EXECUTION COPY
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
DLJ MORTGAGE CAPITAL, INC.,
Seller
WILSHIRE CREDIT CORPORATION,
Servicer
OPTION ONE MORTGAGE CORPORATION,
Servicer
and
JPMORGAN CHASE BANK,
Trustee
________________________________________________________________________________
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2004
________________________________________________________________________________
HOME EQUITY MORTGAGE TRUST SERIES 2004-3
HOME EQUITY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-3
Table of Contents
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions..........................................6
SECTION 1.02 Interest Calculations...............................47
SECTION 1.03 Allocation of Certain Interest Shortfalls...........47
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans........................48
SECTION 2.02 Acceptance by the Trustee...........................55
SECTION 2.03 Representations and Warranties of the Seller
and Servicers.......................................57
SECTION 2.04 Representations and Warranties of the Depositor
as to the Mortgage Loans............................59
SECTION 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions.......................................60
SECTION 2.06 Execution and Delivery of Certificates..............60
SECTION 2.07 REMIC Matters.......................................60
SECTION 2.08 Covenants of each Servicer..........................61
SECTION 2.09 Conveyance of REMIC Regular Interests and Acceptance
of REMIC 1, REMIC 2 and REMIC 3 by the Trustee;
Issuance of Certificates............................61
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicers to Service Mortgage Loans.................63
SECTION 3.02 Subservicing; Enforcement of the Obligations
of Subservicers.....................................65
SECTION 3.03 [Reserved]..........................................66
SECTION 3.04 Trustee to Act as Servicer..........................66
SECTION 3.05 Collection of Mortgage Loans; Collection Accounts;
Certificate Account; Pre-Funding Account;
Capitalized Interest Account........................67
i
SECTION 3.06 Establishment of and Deposits to Escrow Accounts;
Permitted Withdrawals from Escrow Accounts; Payments
of Taxes, Insurance and Other Charges...............71
SECTION 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans; Inspections...........72
SECTION 3.08 Permitted Withdrawals from the Collection Accounts
and Certificate Account.............................73
SECTION 3.09 Maintenance of Hazard Insurance and Mortgage
Impairment Insurance; Claims; Restoration of
Mortgaged Property..................................74
SECTION 3.10 Enforcement of Due-on-Sale Clauses; Assumption
Agreements..........................................76
SECTION 3.11 Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans................77
SECTION 3.12 Trustee to Cooperate; Release of Mortgage Files.....84
SECTION 3.13 Documents, Records and Funds in Possession of a
Servicer to be Held for the Trustee.................85
SECTION 3.14 Servicing Fee.......................................85
SECTION 3.15 Access to Certain Documentation.....................85
SECTION 3.16 Annual Statement as to Compliance...................86
SECTION 3.17 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.....................86
SECTION 3.18 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.................................87
SECTION 3.19 Duties of the Credit Risk Manager...................87
SECTION 3.20 Limitation Upon Liability of the Credit Risk
Manager.............................................88
SECTION 3.21 Advance Facility....................................88
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
SECTION 4.01 Advances by the Servicers...........................91
SECTION 4.02 Priorities of Distribution..........................91
SECTION 4.03 [Reserved]..........................................97
SECTION 4.04 [Reserved]..........................................97
SECTION 4.05 Allocation of Realized Losses.......................97
SECTION 4.06 Monthly Statements to Certificateholders............98
ii
SECTION 4.07 Distributions on the REMIC 1 Regular Interests and
REMIC 2 Regular Interests...........................99
SECTION 4.08 [Reserved].........................................101
SECTION 4.09 Prepayment Charges.................................101
SECTION 4.10 Servicers to Cooperate.............................102
SECTION 4.11 The Interest Rate Cap Reserve Fund and the
Interest Rate Cap Account..........................102
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates...................................105
SECTION 5.02 Certificate Register; Registration of Transfer
and Exchange of Certificates.......................106
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..110
SECTION 5.04 Persons Deemed Owners..............................111
SECTION 5.05 Access to List of Certificateholders' Names and
Addresses..........................................111
SECTION 5.06 Maintenance of Office or Agency....................111
ARTICLE VI
THE DEPOSITOR, THE SELLER AND THE SERVICERS
SECTION 6.01 Respective Liabilities of the Depositor, the
Sellers and the Servicers..........................112
SECTION 6.02 Merger or Consolidation of the Depositor, the
Seller or a Servicer...............................112
SECTION 6.03 Limitation on Liability of the Depositor, the
Seller, the Servicers and Others...................112
SECTION 6.04 Limitation on Resignation of a Servicer............113
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default..................................114
SECTION 7.02 Trustee to Act; Appointment of Successor...........116
SECTION 7.03 Notification to Certificateholders.................118
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee..............................119
iii
SECTION 8.02 Certain Matters Affecting the Trustee..............120
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage
Loans..............................................121
SECTION 8.04 Trustee May Own Certificates.......................121
SECTION 8.05 Trustee's Fees and Expenses........................121
SECTION 8.06 Eligibility Requirements for the Trustee and
Custodian..........................................122
SECTION 8.07 Resignation and Removal of the Trustee.............122
SECTION 8.08 Successor Trustee..................................123
SECTION 8.09 Merger or Consolidation of the Trustee.............123
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee......124
SECTION 8.11 Tax Matters........................................125
SECTION 8.12 Commission Reporting...............................127
ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation or Purchase of
the Mortgage Loans.................................130
SECTION 9.02 Final Distribution on the Certificates.............131
SECTION 9.03 Additional Termination Requirements................132
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment..........................................134
SECTION 10.02 Recordation of Agreement; Counterparts.............135
SECTION 10.03 Governing Law......................................135
SECTION 10.04 [Reserved].........................................136
SECTION 10.05 Notices............................................136
SECTION 10.06 Severability of Provisions.........................137
SECTION 10.07 Assignment.........................................137
SECTION 10.08 Limitation on Rights of Certificateholders.........137
SECTION 10.09 Certificates Nonassessable and Fully Paid..........138
EXHIBITS
EXHIBIT A. Form of Class A Certificates.................................A-1
EXHIBIT B. Form of Subordinate Certificate..............................B-1
iv
EXHIBIT C. Form of Residual Certificate.................................C-1
EXHIBIT D. Form of Notional Amount Certificate..........................D-1
EXHIBIT E. Form of Class P Certificate..................................E-1
EXHIBIT F. Form of Reverse Certificates.................................F-1
EXHIBIT G. Form of Initial Certification of Custodian...................G-1
EXHIBIT H. Form of Final Certification of Custodian.....................H-1
EXHIBIT I. Transfer Affidavit...........................................I-1
EXHIBIT J. Form of Transferor Certificate...............................J-1
EXHIBIT K. Form of Investment Letter (Non-Rule 144A)....................K-1
EXHIBIT L. Form of Rule 144A Letter.....................................L-1
EXHIBIT M. Request for Release..........................................M-1
EXHIBIT N. Form of Subsequent Transfer Agreement........................N-1
EXHIBIT O-1. Form of Collection Account Certification...................O-1-1
EXHIBIT O-2. Form of Collection Account Letter Agreement................O-2-1
EXHIBIT P-1. Form of Escrow Account Certification ......................P-1-1
EXHIBIT P-2. Form of Escrow Account Letter Agreement....................P-2-1
EXHIBIT Q. [Reserved] ..................................................Q-1
EXHIBIT R. Form of Custodial Agreement..................................R-1
EXHIBIT S. [Reserved]...................................................S-1
EXHIBIT T. Data Fields for Option One Serviced Loans Transferred
to Wilshire..................................................T-1
EXHIBIT U. Charged Off Loan Data Report.................................U-1
EXHIBIT V. Form of Monthly Statement to Certificateholders..............V-1
EXHIBIT W. Form of Depositor Certification..............................W-1
EXHIBIT X. Form of Trustee Certification................................X-1
EXHIBIT Y. Form of Servicer Certification...............................Y-1
EXHIBIT Z. Information to be Provided by Servicer to Trustee............Z-1
EXHIBIT AA Form Limited Power of Attorney..............................AA-1
SCHEDULE I Mortgage Loan Schedule.......................................I-1
SCHEDULE II Seller's Representations and Warranties.....................II-1
SCHEDULE IIIA Wilshire Representations and Warranties..................III-A-1
SCHEDULE IIIB Option One Representations and Warranties................III-B-1
SCHEDULE IV Representations and Warranties for the Mortgage Loans.......IV-1
SCHEDULE V Interest Rate Cap Notional Amounts, Ceiling Rates and
Maximum Payment Amounts......................................V-1
v
THIS POOLING AND SERVICING AGREEMENT, dated as of June 1,
2004, among CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., a Delaware
corporation, as depositor (the "Depositor"), DLJ MORTGAGE CAPITAL, INC., a
Delaware corporation, as Seller (the "Seller"), WILSHIRE CREDIT CORPORATION, a
Nevada corporation, as a servicer (a "Servicer" or "Wilshire"), OPTION ONE
MORTGAGE CORPORATION, a California corporation, as a servicer (a "Servicer" or
"Option One", and together with Wilshire, the "Servicers") and JPMORGAN CHASE
BANK, a New York banking corporation, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of sixteen
classes of certificates, designated as (i) the Class A-1 Certificates, (ii) the
Class A-2 Certificates, (iii) the Class A-3 Certificates (iv) the Class M-1
Certificates, (v) the Class M-2 Certificates, (vi) the Class M-3 Certificates,
(vii) the Class M-4 Certificates, (viii) the Class M-5 Certificates, (ix) the
Class B-1 Certificates, (x) the Class B-2A Certificates, (xi) the Class B-2F
Certificates, (xii) the Class P Certificates, (xiii) the Class X-1 Certificates,
(xiv) the Class X-2 Certificates, (xv) the Class A-R Certificates and (xvi) the
Class A-RL Certificates.
REMIC 1
-------
As provided herein, the Trustee will make an election to treat
the segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (exclusive of the Interest Rate Cap
Reserve Fund, the Interest Rate Cap Account, the Pre-Funding Account, the
Capitalized Interest Account and the Subsequent Mortgage Loan Interest) as a
real estate mortgage investment conduit (a "REMIC") for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC 1."
The Class A-RL Certificates will represent the sole class of "residual
interests" in REMIC 1 for purposes of the REMIC Provisions (as defined herein)
under federal income tax law. The following table irrevocably sets forth the
designation, the Uncertificated REMIC 1 Pass-Through Rate, the initial
Uncertificated Principal Balance, and solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC 1 Regular Interests. None of the REMIC 1 Regular Interests
will be certificated. The latest possible maturity date (determined solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) of each
of the REMIC 1 Regular Interests will be the Latest Possible Maturity Date as
defined herein.
Uncertificated REMIC 1 Initial Uncertificated
Designation Pass-Through Rate Balance
----------- ----------------------- ----------------------
LTI-1 Variable(1) $ 372,176,067.03
LTI-PF Variable(1) $ 27,823,932.97
LTI-P Variable(1) $ 100.00
LTI-R Variable(1) $ 100.00
-------------------
(1) Calculated as provided in the definition of Uncertificated REMIC 1
Pass-Through Rate.
REMIC 2
-------
As provided herein, an election will be made to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as REMIC 2. The Class R-2 Interest will represent the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions under
federal income tax law (the "Class R-2 Interest"). The following table
irrevocably sets forth the designation, Uncertificated REMIC 2 Pass-Through Rate
and initial Principal Balance for each of the "regular interests" in REMIC 2
(the "REMIC 2 Regular Interests"). None of the REMIC 2 Regular Interests will be
certificated. The latest possible maturity date (determined solely for purposes
of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) of each of the
REMIC 2 Regular Interests will be the Latest Possible Maturity Date as defined
herein.
Uncertificated REMIC Initial Uncertificated
Designation 2 Pass-Through Rate Principal Balance
----------- ----------------------- ----------------------
MTI-AA Variable(1) $392,000,000.00
MTI-A-1 Variable(1) $ 1,690,000.00
MTI-A-2 Variable(1) $ 1,290,000.00
MTI-A-3 Variable(1) $ 80,000.00
MTI-M-1 Variable(1) $ 360,000.00
MTI-M-2 Variable(1) $ 160,000.00
MTI-M-3 Variable(1) $ 120,000.00
MTI-M-4 Variable(1) $ 50,000.00
MTI-M-5 Variable(1) $ 110,000.00
2
MTI-B-1 Variable(1) $ 60,000.00
MTI-B-2A Variable(1) $ 45,000.00
MTI-B-2F 7.50% $ 35,000.00
MTI-ZZ Variable(1) $ 4,000,000.00
MTI-P Variable(1) $ 100.00
MTI-R Variable(1) $ 100.00
-------------------
(1) Calculated as provided in the definition of Uncertificated REMIC 2
Pass-Through Rate.
REMIC 3
-------
As provided herein, an election will be made to treat the segregated
pool of assets consisting of the REMIC 3 Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as REMIC 3. The Class R-3 Interest will represent the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions under
federal income tax law (the "Class R-3 Interest"). The following table
irrevocably sets forth the designation, Pass- Through Rate, aggregate Initial
Certificate Principal Balance, certain features, Maturity Date and initial
ratings for each Class of Certificates comprising the interests representing
"regular interests" in REMIC 3, and the Class A-R Certificates, Class A-RL
Certificates and Class X-2 Certificates which are not "regular interests" in
REMIC 3. The latest possible maturity date (determined solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) of each of the
Regular Certificates will be the Latest Possible Maturity Date as defined
herein.
Integral
Class Multiples in
Certificate Pass-Through Minimum Excess of
Balance Rate Denomination Minimum
--------------- ------------- ------------ ------------
Class A-1 $169,000,000.00 Adjustable(1) $25,000 $1
Class A-2 $129,000,000.00 Adjustable (1) $25,000 $1
Class A-3 $ 8,000,000.00 Adjustable (1) $25,000 $1
Class P $ 100.00 Variable(2) $ 100 N/A
Class A-R $ 100.00 Variable(2) $ 100 N/A
Class A-RL $ 100.00 Variable(2) $ 100 N/A
Class M-1 $ 36,000,000.00 Adjustable(1) $25,000 $1
Class M-2 $ 16,000,000.00 Adjustable(1) $25,000 $1
Class M-3 $ 12,000,000.00 Adjustable(1) $25,000 $1
Class M-4 $ 5,000,000.00 Adjustable(1) $25,000 $1
Class M-5 $ 11,000,000.00 Adjustable(1) $25,000 $1
3
Class B-1 $ 6,000,000.00 Adjustable(1) $25,000 $1
Class B-2A $ 4,500,000.00 Adjustable(1) $25,000 $1
Class B-2F $ 3,500,000.00 7.50%(5) $25,000 $1
Class X-1 $ 0 Variable(3)(4) $25,000 $1
Class X-2 $ 0 0.00% N/A N/A
--------------
(1) The Class A-1, Class A-2, Class A-3, Class M-1,Class M-2, Class M-3,
Class M-4, Class M- 5, Class B-1 and Class B-2A Certificates are
adjustable rate and will receive interest pursuant to formulas based on
LIBOR, subject to the Net Funds Cap.
(2) The initial pass-through rates on the Class P, Class A-R and Class A-RL
Certificates will be approximately 9.09% per annum which is equal to
the Net Funds Cap and will vary after the first Distribution Date.
(3) The Class X-1 Certificates will have an initial principal balance of
$0.00 and will accrue interest on its notional amount. For any
Distribution Date, the notional amount of the Class X-1 Certificates
will be equal to the Aggregate Collateral Balance minus the aggregate
Class Certificate Balance of the Class A-R, Class A-RL and Class P
Certificates immediately prior to such Distribution Date. The initial
notional amount of the Class X-1 Certificates is $400,000,000.
(4) The Class X-1 Certificates are variable rate and will accrue interest
on a notional amount.
(5) The Class B-2F Certificates have a fixed rate subject to the Net Funds
Cap. The fixed rate will increase by 0.50% per annum after the Optional
Termination Date.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates............ All Classes of Certificates other than the
Physical Certificates.
ERISA-Restricted Certificates...... Class A-R, Class A-RL, Class P and Class X
Certificates.
LIBOR Certificates................. Class A-1, Class X-0, Xxxxx X-0, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5,
Class B-1 and Class B-2A Certificates.
Notional Amount Certificates....... Class X-1 Certificates.
Class A Certificates............... Class A-1, Class A-2, Class A-3, Class A-R
and Class A-RL Certificates.
Class B Certificates............... Class B-1, Class B-2A and Class B-2F
Certificates
4
Class M Certificates............... Class M-1, Class M-2, Class M-3, Class M-4
and Class M-5 Certificates.
Offered Certificates............... All Classes of Certificates (other than the
Class P Certificates and Class X
Certificates).
Physical Certificates.............. Class A-R, Class A-RL, Class P and Class X
Certificates.
Private Certificates............... Class P Certificates and Class X
Certificates.
Rating Agencies.................... S&P and Xxxxx'x.
Regular Certificates............... All Classes of Certificates other than the
Class A-R, Class A-RL and Class X-2
Certificates.
Residual Certificates.............. Class A-R Certificates and Class A-RL
Certificates.
Senior Certificates................ Class A-1, Class A-2, Class A-3, Class P,
Class A-R and Class A-RL Certificates.
Subordinate Certificates........... Class M-1, Class M-2, Class M-3, Class M-4,
Class M- 5, Class B-1, Class B-2A, Class
B-2F and Class X-1 Certificates.
Minimum Denominations.............. Class A-1, Class X-0, Xxxxx X-0, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5,
Class B-1, Class B- 2A and Class B-2F
Certificates: $25,000 and multiples of $1
in excess thereof.
Class A-R, Class A-RL and Class P
Certificates: $100. The Class X-1
Certificates will be issued as a single
Certificate with a Certificate Principal
Balance of $0.00. The Class X-2
Certificates will be issued as a single
Certificate and will not have a principal
balance.
5
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located.
Advance: The payment required to be made by a Servicer with
respect to any Distribution Date pursuant to Section 4.01.
Aggregate Collateral Balance: As of any date of determination
will be equal to the Aggregate Loan Balance plus the amount, if any, then on
deposit in the Pre-Funding Account.
Aggregate Loan Balance: As of any Distribution Date will be
equal to the aggregate of the Stated Principal Balances of the Mortgage Loans
determined as of the last day of the related Collection Period.
Aggregate Subsequent Transfer Amount: With respect to any
Subsequent Transfer Date, the aggregate Stated Principal Balance 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(b); PROVIDED, HOWEVER, that such amount shall
not exceed the amount on deposit in the Pre-Funding Account.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans,
other than Servicing Fees and Prepayment Charges, including but not limited to,
late charges, fees received with respect to checks or bank drafts returned by
the related bank for non-sufficient funds, assumption fees, optional insurance
administrative fees and all other incidental fees and charges.
Applied Loss Amount: As to any Distribution Date, an amount
equal to the excess, if any of (i) the aggregate Class Principal Balance of the
Certificates after giving effect to all Realized Losses incurred with respect to
the Mortgage Loans during the Due Period for such Distribution Date and payments
of principal on such Distribution Date over (ii) the Aggregate Collateral
Balance for such Distribution Date.
Appraised Value: The amount set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
6
Assignment Agreement: An assignment agreement between DLJ
Mortgage Capital, Inc. as Seller and the Depositor, whereby the Mortgage Loans
are transferred and limited representations and warranties relating to the
Mortgage Loans are made.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form (except for the omission
of the name of the assignee if such Mortgage is endorsed in blank), sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect the transfer of the Mortgage to the Trustee for the benefit
of the Certificateholders.
Auction Purchaser: As defined in Section 9.01.
Auction Date: As defined in Section 9.01.
Available Funds: With respect to any Distribution Date the sum
of (i) all Scheduled Payments (net of the related Expense Fees) due on the Due
Date in the month in which such Distribution Date occurs and received prior to
the related Determination Date, together with any Advances in respect thereof
required pursuant to Section 4.01; (ii) all Insurance Proceeds, Liquidation
Proceeds and Net Recoveries received during the month preceding the month of
such Distribution Date; (iii) all Curtailments and Payoffs received during the
Prepayment Period applicable to such Distribution Date (excluding Prepayment
Charges); (iv) amounts received with respect to such Distribution Date as the
Substitution Adjustment Amount or Repurchase Price; (v) Compensating Interest
Payments for such Distribution Date; (vi) with respect to the Distribution Date
in September 2004, the amount remaining in the Pre-Funding Account at the end of
the Pre- Funding Period and (vii) amounts withdrawn from the Interest Rate Cap
Account and added to the Monthly Excess Cashflow for such Distribution Date; as
to clauses (i) through (iv) above, reduced by amounts in reimbursement for
Advances previously made and other amounts as to which the Servicers are
entitled to be reimbursed pursuant to Section 3.08.
Bankruptcy Code: The United States Bankruptcy Reform Act of
1978, as amended.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in the City of New York, New York,
or the city in which the Corporate Trust Office of the Trustee, or the states in
which any Servicer's servicing operations are located, or savings and loan
institutions in the States of Illinois, California, Texas, New Jersey or Florida
is 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 Trustee pursuant to Section
3.05(g) 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(g) hereof, any investment earnings on
the Capitalized Interest Account shall be treated as owned by the Depositor and
will be taxable to the Depositor.
7
Capitalized Interest Deposit: $153,831.
Capitalized Interest Requirement: With respect to the July
2004 Distribution Date, an amount equal to interest accruing during the related
Interest Accrual Period for the LIBOR Certificates at a per annum rate equal to
(x) the weighted average Pass-Through Rate of the Offered Certificates
multiplied by (y) the Pre-Funded Amount outstanding at the end of the related
Due Period. With respect to the August 2004 Distribution Date, an amount equal
to interest accruing during the related Interest Accrual Period for the LIBOR
Certificates at a per annum rate equal to (x) the weighted average Pass-Through
Rate of the Offered Certificates for such Distribution Date multiplied by (y)
the sum of (c) the Pre-Funded Amount at the end of the related Due Period and
(d) the aggregate Stated Principal Balance of the Subsequent Mortgage Loans that
do not have a first Due Date prior to August 1, 2004, transferred to the Trust
during the related Due Period. With respect to the September 2004 Distribution
Date, an amount equal to interest accruing during the related Interest Accrual
Period for the LIBOR Certificates at a per annum rate equal to (x) the weighted
average Pass-Through Rate of the Offered Certificates for such Distribution Date
multiplied by (y) the sum of (c) the Pre-Funded Amount at the end of the related
Due Period and (d) the aggregate Stated Principal Balance of the related
Subsequent Mortgage Loans that do not have a first Due Date prior to September
1, 2004, transferred to the Trust during the related Due Period.
Carryforward Interest: For any Class of Certificates and any
Distribution Date, the sum of (1) the amount, if any, by which (x) the sum of
(A) Current Interest for such Class for the immediately preceding Distribution
Date and (B) any unpaid Carryforward Interest from previous Distribution Dates
exceeds (y) the amount paid in respect of interest on such Class on such
immediately preceding Distribution Date, and (2) interest on such amount for the
related Interest Accrual Period at the applicable Pass-Through Rate.
Ceiling Rate: For any Distribution Date, the amount set forth
on Schedule V hereto.
Certificate: Any one of the Certificates executed by the
Trustee in substantially the forms attached hereto as exhibits.
Certificates: As specified in the Preliminary Statement.
Certificate Account: The separate Eligible Account created and
maintained with the Trustee, or any other bank or trust company acceptable to
the Rating Agencies which is incorporated under the laws of the United States or
any state thereof pursuant to Section 3.05, which account shall bear a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustee on behalf of the Certificateholders or any
other account serving a similar function acceptable to the Rating Agencies.
Funds in the Certificate Account may (i) be held uninvested without liability
for interest or compensation thereon or (ii) be invested at the direction of the
Trustee in Eligible Investments and reinvestment earnings thereon (net of
investment losses) shall be paid to the Trustee. Funds deposited in the
Certificate Account (exclusive of the Trustee Fee and other amounts permitted to
be withdrawn pursuant to Section 3.08) shall be held in trust for the
Certificateholders.
8
Certificate Balance: With respect to any Certificate at any
date, the maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof minus
the sum of (i) all distributions of principal previously made with respect
thereto and (ii) all Realized Losses allocated thereto and, in the case of any
Subordinate Certificates, all other reductions in Certificate Balance previously
allocated thereto pursuant to Section 4.05.
Certificate Margin: As to each Class of LIBOR Certificates,
the applicable amount set forth below:
CLASS CERTIFICATE MARGIN
------------ ----------------------------
(1) (2)
A-1 0.26% 0.52%
A-2 0.19% 0.38%
A-3 0.50% 1.00%
M-1 0.58% 0.87%
M-2 1.00% 1.50%
M-3 1.20% 1.70%
M-4 1.40% 1.90%
M-5 1.80% 2.30%
B-1 2.00% 2.50%
B-2A 4.00% 4.50%
-----------------
(1) On or prior to the Optional Termination Date.
(2) After the Optional Termination Date.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any affiliate of the Depositor shall
be deemed not to be Outstanding and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder. The Trustee is
entitled to rely conclusively on a certification of the Depositor or any
9
affiliate of the Depositor in determining which Certificates are registered in
the name of an affiliate of the Depositor.
Charged Off Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has not yet been liquidated, giving rise to a
Realized Loss, on the date on which the related Servicer determines, pursuant to
the procedures set forth in Section 3.11, that there will be (i) no Significant
Net Recoveries with respect to such Mortgage Loan or (ii) the potential Net
Recoveries are anticipated to be an amount, determined by the related Servicer
in its good faith judgment and in light of other mitigating circumstances, that
is insufficient to warrant proceeding through foreclosure or other liquidation
of the related Mortgaged Property.
Class: All Certificates bearing the same class designation as
set forth in the Preliminary Statement.
Class A-1 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
1.59000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class A-2 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
1.52000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class A-3 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
1.83000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class A-R Pass-Through Rate: With respect to the Distribution
Date in July 2004, August 2004 or September 2004, a per annum rate equal to the
Initial Mortgage Loan Net WAC Rate, initially equal to approximately 9.09% per
annum, and with respect to any Distribution Date thereafter, a per annum rate
equal to the Net Funds Cap.
Class A-RL Pass-Through Rate: With respect to the Distribution
Date in July 2004, August 2004 or September 2004, a per annum rate equal to the
Initial Mortgage Loan Net WAC Rate, initially equal to approximately 9.09% per
annum, and with respect to any Distribution Date thereafter, a per annum rate
equal to the Net Funds Cap.
Class B-1 Principal Payment Amount: For any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, will be the amount, if any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the Class A-1, Class
A-2, Class A-3, Class P, Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3,
Class M-4 and Class M-5 Certificates, in each case, after giving effect to
payments on such Distribution Date and (ii) the Class Principal Balance of the
Class B-1 Certificates immediately prior to such Distribution Date exceeds (y)
the lesser of (A) the product of (i) 84.50% and (ii) the
10
Aggregate Collateral Balance for such Distribution Date and (B) the amount, if
any, by which (i) the Aggregate Collateral Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Collateral Balance as of the Cut-off Date.
Class B-1 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
3.33000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class B-2 Principal Payment Amount: For any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, will be the amount, if any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the Class A-1, Class
A-2, Class A-3, Class P, Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 and Class B-1 Certificates, in each case, after giving
effect to payments on such Distribution Date and (ii) the aggregate Class
Principal Balance of the Class B-2A and Class B-2F Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i)
88.50% and (ii) the Aggregate Collateral Balance for such Distribution Date and
(B) the amount, if any, by which (i) the Aggregate Collateral Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral Balance as of
the Cut-off Date.
Class B-2A Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
5.33000% per annum. With respect to any Interest Accrual Period, will be a per
annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class B-2F Pass-Through Rate: With respect to the initial
Interest Accrual Period (a) on or prior to the Optional Termination Date, the
lesser of (i) 7.50% per annum and (ii) the Net Funds Cap, and (b) after the
Optional Termination Date, the lesser of (i) 7.50% per annum and (ii) the Net
Funds Cap.
Class M-1 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
1.91000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class M-1 Principal Payment Amount: For any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, will be the amount, if any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the Class A-1, Class
A-2, Class A-3, Class P, Class A-R and Class A-RL Certificates after giving
effect to payments on such Distribution Date and (ii) the Class Principal
Balance of the Class M-1 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 59.50% and (ii) the
Aggregate Collateral Balance for such Distribution Date and (B) the amount, if
any, by which (i) the Aggregate Collateral Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Collateral Balance as of the Cut-off Date.
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Class M-2 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
2.33000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class 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 A-1, Class
A-2, Class P, Class A-R, Class A-RL and Class M-1 Certificates, in each case,
after giving effect to payments on such Distribution Date and (ii) the Class
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 67.50% and
(ii) the Aggregate Collateral Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Collateral Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral Balance as of
the Cut-off Date.
Class M-3 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
2.53000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class 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 A-1, Class
A-2, Class P, Class A-R, Class A-RL, Class M-1 and Class M-2 Certificates, in
each case, after giving effect to payments on such Distribution Date and (ii)
the Class Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date exceeds (y) the lesser of (A) the product of (i) 73.50 %
and (ii) the Aggregate Collateral Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Collateral Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral Balance as of
the Cut-off Date.
Class M-4 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
2.73000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class 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 A-1, Class
A-2, Class P, Class A-R, Class A-RL, Class M-1, Class M-2 and Class M-3
Certificates, in each case, after giving effect to payments on such Distribution
Date and (ii) the Class Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 76.00% and (ii) the Aggregate Collateral Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate
Collateral Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Collateral Balance as of the Cut-off Date.
12
Class M-5 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of June 25, 2004,
3.13000% per annum. With respect to any Interest Accrual Period thereafter, will
be a per annum rate equal to the lesser of (i) the sum of LIBOR plus the related
Certificate Margin and (ii) the Net Funds Cap.
Class M-5 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 A-1, Class
A-2, Class P, Class A-R, Class A-RL, Class M-1, Class M-2, Class M-3 and Class
M-4 Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Class Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) 81.50% and (ii) the Aggregate Collateral Balance for
such Distribution Date and (B) the amount, if any, by which (i) the Aggregate
Collateral Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Collateral Balance as of the Cut-off Date.
Class X-1 Distributable Amount: With respect to any
Distribution Date, the amount of interest accrued during the related Interest
Accrual Period at the related Pass-Through Rate on the Class X-1 Notional Amount
for such Distribution Date.
Class X-1 Notional Amount: Immediately prior to any
Distribution Date, with respect to the Class X-1 Certificates, an amount equal
to the aggregate of the Uncertificated Principal Balances of the REMIC 2 Regular
Interests (other than REMIC 2 Regular Interests MTI-P and MTI- R).
Class P Pass-Through Rate: With respect to the Class P
Certificates and the Distribution Dates, for July 2004, August 2004 and
September 2004 a per annum rate equal to the Initial Mortgage Loan Net WAC Rate,
initially equal to approximately 9.09% per annum, and with respect to any
Distribution Date thereafter, a per annum rate equal to the Net Funds Cap. For
federal income tax purposes, however, with respect to any Distribution Date, the
Class P Certificates will be entitled to 100% of the interest accrued on REMIC 3
Regular Interest MTII-P.
Class Principal Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date plus, in the case of any Subordinate
Certificates, any increase in the Class Principal Balance of such Class pursuant
to Section 4.02(vii) due to the receipt of Net Recoveries.
Class R-2 Interest: The sole class of residual interests in
REMIC 2.
Class R-3 Interest: The sole class of residual interests in
REMIC 3.
Closing Date: June 29, 2004.
Code: The Internal Revenue Code of 1986, as the same may be
amended from time to time (or any successor statute thereto).
13
Collection Accounts: The accounts established and maintained
by a Servicer in accordance with Section 3.05.
Collection Period: With respect to any Distribution Date, the
period from the second day of the month immediately preceding such Distribution
Date to and including the first day of the month of such Distribution Date.
Combined Loan-to-Value Ratio: With respect to any Mortgage
Loan and as of any date of determination, the fraction (expressed as a
percentage) the numerator of which is the sum of (i) original principal balance
of the related Mortgage Loan at such date of determination and (ii) the unpaid
principal balance of the related First Mortgage Loan as of the date of
origination of that Mortgage Loan and the denominator of which is (a) with
respect to a refinanced Mortgage Loan, the Appraised Value of the related
Mortgaged Property at origination and (b) with respect to all other Mortgage
Loans, the lesser of (i) the Appraised Value of the related Mortgage Property at
origination and (ii) the purchase price of the related Mortgaged Property.
Compensating Interest Payment: For any Distribution Date, an
amount to be paid by the applicable Servicer for such Distribution Date, equal
to the lesser of (i) the aggregate amount of one half of the Servicing Fee
payable to the related Servicer on such Distribution Date and (ii) the aggregate
Prepayment Interest Shortfall for the Mortgage Loans being serviced by the
related Servicer relating to Principal Prepayments received during the related
Prepayment Period.
Corporate Trust Office: The designated office of the Trustee
in the State of New York at which at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 0 Xxx Xxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Institutional Trust
Services/Global Debt: Home Equity Mortgage Trust-2004-3.
Corresponding Certificate: Corresponding Certificate: With
respect to (i) REMIC 2 Regular Interest MTI-P, (ii) REMIC 2 Regular Interest
MTI-R, (iii) REMIC 2 Regular Interest MTI- A-1, (iv) REMIC 2 Regular Interest
MTI-A-2, (v) REMIC 2 Regular Interest MTI-A-3, (vi) REMIC 2 Regular Interest
MTI-M-1, (vii) REMIC 2 Regular Interest MTI-M-2, (viii) REMIC 2 Regular Interest
MTI-M-3, (ix) REMIC 2 Regular Interest MTI-M-4, (x) REMIC 2 Regular Interest
MTI-M- 5, (xi) REMIC 2 Regular Interest MTI-B-1, (xii) REMIC 2 Regular Interest
MTI-B-2A and (xiii) REMIC 3 Regular Interest MTI-B-2F, the (i) Class P
Certificates, (ii) Class A-R Certificates, (iii) Class A-1 Certificates, (iv)
Class A-2 Certificates, (v) Class A-3 Certificates, (vi) Class M-1 Certificates,
(vii) Class M-2 Certificates, (viii) Class M-3 Certificates, (ix) Class M-4
Certificates, (x) Class M-5 Certificates, (xi) Class B-1 Certificates, (xii)
Class B-2A Certificates and (xiii) Class B-2F Certificates, respectively.
Corresponding Uncertificated Interest: With respect to (i)
REMIC 1 Regular Interest LTI-P and (ii) REMIC 1 Regular Interest LTI-R, (i)
REMIC 2 Regular Interest MTI-P and (ii) REMIC 2 Regular Interest MTI-R,
respectively.
Credit Risk Manager: The Murrayhill Company, a Colorado
corporation.
14
Credit Risk Management Agreement: Either of the agreements
between Option One or Wilshire and the Credit Risk Manager dated as of June 29,
2004.
Credit Risk Manager Fee: As to each Mortgage Loan and any
Distribution Date, an amount equal to one month's interest at the Credit Risk
Manager Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the
Due Date in the month of such Distribution Date (prior to giving effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date).
Credit Risk Manager Fee Rate: 0.0175% per annum with respect
to the Wilshire Serviced Loans and 0.0000% per annum with respect to the Option
One Serviced Loans.
CSFB: Credit Suisse First Boston LLC, a Delaware limited
liability company, and its successors and assigns.
Cumulative Loss Event: For any Distribution Date, a Cumulative
Loss Event is occurring if Cumulative Net Realized Losses on the Mortgage Loans
equal or exceed the percentage of the Aggregate Collateral Balance as of the
Cut-off Date for that Distribution Date as specified below:
DISTRIBUTION DATE PERCENTAGE OF AGGREGATE COLLATERAL BALANCE
------------------------------ ------------------------------------------
July 2004 - June 2007......... N.A.
6.25% for the first month, plus an additional
July 2007 - June 2008......... 1/12th of 2.50% for each month thereafter
8.75% for the first month, plus an additional
July 2008 - June 2009......... 1/12th of 0.75% for each month thereafter
9.50% for the first month, plus an additional
July 2009 - June 2010......... 1/12th of 0.50% for each month thereafter
10.00% for the first month, plus an additional
July 2010 - June 2011......... 1/12th of 0.50% for each month thereafter
July 2011 and thereafter...... 10.50%
Cumulative Net Realized Losses: As to any date of
determination the aggregate amount of Realized Losses as reduced by any Net
Recoveries received on Charged Off Loans.
Current Interest: For any Class of Certificates and
Distribution Date, the amount of interest accruing at the applicable
Pass-Through Rate on the related Class Principal Balance, or Notional Amount, as
applicable, of such Class during the related Interest Accrual Period; provided,
that if and to the extent that on any Distribution Date the Interest Remittance
Amount is less than the aggregate distributions required pursuant to Section
4.02(b)(i)A-F without regard to this proviso, then the Current Interest on each
such Class will be reduced, on a pro rata basis in proportion to the amount of
Current Interest for each Class without regard to this proviso, by the lesser of
(i) the amount of the deficiency described above in this proviso and (ii) the
related Interest Shortfall for such Distribution Date.
15
Curtailment: Any payment of principal on a Mortgage Loan, made
by or on behalf of the related Mortgagor, other than a Scheduled Payment, a
prepaid Scheduled Payment or a Payoff, which is applied to reduce the
outstanding Stated Principal Balance of the Mortgage Loan.
Custodial Agreement: The agreement, among the Trustee, the
Custodian and the Depositor providing for the safekeeping of any documents or
instruments referred to in Section 2.01 on behalf of the Certificateholders,
attached hereto as Exhibit R.
Custodian: LaSalle Bank National Association, a national
banking association, or any successor custodian appointed pursuant to the terms
of the Custodial Agreement. Each Custodian so appointed shall act as agent on
behalf of the Trustee, and shall be compensated by the Depositor. The Trustee
shall remain at all times responsible under the terms of this Agreement,
notwithstanding the fact that certain duties have been assigned to a Custodian.
Cut-off Date: For any Mortgage Loan, other than a Subsequent
Mortgage Loan, June 1, 2004. For any Subsequent Mortgage Loan, the applicable
Subsequent Transfer 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.
Defective Mortgage Loan: Any Mortgage Loan which is required
to be repurchased pursuant to Section 2.02 or 2.03.
Deferred Amount: For any Class of Class M or Class B
Certificates and any Distribution Date, will equal the amount by which (x) the
aggregate of the Applied Loss Amounts previously applied in reduction of the
Class Principal Balance thereof exceeds (y) the sum of (i) the aggregate of
amounts previously paid in reimbursement thereof and (ii) the amount of the
increase in the related Class Principal Balance due to the receipt of Net
Recoveries as provided in Section 4.02(vii).
Definitive Certificates: Any Certificate issued in lieu of a
Book-Entry Certificate pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Rate: For any month, a fraction, expressed as a
percentage, the numerator of which is the aggregate outstanding principal
balance of all Mortgage Loans 60 or more days delinquent (including all
foreclosures and REO Properties) as of the close of business on the last day of
such month, and the denominator of which is the Aggregate 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.
16
Depositor: Credit Suisse First Boston Mortgage Securities
Corp., a Delaware corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: As to any Distribution Date and any
Wilshire Serviced Loan, the second Business Day immediately following the 15th
day of the month of such Distribution Date. As to any Distribution Date and any
Option One Serviced Loan, the 15th day of the month of such Distribution Date
or, if such 15th day is not a Business Day, the Business Day immediately
preceding such 15th day.
Distribution Date: The 25th day of each month or if such day
is not a Business Day, the first Business Day thereafter, commencing in July
2004.
DLJMC: DLJ Mortgage Capital, Inc., a Delaware corporation, and
its successors and assigns.
Due Date: With respect to any Distribution Date and any
Mortgage Loan, the day during the related Due Period on which the Scheduled
Payment is due.
Due Period: With respect to each Distribution Date, the period
commencing on the second day of the month preceding the month of the
Distribution Date and ending on the first day of the month of the Distribution
Date.
Eligible Account: Either (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company
acceptable to the Rating Agencies or (ii) an account or accounts the deposits in
which are insured by the FDIC to the limits established by such corporation,
provided that any such deposits not so insured shall be maintained in an account
at a depository institution or trust company whose commercial paper or other
short term debt obligations (or, in the case of a depository institution or
trust company which is the principal subsidiary of a holding company, the
commercial paper or other short term debt obligations of such holding company)
have been rated by Moody's and Fitch in its highest short-term rating category
and by S&P at least "A-1+", or (iii) a segregated trust account or accounts
(which shall be a "special deposit account") maintained with the Trustee or any
other federal or state chartered depository institution or trust company, acting
in its fiduciary capacity, in a manner acceptable to the Trustee and the Rating
Agencies. Eligible Accounts may bear interest.
17
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully
guaranteed by, the United States of America, or any agency or
instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of
America; or obligations fully guaranteed by, the United States of
America; Xxxxxxx Mac, Xxxxxx Xxx, the Federal Home Loan Banks or any
agency or instrumentality of the United States of America rated AA or
higher by the Rating Agencies;
(ii) federal funds, demand and time deposits in,
certificates of deposits of, or bankers' acceptances issued by, any
depository institution or trust company incorporated or organized under
the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding company) are
rated in one of two of the highest ratings by each of the Rating
Agencies, and the long-term debt obligations of such depository
institution or trust company (or, in the case of a depository
institution or trust company which is the principal subsidiary of a
holding company, the long-term debt obligations of such holding
company) are rated in one of two of the highest ratings, by each of the
Rating Agencies;
(iii) repurchase obligations with a term not to exceed 30
days with respect to any security described in clause (i) above and
entered into with a depository institution or trust company (acting as
a principal) rated "A" or higher by Moody's, "A-1" or higher by S&P and
"F-1" or higher by Fitch; provided, however, that collateral
transferred pursuant to such repurchase obligation must be of the type
described in clause (i) above and must (A) be valued daily at current
market price plus accrued interest, (B) pursuant to such valuation, be
equal, at all times, to 105% of the cash transferred by the Trustee in
exchange for such collateral, and (C) be delivered to the Trustee or,
if the Trustee is supplying the collateral, an agent for the Trustee,
in such a manner as to accomplish perfection of a security interest in
the collateral by possession of certificated securities;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any state thereof which has a long-term unsecured
debt rating in the highest available rating category of each of the
Rating Agencies at the time of such investment;
(v) commercial paper having an original maturity of
less than 365 days and issued by an institution having a short-term
unsecured debt rating in the highest available rating category of
Moody's and Fitch and rated "A-1+" by S&P at the time of such
investment;
18
(vi) a guaranteed investment contract approved by each
of the Rating Agencies and issued by an insurance company or other
corporation having a long-term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time of
such investment;
(vii) which may be 12b-1 funds as contemplated under the
rules promulgated by the Securities and Exchange Commission under the
Investment Company Act of 1940) having ratings in the highest available
rating category of Moody's and Fitch and or "AAAm" or "AAAm-G" by S&P
at the time of such investment (any such money market funds which
provide for demand withdrawals being conclusively deemed to satisfy any
maturity requirements for Eligible Investments set forth herein)
including money market funds of a Servicer or the Trustee and any such
funds that are managed by a Servicer or the Trustee or their respective
Affiliates or for a Servicer or the Trustee or any Affiliate of either
acts as advisor, as long as such money market funds satisfy the
criteria of this subparagraph (vii); and
(viii) such other investments the investment in which will
not, as evidenced by a letter from each of the Rating Agencies, result
in the downgrading or withdrawal of the Ratings of the Certificates.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Restricted Certificates: As specified in the Preliminary
Statement.
Escrow Account: The separate account or accounts created and
maintained by each Servicer pursuant to Section 3.06.
Escrow Mortgage Loan: Any Mortgage Loan for which the related
Servicer has established an Escrow Account for items constituting Escrow
Payments.
Escrow Payments: With respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, mortgage insurance premiums, fire and
hazard insurance premiums, and any other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to the Mortgage, applicable law or any
other related document.
Event of Default: As defined in Section 7.01.
Expense Fees: As to each Mortgage Loan, the sum of the related
Servicing Fee, the Credit Risk Manager Fee and the Trustee Fee.
19
Expense Fee Rate: As to each Mortgage Loan, the sum of the
related Servicing Fee Rate, the Credit Risk Manager Fee Rate and the Trustee Fee
Rate.
Fair Market Value: The fair market value of all of the
property of the Trust, as agreed upon between the Optional Termination Holder
and a majority of the Holders of the Class A-RL Certificates; provided, however,
that if the Optional Termination Holder and a majority of the Holders of the
Class A-RL Certificates do not agree upon the fair market value of all the
property
19
of the Trust, the Trustee shall solicit, or cause the solicitation of, good
faith bids for all of the property of the Trust until it has received three bids
from institutions that are regular purchasers and/or sellers in the secondary
market of residential whole mortgage loans similar to the Mortgage Loans, and
the Fair Market Value shall be equal to the highest of such three bids.
Xxxxxx Xxx: Xxxxxx Xxx, a federally chartered and privately
owned corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the
Xxxxxx Mae Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
First Mortgage Loan: A Mortgage Loan that is secured by a
first lien on the Mortgaged Property securing the related Mortgage Note.
Fitch: Fitch, Inc., or any successor thereto.
Foreclosure Restricted Loan: Any Wilshire Serviced Loan that
is 60 or more days delinquent as of the Closing Date, unless such Wilshire
Serviced Loan has become current for three consecutive Scheduled Payments after
the Closing Date.
Xxxxxxx Mac: Xxxxxxx Mac, a corporate instrumentality of the
United States created and existing under Title III of the Emergency Home Finance
Act of 1970, as amended, or any successor thereto.
Highest Priority: As of any date of determination, the Class
of Subordinate Certificates then outstanding with a Class Principal Balance
greater than zero, with the highest priority for payments pursuant to Section
4.02, in the following order of decreasing priority: Class M-1, Class M-2, Class
B-1, then the Class B-2A Certificates and Class B-2F Certificates, on a pro rata
basis.
Initial Interest Rate Cap Reserve Deposit: $2,312,576.
20
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trust
on the Closing Date pursuant to this Agreement as identified on the Mortgage
Loan Schedule delivered to the Trustee on the Closing Date.
Initial Mortgage Loan Net WAC Rate: A per annum rate equal to
the weighted average of the Net Mortgage Rates of the Initial Mortgage Loans.
Indirect Participant: A broker, dealer, bank or other
financial institution or other Person that clears through or maintains a
custodial relationship with a Depository Participant.
Insurance Proceeds: Proceeds paid under any Insurance Policy
covering a Mortgage Loan to the extent the proceeds are not (i) applied to the
restoration of the related Mortgaged Property, (ii) applied to the satisfaction
of any related First Mortgage Loan or (iii) released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account.
Interest Accrual Period: With respect to each Distribution
Date, (i) with respect to the Class A-R, Class A-RL, Class P, Class X-1 and
Class B-2F Certificates, the calendar month prior to the month of such
Distribution Date, (ii) with respect to the Class X-0, Xxxxx X-0, Class A-3,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1 and Class B-2A
Certificates, the one-month period commencing on the immediately preceding
Distribution Date (or the Closing Date, in the case of the first Distribution
Date) and ending on the day immediately preceding the related Distribution Date.
Interest Rate Cap Account: The separate Eligible Account
created and initially maintained by the Trustee pursuant to Section 4.11 in the
name of the Trustee for the benefit of the Certificateholders and designated
"JPMorgan Chase Bank in trust for registered holders of Credit Suisse First
Boston Mortgage Securities Corp., Home Equity Mortgage Pass-Through
Certificates, Series 2004-3." Funds in the Interest Rate Cap Account shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement. The Interest Rate Cap Account will not be an asset of any REMIC.
Ownership of the Interest Rate Cap Account is evidenced by the Class X-1
Certificates.
Interest Rate Cap Account Deposit: On each Distribution Date,
the amount withdrawn from the Interest Rate Cap Reserve Fund and deposited into
the Interest Rate Cap Account, which shall be equal to the product of (i) a
fraction, the numerator of which is the number of days elapsed since the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, June 25, 2004) through, but not including, the current
Distribution Date, and the denominator of which is 360, (ii) the Interest Rate
Cap Notional Amount for such Distribution Date and (iii) the lesser of (a) the
percentage equal to the excess, if any, of (1) LIBOR for such period over (2)
1.250% and (b) the percentage equal to the excess, if any, of (1) the Ceiling
Rate for such period over (2) 1.250%.
Interest Rate Cap Notional Amount: For any Distribution Date,
the amount set forth on Schedule V hereto.
21
Interest Rate Cap Reserve Fund: The separate Eligible Account
created and initially maintained by the Trustee pursuant to Section 4.11 in the
name of the Trustee for the benefit of the Certificateholders and designated
"JPMorgan Chase Bank in trust for registered holders of Credit Suisse First
Boston Mortgage Securities Corp., Home Equity Mortgage Pass-Through
Certificates, Series 2004-3." Funds in the Interest Rate Cap Reserve Fund shall
be held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement. The Interest Rate Cap Reserve Fund will not be an asset of
any REMIC. Ownership of the Interest Rate Cap Account is evidenced by the Class
X-1 Certificates.
Interest Remittance Amount: For any Distribution Date, an
amount equal to the sum of (1) all interest collected (other than Payaheads, if
applicable) or advanced in respect of Scheduled Payments on the Mortgage Loans
during the related Due Period, the interest portion of Payaheads previously
received and intended for application in the related Due Period and the interest
portion of all Payoffs and Curtailments received on the Mortgage Loans during
the related Prepayment Period, less (x) the Expense Fee with respect to such
Mortgage Loans and (y) unreimbursed Advances and other amounts due to a Servicer
or the Trustee with respect to such Mortgage Loans, to the extent allocable to
interest, (2) all Compensating Interest Payments paid by each Servicer with
respect to the Mortgage Loans it is servicing and such Distribution Date, (3)
the portion of any Substitution Adjustment Amount or Repurchase Price paid with
respect to such Mortgage Loans during the calendar month immediately preceding
the Distribution Date allocable to interest, (4) all Liquidation Proceeds, Net
Recoveries and any Insurance Proceeds and other recoveries (net of unreimbursed
Advances, Servicing Advances and expenses, to the extent allocable to interest,
and unpaid Servicing Fees) collected with respect to the Mortgage Loans during
the prior calendar month, to the extent allocable to interest and (5) any
amounts withdrawn from the Capitalized Interest Account to pay interest on the
Certificates with respect to such Distribution Date.
Interest Shortfall: For any Distribution Date, the aggregate
shortfall, if any, in collections of interest for the previous month (adjusted
to the related Net Mortgage Rate) on Mortgage Loans resulting from (a) Principal
Prepayments received during the related Prepayment Period to the extent not
covered by Compensating Interest and (b) Relief Act Reductions.
Last Scheduled Distribution Date: With respect to each Class
of Certificates, the Distribution Date in October 2034.
Latest Possible Maturity Date: Solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" of all interests created in REMIC 1, REMIC 2 and REMIC 3 shall be
October 25, 2034.
LIBOR: For any Interest Accrual Period other than the first
Interest Accrual Period, the rate for United States dollar deposits for one
month which appears on the Dow Xxxxx Telerate Screen Page 3750 as of 11:00 A.M.,
London, England time, on the second LIBOR Business Day prior to the first day of
such Interest Accrual Period. With respect to the first Interest Accrual Period,
the rate for United States dollar deposits for one month which appears on the
Dow Xxxxx Telerate Screen Page 3750 as of 11:00 A.M., London, England time, two
LIBOR Business Days prior to the Closing Date. If such rate does not appear on
such page (or such other page as may replace that page on that service, or if
such service is no longer offered, such other service for displaying LIBOR or
22
comparable rates as may be reasonably selected by the Trustee), the rate will be
the Reference Bank Rate. If no such quotations can be obtained and no Reference
Bank Rate is available, LIBOR will be the LIBOR applicable to the Interest
Accrual Period preceding the next applicable Distribution Date.
LIBOR Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of New York or
in the city of London, England are required or authorized by law to be closed.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which was
liquidated or for which payments under the related private mortgage insurance
policy, hazard insurance policy or any condemnation proceeds were received, in
the calendar month preceding the month of such Distribution Date and as to which
the related Servicer has determined (in accordance with this Agreement) that it
has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan, including the final disposition of the
related REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or similar
disposition or amounts received in connection with any condemnation or partial
release of a Mortgaged Property and any other proceeds received in connection
with an REO Property, in each case, which, for the avoidance of doubt, is
remaining after, or not otherwise required to be applied to, the satisfaction of
any related First Mortgage Loan, less the sum of related unreimbursed Expense
Fees, Servicing Advances, Advances and reasonable out-of-pocket expenses.
Majority in Interest: As to any Class of Regular Certificates
or the Class X-2 Certificates, the Holders of Certificates of such Class
evidencing, in the aggregate, at least 51% of the Percentage Interests evidenced
by all Certificates of such Class.
Marker Rate: With respect to the Class X-1 Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 2 Pass- Through Rates for REMIC 2 Regular
Interests XXX-X-0, XXX-X-0, XXX-X-0, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, XXX-X0,
XXX-X-0, XXX-X-0X, XXX-X-0X and MTI-ZZ, with the rates on the REMIC 2 Regular
Interests XXX-X-0, XXX-X-0, XXX-X-0, XXX-X-0, MTI-M-2, MTI-M-3, MTI-M- 4,
MTI-M-5, MTI-B-1 and MTI-B-2A, subject to a cap, for the purpose of this
calculation, equal to the lesser of (A) LIBOR plus the Certificate Margin for
the Corresponding Certificate and (B) the REMIC 2 Net WAC Rate, and with the
rate on the REMIC 2 Regular Interest MTI-B-2F subject to a cap, for purposes of
this calculation, equal to the lessor of (A) 7.50% and (B) the REMIC 2 Net WAC
Rate, and with the rate on the REMIC 2 Regular Interest MTI-ZZ subject to a cap,
for the purpose of this calculation, equal to zero.
Maximum Payment Amount: For any Distribution Date, the amount
set forth on Schedule V hereto.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
23
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS System.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
MOM Loan: With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the originator of
such Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Excess Cashflow: For any Distribution Date, an amount
equal to the sum of (1) the Monthly Excess Interest, (2) amounts withdrawn from
the Interest Rate Cap Account for such date, if any, to the extent applied as
described in Section 4.11(c) and (iii) the Overcollateralization Release Amount,
if any, for such date.
Monthly Excess Interest: As to any Distribution Date, the sum
of (A) the Interest Remittance Amount remaining after the application of
payments pursuant to clauses A. through I. of Section 4.02(b)(i) plus (B) the
Principal Payment Amount remaining after the application of payments pursuant to
clauses A. through I. of Section 4.02(b)(ii) or (iii).
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.06.
Moody's: Xxxxx'x Investors Service, Inc., or any successor
thereto. For purposes of Section 10.05(b) the address for notices to Moody's
shall be Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor, the Servicer and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument
creating a first or second lien on an estate in fee simple or leasehold interest
in real property securing a Mortgage Note.
Mortgage File: The Mortgage documents listed in Section
2.01(b) hereof pertaining to a particular Initial Mortgage Loan or Subsequent
Mortgage Loan and any additional documents delivered to the Trustee to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof as from time to time
are held as a part of the Trust Fund (including any REO Property), the mortgage
loans so held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
Mortgage Loan Purchase Price: The price, calculated as set
forth in Section 9.01, to be paid in connection with the purchase of the Trust
Collateral by the Auction Purchaser.
24
Mortgage Loan Schedule: The Mortgage Loan Schedule which will
list the Mortgage Loans (as from time to time amended by the Seller to reflect
the addition of Qualified Substitute Mortgage Loans and the purchase of Mortgage
Loans pursuant to Section 2.02 or 2.03) transferred to the Trustee as part of
the Trust Fund and from time to time subject to this Agreement, attached hereto
as Schedule I, setting forth the following information with respect to each
Mortgage Loan:
(i) ______ the Mortgage Loan identifying number;
(ii) _____ [reserved];
(iii) ____ the zip code of the Mortgaged Property;
(iv) _____ a code indicating the type of Mortgaged Property
and the occupancy status.
(v) ______ the original months to maturity or the remaining
months to maturity from the Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization
schedule;
(vi) _____ the Combined Loan-to-Value Ratio at origination;
(vii) ____ the Mortgage Rate as of the Cut-off Date;
(viii) the stated maturity date;
(ix) _____ the amount of the Scheduled Payment as of the
Cut-off Date;
(x) ______ the original principal amount of the Mortgage Loan;
(xi) _____ the principal balance of the Mortgage Loan as of
the close of business on the Cut-off Date, after deduction of payments
of principal due on or before the Cut-off Date whether or not
collected;
(xii) ____ a code indicating the purpose of the Mortgage Loan
(i.e., purchase, rate and term refinance, equity take-out refinance);
(xiii) the Net Mortgage Rate as of the Cut-off Date;
(xiv) ____ the Originator of the related Mortgage Loan;
(xv) _____ the Servicing Fee Rate;
(xvi) ____ the related sub-servicer;
(xvii) a code indicating whether a Mortgage Loan is subject to
a Prepayment Charge;
25
(xviii) the amount of the Prepayment Charge with respect to
each Mortgage Loan and a code identifying whether such Prepayment
Charge is related to a Curtailment or Payoff;
(xix) ____ whether such Mortgage Loan is a Balloon Loan;
(xx) _____ whether such Mortgage Loan is a Wilshire Serviced
Loan or an Option One Serviced Loan; and
(xxi) ____ a code indicating whether the Mortgage Loan is a
MERS Mortgage Loan and, if so, its corresponding MIN.
With respect to the Mortgage Loans in the aggregate, each, the
Mortgage Loan Schedule shall set forth the following information, as of the
Cut-off Date:
(i) ______ the number of Mortgage Loans; and
(ii) _____ the current aggregate principal balance of the
Mortgage Loans as of the close of business on the Cut-off Date, after
deduction of payments of principal due on or before the Cut-off Date
whether or not collected.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual fixed rate of interest borne by a
Mortgage Note.
Mortgaged Property: The underlying real property securing a
Mortgage Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Excess Spread: With respect to any Distribution Date and
Loan, a fraction, expressed as a percentage, the numerator of which is equal to
the excess of (x) the aggregate Stated Principal Balance for such Distribution
Date of the Mortgage Loans, multiplied by the weighted average Net Mortgage Rate
of such Mortgage Loans over (y) the Interest Remittance Amount for such
Distribution Date, and the denominator of which is an amount equal to the
aggregate Stated Principal Balance for such Distribution Date of the Mortgage
Loans, multiplied by the actual number of days elapsed in the related Interest
Accrual Period divided by 360.
Net Funds Cap: As to any Distribution Date, will be a per
annum rate equal to (a) a fraction, expressed as a percentage, (a) the numerator
of which is (1) the amount of interest accrued on the Mortgage Loans for such
date, minus (2) the Expense Fee, and (b) the denominator of which is the product
of (i) the Aggregate Collateral Balance immediately preceding such Distribution
Date (or as of the Cut-off Date in the case of the first Distribution Date),
multiplied by (ii)(x) in the case of the Class A-R, Class A-RL, Class P and
Class B-2F Certificates, 1/12 and (y) in the case of the Class A-1, Class X-0,
Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1 and
Class B-2A Certificates, the actual number of days in the related Interest
Accrual Period divided by 360. For federal income tax purposes, however, as to
any Distribution Date will be the
26
equivalent of the foregoing, expressed as a per annum rate equal to the weighted
average of the Uncertificated Pass-Through Rates on the REMIC 2 Regular
Interests (other than the REMIC 2 Regular Interest MTI-P and the REMIC 2 Regular
Interest MTI-R) multiplied by (x) in the case of the Class A-R, Class A-RL,
Class P and Class B-2F Certificates, 1/12 and (y) in the case of the Class A-1,
Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class B-1 and Class B-2A Certificates, the actual of days in the related
Interest Accrual Period divided by 360.
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the related Expense Fee Rate.
Net Prepayment Interest Shortfalls: As to any Distribution
Date, the amount, if any, by which the aggregate of Prepayment Interest
Shortfalls during the Prepayment Period exceeds the Compensating Interest
Payment for such Distribution Date.
Net Recovery: Any proceeds received by a Servicer on a
delinquent or Charged Off Loan (including any Liquidation Proceeds received on a
Charged Off Loan), net of any Servicing Fee, Ancillary Income and any other
related expenses.
Nonrecoverable Advance: Any portion of an Advance or Servicing
Advance previously made or proposed to be made by the applicable Servicer that,
in the good faith judgment of the applicable Servicer, will not be ultimately
recoverable by the Servicer from the related Mortgagor, related Liquidation
Proceeds or otherwise.
Notional Amount: The Class X-1 Notional Amount.
Notional Amount Certificates: As specified in the Preliminary
Statement.
Option One: Option One Mortgage Corporation, a California
corporation.
Option One Serviced Loans: The Mortgage Loans identified as
such on the Mortgage Loan Schedule.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by the Chairman of
the Board or the Vice Chairman of the Board or the President or a Vice President
or an Assistant Vice President or the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of a Servicer or the Depositor,
and delivered to the Depositor or the Trustee, as the case may be, as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or a Servicer, including in-house counsel, reasonably
acceptable to the Trustee; provided, however, that with respect to the
interpretation or application of the REMIC Provisions, such counsel must (i) in
fact be independent of the Depositor and any Servicer, (ii) not have any
material direct financial interest in the Depositor or the Servicer or in any
affiliate of either, and (iii) not be
27
connected with the Depositor or the Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Optional Termination: The termination of the trust created
hereunder in connection with the purchase of the Mortgage Loans pursuant to
Section 9.01.
Optional Termination Date: The first date on which the
Optional Termination may be exercised.
Optional Termination Holder: Wilshire, as Servicer, or any
successor servicer appointed by the Seller, so long as the Seller is the owner
of the servicing rights.
OTS: The Office of Thrift Supervision.
Outsourcer: As defined in Section 3.02.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except: (i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (ii) Certificates in exchange for
which or in lieu of which other Certificates have been executed and delivered by
the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Payoff prior to such Due Date and which did not become a Liquidated Mortgage
Loan or Charged Off Loan prior to such Due Date.
Overcollateralization Amount: For any Distribution Date, an
amount equal to the amount, if any, by which (x) the Aggregate Collateral
Balance for such Distribution Date exceeds (y) the aggregate Class Principal
Balance of the Certificates after giving effect to payments on such Distribution
Date.
Overcollateralization Release Amount: For any Distribution
Date, an amount equal to the lesser of (x) the Principal Remittance Amount for
such Distribution Date and (y) the amount, if any, by which (1) the
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the aggregate of the Principal Remittance
Amount for such date is applied on such date in reduction of the aggregate of
the Class Principal Balances of the Certificates (to an amount not less than
zero), exceeds (2) the Targeted Overcollateralization Amount for such date.
Overfunded Interest Amount: With respect to any Subsequent
Transfer Date and the Subsequent Mortgage Loans, the excess of (A) the amount on
deposit in the Capitalized Interest Account on such date over (B) the excess of
(i) the amount of interest accruing at (x) the assumed weighted average
Pass-Through Rates of the Senior Certificates multiplied by (y) the Pre-Funding
Amount outstanding at the end of the related Due Period for the total number of
days remaining through the end of the Interest Accrual Periods ending (a) July
26, 2004, (b) August 25, 2004 and (c) September 27, 2004 over (ii) one month of
investment earnings on the amount on deposit in the
28
Capitalized Interest Account on such date at an annual rate of 1.00%. The
assumed weighted average Pass-Through Rate of the Senior Certificates will be
calculated assuming LIBOR is 1.3300% for any Subsequent Transfer Date for the
Subsequent Mortgage Loans prior to the July 2004 Distribution Date, 1.7300% for
any Subsequent Transfer Date for the Subsequent Mortgage Loans prior to the
August 2004 Distribution Date and 2.1300% for any Subsequent Transfer Date for
the Subsequent Mortgage Loans prior to the September 2004 Distribution Date.
Ownership Interest: As to any Residual Certificate, any
ownership or security interest in such Certificate including any interest in
such Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial.
Par Value: As defined in Section 9.01 hereof; provided that
the "Par Value" for any Auction Date shall also include the auction expenses of
the Trustee (which auction expenses shall not exceed $25,000).
Pass-Through Rate: With respect to the Class A-1, Class A-2,
Class A-3, Class A-R, Class A-RL, Class P, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class B-1, Class B- 2A and Class B-2F Certificates, the
Class A-1 Pass-Through Rate, Class A-2 Pass-Through Rate, Class A-3 Pass-Through
Rate, Class A-R Pass-Through Rate, Class A-RL Pass-Through Rate, Class P
Pass-Through Rate, Class M-1 Pass-Through Rate, Class M-2 Pass-Through Rate,
Class M-3 Pass- Through Rate, Class M-4 Pass-Through Rate, Class M-5
Pass-Through Rate, Class B-1 Pass- Through Rate, Class B-2A Pass-Through Rate
and Class B-2F Pass-Through Rate.
With respect to the Class X-1 Certificates and any Distribution Date, a per
annum rate equal to the percentage equivalent of a fraction, the numerator of
which is the sum of the amounts calculated pursuant to clauses (A) through (M)
below, and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest MTI-AA, REMIC 2 Regular Interest
MTI-A-1, REMIC 2 Regular Interest MTI-A-2, REMIC 2 Regular Interest MTI-A-3,
REMIC 2 Regular Interest MTI-M-1, REMIC 2 Regular Interest MTI-M-2, REMIC 2
Regular Interest MTI-M- 1, REMIC 2 Regular Interest MTI-M-2, REMIC 2 Regular
Interest MTI-M-3, REMIC 2 Regular Interest MTI-M-4, REMIC 2 Regular Interest
MTI-M-5, REMIC 2 Regular Interest MTI-B-1, REMIC 2 Regular Interest MTI-B-2A,
REMIC 2 Regular Interest MTI-B-2F and REMIC 2 Regular Interest MTI-ZZ. For
purposes of calculating the Pass-Through Rate for the Class X-1 Certificates,
the numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-AA minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-AA;
(B) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-A-1 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-A-1;
(C) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-A-2 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-A-2;
29
(D) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-A-3 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-A-3;
(E) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-M-1 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-1;
(F) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-M-2 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-2;
(G) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-M-3 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-3;
(H) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-M-4 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-4;
(I) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-M-5 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-M-5;
(J) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-B-1 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-B-1;
(K) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-B-2A minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-B-2A;
(L) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-B-2F minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-B-2F;
(M) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest MTI-ZZ minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
MTI-ZZ.
Payahead: Any Scheduled Payment intended by the related
Mortgagor to be applied in a Due Period subsequent to the Due Period in which
such payment was received.
30
Payoff: Any payment of principal on a Mortgage Loan equal to
the entire outstanding Stated Principal Balance of such Mortgage Loan, if
received in advance of the last scheduled Due Date for such Mortgage Loan and
accompanied by an amount of interest equal to accrued unpaid interest on the
Mortgage Loan to the date of such payment-in-full.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being set forth on the face thereof or equal to
the percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Transferee: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) a
Person that is not a United States Person, and (vi) a Person designated as a
non-Permitted Transferee by the Depositor based upon an Opinion of Counsel that
the Transfer of an Ownership Interest in a Residual Certificate to such Person
may cause any REMIC created hereunder to fail to qualify as a REMIC at any time
that the Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of Xxxxxxx Mac, a majority of its board of directors is not
selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee with respect to the Mortgage Loans pursuant to Section
3.05(f) in the name of the Trustee for the benefit of the Certificateholders and
designated "JPMorgan Chase Bank, in trust for registered holders of Home Equity
Mortgage Pass-Through Certificates, Series 2004-3." Funds in the Pre-Funding
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
Eligible Investments made with funds in the Pre- Funding Account shall be for
the account of the Depositor.
Pre-Funding Amount: The amount deposited in the Pre-Funding
Account on the Closing Date, which shall equal $27,823,932.97.
31
Pre-Funding Period: the period from the Closing Date until the
earliest of (i) the date on which the amount on deposit in the Pre-Funding
Account is reduced to zero, (ii) the date on which an Event of Default occurs or
(iii) September 24, 2004.
Prepayment Charge: With respect to any Mortgage Loan, any
charge required to be paid if the Mortgagor prepays such Mortgage Loan as
provided in the related Mortgage Note or Mortgage.
Prepayment Interest Shortfall: As to any Mortgage Loan,
Distribution Date and Principal Prepayment, other than Principal Prepayments in
full that occur during the portion of the Prepayment Period that is in the same
calendar month as the Distribution Date, the difference between (i) one full
month's interest at the applicable Mortgage Rate (giving effect to any
applicable Relief Act Reduction), as reduced by the Expense Fee Rate, on the
Stated Principal Balance of such Mortgage Loan immediately prior to such
Principal Payment and (ii) the amount of interest actually received that accrued
during the month immediately preceding such Distribution Date or, with respect
to any Mortgage Loan with a Due Date other than the first of the month, the
amount of interest actually received that accrued during the one-month period
immediately preceding the Due Date following the Principal Prepayment, with
respect to such Mortgage Loan in connection with such Principal Prepayment.
Prepayment Period: With respect to each Distribution Date
(other than the July 2004 Distribution Date), each Mortgage Loan, other than the
Option One Serviced Loans, and each Payoff, the related "Prepayment Period" will
be the 15th of the month preceding the month in which the related Distribution
Date occurs through the 14th of the month in which the related Distribution Date
occurs. With respect to the July 2004 Distribution Date and each Payoff, the
related "Prepayment Period" will be June 1, 2004 through July 14, 2004. With
respect to each Distribution Date, each Mortgage Loan other than the Option One
Serviced Loans, and each Curtailment, 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, each Option One Serviced Loan
and each Principal Prepayment, the related "Prepayment Period" will be the 16th
of the month preceding the month in which the related Distribution Date occurs
through the 15th of the month in which the related Distribution Date occurs.
Principal Payment Amount: For any Distribution Date, an amount
equal to the Principal Remittance Amount plus any Excess Cashflow Loss Payment
for such date, minus the Overcollateralization Release Amount, if any, for such
date.
Principal Remittance Amount: For any Distribution Date, an
amount equal to the sum of (1) all principal collected (other than Payaheads) or
advanced in respect of Scheduled Payments on the Mortgage Loans during the
related Due Period (less unreimbursed Advances, Servicing Advances and other
amounts due to each Servicer and the Trustee with respect to the Mortgage Loans,
to the extent allocable to principal) and the principal portion of Payaheads
previously received and intended for application in the related Due Period, (2)
all Principal Prepayments on the Mortgage Loans received during the related
Prepayment Period, (3) the outstanding principal balance of each Mortgage Loan
that was repurchased by the Seller, the Optional Termination Holder or the
Majority in Interest Class X-2 Certificateholder during the calendar month
immediately preceding such
32
Distribution Date, (4) the portion of any Substitution Adjustment Amount paid
with respect to any Deleted Mortgage Loans during the calendar month immediately
preceding such Distribution Date allocable to principal, (5) all Liquidation
Proceeds, and any Insurance Proceeds and other recoveries (net of unreimbursed
Advances, Servicing Advances and other expenses, to the extent allocable to
principal) and Net Recoveries collected with respect to the Mortgage Loans
during the prior calendar month, to the extent allocable to principal and (6)
with respect to the Distribution Date in September 2004, the amount remaining in
the Pre-Funding Account at the end of the Pre-Funding Period.
Principal Prepayment: Any payment of principal on a Mortgage
Loan which constitutes a Payoff or Curtailment.
Prospectus Supplement: The Prospectus Supplement dated June
25, 2004 relating to the Offered Certificates.
PUD: Planned Unit Development.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
Xxxxxx Xxx- or Xxxxxxx Mac-approved mortgage insurer or having a claims paying
ability rating of at least "AA" or equivalent rating by at least two nationally
recognized statistical rating organizations. Any replacement insurer with
respect to a Mortgage Loan must have at least as high a claims paying ability
rating as the insurer it replaces had on the Closing Date.
Qualified Substitute Mortgage Loan: A Mortgage Loan
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, as confirmed in a Request for Release, substantially in the
form of Exhibit M (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution (or,
in the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of, and not more
than 10% less than the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) be accruing interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Combined
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (iv) have
a remaining term to maturity no greater than (and not more than one year less
than that of) the Deleted Mortgage Loan; and (v) comply with each representation
and warranty set forth in Section 2.03(f).
Rating Agency: S&P and Xxxxx'x. If either such organization or
a successor is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating organization, or other comparable Person, as is
designated by the Depositor, notice of which designation shall be given to the
Trustee and the Servicers. References herein to a given rating or rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers.
33
Ratings: As of any date of determination, the ratings, if any,
of the Certificates as assigned by the Rating Agencies.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an amount (not less than zero or greater than the Stated Principal Balance of
the Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Rate from the related Due
Date as to which interest was last paid or advanced (and not reimbursed) to the
related Certificateholders up to the related Due Date in the month in which
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan from time to time, minus (iii) the
Liquidation Proceeds, if any, received during the month in which such
liquidation occurred, to the extent applied as recoveries of interest at the Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan. Any Charged Off
Loan will give rise to a Realized Loss (calculated as if clause (iii) of the
previous sentence is equal to zero) at the time it is charged off, as described
in Section 3.11(a)(iii) hereof.
If the Servicer receives Net Recoveries with respect to any Charged Off
Loan, the amount of the Realized Loss with respect to that Charged Off Loan will
be reduced to the extent such recoveries are applied to principal distributions
on any Distribution Date.
Record Date: With respect to the Certificates (other than the
Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class B-1 and Class B-2A Certificates which are Book-Entry
Certificates) and any Distribution Date, the close of business on the last
Business Day of the month preceding the month in which such applicable
Distribution Date occurs. With respect to the Class X-0, Xxxxx X-0, Class A-3,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1 and Class B-2A
Certificates which are Book-Entry Certificates and any Distribution Date, the
close of business on the Business Day preceding such Distribution Date.
Reference Bank Rate: With respect to any Interest Accrual
Period, as follows: the arithmetic mean (rounded upwards, if necessary, to the
nearest one sixteenth of a percent) of the offered rates for United States
dollar deposits for one month which are offered by the Reference Banks as of
11:00 A.M., London, England time, on the second LIBOR Business Day prior to the
first day of such Interest Accrual Period to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the aggregate
Class Principal Balance of the LIBOR Certificates; provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean of the rates quoted by one
or more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York time, on such date for loans in U.S. Dollars to leading European Banks
for a period of one month in amounts approximately equal to the aggregate Class
Principal Balance of the LIBOR Certificates. If no such quotations can be
obtained, the Reference Bank Rate shall be LIBOR applicable to the preceding
Distribution Date; provided however, that if, under the priorities indicated
above, LIBOR for a Distribution Date would be based on LIBOR for the previous
Payment Date for the third consecutive Distribution Date, the Trustee shall
select an alternative comparable index over which the Trustee has no control,
used for determining one-month Eurodollar lending rates that is calculated and
published or otherwise made available by an independent party.
34
Reference Banks: Barclays Bank PLC, National Westminster Bank
and Abbey National PLC.
Regular Certificates: As specified in the Preliminary
Statement.
Released Loan: Any Charged Off Loan that is released by
Wilshire to the Class X-2 Certificateholders pursuant to Section 3.11(a),
generally on the date that is six months after the date on which Wilshire begins
using Wilshire Special Servicing on such Charged Off Loans. Any Released Loan
will no longer be an asset of any REMIC or the Trust Fund.
Relief Act: The Servicemembers Civil Relief Act or any similar
state law or regulation.
Relief Act Reductions: With respect to any Distribution Date
and any Mortgage Loan as to which there has been a reduction in the amount of
interest or principal collectible thereon (attributable to any previous month)
as a result of the application of the Relief Act or similar state law or
regulation, the amount, if any, by which (i) interest and/or principal
collectible on such Mortgage Loan for the most recently ended calendar month is
less than (ii) interest and/or principal accrued thereon for such month pursuant
to the Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC 1: The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement (other than
any Prepayment Premiums), together with the Mortgage Files relating thereto, and
together with all collections thereon and proceeds thereof, (ii) any REO
Property, together with all collections thereon and proceeds thereof, (iii) the
Trustee's rights with respect to the Mortgage Loans under all insurance
policies, including the Primary Insurance Policy, required to be maintained
pursuant to this Agreement and any proceeds thereof and, (iv) the Collection
Account and the Certificate Account (subject to the last sentence of this
definition) and such assets that are deposited therein from time to time and any
investments thereof. Notwithstanding the foregoing, however, a REMIC election
will not be made with respect to the Interest Rate Cap Reserve Fund, the
Interest Rate Cap Account, the Pre-Funding Account or the Capitalized Interest
Account.
REMIC 1 Regular Interest LTI-1: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTI-1
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 1 Regular Interest LTI-PF: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTI-PF
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject
35
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC 1 Regular Interest LTI-P: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTI-P
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 1 Regular Interest LTI-R: One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LTI-R
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 1 Regular Interests: REMIC 1 Regular Interest LTI-1,
LTI-PF, LTI-P and
LTI-R.
REMIC 2: The segregated pool of assets consisting of all of
the REMIC 1 Regular Interests conveyed in the trust to the Trustee, for the
benefit of the Holders of the REMIC 2 Regular Interests and the Class A-R
Certificates (in respect of the Class R-2 Interest), pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
REMIC 2 Interest Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-AA minus the Marker Rate, divided by (b) 12.
REMIC 2 Net WAC Rate: With respect to any Distribution Date, a
per annum rate equal to the weighted average of the Uncertificated REMIC 1
Pass-Through Rates on the REMIC 1 Regular Interest LTI-1 and REMIC 1 Regular
Interest LTI-1PF, weighted on the basis of such respective Uncertificated
Principal Balances thereof immediately preceding such Distribution Date.
REMIC 2 Overcollateralization Amount: With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
the REMIC 2 Regular Interests minus (ii) the aggregate Uncertificated Principal
Balances of REMIC 2 Regular Interests XXX-X-0, XXX-X- 0, XXX-X-0, MTI-M-1,
MTI-M-2, MTI-M-3, MTI-M-4, XXX-X-0, XXX-X-0, XXX-X-0X, XXX-X-0X, MTI-R and
MTI-P, in each case as of such date of determination.
REMIC 2 Principal Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate Uncertificated Principal Balance of REMIC 2 Regular Interests XXX-X-0,
00
XXX-X-0, XXX-X-0, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, MTI-B-1, MTI-B-2A
and MTI-B-2F and the denominator of which is the aggregate Uncertificated
Principal Balance of REMIC 2 Regular Interests XXX-X-0, XXX-X-0, XXX-X-0,
MTI-M-1, MTI-M-2, MTI-M-3, MT-M-4, MTI-M- 0, XXX-X-0, XXX-X-0X, XXX-X-0X and
MTI-ZZ.
REMIC 2 Regular Interest MTI-AA: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-AA
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-A-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-A-1
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-A-2: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-A-2
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-A-3: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-A-3
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-M-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-M-1
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-M-2: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-M-2
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
37
REMIC 2 Regular Interest MTI-M-3: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-M-3
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-M-4: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-M-4
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-M-5: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-M-5
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-B-1: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-B-1
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-B-2A: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-B-2A
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MTI-B-2F: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-B-2F
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
REMIC 2 Regular Interest MTI-P: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-P
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject
38
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC 2 Regular Interest MTI-R: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-R
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-ZZ: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-ZZ
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest MTI-ZZ Maximum Interest Deferral
Amount: With respect to any Distribution Date, the excess of (i) REMIC 2
Uncertificated Accrued Interest calculated with the Uncertificated Pass-Through
Rate for REMIC 2 Regular Interest MTI-ZZ and an Uncertificated Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance of REMIC 2
Regular Interest MTI-ZZ over (y) the REMIC 2 Overcollateralization Amount, in
each case for such Distribution Date, over (ii) the sum of REMIC 2
Uncertificated Accrued Interest on REMIC 2 Regular Interests XXX-X-0, XXX-X-0,
XXX-X-0, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M- 5, MTI-B-1, MTI-B-2A and
MTI-B-2F, with the rates on REMIC 2 Regular Interests XXX-X-0, XXX- X-0,
XXX-X-0, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, MTI-B-1 and MTI-B-2A
subject to a cap equal to the lesser of (A) LIBOR plus the Certificate Margin
relating to the Corresponding Uncertificated Interest and (B) the REMIC 2 Net
WAC Rate for the purpose of this calculation for such Distribution Date and with
the rate on REMIC MTI-B-2F subject to a cap equal to the lesser of (A) 7.50% and
(B) the REMIC 2 Net WAC Rate and with the rate on REMIC 2 Regular Interest MT-ZZ
subject to a cap of zero for the purpose of this calculation.
REMIC 2 Regular Interests: REMIC 2 Regular Interest MTI-AA,
REMIC 2 Regular Interest MTI-A-1, REMIC 2 Regular Interest MTI-A-2, REMIC 2
Regular Interest MTI-A-3, REMIC 2 Regular Interest MTI-M-1, REMIC 2 Regular
Interest MTI-M-2, MTI-M-3, REMIC 2 Regular Interest MTI-M-4, REMIC 2 Regular
Interest MTI-M-5, REMIC 2 Regular Interest MTI-B-1, REMIC Regular Interest
MTI-B-2A, REMIC Regular Interest MTI-B-2F, REMIC 2 Regular Interest LT-ZZ, REMIC
2 Regular Interest MT-P and REMIC 2 Regular Interest MTI-R.
REMIC 2 Targeted Overcollateralization Amount: 1% of the
Targeted Overcollateralization Amount.
REMIC 3: The segregated pool of assets consisting of all of
the REMIC 2 Regular Interests conveyed in the trust to the Trustee, for the
benefit of the Holders of the Regular Certificates and the Class A-R
Certificates (in respect of the Class R-3 Interest), and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
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REMIC 3 Regular Interests: The Regular Certificates.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REMIC Regular Interests: The REMIC 1 Regular Interests, REMIC
2 Regular Interests and the Regular Certificates.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan and, for the avoidance of doubt, following the
satisfaction of any related First Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan required
to be purchased by the Seller pursuant to this Agreement or purchased at the
option of the Majority in Interest Holder of the Class X-2 Certificates pursuant
to this Agreement, an amount equal to the sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on the date of such purchase, (ii)
accrued unpaid interest thereon at the applicable Mortgage Rate from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Repurchase Price is to be distributed to Certificateholders,
(iii) any unreimbursed Servicing Advances and (iv) any costs and damages
actually incurred and paid by or on behalf of the Trust (including, but not
limited to late fees) in connection with any breach of the representation and
warranty set forth in clause (xx) of Schedule IV hereto as the result of a
violation of a predatory or abusive lending law applicable to such Mortgage
Loan.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit M.
Required Insurance Policy: With respect to any Mortgage Loan,
any insurance policy that is required to be maintained from time to time under
this Agreement.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, any Assistant Secretary, any
Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Agreement.
Rolling Three Month Delinquency Rate: For any Distribution
Date will be the fraction, expressed as a percentage, equal to the average of
the Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates, respectively) immediately preceding months.
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SAIF: The Savings Association Insurance Fund, or any successor
thereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc. For purposes of Section 10.05(b) the address for notices to S&P
shall be Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Depositor, the Servicers and the Trustee.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan pursuant to the terms of the related Mortgage Note, as reduced by any
Relief Act Reductions.
Second Mortgage Loan: A Mortgage Loan that is secured by a
second lien on the Mortgaged Property securing the related Mortgage Note.
Securities Act: The Securities Act of 1933, as amended.
Seller: DLJ Mortgage Capital, Inc.
Senior Certificates: As specified in the Preliminary
Statement.
Senior Enhancement Percentage: For any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is the sum of the
aggregate Class Principal Balance of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class B-1, Class B-2A and Class B-2F 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 is in effect), and the denominator
of which is the Aggregate Collateral Balance for such Distribution Date.
Senior Principal Payment Amount: For any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect with
respect to such Distribution Date, will be the amount, if any, by which (x) the
aggregate Class Principal Balance of the Class A-1, Class A-2, Class A-3, Class
P, Class A-R and Class A-RL Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 41.50% and (ii) the
Aggregate Collateral Balance for such Distribution Date and (B) the amount, if
any, by which (i) the Aggregate Collateral Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Collateral Balance as of the Cut-off Date.
Servicer: Wilshire and Option One, or their successors in
interest, or any successor servicer appointed as provided herein.
Servicer Employee: As defined in Section 3.18.
Servicer Cash Remittance Date: With respect to each
Distribution Date, the Business Day immediately preceding such Distribution
Date.
Servicer Data Remittance Date: With respect to each
Distribution Date and the Wilshire Serviced Loans, the second Business Day
immediately following the 15th day of the month
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of such Distribution Date. With respect to each Distribution Date and the Option
One Serviced Loans, the third Business Day immediately following the related
Determination Date.
Servicing Advance: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by a Servicer of
its servicing obligations, including, but not limited to, the cost (including
reasonable attorneys' fees and disbursements) of (i) the inspection,
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to such Servicer pursuant to Section 3.11 (including in
connection with the transfer of Charged Off Loans to Wilshire pursuant to
Section 3.11(a)(iv)) and any enforcement or judicial proceedings, including
foreclosures, and including any expenses incurred in relation to any such
proceedings that result from the Mortgage Loan being registered on the MERS
System; (iii) the management and liquidation of any REO Property (including
default management and similar services, appraisal services and real estate
broker services); (iv) any expenses incurred by such Servicer in connection with
obtaining an environmental inspection or review pursuant to Section 3.11(a)(v)
and (vi); (v) compliance with the obligations under Section 3.01, 3.09 and
3.11(b); (vi) the cost of obtaining any broker's price opinion in accordance
with Section 3.11 hereof; (vii) the costs of obtaining an Opinion of Counsel
pursuant to Section 3.11(c) hereof; (viii) expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance as described in Section
3.12 hereof; and (ix) expenses incurred in connection with the recordation of
Assignments of Mortgage.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the Due Date in the month
of such Distribution Date (prior to giving effect to any Scheduled Payments due
on such Mortgage Loan on such Due Date), subject to reduction as provided in
Section 3.05(b)(vi).
Servicing Fee Rate: As to each Mortgage Loan, 0.50% per annum.
Servicing Officer: With respect to each Servicer, any
representative of that Servicer involved in, or responsible for, the
administration and servicing of the related Mortgage Loans whose name and
specimen signature appear on a list of servicing officers furnished to the
Trustee by such Servicer on the Closing Date pursuant to this Agreement, as such
list may from time to time be amended.
Significant Net Recoveries: With respect to a defaulted
Mortgage Loan, a determination by the Servicer that either (A) the potential Net
Recoveries are anticipated to be greater than or equal to the sum of (i) the
total indebtedness of the senior lien on the related Mortgaged Property and (ii)
$10,000 (after anticipated expenses and attorneys' fees) or (B) the related
Mortgagor has shown a willingness and ability to pay over the previous six
months.
Startup Day: June 29, 2004.
Stated Principal Balance: As to any Mortgage Loan and Due
Date, the unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period) after giving effect to any previous Curtailments and
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Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor;
provided, however, for purposes of calculating the Servicing Fee and the Trustee
Fee, the Stated Principal Balance of any REO will be the unpaid principal
balance immediately prior to foreclosure.
Stepdown Date: The date occurring on the later of (x) the
Distribution Date in July 2007 and (y) the first Distribution Date on which the
Senior Enhancement Percentage (calculated for this purpose after giving effect
to payments or other recoveries in respect of the Mortgage Loans during the
related Due Period but before giving effect to payments on the Certificates on
such Distribution Date) is greater than or equal to 58.50%.
Subordinate Certificates: As specified in the Preliminary
Statement.
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 Mortgage Loan Interest: Any amount constituting an
Interest Remittance Amount (other than an amount withdrawn from the related
Capitalized Interest Account pursuant to clause (5) of the definition of
"Interest Remittance Amount") received or advanced with respect to a Subsequent
Mortgage Loan during the Due Periods relating to the July 2004, August 2004 or
September 2004 Distribution Dates, but only to the extent of the excess of such
amount over the amount of interest accruing on such Subsequent Mortgage Loan
during the related period at a per annum rate equal to 1.608%, 2.314% and
2.724%, respectively. The Subsequent Mortgage Loan Interest shall not be an
asset of any REMIC.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit N hereto, executed and delivered by the
related Servicer, the Depositor, the Seller and the Trustee 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 Fund pursuant to the related Subsequent Transfer Agreement.
Subservicer: Any Subservicer which is subservicing the
Mortgage Loans pursuant to a Subservicing Agreement. Any subservicer shall meet
the qualifications set forth in Section 3.02.
Subservicing Agreement: An agreement between a Servicer and a
Subservicer for the servicing of the Mortgage Loans.
Substitution Adjustment Amount: As defined in Section 2.03.
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Target Amount: For any Distribution Date, the excess, if any,
of the Targeted Overcollateralization Amount over the Overcollateralization
Amount, after giving effect to withdrawals from the Interest Rate Cap Account on
that Distribution Date and distributions and allocations of losses on the
Certificates on that Distribution Date.
Targeted Overcollateralization Amount: For any Distribution
Date prior to the Stepdown Date, 5.75% of the Aggregate Collateral 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) 11.50% of the Aggregate Collateral Balance for such Distribution Date, or
(b) 0.50% of the Aggregate 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 is in effect and is continuing, the Targeted
Overcollateralization Amount for the Distribution Date immediately preceding
such Distribution Date. Upon (x) written direction by the Majority in Interest
Holder of the Class X-1 Certificates and (y) the issuance by an affiliate of the
Depositor of a credit enhancement contract in favor of REMIC 1 which is
satisfactory to the Rating Agencies and (z) receipt by the Trustee of an Opinion
of Counsel, which opinion shall not be an expense of the Trustee or the Trust
Fund, but shall be at the expense of the Majority in Interest Holder of the
Class X-1 Certificates, to the effect that such credit enhancement contract will
not cause the imposition of any federal tax on the Trust Fund or the
Certificateholders or cause REMIC 1, REMIC 2 and REMIC 3 to fail to qualify as a
REMIC at any time that any Certificates are outstanding, the Targeted
Overcollateralization Amount shall be reduced to the level approved by the
Rating Agencies as a result of such credit enhancement contract. Any credit
enhancement contract referred to in the previous sentence shall be
collateralized by cash or mortgage loans, provided that (i) the aggregate Stated
Principal Balance of the mortgage loans collateralizing any such credit
enhancement contract shall not be less than the excess, if any, of (x) the
initial Targeted Overcollateralization Amount over (y) the then-current
Overcollateralization Amount and (ii) the issuance of any credit enhancement
contract supported by mortgage loans shall not result in a downgrading of the
ratings assigned by the Rating Agencies.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d) and
temporary Treasury regulation ss. 301.6231(a)(7)-1T.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Trigger Event: A Trigger Event will be in effect for any
Distribution Date on or after the Stepdown Date if (a) the Rolling Three Month
Delinquency Rate as of the last day of the related Due Period equals or exceeds
16.00% of the Senior Enhancement Percentage for such Distribution Date or (ii) a
Cumulative Loss Event is occurring. The Trigger Event may be amended by the
parties hereto in the future with the consent of the Rating Agencies.
Trust Collateral: As defined in Section 9.01(c).
Trust Fund: Collectively, the assets of REMIC 1, REMIC 2,
REMIC 3, the Interest Rate Cap Reserve Fund, the Interest Rate Cap Account, the
Pre-Funding Account, the Capitalized Interest Account and the Subsequent
Mortgage Loan Interest.
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Trustee: JPMorgan Chase Bank and its successors and, if a
successor trustee is appointed hereunder, such successor.
Trustee Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Trustee Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the Due Date in the month
of such Distribution Date (prior to giving effect to any Scheduled Payments due
on such Mortgage Loan on such Due Date).
Trustee Fee Rate: With respect to any Distribution Date,
0.0100% per annum.
Uncertificated Accrued Interest: With respect to each REMIC
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance of such REMIC Regular Interest. In each case, Uncertificated
Accrued Interest will be reduced by any Net Prepayment Interest Shortfalls and
Relief Act Reductions (allocated to such REMIC Regular Interests based on the
priorities set forth in Section 1.03).
Uncertificated Accrued Interest: With respect to each REMIC
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance of such REMIC Regular Interest. In each case, Uncertificated
Accrued Interest will be reduced by any Net Prepayment Interest Shortfalls and
Relief Act Reductions (allocated to such REMIC Regular Interests based on the
priorities set forth in Section 1.03).
Uncertificated Principal Balance: With respect to each REMIC
Regular Interest, the amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.07 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.05(b) , and the
Uncertificated Principal Balance of REMIC 2 Regular Interest MTI-ZZ shall be
increased by interest deferrals as provided in Section 4.07. The Uncertificated
Principal Balance of each REMIC Regular Interest that has an Uncertificated
Principal Balance shall never be less than zero.
Uncertificated REMIC 1 Pass-Through Rate: With respect to each
REMIC 1 Regular Interest (other than REMIC 1 Regular Interest LTI-1PF) and the
Interest Accrual Periods in July 2004, August 2004 and September 2004, a per
annum rate equal to the Initial Mortgage Loan Net WAC Rate; with respect to
REMIC 1 Regular Interest LTI-1PF and the Interest Accrual Periods in (a) July
2004, (b) August 2004 and (c) September 2004, a per annum rate equal to (a)
1.608%, (b) 2.314% and (c) 2.724%; and with respect to each REMIC 1 Regular
Interest and each Interest Accrual Period thereafter, the weighted average of
the Net Mortgage Rates on the Mortgage Loans.
Uncertificated REMIC 2 Pass-Through Rate: For any Distribution
Date, with respect to REMIC 2 Regular Interest MTI-AA, REMIC 2 Regular Interest
MTI-A-1, REMIC 2 Regular
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Interest MTI-A-2, REMIC 2 Regular Interest MTI-A-3, REMIC 2 Regular Interest
MTI-M-1, REMIC 2 Regular Interest MTI-M-2, REMIC 2 Regular Interest MTI-M-3,
REMIC 2 Regular Interest MTI- M-4, REMIC 2 Regular Interest MTI-M-5, REMIC 2
Regular Interest MTI-B-1, REMIC Regular Interest B-2A, REMIC Regular Interest
B-2F and REMIC 2 Regular Interest MTI-ZZ, the REMIC 2 Net WAC Rate, and for any
Distribution Date with respect to REMIC 2 Regular Interest MT-P and REMIC 2
Regular Interest MT-R, in June 2004, July 2004 and August 2004, the Initial
Mortgage Loan Net WAC, and for any Distribution Date thereafter, the REMIC 2 Net
WAC Rate.
Uncertificated Principal Balance: With respect to each REMIC
Regular Interest, the amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.07 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.05(b), and the
Uncertificated Principal Balances of REMIC 1 Regular Interest LTI-PF shall be
increased, pro rata, by interest deferrals as provided in Section 4.07. The
Uncertificated Principal Balance of each REMIC Regular Interest that has an
Uncertificated Principal Balance shall never be less than zero.
United States Person: A citizen or resident of the United
States, a corporation or a partnership (including an entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States or any State
thereof or the District of Columbia (except, in the case of a partnership, to
the extent provided in regulations) provided that, for purposes solely of the
restrictions on the transfer of Class A-R Certificates and Class A-RL
Certificates, no partnership or other entity treated as a partnership for United
States federal income tax purposes shall be treated as a United States Person
unless all persons that own an interest in such partnership either directly or
through any entity that is not a corporation for United States federal income
tax purposes are required to be United States Persons or an estate whose income
is subject to United States federal income tax regardless of its source, or a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more such United
States Persons have the authority to control all substantial decisions of the
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
which have not yet been issued, a trust which was in existence on August 20,
1996 (other than a trust treated as owned by the grantor under subpart E of part
I of subchapter J of chapter 1 of the Code), and which was treated as a United
States person on August 20, 1996 may elect to continue to be treated as a United
States Person notwithstanding the previous sentence.
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
98% of all Voting Rights shall be allocated among the Class A-1, Class X-0,
Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1,
Class B-2A and Class B-2F Certificates. The portion of such 98% Voting Rights
allocated to the Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class B-1, Class B-2Aand Class B-2F Certificates
shall be based on the fraction, expressed as a percentage, the numerator of
which is the aggregate Class Principal Balance then outstanding and the
denominator of which is the Class
46
Principal Balance of all such Classes then outstanding. The Class P Certificates
and Class X-1 Certificates shall each be allocated 1% of the Voting Rights.
Voting Rights shall be allocated among the Certificates within each such Class
(other than the Class P Certificates and Class X-1 Certificates, which each have
only one certificate) in accordance with their respective Percentage Interests.
The Class X-2, Class A-R and Class A-RL Certificates shall have no Voting
Rights.
Wilshire: Wilshire Credit Corporation.
Wilshire Serviced Loans: The Mortgage Loans identified as such
on the Mortgage Loan Schedule.
Wilshire Special Servicing: With regard to any Charged Off
Loans, the servicing of such Charged Off Loans using specialized collection
procedures (including foreclosure, if appropriate) to maximize recoveries.
SECTION 1.02 Interest Calculations.
The calculation of the Trustee Fee, the Servicing Fee, the
Credit Risk Manager Fee and interest on the Class P, Class A-R, Class A-RL,
Class B-2F and Class X-1 Certificates and on the related Uncertificated
Interests shall be made on the basis of a 360-day year consisting of twelve 30-
day months. The calculation of interest on the Class X-0, Xxxxx X-0, Class A-3,
Class M-1, Class M- 2, Class M-3, Class M-4, Class M-5, Class B-1, Class B-2A
and Class B-2F Certificates and the related Uncertificated Interests shall be
made on the basis of a 360-day year and the actual number of days elapsed in the
related Interest Accrual Period. All dollar amounts calculated hereunder shall
be rounded to the nearest xxxxx with one-half of one xxxxx being rounded down.
SECTION 1.03 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 1 Regular Interests for any Distribution Date,
the aggregate amount of any Prepayment Interest Shortfalls (net of any
Compensating Interest Payment) and any Relief Act Reductions incurred in respect
of the Mortgage Loans for any Distribution Date shall be allocated first to
REMIC 1 Regular Interests LTI-1 and LTI-PF and then to REMIC 1 Regular Interests
LTI-P and LTI-R, in each case to the extent of one month's interest at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 1 Regular
Interest; provided, however, that with respect to the first three Distribution
Dates, such amounts relating to the Initial Mortgage Loans shall be allocated to
REMIC 1 Regular Interest LTI-1 and such amounts relating to the Subsequent
Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT-PF.
For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 2 Regular Interests for any Distribution Date,
any Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) relating to the Mortgage Loans for any Distribution Date shall be
allocated in the same priority, and to the same extent, as that allocated to the
Corresponding Certificates.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and
delivery hereof, hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee in trust for the benefit of the Certificateholders,
without recourse, all (i) the right, title and interest of the Depositor (which
does not include servicing rights) in and to each Initial Mortgage Loan,
including all interest and principal received or receivable on or with respect
to such Initial Mortgage Loans after the Cut-off Date and all interest and
principal payments on the Initial Mortgage Loans received prior to the Cut-off
Date in respect of installments of interest and principal due thereafter, but
not including payments of principal and interest due and payable on the Initial
Mortgage Loans on or before the Cut-off Date (other than the rights of the
Servicers to service the Mortgage Loans in accordance with this Agreement), (ii)
the Depositor's rights under the Assignment Agreement (iii) any such amounts as
may be deposited into and held by the Trustee in the Pre-Funding Account and the
Capitalized Interest Account and (iv) all proceeds of any of the foregoing. In
addition, on or prior to the Closing Date, the Depositor shall deposit the
Initial Interest Rate Cap Reserve Deposit into the Interest Rate Cap Reserve
Fund.
(b) In connection with the transfer and assignment set forth
in clause (a) above, the Depositor has delivered or caused to be delivered to
the Trustee or its designated agent, the Custodian, for the benefit of the
Certificateholders, the documents and instruments with respect to each Mortgage
Loan as assigned:
(i) the original Mortgage Note of the Mortgagor in the
name of the Trustee or endorsed "Pay to the order of ________________
without recourse" and signed in the name of the last named endorsee by
an authorized officer, together with all intervening endorsements
showing a complete chain of endorsements from the originator of the
related Mortgage Loan to the last endorsee or with respect to any Lost
Mortgage Note (as such term is defined in the Pooling and Servicing
Agreement), a lost note affidavit stating that the original Mortgage
Note was lost or destroyed, together with a copy of such Mortgage Note;
(ii) for each Mortgage Loan that is not a MERS Mortgage
Loan, the original Mortgage bearing evidence that such instruments have
been recorded in the appropriate jurisdiction where the Mortgaged
Property is located as determined by DLJMC (or, in lieu of the original
of the Mortgage or the assignment thereof, a duplicate or conformed
copy of the Mortgage or the instrument of assignment, if any, together
with a certificate of receipt from the Seller or the settlement agent
who handled the closing of the Mortgage Loan, certifying that such copy
or copies represent true and correct copy(ies) of the original(s) and
that such original(s) have been or are currently submitted to be
recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located) or a
certification or receipt of the recording authority evidencing the same
and in the case of each MERS Mortgage Loan, the original Mortgage,
noting the presence of the MIN of the
48
related Mortgage Loan and either language indicating that the Mortgage
Loan is a MOM Loan if the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage
and the assignment thereof to MERS, with evidence of recording
indicated thereon or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded;
(iii) for each Mortgage Loan that is not a MERS Mortgage
Loan, the original Assignment of Mortgage, in blank, which assignment
appears to be in form and substance acceptable for recording and, in
the event that the related Seller acquired the Mortgage Loan in a
merger, the assignment must be by "[Seller], successor by merger to
[name of predecessor]", and in the event that the Mortgage Loan was
acquired or originated by the related Seller while doing business under
another name, the assignment must be by "[Seller], formerly known as
[previous name]";
(iv) for each Mortgage Loan that was not a MERS Mortgage
Loan at its origination, the originals of all intervening Assignments
of Mortgage not included in (iii) above showing a complete chain of
assignment from the originator of such Mortgage Loan to the Person
assigning the Mortgage to the Trustee, including any warehousing
assignment, with evidence of recording on each such Assignment of
Mortgage (or, in lieu of the original of any such intervening
assignment, a duplicate or conformed copy of such intervening
assignment together with a certificate of receipt from the related
Seller or the settlement agent who handled the closing of the Mortgage
Loan, certifying that such copy or copies represent true and correct
copy(ies) of the original(s) and that such original(s) have been or are
currently submitted to be recorded in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is
located) or a certification or receipt of the recording authority
evidencing the same;
(v) an original of any related security agreement (if
such item is a document separate from the Mortgage) and the originals
of any intervening assignments thereof showing a complete chain of
assignment from the originator of the related Mortgage Loan to the last
assignee;
(vi) an original assignment of any related security
agreement (if such item is a document separate from the Mortgage)
executed by the last assignee in blank;
(vii) the originals of any assumption, modification,
extension or guaranty agreement with evidence of recording thereon, if
applicable (or, in lieu of the original of any such agreement, a
duplicate or conformed copy of such agreement together with a
certificate of receipt from the related Seller or the settlement agent
who handled the closing of the Mortgage Loan, certifying that such
copy(ies) represent true and correct copy(ies) of the original(s) and
that such original(s) have been or are currently submitted to be
recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or a
certification or receipt of the recording authority evidencing the
same;
(viii) if the Mortgage Note or Mortgage or any other document
or instrument relating to the Mortgage Loan has been signed by a person
on behalf of the Mortgagor, the original
49
power of attorney or other instrument that authorized and empowered
such person to sign bearing evidence that such instrument has been
recorded, if so required, in the appropriate jurisdiction where the
Mortgaged Property is located as determined by DLJMC (or, in lieu
thereof, a duplicate or conformed copy of such instrument, together
with a certificate of receipt from the related Seller or the settlement
agent who handled the closing of the Mortgage Loan, certifying that
such copy(ies) represent true and complete copy(ies)of the original(s)
and that such original(s) have been or are currently submitted to be
recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located) or a
certification or receipt of the recording authority evidencing the
same; and
(ix) in the case of the First Mortgage Loans, the
original mortgage title insurance policy, or if such mortgage title
insurance policy has not yet been issued, an original or copy of a
marked-up written commitment or a pro forma title insurance policy
marked as binding and countersigned by the title insurance company or
its authorized agent either on its face or by an acknowledged closing
instruction or escrow letter.
In the event the Seller delivers to the Trustee certified
copies of any document or instrument set forth in 2.01(b) because of a delay
caused by the public recording office in returning any recorded document, the
Seller shall deliver to the Trustee, within 60 days of the Closing Date, an
Officer's Certificate which shall (i) identify the recorded document, (ii) state
that the recorded document has not been delivered to the Trustee due solely to a
delay caused by the public recording office, and (iii) state the amount of time
generally required by the applicable recording office to record and return a
document submitted for recordation.
In the event that in connection with any Mortgage Loan the
Depositor cannot deliver (a) the original recorded Mortgage, (b) all interim
recorded assignments or (c) the lender's title policy (together with all riders
thereto) satisfying the requirements set forth above, concurrently with the
execution and delivery hereof because such document or documents have not been
returned from the applicable public recording office in the case of clause (a)
or (b) above, or because the title policy has not been delivered to the Seller
or the Depositor by the applicable title insurer in the case of clause (c)
above, the Depositor shall promptly deliver to the Trustee, in the case of
clause (a) or (b) above, such original Mortgage or such interim assignment, as
the case may be, with evidence of recording indicated thereon upon receipt
thereof from the public recording office, or a copy thereof, certified, if
appropriate, by the relevant recording office and in the case of clause (c)
above, if such lender's title policy is received by the Depositor, upon receipt
thereof.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Trustee
shall (at the Seller's expense) (i) affix the Trustee's name to each Assignment
of Mortgage, as the assignee thereof, (ii) cause such assignment to be in proper
form for recording in the appropriate public office for real property records
within thirty (30) days after receipt thereof and (iii) cause to be delivered
for recording in the appropriate public office for real property records the
assignments of the Mortgages to the Trustee, except that, with respect to any
assignment of a Mortgage as to which the Trustee has not received the
information required to prepare such assignment in recordable form, the
Trustee's obligation to do so and to deliver the same for such recording shall
be as soon as practicable after receipt of such information and in any event
within thirty (30) days after the receipt thereof, and the Trustee need not
cause to
50
be recorded (a) any assignment referred to in clause (iii) above which relates
to a Mortgage Loan in any jurisdiction under the laws of which, as evidenced by
an Opinion of Counsel delivered to the Trustee (at the Depositor's expense,
provided such expense has been previously approved by the Depositor in writing)
within 180 days of the Closing Date, acceptable to the Rating Agencies, the
recordation of such assignment is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan or (b) if MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as the mortgagee of record solely as nominee for the Seller and its successors
and assigns.
In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Depositor further agrees that it will
cause, at the Depositor's own expense, on or prior to the Closing Date, the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Depositor further agrees that it will not, and will not
permit any Servicer to, and each Servicer agrees that it will not, alter the
codes referenced in this paragraph with respect to any Mortgage Loan during the
term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.
(c) The Trustee is authorized to appoint any bank or
trust company approved by the Depositor as Custodian of the documents or
instruments referred to in this Section 2.01, and to enter into a Custodial
Agreement for such purpose and any documents delivered thereunder shall be
delivered to the Custodian and any Officer's Certificates delivered with respect
thereto shall be delivered to the Trustee and the Custodian.
(d) It is the express intent of the parties to this
Agreement that the conveyance of the Mortgage Loans by the Depositor to the
Trustee as provided in this Section 2.01 be, and be construed as, a sale of the
Mortgage Loans by the Depositor to the Trustee. It is, further, not the
intention of the parties to this Agreement that such conveyance be deemed a
pledge of the Mortgage Loans by the Depositor to the Trustee to secure a debt or
other obligation of the Depositor. However, in the event that, notwithstanding
the intent of the parties to this Agreement, the Mortgage Loans are held to be
the property of the Depositor, or if for any other reason this Agreement is held
or deemed to create a security interest in the Mortgage Loans then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the New York Uniform Commercial Code; (b) the conveyance
provided for in this Section 2.01 shall be deemed to be a grant by the Depositor
to the Trustee for the benefit of the Certificateholders of a security interest
in all of the Depositor's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the 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
51
other items of property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be "in possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 of the
New York Uniform Commercial Code; and (d) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the benefit of the Certificateholders for the purpose of
perfecting such security interest under applicable law (except that nothing in
this clause (e) shall cause any person to be deemed to be an agent of the
Trustee for any purpose other than for perfection of such security interests
unless, and then only to the extent, expressly appointed and authorized by the
Trustee in writing). The Depositor and the Trustee, upon directions from the
Depositor, shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement.
(e) The Depositor hereby sells, transfers, assigns,
sets over and otherwise conveys to the Trustee in trust for the benefit of the
Certificateholders, without recourse, all right, title and interest in such
Subsequent Mortgage Loans (which does not include servicing rights), including
all interest and principal due on or with respect to such Subsequent Mortgage
Loans on or after the related Subsequent Transfer Date and all interest and
principal payments on such Subsequent Mortgage Loans received prior to the
Subsequent Transfer Date in respect of installments of interest and principal
due thereafter, but not including principal and interest due on such Subsequent
Mortgage Loans prior to the related Subsequent Transfer Date, any insurance
policies in respect of such Subsequent Mortgage Loans and all proceeds of any of
the foregoing.
(f) Upon one Business Day's prior written notice to the
Trustee, the Servicer and the Rating Agencies, on any Business Day during the
Pre-Funding Period designated by the Depositor, the Depositor, DLJMC, the
Servicer and the Trustee shall complete, execute and deliver a Subsequent
Transfer Agreement so long as no Rating Agency has provided notice that the
execution and delivery of such Subsequent Transfer Agreement will result in a
reduction or withdrawal of the ratings assigned to the Certificates.
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(f) of this Agreement of the Seller to
cure, repurchase or replace such Subsequent Mortgage Loan shall
constitute the sole remedy against the Seller respecting such breach
available to Certificateholders, the Depositor or the Trustee;
52
(ii) the Trustee and the Rating Agencies are provided
with an Opinion of Counsel or Opinions of Counsel, at the expense of
the Depositor, stating that each REMIC in the Trust Fund is and shall
continue to qualify as a REMIC following the transfer of the Subsequent
Mortgage Loans, to be delivered as provided pursuant to Section
2.01(g);
(iii) the Rating Agencies and the Trustee are provided
with an Opinion of Counsel or Opinions of Counsel, at the expense of
the Depositor, confirming that the transfer of the Subsequent Mortgage
Loans conveyed on such Subsequent Transfer Date is a true sale, to be
delivered as provided pursuant to Section 2.01(g);
(iv) 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 by the Rating Agencies;
(v) no Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date is 30 or more days contractually delinquent as
of such date;
(vi) the remaining term to stated maturity of such
Subsequent Mortgage Loan does not exceed 30 years for fully amortizing
loans or 15 years for balloon loans;
(vii) such Subsequent Mortgage Loan does not have a Net
Mortgage Rate less than 5.22% per annum;
(viii) 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
Transfer Date;
(ix) such Subsequent Mortgage Loan does not have a
Combined Loan-to-Value Ratio greater than 100.00%;
(x) such Subsequent Mortgage Loan has a principal
balance not greater than $356,056;
(xi) no Subsequent Mortgage Loan shall have a final
maturity date after September 1, 2034;
(xii) such Subsequent Mortgage Loan is secured by a first
or second lien;
(xiii) such Subsequent Mortgage Loan is otherwise acceptable
to the Rating Agencies;
(xiv) [reserved];
(xv) following the conveyance of such Subsequent Mortgage
Loans on such Subsequent Transfer Date the characteristics of the
Mortgage Loans (based on the Initial
53
Mortgage Loans as of the Cut-off Date and the Subsequent Mortgage Loans
as of their related Subsequent Transfer Date) will be as follows:
A. a weighted average Mortgage Rate of at least 9.42%
per annum;
B. a weighted average remaining term to stated maturity
of less than 217 months;
C. a weighted average Combined Loan-to-Value Ratio of
not more than 98.02%;
D. a weighted average credit score of at least 675;
E. no more than 70.00% of the Mortgage Loans by
aggregate Cut-off Date Principal Balance are balloon
loans;
F. no more than 41.30% of the Mortgage Loans by
aggregate Cut-off Date Principal Balance are
concentrated in one state; and
G. no more than 8.44% of the Mortgage Loans by aggregate
Cut-off Date Principal Balance relate to non-owner
occupied properties;
(xvi) neither the Seller nor the Depositor shall be
insolvent or shall be rendered insolvent as a result of such transfer;
(xvii) no Event of Default has occurred hereunder; and
(xviii) the Depositor shall have delivered to the Trustee an
Officer's Certificate confirming the satisfaction of each of these
conditions precedent.
(g) Upon (1) delivery to the Trustee by the Depositor of the
Opinions of Counsel referred to in Sections 2.01(f)(ii) and (iii), (2) delivery
to the Trustee 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 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 Trustee 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 Pre-Funding Account.
The Trustee 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.
54
SECTION 2.02 Acceptance by the Trustee.
The Trustee acknowledges receipt by the Custodian of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit G and declares that the Custodian on its behalf hold and will hold the
documents delivered to the Custodian constituting the Mortgage Files, and that
it or the Custodian holds or will hold such other assets as are included in the
Trust Fund, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that it will maintain possession
through the Custodian of the Mortgage Notes in the State of Texas or the State
of Illinois, as directed by the Seller, unless otherwise permitted by the Rating
Agencies.
The Custodian is required under the Custodial Agreement to
execute and deliver on the Closing Date to the Depositor, the Seller, the
Trustee and the Servicers an Initial Certification in the form annexed hereto as
Exhibit G. Based on its review and examination, and only as to the documents
identified in such Initial Certification, pursuant to the Custodial Agreement,
the Custodian will acknowledge that such documents appear regular on their face
and relate to such Mortgage Loan. Neither the Trustee nor the Custodian shall be
under any duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
Not later than 90 days after the Closing Date, the Custodian
is required to deliver to the Depositor, the Seller, the Trustee and the
Servicers a Final Certification in the form annexed hereto as Exhibit H, with
any applicable exceptions noted thereon.
If, in the course of such review, the Custodian finds any
document constituting a part of a Mortgage File which does not meet the
requirements of Section 2.01, pursuant to the Custodial Agreement, the Custodian
will list such as an exception in the Final Certification; provided, however,
that neither the Trustee nor the Custodian shall make any determination as to
whether (i) any endorsement is sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form or is sufficient
to effect the assignment of and transfer to the assignee thereof under the
mortgage to which the assignment relates.
The Seller shall promptly correct or cure such defect within
120 days from the date it was so notified of such defect and, if the Seller does
not correct or cure such defect within such period and such defect materially
and adversely affects the interest of the Certificateholders in the related
Mortgage Loan, the Seller shall either (a) substitute for the related Mortgage
Loan a Qualified Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within 120 days from
the date the Seller was notified of such defect in writing at the Repurchase
Price of such Mortgage Loan; provided, however, that in no event shall such
substitution or repurchase occur more than 540 days from the Closing Date,
except that if the substitution or repurchase of a Mortgage Loan pursuant to
this provision is required by reason of a delay in delivery of any documents by
the appropriate recording office, then such substitution or repurchase shall
occur within 720 days from the Closing Date; and further provided, that the
Seller shall have no liability for recording any
55
Assignment of Mortgage in favor of the Trustee or for the Trustee's failure to
record such Assignment of Mortgage, and the Seller shall not be obligated to
repurchase or cure any Mortgage Loan solely as a result of the Trustee's failure
to record such Assignment of Mortgage. The Trustee shall deliver written notice
to each Rating Agency within 360 days from the Closing Date indicating each
Mortgage Loan (a) the Assignment of Mortgage which has not been returned by the
appropriate recording office or (b) as to which there is a dispute as to
location or status of such Mortgage Loan. Such notice shall be delivered every
90 days thereafter until the Assignment of Mortgage for the related Mortgage
Loan is returned to the Trustee or the dispute as to location or status has been
resolved. Any such substitution pursuant to (a) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05 hereof, if any, and any substitution pursuant to (a) above shall
not be effected prior to the additional delivery to the Trustee of a Request for
Release substantially in the form of Exhibit M. No substitution is permitted to
be made in any calendar month after the Determination Date for such month. The
Repurchase Price for any such Mortgage Loan shall be deposited by the Seller in
the Certificate Account on or prior to the Business Day immediately preceding
such Distribution Date in the month following the month of repurchase and, upon
receipt of such deposit and certification with respect thereto in the form of
Exhibit M hereto, the Trustee shall release the related Mortgage File to the
Seller and shall execute and deliver at such entity's request such instruments
of transfer or assignment prepared by such entity, in each case without
recourse, as shall be necessary to vest in such entity, or a designee, the
Trustee's interest in any Mortgage Loan released pursuant hereto. In furtherance
of the foregoing, if the Seller is not a member of MERS and repurchases a
Mortgage Loan which is registered on the MERS(R) System, the Seller, at its own
expense and without any right of reimbursement, shall cause MERS to execute and
deliver an assignment of the Mortgage in recordable form to transfer the
Mortgage from MERS to the Seller and shall cause such Mortgage to be removed
from registration on the MERS(R) System in accordance with MERS' rules and
regulations.
Pursuant to the Custodial Agreement, the Custodian is required
to execute and deliver on the Subsequent Transfer Date to the Depositor, the
Seller, the Trustee and the Servicer an Initial Certification in the form
annexed hereto as Exhibit G. Based on its review and examination, and only as to
the documents identified in such Initial Certification, the Custodian shall
acknowledge that such documents appear regular on their face and relate to such
Subsequent Mortgage Loan. Neither the Trustee nor the Custodian shall be under a
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 the Custodial Agreement, not later than 90 days
after the end of the Pre- Funding Period, the Custodian is required to deliver
to the Depositor, the Seller, the Trustee and the related Servicer a Final
Certification with respect to the Subsequent Mortgage Loans in the form annexed
hereto as Exhibit H 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, pursuant to the Custodial Agreement, the Custodian will be
required to list such as an exception in the Final Certification; provided,
however that neither the Trustee nor the Custodian shall make any determination
as to whether (i) any endorsement is
56
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 Section 2.02(a).
It is understood and agreed that the obligation of the Seller
to cure, substitute for or to repurchase any Mortgage Loan which does not meet
the requirements of Section 2.01 shall constitute the sole remedy respecting
such defect available to the Trustee, the Depositor and any Certificateholder
against the Seller.
The Trustee shall pay to the Custodian from time to time
reasonable compensation for all services rendered by it hereunder or under the
Custodial Agreement, and the Trustee shall pay or reimburse the Custodian upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Custodian in accordance with any of the provisions of this Agreement
or the Custodial Agreement, except any such expense, disbursement or advance as
may arise from its negligence or bad faith.
SECTION 2.03 Representations and Warranties of the Seller and
Servicers.
(a) The Seller hereby makes the representations and
warranties applicable to it set forth in Schedule II hereto, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date, or if so specified therein, as of the Cut-off Date or such other
date as may be specified.
(b) Wilshire, in its capacity as Servicer, hereby makes
the representations and warranties applicable to it set forth in Schedule IIIA
hereto, and by this reference incorporated herein, to the Depositor and the
Trustee, as of the Closing Date, or if so specified therein, as of the Cut-off
Date or such other date as may be specified.
(c) Option One, in its capacity as Servicer, hereby
makes the representations and warranties set forth in Schedule IIIB hereto, and
by this reference incorporated herein, to the Depositor and the Trustee, as of
the Closing Date, or if so specified therein, as of the applicable Cut- off
Date.
(d) Each of Wilshire and Option One, in their capacity
as Servicer, will use its reasonable efforts to become a member of MERS in good
standing, and will comply in all material respects with the rules and procedures
of MERS in connection with the servicing of the Mortgage Loans that are
registered with MERS.
(e) The Seller hereby makes the representations and
warranties set forth in Schedule IV as applicable hereto, and by this reference
incorporated herein, to the Trustee, as of the Closing Date, or the Subsequent
Transfer Date, as applicable, or if so specified therein, as of the Cut- off
Date or such other date as may be specified.
57
(f) Upon discovery by any of the parties hereto of a
breach of a representation or warranty made pursuant to Section 2.03(e) 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. The Seller hereby covenants that within 120 days
of the earlier of its discovery or its receipt of written notice from any party
of a breach of any representation or warranty made by it pursuant to Section
2.03(e) which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan sold by the Seller to the Depositor, it
shall cure such breach in all material respects, and if such breach is not so
cured, shall, (i) if such 120-day period expires prior to the second anniversary
of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from
the Trust Fund and substitute in its place a Qualified Substitute Mortgage Loan,
in the manner and subject to the conditions set forth in this Section; or (ii)
repurchase the affected Mortgage Loan from the Trustee at the Repurchase Price
in the manner set forth below; provided, however, that any such substitution
pursuant to (i) above shall not be effected prior to the delivery to the Trustee
of the Opinion of Counsel required by Section 2.05 hereof, if any, and any such
substitution pursuant to (i) above shall not be effected prior to the additional
delivery to the Trustee of a Request for Release substantially in the form of
Exhibit M and the Mortgage File for any such Qualified Substitute Mortgage Loan.
The Seller shall promptly reimburse the Trustee for any actual out-of-pocket
expenses reasonably incurred by the Trustee in respect of enforcing the remedies
for such breach. With respect to any representation and warranties described in
this Section which are made to the best of a Seller's knowledge if it is
discovered by the Depositor, the Seller or the Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan or the interests of
the Certificateholders therein, notwithstanding the Seller's lack of knowledge
with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
With respect to any Qualified Substitute Mortgage Loan or
Loans, the Seller shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01(b), with the Mortgage Note endorsed and the Mortgage assigned as required
by Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution shall not be
part of the Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Seller shall
amend the Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
Qualified Substitute Mortgage Loan or Loans and the Seller shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of
this Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(e) with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the Certificate Account of the amount required to be deposited
therein in connection with such substitution as described in the following
paragraph, the Trustee shall release the Mortgage File held for the benefit of
the Certificateholders relating to such Deleted Mortgage
58
Loan to the Seller and shall execute and deliver at the Seller's direction such
instruments of transfer or assignment prepared by the Seller, in each case
without recourse, as shall be necessary to vest title in the Seller, or its
designee, the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Trustee shall determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion of
the monthly payments due in the month of substitution). The amount of such
shortage (the "Substitution Adjustment Amount") plus an amount equal to the sum
of (i) the aggregate of any unreimbursed Advances with respect to such Deleted
Mortgage Loans and (ii) any costs and damages actually incurred and paid by or
on behalf of the Trust in connection with any breach of the representation and
warranty set forth in Schedule III (xx) as the result of a violation of a
predatory or abusive lending law applicable to such Mortgage Loan shall be
deposited in the Certificate Account by the Seller on or before the Business Day
immediately preceding the Distribution Date in the month succeeding the calendar
month during which the related Mortgage Loan became required to be repurchased
or replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage
Loan, the Repurchase Price therefor shall be deposited in the Certificate
Account on or before the Business Day immediately preceding the Distribution
Date in the month following the month during which the Seller became obligated
hereunder to repurchase or replace such Mortgage Loan and upon such deposit of
the Repurchase Price, the delivery of the Opinion of Counsel if required by
Section 2.05 and receipt of a Request for Release in the form of Exhibit M
hereto, the Trustee shall release the related Mortgage File held for the benefit
of the Certificateholders to such Person, and the Trustee shall execute and
deliver at such Person's direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, as shall be necessary to
transfer title from the Trustee. It is understood and agreed that the obligation
under this Agreement of any Person to cure, repurchase or substitute any
Mortgage Loan as to which a breach has occurred and is continuing shall
constitute the sole remedy against such Persons respecting such breach available
to Certificateholders, the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for the benefit of the Certificateholders.
SECTION 2.04 Representations and Warranties of the Depositor
as to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee
with respect to the Mortgage Loans that, as of the Closing Date, assuming good
title has been conveyed to the Depositor, the Depositor had good title to the
Mortgage Loans and Mortgage Notes, and did not encumber the Mortgage Loans
during its period of ownership thereof, other than as contemplated by the
Agreement.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee.
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SECTION 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 shall be made more than 120 days after the
Closing Date unless the Seller delivers to the Trustee an Opinion of Counsel,
which Opinion of Counsel shall not be at the expense of either the Trustee or
the Trust Fund, addressed to the Trustee, to the effect that such substitution
will not (i) result in the imposition of the tax on "prohibited transactions" on
the Trust Fund or contributions after the Startup Date, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
SECTION 2.06 Execution and Delivery of Certificates.
The Trustee (or the Custodian) acknowledges receipt of the
items described in Section 2.02 of this Agreement and the documents identified
in the Initial Certification in the form annexed hereto as Exhibit G and,
concurrently with such receipt, has executed and delivered to or upon the order
of the Depositor, the Certificates in authorized denominations evidencing
directly or indirectly the entire ownership of the Trust Fund. The Trustee
agrees to hold the Trust Fund and exercise the rights referred to above for the
benefit of all present and future Holders of the Certificates and to perform the
duties set forth in this Agreement to the best of its ability, to the end that
the interests of the Holders of the Certificates may be adequately and
effectively protected.
SECTION 2.07 REMIC Matters.
The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date. The REMIC 1 Regular Interests shall be designated as the
"regular interests" in REMIC 1. The REMIC 2 Regular Interests shall be
designated as the "regular interests" in REMIC 2. The Class A-1, Class X-0,
Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1,
Class B-2A, Class B-2F, Class P and Class X-1 Certificates shall be designated
as the "regular interests" in REMIC 3. The Class A-R Certificates and Class A-RL
Certificates will represent beneficial ownership of three residual interests,
each of which will constitute the sole class of residual interests in each of
REMIC 1, REMIC 2 and REMIC 3. The Trustee shall not permit the creation of any
"interests" (within the meaning of Section 860G of the Code) in REMIC 1, REMIC 2
or REMIC 3 other than the Certificates, the REMIC 1 Regular Interests or the
REMIC 2 Regular Interests. The "tax matters person" with respect to each of
REMIC 1, REMIC 2 and REMIC 3 shall be the Holder of the Class A-R Certificate
and Class A-RL Certificate at any time holding the largest Percentage Interest
thereof in the manner provided under Treasury regulations section 1.860F-4(d)
and Treasury regulations section 301.6231(a)(7)-1. The fiscal year for each
REMIC shall be the calendar year. In addition, the Class X-1 Certificateholders
shall be deemed to have entered into a contractual arrangement with the Class
A-R Certificateholders or Class A-RL Certificateholders whereby the Class A-R
Certificateholders or Class A-RL Certificateholders agree to pay to the Class
X-1 Certificateholders on each Distribution Date amounts that would, in the
absence of such contractual agreement, be distributable with respect to the
residual interest in REMIC
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1, REMIC 2, and REMIC 3 pursuant to Section 4.02(b)(iv)(I) (which amounts are
expected to be zero).
SECTION 2.08 Covenants of each Servicer.
Each respective Servicer hereby covenants to the Depositor and
the Trustee that no written information, certificate of an officer, statement
furnished in writing or written report prepared by such Servicer and delivered
to the Depositor, any affiliate of the Depositor or the Trustee and prepared by
such Servicer pursuant to this Agreement will contain any untrue statement of a
material fact.
SECTION 2.09 Conveyance of REMIC Regular Interests and
Acceptance of REMIC 1, REMIC 2 and REMIC 3 by the
Trustee; Issuance of Certificates.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 1 Regular Interests for the benefit of the Holder
of the REMIC 2 Regular Interests and the Holders of the Class R-2 Interest. The
Trustee acknowledges receipt of the REMIC 1 Regular Interests (each of which is
uncertificated) and declares that it holds and will hold the same in trust for
the exclusive use and benefit of the Holders of the REMIC 2 Regular Interests
and Holder of the Class R-2 Interest. The interests evidenced by the Class R-2
Interest, together with the REMIC 2 Regular Interests, constitute the entire
beneficial ownership interest in REMIC 2.
(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 2 Regular Interests for the benefit of the Holders
of the Regular Certificates and the Class R-3 Interest. The Trustee acknowledges
receipt of the REMIC 2 Regular Interests (each of which is uncertificated) and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of the Holders of the Regular Certificates and of the Class R-3
Interest. The interests evidenced by the Class R-3 Interest, together with the
REMIC 3 Regular Interests, constitute the entire beneficial ownership interest
in REMIC 3.
(c) In exchange for the REMIC 2 Regular Interests and,
concurrently with the assignment to the Trustee thereof, pursuant to the written
request of the Depositor executed by an officer of the Depositor, the Trustee
has executed, authenticated and delivered to or upon the order of the Depositor,
the Regular Certificates in authorized denominations evidencing (together with
the Class R-3 Interest) the entire beneficial ownership interest in REMIC 3.
(d) Concurrently with (i) the assignment and delivery
to the Trustee of REMIC 1 (including the Residual Interest therein represented
by the Class A-RL Certificates) and the acceptance by the Trustee thereof,
pursuant to Section 2.01, Section 2.02 and Section 2.09(a); and (ii) the
assignment and delivery to the Trustee of REMIC 2 (including the Residual
Interest therein represented by the Class R-2 Interest) and the acceptance by
the Trustee thereof, pursuant to Section
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2.09(b); and (iii) the assignment and delivery to the Trustee of REMIC 3
(including the Residual Interest therein represented by the Class R-3 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.09(c), the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Class A-RL and the Class A-R Certificates in authorized
denominations evidencing the Class R-2 Interest and the Class R-3 Interest.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicers to Service Mortgage Loans.
For and on behalf of the Certificateholders, each Servicer
shall service and administer the Mortgage Loans in accordance with the terms of
this Agreement and with Accepted Servicing Practices. The obligations of each of
Wilshire and Option One hereunder to service and administer the Mortgage Loans
shall be limited to the Wilshire Serviced Loans and the Option One Serviced
Loans, respectively; and with respect to the duties and obligations of each
Servicer, references herein to "Mortgage Loans" or "related Mortgage Loans"
shall be limited to the Wilshire Serviced Loans (and the related proceeds
thereof and related REO Properties) in the case of Wilshire and the Option One
Serviced Loans (and the related proceeds thereof and related REO Properties), in
the case of Option One, and in no event shall any Servicer have any
responsibility or liability with respect to any of the other Mortgage Loans.
Notwithstanding anything in this Agreement, any Subservicing Agreement or the
Credit Risk Management Agreement to the contrary, neither Option One nor
Wilshire shall have any duty or obligation to enforce any Credit Risk Management
Agreement or to supervise, monitor or oversee the activities of the Credit Risk
Manager under its Credit Risk Management Agreement with respect to any action
taken or not taken by Option One or Wilshire, as applicable, pursuant to a
recommendation of the Credit Risk Manager. In connection with such servicing and
administration, 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 Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of any
Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages
(but only in the manner provided in this Agreement), (iii) to collect any
Insurance Proceeds and other Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan; provided that a Servicer shall not take any action
that is materially inconsistent with or materially prejudices the interests of
the Trust Fund or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor, the Trustee or the Certificateholders under this
Agreement unless such action is specifically called for by the terms hereof. The
Trustee will provide a limited power of attorney to each Servicer, prepared by
each Servicer and reasonably acceptable to the Trustee, to permit each Servicer
to act on behalf of the Trustee under this Agreement. Each Servicer hereby
indemnifies the Trustee for all costs and expenses incurred by the Trustee in
connection with the negligent or willful misuse of such power of attorney. 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. Each Servicer
further is hereby authorized and empowered in its own name or in the name of the
Subservicer, when such Servicer or the Subservicer, as the case may be, believes
it is appropriate in its best judgment to register any Mortgage Loan on the
MERS(R) System, or cause the removal from the registration of any Mortgage Loan
on the MERS(R) System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable
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instruments with respect to such assignment or re-recording of a Mortgage in the
name of MERS, solely as nominee for the Trustee and its successors and assigns.
Any reasonable expenses incurred in connection with the actions described in the
preceding sentence or as a result of MERS discontinuing or becoming unable to
continue operations in connection with the MERS(R) System, shall be reimbursable
by the Trust Fund to such Servicer. Notwithstanding the foregoing, subject to
Section 3.05(a), the Servicers shall not make or permit any modification, waiver
or amendment of any Mortgage Loan that would both constitute a sale or exchange
of such Mortgage Loan within the meaning of Section 1001 of the Code and any
proposed, temporary or final regulations promulgated thereunder (other than in
connection with a proposed conveyance or assumption of such Mortgage Loan that
is treated as a Principal Prepayment in Full pursuant to Section 3.10 hereof)
which would cause any of REMIC 1 , REMIC 2 or REMIC 3 to fail to qualify as a
REMIC. Without limiting the generality of the foregoing, each Servicer, in its
own name or in the name of the Depositor and the Trustee, is hereby authorized
and empowered by the Depositor and the Trustee, when such Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. Each Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by either or
both of them as are necessary or appropriate to enable such Servicer to service
and administer the Mortgage Loans to the extent that such Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents and a written request signed by an
authorized officer, the Depositor and/or the Trustee shall execute such
documents and deliver them to such Servicer.
In accordance with the standards of the preceding paragraph,
each Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on any Mortgaged
Property (to the extent the Servicer has been notified that such taxes or
assessments have not paid by the related Mortgagor or the owner or the servicer
of the related First Mortgage Loan), which advances shall be reimbursable in the
first instance from related collections from the Mortgagors pursuant to Section
3.06, and further as provided in Section 3.08; provided, however, that each
Servicer shall be required to advance only to the extent that such advances, in
the good faith judgment of such Servicer, will be recoverable by such Servicer
out of Insurance Proceeds, Liquidation Proceeds, or otherwise out of the
proceeds of the related Mortgage Loan; and provided, further, that such payments
shall be advanced within such time period required to avoid the loss of the
Mortgaged Property by foreclosure of a tax or other lien. The costs incurred by
a Servicer, if any, in effecting the timely payments of taxes and assessments on
the Mortgaged Properties and related insurance premiums shall not, for the
purpose of calculating monthly distributions to the Certificateholders, be added
to the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
Subject to the provisions of the first paragraph of this
Section, the Trustee shall execute, at the written request of a Servicer, and
furnish to such Servicer and any Subservicer such documents as are necessary or
appropriate to enable such Servicer or any Subservicer to carry out their
servicing and administrative duties hereunder, and the Trustee hereby grants to
each Servicer a power of attorney, to be completed in the form of Exhibit AA
hereto, to carry out such duties. The
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Trustee shall not be liable for the actions of the Servicers or any Subservicers
under such powers of attorney.
If the Mortgage relating to a Mortgage Loan had a lien senior
to the Mortgage Loan on the related Mortgaged Property as of the Cut-off Date,
then the related Servicer, in such capacity, may consent to the refinancing of
the prior senior lien, provided that the following requirements are met:
(i) the resulting Combined Loan-to-Value Ratio of such
Mortgage Loan is no higher than the Combined Loan-to-Value Ratio prior
to such refinancing; and
(ii) the interest rate, or, in the case of an adjustable
rate existing senior lien, the maximum interest rate, for the loan
evidencing the refinanced senior lien is no more than 2.0% higher than
the interest rate or the maximum interest rate, as the case may be, on
the loan evidencing the existing senior lien immediately prior to the
date of such refinancing; and
(iii) the loan evidencing the refinanced senior lien is
not subject to negative amortization.
With respect to the Mortgage Loans, the Servicer of each
Mortgage Loan agrees that, with respect to the Mortgagors of such Mortgage
Loans, such Servicer for each Mortgage Loan shall furnish, in accordance with
the Fair Credit Reporting Act and its implementing regulations, accurate and
complete information on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company on a monthly basis.
SECTION 3.02 Subservicing; Enforcement of the Obligations of
Subservicers.
(a) The Mortgage Loans may be subserviced by a
Subservicer on behalf of the related Servicer in accordance with the servicing
provisions of this Agreement, provided that the Subservicer is an approved
Xxxxxx Xxx or Xxxxxxx Mac seller/servicer in good standing. A 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. Each Servicer shall pay all fees and
expenses of any Subservicer engaged by such Servicer from its own funds.
Notwithstanding the foregoing, 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 Mortgage Loans to such Outsourcer. In such event, the use by a
Servicer of any such Outsourcer 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 Outsourcer as fully as if such
65
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.
(b) At the cost and expense of a Servicer, without any
right of reimbursement from the Depositor, Trustee, the Trust Fund, 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 Mortgage Loans itself.
In the event that a Servicer's responsibilities and duties under this Agreement
are terminated pursuant to Section 7.01, and if requested to do so by the
Trustee, 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, the Trust Fund, or the Collection Account.
(c) Notwithstanding any of the provisions of this
Agreement relating to agreements or arrangements between a Servicer and its
Subservicer, a Servicer and its Outsourcer, or any reference herein to actions
taken through the Subservicer, the Outsourcer, or otherwise, no Servicer shall
be relieved of its obligations to the Depositor, Trustee or Certificateholders
and shall be obligated to the same extent and under the same terms and
conditions as if it alone were servicing and administering the related Mortgage
Loans. Each Servicer shall be entitled to enter into an agreement with its
Subservicer and Outsourcer for indemnification of such Servicer or Outsourcer,
as applicable, by such Subservicer and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.
For purposes of this Agreement, a Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
related Mortgage Loans that are received by a related Subservicer or Outsourcer,
as applicable, regardless of whether such payments are remitted by the
Subservicer or Outsourcer, as applicable, to such Servicer.
Any Subservicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Subservicer or an Outsourcer
shall be deemed to be between the Subservicer or an Outsourcer, and the related
Servicer alone, and the Depositor, the Trustee and the other Servicer shall have
no obligations, duties or liabilities with respect to a Subservicer including no
obligation, duty or liability of the Depositor and Trustee or the Trust Fund to
pay a Subservicer's fees and expenses.
SECTION 3.03 [Reserved].
SECTION 3.04 Trustee to Act as Servicer.
(a) In the event that any Servicer shall for any reason
no longer be a Servicer hereunder (including by reason of an Event of Default),
the Trustee or its successor shall thereupon assume all of the rights and
obligations of such Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of such Servicer pursuant to Section
3.09 hereof or any acts
66
or omissions of the related predecessor Servicer hereunder, (ii) obligated to
make Advances if it is prohibited from doing so by applicable law or (iii)
deemed to have made any representations and warranties of such Servicer
hereunder). Any such assumption shall be subject to Section 7.02 hereof.
Each Servicer shall, upon request of the Trustee, 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
substitute Subservicing Agreement to the assuming party.
(b) [reserved]
SECTION 3.05 Collection of Mortgage Loans; Collection
Accounts; Certificate Account; Pre-Funding
Account; Capitalized Interest Account.
(a) Continually from the date hereof until the
principal and interest on all Mortgage Loans have been paid in full or such
Mortgage Loans have become Liquidated Mortgage Loans, each Servicer shall
proceed in accordance with Accepted Servicing Practices to collect all payments
due under each of the related Mortgage Loans when the same shall become due and
payable to the extent consistent with this Agreement and, consistent with such
standard, with respect to Escrow Mortgage Loans, a Servicer shall ascertain and
estimate Escrow Payments and all other charges that will become due and payable
with respect to the Mortgage Loans and the Mortgaged Properties, to the end that
the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable. Consistent with the terms of
this Agreement, each Servicer may also waive, modify or vary any term of any
Mortgage Loan or consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to any Mortgagor if in such Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action);
provided, however, that such Servicer may not modify materially or permit any
Subservicer to modify any Mortgage Loan (unless such Mortgage Loan is in default
or, in the judgment of such Servicer, such default is reasonably foreseeable),
including without limitation any modification that would change the Mortgage
Rate, forgive the payment of any principal or interest (unless in connection
with the liquidation of the related Mortgage Loan or except in connection with
Principal Prepayments to the extent that such reamortization is not inconsistent
with the terms of the Mortgage Loan), increase the principal balance, or extend
the final maturity date of such Mortgage Loan, and, provided however, that in no
event shall such modification reduce the interest rate on a Mortgage Loan below
the rate at which the Servicing Fee with respect to such Mortgage Loan accrues
and provided, further, that any such waiver, modification, postponement or
indulgence granted to a Mortgagor by a Servicer in connection with its servicing
of the related First Mortgage Loan shall not be considered relevant to a
determination of whether such Servicer has acted consistently with the terms and
standards of this Agreement, so long as in such Servicer's determination such
action is not materially adverse to the interests of the Certificateholders. In
the event of any such arrangement that permits the deferment of principal and
interest payment on any Mortgage Loan, the related Servicer shall make Advances
on the related Mortgage Loan in accordance with the provisions of Section 4.01
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during the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements. Each
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
(b) Each Servicer shall segregate and hold all funds
collected and received pursuant to a Mortgage Loan separate and apart from any
of its own funds and general assets and shall establish and maintain one or more
Collection Accounts, each of which shall be an Eligible Account, titled
"[Servicer's name], in trust for the Holders of Credit Suisse First Boston
Mortgage Securities Corp., Home Equity Mortgage Pass-Through Certificates,
Series 2004-3" or, if established and maintained by a Subservicer on behalf of
the related 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". Any funds
deposited in a Collection Account shall at all times be either invested in
Eligible Investments or shall be fully insured to the full extent permitted
under applicable law. Funds deposited in a Collection Account may be drawn on by
the applicable Servicer in accordance with Section 3.08.
Each Servicer shall deposit in the Collection Account within
two Business Days of receipt and retain therein, the following collections
remitted by Subservicers or payments received by such Servicer and payments made
by such Servicer subsequent to the Cut-off Date, other than Scheduled Payments
due on or before the Cut-off Date:
(i) all payments on account of principal on the
Mortgage Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage
Loans adjusted to the per annum rate equal to the Mortgage Rate reduced
by the related Servicing Fee Rate;
(iii) all Liquidation Proceeds on the Mortgage Loans;
(iv) all Insurance Proceeds on the Mortgage Loans
including amounts required to be deposited pursuant to Section 3.09
(other than proceeds to be held in the Escrow Account and applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 3.09);
(v) all Advances made by such Servicer pursuant to
Section 4.01;
(vi) with respect to each Principal Prepayment on the
Mortgage Loans, the Compensating Interest Payment, if any, for the
related Prepayment Period;
(vii) any amounts required to be deposited by such
Servicer in respect of net monthly income from REO Property pursuant to
Section 3.11; and
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(viii) any other amounts required to be deposited hereunder
including all collected Prepayment Charges.
The foregoing requirements for deposit into each Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, Ancillary Income need not be deposited
by 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 to the applicable Collection Account, any portion of any
Scheduled Payment representing the applicable Servicing Fee. 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.
(c) On or prior to the Closing Date, the Trustee shall
establish and maintain, on behalf of the Certificateholders, the
Certificate Account. The Trustee shall, promptly upon receipt, deposit
in the Certificate Account and retain therein the following:
(i) the aggregate amount remitted by each Servicer to
the Trustee pursuant to Section 3.08(viii);
(ii) any amount deposited by the Trustee pursuant to
Section 3.05(d) in connection with any losses on Eligible Investments;
and
(iii) any other amounts deposited hereunder which are
required to be deposited in the Certificate Account.
In the event that a Servicer shall remit to the Trustee any
amount not required to be remitted, it may at any time direct the Trustee to
withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering an
Officer's Certificate to the Trustee which describes the amounts deposited in
error in the Certificate Account. All funds deposited in the Certificate Account
shall be held by the Trustee in trust for the Certificateholders until disbursed
in accordance with this Agreement or withdrawn in accordance with Section
3.08(b). In no event shall the Trustee incur liability for withdrawals from the
Certificate Account at the direction of a Servicer.
(d) Each institution at which a Collection Account, the
Certificate Account or the Pre-Funding 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 (in the case of a Collection Account), the
Trustee (in the case of the Certificate Account) or the Depositor (in the case
of the Pre-Funding Account), in Eligible Investments, which shall mature not
later than (i) in the case of a Collection Account, the second Business Day
immediately preceding the related Distribution Date and (ii) in the
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case of the Certificate Account and the Pre-Funding Account, the Business Day
immediately preceding the Distribution Date and, in each case, shall not be sold
or disposed of prior to its maturity. All income and gain net of any losses
realized from any such balances or investment of funds on deposit in a
Collection Account shall be for the benefit of the 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. The Trustee in its fiduciary
capacity shall not be liable for the amount of any loss incurred in respect of
any investment or lack of investment of funds held in a Collection Account or
the Pre-Funding Account. All income and gain net of any losses realized from any
such investment of funds on deposit in the Certificate Account shall be for the
benefit of the Trustee as compensation and shall be remitted to it monthly as
provided herein. The amount of any realized losses in the Certificate Account
incurred in any such account in respect of any such investments shall promptly
be deposited by the Trustee in the Certificate Account. All income and gain net
of any losses realized from any such balances or investment of funds on deposit
in the Pre-Funding Account shall be for the benefit of the Depositor and shall
be remitted to it monthly.
(e) Each Servicer shall give notice to the Trustee, the
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the related Collection Account prior to any change thereof. The
Trustee shall give notice to each Servicer, the Seller, each Rating Agency and
the Depositor of any proposed change of the location of the Certificate Account
prior to any change thereof.
(f) The Trustee shall establish and maintain, on behalf
of the Certificateholders, the Pre-Funding Account. On the Closing Date, the
Depositor shall remit the Pre-Funding Amount to the Trustee for deposit in the
Pre-Funding Account. On each Subsequent Transfer Date, upon satisfaction of the
conditions for such Subsequent Transfer Date set forth in Section 2.01(f), with
respect to the related Subsequent Transfer Agreement, the Trustee 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 Pre-Funding Account on September
24, 2004, to the extent they represent interest earnings on the amounts
originally deposited into the Pre-Funding Account, the Trustee shall distribute
them to the order of the Depositor. The remaining funds in the Pre- Funding
Account shall be transferred to the Certificate Account to be included as part
of principal distributions to the Class A-1 Certificates, Class A-2 Certificates
and Class A-3 Certificates in the manner and priority set forth herein on the
September 2004 Distribution Date.
(g) The Trustee 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 Trustee
for deposit in the Capitalized Interest Account. On the Business Day prior to
each of the July 2004, August 2004 and September 2004 Distribution Dates, the
Trustee shall transfer from each Capitalized Interest Account to the Certificate
Account an amount equal to the Capitalized Interest Requirement for such
Distribution Date. On each of the July 2004 and August 2004 Distribution Dates,
the Overfunded Interest Amount shall be withdrawn from the Capitalized
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Interest Account and paid to the Depositor. Any funds remaining in the
Capitalized Interest Account immediately after the September 2004 Distribution
Date 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 in violation of current law, the applicable Servicer shall segregate and
hold all funds collected and received pursuant to a Mortgage Loan constituting
Escrow Payments separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Escrow Accounts, each of which
shall be an Eligible Account, titled, "[Servicer's name], in trust for "Credit
Suisse First Boston Mortgage Securities Corp., Home Equity Mortgage Pass-Through
Certificates, Series 2004-3 and various mortgagors" or, if established and
maintained by a Subservicer on behalf of the related 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". Funds deposited in the Escrow Account may be drawn
on by the related Servicer in accordance with Section 3.06(b). The creation of
any Escrow Account shall be evidenced by a certification in the form of Exhibit
P-1 hereto, in the case of an account established with a Servicer, or by a
letter agreement in the form of Exhibit P-2 hereto, in the case of an account
held by a depository other than a Servicer. A copy of such certification shall
be furnished to the Depositor and Trustee.
(b) Each Servicer shall deposit in its Escrow Account or
Accounts on a daily basis within two Business Day of receipt and retain therein:
(i) all Escrow Payments collected on account of the
related Mortgage Loans, for the purpose of effecting timely payment of
any such items as required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds which
are to be applied to the restoration or repair of any Mortgaged
Property.
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(c). 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.
(c) Withdrawals from the Escrow Account or Accounts may
be made by the related Servicer only:
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(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 such Servicer pursuant to this Agreement with respect
to a related Mortgage Loan, but only from amounts received on the
related Mortgage Loan which represent late collections of Escrow
Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage
Loan;
(iv) for transfer to the related Collection Account to
reduce the principal balance of the related Mortgage Loan in accordance
with the terms of the related Mortgage and Mortgage Note;
(v) for application to restore or repair of the related
Mortgaged Property in accordance with the procedures outlined in
Section 3.09;
(vi) to pay to such Servicer, or any Mortgagor 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 such Servicer.
SECTION 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans; Inspections.
(a) Each Servicer shall afford the Depositor and the
Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance information and other matters
relating to this Agreement, such access being afforded without charge, but only
upon reasonable request and during normal business hours at the office
designated by such Servicer.
(b) Each Servicer shall inspect the Mortgaged
Properties as often as deemed necessary by such Servicer in such Servicer's sole
discretion, to assure itself that the value of such Mortgaged Property is being
preserved. In addition, if any Mortgage Loan is more than 60 days delinquent,
each Servicer 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.
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SECTION 3.08 Permitted Withdrawals from the Collection
Accounts and Certificate Account.
Each Servicer may (and in the case of clause (viii) below,
shall) from time to time make withdrawals from the related Collection Account
for the following purposes:
(i) to pay to 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 Mortgage
Loan(s) in respect of which any such Advance was made (including
without limitation, late recoveries of payments, Liquidation Proceeds
and Insurance Proceeds, amounts representing proceeds of other
insurance policies, if any, covering the related Mortgaged Property,
rental and other income from REO Property and proceeds of any purchase
or repurchase of the related Mortgage Loan);
(iii) to reimburse such Servicer for any Nonrecoverable
Advance;
(iv) to reimburse such Servicer for (A) unreimbursed
Servicing Advances, such Servicer's right to reimbursement pursuant to
this clause (A) with respect to any Mortgage Loan being limited to
amounts received on such Mortgage Loan which represent late payments of
principal and/or interest (including, without limitation, Liquidation
Proceeds and Insurance Proceeds, amounts representing proceeds of other
insurance policies, if any, covering the related Mortgaged Property,
rental and other income from REO Property and proceeds of any purchase
or repurchase of the related Mortgage Loan with respect to such
Mortgage Loan) respecting which any such advance was made and (B) for
unpaid Servicing Fees as provided in Section 3.11 and unreimbursed
Servicing Advances and Advances as provided in Section 3.11(a)(iv)(A)
hereof;
(v) to pay to the purchaser, with respect to each
Mortgage Loan or property acquired in respect thereof that has been
purchased pursuant to Section 2.02, 2.03 or 3.11, all amounts received
thereon after the date of such purchase;
(vi) to reimburse such Servicer or the Depositor for
expenses incurred by any of them and reimbursable pursuant to Section
6.03 hereof;
(vii) to withdraw any amount deposited in such Collection
Account and not required to be deposited therein;
(viii) on or prior to the Servicer Cash Remittance Date, to
withdraw an amount equal to the Available Funds (other than clauses
(vi) and (vii) thereof) plus any related Expense Fees (other than the
Servicing Fee) for such Distribution Date and any Prepayment Charges
received in respect of the Mortgage Loans, subject to the collection of
funds included in the
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definition of "Available Funds" and remit such amount to the Trustee
for deposit in the Certificate Account;
(ix) to clear and terminate such Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof; and
(x) to invest funds in certain Eligible Investments and
to transfer funds to another Eligible Account.
Each Servicer shall keep and maintain separate accounting, on
a Mortgage Loan basis for the purpose of justifying any withdrawal from the
Collection Account pursuant to such subclauses (i), (ii), (iv) and (v). Prior to
making any withdrawal from a Collection Account pursuant to subclause (iii), the
related Servicer shall deliver to the Trustee a certificate of a Servicing
Officer indicating the amount of any previous Advance determined by such
Servicer to be a Nonrecoverable Advance and identifying the related Mortgage
Loans(s), and their respective portions of such Nonrecoverable Advance.
The Trustee shall withdraw funds from the Certificate Account
for distributions to the Certificateholders and the Credit Risk Manager, if
applicable, in the manner specified in this Agreement (and to withhold from the
amounts so withdrawn, the amount of any taxes that it is authorized to withhold
pursuant to the last paragraph of Section 8.11). In addition, the Trustee may
from time to time make withdrawals from the Certificate Account for the
following purposes:
(i) to pay to itself the Trustee Fee and any investment
income earned for the related Distribution Date;
(ii) to withdraw and return to the applicable Servicer
for deposit to the Collection Account any amount deposited in the
Certificate Account and not required to be deposited therein; and
(iii) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
SECTION 3.09 Maintenance of Hazard Insurance and Mortgage
Impairment Insurance; Claims; Restoration of
Mortgaged Property.
Each Servicer shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the related Mortgage Loans, which policy shall provide
coverage in an amount equal to the amount at least equal to the lesser of (i)
the maximum insurable value of the improvements securing such Mortgage Loan and
(ii) the greater of (A) the outstanding principal balance of the Mortgage Loan
and (B) an amount such that the proceeds of such policy shall be sufficient to
prevent the Mortgagor and/or the mortgagee from becoming co- insurer. Any
amounts collected by a Servicer under any such policy relating to a Mortgage
Loan (for the avoidance of doubt, remaining after application of any such
amounts to any related First Mortgage Loan) shall be deposited in the related
Collection Account subject to withdrawal pursuant to Section
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3.08. Such policy may contain a deductible clause, in which case, in the event
that there shall not have been maintained on the related Mortgaged Property a
standard hazard insurance policy, and there shall have been a loss which would
have been covered by such policy, the 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 which is in
excess of a deductible under a standard hazard insurance policy, such amount to
be deposited from such Servicer's funds, without reimbursement therefor. Upon
request of the Trustee, a Servicer shall cause to be delivered to the Trustee a
certified true copy of such policy and a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified without
30 days' prior written notice to the Trustee. In connection with its activities
as Servicer of the Mortgage Loans, each Servicer agrees to present, on behalf of
itself, the Depositor, and the Trustee for the benefit of the
Certificateholders, claims under any such blanket policy.
Pursuant to Section 3.05, any amounts collected by 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 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). Any costs incurred by a Servicer in
maintaining such insurance shall be recoverable by the Servicer as a Servicing
Advance out of payments by the related Mortgagor or out of Insurance Proceeds or
Liquidation Proceeds. Notwithstanding anything to the contrary in this
paragraph, each Servicer shall be required to pay the costs of maintaining any
insurance contemplated by this Section 3.09 only to the extent that such
advances, in the good faith judgment of such Servicer, will be recoverable.
A Servicer need not obtain the approval of the Trustee prior
to releasing any Insurance Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in accordance
with Accepted Servicing Practices. At a minimum, each Servicer shall comply with
the following conditions in connection with any such release of Insurance
Proceeds in excess of $10,000:
(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, if any.
If the Trustee 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.
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SECTION 3.10 Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
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 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 Primary Insurance Policy, if any or, if consistent with Accepted
Servicing Practices, the Servicer believes the collections and other recoveries
in respect of such Mortgage Loans could reasonably be expected to be maximized
if the Mortgage Loan were not accelerated.
If a Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause or, if any of the other
conditions set forth in the last sentence of the preceding paragraph apply, 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 and
such Servicer has the prior consent of the primary mortgage guaranty insurer, a
substitution of liability agreement with the purchaser of the Mortgaged Property
pursuant to which the original Mortgagor is released from liability and the
purchaser of the Mortgaged Property is substituted as Mortgagor and becomes
liable under the Mortgage Note. Notwithstanding the foregoing, 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 Mortgage Loan
or the outstanding principal amount of the Mortgage Loan shall be changed.
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 a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, 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
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stating that the requirements of this Section 3.10 have been met in connection
therewith. The related Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by a Servicer for entering into an assumption, modification 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) (i) Each Servicer shall use reasonable efforts to
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the related Mortgage Loans as come into and continue in default
and as to which no satisfactory arrangements can be made for collection of
delinquent payments. With respect to such of the Mortgage Loans as come into and
continue in default, each Servicer will decide whether to (i) foreclose upon the
Mortgaged Properties securing such Mortgage Loans, (ii) write off the unpaid
principal balance of the Mortgage Loans as bad debt, (iii) take a deed in lieu
of foreclosure, (iv) accept a short sale (a payoff of the Mortgage Loan for an
amount less than the total amount contractually owed in order to facilitate a
sale of the Mortgaged Property by the Mortgagor) or permit a short refinancing
(a payoff of the Mortgage Loan for an amount less than the total amount
contractually owed in order to facilitate refinancing transactions by the
Mortgagor not involving a sale of the Mortgaged Property), (v) arrange for a
repayment plan, or (vi) agree to a modification in accordance with this
Agreement. In connection with such decision, the related 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 Trustee and Certificateholders, provided, that actions taken by
a Servicer in connection with its servicing of the related First Mortgage Loan
shall not be considered relevant to a determination of whether such Servicer has
met the standard set forth in this clause (iii), so long as in such Servicer's
determination such action is not materially adverse to the interests of the
Certificateholders and (iv) is consistent with the requirements of the insurer
under any Required Insurance Policy; 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 in its sole
discretion (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the related Collection Account). The 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, as provided in the definition of Liquidation Proceeds and as
provided in Section 3.08(iv)(A).
(ii) Notwithstanding anything to the contrary contained
in this Agreement, with respect to any Mortgage Loan that is one hundred twenty
(120) days delinquent, the related Servicer shall obtain a broker's price
opinion with respect to the related Mortgaged Property and shall use all
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reasonable efforts to obtain a total indebtedness balance (including, but not
limited to, unpaid principal, interest, escrows, taxes and expenses) for any
related senior lien. The cost of obtaining any such broker's price opinion shall
be reimbursable to the related Servicer as a Servicing Advance pursuant to
Section 3.08(iii) or (iv). After obtaining the related broker's price opinion,
the related Servicer will determine whether any Significant Net Recovery is
possible through foreclosure proceedings or other liquidation of the related
Mortgaged Property. If the related Servicer determines that (x) no Significant
Net Recovery is possible or (y) the potential Net Recoveries are anticipated to
be an amount, determined by the related Servicer in its good faith judgment and
in light of other mitigating circumstances, that is insufficient to warrant
proceeding through foreclosure or other liquidation of the related Mortgaged
Property, it may, at its discretion, charge off such delinquent Mortgage Loan in
accordance with subsections (a)(iii) and (a)(iv) below.
(iii) If the related Servicer determines based on the broker's
price opinion obtained under paragraph (a)(ii) above and other relevant
considerations that (x) no Significant Net Recovery is possible through
foreclosure proceedings or other liquidation of the related Mortgaged Property
or (y) the potential Net Recoveries are anticipated to be an amount, determined
by the related Servicer in its good faith judgment and in light of other
mitigating circumstances, that is insufficient to warrant proceeding through
foreclosure or other liquidation of the related Mortgaged Property, it will be
obligated to charge off the related Mortgage Loan at the time such Mortgage Loan
becomes 180 days delinquent. Once a Mortgage Loan has been charged off, the
related Servicer will discontinue making Advances, the related Servicer will not
be entitled to any additional servicing compensation (except as described in
paragraphs(a)(ii) or (a) (iv) of this Section 3.11), the Charged Off Loan will
give rise to a Realized Loss, and the related Servicer will follow the
procedures described in paragraph (a)(iv) below. If the related Servicer
determines that (x) a Significant Net Recovery is possible through foreclosure
proceedings or other liquidation of the Mortgaged Property and (y) the potential
Net Recoveries are anticipated to be an amount, determined by the related
Servicer in its good faith judgment and in light of other mitigating
circumstances, that is sufficient to warrant proceeding through foreclosure or
other liquidation of the related Mortgaged Property, such Servicer may continue
to make Advances or Servicing Advances on the related Mortgage Loan that has
become 180 days delinquent and, will notify the Credit Risk Manager of that
decision.
(iv) (A) With respect to any Option One Serviced Loan that
becomes a Charged Off Loan, Option One shall notify Wilshire
of its decision to charge off such Mortgage Loan and the
servicing of such Option One Serviced Loan will be transferred
to Wilshire, such transfer to be initiated by Option One on
the 15th day of the month (or if the 15th of the month is not
a Business Day, the next Business Day) following the month in
which such Option One Serviced Loan becomes a Charged Off Loan
and may be serviced, at Wilshire's discretion, using Wilshire
Special Servicing as provided in paragraph (iv)(B) below.
Immediately upon transfer of any Option One Serviced Loan to
Wilshire, Option One shall be reimbursed for all unreimbursed
Advances and Servicing Advances (including any trailing
expenses incurred prior to but invoiced after the date
servicing is transferred to Wilshire, so long as Option One
notifies the Trustee of such trailing expenses within 90 days
of the date of such transfer) and unpaid Servicing Fees
relating to such transferred Mortgage Loan out of funds on
deposit in the Collection Account. Option One shall provide an
Officer's Certificate to the Trustee no later than the related
Servicer Remittance Date
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evidencing the amount to be reimbursed pursuant to the
previous sentence with respect to any Mortgage Loans
transferred by Option One to Wilshire. Option One shall notify
the Trustee of any Option One Serviced Loan that is
transferred to Wilshire. Option One shall provide servicing
information on such transferred Mortgage Loans as reasonably
requested by Wilshire including, but not limited to, an
electronic data tape containing the fields set forth in
Exhibit T hereto, and an electronic file or hard copy
containing collection comments, outstanding advance balances,
payment histories, and hardcopies of any imaged files. Option
One shall be responsible for any other reasonable actions
required by Accepted Servicing Practices relating to the
transfer of servicing and the charging off of such Mortgage
Loans. All costs of such transfer of the electronic data tape
and files relating to Option One Serviced Loans shall be paid
by Option One. Option One shall not be responsible for
Wilshire's boarding costs of such transferred Mortgage Loans.
Wilshire shall not be responsible for the reimbursement of any
Advance or Servicing Advance on a transferred Mortgage Loan.
(B) Any (x) Wilshire Serviced Loan that becomes a
Charged Off Loan and (y) any Option One Serviced Loan that
becomes a Charged Off Loan and is transferred to Wilshire
pursuant to paragraph (iv)(A) above may continue to be
serviced by Wilshire for the Certificateholders using Wilshire
Special Servicing. Wilshire will accrue, but not be entitled
to any Servicing Fees and reimbursement of expenses in
connection with such Charged Off Loans, except to the extent
of funds available from the aggregate amount of recoveries on
all Charged Off Loans. Such aggregate recovery amounts on
Charged Off Loans shall be paid to Wilshire first, as
reimbursement of any outstanding and unpaid expenses, and
second, as any accrued and unpaid Servicing Fees. Wilshire
will only be entitled to previously accrued Servicing Fees and
expenses on any such Charged Off Loans. Wilshire will not be
entitled to receive any future unaccrued Servicing Fees or
expenses from collections on such Charged Off Loans. Any
Charged Off Loan serviced by Wilshire using Wilshire Special
Servicing shall be so serviced until the Release Date
described below. Any Net Recoveries on such Charged Off Loans
received prior to the Release Date will be included in
Available Funds.
On the date (the "Release Date") which is no more than six
months after the date on which Wilshire begins servicing any Charged Off Loans
using Wilshire Special Servicing, unless specific Net Recoveries are anticipated
by Wilshire on a particular Charged Off Loan (in which case the Release Date
will be delayed until all such specific anticipated Net Recoveries are
received), such Charged Off Loan will be released from the Trust Fund, will no
longer be an asset of any REMIC, and will be transferred to the Class X-2
Certificateholders, without recourse, and thereafter (i) those Holders will be
entitled to any amounts subsequently received in respect of any such Released
Loans, (ii) the Majority in Interest Class X-2 Certificateholder may designate
any servicer to service any such Released Loan and (iii) the Majority in
Interest Class X-2 Certificateholder may sell any such Released Loan to a third
party. Notwithstanding the previous sentence, if at any time after a Mortgage
Loan has been Charged Off and prior to six months after the date on which
Wilshire begins servicing such Charged Off Loan using Wilshire Special
Servicing, Wilshire determines that there will not be any Net Recoveries on such
Charged Off Loan under any circumstances, Wilshire may release such
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Charged Off Loan to the Majority in Interest Class X-2 Certificateholder in
accordance with the provisions set forth in the previous sentence.
Notwithstanding the foregoing, the procedures described above
in this subsection 3.11(a)(iv) relating to the treatment of Charged Off Loans
may be modified at any time at the discretion of the Majority in Interest Class
X-1 Certificateholder, with the consent of Wilshire, which consent shall not be
unreasonably withheld, and if the modification would adversely affect or
materially increase the obligations of Option One with the consent of Option One
which consent shall not be unreasonably withheld; provided, however, that in no
event shall the Majority in Interest Class X-1 Certificateholder change the fee
structure relating to Charged Off Loans in a manner that would cause fees to be
paid to Wilshire other than from recoveries on Charged Off Loans.
The Trustee shall track collections received by Wilshire on
any Charged Off Loans based upon loan level data provided to the Trustee by
Wilshire on each Servicer Data Remittance Date in a report in the form of
Exhibit U hereto, identifying the Charged Off Loans as of the related Due Period
that Wilshire will continue to service until the related Release Date using
Wilshire Special Servicing. On each Distribution Date, the Trustee shall verify,
based on the recovery and expense information provided by Wilshire on the
related Servicer Data Remittance Date, (i) the aggregate amount of accrued and
unpaid Servicing Fees to be paid to Wilshire and expenses to be reimbursed to
Wilshire on such Charged Off Loans as of the related Due Period and (ii) the
amount of Net Recoveries on such Charged Off Loans for such Distribution Date.
The Trustee shall be entitled to rely, without independent verification, on the
loan level data provided by Wilshire that identifies the recovery amounts and
the outstanding and unpaid expenses on any Charged Off Loan in order to verify
the amount in clause (ii) of the previous sentence. The Trustee will be
responsible for independently verifying the aggregate amount of accrued and
unpaid Servicing Fees described in clause (i) of the second preceding sentence
to be paid to Wilshire.
(v) Notwithstanding anything to the contrary contained
in this Agreement, in connection with a foreclosure or acceptance of a deed in
lieu of foreclosure, in the event the related Servicer has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Trustee otherwise requests, an environmental
inspection or review of such Mortgaged Property conducted by a qualified
inspector shall be arranged for by such Servicer. Upon completion of the
inspection, the related Servicer shall promptly provide the Trustee with a
written report of environmental inspection. It is understood by the parties
hereto that any cost related to such inspection shall be advanced by the related
Servicer and will be deemed a Servicing Advance in accordance with the
provisions of Section 3.08 hereof.
(vi) 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 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 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
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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 fully reimburse such Servicer, such
Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.08 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 Servicing Advances made with respect to the related
Mortgaged Property from the related Collection Account pursuant to Section 3.08
hereof, such Servicer shall have no further obligation to service such Mortgage
Loan under the provisions of this Agreement and the related Mortgage Loan will
be transferred to Wilshire in accordance with paragraph (iv) above.
(b) With respect to any REO Property, the deed or
certificate of sale shall be taken in the name of JPMorgan Chase Bank (or in the
case of a successor trustee, the name of such successor trustee), the Trustee
for the benefit of the Certificateholders of Home Equity Mortgage Trust Series
2004-3, 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. 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. The related Servicer may rent such property, as the
Servicer deems to be in the best interest of the Trustee and the
Certificateholders for the period prior to the sale of such REO Property on such
terms and conditions and for such periods as the Servicer deems to be in the
best interest of the Trustee and the Certificateholders. The related Servicer
shall furnish to the Trustee on or before each Distribution Date a statement
with respect to any REO Property covering the liquidation thereof during the
previous calendar month. That statement shall be accompanied by such other
information as the Trustee shall reasonably request and which is necessary to
enable the Trustee to comply with the reporting requirements of the REMIC
Provisions. The net monthly rental income, if any, from such REO Property shall
be deposited in the related Collection Account no later than the close of
business on each Determination Date. The 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 Trustee for filing. Notwithstanding the
previous sentence, with respect to any Option One Serviced Loan that becomes a
Charged Off Loan and is transferred to Wilshire pursuant to Section
3.11(a)(iv)(A) above, Option One shall not file a Form 1099C or other tax report
relating to the forgiveness of debt of the related Mortgagor.
To the extent consistent with Accepted Servicing Practices,
the related Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is equal to the outstanding
principal balance of the related Mortgage Loan (as reduced by any
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amount applied as a reduction of principal at the time of acquisition of the REO
Property), liability insurance and, to the extent required and available under
the Flood Disaster Protection Act of 1973, as amended, flood insurance in the
amount required above. Any costs incurred by a Servicer in maintaining such
insurance shall be recoverable by the Servicer as a Servicing Advance out of
payments by the related Mortgagor or out of Insurance Proceeds or Liquidation
Proceeds. Notwithstanding anything to the contrary in this paragraph, each
Servicer shall be required to pay the costs of maintaining any insurance
contemplated by this Section 3.11(b) only to the extent that such advances, in
the good faith judgment of such Servicer, will be recoverable.
(c) In the event that the Trust Fund acquires any
Mortgaged Property as aforesaid or otherwise in connection with a default or
imminent default on a Mortgage Loan, the 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 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. The applicable Servicer shall be
entitled to be reimbursed from the Collection Account, as a Servicing Advance,
for any costs incurred in obtaining such Opinion of Counsel. Notwithstanding any
other provision of this Agreement, no Mortgaged Property acquired by the Trust
Fund shall be rented (or allowed to continue to be rented) or otherwise used for
the production of income by or on behalf of the Trust 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 obligor is not a United States Person, as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a
deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the 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 the Mortgage Loan.
(d) The decision of a Servicer to foreclose on a
defaulted 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
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of principal and interest on the related defaulted Mortgage Loans (with interest
accruing as though such Mortgage Loans were still current) and all such income
shall be deemed, for all purposes in this Agreement, to be payments on account
of principal and interest on the related Mortgage Notes and shall be deposited
into the related Collection Account. To the extent the net income received
during any calendar month is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan for such calendar month, such excess shall be considered to be a
partial prepayment of principal of the related Mortgage Loan.
Wilshire shall not acquire any Mortgaged Property on behalf of
any REMIC created hereunder in connection with a default or imminent default on
a Foreclosure Restricted Loan, if acquiring title to the Mortgaged Property
underlying the loan would cause the adjusted basis, for federal income tax
purposes, of these Mortgaged Properties owned by the related REMIC after
foreclosure, along with any other assets owned by the related REMIC other than
"qualified mortgages" and "permitted investments" within the meaning of Section
860G of the Code, to exceed 0.75% of the adjusted basis of the assets of the
related REMIC. If the adjusted basis of such Mortgaged Properties in
foreclosure, along with any other assets owned by the related REMIC, other than
"qualified mortgages" and "permitted investments" with the meaning of Section
860G of the Code, exceed 1.0% of the adjusted basis of the assets of the related
REMIC immediately after the distribution of principal and interest on any
Distribution Date, Wilshire will dispose of enough of such Mortgaged Properties
in foreclosure, for cash or otherwise, so that the adjusted basis of such
Mortgaged Properties in foreclosure, along with any other assets owned by the
related REMIC, other than "qualified mortgages" and "permitted investments"
within the meaning of Section 860G of the Code, will be less than 1.0% of the
adjusted basis of the assets of the related REMIC. The foregoing percentage
limitations will apply only to the Mortgage Loans serviced by Wilshire.
(e) The proceeds from any liquidation of a Mortgage
Loan, as well as any income from an REO Property, if applicable, will be applied
in the following order of priority: first, to reimburse the 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(iii)
that related to such Mortgage Loan; fourth, to accrued and unpaid interest (to
the extent no Advance has been made for such amount or any such Advance has been
reimbursed) on the Mortgage Loan or related REO Property, at the per annum rate
equal to the related Mortgage Rate reduced by the related Servicing Fee Rate, to
the Due Date occurring in the month in which such amounts are required to be
distributed; and fifth, as a recovery of principal of the Mortgage Loan. Excess
proceeds, if any, from the liquidation of a Liquidated Mortgage Loan will be
retained by the related Servicer as additional servicing compensation pursuant
to Section 3.14.
(f) [reserved].
(g) The Majority in Interest Class X-2
Certificateholder, at its option, may (but is not obligated to) repurchase from
the Trust Fund, (a) any related Mortgage Loan that is delinquent in payment by
three or more Scheduled Payments 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. If it elects to make any such repurchase, the
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Majority in Interest Class X-2 Certificateholder shall repurchase such Mortgage
Loan with its own funds at a price equal to the Repurchase Price for such
Mortgage Loan. The Majority in Interest Class X-2 Certificateholder may
designate any servicer to service any such Mortgage Loan purchased from the
Trust.
SECTION 3.12 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by 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
Trustee (or the Custodian, as the case may be) by delivering, or causing to be
delivered a "Request for Release" substantially in the form of Exhibit M. Upon
receipt of such request, the Trustee (or the Custodian, as the case may be)
shall within three Business Days release the related Mortgage File to the
related Servicer, and the Trustee shall within three Business Days of such
Servicer's direction execute and deliver to such Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage in each case provided by such
Servicer, together with the Mortgage Note with written evidence of cancellation
thereon. Each Servicer is authorized to cause the removal from the registration
on the MERS(R) System of such Mortgage, if applicable, and to execute and
deliver, on behalf of the Trustee and the Certificateholders or any of them, any
and all instruments of satisfaction or cancellation or of partial or full
release. Expenses incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be chargeable to the related Mortgagor to the extent
permitted by law and otherwise shall constitute a Servicing Advance. From time
to time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under any policy of flood
insurance, any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Trustee shall,
within three Business Days of delivery to the Trustee (or the Custodian, as the
case may be) of a Request for Release in the form of Exhibit M signed by a
Servicing Officer, release the Mortgage File to the 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 Trustee (or the
Custodian, as the case may be) when the need therefor by such Servicer no longer
exists, unless the 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, as the case may be) a Request for
Release in the form of Exhibit M, signed by a Servicing Officer.
If a Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
such Servicer shall, if applicable, deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents (which, if acceptable by the related court,
may be copies) necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity.
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SECTION 3.13 Documents, Records and Funds in Possession of a
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, each
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the related Servicer from time to time required to be delivered to
the Trustee pursuant to the terms hereof and shall account fully to the Trustee
for any funds received by such Servicer or which otherwise are collected by such
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan. All Mortgage Files and funds collected or held by, or under the
control of, a Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in a Collection Account,
shall be held by the related Servicer for and on behalf of the Trustee and shall
be and remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this Agreement. 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
Trustee for the benefit of the Certificateholders, to any claim, lien (other
than the lien of a related First Mortgage Loan), security interest, judgment,
levy, writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of setoff against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that 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.
As compensation for its services hereunder, each Servicer
shall be entitled to withdraw from the Collection Account or to retain from
interest payments on the related Mortgage Loans the amount of its Servicing Fee
for each Mortgage Loan, less any amounts in respect of its Servicing Fee payable
by such Servicer pursuant to Section 3.05(b)(vi). The Servicing Fee is limited
to, and payable solely from, the interest portion of such Scheduled Payments
collected by the related Servicer or as otherwise provided in Section 3.08.
Additional servicing compensation in the form of Ancillary
Income shall be retained by the related Servicer. 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 shall not be entitled to reimbursement thereof except as specifically
provided for in this Agreement.
SECTION 3.15 Access to Certain Documentation.
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
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
such Servicer. Nothing in this Section shall limit the
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obligation of any Servicer to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors and the failure of 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 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 the date on
which the Depositor's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission
(or, in each case, if such day is not a Business Day, the immediately preceding
Business Day), each Servicer shall deliver to the Depositor, the Rating Agencies
and the Trustee an Officer's Certificate stating, as to the signer thereof, that
(i) a review of the activities of the Servicer during the preceding calendar
year and of the performance of 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.
SECTION 3.17 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
Not later than the earlier of (a) March 15 of each calendar
year (other than the calendar year during which the Closing Date occurs) or (b)
with respect to any calendar year during which the Depositor's annual report on
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, 15 calendar days before the date on
which the Depositor's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission
(or, in each case, if such day is not a Business Day, the immediately preceding
Business Day), each Servicer at its expense shall cause a nationally or
regionally recognized firm of independent public accountants (who may also
render other services to such Servicer, the Seller or any affiliate thereof)
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee and the Depositor to the effect that 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
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rely, as to matters relating to direct servicing of mortgage loans by
Subservicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Guide for HUD Approved Title II Approved
Mortgagees and Loan Correspondent Programs (rendered within one year of such
statement) of independent public accountants with respect to the related
Subservicer. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the related Servicer's expense, provided such
statement is delivered by such Servicer to the Trustee.
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"). The amount
of coverage under any such Fidelity Bond and Errors and Omissions Insurance
Policy shall be at least equal to the coverage maintained by the related
Servicer in order to be acceptable to Xxxxxx Xxx or Xxxxxxx Mac to service loans
for it or otherwise in an amount as is commercially available at a cost that is
generally not regarded as excessive by industry standards. No provision of this
Section 3.18 requiring such Fidelity Bond and Errors and Omissions Insurance
Policy shall diminish or relieve 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 required
by Xxxxxx Mae. Upon the request of the Trustee, the related Servicer shall cause
to be delivered to the Trustee a certificate of insurance of the insurer and the
surety including a statement from the surety and the insurer that such fidelity
bond and insurance policy shall in no event be terminated or materially modified
without 30 days' prior written notice to the Trustee.
SECTION 3.19 Duties of the Credit Risk Manager.
The Depositor appoints The Murrayhill Company as Credit Risk
Manager. For and on behalf of the Depositor, and the Trustee, the Credit Risk
Manager will provide the Depositor with reports and recommendations concerning
Mortgage Loans that are past due, as to which there has been commencement of
foreclosure, as to which there has been forbearance in exercise of remedies
which are in default, as to which obligor is the subject of bankruptcy,
receivership, or an arrangement of creditors, or as to which have become REO
Properties. Such reports and recommendations will be based upon information
provided to the Credit Risk Manager pursuant to the Credit Risk Management
Agreements and the Credit Risk Manager shall look solely to the related Servicer
for all information and data (including loss and delinquency information and
data) and loan level information and data relating to the servicing of the
Mortgage Loans. If the Credit Risk Manager is no longer able to perform its
duties hereunder, the Depositor shall terminate the Credit Risk Manager and
cause the appointment of a successor Credit Risk Manager. Upon any termination
of the Credit Risk Manager or the appointment of a successor Credit Risk
Manager, the Depositor shall give written notice thereof to the Seller, the
Servicers, the Trustee and each Rating Agency. Notwithstanding the foregoing,
the termination of the Credit Risk Manager pursuant to this Section 3.19 shall
not become effective until the appointment of a successor Credit Risk Manager.
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SECTION 3.20 Limitation Upon Liability of the Credit Risk
Manager.
Neither the Credit Risk Manager, nor any of the directors,
officers, employees or agents of the Credit Risk Manager, shall be under any
liability to the Trustee, the Certificateholders or the Depositor for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, in reliance upon information provided by a Servicer under the
Credit Risk Management Agreements or of errors in judgment; provided, however,
that this provision shall not protect the Credit Risk Manager or any such person
against liability that would otherwise be imposed by reason of willful
malfeasance, bad faith or gross negligence in its performance of its duties
under this Agreement or the Credit Risk Manager Agreements. The Credit Risk
Manager and any director, officer, employee or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder, and may
rely in good faith upon the accuracy of information furnished by any Servicer
pursuant to the Credit Risk Management Agreements in the performance of its
duties thereunder and hereunder.
SECTION 3.21 Advance Facility.
(a) Option One and Wilshire are each hereby authorized
to enter into a financing or other facility (any such arrangement, an "Advance
Facility") under which (1) Option One or Wilshire, as applicable, assigns or
pledges to another Person (an "Advancing Person") such Servicer's rights under
this Agreement to be reimbursed for any Advances or Servicing Advances and/or
(2) an Advancing Person agrees to fund some or all Advances and/or Servicing
Advances required to be made by Option One or Wilshire, as applicable, pursuant
to this Agreement. No consent of the Trustee, Certificateholders or any other
party is required before Option One or Wilshire, as applicable, may enter into
an Advance Facility; PROVIDED, HOWEVER, that the consent of the Trustee (which
consent shall not be unreasonably withheld) shall be required before Option One
or Wilshire, as applicable, may cause to be outstanding at one time more than
one Advance Facility with respect to Advances or more than one Advance Facility
with respect to Servicing Advances. Notwithstanding the existence of any Advance
Facility under which an Advancing Person agrees to fund Advances and/or
Servicing Advances on such Servicer's behalf, Option One or Wilshire, as
applicable, shall remain obligated pursuant to this Agreement to make Advances
and Servicing Advances pursuant to and as required by this Agreement, and shall
not be relieved of such obligations by virtue of such Advance Facility. If
Option One or Wilshire enters into an Advance Facility, and for so long as an
Advancing Person remains entitled to receive reimbursement for any Advances or
Servicing Advances outstanding and previously unreimbursed pursuant to this
Agreement, then Option One or Wilshire, as applicable, may elect by providing
written notice to the Trustee not to be permitted to reimburse itself for
Advances and/or Servicing Advances, as applicable, pursuant to Section 3.08 of
this Agreement, but following any such election Option One or Wilshire, as
applicable, shall be required to include amounts collected that would otherwise
be retained by Option One or Wilshire, as applicable, to reimburse it for
previously unreimbursed Advances ("Advance Reimbursement Amounts") and/or
previously unreimbursed Servicing Advances ("Servicing Advance Reimbursement
Amounts" and together with Advance Reimbursement Amounts, "Reimbursement
Amounts") (in each case to the extent such type of Reimbursement Amount is
included in the Advance Facility) in the remittance to the Trustee made pursuant
to this Agreement to the extent of amounts on deposit in the Collection Account
on the related Servicer Cash Remittance Date. Notwithstanding anything
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to the contrary herein, in no event shall Advance Reimbursement Amounts or
Servicing Advance Reimbursement Amounts be included in Interest Remittance
Amounts or Principal Remittance Amounts or distributed to Certificateholders.
Option One or Wilshire, as applicable, if making the election set forth herein,
shall report to the Trustee the portions of the Reimbursement Amounts that
consist of Advance Reimbursement Amounts and Servicing Advance Reimbursement
Amounts, respectively.
(b) If Option One or Wilshire enters into an Advance
Facility and makes the election set forth in Section 3.21(a), Option One or
Wilshire, as applicable, and the related Advancing Person shall deliver to the
Trustee a written notice and payment instruction (an "Advance Facility Notice"),
providing the Trustee with written payment instructions as to where to remit
Advance Reimbursement Amounts and/or Servicing Advance Reimbursement Amounts
(each to the extent such type of Reimbursement Amount is included within the
Advance Facility) on subsequent Distribution Dates. The payment instruction
shall require the applicable Reimbursement Amounts to be distributed to the
Advancing Person or to a trustee or custodian (an "Advance Facility Trustee")
designated in the Advance Facility Notice. An Advance Facility Notice may only
be terminated by the joint written direction of Option One or Wilshire, as
applicable, and the related Advancing Person (and any related Advance Facility
Trustee); PROVIDED, HOWEVER, that the provisions of this Section 3.21 shall
cease to be applicable when all Advances and Servicing Advances funded by an
Advancing Person, and when all Advances and Servicing Advances (the rights to be
reimbursed for which have been assigned or pledged to an Advancing Person), have
been repaid to the related Advancing Person in full.
(c) Reimbursement Amounts shall consist solely of
amounts in respect of Advances and/or Servicing Advances made with respect to
the Mortgage Loans for which Option One or Wilshire, as applicable, would be
permitted to reimburse itself in accordance with Section 3.08(ii), (iii) and
(iv) hereof, assuming Option One or Wilshire, as applicable, had made the
related Advance(s) and/or Servicing Advance(s). Notwithstanding the foregoing,
no Person shall be entitled to reimbursement from funds held in the Collection
Account for future distribution to Certificateholders pursuant to the provisions
of Section 4.01. The Trustee shall not have any duty or liability with respect
to the calculation of any Reimbursement Amount and shall be entitled to rely
without independent investigation on the Advance Facility Notice and on the
applicable Servicer's report of the amount of Advance Reimbursement Amounts and
Servicing Advance Reimbursement Amounts that were included in the remittance
from Option One or Wilshire, as applicable, to the Trustee pursuant to Section
3.08(viii). Option One or Wilshire, as applicable, shall maintain and provide to
any successor Servicer a detailed accounting on a loan-by-loan basis as to
amounts advanced by, pledged or assigned to, and reimbursed to any Advancing
Person. The successor Servicer shall be entitled to rely on any such information
provided by Option One or Wilshire, as applicable, and the successor Servicer
shall not be liable for any errors in such information.
(d) An Advancing Person who receives an assignment or
pledge of the rights to be reimbursed for Advances and/or Servicing Advances,
and/or whose obligations hereunder are limited to the funding of Advances and/or
Servicing Advances shall not be required to meet the criteria for qualification
of a Subservicer set forth in Section 3.02 hereof.
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(e) With respect to any Advance Facility pursuant to
which Option One or Wilshire has made the election set forth in Section 3.21(a),
the documentation establishing any Advance Facility shall require that
Reimbursement Amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first-out"
(FIFO) basis. Such documentation shall also require Option One or Wilshire, as
applicable, to provide to the related Advancing Person or Advance Facility
Trustee loan-by-loan information with respect to each Reimbursement Amount
distributed by the Trustee to such Advancing Person or Advance Facility Trustee
on each Distribution Date, to enable the Advancing Person or Advance Facility
Trustee to make the FIFO allocation of each Reimbursement Amount with respect to
each Mortgage Loan. Option One or Wilshire, as applicable, shall remain entitled
to be reimbursed by the Advancing Person or Advance Facility Trustee for all
Advances and Servicing Advances funded by Option One or Wilshire, as applicable,
to the extent the related rights to be reimbursed therefor have not been
assigned or pledged to an Advancing Person.
(f) If Option One or Wilshire enters into an Advance
Facility, Option One or Wilshire, as applicable, shall indemnify the Trustee and
the Trust and any successor Servicer, as applicable, from and against any
claims, losses, liabilities or damages resulting from any claim by the related
Advancing Person, except to the extent that such claim, loss, liability or
damage resulted from or arose out of negligence, recklessness or willful
misconduct on the part of the successor Servicer or the Trustee, or failure by
the successor Servicer or the Trustee to remit funds as required by Section
3.21(b). Any amendment to this Section 3.21 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.21, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee, the Seller and Option One or Wilshire, as applicable, without the
consent of any Certificateholder notwithstanding anything to the contrary in
Section 10.01 of or elsewhere in this Agreement.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
SECTION 4.01 Advances by the Servicers.
Each Servicer shall deposit in a Collection Account an amount
equal to all Scheduled Payments (with interest at the Mortgage Rate less the
Servicing Fee Rate) which were due but not received on the related Mortgage
Loans during the applicable Due Period; provided however, that with respect to
any Balloon Loan that is delinquent on its maturity date, the related Servicer
will not be required to advance the related balloon payment but will be required
to continue to make Advances in accordance with this Section 4.01 with respect
to such Balloon Loan in an amount equal to an assumed scheduled payment that
would otherwise be due based on the original amortization schedule for that
Mortgage Loan (with interest at the Mortgage Rate less the Servicing Fee Rate).
Each Servicer's obligation to make such Advances as to any related Mortgage Loan
will continue through the last Scheduled Payment due prior to the payment in
full of such Mortgage Loan, or through the date that the related Mortgaged
Property has, in the judgment of such Servicer, been completely liquidated;
provided however, that such obligation with respect to any related Mortgage Loan
shall cease if such Servicer determines, in its reasonable opinion, that
Advances with respect to such Mortgage Loan are Nonrecoverable Advances;
provided that the related Servicer will be required to make Advances until the
earlier of (i) the time at which the related Mortgage Loan becomes 120 days
delinquent or (ii) the time at which the related Servicer determines that such
Advances with respect to such Mortgage Loan are Nonrecoverable Advances. In the
event that such Servicer determines that any such Advances are Nonrecoverable
Advances, such Servicer shall provide the Trustee with a certificate signed by a
Servicing Officer evidencing such determination.
If an Advance is required to be made hereunder, the related
Servicer shall on the second Business Day immediately preceding the Distribution
Date immediately following the related Determination Date either (i) deposit in
the Collection Account from its own funds an amount equal to such Advance, (ii)
cause to be made an appropriate entry in the records of the Collection Account
that funds in such account being held for future distribution or withdrawal have
been, as permitted by this Section 4.01, used by the related Servicer to make
such Advance or (iii) make Advances in the form of any combination of clauses
(i) and (ii) aggregating the amount of such Advance. Any such funds being held
in a Collection Account for future distribution and so used shall be replaced by
the related Servicer from its own funds by deposit in such Collection Account on
or before any future Distribution Date in which such funds would be due. The
related Servicer shall be entitled to be reimbursed from the Collection Account
for all Advances of its own funds made pursuant to this Section as provided in
Section 3.08.
SECTION 4.02 Priorities of Distribution.
(a) On each Distribution Date, prior to making
distributions to the holders of the Certificates, the Trustee first, shall pay
itself the Trustee's Fee for such Distribution Date, and second, shall pay the
Credit Risk Manager the Credit Risk Manager Fee.
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(b) With respect to the Available Funds, on each Distribution
Date, the Trustee shall withdraw such Available Funds from the Certificate
Account and based on the information provided to it by the Servicers, apply such
funds to distributions on the Certificates in the following order and priority
and, in each case, to the extent of such Available Funds remaining:
(i) On each Distribution Date, the Trustee shall
distribute the Interest Remittance Amount for such date in the
following order of priority:
A. to the Senior Certificates, pro rata, Current Interest
and any Carryforward Interest, as applicable, for each
such Class and such Distribution Date;
B. to the Class M-1 Certificates, Current Interest and any
Carryforward Interest for such Class and such
Distribution Date;
C. to the Class M-2 Certificates, Current Interest and any
Carryforward Interest for such Class and such
Distribution Date;
D. to the Class M-3 Certificates, Current Interest and any
Carryforward Interest for such Class and such
Distribution Date;
E. to the Class M-4 Certificates, Current Interest and any
Carryforward Interest for such Class and such
Distribution Date;
F. to the Class M-5 Certificates, Current Interest and any
Carryforward Interest for such Class and such
Distribution Date;
G. to the Class B-1 Certificates, Current Interest and any
Carryforward Interest for such Class and such
Distribution Date;
H. to the Class B-2A Certificates and Class B-2F
Certificates, concurrently and pro rata, Current
Interest and any Carryforward Interest for each such
Classes and such Distribution Date; and
I. On the Distribution Dates occurring in July 2004,
August 2004 and September 2004, to the Depositor an
amount equal to the amount received during the related
Due Period which constitutes Subsequent Mortgage Loan
Interest; and
J. for application in the same manner as the Monthly
Excess Cashflow for such Distribution Date as provided
in clause (iv) of this Section 4.02(b), any Interest
Remittance Amount remaining after application pursuant
to clauses A. through H. above.
(ii) On each Distribution Date (a) prior to the Stepdown
Date or (b) with respect to which a Trigger Event has occurred, the
Trustee shall distribute the Principal Payment Amount for such date in
the following order of priority:
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A. commencing on the Distribution Date in October 2009, to
the Class P Certificates, until the Class Principal
Balance of such class has been reduced to zero;
B. first to the Class A-R Certificates and Class A-RL
Certificates, concurrently on a pro rata basis, based
on their respective Class Principal Balances, until the
Class Principal Balance of each such Class has been
reduced to zero, and then concurrently on a pro rata
basis, as follows: (a) to the Class A-1 Certificates,
until the Class Principal Balance thereof has been
reduced to zero and (b) to the Class A-2 Certificates
and Class A-3 Certificates, with the total amount under
this clause (ii)(B)(b) distributed sequentially to the
Class A-2 Certificates and Class A-3 Certificates, in
that order, in each case until the Class Principal
Balance thereof has been reduced to zero;
C. to the Class M-1 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
D. to the Class M-2 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
E. to the Class M-3 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
F. to the Class M-4 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
G. to the Class M-5 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
H. to the Class B-1 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
I. to the Class B-2A Certificates and Class B-2F
Certificates, concurrently on a pro rata basis, based
on their respective Class Principal Balances, until the
Class Principal Balance of each such Class has been
reduced to zero; and
J. for application in the same manner as the Monthly
Excess Cashflow for such Distribution Date, as provided
in clause (iv) of this Section 4.02(b), any Principal
Payment Amount remaining after application pursuant to
clauses A. through I. above.
(iii) On each Distribution Date (a) on or after the
Stepdown Date and (b) with respect to which a Trigger Event has not
occurred, the Trustee shall distribute the Principal Payment Amount for
such date in the following order of priority:
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A. commencing on the Distribution Date in October 2009 or
thereafter, to the Class P Certificates, until the
Class Principal Balance of such Class has been reduced
to zero;
B. to the Class A-1, Class A-2 and Class A-3 Certificates,
the Senior Principal Payment Amount for such
Distribution Date, allocated concurrently on a pro rata
basis, as follows: (a) to the Class A-1 Certificates,
until the Class Principal Balance thereof has been
reduced to zero and (b) to the Class A-2 Certificates
and Class A-3 Certificates, with the total amount under
this clause (iii)(B)(b) distributed sequentially to the
Class A-2 Certificates and Class A-3 Certificates, in
that order, in each case until the Class Principal
Balance thereof has been reduced to zero;
C. ________ to the Class M-1 Certificates, the Class M-1
Principal Payment Amount for such Distribution Date,
until the Class Principal Balance of such Class has
been reduced to zero;
D. to the Class M-2 Certificates, the Class M-2 Principal
Payment Amount for such Distribution Date, until the
Class Principal Balance of such Class has been reduced
to zero;
E. to the Class M-3 Certificates, the Class M-3 Principal
Payment Amount for such Distribution Date, until the
Class Principal Balance of such Class has been reduced
to zero;
F. to the Class M-4 Certificates, the Class M-4 Principal
Payment Amount for such Distribution Date, until the
Class Principal Balance of such Class has been reduced
to zero;
G. to the Class M-5 Certificates, the Class M-5 Principal
Payment Amount for such Distribution Date, until the
Class Principal Balance of such Class has been reduced
to zero;
H. to the Class B-1 Certificates, the Class B-1 Principal
Payment Amount for such distribution date, until the
Class Principal Balance of such class has been reduced
to zero;
I. to the Class B-2A Certificates and Class B-2F
Certificates, the Class B-2 Principal Payment Amount
for such Distribution Date, concurrently on a pro rata
basis, based on their respective Class Principal
Balances, until the Class Principal Balance of each
such Class has been reduced to zero; and
J. for application as part of Monthly Excess Cashflow for
such Distribution Date, as provided in clause (iv) of
this Section 4.02(b), any Principal Payment Amount
remaining after application pursuant to clauses A.
through I. above.
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(iv) On each Distribution Date, the Trustee shall distribute
the Monthly Excess Cashflow for such date in the following order of
priority:
A. an amount equal to the aggregate Realized Losses on the
Mortgage Loans incurred during the related Collection
Period, such amount to be added to the Principal
Payment Amount and distributed as set forth above in
Section 4.02(b)(ii) and (iii) (any such amount, an
"Excess Cashflow Loss Payment");
B. (I) except for the first Distribution Date,
until the Overcollateralization Amount
equals the Targeted Overcollateralization
Amount for such date, on each Distribution
Date (a) prior to the Stepdown Date or (b)
with respect to which a Trigger Event has
occurred, to the extent of Monthly Excess
Interest for such Distribution Date, to fund
any principal distributions to the Class
A-1, Class A-2, Class A-3, Class A-R, Class
A-RL, Class P, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class B-1, Class
B-2A and Class B-2F Certificates required to
be made on such Distribution Date set forth
above in clause (ii) above, after giving
effect to the distribution of the Principal
Payment Amount for such Distribution Date,
in accordance with the priorities set forth
therein.
(II) on each Distribution Date on or after the
Stepdown Date and with respect to which a
Trigger Event has not occurred, to fund any
principal distributions to the Class A-1,
Class A-2, Class A-3, Class A-R, Class A-RL,
Class P, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class B-1, Class B-2A
and Class B-2F Certificates required to be
made on such Distribution Date set forth
above in clause (iii) above, after giving
effect to the distribution of the Principal
Payment Amount for such Distribution Date,
in accordance with the priorities set forth
therein;
C. to the Class M-1 Certificates, any Deferred Amount for
such Class, with interest thereon at the Pass-Through
Rate for such Class, to the extent not paid from
amounts on deposit in the Interest Rate Cap Account;
D. to the Class M-2 Certificates, any Deferred Amount for
such Class, with interest thereon at the Pass-Through
Rate for such Class, to the extent not paid from
amounts on deposit in the Interest Rate Cap Account;
E. to the Class M-3 Certificates, any Deferred Amount for
such Class, with interest thereon at the Pass-Through
Rate for such Class, to the extent not paid from
amounts on deposit in the Interest Rate Cap Account;
F. to the Class M-4 Certificates, any Deferred Amount for
such Class, with interest thereon at the Pass-Through
Rate for such Class, to the extent not paid from
amounts on deposit in the Interest Rate Cap Account;
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G. to the Class M-5 Certificates, any Deferred Amount for
such Class, with interest thereon at the Pass-Through
Rate for such Class, to the extent not paid from
amounts on deposit in the Interest Rate Cap Account;
H. to the Class B-1 Certificates, any Deferred Amount for
such Class, with interest thereon at the Pass-Through
Rate for such Class, to the extent not paid from
amounts on deposit in the Interest Rate Cap Account;
I. concurrently, to the Class B-2A Certificates and Class
B-2F Certificates on a pro rata basis, based on their
respective Class Principal Balances, any Deferred
Amount with interest thereon at the Pass-Through Rate
for each such Class, to the extent not paid from
amounts on deposit in the Interest Rate Cap Account;
J. to the Class X-1 Certificate, the Class X-1
Distributable Amount for such Distribution Date reduced
by amounts distributed pursuant to clause E of Section
4.02(b)(i) for such Distribution Date, the amount of
any Overcollateralization Release Amount for such
Distribution Date and, for any Distribution Date on or
after which the aggregate Class Principal Balance of
the Regular Certificates has been reduced to zero, the
Overcollateralization Amount; and
K. to the Class A-R Certificate or Class A-RL Certificate,
as applicable, any remaining amount; provided, however
that any amount that would be distributable pursuant to
this priority (I) shall not be paid with respect to the
Class A-R Certificate or Class A-RL Certificates, as
applicable, but shall be paid instead with respect to
the Class X-1 Certificates pursuant to a contract that
exists under this Agreement between the Class A-R
Certificateholders or Class A-RL Certificateholders and
the Class X-1 Certificateholders.
Distributions pursuant to Section 4.02(b)(iv)C. through I. on
any Distribution Date will be made after giving effect to withdrawals from the
Interest Rate Cap Account on such date to pay Deferred Amounts.
(v) On each Distribution Date, the Trustee shall
distribute to the Holder of the Class P Certificate, the aggregate of
all Prepayment Charges collected during the preceding Prepayment
Period.
(vi) On the first Distribution Date only, the Trustee
shall distribute the Monthly Excess Cashflow for such date to the Class
X-1 Certificate.
(vii) On each Distribution Date, following the foregoing
distributions, an amount equal to the amount of Net Recoveries included
in the Available Funds for such Distribution Date shall be applied to
increase the Class Principal Balance of the Class of Certificates with
the Highest Priority up to the extent of such Realized Losses
previously allocated to that Class of Certificates pursuant to Section
4.05. An amount equal to the amount of any remaining Net
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Recoveries shall be applied to increase the Class Principal Balance of
the Class of Certificates with the next Highest Priority, up to the
amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.05, and so on. Holders of such
Certificates will not be entitled to any distribution in respect of
interest on the amount of such increases for any Interest Accrual
Period preceding the Distribution Date on which such increase occurs.
Any such increases shall be applied to the Class Principal Balance of
each Certificate of such Class in accordance with its respective
Percentage Interest.
SECTION 4.03 [Reserved]
SECTION 4.04 [Reserved]
SECTION 4.05 Allocation of Realized Losses.
On each Distribution Date, the Trustee shall determine the
total of the Applied Loss Amount, if any, for such Distribution Date. The
Applied Loss Amount for any Distribution Date shall be applied by reducing the
Class Principal Balance of each Class of Subordinate Certificates beginning with
the Class of Subordinate Certificates then outstanding with the lowest relative
payment priority, in each case until the respective Class Principal Balance
thereof is reduced to zero. Any Applied Loss Amount allocated to a Class of
Subordinate Certificates shall be allocated among the Subordinate Certificates
of such Class in proportion to their respective Percentage Interests.
All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the following REMIC 1 Regular Interests: first, to REMIC 1
Regular Interests LTI-1 until the Uncertificated Principal Balance thereof has
been reduced to zero, then to REMIC 1 Regular Interest LTI-PF until the
Uncertificated Principal Balance thereof has been reduced to zero, however, that
with respect to the first three Distribution Dates, Realized Losses relating to
the Initial Mortgage Loans shall be allocated to REMIC 1 Regular Interest LTI-1
and Realized Losses relating to the Subsequent Mortgage Loans shall be allocated
to REMIC 1 Regular Interest LTI-PF until the Uncertificated Principal Balance
thereof has been reduced to zero. All Realized Losses on the REMIC 1 Regular
Interests LTI-1 and LTI-PF shall be deemed to have been allocated to the
following REMIC 2 Regular Interests in the specified percentages, as follows:
first to Uncertificated Accrued Interest payable to the REMIC 2 Regular
Interests MTI-AA and MTI-ZZ up to an aggregate amount equal to the excess of (a)
the REMIC 2 Interest Loss Allocation Amount over (b) Prepayment Interest
Shortfalls (to the extent not covered by Compensating Interest) relating to the
Mortgage Loans for such Distribution Date, 98% and 2%, respectively; second, to
the Uncertificated Principal Balances of the REMIC 2 Regular Interests MTI-AA
and MTI-ZZ up to an aggregate amount equal to the REMIC 2 Principal Loss
Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest MTI-AA, REMIC 2 Regular Interest
MTI-B-2F and REMIC 2 Regular Interest MTI-ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Principal Balance of REMIC 2 Regular Interests MTI-B-2F
have been reduced to zero; fourth, to the Uncertificated Principal Balances of
REMIC 2 Regular Interest MTI-AA, REMIC 2 Regular Interest MTI-B-2A and REMIC 2
Regular Interest MTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC 2 Regular Interest MTI-B-2A has been reduced to zero;
fifth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest
MTI-AA, REMIC 2 Regular Interest MTI-B-1 and REMIC 2 Regular Interest MTI-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal
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Balance of REMIC 2 Regular Interest MTI-B-1 has been reduced to zero; sixth, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest MTI-AA, REMIC
2 Regular Interest MTI-M-5 and REMIC 2 Regular Interest MTI-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest MTI-M-5 has been reduced to zero; seventh, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest MTI-AA, REMIC 2 Regular Interest
MTI-M-4 and REMIC 2 Regular Interest MTI-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest MTI-M-4 has
been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC
2 Regular Interest MTI-AA, REMIC 2 Regular Interest MTI-M-3 and REMIC 2 Regular
Interest MTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC 2 Regular Interest MTI-M-3 has been reduced to zero;
ninth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest
MTI-AA, REMIC 2 Regular Interest MTI-M-2 and REMIC 2 Regular Interest MTI-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC 2 Regular Interest MTI-M-2 has been reduced to zero; and tenth, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest MTI-AA, REMIC 2
Regular Interest MTI-M-1 and REMIC 2 Regular Interest MTI-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest MTI-M-1 has been reduced to zero.
SECTION 4.06 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee
shall prepare, and make available on the website maintained by the Trustee at
xxxx://xxx.xxxxxxxx.xxx/xxx, a statement setting forth with respect to the
related distribution, the items listed on Exhibit V.
Assistance in using the website can be obtained by calling the
Trustee's customer service desk at 000-000-0000. Parties that are unable to use
the website are entitled to have a paper copy mailed to them via first class
mail by written notice to the Trustee at its Corporate Trust Office. The
Trustee's responsibility for disbursing the above information to the
Certificateholders is limited to the availability, timeliness and accuracy of
the information derived from the Servicers. The foregoing information shall be
reported to the Trustee each month on or before the Servicer Data Remittance
Date.
(b) Within a reasonable period of time after the end of
each calendar year, the Trustee shall cause to be furnished to each Person who
at any time during the calendar year was a Certificateholder, a statement
containing the information set forth in, items (i)(c), (i)(d), (i)(g), (i)(j),
(i)(k), (ii)(c), (ii)(d), (ii)(g), (ii)(i), (v)(d), (v)(e) and (v)(s) of Exhibit
V aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
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SECTION 4.07 Distributions on the REMIC 1 Regular Interests
and REMIC 2 Regular Interests.
(a) Distributions on the REMIC 1 Regular Interests.
On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 1
to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the holders of the Class A-RL
Certificates, as the case may be:
(i) first, to the Holders of REMIC 1 Regular Interests
LTI-P and LTI-R, in an amount equal to (x) the related Uncertificated Accrued
Interest for such Distribution Date, plus (y) any amounts in respect thereof
remaining unpaid from previous Distribution Dates and second, to Holders of
Uncertificated REMIC 1 Regular Interests LTI-1 and LTI-PF an amount equal to (x)
the related Uncertificated Accrued Interest for such Distribution Date, plus (y)
any amounts in respect thereof remaining unpaid from previous Distribution
Dates;
(ii) to the Holders of REMIC 1 Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution Date
after the distributions made pursuant to clause (i) above and, in the case of
distributions made pursuant to Section 4.07(a)(ii)(b), the amount of any
Prepayment Charges for such Distribution Date, allocated as follows:
(a) to the Holders of REMIC 1 Regular Interest LTI-R,
an amount equal to the amount of principal distributed to the holder of the
Corresponding Uncertificated Interest on such Distribution Date pursuant to
Section 4.07(b)(ii)(a);
(b) to the Holders of REMIC 1 Regular Interest LTI-P,
an amount equal to the amount distributed to the holder of the Corresponding
Uncertificated Interest on such Distribution Date pursuant to Section
4.07(b)(ii)(b);
(c) to the Holders of REMIC 1 Regular Interest LTI-1,
until the Uncertificated Principal Balance of Uncertificated REMIC 1 Regular
Interest LTI-1 is reduced to zero;
(d) to the Holders of REMIC 1 Regular Interest
LTI-1PF, until the Uncertificated Principal Balance of REMIC 1 Regular Interest
LTI-1PF is reduced to zero; and
(iii) any remaining amount to the Holders of the Class A-RL
Certificates;
provided, however, that for the first three Distribution Dates, such amounts
constituting Available Funds relating to the Initial Mortgage Loans shall be
allocated to REMIC 1 Regular Interest LTI-1, and such amounts constituting
Available Funds relating to the Subsequent Mortgage Loans and shall be allocated
to REMIC 1 Regular Interest LT-1PF.
(b) Distributions on the REMIC 2 Regular Interests.
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On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 2
to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn from the
Distribution Account and distributed to the holders of the Class A-R
Certificates (in respect of the Class R-2 Interest), as the case may be:
(i) first, to the extent of the sum of Available Funds
for such Distribution Date, to Holders of REMIC 2 Regular Interests XXX-XX,
XXX-X-0, XXX-X-0, XXX-X-0, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, XXX-X-0, XXX-X-0,
XXX-X-0X, and MTI-B-2F, MTI-ZZ, MTI-P and MTI-R pro rata, in an amount equal to
(A) the Uncertificated Accrued Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution Dates.
Amounts payable as Uncertificated Accrued Interest in respect of REMIC 2 Regular
Interest MTI-ZZ shall be reduced when the REMIC 2 Overcollateralization Amount
is less than the REMIC 2 Overcollateralization Target Amount, by the lesser of
(x) the amount of such difference and (y) the REMIC 2 Regular Interest MTI-ZZ
Maximum Interest Deferral Amount and such amount will be payable to the Holders
of REMIC 2 Regular Interest MTI-A-1, REMIC 2 Regular Interest MTI-A-2, REMIC 2
Regular Interest MTI-A-3, REMIC 2 Regular Interest MTI-M-1, REMIC 2 Regular
Interest MTI-M-2, REMIC 2 Regular Interest MTI-M-3, REMIC 2 Regular Interest
MTI- M-4, REMIC 2 Regular Interest MTI-M-5, REMIC 2 Regular Interest MTI-B-1,
REMIC 2 Regular Interest MTI-B-2A and REMIC 2 Regular Interest MTI-B-2F in the
same proportion as the amounts are allocated to the Corresponding Uncertificated
Interest, pursuant to Section 4.07(c) herein, for each such REMIC 2 Regular
Interest, and the Uncertificated Principal Balance of the REMIC 2 Regular
Interest MTI-ZZ shall be increased by such amount;
(ii) second, to the Holders of REMIC 2 Regular
Interests, in an amount equal to the remainder of the Available Funds for such
Distribution Date after the distributions made pursuant to clause (i) above and,
in the case of distributions made pursuant to Section 4.07(b)(ii)(b), the amount
of any Prepayment Charges for such Distribution Date, allocated as follows:
(a) to the Holders of REMIC 2 Regular Interest MTI-R,
an amount equal to the amount of principal distributed to the holder of the
Corresponding Certificate on such Distribution Date pursuant to Section 4.07(c);
and
(b) to the Holders of REMIC 2 Regular Interest MTI-P,
an amount equal to the amount of principal distributed to the holder of the
Corresponding Certificate on such Distribution Date pursuant to Section 4.07(c);
and
(iii) third, to the Holders of REMIC 2 Regular Interests,
in an amount equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clauses (i) and (ii) above,
allocated as follows:
(a) 98% of such remainder to the Holders of REMIC 2
Regular Interest MTI-AA, until the Uncertificated Principal Balance of such
Uncertificated REMIC 2 Regular Interest is reduced to zero;
(b) 2% of such remainder, first, to the Holders of
REMIC 2 Regular Interest XXX-X-0, XXX-X-0, XXX-X-0, MTI-M-1, MTI-M-2, MTI-M-3,
MTI-M-4, MTI-M-5, MTI-B-1, MTI-
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B-2A and MTI-B-2F, equal to 1% of and in the same proportion as principal
payments are allocated to the Corresponding Certificates, until the
Uncertificated Principal Balances of such REMIC 2 Regular Interests are reduced
to zero; and second, to the Holders of REMIC 2 Regular Interest MTI-ZZ, 1.00% of
such remainder, until the Uncertificated Principal Balance of such REMIC 2
Regular Interest is reduced to zero; and
(c) any remaining amount to the Holders of the Class
A-R Certificates (in respect of the Class R-2 Interest).
SECTION 4.08 [Reserved].
SECTION 4.09 Prepayment Charges.
Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment of a Mortgage Loan, the related Servicer may
not waive any Prepayment Charge or portion thereof required by the terms of the
related Mortgage Note unless (i) the Mortgage Loan is in default or foreseeable
default and such waiver (a) is standard and customary in servicing similar
mortgage loans to the Mortgage Loans and (b) would, in the reasonable judgment
of the related Servicer, maximize recovery of total proceeds taking into account
the value of such Prepayment Charge and the related Mortgage Loan or (ii)(A) the
enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium,
receivership, or other similar law relating to creditors' rights generally or
(2) due to acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law. For the avoidance of doubt, the related Servicer may waive a
Prepayment Charge in connection with a short sale or short payoff on a defaulted
Mortgage Loan. If the related Servicer has waived all or a portion of a
Prepayment Charge relating to a Principal Prepayment, other than as provided
above, the related Servicer shall deliver to the Trustee no later than the
Business Day immediately preceding the next Distribution Date, for deposit into
the Certificate Account the amount of such Prepayment Charge (or such portion
thereof as had been waived) for distribution in accordance with the terms of
this Agreement; provided, however, the related Servicer shall not have any
obligation to pay the amount of any uncollected Prepayment Charge under this
Section 4.09 if such Servicer did not have a copy of the related Mortgage Note,
such Servicer requested via email a copy of the same from the Trustee and the
Trustee failed to provide such a copy within two (2) Business Days of receipt of
such request. If the related Servicer has waived all or a portion of a
Prepayment Charge for any reason, it shall promptly notify the Trustee thereof
and shall include such information in any monthly reports it provides the
Trustee. Notwithstanding any provision in this Agreement to the contrary, in the
event the Prepayment Charge payable under the terms of the Mortgage Note is
different from the amount of the Prepayment Charge set forth in the Mortgage
Loan Schedule or other information provided to the related Servicer, such
Servicer shall rely conclusively on the Prepayment Charge as set forth under the
terms of the Mortgage Note. To the extent the Prepayment Charge payable under
the terms of the Mortgage Note is less than the amount of the Prepayment Charge
set forth in the Mortgage Loan Schedule or other information provided to the
related Servicer, such Servicer shall not have any liability or obligation with
respect to such difference, and in addition shall not have any liability or
obligation to pay the amount of any uncollected Prepayment Charge if the failure
to collect such amount is the direct result of inaccurate or incomplete
information on the Mortgage Loan Schedule.
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SECTION 4.10 Servicers to Cooperate.
Each Servicer shall provide to the Trustee the information set
forth in Exhibit Z hereto in such form as the Trustee shall reasonably request
with respect to each Mortgage Loan serviced by such Servicer no later than
twelve noon on the Servicer Data Remittance Date to enable the Trustee to
calculate the amounts to be distributed to each Class of Certificates and
otherwise perform its distribution, accounting and reporting requirements
hereunder.
SECTION 4.11 The Interest Rate Cap Reserve Fund and the
Interest Rate Cap Account.
(a) On the Closing Date, the Trustee shall establish
and maintain in its name, in trust for the benefit of the Certificates, the
Interest Rate Cap Reserve Fund and the Interest Rate Cap Account. Each of the
Interest Rate Cap Reserve Fund and the Interest Rate Cap Account shall be
Eligible Accounts, and funds on deposit therein shall be held separate and apart
from, and shall not be commingled with, any other moneys, including without
limitation, other moneys held by the Trustee pursuant to this Agreement.
(b) On or prior to the Closing Date, the Depositor will
deposit the Initial Interest Rate Cap Reserve Deposit into the Interest Rate Cap
Reserve Fund. The Interest Rate Cap Reserve Fund and the Interest Rate Cap
Account will be each be an asset of the Trust Fund but will not be an asset of
any REMIC. On each Distribution Date, the Trustee shall make a deposit into the
Interest Rate Cap Account, from amounts on deposit in the Interest Rate Cap
Reserve Fund, in an amount equal to the Interest Rate Cap Account Deposit. On
each Distribution Date, the Trustee will distribute from the Interest Rate Cap
Reserve Fund the excess, if any, of (1) the Maximum Payment Amount for such
Distribution Date over (2) the Interest Rate Cap Account Deposit for such
Distribution Date to the Class X-1 Certificateholders.
(c) On each Distribution Date, am amount equal to the
excess, if any, of cumulative Realized Losses on the Mortgage Loans as of such
Distribution Date over the total of all amounts previously withdrawn from the
Interest Rate Cap Account shall be withdrawn by the Trustee from the Interest
Rate Cap Account and distributed to pay the following amounts:
(i) to the Class M-1 Certificates, any
applicable Deferred Amounts, with interest thereon 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 4.02(b)(iv)C. through I. on such
Distribution Date;
(ii) to the Class M-2 Certificates, any
applicable Deferred Amounts, with interest thereon 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 4.02(b)(iv)C. through I. on such
Distribution Date;
(iii) to the Class M-3 Certificates, any
applicable Deferred Amounts, with interest thereon at the
applicable Pass-Through Rate, prior to giving effect to
amounts
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available to be paid in respect of Deferred Amounts as
described in Section 4.02(b)(iv)C. through I. on such
Distribution Date;
(iv) to the Class M-4 Certificates, any
applicable Deferred Amounts, with interest thereon 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 4.02(b)(iv)C. through I. on such
Distribution Date;
(v) to the Class M-5 Certificates, any
applicable Deferred Amounts, with interest thereon 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 4.02(b)(iv)C. through I. on such
Distribution Date;
(vi) to the Class B-1 Certificates, any
applicable Deferred Amounts, with interest thereon 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 4.02(b)(iv)C. through I. on such
Distribution Date;
(vii) to the Class B-2A Certificates and Class
B-2F Certificates, concurrently on a pro rata basis, based on
their respective Class Principal Balances, any applicable
Deferred Amounts, with interest thereon 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 4.02(b)(iv)C. through I. on such Distribution Date;
and
(viii) for application as part of Monthly Excess
Cashflow for such Distribution Date.
(d) Funds in the Interest Rate Cap Reserve Fund and the
Interest Rate Cap Account may be invested in Eligible Investments by the Trustee
at the written direction of the Majority in Interest Class X-1 Certificateholder
maturing on or prior to the next succeeding Distribution Date. The Trustee shall
account for each of the Interest Rate Cap Reserve Fund and the Interest Rate Cap
Account as an outside reserve fund within the meaning of Treasury regulation
1.860G-2(h) and not an asset of any REMIC created pursuant to this Agreement.
The Trustee shall treat amounts paid by the Interest Rate Cap Account as
payments made from outside the REMIC's for all federal tax purposes. Any net
investment earnings on such amounts shall be payable to the Class X-1
Certificateholders. The Class X-1 Certificateholders will be the owner of the
Interest Rate Cap Reserve Fund and the Interest Rate Cap Account for federal tax
purposes and the Majority in Interest Class X-1 Certificateholder shall direct
the Trustee in writing as to the investment of amounts therein. In the absence
of such written direction, all funds in the Interest Rate Cap Reserve Fund and
the Interest Rate Cap Account shall remain uninvested with no liability for
interest or other compensation thereon. The Trustee shall have no liability for
losses on investments in Eligible Investments made pursuant to this Section
4.11(d) (other than as obligor on any such investments). Upon termination of the
Trust Fund, any amounts remaining in the Interest Rate Cap Reserve Fund or the
Interest Rate Cap Account shall be distributed to the Class X-1
Certificateholders.
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(e) Amounts in the Interest Rate Cap Account not used
on any Distribution Date as described in Section 4.11(c) shall remain on deposit
in the Interest Rate Cap Account and may be available on future Distribution
Dates to make the payments described in Section 4.11(c). However, at no time
shall the amount on deposit in the Interest Rate Cap Account exceed the Target
Amount. On any Distribution Date the Trustee shall distribute any amount on
deposit in the Interest Rate Cap Account in excess of the Target Amount (after
giving effect to all distributions on such Distribution Date) to the Class X-1
Certificateholders.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.
The Certificates shall be substantially in the forms attached
hereto as exhibits. The Certificates shall be issuable in registered form, in
the minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on
the Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such holder at a
bank or other entity having appropriate facilities therefor, if (i) such Holder
has so notified the Trustee at least five Business Days prior to the related
Record Date and (ii) such Holder shall hold (A) a Notional Amount Certificate,
(B) 100% of the Class Principal Balance of any Class of Certificates or (C)
Certificates of any Class with aggregate principal Denominations of not less
than $1,000,000 or (y) by check mailed by first class mail to such
Certificateholder at the address of such holder appearing in the Certificate
Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer upon the written
order of the Depositor. Certificates bearing the manual or facsimile signatures
of individuals who were, at the time such signatures were affixed, authorized to
sign on behalf of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
countersignature and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless countersigned
by the Trustee by manual signature, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly executed and delivered hereunder. All Certificates
shall be dated the date of their countersignature. On the Closing Date, the
Trustee shall countersign the Certificates to be issued at the written direction
of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restriction or transfer imposed
under Article V of this Agreement or under applicable law with respect to any
transfer of any Certificate, or any interest therein, other than to require
delivery of the certification(s) and/or opinions of counsel described in Article
V applicable with respect to changes in registration of record ownership of
Certificates in the Certificate Register. The Trustee shall have no liability
for transfers, including transfers made through the book-entry
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facilities of the Depository or between or among Depository Participants or
beneficial owners of the Certificates made in violation of applicable
restrictions.
SECTION 5.02 Certificate Register; Registration of Transfer
and Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made
unless such transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under said Act and such state securities
laws. Except in connection with any transfer of a Private Certificate by the
Depositor to any affiliate, in the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer and such Certificateholder's prospective
transferee shall each certify to the Trustee in writing the facts surrounding
the transfer in substantially the form set forth in Exhibit J (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either (A)
Exhibit K (the "Investment Letter") provided that all of the Class X
Certificates of a Class shall be transferred to one investor or the Depositor
otherwise consents to such transfer, or (B) Exhibit L (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Securities Act. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans
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and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Servicers
shall cooperate with the Depositor in providing the Rule 144A information
referenced in the preceding sentence, including providing to the Depositor such
information regarding the Certificates, the Mortgage Loans and other matters
regarding the Trust Fund as the Depositor shall reasonably request to meet its
obligation under the preceding sentence. Each Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Seller and the Servicers against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate or a Residual Certificate, such requirement is satisfied only by the
Trustee's receipt of a representation letter from the transferee substantially
in the form of Exhibit K or Exhibit L, or Exhibit I, as applicable), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code,
nor a person acting on behalf of any such plan or arrangement nor using the
assets of any such plan or arrangement to effect such transfer or (ii) in the
case of any such ERISA-Restricted Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel shall
not be an expense of either the Trustee or the Trust Fund, addressed to the
Trustee for the benefit of the Trustee, the Depositor and the Servicers and on
which they may rely, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee, the Depositor
or the Servicers to any obligation in addition to those expressly undertaken in
this Agreement or to any liability. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA-Restricted Certificate to or
on behalf of an employee benefit plan subject to ERISA or to the Code without
the delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect.
To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of transfer of any ERISA- Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:
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(i) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may
be registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
I.
(iii) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Residual Certificate and (C) not to Transfer its Ownership Interest
in a Residual Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Residual Certificate in violation of the
provisions of this Section 5.02(c) shall be absolutely null and void
and shall vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Residual Certificate in violation
of the provisions of this Section 5.02(c), then the last preceding
Permitted Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit and Transferor Certificate. The Trustee
shall be entitled but not obligated to recover from any Holder of a
Residual Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
108
which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Seller or the Servicers, to the effect that the elimination of such
restrictions will not cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates
and opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Depositor is unable to locate a qualified successor, (y) the Depositor with the
consent of the Depository Participants advises the Trustee in writing that it
elects to terminate the book-entry system through the Depository or (z) after
the occurrence of an Event of Default, Certificate Owners representing at least
51% of the Certificate Balance of the Book-Entry Certificates together advise
the Trustee and the Depository through the Depository Participants in writing
that the continuation of a book-entry system through the Depository is no longer
in the best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the
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occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates.
In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its option
request a Definitive Certificate evidencing such Certificate Owner's Percentage
Interest in the related Class of Certificates. In order to make such request,
such Certificate Owner shall, subject to the rules and procedures of the
Depository, provide the Depository or the related Depository Participant with
directions for the Trustee to exchange or cause the exchange of the Certificate
Owner's interest in such Class of Certificates for an equivalent Percentage
Interest in fully registered definitive form. Upon receipt by the Trustee of
instruction from the Depository directing the Trustee to effect such exchange
(such instructions to contain information regarding the Class of Certificates
and the Certificate Balance being exchanged, the Depository Participant account
to be debited with the decrease, the registered holder of and delivery
instructions for the Definitive Certificates and any other information
reasonably required by the Trustee), (i) the Trustee shall instruct the
Depository to reduce the related Depository Participant's account by the
aggregate Certificate Balance of the Definitive Certificates, (ii) the Trustee
shall execute, authenticate and deliver, in accordance with the registration and
delivery instructions provided by the Depository, a Definitive Certificate
evidencing such Certificate Owner's Percentage Interest in such Class of
Certificates and (iii) the Trustee shall execute and authenticate a new
Book-Entry Certificate reflecting the reduction in the aggregate Class Principal
Balance of such Class of Certificates by the amount of the Definitive
Certificates.
None of the Seller, the Servicers, the Depositor or the Trustee shall
be liable for any delay in delivery of any instruction required under this
section and each may conclusively rely on, and shall be protected in relying on,
such instructions. The Depositor shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Trustee such security or indemnity as may be required by it to hold it harmless,
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, countersign and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
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therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04 Persons Deemed Owners.
The Servicers, the Trustee and any agent of the Servicers or
the Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and none of
the Servicers, the Trustee or any agent of the Servicers or the Trustee shall be
affected by any notice to the contrary.
SECTION 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or a Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicers or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.06 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York, New York where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR, THE SELLER AND THE SERVICERS
SECTION 6.01 Respective Liabilities of the Depositor, the
Sellers and the Servicers.
The Depositor, the Seller and each Servicer shall each be
liable in accordance herewith only to the extent of the obligations specifically
and respectively imposed upon and undertaken by them herein.
SECTION 6.02 Merger or Consolidation of the Depositor, the
Seller or a Servicer.
The Depositor, the Seller and each Servicer will each keep in
full effect its existence, rights and franchises as a corporation under the laws
of the United States or under the laws of one of the states thereof or as a
federally chartered savings bank organized under the laws of the United States
and will each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Mortgage Loans and to perform its respective duties under this Agreement.
Notwithstanding the foregoing, the Seller or a Servicer may be merged or
consolidated into another Person in accordance with the following paragraph.
Any Person into which the Depositor, the Seller or a Servicer
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Seller or a Servicer shall be a party,
or any person succeeding to the business of the Depositor, the Seller or a
Servicer, shall be the successor of the Depositor, the Seller or a Servicer, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding, provided, however, that the successor or surviving
Person with respect to a merger or consolidation of a Servicer shall be an
institution which is a Xxxxxx Xxx or Xxxxxxx Mac approved company in good
standing. In addition to the foregoing, there must be delivered to the Trustee a
letter from each of the Rating Agencies, to the effect that such merger,
conversion or consolidation of a Servicer will not result in a disqualification,
withdrawal or downgrade of the then current rating of any of the Certificates.
SECTION 6.03 Limitation on Liability of the Depositor, the
Seller, the Servicers and Others.
None of the Depositor, the Seller, any Servicer nor any of the
directors, officers, employees or agents of the Depositor, the Seller or any
Servicer shall be under any liability to the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Seller, any Servicer or any such
Person against any breach of representations or warranties made by it herein or
protect the Depositor, the Seller, any Servicer or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of reckless
disregard
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of obligations and duties hereunder. The Depositor, the Seller, each Servicer
and any director, officer, employee or agent of the Depositor, the Seller or a
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor, the Seller, the Trustee, each Servicer and any director, officer,
employee or agent of the Depositor, the Seller, the Trustee, or the related
Servicer shall be indemnified by the Trust Fund out of the Collection Account
and held harmless against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of its duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. None of the Depositor,
the Seller or any Servicer shall be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to its respective duties
hereunder and which in its opinion may involve it in any expense or liability;
provided, however, that any of the Depositor, the Seller or any Servicer may in
its discretion undertake any such action that it may deem necessary or desirable
in respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Seller and each Servicer shall be entitled to be reimbursed
therefor out of the Collection Account. Each Servicer's right to indemnity or
reimbursement pursuant to this Section 6.03 shall survive the resignation or
termination of such Servicer as set forth herein.
SECTION 6.04 Limitation on Resignation of a Servicer.
(a) Subject to Section 6.04(b) below, a Servicer shall
not resign from the obligations and duties hereby imposed on it except (a)(i)
upon appointment, pursuant to the provisions of Section 7.02, of a successor
servicer which (x) has a net worth of not less than $10,000,000 and (y) is a
Xxxxxx Xxx or Xxxxxxx Mac approved company in good standing and (ii) receipt by
the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a qualification, withdrawal or downgrading of the
then current rating of any of the Certificates, or (b) upon determination that
its duties hereunder are no longer permissible under applicable law. Any such
determination under clause (b) permitting the resignation of a Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation shall become effective until the Trustee or a successor
servicer shall have assumed such Servicer's responsibilities, duties,
liabilities and obligations hereunder and the requirements of Section 7.02 have
been satisfied.
(b) Notwithstanding the foregoing and except with
respect to any Option One Serviced Loan, at the Seller's request, so long as it
is the owner of the servicing rights, Wilshire shall resign upon the Seller's
selection and appointment of a successor servicer; provided that the Seller
delivers to the Trustee the letter required by Section 6.04(a)(ii) above.
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ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.
"Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by a Servicer to make any deposit or
payment required pursuant to this Agreement which continues unremedied
for a period of one Business Day (or, in the case of any such failure
to make any deposit or payment due to any outbreak or escalation of
hostilities, declaration by the United States of a national emergency
or war or other calamity or crisis or act of god, for a period of three
Business Days) after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to
such Servicer by the Trustee or the Depositor, or to such Servicer and
the Trustee by the Holders of Certificates having not less than 25% of
the Voting Rights evidenced by the Certificates; or
(ii) any failure by a Servicer duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of such Servicer set forth in this Agreement,
which failure or breach (a) materially affects the rights of the
Certificateholders and (b) continues unremedied for a period of 30 days
after the date on which written notice of such failure or breach,
requiring the same to be remedied, shall have been given to such
Servicer by the Trustee or the Depositor, or to such Servicer and the
Trustee by the Holders of Certificates having not less than 25% of the
Voting Rights evidenced by the Certificates; or
(iii) if a representation or warranty set forth in
Section 2.03(b), (c) or (d), as applicable, hereof 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
30 days (or, if such breach is not capable of being cured within 30
days and provided that the related Servicer believes in good faith that
such breach can be cured and is diligently pursuing the cure thereof,
within 90 days) after the date on which written notice thereof shall
have been given to the related Servicer by the Trustee for the benefit
of the Certificateholders or by the Depositor; or
(iv) failure by a Servicer to maintain, if required,
its license to do business in any jurisdiction where the related
Mortgaged Property is located, to the extent such failure materially
and adversely affects the ability of such Servicer to perform its
obligations under this Agreement; or
(v) a decree or order of a court or agency or
supervisory authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, including bankruptcy, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against
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a Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(vi) a Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to such Servicer or of or relating to all or substantially
all of its property; or
(vii) any failure of a Servicer to make any Advance, to
the extent required under Section 4.01 in the manner and at the time
required to be made from its own funds pursuant to this Agreement and
after receipt of notice from the Trustee, which failure continues
unremedied after the close of business on the Business Day immediately
preceding the related Distribution Date; or
(viii) 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, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for three Business
Days; or
(ix) (a) either (I) the servicer rankings or ratings of
the Servicer are downgraded two or more levels below the level in
effect on the Closing Date by one or more of the Rating Agencies rating
the Certificates or (II) the servicer rankings or ratings for the
Servicer are downgraded to "below average" status by one or more of the
Rating Agencies rating the Certificates or (b) one or more Classes of
the Certificates are downgraded or placed on negative watch due in
whole or in part to the performance or servicing of the Servicer.
Other than an Event of Default resulting from a failure of a
Servicer to make any Advance, if an Event of Default described in clauses (i)
through (viii) of this Section shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, or at the direction of the Holders of Certificates evidencing not less than
51% of the Voting Rights evidenced by the Certificates, the Trustee shall by
notice in writing to such Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the related Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder (and the rights to
reimburse itself for Advances and Servicing Advances previously made pursuant to
this Agreement, the right to accrued and unpaid Servicing Fees and the rights
under Section 6.03 with respect to events occurring prior to such termination).
If an Event of Default results from the failure of a Servicer to make an
Advance, the Trustee shall prior to the Distribution Date occurring in the
succeeding calendar month, by notice in writing to such Servicer and the
Depositor (with a copy to each Rating Agency), terminate all of the rights and
obligations of such Servicer under this Agreement prior to the Distribution Date
occurring in the succeeding calendar month and in and to the related Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder and the rights to reimburse itself for Advances and Servicing Advances
previously made pursuant to this Agreement, the right to accrued and unpaid
Servicing Fees and the rights under Section 6.03 with respect to events
occurring prior to such termination. If an Event of Default described in clause
(ix) of this Section occurs, the Trustee shall,
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at the direction of the Seller, by notice in writing to the related Servicer,
terminate all of the rights and obligations of such Servicer under this
Agreement (other than its right to reimburse itself for Advances and Servicing
Advances previously made, as provided in Section 3.08, the right to accrued and
unpaid Servicing Fees and the rights under Section 6.03 with respect to events
occurring prior to such termination) and shall appoint as successor Servicer the
entity selected by the Seller in accordance with Section 7.02; provided the
Seller shall first furnish to the Trustee a letter from each Rating Agency that
the appointment of such successor will not result in a downgrading of the rating
of any of the Certificates.
Upon receipt by a Servicer of such written notice of
termination, all authority and power of such Servicer under this Agreement,
whether with respect to the Mortgage Loans serviced by it or otherwise, shall
pass to and be vested in the Trustee or its nominee. Upon written request from
the Trustee, such Servicer shall prepare, execute and deliver to the successor
entity designated by the Trustee any and all documents and other instruments,
place in such successor's possession all related Mortgage Files, and do or cause
to be done all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, including but not limited to the
transfer and endorsement or assignment of the Mortgage Loans serviced by it and
related documents, at such Servicer's sole expense. The related Servicer shall
cooperate with the Trustee and such successor in effecting the termination of
such Servicer's responsibilities and rights hereunder, including without
limitation, the transfer to such successor for administration by it of all cash
amounts, net of unreimbursed Advances and Servicing Advances and unpaid
Servicing Fees which shall at the time be credited by the related Servicer to
the Collection Account or Escrow Account or thereafter received with respect to
the Mortgage Loans serviced by it. The Trustee, as successor Servicer, shall
thereupon make any Advance. The Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the related Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the related Mortgage Loans and related documents, or otherwise.
SECTION 7.02 Trustee to Act; Appointment of Successor.
On and after the time a Servicer receives a notice of
termination pursuant to Section 7.01 of this Agreement or the resignation of a
Servicer pursuant to Section 6.04, the Trustee shall, subject to and to the
extent provided herein, be the successor to the related Servicer, but only in
its capacity as servicer under this Agreement, and not in any other, and the
transactions set forth herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the related Servicer by the
terms and provisions hereof and applicable law including the obligation to make
Advances pursuant to Section 4.01. As compensation therefor, the Trustee shall
be entitled to all funds relating to the Mortgage Loans that the related
Servicer would have been entitled to charge to the Collection Account, provided
that the terminated Servicer shall nonetheless be entitled to payment or
reimbursement as provided in Section 3.08 to the extent that such payment or
reimbursement relates to the period prior to termination of the related
Servicer. Notwithstanding the foregoing, if the Trustee has become the successor
to a Servicer in accordance with Section 7.01, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to 4.01 hereof, or if it is otherwise unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the
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appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to a Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any successor to a Servicer shall be an institution
which is a Xxxxxx Mae or Xxxxxxx Mac approved seller/servicer for first and
second loans in good standing, which has a net worth of at least $10,000,000,
which is willing to service the related Mortgage Loans and which executes and
delivers to the Depositor and the Trustee an agreement accepting such delegation
and assignment, containing an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the related Servicer
(other than liabilities of the related Servicer under Section 6.03 hereof
incurred prior to termination of the related Servicer under Section 7.01
hereunder), with like effect as if originally named as a party to this
Agreement; provided that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified, withdrawn or downgraded as a result of such assignment and
delegation. Pending appointment of a successor to a Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to the limitations described herein, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the related Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of the Servicing Fee. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by
the failure of the related Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
In connection with the termination or resignation of any
Servicer hereunder, either (i) the successor servicer, including the Trustee if
the Trustee is acting as successor Servicer, shall represent and warrant that it
is a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, in which case the
predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to revise its records to reflect the transfer of servicing to the successor
Servicer as necessary under MERS' rules and regulations, or (ii) the predecessor
Servicer shall cooperate with the successor Servicer in causing MERS to execute
and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Trustee and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor Servicer. The predecessor Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Servicer shall bear any and all fees of MERS, costs of preparing any
assignments of Mortgage, and fees and costs of filing any assignments of
Mortgage that may be required under this subsection.
Any successor to a Servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that such Servicer is
required to maintain pursuant to this Agreement.
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SECTION 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a
successor to a Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder actually known to the Trustee, unless such
Event of Default shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) unless an Event of Default actually known to the
Trustee shall have occurred and be continuing, the duties and
obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except
for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall
be read into this Agreement against the Trustee and the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement which it believed in good faith to be genuine and to
have been duly executed by the proper authorities respecting any
matters arising hereunder;
(ii) the Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be finally proven that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates evidencing not
less than 25% of the Voting Rights of Certificates relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Agreement.
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SECTION 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon
and shall be protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party
or parties;
(ii) the Trustee may consult with counsel, financial
advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(iv) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, affiliates, accountants or attorneys;
(vi) the Trustee shall not be required to risk or expend
its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not assured to it;
(vii) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer of
the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(ix) the Trustee shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such
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Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred therein or thereby.
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor or the Seller, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document, or of MERS or the
MERS(R) System, other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or a Servicer of any funds paid to the
Depositor or a Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or a Servicer.
SECTION 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates and may transact business with the
Depositor, the Seller, any Servicer and their affiliates, with the same rights
as it would have if it were not the Trustee.
SECTION 8.05 Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder,
shall be entitled to withdraw from the Certificate Account on each Distribution
Date prior to making distributions pursuant to Section 4.02 an amount equal to
the Trustee Fee for such Distribution Date. The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Depositor
and the Servicers, to the extent such indemnity related to the failure of the
related Servicer to perform its servicing obligations in accordance with this
Agreement, and held harmless against any loss, liability or expense (including
reasonable attorney's fees and expenses) (i) incurred in connection with any
claim or legal action relating to (a) this Agreement, (b) the Custodial
Agreement, (c) the Certificates, or (d) the performance of any of the Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or incurred by reason of any action of the Trustee
taken at the direction of the Certificateholders and (ii) resulting from any
error in any tax or information return prepared by the related 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
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preparing any Definitive Certificates. Except as otherwise provided herein, the
Trustee shall not be entitled to payment or reimbursement for any routine
ongoing expenses incurred by the Trustee in the ordinary course of its duties as
Trustee, Registrar or agent for the Tax Matters Person hereunder or for any
other expenses.
SECTION 8.06 Eligibility Requirements for the Trustee and
Custodian.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current Ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor and
its affiliates or a Servicer and its affiliates; provided, however, that such
entity cannot be an affiliate of the Seller, the Depositor or a Servicer other
than the Trustee in its role as successor to a Servicer.
SECTION 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the Depositor,
the Seller, each Servicer and each Rating Agency not less than 60 days before
the date specified in such notice, when, subject to Section 8.08, such
resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 8.08 meeting the qualifications set forth in Section
8.06. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation or removal (as provided below), the resigning or removed
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request thereto by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor may remove the Trustee
and appoint a successor trustee by written instrument, in triplicate, one copy
of which shall be delivered to the Trustee, one copy to each Servicer and the
Seller and one copy to the successor trustee.
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The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to each Servicer and the Seller, one complete
set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the successor trustee. All costs and expenses incurred by the Trustee
in connection with the removal of the Trustee without cause shall be reimbursed
to the Trustee from amounts on deposit in the Collection Account.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and each Servicer and the Seller an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, each
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.
SECTION 8.09 Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 without the execution or filing of
any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
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SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, each Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as each
Servicer and the Trustee may consider necessary or desirable. If a Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) To the extent necessary to effectuate the purposes
of this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to a Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally
liable by reason of any act or omission of any other trustee hereunder
and such appointment shall not, and shall not be deemed to, constitute
any such separate trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable
for the payment of reasonable compensation, reimbursement and
indemnification to any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the separate trustees and
co-trustees, when and as effectively as if given to each of
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them. Every instrument appointing any separate trustee or co-trustee shall refer
to this Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to each Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co- trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11 Tax Matters.
It is intended that the assets with respect to which the REMIC
elections are to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters relating to each such segregated
pool of assets shall be such as to qualify such assets as, a "real estate
mortgage investment conduit" as defined in and in accordance with the Trust Fund
Provisions. In furtherance of such intention, the Trustee covenants and agrees
that it shall act as agent (and the Trustee is hereby appointed to act as agent)
for the Tax Matters Person and on behalf of the Trust Fund and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each of REMIC 1, REMIC 2 and REMIC
3 containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such form, and
update such information at the time or times in the manner required by the Code;
(c) make or cause to be made elections that the assets of each of REMIC 1, REMIC
2 and REMIC 3 be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law); (d) prepare and
forward, or cause to be prepared and forwarded, to the Certificateholders and to
the Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Residual Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non- Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and
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furnishing such information may be charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters relating to
such assets at all times that any Certificates are outstanding so as to maintain
the status of REMIC 1, REMIC 2 and REMIC 3 as a REMIC under the REMIC
Provisions; (g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of REMIC 1,
REMIC 2 or REMIC 3; (h) pay, from the sources specified in the fourth paragraph
of this Section 8.11, the amount of any federal or state tax, including
prohibited transaction taxes as described below, imposed on the Trust Fund prior
to its termination when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings); (i) ensure that federal, state or local income tax
or information returns shall be signed by the Trustee or such other person as
may be required to sign such returns by the Code or state or local laws,
regulations or rules; (j) maintain records relating to the Trust Fund, including
but not limited to the income, expenses, assets and liabilities thereof and the
fair market value and adjusted basis of the assets determined at such intervals
as may be required by the Code, as may be necessary to prepare the foregoing
returns, schedules, statements or information; and (k) as and when necessary and
appropriate, represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of the
Trust Fund, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of the Trust
Fund, and otherwise act on behalf of the Trust Fund in relation to any tax
matter or controversy involving it.
To the extent that they are under its control, each Servicer
shall conduct matters relating to the assets of each REMIC at all times that any
Certificates are outstanding so as to maintain the status of REMIC 1, REMIC 2
and REMIC 3 as a REMIC under the REMIC Provisions. No Servicer shall knowingly
or intentionally take any action that would cause the termination of the REMIC
status of REMIC 1, REMIC 2 or REMIC 3.
In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten (10) days after the Closing Date all information or data that
the Trustee requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contribution to the Trust Fund after the
Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Trustee, if any such other tax arises
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out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) the related Servicer or the Seller, in the case of any such
minimum tax, if such tax arises out of or results from a breach by such Servicer
or the Seller of any of their obligations under this Agreement or (iii) the
Seller, if any such tax arises out of or results from the Seller's obligation to
repurchase a related Mortgage Loan pursuant to Section 2.02 or 2.03 or (iv) in
all other cases, or in the event that the Trustee, the related Servicer or
Seller fails to honor its obligations under the preceding clauses (i), (ii) or
(iii), any such tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.02.
Neither a Servicer nor the Trustee shall enter into any
arrangement by which any of REMIC 1, REMIC 2 or REMIC 3 will receive a fee or
other compensation for services nor permit any of REMIC 1, REMIC 2 or REMIC 3 to
receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
SECTION 8.12 Commission Reporting.
(a) The Trustee and each Servicer shall reasonably
cooperate with the Depositor in connection with the Trust's satisfying the
reporting requirements under the Exchange Act. The Trustee shall prepare on
behalf of the Depositor any Forms 8-K and 10-K customary for similar securities
as required by the Exchange Act and the rules and regulations of the Commission
thereunder, and the Depositor shall sign and the Trustee shall file (via XXXXX)
such Forms on behalf of the Depositor. The Depositor hereby grants to the
Trustee a limited power of attorney to execute and file each such document on
behalf of the Depositor. Such power of attorney shall continue until the earlier
of (i) receipt by the Trustee from the Depositor of written termination of such
power of attorney and (ii) the termination of the Trust.
(b) Each Form 8-K shall be filed by the Trustee within
15 days after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 31st of the calendar year following the calendar year during which the
Closing Date occurs (or such earlier date as may be required by the Exchange Act
and the rules and regulations of the Commission), the Trustee shall file a Form
10-K, in substance as required by applicable law or applicable Commission
staff's interpretations. Such Form 10-K shall include as exhibits, each
Servicer's annual statement of compliance described under Section 3.16 and the
accountant's report described under Section 3.17, in each case to the extent
they have been timely delivered to the Trustee. If they are not so timely
delivered, the Trustee shall file an amended Form 10-K including such documents
as exhibits promptly after they are delivered to the Trustee. The Trustee shall
have no liability with respect to any failure to properly or timely prepare or
file such periodic reports resulting from or relating to the Trustee's inability
or failure to obtain any information not resulting from its own negligence or
willful misconduct. The Form 10-K shall also include a certification in the form
attached hereto as Exhibit W (the "Depositor Certification"), which shall be
signed by the senior officer of the Depositor in charge of securitization. The
Trustee shall have no responsibility to file any items other than those
specified in this Section 8.12.
(c) Not later than 15 calendar days before the date on
which the Depositor's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and
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regulations of the Commission (or, if such day is not a Business Day, the
immediately preceding Business Day), the Trustee shall sign a certification in
the form attached hereto as Exhibit X (the "Trustee Certification") for the
benefit of the Depositor and its officers, directors and affiliates regarding
certain aspects of items 1 through 3 of the Depositor Certification. In
addition, the Trustee shall, subject to the provisions of Section 8.01 and 8.02
hereof, indemnify and hold harmless the Depositor and each Person, if any, who
"controls" the Depositor within the meaning of the Securities Act and its
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 8.12 or any inaccuracy
made in the Trustee Certification. If the indemnification provided for in this
Section 8.12(c) is unavailable or insufficient to hold harmless such Persons,
then the Trustee shall contribute to the amount paid or payable by such Persons
as a result of the losses, claims, damages or liabilities of such Persons in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other. The Trustee acknowledges that the
Depositor is relying on the Trustee's performance of its obligations under this
Section 8.12 in order to perform its obligations under Section 8.12(b) above.
(d) Not later than 15 calendar days before the date on
which the Depositor's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission
(or, if such day is not a Business Day, the immediately preceding Business Day),
each Servicer will deliver to the Depositor and the Trustee an Officer's
Certificate for the prior calendar year in substantially the form of Exhibit Y
to this Agreement. Each Servicer agrees to indemnify and hold harmless the
Depositor, the Trustee and each Person, if any, who "controls" the Depositor or
the Trustee within the meaning of the Securities Act and their respective
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs, fees and expenses that such Person may sustain
arising out of third party claims based on (i) the failure of such Servicer to
deliver or caused to be delivered when required any Officer's Certificate
pursuant to this Section 8.12(d), or (ii) any material misstatement or omission
contained in any Officer's Certificate provided pursuant to this Section
8.12(d). If an event occurs that would otherwise result in an indemnification
obligation under clauses (i) or (ii) above, but the indemnification provided for
in this Section 8.12(d) by 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 or Trustee on the one hand and such Servicer on
the other. Each Servicer acknowledges that the Depositor and the Trustee are
relying on such Servicer's performance of its obligations under this Agreement
in order to perform their respective obligations under this Section 8.12.
(e) Upon any filing with the Commission, the Trustee
shall promptly deliver to the Depositor a copy of any executed report, statement
or information.
(f) If the Commission issues additional interpretative
guidance or promulgates additional rules or regulations, or if other changes in
applicable law occur, that would require the reporting arrangements, or the
allocation of responsibilities with respect thereto, described in this Section
8.12, to be conducted differently than as described, the Depositor, Servicers
and Trustee will reasonably cooperate to amend the provisions of this Section
8.12 in order to comply with such
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amended reporting requirements and such amendment of this Section 8.12. Any such
amendment shall be made in accordance with Section 10.01 without the consent of
the Certificateholders, and may result in a change in the reports filed by the
Trustee on behalf of the Trust under the Exchange Act. Notwithstanding the
foregoing, the Depositor, Servicers and Trustee shall not be obligated to enter
into any amendment pursuant to this Section 8.12 that adversely affects its
obligations and immunities under this Agreement.
(g) Prior to January 31 of the first year in which the
Trustee is able to do so under applicable law, the Trustee shall file a Form 15D
Suspension Notification with respect to the Trust.
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ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans.
Subject to Section 9.03, the rights, obligations and
responsibilities of the Depositor, the Seller, the Servicers and the Trustee
created hereunder with respect to the Trust Fund shall terminate upon the
earliest of:
(a) the purchase by the Optional Termination Holder of all Mortgage
Loans (and REO Properties) remaining at the price equal to the greater of (I)
the sum of (A) 100% of the Aggregate Collateral Balance (other than in respect
of REO Property) plus one month's accrued interest thereon at the applicable
Mortgage Rate, (B) with respect to any REO Property, the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
independent valuations completed by two independent companies selected by the
Depositor at the expense of the Depositor and (y) the Stated Principal Balance
of each Mortgage Loan related to any REO Property, in each case plus accrued and
unpaid interest thereon at the applicable Mortgage Rate and (C) any remaining
unreimbursed Advances, Servicing Advances and Servicing Fees payable to a
Servicer and any unreimbursed Advances (made by the Trustee as a successor
Servicer), Trustee Fees and expenses payable to the Trustee (the sum of (A), (B)
and (C), collectively, the "Par Value") and (II) the Fair Market Value;
(b) the later of (i) the maturity or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and
the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement; and
(c) the purchase by the Auction Purchaser of all the Mortgage Loans and
all property acquired in respect of any remaining Mortgage Loan (the "Trust
Collateral"), in each case as described below.
In no event shall the trusts created hereby continue beyond
the expiration of 21 years from the death of the survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof. The right to repurchase all Mortgage Loans
and REO Properties pursuant to clause (a) above shall be conditioned upon the
aggregate Stated Principal Balance of the Mortgage Loans and the appraised value
of the REO Properties at the time of any such repurchase, aggregating less than
ten percent of the Aggregate Collateral Balance as of the Cut-off Date.
If the Optional Termination Holder has not exercised its
purchase option described above, on any Distribution Date on or after the date
on which the aggregate Stated Principal Balance of the Mortgage Loans and the
appraised value of the REO Properties at the time of the purchase is less than
five percent of the Aggregate Collateral Balance as of the Cut-off Date (the
"Auction Date"), the Trustee shall solicit, or cause to be solicited, good faith
bids for the Trust Collateral from at least three institutions that are regular
purchasers and/or sellers in the secondary market of residential
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whole mortgage loans similar to the Mortgage Loans. If the Trustee receives at
least three bids for the Trust Collateral, and one of such bids is equal to or
greater than the Par Value, the Trustee shall sell the Trust Collateral to the
highest bidder (the "Auction Purchaser") at the price offered by the Auction
Purchaser (the "Mortgage Loan Purchase Price") and following such sale shall
have no further liability or responsibility therefor. If the Trustee receives
less than three bids, or does not receive any bid that is equal to or greater
than the Par Value, the Trustee shall continue conducting auctions every six
months until the earlier of (a) the completion of a successful auction and (b)
the Optional Termination Holder exercises its purchase option. Only expenses
incurred by the Trustee in connection with the solicitation of bids for a
successful auction described in this paragraph shall be payable to the Trustee,
out of the Mortgage Loan Purchase Price received in connection with such
successful auction, as described in Section 9.02 hereof; provided, however that
any indemnification rights available to the Trustee under this Agreement in
connection with any auctions will not be limited by this sentence.
SECTION 9.02 Final Distribution on the Certificates.
If on any Determination Date, the Trustee determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Collection Accounts and Certificate
Account, the Trustee shall promptly send a final distribution notice to each
Certificateholder. If the Optional Termination Holder above elects to terminate
the Trust Fund pursuant to Section 9.01 or the Auction Purchaser purchases the
Trust Collateral pursuant to Section 9.01, at least 20 days prior to the date
notice is to be mailed to the affected Certificateholders such Person shall
notify the Servicers and the Trustee of the date the Optional Termination Holder
or the Auction Purchaser intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders shall surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month next preceding the month of
such final distribution. Any such notice shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon presentation
and surrender of Certificates at the office therein designated, (b) the amount
of such final distribution, (c) the location of the office or agency at which
such presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The Trustee shall give such notice to each Rating
Agency at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the
Trustee shall cause the final distribution to the Certificateholders of each
Class on the final Distribution Date to be made in accordance with the
priorities of Section 4.02. On the final Distribution Date, the
Overcollateralization Amount shall be distributed to the Class X-1 Certificates
in accordance with Section 4.02(b)(iv)(J) hereof. Notwithstanding the foregoing,
if the final Distribution Date has occurred as a result of the Optional
Termination Holder's purchase of the Trust Fund pursuant to Section 9.01(a) or
the purchase of the Trust Collateral by the Auction Purchaser pursuant to
Section 9.01(c), all amounts, if any, in excess of the Par Value shall be
distributed by the Trustee directly to
131
the Class A-RL Certificateholders. All amounts described in the definition of
"Par Value" payable to the Trustee shall be paid to the Trustee from the
proceeds of an optional termination or from the Mortgage Loan Purchase Price
received in connection with a successful auction, as applicable, prior to any
distributions to Certificateholders.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class A-R Certificateholders and Class A-RL Certificateholders shall be
entitled to all unclaimed funds and other assets of the Trust Fund which remain
subject hereto and the Trustee shall be discharged from all further liability
with respect to the Certificates and this Agreement.
SECTION 9.03 Additional Termination Requirements.
(a) In the event that the Optional Termination Holder
exercises its purchase option with respect to the Mortgage Loans as provided in
Section 9.01 or the Auction Purchaser purchases the Mortgage Loans pursuant to
Section 9.01, at such time as the Mortgage Loans are so purchased, the Trust
Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel,
at the expense of the Depositor, to the effect that the failure to comply with
the requirements of this Section 9.03 will not (i) result in the imposition of
taxes on "prohibited transactions" on any REMIC as defined in Section 860F of
the Code, or (ii) cause REMIC 1, REMIC 2 and REMIC 3 to fail to qualify as a
REMIC at any time that any Certificates are outstanding:
(1) Within 90 days prior to the final
Distribution Date set forth in the notice
given by the Trustee under Section 9.02, the
Depositor shall prepare and the Trustee, at
the expense of the Depositor, shall adopt a
plan of complete liquidation within the
meaning of Section 860F(a)(4) of the Code
which, as evidenced by an Opinion of Counsel
(which opinion shall not be an expense of
the Trustee, the Tax Matters Person or the
Trust Fund), meets the requirements of a
qualified liquidation;
(2) Within 90 days after the time of adoption of
such a plan of complete liquidation, the
Trustee shall sell all of the assets of the
Trust Fund to the Depositor for cash in
accordance with Section 9.01; and
On the date specified for final
payment of the Certificates, the Trustee
shall, after payment of any unreimbursed
Advances, Servicing Advances, Servicing Fees
or other fee compensation payable to each
132
Servicer pursuant to this Agreement, make
final distributions of principal and
interest on the Certificates in accordance
with Section 4.02 and distribute or credit,
or cause to be distributed or credited, to
the Holders of the Residual Certificates all
cash on hand after such final payment (other
than the cash retained to meet claims), and
the Trust Fund (and any REMIC) shall
terminate at that time.
(b) The Trustee as agent for REMIC 1, REMIC 2 and REMIC
3 hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Depositor, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1) and to take such other action in connection
therewith as may be reasonably requested by the Depositor.
(c) By their acceptance of the Certificates, the
Holders thereof hereby authorize the Depositor to prepare and the Trustee to
adopt and sign a plan of complete liquidation.
133
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment.
This Agreement may be amended from time to time by the
Depositor, each Servicer, the Seller and the Trustee without the consent of any
of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct
any defective provision herein or to supplement any provision herein which may
be inconsistent with any other provision herein, (iii) to add to the duties of
the Depositor, the Seller or any Servicer, (iv) to add any other provisions with
respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided that any action pursuant to clauses (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund, but shall be at the expense of
the party proposing such amendment), adversely affect in any material respect
the interests of any Certificateholder; provided, however, that no such Opinion
of Counsel shall be required if the Person requesting the amendment obtains a
letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Seller and the
Servicers also may at any time and from time to time amend this Agreement
without the consent of the Certificateholders to modify, eliminate or add to any
of its provisions to such extent as shall be necessary or helpful to (i)
maintain the qualification of REMIC 1, REMIC 2 and REMIC 3 as a REMIC under the
Code, (ii) avoid or minimize the risk of the imposition of any tax on the Trust
Fund pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicers, the Seller and the Trustee with the consent of the
Holders of a Majority in Interest of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating
66%, or (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding.
134
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, but shall be at the expense of the party
preparing such amendment, to the effect that such amendment will not cause the
imposition of any federal tax on the Trust Fund or the Certificateholders or
cause REMIC 1, REMIC 2 and REMIC 3 to fail to qualify as a REMIC at any time
that any Certificates are outstanding.
Promptly after the execution of any amendment to this
Agreement, the Trustee shall furnish written notification of the substance or a
copy of such amendment to each Certificateholder if the consent of
Certificateholders was required and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 10.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee or the Trust Fund), satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
SECTION 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Depositor at its expense, but only upon
direction by the Trustee accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
135
HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 10.04 [Reserved]
SECTION 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not
been cured;
(iii) The resignation or termination of any Servicer or
the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans
pursuant to Sections 2.02 and 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies of the following to the extent such items are in its
possession:
(i) Each report to Certificateholders described in
Section 4.06 and 3.19;
(ii) Each annual statement as to compliance described in
Section 3.16;
(iii) Each annual independent public accountants'
servicing report described in Section 3.17; and
(iv) Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor and the Seller, Eleven Madison Avenue, 4th Floor, New
York, New York 10010, Attention: Xxxx X. Xxxxxx (with a copy to Credit Suisse
First Boston Mortgage Securities Corp., Eleven Madison Avenue, 4th Floor, New
York, New York 10010, Attention: Office of the General Counsel), (b) in the case
of the Trustee, the Corporate Trust Office or such other address as the Trustee
may hereafter furnish to the Depositor and the Servicers, (c) in the case of
Wilshire, 00000 XX Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000 Attention:
Xxx Xxxxxxx, with a copy to Stoel Rives LLP, 000 XX Xxxxx, Xxxxxxxx, Xxxxxx
00000 Attention: Xxxx Xxxxxx or such other address as may be hereafter furnished
in writing to the Depositor and the Trustee by the Servicer, (d) in the case of
Option One, Option One Mortgage Corporation, 0 Xxx, Xxxxxx, Xxxxxxxxxx, 00000,
Attention: Xxxxxx Xxxxxxxx or such other address as
136
may be hereafter furnished in writing to the Depositor and the Trustee by Option
One and (e) in the case of each of the Rating Agencies, the address specified
therefor in the definition corresponding to the name of such Rating Agency.
Notices to Certificateholders shall be deemed given when mailed, first class
postage prepaid, to their respective addresses appearing in the Certificate
Register.
SECTION 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07 Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided in Sections 6.02 and 6.04, this Agreement may not be assigned
by any Servicer without the prior written consent of the Trustee and Depositor;
provided, however, that neither the Depositor nor the Trustee shall consent to
any such assignment unless each Rating Agency has confirmed in writing that such
assignment will not cause a reduction or withdrawal of the ratings then assigned
by it to any Class of Certificates.
SECTION 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the trust created hereby, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of
137
indemnity shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 10.09 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
SECTION 10.10 Non-Solicitation
From and after the date of this Agreement, each of the
Depositor, the Seller, the Servicers and the Trustee agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on any such party's behalf, to
personally, by telephone, by mail, or electronically by e-mail or through the
internet or otherwise, solicit the borrower or obligor under any Mortgage Loan
to refinance the Mortgage Loan, in whole or in part. Notwithstanding the
foregoing, it is understood and agreed that promotions undertaken by the
Depositor, the Seller, any Servicer or the Trustee or any affiliate of any such
party that originates mortgage loans in the normal course, which are directed to
the general public at large, or segments thereof, including, without limitation,
mass mailings based on commercially acquired mailing lists or newspaper,
internet, company website, radio and television advertisements shall not
constitute solicitation under this Section 10.10, provided, that no segment of
the general public shall consist primarily of the borrowers or obligors under
the Mortgage Loans. None of the Depositor, the Seller, a Servicer or the Trustee
shall permit the sale of the name of any Mortgagor or any list of names that
consist primarily of the Mortgages to any Person.
138
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller,
the Servicers have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.,
as Depositor
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
JPMORGAN CHASE BANK,
as Trustee
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
DLJ MORTGAGE CAPITAL, INC.,
as Seller
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
WILSHIRE CREDIT CORPORATION,
as a Servicer
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
OPTION ONE MORTGAGE CORPORATION,
as a Servicer
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
[NOTARY PAGES TO BE ATTACHED]
140
EXHIBIT A
[FORM OF CLASS A CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
A-1
Certificate No. [____] Adjustable Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this
June 1, 2004 Certificate ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all
July 26, 2004 Certificates of this Class:
$[_______________]
Maturity Date: CUSIP: [_________________]
October 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
Class [_______]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to a Trust Fund consisting primarily of a pool of
conventional mortgage loans (the "Mortgage Loans") secured by
fixed rate, second lien residential mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the
Servicers or the Trustee referred to below or any of their respective
affiliates. This Certificate and the Mortgage Loans are not guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [ _____________________ ] is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Credit Suisse First Boston Mortgage Securities Corp.
(the "Depositor"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, DLJ Mortgage Capital, Inc. as seller
("DLJMC"), Option One Mortgage Corporation as servicer ("Option One"), Wilshire
Credit Corporation as servicer ("Wilshire" and together with Option One, the
"Servicers") and JPMorgan Chase Bank as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
to such terms in the Agreement. This Certificate is issued under and is subject
A-2
to the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By ____________________________
Countersigned:
By __________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
A-4
EXHIBIT B
[FORM OF SUBORDINATE CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
B-1
Certificate No. [____] [Adjustable][_%][Variable] Pass-Through Rate
Cut-off Date: Initial [Certificate Balance] [Notional Amount]
June 1, 2004 of this Certificate ("Denomination"):
$[_________________]
First Distribution Date: Initial [Certificate Balances] [Notional
July 26, 0000 Xxxxxx] of all Certificates of this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
October 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
Class [_______]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to a Trust Fund consisting primarily of a pool of
conventional mortgage loans (the "Mortgage Loans") secured by
fixed rate, second lien residential mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the
Servicers or the Trustee referred to below or any of their respective
affiliates. This Certificate and the Mortgage Loans are not guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [__________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"),Option One
Mortgage Corporation as servicer ("Option One"), Wilshire Credit Corporation as
servicer ("Wilshire" and together with Option One, the "Servicers") and JPMorgan
Chase Bank as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the
B-2
meanings assigned to such terms in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made except in
compliance with section 5.02 of the Pooling Servicing Agreement.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By _______________________________
Countersigned:
By ____________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
B-4
EXHIBIT C
[FORM OF RESIDUAL CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-1
Certificate No. [____] Variable Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this
June 1, 2004 Certificate ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all
July 26, 2004 Certificates of this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
October 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
Class [_______]
evidencing the distributions allocable to the Class
[A-R][A-RL] Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans
(the "Mortgage Loans") secured by fixed rate, second lien
residential mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the
Servicers or the Trustee referred to below or any of their respective
affiliates. This Certificate and the Mortgage Loans are not guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [______________________] is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Option One
Mortgage Corporation as servicer ("Option One"), Wilshire Credit Corporation as
servicer ("Wilshire" and together with Option One, the "Servicers") and JPMorgan
Chase Bank as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to such terms in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the
C-2
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class [A-R][A-RL]
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York.
No transfer of a Class [A-R][A-RL] Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, or a person acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee or the Trust Fund
or (ii) in the case of any such Class A-R Certificate presented for registration
in the name of an employee benefit plan subject to ERISA, or Section 4975 of the
Code (or comparable provisions of any subsequent enactments), or a trustee of
any such plan or any other person acting on behalf of any such plan or
arrangement, or using such plan's or arrangement's assets, an Opinion of Counsel
addressed to the Trustee, for the benefit of the Trustee, the Depositor and the
Servicers and on which they may rely, and satisfactory to the Trustee to the
effect that the purchase or holding of such Class A-R Certificate will not
result in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA and the Code and will
not subject the Trustee to any obligation in addition to those undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the Trustee
or the Trust Fund. Notwithstanding anything else to the contrary herein, any
purported transfer of a Class A-R Certificate to or on behalf of an employee
benefit plan subject to ERISA or to the Code without the Opinion of Counsel
satisfactory to the Trustee as described above shall be void and of no effect.
Each Holder of this Class [A-R][A-RL] Certificate will be deemed to
have agreed to be bound by the restrictions of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class A-R Certificate must be a Permitted Transferee,
(ii) no Ownership Interest in this Class [A-R][A-RL] Certificate may be
transferred without delivery to the Trustee of (a) a transfer affidavit of the
proposed transferee and (b) a transfer certificate of the transferor, each of
such documents to be in the form described in the Agreement, (iii) each person
holding or acquiring any Ownership Interest in this Class [A-R][A-RL]
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Class [A-R][A-RL]
Certificate must agree not to transfer an Ownership Interest in this Class
[A-R][A-RL] Certificate if it has actual knowledge that the proposed transferee
is not a Permitted Transferee and (v) any attempted or purported transfer of any
Ownership Interest in this Class [A-R][A-RL] Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
C-3
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By ___________________________
Countersigned:
By ____________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
C-4
EXHIBIT D
[FORM OF NOTIONAL AMOUNT CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
[THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.]
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
D-1
Certificate No. [____] Variable Interest Rate
Cut-off Date: Initial Notional Amount of this Certificate
June 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Notional Amount of all Certificates
July 26, 2004 of this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
October 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust Series 2004-3
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
Class [ ]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to a Trust Fund consisting primarily of a pool of
conventional mortgage loans (the "Mortgage Loans") secured by
fixed rate, second lien residential mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
This Certificate is payable solely from the assets of the Trust and
does not evidence an obligation of, or an interest in, and is not guaranteed by
the Depositor, the Seller, the Servicers or the Trustee referred to below or any
of their respective affiliates. This Certificate and the Mortgage Loans are not
guaranteed or insured by any governmental agency or instrumentality.
This certifies that ___________, is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Option One
Mortgage Corporation as servicer ("Option One"), Wilshire Credit Corporation as
servicer ("Wilshire" and together with Option One, the "Servicers") and JPMorgan
Chase Bank as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to such terms in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
D-2
[This Certificate has not been registered under the Securities Act of 1933, as
amended ("the Act"). Any resale or transfer of this Certificate without
registration thereof under the Act may only be made in a transaction exempted
from the registration requirements of the Act and in accordance with the
provisions of the Agreement referred to herein.]
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
D-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By ______________________________
Countersigned:
By _________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
D-4
EXHIBIT E
[FORM OF CLASS P CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
E-1
Certificate No. [____] Variable Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this
June 1, 2004 Certificate ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all
July 26, 2004 Certificates of this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
October 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
Class [_______]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to a Trust Fund consisting primarily of a pool of
conventional mortgage loans (the "Mortgage Loans") secured by
fixed rate, first and second lien residential mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance of this Class P
Certificate at any time may be less than the Initial Certificate Balance set
forth on the face hereof, as described herein. This Class P Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Servicers or the Trustee referred to below or any of their
respective affiliates.
This certifies that _________________ is the registered owner of the
Percentage Interest evidenced by this Class P Certificate (obtained by dividing
the Denomination of this Class P Certificate by the Initial Class Principal
Balance) in certain distributions with respect to a Trust consisting primarily
of the Mortgage Loans deposited by Credit Suisse First Boston Mortgage
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of June 1, 2004 (the "Agreement") among the
Depositor, DLJ Mortgage Capital Inc., as seller ("DLJMC"), Option One Mortgage
Corporation as servicer ("Option One"), Wilshire Credit Corporation as servicer
("Wilshire" and together with Option One, the "Servicers") and JPMorgan Chase
Bank, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class P Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement
E-2
the Holder of this Class P Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Seller, the Servicers or the Depositor; or there shall be
delivered to the Trustee and the Depositor a transferor certificate by the
transferor and an investment letter shall be executed by the transferee. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of a Class P Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, or a person acting
on behalf of any such plan or arrangement or using the assets of any such plan
or arrangement to effect such transfer, which representation letter shall not be
an expense of the Trustee or the Trust Fund or (ii) in the case of any such
Class P Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement, or using such
plan's or arrangement's assets, an Opinion of Counsel addressed to the Trustee,
for the benefit of the Trustee, the Depositor and the Servicers and on which
they may rely, and satisfactory to the Trustee to the effect that the purchase
or holding of such Class P Certificate will not result in the assets of the
Trust Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee to
any obligation in addition to those undertaken in this Agreement, which Opinion
of Counsel shall not be an expense of the Trustee or the Trust Fund.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Class P Certificate to or on behalf of an employee benefit plan subject to
ERISA or to the Code without the Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect.
Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
E-3
This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
E-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 29, 2004
JPMORGAN CHASE BANK,
as Trustee
By ________________________________
Countersigned:
By _______________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
E-5
EXHIBIT F
[FORM OF REVERSE OF CERTIFICATES]
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
Class [_______]
This Certificate is one of a duly authorized issue of Certificates
designated as Credit Suisse First Boston Mortgage Securities Corp., Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. [The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.][The Record Date applicable to each Distribution Date
is the Business Day immediately preceding the related Distribution Date;
provided that if this Certificate is not a Book-Entry Certificate, then the
Record Date applicable to each Distribution Date is the last Business Day of the
month next preceding such Distribution Date.]
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
F-1
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Seller and the Trustee and any agent
of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and the Seller,
the Depositor, the Trustee, or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the sum of the aggregate Stated
Principal Balance of the Mortgage Loans and the appraised value of the REO
Properties at the time of repurchase is less than 10% of the sum of the
Aggregate Collateral Balance of the Mortgage Loans as of the Cut-off Date, the
Optional Termination Holder will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and REO Properties at a purchase
price determined as provided in the Agreement. If the Optional Termination
Holder does not exercise its option to purchase, on any Distribution Date on
which the sum of the aggregate Stated Principal Balance of the Mortgage Loans
and the appraised value of the REO Properties at the time of repurchase is less
than 5% of the sum of the Aggregate Collateral Balance of the Mortgage Loans as
of the Cut-off Date, the Trustee shall conduct an auction and upon satisfaction
of the conditions described in the Agreement, the Auction Purchaser shall
purchase the Trust Collateral at a purchase price determined as provided in the
F-2
Agreement. In the event that no such optional termination occurs and no purchase
pursuant to an auction occurs, the obligations and responsibilities created by
the Agreement will terminate upon the later of the maturity or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the distribution to Certificateholders of all amounts required to
be distributed pursuant to the Agreement. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
F-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number __________ , or, if mailed by check, to _________________________
________________________________________________________________________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ____________________________, the assignee named
above, or _____________________________, as its agent.
F-4
EXHIBIT G
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
June 29, 2004
________________________________
________________________________
Cut-off Date Principal Balance:
$_________________
JPMorgan Chase Bank,
as Trustee, for the
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Custodial Agreement, dated as of June 1, 2004, between
JPMorgan Chase Bank, as Trustee and LaSalle Bank National
Association, as Custodian
---------------------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 4 of the above-referenced
Custodial Agreement, the undersigned, as the Custodian, hereby certifies as to
each Mortgage Loan in the Mortgage Loan Schedule that (i) it has received: the
original Mortgage Note and Assignment of Mortgage with respect to each Mortgage
Loan identified on the Mortgage Loan Schedule attached hereto as Exhibit A and
(ii) such Mortgage Note has been reviewed by it and appears regular on its face
and relates.
The Custodian makes no representations as to: (i) the validity,
legality, enforceability, sufficiency, due authorization or genuineness of any
of the documents contained in each Custodial File or of any of the Mortgage
Loans or (ii) the collectability, insurability, effectiveness or suitability of
any such Mortgage Loan.
The Custodian hereby confirms that it is holding each such Mortgage
Note and Assignment of Mortgage as agent and bailee of, and custodian for the
exclusive use and benefit, and subject to the sole direction, of the Trustee
pursuant to the terms and conditions of the Custodial Agreement.
This Trust Receipt and Initial Certification is not divisible or
negotiable.
The Custodian will accept and act on instructions with respect to the
Mortgage Loans subject hereto upon surrender of this Trust Receipt and Initial
Certification at its office at LaSalle Bank National Association: 0000 Xxxxx
Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx, 00000.
G-1
Capitalized terms used herein shall have the meaning ascribed to them
in the Custodial Agreement.
LASALLE BANK NATIONAL ASSOCIATION
as Custodian
By: ____________________________
Name:
Title:
G-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF CUSTODIAN
Trust Receipt #_________
Cut-off Date Principal Balance
$-------------
[To be addressed to the Trustee of record]
Re: Custodial Agreement, dated as of June 1, 2004, between
JPMorgan Chase Bank, as Trustee and LaSalle Bank National
Association, as Custodian
---------------------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 6 of the above-referenced
Custodial Agreement, the undersigned, as the Custodian, hereby certifies that as
to each Mortgage Loan listed on the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan listed on the attachment hereto)
it has reviewed the Custodial Files and has determined that (i) all documents
required to be delivered to it pursuant to Sections 2(i)-(ix) of the Custodial
Agreement are in its possession; (ii) such documents have been reviewed by it
and appear regular on their face and related to such Mortgage Loan; (iii) all
Assignments of Mortgage or intervening assignments of mortgage, as applicable,
have been submitted for recording in the jurisdictions in which recording is
necessary; and (iv) each Mortgage Note has been endorsed as provided in Section
2(ii) of the Custodial Agreement and each Mortgage has been assigned in
accordance with Section 2(iii) of the Custodial Agreement. The Custodian makes
no representations as to: (i) validity, legality, enforceability, sufficiency,
due authorization or genuineness of any of the documents contained in each
Custodial File or of any of the Mortgage Loans, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
The Custodian hereby confirms that it is holding each such Custodial
File as agent and bailee of, and custodian for the exclusion use and benefit,
and subject to the sole direction, of Trustee pursuant to the terms and
conditions of the Custodial Agreement.
This Trust Receipt and Final Certification is not divisible or
negotiable.
The Custodian will accept and act on instructions with respect to the
Mortgage Loans subject hereto upon surrender of this Trust Receipt and Final
Certification at its office at LaSalle Bank National Association: 0000 Xxxxx
Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx, 00000.
H-1
Capitalized terms used herein shall have the meaning ascribed to them
in the Custodial Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By: ________________________________
Name:
Title:
H-2
EXHIBIT I
TRANSFER AFFIDAVIT
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
Class [_______]
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _ , the
proposed Transferee of an Ownership Interest in a Class [A-R][A-RL] Certificate
(the "Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Series, among Credit Suisse First
Boston Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as
seller ("DLJMC"), Option One Mortgage Corporation as servicer ("Option One"),
Wilshire Credit Corporation as servicer ("Wilshire") and JPMorgan Chase Bank as
trustee (the "Trustee"). Capitalized terms used, but not defined herein or in
Exhibit 1 hereto, shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to make this affidavit
on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate either (i) for its own account or (ii)
as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i)
a tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company,
I-1
a real estate investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives and, except as may be provided in Treasury
Regulations, persons holding interests in pass-through entities as a nominee for
another Person.)
5. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement (attached hereto as Exhibit 2 and incorporated herein
by reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as EXHIBIT J to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is [________].
9. The Transferee is a United States Person.
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee is (a) not an employee benefit plan that is
subject to ERISA or a plan that is subject to Section 4975 of the Code, and the
Transferee is not acting on behalf of such a plan or (b) an employee benefit
plan that is subject to ERISA or a plan that is subject to Section 4975 of the
Code, and the Transferee is not acting on behalf of such a plan and will provide
an Opinion of Counsel in accordance with the provisions of Agreement.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this _____ day of _____________, 20___.
________________________________
Print Name of Transferee
By: ____________________________
Name:
Title:
[Corporate Seal]
ATTEST:
________________________________
[Assistant] Secretary
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this _____ day of ______________, 20___.
________________________________
NOTARY PUBLIC
My Commission expires the _____ day of
_________________, 20___.
I-3
EXHIBIT 1
to
EXHIBIT I
Certain Definitions
-------------------
"Ownership Interest": As to any Residual Certificate, any ownership or
security interest in such Certificate including any interest in such Certificate
as the Holder thereof and any other interest therein, whether direct or
indirect, legal or beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a
United States Person, and (vi) a Person designated as a non-Permitted Transferee
by the Depositor based upon an Opinion of Counsel that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of Xxxxxxx Mac, a majority of its board of directors is not
selected by such government unit.
"Person": Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
I-1-1
EXHIBIT 2
to
EXHIBIT I
Section 5.02(c) of the Agreement
--------------------------------
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) ______ Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) _____ No Ownership Interest in a Residual Certificate may
be registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
I.
(iii) ____ Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Residual Certificate and (C) not to Transfer its Ownership Interest
in a Residual Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) _____ Any attempted or purported Transfer of any
Ownership Interest in a Residual Certificate in violation of the
provisions of this Section 5.02(c) shall be absolutely null and void
and shall vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Residual Certificate in violation
of the provisions of this Section 5.02(c), then the last preceding
Permitted Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit and Transferor Certificate. The Trustee
shall be entitled but not obligated to recover from any Holder of a
Residual Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on
I-2-1
such Residual Certificate at and after either such time. Any such
payments so recovered by the Trustee shall be paid and delivered by the
Trustee to the last preceding Permitted Transferee of such Certificate.
(v) ______ The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Seller or the Servicers, to the effect that the elimination of such
restrictions will not cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
I-2-2
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates,
Series 2004-3, Class [___]
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that [FOR PRIVATE CERTIFCATES: (a) we understand that the Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed by us in a transaction that is exempt from the registration
requirements of the Act and (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner that
would be deemed, or taken any other action which would result in, a violation of
Section 5 of the Act][FOR CLASS A-R CERTIFICATES AND CLASS A-RL CERTIFICATES: we
have no knowledge the Transferee is not a Permitted Transferee].
Very truly yours,
_________________________________
Print Name of Transferor
By: _____________________________
Authorized Officer
J-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates,
Series 2004-3, Class [___]
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
insitutional "accredited investor," as defined in Regulation D under the Act,
and have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement nor are we using the assets of any such plan or
arrangement to effect such or we have provided the opinion letter set forth in
section 5.02 of the Pooling and Servicing Agreement, (f) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(h) below), (g) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (h) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser
K-1
or transferee of such Certificate has executed and delivered to you a
certificate to substantially the same effect as this certificate, and (3) the
purchaser or transferee has otherwise complied with any conditions for transfer
set forth in the Pooling and Servicing Agreement.
Very truly yours,
________________________________
Print Name of Transferee
By: ____________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
____________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates,
Series 2004-3, Class [___]
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, nor are we acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such acquisition,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Act or that would render the disposition of the Certificates a
violation of Section 5 of the Act or require registration pursuant thereto, nor
will act, nor has authorized or will authorize any person to act, in such manner
with respect to the Certificates, (f) we are a "qualified institutional buyer"
as that term is defined in Rule 144A under the Act ("Rule 144A") and have
completed either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2, (g) we are aware that the sale to us is being made in
reliance on Rule 144A, and (h) we are acquiring the Certificates for our own
L-1
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (A) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (B) pursuant to another exemption from registration under the Act.
Very truly yours,
__________________________________
Print Name of Transferee
By: ______________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $___________\1 in securities (except for the 1
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is attached
hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
----------------------
\1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in
that case, Buyer must own and/or invest on a discretionary
basis at least $10,000,000 in securities.
L-1-1
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of
1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors Act
of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
L-1-2
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
__________________________________
Print Name of Buyer
By: ______________________________
Name:
Title:
Date: ____________________________
X-0-0
XXXXX 0 XX XXXXXXX L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
3. _______ The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned subsidiary
of the other).
4. _______ The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of
the Buyer's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank
deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi)
L-2-1
securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
5. _______ The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be
in reliance on Rule 144A. In addition, the Buyer will only purchase for
the Buyer's own account.
6. _______ Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate
to which this certification relates of any changes in the information
and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
_________________________________
Print Name of Buyer or Adviser
By:______________________________
Name:
Title:
IF AN ADVISER:
_________________________________
Print Name of Buyer
Date: ___________________________
L-2-2
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-3
Home Equity Mortgage Pass-Through Certificates, Series 2004-3
LOAN INFORMATION
Name of Mortgagor: _____________________________________
Servicer
Loan No.: _____________________________________
TRUSTEE
Name:
Address: _____________________________________
_____________________________________
_____________________________________
Trustee
Mortgage File No.:
The undersigned Servicer hereby acknowledges that it has received from
LaSalle Bank National Association, as Custodian for the Holders of Mortgage
Pass-Through Certificates, of the above-referenced Series, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series among Credit Suisse First Boston Mortgage Securities
Corp. as depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Option One
Mortgage Corporation as servicer ("Option One"), Wilshire Credit Corporation as
servicer ("Wilshire") and JPMorgan Chase Bank as trustee (the "Trustee").
( ) ______ Mortgage Note dated _____________________, _______, in the
original principal sum of $___________________, made by
____________________. payable to, or endorsed to the order of, the
Trustee.
( ) Mortgage recorded on ________________ as instrument no. ______________
in the County Recorder's Office of the County of ___________________,
State of ___________ in book/reel/docket _________________ of official
records at page/image _____________.
M-1
( ) Deed of Trust recorded on _____________ as instrument no.
______________ in the County Recorder's Office of the County of
_______________, State of ______________ in book/reel/docket
_____________________ of official records at page/image _________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________ as instrument no. ______________ in the County Recorder's
Office of the County of ______, State of ________________ in
book/reel/docket _______________ of official records at page/image
_______________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) __________________________________________________________
( ) __________________________________________________________
( ) __________________________________________________________
( ) __________________________________________________________
The undersigned Servicer hereby acknowledges and agrees as follows:
(1) Such Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for
the purposes provided in the Agreement.
(2) Such Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim,
liens, security interest, charges, writs of attachment or
other impositions nor shall the Servicer, if applicable,
assert or seek to assert any claims or rights of setoff to or
against the Documents or any proceeds thereof.
(3) Such Servicer shall return each and every Document
previously requested from the Mortgage File to the Custodian
when the need therefor no longer exists, unless the Mortgage
Loan relating to the Documents has been liquidated and the
proceeds thereof have been remitted to the Certificate Account
and except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of
such Servicer shall at all times be earmarked for the account
of the Custodian, and such Servicer shall keep the Documents
and any proceeds separate and distinct from all other property
in such Servicer's possession, custody or control.
M-2
[Servicer]
By __________________________________
Its _________________________________
Date: ____________, 20__
M-3
EXHIBIT N
FORM OF SUBSEQUENT TRANSFER AGREEMENT
THIS SUBSEQUENT TRANSFER AGREEMENT, dated as of _________ ___, 2004
(this "Subsequent Transfer Agreement"), among CREDIT SUISSE FIRST BOSTON
MORTGAGE SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), DLJ MORTGAGE CAPITAL, INC., a Delaware corporation, in its
capacity as seller under the Pooling and Servicing Agreement referred to below
(the "Seller"), OPTION ONE MORTGAGE CORPORATION, as servicer ("Option One"),
WILSHIRE CREDIT CORPORATION, as servicer ("Wilshire" and together with Option
One, the "Servicers") and JPMORGAN CHASE BANK, a national banking association,
as trustee (the "Trustee");
WHEREAS, the parties hereto are also among the parties to the Pooling
and Servicing Agreement among Credit Suisse First Boston Mortgage Securities
Corp., as depositor, Option One Mortgage Corporation, as servicer, Wilshire
Credit Corporation, as servicer, DLJ Mortgage Capital, Inc., as seller and
JPMorgan Chase Bank, as trustee, dated as of June 1, 2004 (the "Pooling and
Servicing Agreement"), in relation to the Home Equity Mortgage Pass-Through
Certificates, Series
2004-3;
WHEREAS, Sections 2.01(f) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer Agreement
in accordance with the terms and conditions of the Pooling and Servicing
Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged
the parties hereto agree as follows:
(i) ______ The "Subsequent Transfer Date" with respect to this
Subsequent Transfer Agreement shall be ____________, 200__.
(ii) _____ The "Aggregate Subsequent Purchase Amount" with respect to
this Subsequent Transfer Agreement shall be $____________, provided, however,
that such amount shall not exceed the amount on deposit in the Pre-Funding
Account.
(iii) ____ The Subsequent Mortgage Loans conveyed on the Subsequent
Transfer Date shall satisfy the pool characteristics for the Trust Fund
identified in Section 2.01(f) of the Pooling and Servicing Agreement.
(iv) _____ In case any provision of this Subsequent Transfer Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions or obligations shall not in any way
be affected or impaired thereby.
(v) ______ In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing
N-1
Agreement shall prevail. Capitalized terms used herein and not otherwise defined
have the meanings in the Pooling and Servicing Agreement.
(vi) _____ The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for the benefit of the Certificateholders,
without recourse, all right title and interest in the Subsequent Mortgage Loans
identified in Schedule A, including all interest and principal due on or with
respect to such Subsequent Mortgage Loans on or after the Subsequent Cut-off
Date and all interest and principal payments on such Subsequent Mortgage Loans
received prior to the Subsequent Cut-off Date in respect of installments of
interest and principal due thereafter, but not including principal and interest
due on such Subsequent Mortgage Loans prior to the Subsequent Cut-off Date, any
insurance policies in respect of such Subsequent Mortgage Loans and all proceeds
of any of the foregoing.
(vii) ____ This Subsequent Transfer Agreement shall be governed by, and
shall be construed and enforced in accordance with the laws of the State of New
York.
(viii) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
N-2
EXHIBIT O-1
FORM OF COLLECTION ACCOUNT CERTIFICATION
[ ], 20__
[Servicer's name] hereby certifies that it has established the account
described below as a Collection Account pursuant to Section 3.05 of the Pooling
and Servicing Agreement, dated as of June 1, 2004, among Credit Suisse First
Boston Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as
seller ("DLJMC"), Option One Mortgage Corporation as servicer ("Option One"),
Wilshire Credit Corporation as servicer ("Wilshire"), and JPMorgan Chase Bank as
trustee (the "Trustee").
Title of Account: [Servicer's Name], in trust for the Holders of Credit
Suisse First Boston Mortgage Securities Corp., Home
Equity Mortgage Pass-Through Certificates, Series
2004-3.
Account Number: ______________
Address of officer or branch
of the Company at
which Account is maintained:
___________________________________
___________________________________
___________________________________
[Servicer's Name], AS SERVICER
By: _______________________________
Name: _____________________________
Title: ____________________________
O-1-1
EXHIBIT O-2
FORM OF COLLECTION ACCOUNT LETTER AGREEMENT
[ ], 20__
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Pooling and Servicing Agreement, dated as of June
1, 2004, among Credit Suisse First Boston Mortgage Securities Corp. as
depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Option One Mortgage
Corporation as servicer ("Option One"), Wilshire Credit Corporation as servicer
("Wilshire") and JPMorgan Chase Bank as trustee (the "Trustee") (the
"Agreement"), we hereby authorize and request you to establish an account, as a
Collection Account pursuant to Section 3.05 of the Agreement, to be designated
as "[Servicer's Name], in trust for the Holders of Credit Suisse First Boston
Mortgage Securities Corp., Home Equity Mortgage Pass- Through Certificates,
Series 2004-3." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. This letter is submitted to you in
duplicate. Please execute and return one original to us.
[Servicer's Name], AS SERVICER
By: _________________________________
Name: _______________________________
Title: ______________________________
Date: _______________________________
O-2-1
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number _________ at the office of the
Depository indicated above and agrees to honor withdrawals on such account as
provided above. The full amount deposited at any time in the account will be
insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund ("BIF") or the Savings Association Insurance
Fund ("SAIF").
_____________________________________
Depository
By: _________________________________
Name: _______________________________
Title: ______________________________
Date: _______________________________
X-0-0
XXXXXXX X-0
FORM OF ESCROW ACCOUNT CERTIFICATION
[ ], 20__
[Servicer's Name] hereby certifies that it has established the account
described below as an Escrow Account pursuant to Section 3.06 of the Pooling and
Servicing Agreement, dated as of June 1, 2004, among Credit Suisse First Boston
Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as seller
("DLJMC"), Option One Mortgage Corporation as servicer ("Option One"), Wilshire
Credit Corporation as servicer ("Wilshire") and JPMorgan Chase Bank as trustee
(the "Trustee").
Title of Account: "[Servicer's Name], in trust for Credit Suisse First
Boston Mortgage Securities Corp., Home Equity
Mortgage Trust 2004-3, Home Equity Mortgage
Pass-Through Certificates, Series 2004-3 and various
mortgagors"
Account Number: ___________________________
Address of officer or branch of the Company at which Account is maintained:
___________________________________
___________________________________
___________________________________
[Servicer's Name], AS SERVICER
By: _______________________________
Name: _____________________________
Title: ____________________________
X-0-0
XXXXXXX X-0
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
[ ], 20__
To: __________________________
__________________________
__________________________
(the "Depository")
As Servicer under the Pooling and Servicing Agreement, dated as of June
1, 2004, among Credit Suisse First Boston Mortgage Securities Corp. as
depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Option One Mortgage
Corporation as servicer ("Option One"), Wilshire Credit Corporation as servicer
("Wilshire") and JPMorgan Chase Bank as trustee (the "Trustee") (the
"Agreement"), we hereby authorize and request you to establish an account, as an
Escrow Account pursuant to Section 3.06 of the Agreement, to be designated as
"Credit Suisse First Boston Mortgage Securities Corp., Home Equity Mortgage
Trust 2004-3, Home Equity Mortgage Pass-Through Certificates, Series 2004-3".
All deposits in the account shall be subject to withdrawal therefrom by order
signed by the Servicer. This letter is submitted to you in duplicate. Please
execute and return one original to us.
[SERVICER'S NAME], AS SERVICER
By: _____________________________
Name: ___________________________
Title: __________________________
Date: ___________________________
P-2-1
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ________________ at the office
of the Depository indicated above and agrees to honor withdrawals on such
account as provided above. The full amount deposited at any time in the account
will be insured up to applicable limits by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
_____________________________
Depository
By: _______________________________
Name: _____________________________
Title: ____________________________
Date: _____________________________
P-2-2
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
FORM OF CUSTODIAL AGREEMENT
(Available Upon Request)
R-1
EXHIBIT S
[Reserved]
S-1
EXHIBIT T
DATA FIELDS FOR OPTION ONE SERVICED LOANS TRANSFERRED TO WILSHIRE
T-1
EXHIBIT U
CHARGED OFF LOAN DATA REPORT
(Available Upon Request)
U-1
EXHIBIT V
FORM OF MONTHLY STATEMENT TO CERTIFICATEHOLDERS
(i) with respect to each Class of Certificates which are not Notional
Amount Certificates and, unless otherwise stated, the related Distribution Date,
a. the initial Class Principal Balance of such Class as of the
Closing Date;
b. the Class Principal Balance of such Class before giving
effect to the distribution of principal and interest;
c. the amount of the related distribution on such Class
allocable to interest;
d. the amount of the related distribution on such Class
allocable to principal;
e. the sum of the principal and interest payable to such
Class;
f. the Realized Loss allocable to such Class;
g. the Carryforward Interest allocable to such Class;
h. the Class Principal Balance of such Class after giving
effect to the distribution of principal and interest;
i. the Pass-Through Rate for such Class;
j. [reserved];
k. any shortfall in principal allocable to such Class, if such
amount is greater than zero; and
l. any shortfall in interest allocable to such Class, if such
amount is greater than zero.
(ii) with respect to each Class of Certificates which are Notional
Amount Certificates and, unless otherwise stated, the related Distribution Date,
a. the Notional Amount of such Class as of the Cut-off Date;
b. the Notional Amount of such Class before giving effect to
the distribution of interest;
c. the amount of the related distribution on such Class
allocable to interest;
d. the amount of the related distribution on such Class
allocable to principal;
V-1
e. the sum of the principal and interest payable to such
class;
f. the Realized Loss allocable to such Class;
g. the Deferred Interest allocable to such Class;
h. the Notional Amount of such Class after giving effect to
the distribution of interest;
i. the Pass-Through Rate for such Class; and
j. [reserved].
(iii) with respect to a $1000 factor of the Initial Class Principal
Balance of each Class of Certificates which are not Notional Amount Certificates
and the related Distribution Date,
a. the CUSIP number assigned to such Class;
b. the Class Principal Balance of such Class factor prior to
giving effect to the distribution of principal and interest;
c. the amount of the related distribution allocable to
interest on such Class factor;
d. the amount of the related distribution allocable to
principal on such Class factor;
e. the sum of the principal and interest payable to such Class
factor; and
f. the Class Principal Balance of such Class factor after
giving effect to the distribution of principal and interest.
(iv) with respect to a $1000 factor of the Initial Class Principal
Balance of each Class of Certificates which are Notional Amount Certificates and
the related Distribution Date,
a. the CUSIP number assigned to such Class;
b. the Notional Amount of such Class factor prior to giving
effect to the distribution of interest;
c. the amount of the related distribution allocable to
interest on such Class factor;
d. the amount of the related distribution allocable to
principal on such Class factor;
e. the sum of the principal and interest payable to such Class
factor; and
V-2
f. the Notional Amount of such Class factor after giving
effect to the distribution of interest.
(v) with respect to the related Distribution Date,
a. the Principal Payment Amount or Principal Remittance
Amount;
b. the amount of Curtailments;
c. the amount of Curtailment interest adjustments;
d. the Scheduled Payment of principal;
e. the amount of Principal Prepayments;
f. the amount of principal as a result of repurchased Mortgage
Loans;
g. the Substitution Adjustment Amount;
h. the aggregate amount of scheduled interest prior to
reduction for fees;
i. the amount of Net Recoveries;
j. the amount of reimbursements of Nonrecoverable Advances
previously made;
k. the amount of recovery of reimbursements previously deemed
nonrecoverable;
l. the amount of net Liquidation Proceeds;
m. the amount of Insurance Proceeds;
n. the amount of any other distributions allocable to
principal;
o. the number of Mortgage Loans as of the first day of the
related Collection Period;
p. the aggregate Stated Principal Balance of the
Mortgage Loans as of the first day of the related Collection Period;
q. the number of Mortgage Loans as of the last day of the
related Collection Period;
r. the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Collection Period;
V-3
s. the sum of the Servicing Fee, the Credit Risk Manager Fee
and the Trustee Fee ;
t. the amount of current Advances ;
u. the amount of outstanding Advances ;
v. the number and aggregate principal amounts of Mortgage
Loans delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 days or more,
including delinquent bankrupt Mortgage Loans but excluding Mortgage Loans in
foreclosure and REO Property;
w. the number and aggregate principal amounts of Mortgage
Loans that are currently in bankruptcy, but not delinquent;
x. the number and aggregate principal amounts of Mortgage
Loans that are in foreclosure;
y. the Delinquency Rate, Rolling Three Month Delinquency Rate,
the Senior Enhancement Percentage and whether a Trigger Event is in effect ;
z. the number and aggregate principal amount of any REO
Properties as of the close of business on the Determination Date preceding such
Distribution Date;
aa. current Realized Losses;
bb. Cumulative Net Realized Losses and whether a Cumulative
Loss Event is occurring;
cc. the weighted average term to maturity of the Mortgage
Loans as of the close of business on the last day of the calendar month
preceding the related Distribution Date;
dd. the number of Mortgage Loans that have Prepayment
Penalties and for which prepayments were made during the related Collection
Period, as applicable;
ee. the aggregate principal balance of Mortgage Loans that
have Prepayment Penalties and for which prepayments were made during the related
Collection Period, as applicable;
ff. the aggregate amount of Prepayment Penalties collected
during the related Collection Period, as applicable;
gg. [reserved];
hh. The amount of any funds remaining in the Pre-Funding
Account as of such Distribution Date;
ii. the weighted average Net Mortgage Rate;
V-4
jj. the Net Excess Spread; and
kk. [reserved].
(vi) with respect to the related Distribution Date,
a. the Targeted Overcollateralization Amount;
b. the Overcollateralization Amount;
c. the amount, if any, by which the Targeted
Overcollateralization Amount exceeds the Overcollateralization Amount;
d. the Overcollateralization Release Amount;
e. the Monthly Excess Interest; and
f. the amount of any payment to the Class X-1
Certificates.
V-5
EXHIBIT W
FORM OF DEPOSITOR CERTIFICATION
Re: Credit Suisse First Boston Mortgage Securities Corp.
Home Equity Mortgage Trust 2004-3
I, __________________________, certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution and servicing reports filed in respect of
periods included in the year covered by this annual report, of Home Equity
Mortgage Trust 2004-3 (the "Trust");
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information required to be
prepared by the Trustee based upon the servicing information required to be
provided by each Servicer under the Pooling and Servicing Agreement is included
in these reports;
4. Based on my knowledge and upon the annual compliance statements
included in the report and required to be delivered to the Trustee in accordance
with the terms of the Pooling and Servicing Agreement and based upon the review
required under the Pooling and Servicing Agreement, and except as disclosed in
the report, each Servicer has fulfilled its obligations under the Pooling and
Servicing Agreement; and
5. The reports disclose all significant deficiencies relating to each
Servicer's compliance with the minimum servicing standards based, in each case,
upon the report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar standard as set forth in the Pooling and Servicing Agreement,
that is included in these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: each Servicer
and the Trustee.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2004 (the
"Pooling and Servicing Agreement"), among Credit Suisse First Boston Mortgage
Securities Corp., as depositor (the "Depositor"), DLJ Mortgage Capital, Inc., as
seller, Option One Mortgage Corporation as servicer ("Option One") Wilshire
Credit Corporation, as servicer ("Wilshire") and JPMorgan Chase Bank, as trustee
(the "Trustee").
_____________________________________
[Name]
W-1
[Title]
[Date]
W-2
EXHIBIT X
FORM OF TRUSTEE CERTIFICATION
Re: Credit Suisse First Boston Mortgage Securities Corp.
Home Equity Mortgage Trust 2004-3
JPMorgan Chase Bank (the "Trustee") hereby certifies to Credit Suisse
First Boston Mortgage Securities Corp. (the "Depositor"), and each Person, if
any, who "controls" the Depositor within the meaning of the Securities Act of
1933, as amended, and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. The Trustee has reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;
2. Based on the Trustee's knowledge, and assuming the accuracy and
completeness of the information supplied to the Trustee by each Servicer, the
distribution information in the distribution reports contained in all reports on
Form 8-K included in the year covered by the annual report on Form 10-K for
fiscal year [_____], prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
required by the Pooling and Servicing Agreement to be included therein and
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on the Trustee's knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these reports.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2004 (the
"Pooling and Servicing Agreement"), among Credit Suisse First Boston Mortgage
Securities Corp., as depositor (the "Depositor"), DLJ Mortgage Capital, Inc., as
seller, Option One Mortgage Corporation as servicer ("Option One") Wilshire
Credit Corporation, as servicer ("Wilshire") and JPMorgan Chase Bank, as trustee
(the "Trustee").
JPMORGAN CHASE BANK,
as Trustee
By: _______________________________
[Name]
[Title]
[Date]
X-1
EXHIBIT Y
FORM SERVICER CERTIFICATION
Re: Credit Suisse First Boston Mortgage Securities Corp.
Home Equity Mortgage Trust 2004-3
I, ___________________________, a duly elected and acting officer of
[__________________] (the "Servicer"), certify pursuant to Section 8.12(d) of
the Pooling and Servicing Agreement to the Depositor, the Trustee and each
Person, if any, who "controls" the Depositor or the Trustee within the meaning
of the Securities Act of 1933, as amended, and their respective officers and
directors, with respect to the calendar year immediately preceding the date of
this Certificate (the "Relevant Year"), as follows":
1. For purposes of this Certificate, "Relevant Information" means the
information in the certificate provided pursuant to Section 3.16 of the Pooling
and Servicing Agreement (the "Annual Compliance Certificate") for the Relevant
Year and the information in all servicing reports required pursuant to the
Pooling and Servicing Agreement to be provided by the Servicer to the Trustee
during the Relevant Year (as such information is amended or corrected in writing
and delivered to the Trustee). Based on my knowledge, the Relevant Information,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein which is necessary
to make the statements made therein, in light of the circumstances under which
such statements were made, not misleading as of the last day of the Relevant
Year;
2. The Relevant Information required to be provided to the Trustee under
the Pooling and Servicing Agreement has been provided to the Trustee;
3. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement during the Relevant Year.
Based upon the review required under the Pooling and Servicing Agreement and
except as disclosed in the Annual Compliance Certificate or the accountants'
statement provided pursuant to Section 3.17 of the Pooling and Servicing
Agreement, to the best of my knowledge, the Servicer has fulfilled its
obligations under the Pooling and Servicing Agreement throughout the Relevant
Year.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2004 (the
"Pooling and Servicing Agreement"), among Credit Suisse First Boston Mortgage
Securities Corp., as depositor (the "Depositor"), DLJ Mortgage Capital, Inc., as
seller, Option One Mortgage Corporation, as servicer ("Option One") Wilshire
Credit Corporation, as servicer ("Wilshire") and JPMorgan Chase Bank, as trustee
(the "Trustee").
[__________________________________],
as Servicer
By: _______________________________
[Name]
[Title]
Y-1
EXHIBIT Z
INFORMATION TO BE PROVIDED BY SERVICER TO TRUSTEE
The following information with respect to each Mortgage Loan will be
e-mailed by each Servicer to the Trustee in accordance with Section 4.10:
Servicer loan number
Trust loan number (if applicable)
Scheduled net interest
Scheduled principal
Curtailment applied
Curtailment adjustment
Mortgage Rate
Servicing Fee Rate
P&I payment
Beginning scheduled balance
Ending scheduled balance
Ending actual principal balance
Due Date
Prepayment in full principal
Prepayment in full net interest
Prepayment in full penalty
Delinquencies:
1-30
31-60
61-90
90+
Foreclosures
REO Properties
Loss amounts and loss types
Z-1
EXHIBIT AA
FORM OF LIMITED POWER OF ATTORNEY
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, a New York banking
corporation, having a place of business at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx
Xxxx, X.X. 00000, as Trustee (and in no personal or other representative
capacity) under the Pooling and Servicing Agreement, dated as of June 1, 2004
(as amended, restated, supplemented or otherwise modified from time to time, the
"Agreement"; capitalized terms not defined herein have the definitions assigned
to such terms in the Agreement), relating to the Home Equity Mortgage
Pass-Through Certificates, Series 2004-3, hereby appoints [_______________], in
its capacity as a Servicer under the Agreement, as the Trustee's true and lawful
Special Attorney-in-Fact, in the Trustee's name, place and stead and for the
Trustee's benefit, but only in its capacity as Trustee aforesaid, to perform all
acts and execute all documents as may be customary, necessary and appropriate to
effectuate the following enumerated transactions in respect of any mortgage,
deed of trust, promissory note or real estate owned from time to time owned
(beneficially or in title, whether the Trustee is named therein as mortgagee or
beneficiary or has become mortgagee or beneficiary by virtue of endorsement,
assignment or other conveyance) or held by or registered to the Trustee
(directly or through custodians or nominees), or in respect of which the Trustee
has a security interest or other lien, all as provided under the applicable
Agreement and only to the extent the respective Trustee has an interest therein
under the Agreement, and in respect of which the Servicer is acting as servicer
pursuant to the Agreement (the "Mortgage Documents").
This appointment shall apply to the following enumerated transactions under the
Agreement only:
1. The modification or re-recording of any Mortgage Document
for the purpose of correcting it to conform to the original intent of the
parties thereto or to correct title errors discovered after title insurance was
issued and where such modification or re-recording does not adversely affect the
lien under the Mortgage Document as insured.
2. The subordination of the lien under a Mortgage Document to
an easement in favor of a public utility company or a state or federal agency or
unit with powers of eminent domain including, without limitation, the execution
of partial satisfactions/releases, partial reconveyances and the execution of
requests to trustees to accomplish same.
3. The conveyance of the properties subject to a Mortgage
Document to the applicable mortgage insurer, or the closing of the title to the
property to be acquired as real estate so owned, or conveyance of title to real
estate so owned.
4. The completion of loan assumption and modification
agreements in respect of Mortgage Documents.
AA-1
5. The full or partial satisfaction/release of a Mortgage
Document or full conveyance upon payment and discharge of all sums secured
thereby, including, without limitation, cancellation of the related note.
6. The assignment of any Mortgage Document, in connection with
the repurchase of the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage Document upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related note.
8. With respect to a Mortgage Document, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of judicial or
non-judicial foreclosure or termination, cancellation or rescission of any such
foreclosure, including, without limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a deed
of trust, in accordance with state law and the deed
of trust;
b. the preparation and issuance of statements of breach
or non-performance;
c. the preparation and filing of notices of default
and/or notices of sale;
d. the cancellation/rescission of notices of default
and/or notices of sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents
and performance of such other actions as may be
necessary under the terms of the Mortgage Document or
state law to expeditiously complete said transactions
in paragraphs 8(a) through 8(e), above.
9. Demand, xxx for, recover, collection and receive each and
every sum of money, debt, account and interest (which now is, or hereafter shall
become due and payable) belonging to or claimed by the Trustee under the
Mortgage Documents, and to use or take any lawful means for recovery thereof by
legal process or otherwise.
10. Endorse on behalf of the Trustee all checks, drafts and/or
negotiable instruments made payable to the Trustee in respect of the Mortgage
Documents.
The Trustee gives the Special Attorney-in-Fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by this
Limited Power of Attorney, subject to the terms and conditions set forth in the
Agreement including the standard of care applicable to servicers in the
Agreement, and hereby does ratify and confirm what such Special Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
AA-2
IN WITNESS WHEREOF, the Trustee has caused its corporate name and seal to be
hereto signed and affixed and these presents to be acknowledged by its duly
elected and authorized officer this ___ day of ___ , 200_.
JPMORGAN CHASE BANK, as Trustee
By:___________________________
Name:
Title:
WITNESS: WITNESS:
_________________________ ______________________________
Name: Name:
Title: Title:
XXXXX XX XXX XXXX
XX
XXXXXX XX XXX XXXX
Xx ______________, 200_, before me, the undersigned, a Notary Public in
and for said state, personally appeared __________________, personally known to
me to be the person whose name is subscribed to the within instrument and to be
a duly authorized and acting Senior Vice President of JPMorgan Chase Bank, and
such person acknowledged to me that such person executed the within instrument
in such person's authorized capacity as a Senior Vice President of JPMorgan
Chase Bank, and that by such signature on the within instrument the entity upon
behalf of which such person acted executed the instrument.
WITNESS my hand and official seal.
________________________________
Notary Public
AA-3
SCHEDULE I
MORTGAGE LOAN SCHEDULE
(Available Upon Request)
I-1
SCHEDULE II
SELLER'S REPRESENTATIONS AND WARRANTIES
(i) The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation;
(ii) The Seller has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) The execution and delivery by the Seller of this Agreement
have been duly authorized by all necessary corporate action on the part of the
Seller; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated hereby, nor compliance with
the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Seller or its properties or
the certificate of incorporation or by-laws of the Seller, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Seller's ability to enter into this Agreement and
to consummate the transactions contemplated hereby;
(iv) The execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
(v) This Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the Trustee,
the Servicer and the Depositor, constitutes a valid and binding obligation of
the Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally); and
(vi) There are no actions, litigation, suits or proceedings
pending or to the knowledge of the Seller, threatened against the Seller before
or by any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii) with
respect to any other matter which in the judgment of the Seller if determined
adversely to the Seller would reasonably be expected to materially and adversely
affect the Seller's ability to perform its obligations under this Agreement; and
the Seller is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to materially and
adversely affect the transactions contemplated by this Agreement.
II-1
SCHEDULE IIIA
WILSHIRE REPRESENTATIONS AND WARRANTIES
(i) Wilshire is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation;
(ii) Wilshire has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) The execution and delivery by Wilshire of this Agreement
have been duly authorized by all necessary corporate action on the part of
Wilshire; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated hereby, nor compliance with
the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on Wilshire or its properties or
the certificate of incorporation or bylaws of Wilshire, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on Wilshire ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(iv) This Agreement has been duly executed and delivered by
Wilshire and, assuming due authorization, execution and delivery by the Trustee,
the Seller and the Depositor, constitutes a valid and binding obligation of
Wilshire enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally); and
(v) There are no actions, litigation, suits or proceedings
pending or to the knowledge of Wilshire, threatened against Wilshire before or
by any court, administrative agency, arbitrator or governmental body (a) with
respect to any of the transactions contemplated by this Agreement or (b) with
respect to any other matter which in the judgment of Wilshire if determined
adversely to Wilshire would reasonably be expected to materially and adversely
affect Wilshire's ability to perform its obligations under this Agreement, other
than as Servicer has previously advised Seller; and Wilshire is not in default
with respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement.
IIIA-1
SCHEDULE IIIB
OPTION ONE REPRESENTATIONS AND WARRANTIES
(i) Option One is a corporation duly organized, validly existing
and in good standing under the laws of the State of California;
(ii) Option One has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) The execution and delivery by Option One of this Agreement
have been duly authorized by all necessary corporate action on the part of
Option One; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated hereby, nor compliance with
the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on Option One or its properties or
the charter or bylaws of Option One, except those conflicts, breaches or
defaults which would not reasonably be expected to have a material adverse
effect on Option One's ability to enter into this Agreement and to consummate
the transactions contemplated hereby;
(iv) This Agreement has been duly executed and delivered by
Option One and, assuming due authorization, execution and delivery by the
Trustee, the Seller, Wilshire and the Depositor, constitutes a valid and binding
obligation of Option One enforceable against it in accordance with its terms
(subject to applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally) and general
principles of equity, whether enforcement is sought in a proceeding in equity or
at law); and
(v) There are no actions, litigation, suits or proceedings
pending or to the knowledge of Option One, threatened against Option One before
or by any court, administrative agency, arbitrator or governmental body (a) with
respect to any of the transactions contemplated by this Agreement or (b) with
respect to any other matter which in the judgment of Option One if determined
adversely to Option One would reasonably be expected to materially and adversely
affect Option One's ability to perform its obligations under this Agreement,
other than as Option One has previously advised Seller; and Option One is not in
default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement.
IIIB-1
SCHEDULE IV
REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS
DLJMC, in its capacity as Seller, hereby makes the representations and
warranties set forth in this Schedule IV to the Depositor and the Trustee, as of
the Closing Date, or the date specified herein, with respect to the Mortgage
Loans identified on Schedule I hereto.
(i) The Seller or its affiliate is the sole owner of record and
holder of the Mortgage Loan and the indebtedness evidenced by the Mortgage Note.
Immediately prior to the transfer and assignment to the Depositor on the Closing
Date, the Mortgage Loan, including the Mortgage Note and the Mortgage, were not
subject to an assignment or pledge, and the Seller had good and marketable title
to and was the sole owner thereof and had full right to transfer and sell the
Mortgage Loan to the Depositor free and clear of any encumbrance, equity, lien,
pledge, charge, claim or security interest and has the full right and authority
subject to no interest or participation of, or agreement with, any other party,
to sell and assign the Mortgage Loan and following the sale of the Mortgage
Loan, the Depositor will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest.
(ii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects.
(iii) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Depositor. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, from the terms thereof except
in connection with an assumption agreement and which assumption agreement is
part of the Mortgage File and the terms of which are reflected in the Mortgage
Loan Schedule; the substance of any such waiver, alteration or modification has
been approved by the issuer of any related Primary Insurance Policy and title
insurance policy, to the extent required by the related policies.
(iv) The Mortgage Loan complies with all the terms, conditions
and requirements of the originator's underwriting standards in effect at the
time of origination of such Mortgage Loan.
(v) The information set forth in the Mortgage Loan Schedule,
attached to the Agreement as Schedule I, is complete, true and correct in all
material respects as of the Cut-off Date.
(vi) With respect to any first lien Mortgage Loan, the related
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property and, with respect to any second lien Mortgage Loan, the
related Mortgage is a valid, subsisting, enforceable and perfected second lien
on the Mortgaged Property, and all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any security interest or other interest or right
thereto. Such xxxx
XX-1
is free and clear of all adverse claims, liens and encumbrances having priority
over the first or second lien, as applicable, of the Mortgage subject only to
(1) with respect to any Second Mortgage Loan, the related First Mortgage Loan,
(2) the lien of non-delinquent current real property taxes and assessments not
yet due and payable, (3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
which are acceptable to mortgage lending institutions generally and either (A)
which are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, and
(4) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates (1) with respect to any First Mortgage Loan, a valid,
subsisting, enforceable and perfected first lien and first priority security
interest and (2) with respect to any second lien Mortgage Loan, a valid,
subsisting, enforceable and perfected second lien and second priority security
interest, in each case, on the property described therein, and the Seller has
the full right to sell and assign the same to the Depositor.
(vii) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the related
Mortgage.
(viii) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or escrow funds have been established in an
amount sufficient to pay for every such escrowed item which remains unpaid and
which has been assessed but is not yet due and payable.
(ix) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the terms of
the Mortgage Note or the Mortgage, or the exercise of any right thereunder,
render the Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto.
(x) The Mortgaged Property is not subject to any material damage
by waste, fire, earthquake, windstorm, flood or other casualty. At origination
of the Mortgage Loan there was, and there currently is, no proceeding pending
for the total or partial condemnation of the Mortgaged Property.
(xi) All improvements subject to the Mortgage which were
considered in determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium unit) and
no improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by a title insurance policy and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances.
(xii) Seller has delivered or caused to be delivered to the
Trustee or the Custodian on behalf of the Trustee the original Mortgage bearing
evidence that such instruments have been
IV-2
recorded in the appropriate jurisdiction where the Mortgaged Property is located
as determined by the Seller (or, in lieu of the original of the Mortgage or the
assignment thereof, a duplicate or conformed copy of the Mortgage or the
instrument of assignment, if any, together with a certificate of receipt from
the Seller or the settlement agent who handled the closing of the Mortgage Loan,
certifying that such copy or copies represent true and correct copy(ies) of the
original(s) and that such original(s) have been or are currently submitted to be
recorded in the appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located) or a certification or receipt of the
recording authority evidencing the same.
(xiii) The Mortgage File contains each of the documents specified in
Section 2.01(b) of the Agreement.
(xiv) As of the Closing Date, each Mortgage Loan shall be serviced
in all material respects in accordance with the terms of the Agreement.
(xv) All buildings or other customarily insured improvements upon
the Mortgaged Property are insured by an insurer acceptable under the FNMA
Guides, against loss by fire, hazards of extended coverage and such other
hazards as are provided for in the FNMA Guides or by FHLMC, as well as all
additional requirements set forth in this Agreement. All such standard hazard
policies are in full force and effect and on the date of origination contained a
standard mortgagee clause naming the Seller and its successors in interest and
assigns as loss payee and such clause is still in effect and all premiums due
thereon have been paid. If at the time of origination, the Mortgage Loan was
required to have flood insurance coverage in accordance with the Flood Disaster
Protection Act of 1973, as amended, such Mortgage Loan is covered by a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration which policy conforms to FNMA and FHLMC
requirements, as well as all additional requirements set forth in this
Agreement. Such policy was issued by an insurer acceptable under FNMA or FHLMC
guidelines. The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and upon the Mortgagor's failure
to do so, authorizes the holder of the Mortgage to maintain such insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor.
(xvi) With respect to each Mortgage Loan that has a Prepayment
Penalty feature, each such Prepayment Penalty is enforceable and, at the time
such Mortgage Loan was originated, each Prepayment Penalty complied with
applicable federal, state and local law, subject to federal preemption where
applicable.
(xvii) As of the Cut-off Date, no Mortgage Loan is (a) a non-performing
loan (i.e. a mortgage loan that is more than 90 days delinquent); (b) a
re-performing loan (i.e. a mortgage loan that was more than 90 days delinquent
within the twelve month period preceding the Cut-off Date but is contractually
current); or (c) a sub-performing loan (i.e. a mortgage loan that is at least 30
days delinquent but subject to a payment plan or agreement pursuant to which the
Mortgagor is contractually current).
(xviii) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application affecting the rights of creditors and by general equitable
principles.
IV-3
(xix) To the knowledge of the Seller, (i) no proceeds from any
Mortgage Loan were used to finance single-premium credit insurance policies,
(ii) no Mortgage Loan originated prior to October 1, 2002 will impose a
Prepayment Penalty for a term in excess of five years and no Mortgage Loan
originated on or after October 1, 2002 will impose a Prepayment Penalty for a
term in excess of three years, (iii) the related Servicer of each Mortgage Loan
has fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information on its borrower
credit files to Equifax, Experian and Trans Union Credit Information on a
monthly basis, (iv) the original principal balance of each Mortgage Loan is
within Xxxxxxx Mac's dollar amount for conforming one- to four-family mortgage
loans and (v) no Mortgage Loan secured by a Mortgaged Property located in the
State of Georgia was originated on or after October 1, 2002 and before March 7,
2003 and no Mortgage Loan secured by Mortgaged Property located in the State of
Georgia that was originated on or after March 7, 2003 is a "high cost home loan"
as defined in the Georgia Fair Lending Act (HB 1361), as amended.
(xx) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws, including, but
not limited to, all applicable predatory and abusive lending laws.
(xxi) No Mortgage Loan is classified as (a) a "high cost mortgage
loan" under the Home Ownership and Equity Protection Act of 1994 or (b) a "high
cost home," "covered," "high cost," "high risk home" or "predatory" loan under
any other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees).
(xxii) No Mortgage Loan is a High Cost Loan or Covered Loan as such
terms are defined in Version 5.6 Revised; Appendix E of the Standard & Poor's
LEVELS(R) Glossary
IV-4
SCHEDULE V
INTEREST RATE CAP NOTIONAL AMOUNTS, CEILING RATES AND MAXIMUM
PAYMENT AMOUNTS
MAXIMUM
NOTIONAL PAYMENT
DISTRIBUTION DATE AMOUNT ($) CEILING RATE (%) AMOUNT ($)
----------------- ---------- ---------------- ----------
July 2004 185,000,000 1.250 0
August 2004 180,447,486 1.250 0
September 2004 175,240,164 1.350 15,090
October 2004 169,407,874 1.475 31,764
November 2004 163,221,972 1.600 49,193
December 2004 156,565,808 1.725 61,974
January 2005 149,549,295 1.850 77,267
February 2005 142,114,504 1.975 88,723
March 2005 134,297,731 2.100 88,786
April 2005 126,998,854 2.225 106,626
May 2005 120,048,049 2.350 110,044
June 2005 113,303,969 2.475 119,520
July 2005 106,991,438 2.600 120,365
August 2005 100,907,709 2.725 128,167
September 2005 95,285,776 2.850 131,283
October 2005 89,653,610 2.975 128,877
November 2005 84,550,678 3.100 134,694
December 2005 79,737,518 3.225 131,235
January 2006 75,197,642 3.350 135,982
February 2006 70,915,567 3.475 135,872
March 2006 66,876,685 3.600 122,236
April 2006 63,067,214 3.725 134,412
May 2006 59,474,152 3.850 128,861
June 2006 56,085,233 3.975 131,606
July 2006 and thereafter 0 0 0
IV-5
