Regular Interests LT1, LT2, LT3, LT4 and LT-Y7A, pro rata, based on, and to the
extent of, Uncertificated Accrued Interest, as calculated without application of this
sentence and any Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) relating to the Group 7B Mortgage Loans for any Distribution Date shall be
allocated among REMIC III Regular Interests LT5, LT6, LT7, LT8 and LT-Y7B, pro rata, based
on, and to the extent of, Uncertificated Accrued Interest, as calculated without
application of this sentence. Uncertificated Accrued Interest on the REMIC IV Regular
Interest 7-X-PO shall be zero. Uncertificated Accrued Interest on the REMIC IV Regular
Interest 7-X-IO for each Distribution Date shall equal Accrued Certificate Interest for the
Class 7-X Certificates.
Uncertificated Notional Amount: With respect to the Class LT-IO Regular
Interest or the REMIC III Regular Interest IOL, its notional amount outstanding as of any
date of determination.
Uncertificated Pass-Through Rate: For any REMIC I Regular Interest, REMIC II
Regular Interest or REMIC III Regular Interest, the per annum rate set forth or calculated
in the manner described in the Preliminary Statement under "REMIC I", "REMIC II" or "REMIC
III", respectively.
Uncertificated Principal Balance: The principal amount of any REMIC I, REMIC
II or REMIC III Regular Interest outstanding as of any date of determination. As of the
Closing Date, the Uncertificated Principal Balance of each REMIC I, REMIC II and REMIC III
Regular Interest shall equal the amount set forth in the Preliminary Statement hereto as
its Initial Uncertificated Principal Balance under "REMIC I," "REMIC II" and "REMIC III"
respectively. On each Distribution Date, the Uncertificated Principal Balance of each REMIC
I Regular Interest, REMIC II Regular Interest and REMIC III Regular Interest shall be
reduced, in the case of REMIC I Regular Interests, by the sum of (i) the principal portion
of Realized Losses allocated to the REMIC I Regular Interests in accordance with the
definition of REMIC I Realized Losses and (ii) the amounts deemed distributed on each
Distribution Date in respect of principal on the REMIC I Regular Interests pursuant to
Section 4.01(III)(a), in the case of REMIC II Regular Interests, by the sum of (i) the
principal portion of Realized Losses allocated to the REMIC II Regular Interests in
accordance with the definition of REMIC II Realized Losses and (ii) the amounts deemed
distributed on each Distribution Date in respect of principal on the REMIC II Regular
Interests pursuant to Section 4.01(III)(b), and, in the case of REMIC III Regular
Interests, by the sum of (i) the principal portion of Realized Losses allocated to the
REMIC III Regular Interests in accordance with the definition of REMIC III Realized Loss
and (ii) the amounts deemed distributed on each Distribution Date in respect of principal
on the REMIC III Regular Interests pursuant to Section 4.01(III)(c).
Uncertificated Regular Interest: Any of the REMIC I Regular Interests, REMIC
II Regular Interests and REMIC III Regular Interests.
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, 97% of all Voting Rights shall be allocated
among the Class A Certificates (other than the Class 2-A-X, Class 3-A-X, Class 4-A-X, Class
7-X and Residual Certificates), Class M Certificates and Class C-B Certificates (other than
the Class C-B-1X Certificates). The portion of such 97% Voting Rights allocated to each of
the Class A Certificates (other than the Class 2-A-X, Class 3-A-X, Class 4-A-X, Class 7-X
and Residual Certificates), Class M Certificates and Class C-B Certificates (other than the
Class C-B-1X Certificates) shall be based on the fraction, expressed as a percentage, the
numerator of which is the Class Principal Balance of each such Class then outstanding and
the denominator of which is the aggregate Class Principal Balance of all such Classes then
outstanding. At all times during the term of this Agreement, 1% of all Voting Rights shall
be allocated among the Class 2-A-X, Class 3-A-X and Class 4-A-X Certificates. The portion
of such 1% Voting Rights allocated to each of the Class 2-A-X, Class 3-A-X and Class 4-A-X
Certificates shall be based on the fraction, expressed as a percentage, the numerator of
which is the Class Notional Amount of each such Class then outstanding and the denominator
of which is the aggregate Class Notional Amount of all such Classes then outstanding. At
all times during the term of this Agreement, the Class C-B-1X and Class 7-X Certificates
shall each be allocated 1% of the Voting Rights. Voting Rights shall be allocated among
the Certificates within each Class in proportion to their respective outstanding Class
Principal Balances or Class Notional Amounts, as applicable. The Class AR and Class AR-L
Certificates shall have no Voting Rights.
Wachovia: Wachovia Financial Corporation, and its successors and assigns.
Wachovia Serviced Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule, for which Wachovia is the applicable Servicer.
Wachovia Servicing Agreement: That certain Reconstituted Servicing Agreement
dated as of October 1, 2004 among DLJMC, Wachovia and the Master Servicer, and acknowledged
by the Trustee and the Trust Administrator.
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.
WMMSC: Washington Mutual Mortgage Securities Corp., a Delaware corporation,
and its successors and assigns.
WMMSC Mortgage Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule for which WMMSC is the applicable Seller.
WMMSC Serviced Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule, for which WMMSC is the applicable Servicer. For the avoidance of
doubt, no WMMSC Serviced Mortgage Loan is master serviced by the Master 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 Initial 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 Initial
Mortgage Loans after the Initial Cut-off Date, but not including payments of principal and
interest due and payable on the Initial Mortgage Loans on or before the Initial Cut-off
Date, together with the Mortgage Files relating to the Initial Mortgage Loans, (b) REO
Property, (c) the Collection Account, the Certificate Account, the Prefunding Account, the
Capitalized Interest Account, the Basis Risk Reserve Funds and all amounts deposited
therein pursuant to the applicable provisions of this Agreement, (d) any insurance policies
with respect to the Initial 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 Initial 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 such 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 (and any Subsequent Transfer 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 or the related
Subsequent Transfer Date, as applicable, 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) In addition, on or prior to the Closing Date, the Trustee shall execute the Interest
Rate Cap Agreements and the Depositor hereby directs the Trustee to do so. In addition,
the Depositor shall pay or cause to be paid on behalf of the Trust the payments owed to any
Counterparty as of the Closing Date pursuant to any of the Interest Rate Cap Agreements.
(f) Upon one Business Day's prior written notice to the Trustee, WMMSC and the Rating
Agencies, on any Business Day designated by the Depositor during the Prefunding Period, the
Depositor, the Seller and the Trustee shall complete, execute and deliver (and WMMSC shall
acknowledge) a Subsequent Transfer Agreement so long as each Rating Agency has provided
notice that the execution and delivery of such Subsequent Transfer Agreement will not
result in a reduction or withdrawal of the ratings assigned to the Certificates on the
Closing Date.
The transfer of Subsequent Mortgage Loans and the other property and rights
relating to them on a Subsequent Transfer Date is subject to the satisfaction of each of
the following conditions:
(i) each Subsequent Mortgage Loan conveyed on such Subsequent Transfer
Date satisfies the representations and warranties applicable to it under this
Agreement as of the applicable Subsequent Transfer Date; provided, however, that with
respect to a breach of a representation and warranty with respect to a Subsequent
Mortgage Loan, the obligation under Section 2.03 of this Agreement of the related
Seller to cure, repurchase or replace such Subsequent Mortgage Loan shall constitute
the sole remedy against such Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee;
(ii) the Rating Agencies, the Trustee and the Trust Administrator are
provided with an Opinion of Counsel or Opinions of Counsel, at the expense of the
Depositor, with respect to the characterization of the transfer of the Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date as a sale, to be delivered
as provided pursuant to Section 2.01(g);
(iii) the execution and delivery of such Subsequent Transfer Agreement
or conveyance of the related Subsequent Mortgage Loans does not result in a reduction
or withdrawal of any ratings assigned to the Certificates on the Closing Date by the
Rating Agencies;
(iv) no Subsequent Mortgage Loan conveyed on such Subsequent Transfer
Date was 30 or more days contractually delinquent as of its subsequent Cut off Date;
(v) the remaining term to stated maturity of such Subsequent Mortgage
Loan will not exceed 30 years;
(vi) the Depositor shall have deposited in the Collection Account all
principal and interest collected with respect to the related Subsequent Mortgage
Loans on or after the related Subsequent Cut-off Date;
(vii) such Subsequent Mortgage Loan will not have a Loan-to-Value Ratio
greater than 100.0%;
(viii) such Subsequent Mortgage Loan will have a principal balance not
greater than $1,500,000;
(ix) no Subsequent Mortgage Loan shall have a maturity date after
January 1, 2035;
(x) such Subsequent Mortgage Loan shall have a Net Mortgage Rate equal
to or greater than 2.50%;
(xi) such Subsequent Mortgage Loan shall have a first payment date no
later than February 1, 2005;
(xii) such Subsequent Mortgage Loan will be otherwise acceptable to the
Rating Agencies, as evidenced by prior written notification from each Rating Agency
to the effect that the purchase of such Subsequent Mortgage Loan will not cause such
Rating Agency to downgrade its then-current rating of the Certificates;
(xiii) no Subsequent Mortgage Loan will be subject to the Homeownership
and Equity Protection Act of 1994 or any comparable state or local law; and
(xiv) following the conveyance of the Subsequent Mortgage Loans on such
Subsequent Transfer Date the characteristics of the Mortgage Loans in Loan Group 7B
will be as follows (calculated as of the respective Cut-off Dates):
(A) weighted average Mortgage Rate of approximately 6.373%
per annum;
(B) a weighted average remaining term to stated maturity of
approximately 357 months;
(C) a weighted average Loan-to-Value Ratio of not more than
78.52%
(D) none of such Group 7B Mortgage Loans will be balloon
loans;
(E) no more than 35.5% of such Group 7B Mortgage Loans by
aggregate Cut-off Date Principal Balance of Loan Group 7B will be concentrated
in one state;
(F) no more than 27.0% of such Group 7B Mortgage Loans by
aggregate Cut-off Date Principal Balance of Loan Group 7B will relate to
non-owner occupied properties; and
(G) no more than 52.0% of such Group 7B Mortgage Loans by
aggregate Cut-off Date Principal Balance of Loan Group 7B will be interest only
Mortgage Loans.
(g) Upon (1) delivery to the Trustee and the Trust Administrator by the Depositor of the
Opinions of Counsel referred to in Sections 2.01(f)(ii) and (iii), (2) delivery to the
Trustee and the Trust Administrator by the Depositor of a revised Mortgage Loan Schedule
reflecting the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date and the
related Subsequent Mortgage Loans and (3) delivery to the Trustee and the Trust
Administrator by the Depositor of an Officer's Certificate confirming the satisfaction of
each of the conditions precedent set forth in Section 2.01(f), the Trust Administrator
shall remit to the Depositor the Aggregate Subsequent Transfer Amount related to the
Subsequent Mortgage Loans transferred by the Depositor on such Subsequent Transfer Date
from funds in the Prefunding Account.
The Trustee and the Trust Administrator shall not be required to investigate or
otherwise verify compliance with the conditions set forth in the preceding paragraph,
except for its own receipt of documents specified above, and shall be entitled to rely on
the required Officer's Certificate.
(h) 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 I-1. 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 Initial 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 J, 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 such 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, such 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 deliver or 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 K. 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 such 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 K 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.
The Custodian shall execute and deliver prior to 10:00 a.m. (New York time) on
each Subsequent Transfer Date to the Depositor, the Trust Administrator and each Servicer a
Subsequent Certification in the form annexed hereto as Exhibit I-2. Based on its review
and examination, and only as to the documents identified in such Subsequent Certification,
the Custodian shall acknowledge that such documents appear regular on their face and relate
to such Subsequent Mortgage Loan. None of the Trustee, the Trust Administrator or the
Custodian shall be under any duty or obligation to inspect, review or examine said
documents, instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they have actually
been recorded in the real estate records or that they are other than what they purport to
be on their face.
Not later than 90 days after the end of the Prefunding Period, the Custodian
shall deliver to the Depositor, the Trust Administrator, the Sellers and each Servicer a
Final Certification with respect to the Subsequent Mortgage Loans in the form annexed
hereto as Exhibit J with any applicable exceptions noted thereon.
If, in the course of such review of the Mortgage Files relating to the
Subsequent Mortgage Loans, 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 Final Certification; 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. The Seller shall cure any such defect or
repurchase or substitute for any such Mortgage Loan in accordance with this Section 2.02(a).
(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 Sellers.
SECTION 2.03. Representations and Warranties of the Sellers, Master Servicer and
Servicers.
(a) Each of DLJMC, in its capacity as Seller, Xxxxx Fargo, in its capacity as Master
Servicer, WMMSC, in its capacity as Seller and Servicer, SPS, in its capacity as Servicer,
GreenPoint, 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, IIE, IIF or IIG, 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, GreenPoint, 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 IID, IIE, IIF and IIG 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) Each of DLJMC, in its capacity as Seller and WMMSC, in its capacity as Seller, hereby
makes the representations and warranties set forth in Schedule IIIA and IIIB, respectively,
as to the DLJMC Mortgage Loans and the WMMSC Mortgage Loans, respectively, 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 IIIA(xix), IIIA(xxii),
IIIA(xxiv), IIIA(xxvii), IIIA(xxviii), IIIA(xxix) and IIIA(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 such 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 K 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, any
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 such 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 such Seller and the Trustee shall execute and deliver at the related
Seller's direction such instruments of transfer or assignment prepared by such Seller, in
each case without recourse, as shall be necessary to vest title in such 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, or WMMSC if
such Deleted Mortgage Loan is a WMMSC Serviced Mortgage Loan, 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 such 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 K 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.
Notwithstanding the foregoing, (i) the substitution of a Deleted Mortgage Loan
that is a WMMSC Serviced Mortgage Loan or the repurchase of a Mortgage Loan that is a WMMSC
Serviced Mortgage Loan by a Seller shall be subject to, and shall in no way adversely
affect, the right of WMMSC to continue servicing and collecting its Servicing Fee for such
Deleted Mortgage Loan or Mortgage Loan, as applicable and (ii) the substitution of a
Deleted Mortgage Loan that is a GreenPoint Serviced Mortgage Loan or the repurchase of a
Mortgage Loan that is a GreenPoint Serviced Mortgage Loan by a Seller shall be subject to,
and shall in no way adversely affect, the right of GreenPoint to continue servicing and
collecting its Servicing Fee for such Deleted Mortgage Loan or Mortgage Loan, as applicable.
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). However, in the case of
WMMSC, the prompt deposit of any such amount in the Certificate Account shall cure any
Special Event of Default unless notice of such Special Event of Default is accompanied by
an Opinion of Counsel, at the expense of WMMSC, to the effect that the cumulative effect of
WMMSC's breach or breaches, notwithstanding the deposit of the amounts of any such tax,
shall have given rise to a substantial risk that any REMIC created hereunder would fail to
continue to qualify as a REMIC.
(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, or with respect to the WMMSC
Serviced Mortgage Loans, WMMSC, shall provide, promptly upon request therefor, any such
additional information or data (or with respect to WMMSC, any such additional loan level
information and data regarding the WMMSC Serviced Mortgage Loans) 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 (other than WMMSC) 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. WMMSC shall indemnify
the Trustee and the Trust Administrator and hold each of them harmless for any loss,
liability, damage, claim or expense, other than any special, indirect, punitive or
consequential loss, liability, damage, claim or expense, of the Trustee and the Trust
Administrator arising from any failure of WMMSC to provide, or to cause to be provided, the
loan level information or data regarding the WMMSC Serviced Mortgage Loans reasonably
requested by the Trustee or Trust Administrator, and required to be provided by WMMSC
pursuant to this Section 2.07(m), 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 Group 7 Basis Risk Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.860G 2(h) that is owned by the
Class 7-X Certificateholders and that is not an asset of any REMIC created hereunder. The
Trust Administrator shall account for the rights of the Class 7-A-1-1, Class 7-A-1-2,
Class 7-A-2, Class 7-A-3, Class 7-A-4, Class 7-A-5, Class 7-A-6, Class 7-M-1, Class 7-M-2,
Class 7-M-3 and Class 7-M-4 Certificateholders to receive payments from the Group 7 Basis
Risk Reserve Fund as rights in an interest rate cap contract written by the Class 7-X
Certificateholders in favor of the Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2, Class 7-A-3,
Class 7-A-4, Class 7-A-5, Class 7-A-6, Class 7-M-1, Class 7-M-2, Class 7-M-3 and
Class 7-M-4 Certificateholders and not as an obligation of REMIC IV, whose obligation to
pay such Certificates will be subject to a cap equal to the applicable Net Funds Cap 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 Group 7 Basis Risk Reserve Fund by REMIC IV shall be treated as a distribution to
the Class 7-X Certificates. In addition, the Class 7-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 7-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 IV pursuant to Section 4.01(II)(d)(xiii) (which amounts are expected to
be zero). Thus each Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2, Class 7-A-3, Class 7-A-4,
Class 7-A-5, Class 7-A-6, Class 7-M-1, Class 7-M-2, Class 7-M-3 and Class 7-M-4 Certificate
shall be treated as representing ownership of not only REMIC IV regular interests, but also
ownership of an interest in an interest rate cap contract. Each Class 7-X Certificate
shall represent an obligation under an interest rate cap contract. For purposes of
determining the issue price of REMIC IV regular interests, the Trust Administrator shall
assume that the interest rate cap contract has a value of $5,000.
(o) The Trust Administrator shall treat the Class C-B-1 Basis Risk Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation 1.860G 2(h) that is owned by
the Class C-B-1X Certificateholders and that is not an asset of any REMIC created
hereunder. The Trust Administrator shall account for the rights of the Class C-B-1
Certificateholders to receive payments from the Class C-B-1 Basis Risk Reserve Fund as
rights in an interest rate cap contract written by the Class C-B-1X Certificateholders in
favor of the Class C-B-1 Certificateholders and not as an obligation of REMIC IV, whose
obligation to pay such Certificates will be subject to a cap equal to the Class C-B-1 Cap
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 Class C-B-1 Basis Risk Reserve Fund by REMIC IV shall be treated as a distribution
to the Class C-B-1X Certificates. In addition, the Class C-B-1X 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 C-B-1X 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 IV pursuant to Section 4.09(b) and (e) (which amounts are expected to be
zero). Thus the Class C-B-1 Certificates shall be treated as representing ownership of not
only REMIC IV regular interests, but also ownership of an interest in an interest rate cap
contract. Each Class C-B-1X Certificate shall represent an obligation under an interest
rate cap contract. For purposes of determining the issue price of REMIC IV regular
interests, the Trust Administrator shall assume that the interest rate cap contract has a
value of $5,000.
For any Distribution Date on which there is a payment under the Class C-B-1
Interest Rate Cap Agreement based on a notional balance in excess of the Class Principal
Balance of the Class C-B-1 Certificates, the amount representing such excess payment shall
not be an asset of the Trust and, instead, shall be paid into and distributed out of a
separate trust created by this Agreement for the benefit of the Class C-B-1 Certificates
and shall be distributed to the Class C-B-1 Certificates pursuant to
Section 4.01(I)(A)(i)(xiii). The Trust Administrator shall not be responsible for any tax
reporting with respect to such separate trust.
For any Distribution Date on which there is a payment under the Class 7-A-3
Interest Rate Cap Agreement based on a notional balance in excess of the Class Principal
Balance of the Class 7-A-3 Certificates, the amount representing such excess payment shall
not be an asset of the Trust and, instead, shall be paid into and distributed out of a
separate trust created by this Agreement for the benefit of the Group 7 Certificates and
shall be distributed to the Group 7 Certificates pursuant to Section 4.01(II)(d)(vi). The
Trust Administrator shall not be responsible for any tax reporting with respect to such
separate trust.
For any Distribution Date on which there is a payment under the Class 7-A-4
Interest Rate Cap Agreement based on a notional balance in excess of the Class Principal
Balance of the Class 7-A-4 Certificates, the amount representing such excess payment shall
not be an asset of the Trust and, instead, shall be paid into and distributed out of a
separate trust created by this Agreement for the benefit of the Group 7 Certificates and
shall be distributed to the Group 7 Certificates pursuant to Section 4.01(II)(d)(vi). The
Trust Administrator shall not be responsible for any tax reporting with respect to such
separate trust.
For any Distribution Date on which there is a payment under the Class 7-M-4
Interest Rate Cap Agreement based on a notional balance in excess of the Class Principal
Balance of the Class 7-M-4 Certificates, the amount representing such excess payment shall
not be an asset of the Trust and, instead, shall be paid into and distributed out of a
separate trust created by this Agreement for the benefit of the Group 7 Certificates and
shall be distributed to the Group 7 Certificates pursuant to Section 4.01(II)(d)(vi). The
Trust Administrator shall not be responsible for any tax reporting with respect to such
separate trust.
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 (other than the WMMSC Serviced Mortgage Loans) by overseeing and enforcing the
servicing of the Non-Designated Mortgage Loans by the related Servicer (other than WMMSC)
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 related Designated Servicer according to the terms of the related Designated
Servicing Agreement. The obligations of each of SPS, GreenPoint, Xxxxx Fargo and WMMSC
hereunder to service and administer the Mortgage Loans shall be limited to the SPS Serviced
Mortgage Loans, GreenPoint Serviced Mortgage Loans, Xxxxx Fargo Serviced Mortgage Loans and
WMMSC 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, GreenPoint Serviced Mortgage Loans (and the related proceeds thereof and
related REO Properties) in the case of GreenPoint, Xxxxx Fargo Serviced Mortgage Loans (and
the related proceeds thereof and related REO Properties) in the case of Xxxxx Fargo and the
WMMSC Serviced Mortgage Loans (and the related proceeds thereof and related REO
Properties), in the case of WMMSC; and in no event shall any Servicer have any
responsibility or liability with respect to any of the other Mortgage Loans. The
obligations of the Master Servicer to master service and administer the Non-Designated
Mortgage Loans shall be limited to the GreenPoint Serviced Mortgage Loans, the Xxxxx Fargo
Serviced Mortgage Loans, the SPS Serviced Mortgage Loans and the Special Serviced Mortgage
Loans. Notwithstanding anything to the contrary contained in this Agreement, the Master
Servicer shall have no obligations to master service or administer the WMMSC Serviced
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 any
Designated Servicer has previously serviced some or all of the Designated Mortgage Loans
pursuant to another servicing agreement, the provisions contained in the related 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, (i) if such action relates to a WMMSC Serviced
Mortgage Loan, only WMMSC shall have an obligation to perform such action, and (ii) if such
action relates to a Mortgage Loan which is not a WMMSC Serviced Mortgage Loan, 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, (i) the purchase
of any WMMSC Serviced Mortgage Loan by any Person shall be subject to the rights of WMMSC
to continue servicing such WMMSC Serviced Mortgage Loan for the same Servicing Fee
substantially in accordance with the terms of this Agreement, (ii) the purchase of any
GreenPoint Serviced Mortgage Loan by any Person shall be subject to the rights of
GreenPoint to continue servicing such GreenPoint Serviced Mortgage Loan for the same
servicing fee substantially in accordance with the terms of this Agreement and (iii) 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 (other than with respect to the WMMSC
Serviced Mortgage Loans), the related Servicer, other than WMMSC, 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.
With respect to each WMMSC Serviced Mortgage Loan, WMMSC will furnish
information regarding its borrower credit files to credit reporting agencies in compliance
with the provisions of the Fair Credit Reporting Act and its implementing regulations
applicable to WMMSC.
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 GreenPoint, Xxxxx Fargo and SPS to service and administer the
GreenPoint Serviced Mortgage Loans, 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 GreenPoint, 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 GreenPoint, Xxxxx Fargo and SPS and shall cause each of
GreenPoint, 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 GreenPoint Serviced Mortgage Loans, the Xxxxx Fargo Serviced
Mortgage Loans, SPS Serviced Mortgage Loans and the Designated Mortgage Loans, for the
related Prepayment Period to the extent GreenPoint, Xxxxx Fargo, SPS or the related
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 other than WMMSC, 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 2004-2, Adjustable Rate Mortgage-Backed Pass-Through
Certificates, Series 2004-2" 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
(other than an account established by WMMSC) shall either be invested in Eligible
Investments or at all times be fully insured to the full extent permitted under applicable
law. Notwithstanding the foregoing, one of the Collection Accounts established by WMMSC
shall be an Investment Account.
(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 each Designated Servicer to the Master Servicer or Trust
Administrator pursuant to their respective Designated Servicing Agreements;
(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, the Certificate Account or the
Prefunding 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, the Trust
Administrator or the Depositor, respectively, in Eligible Investments, which shall mature
not later than (i) in the case of a Collection Account, the Cash Remittance Date, (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 (iii) in the case of the
Prefunding Account, the Business Day immediately preceding a Subsequent Transfer Date or on
the Subsequent Transfer Date if the invested funds are managed or advised by the Trust
Administrator or its affiliates, 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 or the Prefunding
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. All income and gain net
of any losses realized from any such balances or investment of funds on deposit in the
Prefunding Account shall be for the benefit of the Depositor and shall be remitted to it
monthly. The amount of any net investment losses in the Prefunding Account shall promptly
be deposited by the Depositor in the Prefunding 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.
(g) The Trust Administrator shall establish and maintain, on behalf of the
Certificateholders, the Prefunding Account. On the Closing Date the Depositor shall remit
the Prefunded Amount to the Trust Administrator for deposit in the Prefunding Account. On
each Subsequent Transfer Date, upon satisfaction of the conditions for such Subsequent
Transfer Date set forth in Sections 2.01(f) and (g), with respect to the related Subsequent
Transfer Agreement, the Trust Administrator shall remit to the Depositor the applicable
Aggregate Subsequent Transfer Amount as payment of the purchase price for the related
Subsequent Mortgage Loans.
If any funds remain in the Prefunding Account on December 31, 2004, to the
extent that they represent earnings on the amounts originally deposited into the Prefunding
Account, the Trust Administrator shall distribute them to the order of the Depositor. The
remaining funds shall be transferred to the Certificate Account to be included as part of
principal distributions to the Certificates on the January 2005 Distribution Date.
(h) The Trust Administrator shall establish and maintain, on behalf of the
Certificateholders, the Capitalized Interest Account. On the Closing Date the Depositor
shall remit the Capitalized Interest Deposit to the Trust Administrator for deposit in the
Capitalized Interest Account. On the Business Day prior to the November 2004,
December 2004 and January 2005 Distribution Dates, the Trust Administrator shall transfer
from the Capitalized Interest Account to the Certificate Account an amount equal to the
Capitalized Interest Requirement for such Distribution Date. Any funds remaining in the
Capitalized Interest Account immediately after the termination of the Prefunding Period
shall be paid to the Depositor.
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 2004-2,
Adjustable Rate Mortgage-Backed Pass Through Certificates, Series 2004-2," in the case of
Xxxxx Fargo, "Xxxxx Fargo Bank, N.A., as Servicer for Adjustable Rate Mortgage Trust
2004-2, Adjustable Rate Mortgage-Backed Pass Through Certificates, Series 2004-2," in the
case of SPS, "SPS Capital Corp., as Servicer for Adjustable Rate Mortgage Trust 2004-2,
Adjustable Rate Mortgage-Backed Pass Through Certificates, Series 2004-2" 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 other than WMMSC 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, other than WMMSC, 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 (a) with respect to the Group 1
Mortgage Loans, Group 2 Mortgage Loans, Group 3 Mortgage Loans, Group 4 Mortgage
Loans, Group 5 Mortgage Loans and Group 6 Mortgage Loans, the Available Distribution
Amount and (b) with respect to the Group 7 Mortgage Loans, the Interest Remittance
Amount and Principal Remittance Amount, in each case 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 K.
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 K 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 K, 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 and
WMMSC, as applicable. 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 V-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 WMMSC and 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, any 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 WMMSC and 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), WMMSC, at its expense, shall furnish to the Trust Administrator a copy of a report
delivered to WMMSC by a firm of independent public accountants (who may also render other
services to WMMSC or any affiliate thereof) to the effect that, on the basis of an
examination conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, WMMSC has complied with certain minimum
residential mortgage loan servicing standards in its role as master servicer with respect
to the servicing of residential mortgage loans (including the WMMSC Serviced Mortgage
Loans) during the most recently completed fiscal year. In rendering its report such firm
may rely, (a) as to matters relating to the Certificates, upon a statistical sampling of
series of mortgage-backed certificates which may include the Certificates and (b) as to
matters relating to the direct servicing of residential mortgage loans by subservicers,
upon comparable reports of firms of independent certified public accountants rendered on
the basis of examinations conducted in accordance with the same standards (rendered within
one year of such report) with respect to those subservicers. In addition, WMMSC shall
disclose to such firm all significant deficiencies relating to WMMSC's compliance with the
minimum residential mortgage loan servicing standards referred to in the preceding sentence.
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, any
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 other than WMMSC (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, other than WMMSC, 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, other than
WMMSC, 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 each Designated Servicer to service and administer the related
Designated Mortgage Loans in accordance with the terms of the related Designated 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 each 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 each Designated
Servicer.
The Master Servicer shall terminate the rights and obligations of any
Designated Servicer under the related Designated Servicing Agreement, upon the failure of
such Designated Servicer to perform any of its obligations under such Designated Servicing
Agreement, which failure results in an event of default as provided in Section 8.01 of the
National City Servicing Agreement, with respect to National City and as provided in
Section 14.01 of the Wachovia Servicing Agreement, with respect to Wachovia. In the event
a Designated Servicer 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 Designated Mortgage Loans related to
such Designated Servicing Agreement shall be serviced by the successor to such Designated
Servicer pursuant to the servicing provisions of this Agreement, and such Designated
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 such successor Designated Servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Designated Servicing
Agreements and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The Master
Servicer shall pay the costs of such enforcement at its own expense, 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 a Designated Servicer, appointment of a successor Designated Servicer or the
transfer and assumption of servicing by the Master Servicer with respect to any Designated
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 a Designated Servicer as a result of an event of default by such 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 a Designated Servicer fails to make a required Advance by the date
such Advance is required to be made under the related Designated 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, with respect to the Group 1, Group 2,
Group 3, Group 4, Group 5, Group 6 and Class C-B Certificates, 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, an amount allocable to interest
equal to the related Interest Distribution Amount for such Distribution Date,
any shortfall being allocated pro rata between such Classes based on the
Interest Distribution Amount that would have been distributed in the absence of
such shortfall; 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 its Class Principal Balance is reduced
to zero.
(b) with respect to the Group 2 Certificates, and from the Available Distribution Amount
relating to Loan Group 2:
(i) first, concurrently, to the Group 2 Certificates, an amount allocable to interest
equal to the related Interest Distribution Amount for such Distribution Date,
any shortfall being allocated pro rata between such Classes based on the
Interest Distribution Amount that would have been distributed in the absence of
such shortfall; 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, as principal, to the Class 2-A-1 Certificates,
the Group 2 Senior Principal Distribution Amount, until its Class Principal
Balance is reduced to zero.
(c) with respect to the Group 3 Certificates, and from the Available Distribution Amount
relating to Loan Group 3:
(i) first, concurrently, to the Group 3 Certificates, an amount allocable to interest
equal to the related Interest Distribution Amount for such Distribution Date,
any shortfall being allocated pro rata between such Classes based on the
Interest Distribution Amount that would have been distributed in the absence of
such shortfall; and
(ii) second, on each Distribution Date, from the Available Distribution Amount for Loan
Group 3 remaining after giving effect to the distributions pursuant to
Section 4.01(I)(A)(c)(i) above, as principal, to the Class 3-A-1 Certificates,
the Group 3 Senior Principal Distribution Amount, until its Class Principal
Balance is reduced to zero.
(d) with respect to the Group 4 Certificates, and from the Available Distribution Amount
relating to Loan Group 4:
(i) first, concurrently, to the Group 4 Certificates, an amount allocable to interest
equal to the related Interest Distribution Amount for such Distribution Date,
any shortfall being allocated pro rata between such Classes based on the
Interest Distribution Amount that would have been distributed in the absence of
such shortfall; and
(ii) second, on each Distribution Date, from the Available Distribution Amount for Loan
Group 4 remaining after giving effect to the distributions pursuant to
Section 4.01(I)(A)(d)(i) above, as principal, the Group 4 Senior Principal
Distribution Amount, pro rata, weighted based on the aggregate Class Principal
Balances of such Classes immediately prior to such Distribution Date (the Class
4-A-1 Certificates on one side and the Class 4-A-2 and Class 4-A-3 Certificates
on the other), as follows:
(A) to the Class 4-A-1 Certificates, until the Class Principal Balance of such Class is
reduced to zero; and
(B) sequentially, to the Class 4-A-2 Certificates and Class 4-A-3 Certificates, in that
order, until their respective Class Principal Balances have been reduced
to zero.
(e) with respect to the Group 5 Certificates, and from the Available Distribution Amount
relating to Loan Group 5:
(i) first, to the Class 5-A-1 Certificates and the Interest Remittance Amount, an amount
allocable to interest equal to the related Interest Distribution Amount, or, in
the case of the Interest Remittance Amount, the Group 5 Excess Interest Amount
for such Distribution Date, any shortfall being allocated pro rata among such
Class and the Interest Remittance Amount in proportion to the amount of the
Interest Distribution Amount or Group 5 Excess Interest Amount, as applicable,
that would have been distributed in the absence of such shortfall; and
(ii) second, on each Distribution Date, from the Available Distribution Amount for Loan
Group 5 remaining after giving effect to the distributions pursuant to
Section 5.01(I)(A)(e)(i) above, to the Class 5-A-1 Certificates, as principal,
the Group 5 Senior Principal Distribution Amount, until the Class Principal
Balance of such Class is reduced to zero.
(f) with respect to the Group 6 Certificates, and from the Available Distribution Amount
relating to Loan Group 6:
(i) first, to the Class 6-A-1 Certificates and the Interest Remittance Amount, an amount
allocable to interest equal to the related Interest Distribution Amount, or, in
the case of the Interest Remittance Amount, the Group 6 Excess Interest Amount
for such Distribution Date, any shortfall being allocated pro rata among such
Class and the Interest Remittance Amount in proportion to the amount of the
Interest Distribution Amount or Group 6 Excess Interest Amount, as applicable,
that would have been distributed in the absence of such shortfall; and
(ii) second, on each Distribution Date, from the Available Distribution Amount for Loan
Group 6 remaining after giving effect to the distributions pursuant to
Section 4.01(I)(A)(f)(i) above, to the Class 6-A-1 Certificates, as principal,
the Group 6 Senior Principal Distribution Amount, until the Class Principal
Balance of such Class is reduced to zero.
(g) with respect to the Group C-B and Class AR-L Certificates, from the Available
Distribution Amount relating to Loan Group 1, Loan Group 2, Loan Group 3, Loan
Group 4, Loan Group 5 and Loan Group 6 remaining after the distributions pursuant to
Sections 4.01(I)(A)(a), (b), (c), (d), (e) and (f) above, subject to Sections
4.01(I)(C) below, and further subject to any payments to the Group 1, Group 2,
Group 3, Group 4, Group 5 and Group 6 Certificates as described in Section 4.07, to
the following Classes in the following order of priority:
(i) first, to the Class C-B-1 and Class C-B-1X Certificates, pro rata based on amounts
due, the respective Interest Distribution Amounts; provided, however, that,
notwithstanding the foregoing, accrued interest to be distributed to the
Class C-B-1X Certificates will be reduced to the extent of the Class C-B-1X
Required Reserve Fund Deposit for such Distribution Date pursuant to
Section 4.09(b);
(ii) second, 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 of Class C-B-1 Certificates has been reduced to zero;
(iii) third, 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;
(iv) fourth, 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 of Class C-B-2 Certificates has been reduced to zero;
(v) fifth, 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;
(vi) sixth, 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 of
Class C-B-3 Certificates has been reduced to zero;
(vii) seventh, 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;
(viii) eighth, 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 of Class C-B-4 Certificates has been reduced to zero;
(ix) ninth, 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;
(x) tenth, 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 of
Class C-B-5 Certificates has been reduced to zero;
(xi) eleventh, 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;
(xii) twelfth, 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 of Class C-B-6 Certificates has been reduced to zero;
(xiii) thirteenth, to the Class C-B-1 Certificates, any amounts withdrawn from the
Class C-B-1 Basis Risk Reserve Fund for distribution to such Class C-B-1
Certificates pursuant to Sections 4.09(b); and
(xiv) fourteenth, to 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, 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)(xiv) shall not result in a further
reduction of the Class Principal Balance of any of the Class C-B Certificates;
and
(xv) to the Class AR-L Certificates, any remaining Available Distribution Amount for Loan
Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan
Group 6 (to the extent such amount is held by REMIC I or REMIC II), or to the
Class AR Certificates, any remaining Available Distribution Amount for Loan
Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan
Group 6 (to the extent such amount is held by REMIC III or REMIC IV).
(B) On each Distribution Date, the amount referred to in clause (i) of the definition of
Interest Distribution Amount for such Distribution Date for each Class of Group 1,
Group 2, Group 3, Group 4, Group 5, Group 6 and Class C-B Certificates and for each of
the Group 5 Excess Interest Amounts and Group 6 Excess Interest Amounts shall be reduced
by the Trust Administrator by the related Class' or Excess Interest Amounts' pro rata
share (based on the amount of the Interest Distribution Amount for each such Class or
Excess Interest Amount before reduction pursuant to this Section 4.01(I)(B)) of (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, Group 2, Group 3, Group 4, Group 5 or Group 6 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,
Group 2, Group 3, Group 4, Group 5 or Group 6 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, Group 2, Group 3, Group 4, Group 5 or Group 6 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, Group 2, Group 3, Group 4,
Group 5 or Group 6 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. For purposes of calculating the reduction of the Interest
Distribution Amount for each Class of Class C-B Certificates with respect to Loan
Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan Group 5 or Loan Group 6 such
reduction shall be based on the amount of interest accruing at the Net WAC Rate for such
Loan Group on such Class' proportionate share, based on the Class Principal Balance of
the related Subordinate Component Balance for that Distribution Date.
(C) With respect to each Class of Class C-B Certificates (other than the Class C-B-1X
Certificates), if on any Distribution Date the related Subordination Level of such Class
is less than such percentage as of the Closing Date, no distribution of Principal
Prepayments will be made to any Class or Classes of Class C-B Certificates junior to
such Class (the "Restricted Classes") and the amount otherwise distributable to the
Restricted Classes in respect of such Principal Prepayments will be allocated among the
remaining Classes of Class C-B Certificates (other than the Class C-B-1X Certificates),
pro rata, based upon their respective Class Principal Balances.
(D) The Trust Administrator shall distribute the Mortgage Loan Purchase Price of any
Optional Termination of Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4, Loan
Group 5 and Loan Group 6 in excess of the Par Value to the holder of the Class AR-L
Certificate.
(II) With respect to the Group 7 Certificates:
(a) On each Distribution Date, the Trust Administrator shall distribute the Interest
Remittance Amount for such date in the following order of priority:
(i) from the Interest Remittance Amount for Loan Group 7A and Loan Group 7B, to the
Group 7 Senior Certificates, pro rata based on amounts due, Current Interest
and any Carryforward Interest for such Class and such Distribution Date,
applied to the Group 7 Senior Certificates as follows:
(1) amounts distributed to the Class 7-A-1-1 and Class 7-A-1-2 Certificates will reduce
the Interest Remittance Amount for Loan Group 7A before any reduction to
the Interest Remittance Amount for Loan Group 7B in respect of such
distribution; and
(2) amounts distributed to the Class 7-A-2, Class 7-A-3, Class 7-A-4, Class 7-A-5 and
Class 7-A-6 Certificates will reduce the Interest Remittance Amount for
Loan Group 7B before any reduction to the Interest Remittance Amount for
Loan Group 7A in respect of such distribution;
(ii) first, from the Interest Remittance Amount for Loan Group 7B and then from the
Interest Remittance Amount for Loan Group 7A, to the Class 7-M-1 Certificates,
Current Interest and any Carryforward Interest for such Class and such
Distribution Date;
(iii) first, from the Interest Remittance Amount for Loan Group 7B and then from the
Interest Remittance Amount for Loan Group 7A, to the Class 7-M-2 Certificates,
Current Interest and any Carryforward Interest for such Class and such
Distribution Date;
(iv) first, from the Interest Remittance Amount for Loan Group 7B and then from the
Interest Remittance Amount for Loan Group 7A, to the Class 7-M-3 Certificates,
Current Interest and any Carryforward Interest for such Class and such
Distribution Date;
(v) first, from the Interest Remittance Amount for Loan Group 7B and then from the
Interest Remittance Amount for Loan Group 7A, to the Class 7-M-4 Certificates,
Current Interest and any Carryforward Interest for such Class and such
Distribution Date; and
(vi) for application as part of Monthly Excess Cashflow for such Distribution Date as
provided in Section 4.01(II)(d), any Interest Remittance Amount remaining for
such Distribution Date.
(b) On each Distribution Date (A) prior to the Stepdown Date or (B) with respect to which
a Trigger Event is in effect, the Trust Administrator shall distribute the Principal
Payment Amount for Loan Group 7 for such date in the following order of priority:
(i) to the Group 7 Senior Certificates, concurrently, as follows:
(1) from the Principal Remittance Amount for Loan Group 7A,
sequentially, first (x) to the Class 7-A-1-1 and Class 7-A-1-2
Certificates in the order and priority described below in
Section 4.01(II)(f), until their respective Class Principal Balances are
reduced to zero, and then (y) pro rata, weighted based on the aggregate
Class Principal Balances of such Classes immediately prior to such
Distribution Date (the Class 7-A-2 Certificates on one side and the
Class 7-A-3, Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates on the
other), (1) to the Class 7-A-2 Certificates, until the Class Principal
Balance thereof has been reduced to zero and (2) to the Class 7-A-3,
Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates in the order and
priority described below in Section 4.01(II)(g), until their respective
Class Principal Balances have been reduced to zero; and
(2) from the Principal Remittance Amount for Loan Group 7B,
sequentially, first (x) pro rata, weighted based on the aggregate Class
Principal Balances of such Classes immediately prior to such Distribution
Date (the Class 7-A-2 Certificates on one side and the Class 7-A-3,
Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates on the other), (1)
to the Class 7-A-2 Certificates, until the Class Principal Balance
thereof has been reduced to zero and (2) to the Class 7-A-3, Class 7-A-4,
Class 7-A-5 and Class 7-A-6 Certificates in the order and priority
described below in Section 4.01(II)(g), until their respective Class
Principal Balances have been reduced to zero, and then (y) to the
Class 7-A-1-1 and Class 7-A-1-2 Certificates in the order and priority
described below in Section 4.01(II)(f), until their respective Class
Principal Balances are reduced to zero;
(ii) to the Class 7-M-1 Certificates, until its Class Principal Balance is reduced to zero;
(iii) to the Class 7-M-2 Certificates, until its Class Principal Balance is reduced to zero;
(iv) to the Class 7-M-3 Certificates, until its Class Principal Balance is reduced to zero;
(v) to the Class 7-M-4 Certificates, until its Class Principal Balance is reduced to
zero; and
(vi) for application as part of Monthly Excess Cashflow for such Distribution Date, as
provided in Section 4.01(II)(d), any Principal Payment Amount remaining after
application pursuant to Section 4.01(II)(b)(i) through (v) above.
(c) On each Distribution Date (A) on or after the Stepdown Date and (B) with respect to
which a Trigger Event is not in effect, the Trust Administrator shall distribute the
Principal Payment Amount for Loan Group 7 for such date in the following order of
priority:
(i) to the Group 7 Senior Certificates, concurrently, as follows:
(1) from the Principal Remittance Amount for Loan Group 9A,
sequentially, first (x) to the Class 7-A-1-1 and Class 7-A-1-2
Certificates in the order and priority described below in
Section 4.01(II)(f), until their respective Class Principal Balances are
reduced to zero, and then (y) pro rata, weighted based on the aggregate
Class Principal Balances of such Classes immediately prior to such
Distribution Date (the Class 7-A-2 Certificates on one side and the
Class 7-A-3, Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates on the
other), (1) to the Class 7-A-2 Certificates, until the Class Principal
Balance thereof has been reduced to zero and (2) to the Class 7-A-3,
Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates in the order and
priority described below in Section 4.01(II)(g), until their respective
Class Principal Balances have been reduced to zero, the sum of (1) the
Group 7A Allocation Amount and (2) the component of the Principal
Remittance Amount for Loan Group 7A representing payments, if any, under
the Class 7-A-3 Interest Rate Cap Agreement, Class 7-A-4 Interest Rate
Cap Agreement and Class 7-M-4 Interest Rate Cap Agreement to cover
Realized Losses on the Group 7A Mortgage Loans;
(2) from the Principal Remittance Amount for Loan Group 9B,
sequentially, first (x) pro rata, weighted based on the aggregate Class
Principal Balances of such Classes immediately prior to such Distribution
Date (the Class 7-A-2 Certificates on one side and the Class 7-A-3,
Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates on the other), (1)
to the Class 7-A-2 Certificates, until the Class Principal Balance
thereof has been reduced to zero and (2) to the Class 7-A-3, Class 7-A-4,
Class 7-A-5 and Class 7-A-6 Certificates in the order and priority
described below in Section 4.01(II)(g), until their respective Class
Principal Balances have been reduced to zero, and then (y) to the
Class 7-A-1-1 and Class 7-A-1-2 Certificates in the order and priority
described below in Section 4.01(II)(f), until their respective Class
Principal Balances are reduced to zero, the sum of (1) the Group 7B
Allocation Amount and (2) the component of the Principal Remittance
Amount for Loan Group 7B representing payments, if any, under the
Class 7-A-3 Interest Rate Cap Agreement, Class 7-A-4 Interest Rate Cap
Agreement and Class 7-M-4 Interest Rate Cap Agreement to cover Realized
Losses on the Group 7B Mortgage Loans;
(ii) to the Class 7-M-1 Certificates, the Class 7-M-1 Principal Payment Amount for such
Distribution Date, until its Class Principal Balance is reduced to zero;
(iii) to the Class 7-M-2 Certificates, the Class 7-M-2 Principal Payment Amount for such
Distribution Date, until the Class Principal Balance of such Class has been
reduced to zero;
(iv) to the Class 7-M-3 Certificates, the Class 7-M-3 Principal Payment Amount for such
Distribution Date, until the Class Principal Balance of such Class has been
reduced to zero;
(v) to the Class 7-M-4 Certificates, the Class 7-M-4 Principal Payment Amount for such
Distribution Date, until the Class Principal Balance of such Class has been
reduced to zero; and
(vi) for application as part of Monthly Excess Cashflow for such Distribution Date, as
provided in Section 4.01(II)(d), any Principal Payment Amount remaining after
application pursuant to Section 4.01(II)(c)(i) though (v) above.
(d) On each Distribution Date, the Trust Administrator shall distribute the Monthly
Excess Cashflow for such date in the following order of priority:
(i) (A) until the aggregate Class Principal Balance of the Group 7 Certificates,
other than the Class 7-X Certificates, equals the Aggregate Group 7
Collateral Balance for such Distribution Date minus the Targeted
Overcollateralization Amount for such date, on each Distribution Date (x)
prior to the Stepdown Date or (y) with respect to which a Trigger Event is
in effect, to the extent of Monthly Excess Interest for such Distribution
Date, to the Group 7 Certificates, in the following order of priority:
(1) (a) from the Monthly Excess Interest derived from Loan Group 7A, the
Group 7A Excess Interest Amount, sequentially, first (x) to the
Class 7-A-1-1 and Class 7-A-1-2 Certificates in the order and
priority described below in Section 4.01(II)(f), until their
respective Class Principal Balances are reduced to zero, and then
(y) pro rata, weighted based on the aggregate Class Principal
Balances of such Classes immediately prior to such Distribution
Date (the Class 7-A-2 Certificates on one side and the Class 7-A-3,
Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates on the
other), (1) to the Class 7-A-2 Certificates, until the Class
Principal Balance thereof has been reduced to zero and (2) to the
Class 7-A-3, Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates
in the order and priority described below in Section 4.01(II)(g),
until their respective Class Principal Balances have been reduced
to zero;
(b) sequentially, first (x) pro rata, weighted based on the aggregate Class Principal
Balances of such Classes immediately prior to such Distribution
Date (the Class 7-A-2 Certificates on one side and the Class 7-A-3,
Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates on the
other), (1) to the Class 7-A-2 Certificates, until the Class
Principal Balance thereof has been reduced to zero and (2) to the
Class 7-A-3, Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates
in the order and priority described below in Section 4.01(II)(g),
until their respective Class Principal Balances have been reduced
to zero, and then (y) to the Class 7-A-1-1 and Class 7-A-1-2
Certificates in the order and priority described below in
Section 4.01(II)(f), until their respective Class Principal
Balances are reduced to zero;
(2) to the Class 7-M-1 Certificates, until its Class Principal Balance is reduced to zero;
(3) to the Class 7-M-2 Certificates, until its Class Principal Balance is reduced to zero;
(4) to the Class 7-M-3 Certificates, until its Class Principal Balance is reduced to
zero; and
(5) to the Class 7-M-4 Certificates, until its Class Principal Balance is reduced to zero;
(B) on each Distribution Date (x) on or after the Stepdown Date and (y) with respect to
which a Trigger Event is not in effect, to fund any principal distributions
required to be made on such Distribution Date set forth above in
Section 4.01(II)(c) above, after giving effect to the distribution of the
Principal Payment Amount for Loan Group 7 for such Distribution Date, in
accordance with the priorities set forth therein;
(ii) to the Class 7-M-1 Certificates, any Deferred Amount for such Class;
(iii) to the Class 7-M-2 Certificates, any Deferred Amount for such Class;
(iv) to the Class 7-M-3 Certificates, any Deferred Amount for such Class;
(v) to the Class 7-M-4 Certificates, any Deferred Amount for such Class;
(vi) to the Class 7-A-1-1, Class 7-A-1-2, Class 7-A-2, Class 7-A-3, Class 7-A-4,
Class 7-A-5 and Class 7-A-6 Certificates, pro rata based on amounts due, any
Basis Risk Shortfall due and owing for each such Class;
(vii) to the Class 7-M-1 Certificates, any Basis Risk Shortfall due and owing for such
Class;
(viii) to the Class 7-M-2 Certificates, any Basis Risk Shortfall due and owing for
such Class;
(ix) to the Class 7-M-3 Certificates, any Basis Risk Shortfall due and owing for such
Class;
(x) to the Class 7-M-4 Certificates, any Basis Risk Shortfall due and owing for such
Class;
(xi) to the Group 7 Basis Risk Reserve Fund, any Group 7 Required Basis Risk Reserve Fund
Deposit;
(xii) to the Class 7-X Certificates, the Class 7-X Distributable Amount for such
Distribution Date together with any amounts withdrawn from the Group 7 Basis
Risk Reserve Fund for distribution to such Class 7-X Certificates pursuant to
Sections 4.08(b) and (e); and
(xiii) to the Class AR Certificates, any remaining amount; provided, however that any
amount that would be distributable pursuant to this priority (xi) shall not be
paid with respect to the Class AR Certificates but shall be paid instead with
respect to the Class 7-X Certificates pursuant to a contract that exists under
this Agreement between the Class AR Certificateholders and the Class 7-X
Certificateholders.
(e) The Trust Administrator shall distribute the Mortgage Loan Purchase Price of any
Optional Termination of Loan Group 7 in excess of the Par Value to the holder of the
Class AR-L Certificate.
(f) On any Distribution Date, the Principal Remittance Amount and the Monthly Excess
Cashflow distributable to the Class 7-A-1-1 and Class 7-A-1-2 Certificates shall be
paid pro rata, based on the Class Principal Balances of such Classes immediately
prior to such Distribution Date, if such Distribution Date is (a) prior to November
2007 and cumulative Realized Losses on the Mortgage Loans in Loan Group 7 for such
Distribution Date as a percentage of the Aggregate Group 7 Collateral Balance as of
the Initial Cut-off Date are less than 1.00% or (b) on or after November 2007 and no
Trigger Event is in effect. If such conditions are not satisfied on any Distribution
Date, the Principal Remittance Amount and Monthly Excess Cashflow distributable to
the Class 7-A-1-1 and Class 7-A-1-2 Certificates shall be paid sequentially to the
Class 7-A-1-1 and Class 7-A-1-2 Certificates, in that order, until their respective
Class Principal Balances are reduced to zero.
(g) On any Distribution Date on or prior to the Group 7 Credit Support Depletion Date,
the aggregate Principal Remittance Amount and Monthly Excess Cashflow distributable
to the Class 7-A-3, Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates shall be
paid, pro rata, based on the Class Principal Balances of such classes immediately
prior to such Distribution Date, as follows:
(1) to the Class 7-A-3 and Class 7-A-4 Certificates, pro rata, based on
the Class Principal Balances of such classes immediately prior to
such Distribution Date, until their respective Class Principal
Balances are reduced to zero; and
(2) sequentially, to the Class 7-A-5 and Class 7-A-6 Certificates, in
that order, in each case until its respective Class Principal
Balance has been reduced to zero.
On any Distribution Date after the Group 7 Credit Support Depletion Date
and on which the Overcollateralization Amount is zero, the aggregate Principal
Remittance Amount and Monthly Excess Cashflow distributable to the Class 7-A-3,
Class 7-A-4, Class 7-A-5 and Class 7-A-6 Certificates shall be paid concurrently as
follows:
(0) 00.0000000000% of such amount, sequentially, to the Class 7-A-3,
Class 7-A-5 and Class 7-A-6 Certificates, in that order, in each
case until its respective Class Principal Balance is reduced to
zero; and
(0) 00.0000000000%% of such amount, sequentially, to the Class 7-A-4,
Class 7-A-5 and Class 7-A-6 Certificates, in that order, in each
case until its respective Class Principal Balance is reduced to
zero.
(III) Prior to the distributions described in Sections 4.01(I) and (II), the
following distributions shall be deemed to have been made:
(a) From REMIC I to REMIC III, as the holder of the REMIC I Regular
Interests, and to Holders of the Class AR-L Certificates in respect of Component I
thereof, from the REMIC I Available Distribution Amounts for Group 1, Group 2, Group
3, Group 4, Group 5 and Group 6, the REMIC I Distribution Amount in the amounts, from
the sources and with the character set forth in the definition thereof in respect of
the REMIC I Regular Interests and Component I of the Class AR-L Certificates as set
forth therein;
(b) from REMIC II to REMIC III, as the holder of the REMIC II Regular
Interests, and to Holders of the Class AR-L Certificates in respect of Component II
thereof, from the REMIC II Available Distribution Amounts for Group 7A and Group 7B,
the REMIC II Distribution Amount in the amounts, from the sources and with the
character set forth in the definition thereof in respect of the REMIC II Regular
Interests and Component II of the Class AR-L Certificates as set forth therein;
(c) from REMIC III to REMIC IV, as the holder of the REMIC III Regular
Interests, and to Holders of the Class AR Certificates in respect of Component I
thereof, from the amounts deemed distributed with respect to the REMIC I Regular
Interests and the REMIC II Regular Interests pursuant to Section 4.01(III)(a) and (b)
above, the following amounts, in the following order of priority:
(i) to the extent of the REMIC I and REMIC II Available Distribution Amounts for Group 1,
Group 2, Group 3, Group 4, Group 5 and Group 6, first, (A) to REMIC IV as the
holder of the REMIC III Regular Interests (other than REMIC III Regular
Interests LT1, LT2, LT3 , XX0, XX0, XX0, XX0, XX0, XX-X0X and LT-Y7B), in an
amount equal to, in each case, the amount distributed to the Related
Certificates from such Available Distribution Amounts pursuant to
Sections 4.01(I) and 4.01(II), with such amount allocated among Uncertificated
Accrued Interest thereon and Uncertificated Principal Balance thereof in the
same manner and to the same extent that the payment to such Related
Certificates is so allocated and any remaining amount shall be distributed to
Holders of the Class AR Certificates in respect of Component I thereof;
(ii) to the extent of the REMIC I and REMIC II Available Distribution Amounts for Group 7A:
(1) first, to REMIC IV, as holder of REMIC III Regular
Interests LT1, LT2, LT3, LT4 and LT-Y7A, pro rata, in an amount equal to
(A) their Uncertificated Accrued Interest for such Distribution Date,
plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates; and
(2) second:
(A) to REMIC IV, as the holder of REMIC III Regular
Interests LT2, LT3, LT4 and LT-Y7A, their respective Principal
Distribution Amounts;
(B) to REMIC IV, as the holder of REMIC III Regular
Interest LT1 its Principal Distribution Amount;
(C) any remainder to REMIC IV, as the holder of
REMIC III Regular Interest LT1, until the Uncertificated Principal
Balance thereof has been reduced to zero;
(D) any remainder to REMIC IV, as the holder of
REMIC III Regular Interests LT2, LT3 and LT4, pro rata according to
their respective Uncertificated Principal Balances as reduced by
the distributions deemed made pursuant to (A) above, until their
respective Uncertificated Principal Balances are reduced to zero;
and
(E) any remaining amounts to the Holders of the Class
AR Certificates in respect of Component I thereof; and
(iii) to the extent of the REMIC I and REMIC II Available Distribution Amounts for Group 7B:
(1) first, to REMIC IV, as holder of REMIC III Regular
Interests LT5, LT6, LT7, LT8 and LT-Y7B, pro rata, in an amount equal to
(A) their Uncertificated Accrued Interest for such Distribution Date,
plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates; and
(2) second:
(A) to REMIC IV, as the holder of REMIC III Regular
Interests LT6, LT7, LT8 and LT-Y7B, their respective Principal
Distribution Amounts;
(B) to REMIC IV, as the holder of REMIC III Regular
Interest LT5 its Principal Distribution Amount;
(C) any remainder to REMIC IV, as the holder of
REMIC III Regular Interest LT5, until the Uncertificated Principal
Balance thereof has been reduced to zero;
(D) any remainder to REMIC IV, as the holder of
REMIC III Regular Interests LT6, LT7 and LT8, pro rata according to
their respective Uncertificated Principal Balances as reduced by
the distributions deemed made pursuant to (A) above, until their
respective Uncertificated Principal Balances are reduced to zero;
and
(E) any remaining amounts to the Holders of the Class
AR Certificates in respect of Component I thereof; and
(iv) the Group 5 Excess Interest Amount and the Group 6 Excess Interest Amount to REMIC
IV, as the holder of the REMIC III Regular Interest IOL in respect of interest
thereon.
(d) Notwithstanding the distributions on the REMIC Regular Interests
described in this Section 4.01(III), distribution of funds from the Certificate
Account shall be made only in accordance with Sections 4.01(I) and (II).
SECTION 4.02. Allocation of Losses.
(a) Realized Losses on the Mortgage Loans in each of Loan Group 1, Loan Group 2, Loan
Group 3, Loan Group 4, Loan Group 5 and Loan Group 6 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 (other than the Class C-B-1X 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, and second, to the Senior Certificates of the related Certificate
Group, pro rata, on the basis of their respective Class Principal Balances; and
(ii) Excess Losses in respect of principal for Mortgage Loans in Loan Group 1, Loan
Group 2, Loan Group 3, Loan Group 4, Loan Group 5 and Loan Group 6 will be allocated
among all Group 1, Group 2, Group 3, Group 4, Group 5, Group 6 and the Class C-B
Certificates (other than the Class C-B-1X Certificates), pro rata based on their
respective Class Principal Balances.
(b) On each Distribution Date, if the aggregate Class Principal Balance of all Group 1,
Group 2, Group 3, Group 4, Group 5, Group 6 and Class C-B Certificates exceeds the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1, Loan Group 2,
Loan Group 3, Loan Group 4, Loan Group 5 and Loan Group 6 (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 (other than the
Class C-B-1X Certificates) then outstanding.
(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) On each Distribution Date, the Trust Administrator shall determine the total of the
Applied Loss Amount with respect to the Group 7 Certificates, if any, for such Distribution
Date. The Applied Loss Amount with respect to the Group 7 Certificates for any
Distribution Date shall be applied by reducing the Class Principal Balance of each Class of
Group 7 Subordinate Certificates beginning with the Class of Group 7 Subordinate
Certificates then outstanding, other than the Class 7-X Certificates, with the lowest
relative payment priority, in each case until the respective Class Principal Balance
thereof is reduced to zero. Any Applied Loss Amount with respect to the Group 7
Certificates allocated to a Class of Group 7 Subordinate Certificates shall be allocated
among the Group 7 Subordinate Certificates of such Class in proportion to their respective
Percentage Interests.
(f) All Realized Losses on the Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6
Mortgage Loans shall be allocated on each Distribution Date to the REMIC I Regular
Interests and REMIC III Regular Interests as provided in the definitions of REMIC I
Realized Losses and REMIC III Realized Losses.
(g) All Realized Losses on the Group 7 Mortgage Loans shall be allocated on each
Distribution Date to the REMIC II Regular Interests and REMIC III Regular Interests as
provided in the definitions of REMIC II Realized Losses and REMIC III Realized Losses.
(h) Realized Losses on the Group 7 Mortgage Loans that are not Applied Loss Amounts shall
be deemed allocated to the Class 7-X Certificates. Realized Losses allocated to the
Class 7-X Certificates shall, be allocated between the REMIC IV Regular Interests 7-X-IO
and 7-X-PO as provided in the definition of Realized Losses.
(i) Realized Losses shall be allocated among the REMIC I, REMIC II, REMIC III and REMIC
IV Regular Interests as specified in the definition of Realized Losses and, as to REMIC I,
REMIC II and REMIC III Regular Interests, in the definitions of REMIC I Realized Losses,
REMIC II Realized Losses and REMIC III Realized Losses, respectively.
SECTION 4.03. Recoveries.
(a) With respect to any Class of Certificates to which a Realized Loss or Applied Loss
Amount, as applicable, 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) with respect to Recoveries on Group 1, Group 2, Group 3, Group 4, Group 5 and Group 6
Mortgage Loans,
(A) 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, and
(B) second, 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
(ii) with respect to Recoveries on Group 7 Mortgage Loans, the Class Principal Balance of
each Class of Class M Certificates will be increased in order of seniority, up to the
Deferred Amount such Class is entitled to receive pursuant to Section 4.01(II)(d) on
such Distribution Date prior to giving effect to payments pursuant to
Section 4.01(II)(d) on such Distribution Date.
(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: (A) the items listed in Exhibit S, other than items (vi)(a),
(vi)(b), (vi)(c) and (vi)(d), (B) the amount on deposit in the Prefunding Account
(including a breakdown of amounts released during the prior calendar month in respect of
Aggregate Subsequent Transfer Amounts) and (C) the amount on deposit in the Capitalized
Interest Account (including a breakdown of amounts released for the calendar month
preceding such Distribution Date).
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 S 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, other than WMMSC, shall provide to the Master Servicer the
information set forth in Exhibit H, 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 which are not WMMSC
Serviced Mortgage Loans, and WMMSC, with respect to the WMMSC Serviced Mortgage Loans,
shall provide to the Trust Administrator the information set forth in Exhibit H 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 Class C-B Credit Support Depletion Date, but
after the date on which the aggregate Class Principal Balance of the Group 1, Group 2,
Group 3, Group 4, Group 5 or Group 6 Certificates has been reduced to zero, the Trust
Administrator shall distribute the principal portion of 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(s). Such amount
will be allocated between the other Groups, pro rata, based on aggregate Class Principal
Balance of the related Senior Certificates and paid the Senior Certificates in each 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 Class C-B Percentage
for such Distribution Date is greater than or equal to 200% of such Class C-B 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,
Group 2, Group 3, Group 4, Group 5 and Group 6 Certificates is greater than the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan Group (each such Loan
Group, an "Undercollateralized Group"), then the Trust Administrator shall reduce the
Available Distribution Amount of the other Loan Group(s) that is not undercollateralized
(each, an "Overcollateralized Group"), as follows:
(1) to add to the Available Distribution Amount of the Undercollateralized Group(s) an
amount equal to the lesser of (a) one month's interest on the Principal Transfer
Amount of the Undercollateralized Group(s) at the Net WAC Rate (without giving effect
to any reduction for any Excess Interest 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(s) on such Distribution Date pursuant to Section 4.01; and
(2) to the Senior Certificates of each Undercollateralized Group, to the extent of the
principal portion of Available Distribution Amount of the Overcollateralized Group(s)
remaining after making interest and principal distributions to the Senior
Certificates of the Overcollateralized Group(s) on such Distribution Date pursuant to
Section 4.01, until the Class Principal Balance of the Senior Certificates of such
Undercollateralized Group(s) equals the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group(s). 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).
(c) If more than one Overcollateralized Group exists on any Distribution Date, reductions
in the Available Distribution Amount of such Groups to make the payments required to be
made pursuant to Section 4.07(b) on such Distribution Date shall be made pro rata, based on
the Overcollateralization Amount of each Overcollateralized Group. If more than one
Undercollateralized Group exists on any Distribution Date, payments made to such Groups
from the Available Distribution Amount of the Overcollateralized Group shall be made pro
rata, based on the amount of payments required to be made to the Undercollateralized
Group(s).
SECTION 4.08. Group 7 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 Group 7 Certificates, the Group 7
Basis Risk Reserve Fund. The Group 7 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, $5,000 will be deposited by the Depositor in the Group 7 Basis
Risk Reserve Fund. On each Distribution Date, the Trust Administrator shall transfer from
the Certificate Account to the Group 7 Basis Risk Reserve Fund pursuant to
Section 4.01(II)(d)(xi), the Group 7 Required Basis Risk Reserve Fund Deposit. Amounts on
deposit in the Group 7 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 Group 7 Certificates (other than the Class 7-X Certificates) in respect of
any Basis Risk Shortfalls. On any Distribution Date, any amounts on deposit in the Group 7
Basis Risk Reserve Fund in excess of the Group 7 Required Basis Risk Reserve Fund Amount
after giving effect to withdrawals to pay related Basis Risk Shortfalls on such
Distribution Date shall be distributed to the Class 7-X Certificateholders pursuant to
Section 4.01(II)(d)(xii) hereof.
(c) Funds in the Group 7 Basis Risk Reserve Fund may be invested in Eligible Investments
by the Trust Administrator at the direction of the holders of the Class 7-X
Certificateholders. Any net investment earnings on such amounts shall be payable to the
Class 7-X Certificateholders. The Class 7-X Certificateholders shall evidence ownership of
the Group 7 Basis Risk Reserve Fund for federal tax purposes and the Class 7-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 Group 7 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 4.08(c) (other than as
obligor on any such investments). Upon termination of the Trust Fund, any amounts
remaining in the Group 7 Basis Risk Reserve Fund shall be distributed to the Class 7-X
Certificateholders.
(d) If the Trust Administrator shall deposit in the Group 7 Basis Risk Reserve Fund any
amount not required to be deposited therein, it may at any time withdraw such amount from
the Group 7 Basis Risk Reserve Fund, any provision herein to the contrary notwithstanding.
(e) On the Distribution Date immediately after the Distribution Date on which the
aggregate Class Principal Balance of the Group 7 Certificates equals zero, any amounts on
deposit in the Group 7 Basis Risk Reserve Fund not payable on such Certificates shall be
deposited into the Certificate Account and distributed to the Holders of the Class 7-X
Certificates in the same manner as if distributed pursuant to Section 4.01(II)(d)(xii)
hereof.
SECTION 4.09. Class C-B-1 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 Class C-B-1 Basis
Risk Reserve Fund. The Class C-B-1 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 Class C-B-1X Required Basis Risk Reserve
Fund Amount will be deposited by the Depositor in the Class C-B-1 Basis Risk Reserve Fund.
On each Class C-B-1 Interest Rate Cap Agreement Payment Date, amounts paid under the
Class C-B-1 Interest Rate Cap Agreement shall be transferred by the Trustee to the
Class C-B-1 Basis Risk Reserve Fund. Amounts on deposit in the Class C-B-1 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
Class C-B-1 Certificates in respect of any Basis Risk Shortfall for such Certificates
pursuant to Section 4.01(I)(A)(i)(xiii); provided, however, if on any Distribution Date a
related Basis Risk Shortfall remains after giving effect to amounts paid under the
Class C-B-1 Interest Rate Cap Agreement on such date, the Trust Administrator shall
transfer from the Certificate Account to the Class C-B-1 Basis Risk Reserve Fund pursuant
to Section 4.01(I)(A)(i)(i), the Class C-B-1 Required Reserve Fund Deposit for such
Distribution Date for payment of such remaining related Basis Risk Shortfall pursuant to
Section 4.01(I)(A)(i)(xiii); provided, further, that other than amounts paid under the
Class C-B-1 Interest Rate Cap Agreement on deposit in the Class C-B-1 Basis Risk Reserve
Fund, amounts withdrawn from the Class C-B-1 Basis Risk Reserve Fund to pay Basis Risk
Shortfall to the Class C-B-1 Certificates shall first reduce the amount on deposit therein
prior to reducing any Class C-B-1X Required Reserve Fund Deposit for such Distribution
Date. Amounts paid under the Class C-B-1 Interest Rate Cap Agreement on any Class C-B-1
Interest Rate Cap Agreement Payment Date not needed on that Distribution Date to pay Basis
Risk Shortfall to the Class C-B-1 Certificates or to maintain an amount on deposit in the
Class C-B-1 Basis Risk Reserve Fund equal to the Class C-B-1X Required Basis Risk Reserve
Fund Amount shall be distributed to the Class C-B-1X Certificateholders. On any
Distribution Date, any amounts on deposit in the Class C-B-1 Basis Risk Reserve Fund in
excess of the Class C-B-1 Required Basis Risk Reserve Fund Amount shall be distributed to
the Class C-B-1X Certificateholders.
(c) Funds in the Class C-B-1 Basis Risk Reserve Fund may be invested in Eligible
Investments by the Trust Administrator at the direction of the holders of the Class C-B-1X
Certificateholders. Any net investment earnings on such amounts shall be payable to the
Class C-B-1X Certificateholders. The Class C-B-1X Certificateholders shall evidence
ownership of the Class C-B-1 Basis Risk Reserve Fund for federal tax purposes and the
Class C-B-1X 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 C-B-1 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 Class C-B-1 Basis Risk Reserve Fund shall be distributed to the
Class C-B-1X Certificateholders.
(d) If the Trust Administrator shall deposit in the Class C-B-1 Basis Risk Reserve Fund
any amount not required to be deposited therein, it may at any time withdraw such amount
from the Class C-B-1 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 Class C-B-1 Certificates equals zero, any amounts on deposit in
the Class C-B-1 Basis Risk Reserve Fund not payable on such Certificates shall be
distributed to the Holders of the Class C-B-1X Certificates.
(f) If any Counterparty no longer has a long-term credit rating of at least A (or its
equivalent) from at least one of the Rating Agencies (a "Counterparty Rating Agency
Downgrade"), the applicable Counterparty, shall, no later than the 30th day following the
Counterparty Rating Agency Downgrade, at such Counterparty's expense: (i) obtain a
replacement counterparty that is a bank or other financial institution that has a rating
that is in one of the three highest long-term credit rating categories from at least one of
the Rating Agencies rating the Certificates; (ii) obtain a guaranty of or a contingent
agreement of another person with a long-term credit rating of at least A (or its
equivalent) from at least one of the Rating Agencies to honor such Counterparty's
obligations under the applicable Interest Rate Cap Agreement; (iii) cause such
Counterparty to post xxxx-to-market collateral with the Trustee in an amount sufficient to
restore the immediately prior ratings of the Offered Certificates; or (iv) establish any
other arrangement satisfactory to the Rating Agencies to restore the ratings of the Offered
Certificates.
SECTION 4.10. Class 7-A-3 Interest Rate Cap Account.
(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 Class 7-X Certificates, the
Class 7-A-3 Interest Rate Cap Account. The Class 7-A-3 Interest Rate Cap Account shall be
an Eligible Account, and funds on deposit therein shall be held separate and apart from,
and shall not be commingled with, any other moneys, including without limitation, other
moneys held by the Trust Administrator pursuant to this Agreement.
(b) On each Distribution Date on and after the Distribution Date in November 2004 and on
and prior to the Distribution Date in August 2007, the Trust Administrator shall deposit
any amounts paid under the Class 7-A-3 Interest Rate Cap Agreement into the Class 7-A-3
Interest Rate Cap Account. On each Distribution Date on and after the Distribution Date in
November 2004 and on and prior to the Distribution Date in August 2007, the Trust
Administrator shall distribute amounts on deposit in the Class 7-A-3 Interest Rate Cap
Account to pay to the Class 7-A-3 Certificates, any applicable Basis Risk Shortfalls, prior
to giving effect to any withdrawals from the Group 7 Basis Risk Reserve Fund or from
amounts available to be paid in respect of related Basis Risk Shortfalls as described in
Section 4.01(II)(d)(vi) on such Distribution Date
(c) On any Distribution Date, after payment of applicable Basis Risk Shortfall to the
Class 7-A-3 Certificates, the pro rata share, based on the amount remaining on deposit in
the Class 7-A-3 Interest Rate Cap Account as a percentage of the aggregate amount remaining
in the Class 7-A-3 Interest Rate Cap Account, Class 7-A-4 Interest Rate Cap Account and
Class 7-M-4 Interest Rate Cap Account, in each case after payments in respect of Basis Risk
Shortfalls on the related Class of Certificates, of remaining amounts on deposit in the
Class 7-A-3 Interest Rate Cap Account, shall be distributed in the following order of
priority:
(i) to the Principal Remittance Amount for Loan Group 7A and Loan Group 7B, up to the
amount of Realized Losses on the Mortgage Loans in the related Loan Group incurred
during the related Collection Period, any shortfall to be allocated pro rata based
upon the amount of such Realized Losses applicable to each such Loan Group; and
(ii) to the Class 7-M-1, Class 7-M-2, Class 7-M-3 and Class 7-M-4 Certificates, in that
order, any applicable Deferred Amounts, with interest therein at the applicable
Pass-Through Rate, prior to giving effect to amounts available to be paid in respect
of Deferred Amounts as described in Section 4.01(II)(d)(ii)-(v) on such Distribution
Date.
(d) Funds in the Class 7-A-3 Interest Rate Cap Account may be invested in Eligible
Investments by the Trust Administrator at the direction of the Depositor maturing on or
prior to the next succeeding Distribution Date. The Trust Administrator shall account for
the Class 7-A-3 Interest Rate Cap Account as an outside reserve fund within the meaning of
Treasury regulation 1.860G-2(h) and not an asset of any REMIC created pursuant to this
Agreement. The Trust Administrator shall treat amounts paid by the Class 7-A-3 Interest
Rate Cap Account as payments made from outside the REMIC's for all Federal tax purposes.
Any net investment earnings on such amounts shall be payable to the Depositor. The
Depositor will be the owner of the Class 7-A-3 Interest Rate Cap Account for federal tax
purposes and the Depositor 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 7-A-3 Interest Rate Cap Account may be invested by the Trust Administrator in the
Xxxxx Fargo Prime Investment Money Market Fund. The Trust Administrator shall have no
liability for losses on investments in Eligible Investments made pursuant to this
Section 4.10(c) (other than as obligor on any such investments). Upon termination of the
Trust Fund, any amounts remaining in the Class 7-A-3 Interest Rate Cap Account shall be
distributed to the Class 7-X Certificateholders.
(e) On the Distribution Date immediately after the Distribution Date on which the
aggregate Class Principal Balance of the Group 7 Certificates equals zero, any amounts on
deposit in the Class 7-A-3 Interest Rate Cap Agreement not payable on the Group 7
Certificates shall be distributed to the Class 7-X Certificateholders.
(f) Amounts paid under the Class 7-A-3 Interest Rate Cap Agreement not used on any
Distribution Date as described in Section 4.10(b) shall remain on deposit in the
Class 7-A-3 Interest Rate Cap Account and may be available on future Distribution Dates to
make the payments described in Section 4.10(b). However, at no time shall the amount on
deposit in the Class 7-A-3 Interest Rate Cap Account exceed the related Deposit Amount.
The "Deposit Amount" with respect to the Class 7-A-3 Interest Rate Cap Account will be
calculated on each Distribution Date, after giving effect to withdrawals from the
Class 7-A-3 Interest Rate Cap Account on such Distribution Date and distributions and
allocation of losses on the Certificates on such Distribution Date, and will equal the
product of (1) a fraction expressed as a percentage, the numerator of which is equal to the
Class Principal Balance of the Class 7-A-3 Certificates after giving effect to
distributions on such Distribution Date and the denominator of which is equal to the
aggregate Class Principal Balance of the Class 7-A-4, Class 7-A-5 and Class 7-M-4
Certificates after giving effect to distributions on such distribution date and (2) the
excess, if any, of the Targeted Overcollateralization Amount for such Distribution Date
over the Overcollateralization Amount for such Distribution Date. On each Distribution
Date, the Trust Administrator shall distribute amounts in the Class 7-A-3 Interest Rate Cap
Account in excess of the related Deposit Amount to the Class 7-X Certificateholders.
SECTION 4.11. Class 7-A-4 Interest Rate Cap Account.
(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 Class 7-X Certificates, the
Class 7-A-4 Interest Rate Cap Account. The Class 7-A-4 Interest Rate Cap Account shall be
an Eligible Account, and funds on deposit therein shall be held separate and apart from,
and shall not be commingled with, any other moneys, including without limitation, other
moneys held by the Trust Administrator pursuant to this Agreement.
(b) On each Distribution Date on and after the Distribution Date in November 2004 and on
and prior to the Distribution Date in August 2007, the Trust Administrator shall deposit
any amounts paid under the Class 7-A-4 Interest Rate Cap Agreement into the Class 7-A-4
Interest Rate Cap Account. On each Distribution Date on and after the Distribution Date in
November 2004 and on and prior to the Distribution Date in August 2007, the Trust
Administrator shall distribute amounts on deposit in the Class 7-A-4 Interest Rate Cap
Account to pay to the Class 7-A-4 Certificates, any applicable Basis Risk Shortfalls, prior
to giving effect to any withdrawals from the Group 7 Basis Risk Reserve Fund or from
amounts available to be paid in respect of related Basis Risk Shortfalls as described in
Section 4.01(II)(d)(vi) on such Distribution Date
(c) On any Distribution Date, after payment of applicable Basis Risk Shortfall to the
Class 7-A-4 Certificates, the pro rata share, based on the amount remaining on deposit in
the Class 7-A-4 Interest Rate Cap Account as a percentage of the aggregate amount remaining
in the Class 7-A-3 Interest Rate Cap Account, Class 7-A-4 Interest Rate Cap Account and
Class 7-M-4 Interest Rate Cap Account, in each case after payments in respect of Basis Risk
Shortfalls on the related Class of Certificates, of remaining amounts on deposit in the
Class 7-A-4 Interest Rate Cap Account, shall be distributed in the following order of
priority;
(i) to the Principal Remittance Amount for Loan Group 7A and Loan Group 7B, up to the
amount of Realized Losses on the Mortgage Loans in the related Loan Group incurred
during the related Collection Period, any shortfall to be allocated pro rata based
upon the amount of such Realized Losses applicable to each such Loan Group; and
(ii) to the Class 7-M-1, Class 7-M-2, Class 7-M-3 and Class 7-M-4 Certificates, in that
order, any applicable Deferred Amounts, with interest therein at the applicable
Pass-Through Rate, prior to giving effect to amounts available to be paid in respect
of Deferred Amounts as described in Section 4.01(II)(d)(ii)-(v) on such Distribution
Date.
(d) Funds in the Class 7-A-4 Interest Rate Cap Account may be invested in Eligible
Investments by the Trust Administrator at the direction of the Depositor maturing on or
prior to the next succeeding Distribution Date. The Trust Administrator shall account for
the Class 7-A-4 Interest Rate Cap Account as an outside reserve fund within the meaning of
Treasury regulation 1.860G-2(h) and not an asset of any REMIC created pursuant to this
Agreement. The Trust Administrator shall treat amounts paid by the Class 7-A-4 Interest
Rate Cap Account as payments made from outside the REMIC's for all Federal tax purposes.
Any net investment earnings on such amounts shall be payable to the Depositor. The
Depositor will be the owner of the Class 7-A-4 Interest Rate Cap Account for federal tax
purposes and the Depositor 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 7-A-4 Interest Rate Cap Account may be invested by the Trust Administrator in the
Xxxxx Fargo Prime Investment Money Market Fund. The Trust Administrator shall have no
liability for losses on investments in Eligible Investments made pursuant to this
Section 4.10(c) (other than as obligor on any such investments). Upon termination of the
Trust Fund, any amounts remaining in the Class 7-A-4 Interest Rate Cap Account shall be
distributed to the Class 7-X Certificateholders.
(e) On the Distribution Date immediately after the Distribution Date on which the
aggregate Class Principal Balance of the Group 7 Certificates equals zero, any amounts on
deposit in the Class 7-A-4 Interest Rate Cap Agreement not payable on the Group 7
Certificates shall be distributed to the Class 7-X Certificateholders.
(f) Amounts paid under the Class 7-A-4 Interest Rate Cap Agreement not used on any
Distribution Date as described in Section 4.10(b) shall remain on deposit in the
Class 7-A-4 Interest Rate Cap Account and may be available on future Distribution Dates to
make the payments described in Section 4.10(b). However, at no time shall the amount on
deposit in the Class 7-A-4 Interest Rate Cap Account exceed the related Deposit Amount.
The "Deposit Amount" with respect to the Class 7-A-4 Interest Rate Cap Account will be
calculated on each Distribution Date, after giving effect to withdrawals from the
Class 7-A-4 Interest Rate Cap Account on such Distribution Date and distributions and
allocation of losses on the Certificates on such Distribution Date, and will equal the
product of (1) a fraction expressed as a percentage, the numerator of which is equal to the
Class Principal Balance of the Class 7-A-4 Certificates after giving effect to
distributions on such Distribution Date and the denominator of which is equal to the
aggregate Class Principal Balance of the Class 7-A-4, Class 7-A-5 and Class 7-M-4
Certificates after giving effect to distributions on such distribution date and (2) the
excess, if any, of the Targeted Overcollateralization Amount for such Distribution Date
over the Overcollateralization Amount for such Distribution Date. On each Distribution
Date, the Trust Administrator shall distribute amounts in the Class 7-A-4 Interest Rate Cap
Account in excess of the related Deposit Amount to the Class 7-X Certificateholders.
SECTION 4.12. Class 7-M-4 Interest Rate Cap Account.
(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 Class 7-X Certificates, the
Class 7-M-4 Interest Rate Cap Account. The Class 7-M-4 Interest Rate Cap Account shall be
an Eligible Account, and funds on deposit therein shall be held separate and apart from,
and shall not be commingled with, any other moneys, including without limitation, other
moneys held by the Trust Administrator pursuant to this Agreement.
(b) On each Distribution Date on and after the Distribution Date in November 2004 and on
and prior to the Distribution Date in October 2009, the Trust Administrator shall deposit
any amounts paid under the Class 7-M-4 Interest Rate Cap Agreement into the Class 7-M-4
Interest Rate Cap Account. On each Distribution Date on and after the Distribution Date in
November 2004 and on and prior to the Distribution Date in October 2009, the Trust
Administrator shall distribute amounts on deposit in the Class 7-M-4 Interest Rate Cap
Account to pay to the Class 7-M-4 Certificates, any applicable Basis Risk Shortfalls, prior
to giving effect to any withdrawals from the Group 7 Basis Risk Reserve Fund or from
amounts available to be paid in respect of related Basis Risk Shortfalls as described in
Section 4.01(II)(d)(vi) on such Distribution Date
(c) On any Distribution Date, after payment of applicable Basis Risk Shortfall to the
Class 7-M-4 Certificates, the pro rata share, based on the amount remaining on deposit in
the Class 7-M-4 Interest Rate Cap Account as a percentage of the aggregate amount remaining
in the Class 7-A-3 Interest Rate Cap Account, Class 7-A-4 Interest Rate Cap Account and
Class 7-M-4 Interest Rate Cap Account, in each case after payments in respect of Basis Risk
Shortfalls on the related Class of Certificates, of remaining amounts on deposit in the
Class 7-M-4 Interest Rate Cap Account, shall be distributed in the following order of
priority;
(i) to the Principal Remittance Amount for Loan Group 7A and Loan Group 7B, up to the
amount of Realized Losses on the Mortgage Loans in the related Loan Group incurred
during the related Collection Period, any shortfall to be allocated pro rata based
upon the amount of such Realized Losses applicable to each such Loan Group; and
(ii) to the Class 7-M-1, Class 7-M-2, Class 7-M-3 and Class 7-M-4 Certificates, in that
order, any applicable Deferred Amounts, with interest therein at the applicable
Pass-Through Rate, prior to giving effect to amounts available to be paid in respect
of Deferred Amounts as described in Section 4.01(II)(d)(ii)-(v) on such Distribution
Date.
(d) Funds in the Class 7-M-4 Interest Rate Cap Account may be invested in Eligible
Investments by the Trust Administrator at the direction of the Depositor maturing on or
prior to the next succeeding Distribution Date. The Trust Administrator shall account for
the Class 7-M-4 Interest Rate Cap Account as an outside reserve fund within the meaning of
Treasury regulation 1.860G-2(h) and not an asset of any REMIC created pursuant to this
Agreement. The Trust Administrator shall treat amounts paid by the Class 7-M-4 Interest
Rate Cap Account as payments made from outside the REMIC's for all Federal tax purposes.
Any net investment earnings on such amounts shall be payable to the Depositor. The
Depositor will be the owner of the Class 7-M-4 Interest Rate Cap Account for federal tax
purposes and the Depositor 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 7-M-4 Interest Rate Cap Account may be invested by the Trust Administrator in the
Xxxxx Fargo Prime Investment Money Market Fund. The Trust Administrator shall have no
liability for losses on investments in Eligible Investments made pursuant to this
Section 4.10(c) (other than as obligor on any such investments). Upon termination of the
Trust Fund, any amounts remaining in the Class 7-M-4 Interest Rate Cap Account shall be
distributed to the Class 7-X Certificateholders.
(e) On the Distribution Date immediately after the Distribution Date on which the
aggregate Class Principal Balance of the Group 7 Certificates equals zero, any amounts on
deposit in the Class 7-M-4 Interest Rate Cap Agreement not payable on the Group 7
Certificates shall be distributed to the Class 7-X Certificateholders.
(f) Amounts paid under the Class 7-M-4 Interest Rate Cap Agreement not used on any
Distribution Date as described in Section 4.10(b) shall remain on deposit in the
Class 7-M-4 Interest Rate Cap Account and may be available on future Distribution Dates to
make the payments described in Section 4.10(b). However, at no time shall the amount on
deposit in the Class 7-M-4 Interest Rate Cap Account exceed the related Deposit Amount.
The "Deposit Amount" with respect to the Class 7-M-4 Interest Rate Cap Account will be
calculated on each Distribution Date, after giving effect to withdrawals from the
Class 7-M-4 Interest Rate Cap Account on such Distribution Date and distributions and
allocation of losses on the Certificates on such Distribution Date, and will equal the
product of (1) a fraction expressed as a percentage, the numerator of which is equal to the
Class Principal Balance of the Class 7-M-4 Certificates after giving effect to
distributions on such Distribution Date and the denominator of which is equal to the
aggregate Class Principal Balance of the Class 7-A-3, Class 7-A-4 and Class 7-M-4
Certificates after giving effect to distributions on such distribution date and (2) the
excess, if any, of the Targeted Overcollateralization Amount for such Distribution Date
over the Overcollateralization Amount for such Distribution Date. On each Distribution
Date, the Trust Administrator shall distribute amounts in the Class 7-M-4 Interest Rate Cap
Account in excess of the related Deposit Amount to the Class 7-X Certificateholders.
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, other than WMMSC, 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 any Designated Mortgage Loan, 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, F and G 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 Notional Amount Certificate, (B) 100% of the Class Principal
Balance of any Class of Certificates or (c) Certificates of any Class with aggregate
principal Denominations of not less than $1,000,000 or (y) by check mailed by first class
mail to such Certificateholder at the address of such holder appearing in the Certificate
Register.
The 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.
(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 L (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either (A) Exhibit M-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 M-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 M-1 or Exhibit M-2, 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 N, 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 N) 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 O, 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 O.
(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 O 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 SELLERS, THE MASTER
SERVICER, THE SERVICERS AND THE SPECIAL SERVICER
SECTION 7.01. Liabilities of the Sellers, 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, other than WMMSC, 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 Sellers, 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, any 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, any 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, any Seller, the Back-Up
Servicer or any Servicer, shall be the successor of the Depositor, such 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 (i) 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 (other than WMMSC) or the
Special Servicer shall be qualified to sell mortgage loans to, and to service mortgage
loans on behalf of, FNMA or FHLMC and (ii) the successor or surviving Person to WMMSC shall
have a net worth of at least $15,000,000, unless each of the Rating Agencies acknowledge,
at the expense of the successor or surviving person to WMMSC, that its rating of the
Certificates in effect immediately prior to such assignment will not be qualified or
reduced as a result of such successor or surviving Person to WMMSC not having a net worth
of at least $15,000,000.
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 Sellers, 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,
any 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, any 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, any 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,
any 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, any Seller and the Special Servicer and any director, officer,
employee or agent of the Depositor, the Master Servicer, the Back-Up Servicer, any
Servicer, any 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,
any Seller and the Special Servicer and any director, officer, employee or agent of the
Depositor, the Master Servicer, the Back-Up Servicer, any Servicer, any 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, any 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, any 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 (other than WMMSC) agrees, at the request
of any Seller (other than WMMSC), to act on behalf of such 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, such 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) (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) Notwithstanding anything to the contrary in this Agreement, servicing with respect to
all or a portion of the Eligible Servicing Transfer Loans may be transferred to WMMSC under
this Agreement upon written notice being delivered to the Trustee, the Master Servicer, the
Depositor, DLJMC and the Trust Administrator. Any transfer of servicing with respect to
such Eligible Servicing Transfer Loans shall not require the letter set forth in
Section 7.04(a)(i) above or any consent from the Certificateholders or any other party
hereto. Upon the transfer of servicing to WMMSC, such Mortgage Loans shall be serviced in
accordance with the procedures WMMSC employs in servicing Mortgage Loans serviced by it
under this Agreement.
(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 WMMSC and
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 WMMSC and 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 WMMSC and 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,
other than WMMSC, 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, (ii) if WMMSC has failed to make any
Advance, the Trust Administrator, and (iii) if any Servicer, other than WMMSC, 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, other than WMMSC terminate all of the
rights and obligations of such Servicer, other than WMMSC, 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 Trust Administrator (in the case of WMMSC), the Back-Up Servicer (in the
case of SPS), or the Master Servicer (in the case of a Servicer other than WMMSC), 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 Sellers,
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 Sellers 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, any 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 Sellers 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 Class 7-X and
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 Sellers, 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 Sellers 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 the 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
Sellers, 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 T (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 U (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 V-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 V-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 Sellers, 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) (i) with respect to Loan Group 1, Loan Group 2, Loan Group 3, Loan Group 4,
Loan Group 5, Loan Group 6 and Loan Group 6 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
(ii) with respect to Loan Group 7, the purchase by the Terminating Entity, at its
election, of all Mortgage Loans in such Loan Group and all property acquired in
respect of any remaining Mortgage Loan in such Loan Group, 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
Group, at the time of the purchase is less than or equal to 10% of the Aggregate
Group 7 Collateral Balance as of the Initial 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 applicable 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 (i) the right of
WMMSC to continue servicing and collecting its Servicing Fee for any WMMSC Serviced
Mortgage Loan that remains outstanding at the time of such Optional Termination, (ii) the
right of GreenPoint to continue servicing and collecting its Servicing Fee for any
GreenPoint Serviced Mortgage Loan that remains outstanding at the time of such Optional
Termination and (iii) 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 Sellers, 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 Sellers, 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 a
Designated Servicing Agreement to make any other provisions with respect to matters or
questions arising under such Designated Servicing Agreement or this Agreement that are not
materially inconsistent with the provisions of such Designated 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 a Designated 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 a Designated 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 a Designated Servicing
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 Sellers, 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 Sellers' 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 WMMSC, GreenPoint, 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 Sellers 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 Sellers' 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
Sellers and the Depositor under this Agreement and the Assignment and Assumption Agreement.
(b) The Sellers 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 2004-2 or such other address as may be hereafter furnished to the Depositor or the
Trustee in writing by Xxxxx Fargo; (viii) in the case of WMMSC, 1201 Third Avenue, WMT
1706, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Servicing Compliance, with a copy to
Washington Mutual Legal Department, 0000 Xxxxx Xxxxxx, XXX 0000, Xxxxxxx, Xxxxxxxxxx 00000,
Attention: WMMSC, or such other address as may be hereafter furnished in writing to the
Depositor and the Trustee by WMMSC; (viii) in the case of the Trust Administrator, the
Corporate Trust Office; (ix) in the case of GreenPoint, 000 Xxxx Xxxxxx Xxxxx, Xxxxxx, XX
00000, (x) in the case of the Special Servicer, 00000 XX Xxxxxxxx Xxx, Xxxxxxxxx XX 00000,
Attention: Xxxxx Xxxxxxxx and (xi) 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 Sellers
(other than WMMSC), the Master Servicer, the Servicers (other than WMMSC), 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, any Seller (other than WMMSC), the Master Servicer, any Servicer (other than
WMMSC), 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 (other than WMMSC), the Master Servicer, a Servicer
(other than WMMSC), 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.
WMMSC covenants and agrees that it shall not take any action to solicit the
refinancing of any Mortgage Loan following the date hereof or provide information to any
other entity to solicit the refinancing of any Mortgage Loan; provided that, the foregoing
shall not preclude WMMSC or any of its affiliates from (a) engaging in general
solicitations to its customer base, including by mass mailing or as part of monthly or
periodic statements mailed to its borrowers or to holders of deposit or other accounts,
(b) engaging in solicitations to the general public, including without limitation by mass
mailing, newspaper, radio, television or other media which are not specifically directed
toward the Mortgagors, (c) engaging in solicitations of optional insurance or other bank
products (not including mortgage loans), (d) refinancing the Mortgage Loan of any Mortgagor
who, without solicitation, contacts WMMSC to request the refinancing of the related
Mortgage Loan or (e) engaging in any action to solicit the refinancing of any Mortgage Loan
to the extent such action would be permitted under the Xxxxxx Mae Selling Guide or the
Xxxxxx Xxx Servicing Guide, provided that WMMSC agrees that it shall not, in engaging in
any such solicitation, specifically target any of the Mortgage Loans.
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 P 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 P 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 Q 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 Sellers, 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 a Seller
By: ___________________________________
Name:
Title:
WASHINGTON MUTUAL MORTGAGE SECURITIES
CORP.,
as a Seller and a Servicer
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:
GREENPOINT MORTGAGE FUNDING, INC.,
as Servicer
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 WASHINGTON )
: ss.:
COUNTY OF KING )
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
Washington Mutual 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, 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]
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
GreenPoint Mortgage Funding, 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]
