EXECUTION COPY
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
DLJ MORTGAGE CAPITAL, INC.,
Seller
WILSHIRE CREDIT CORPORATION,
Servicer
and
JPMORGAN CHASE BANK,
Trustee
--------------------------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2004
--------------------------------------------------------------------------------
HOME EQUITY MORTGAGE TRUST SERIES 2004-4
HOME EQUITY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-4
Table of Contents
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions..................................................6
SECTION 1.02 Interest Calculations.......................................50
SECTION 1.03 Allocation of Certain Interest Shortfalls...................50
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans................................52
SECTION 2.02 Acceptance by the Trustee...................................59
SECTION 2.03 Representations and Warranties of the Seller and
Servicer....................................................61
SECTION 2.04 Representations and Warranties of the Depositor
as to the Mortgage Loans....................................63
SECTION 2.05 Delivery of Opinion of Counsel in Connection
with Substitutions..........................................64
SECTION 2.06 Execution and Delivery of Certificates......................64
SECTION 2.07 REMIC Matters...............................................64
SECTION 2.08 Covenants of the Servicer...................................65
SECTION 2.09 Conveyance of REMIC Regular Interests and
Acceptance of REMIC 1, REMIC 2 and
REMIC 3 by the Trustee; Issuance of
Certificates................................................65
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicer to Service Mortgage Loans..........................67
SECTION 3.02 Subservicing; Enforcement of the Obligations of
Subservicers................................................69
SECTION 3.03 [Reserved]..................................................70
SECTION 3.04 Trustee to Act as Servicer..................................70
SECTION 3.05 Collection of Mortgage Loans; Collection
Accounts; Certificate Account; Pre-Funding
Account; Capitalized Interest Account.......................71
SECTION 3.06 Establishment of and Deposits to Escrow
Accounts; Permitted Withdrawals from
i
Escrow Accounts; Payments
of Taxes, Insurance and
Other Charges...............................................74
SECTION 3.07 Access to Certain Documentation and
Information Regarding the Mortgage Loans;
Inspections.................................................77
SECTION 3.08 Permitted Withdrawals from the Collection
Accounts and Certificate Account............................77
SECTION 3.09 Maintenance of Hazard Insurance and Mortgage
Impairment Insurance; Claims; Restoration of
Mortgaged Property..........................................79
SECTION 3.10 Enforcement of Due-on-Sale Clauses;
Assumption Agreements.......................................80
SECTION 3.11 Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans........................81
SECTION 3.12 Trustee to Cooperate; Release of Mortgage Files
...........................................................87
SECTION 3.13 Documents, Records and Funds in Possession of
the Servicer to be Held for the Trustee.....................88
SECTION 3.14 Servicing Fee...............................................88
SECTION 3.15 Access to Certain Documentation.............................89
SECTION 3.16 Annual Statement as to Compliance...........................89
SECTION 3.17 Annual Independent Public Accountants'
Servicing Statement; Financial Statements...................89
SECTION 3.18 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.........................................90
SECTION 3.19 Duties of the Credit Risk Manager...........................90
SECTION 3.20 Limitation Upon Liability of the Credit Risk
Manager.....................................................91
SECTION 3.21 Advance Facility............................................91
SECTION 3.22 Maintenance of Credit Insurance Policy......................93
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01 Advances by the Servicer....................................95
SECTION 4.02 Priorities of Distribution..................................96
SECTION 4.03 [Reserved].................................................102
SECTION 4.04 [Reserved].................................................102
SECTION 4.05 Allocation of Realized Losses..............................102
SECTION 4.06 Monthly Statements to Certificateholders
..........................................................103
SECTION 4.07 Distributions on the REMIC 1 Regular Interests
and REMIC 2 Regular Interests..............................103
SECTION 4.08 [Reserved].................................................106
SECTION 4.09 Prepayment Charges.........................................106
ii
SECTION 4.10 Servicer to Cooperate......................................107
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates...........................................108
SECTION 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates...................................109
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates
..........................................................113
SECTION 5.04 Persons Deemed Owners......................................114
SECTION 5.05 Access to List of Certificateholders' Names and
Addresses..................................................114
SECTION 5.06 Maintenance of Office or Agency............................114
ARTICLE VI
THE DEPOSITOR, THE SELLER AND THE SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the Sellers
and the Servicer...........................................115
SECTION 6.02 Merger or Consolidation of the Depositor, the
Seller or the Servicer.....................................115
SECTION 6.03 Limitation on Liability of the Depositor, the
Seller, the Servicer and Others............................115
SECTION 6.04 Limitation on Resignation of the Servicer..................116
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default..........................................117
SECTION 7.02 Trustee to Act; Appointment of Successor
..........................................................119
SECTION 7.03 Notification to Certificateholders.........................121
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee......................................122
SECTION 8.02 Certain Matters Affecting the Trustee......................123
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage
Loans......................................................124
SECTION 8.04 Trustee May Own Certificates...............................124
SECTION 8.05 Trustee's Fees and Expenses................................124
SECTION 8.06 Eligibility Requirements for the Trustee and
Custodian..................................................125
SECTION 8.07 Resignation and Removal of the Trustee.....................125
iii
SECTION 8.08 Successor Trustee..........................................126
SECTION 8.09 Merger or Consolidation of the Trustee.....................126
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee
..........................................................127
SECTION 8.11 Tax Matters................................................128
SECTION 8.12 Commission Reporting.......................................130
ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans.............................................133
SECTION 9.02 Final Distribution on the Certificates.....................134
SECTION 9.03 Additional Termination Requirements........................135
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment..................................................137
SECTION 10.02 Recordation of Agreement; Counterparts
..........................................................138
SECTION 10.03 Governing Law..............................................139
SECTION 10.04 [Reserved].................................................139
SECTION 10.05 Notices....................................................139
SECTION 10.06 Severability of Provisions.................................140
SECTION 10.07 Assignment.................................................140
SECTION 10.08 Limitation on Rights of Certificateholders.................140
SECTION 10.09 Certificates Nonassessable and Fully Paid
..........................................................141
EXHIBITS
EXHIBIT A. Form of Class A Certificates..............................................................A-1
EXHIBIT B. Form of Subordinate Certificate...........................................................B-1
EXHIBIT C. Form of Residual Certificate..............................................................C-1
EXHIBIT D. Form of Notional Amount Certificate.......................................................D-1
EXHIBIT E. Form of Class P Certificate...............................................................E-1
EXHIBIT F. Form of Reverse Certificates..............................................................F-1
EXHIBIT G. Form of Initial Certification of Custodian................................................G-1
EXHIBIT H. Form of Final Certification of Custodian..................................................H-1
EXHIBIT I. Transfer Affidavit........................................................................I-1
EXHIBIT J. Form of Transferor Certificate............................................................J-1
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
iv
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. [Reserved]................................................................................T-1
EXHIBIT U. Charged Off Loan Data Report..............................................................U-1
EXHIBIT V. Form of Monthly Statement to Certificateholders...........................................V-1
EXHIBIT W. Form of Depositor Certification...........................................................W-1
EXHIBIT X. Form of Trustee Certification.............................................................X-1
EXHIBIT Y. Form of Servicer Certification............................................................Y-1
EXHIBIT Z. Information to be Provided by Servicer to Trustee.........................................Z-1
EXHIBIT AA Form of Limited Power of Attorney........................................................AA-1
EXHIBIT BB. Credit Insurance Policy..................................................................BB-1
SCHEDULE I Mortgage Loan Schedule....................................................................I-1
SCHEDULE II Seller's Representations and Warranties..................................................II-1
SCHEDULE III Wilshire Representations and Warranties.................................................III-1
SCHEDULE IV Representations and Warranties for the Mortgage Loans....................................IV-1
v
THIS POOLING AND SERVICING AGREEMENT, dated as of August 1,
2004, among CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., a Delaware
corporation, as depositor (the "Depositor"), DLJ MORTGAGE CAPITAL, INC., a
Delaware corporation, as Seller (the "Seller"), WILSHIRE CREDIT CORPORATION, a
Nevada corporation, as servicer (the "Servicer" or "Wilshire") 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 eighteen
classes of certificates, designated as (i) the Class A-1 Certificates, (ii) the
Class A-2 Certificates, (iii) the Class A-3 Certificates, (iv) the Class A-4
Certificates, (v) the Class M-1 Certificates, (vi) the Class M-2 Certificates,
(vii) the Class M-3 Certificates, (viii) the Class M-4 Certificates, (ix) the
Class M-5 Certificates, (x) the Class M-6 Certificates, (xi) the Class B-1
Certificates, (xii) the Class B-2 Certificates, (xiii) the Class B-3
Certificates, (xiv) the Class P Certificates, (xv) the Class X-1 Certificates,
(xvi) the Class X-2 Certificates, (xvii) the Class A-R Certificates and (xviii)
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 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) $ 440,792,227.23
LTI-PF Variable(1) $ 29,207,772.77
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 2 Initial Uncertificated
Designation Pass-Through Rate Principal Balance
----------- ----------------- -----------------
MTI-AA Variable(1) $ 460,600,000.00
MTI-A-1 Variable(1) $ 1,000,000.00
MTI-A-2 Variable(1) $ 1,480,000.00
MTI-A-3 Variable(1) $ 1,043,000.00
MTI-A-4 Variable(1) $ 190,000.00
MTI-M-1 Variable(1) $ 199,750.00
MTI-M-2 Variable(1) $ 188,000.00
MTI-M-3 Variable(1) $ 105,750.00
MTI-M-4 Variable(1) $ 105,750.00
MTI-M-5 Variable(1) $ 94,000.00
2
MTI-M-6 Variable(1) $ 105,750.00
MTI-B-1 Variable(1) $ 70,500.00
MTI-B-2 Variable(1) $ 82,250.00
MTI-B-3 Variable(1) $ 35,250.00
MTI-ZZ Variable(1) $ 4,700,000.00
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 Multiples
Class Certificate Minimum in Excess of
Balance Pass-Through Rate Denomination Minimum
------- ----------------- ------------ -------
Class A-1 $ 100,000,000.00 Adjustable(1) $25,000 $ 1
Class A-2 $ 148,000,000.00 Adjustable(1) $25,000 $ 1
Class A-3 $ 104,300,000.00 Adjustable(1) $25,000 $ 1
Class A-4 $ 19,000,000.00 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 $ 19,975,000.00 Adjustable(1) $25,000 $ 1
Class M-2 $ 18,800,000.00 Adjustable(1) $25,000 $ 1
3
Class M-3 $ 10,575,000.00 Adjustable(1) $25,000 $ 1
Class M-4 $ 10,575,000.00 Adjustable(1) $25,000 $ 1
Class M-5 $ 9,400,000.00 Adjustable(1) $25,000 $ 1
Class M-6 $ 10,575,000.00 Adjustable(1) $25,000 $ 1
Class B-1 $ 7,050,000.00 Adjustable(1) $25,000 $ 1
Class B-2 $ 8,225,000.00 Adjustable(1) $25,000 $ 1
Class B-3 $ 3,525,000.00 Adjustable(1) $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 ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1,Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and
Class B-3 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 8.51% 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 $470,000,000.
(4) The Class X-1 Certificates are variable rate and will accrue interest
on a notional amount.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates.......................... All Classes of Certificates
other than the Physical
Certificates.
ERISA-Restricted Certificates.................... Class A-R, Class A-RL, Class
P and Class X Certificates.
LIBOR Certificates............................... Class A-1, Class ▇-▇, ▇▇▇▇▇
▇-▇, Class A-4, Class M-1,
Class M-2, Class M-3, Class
M-4, Class M-5, Class M- 6,
Class B-1, Class B-2 and
Class B-3 Certificates.
Notional Amount Certificates..................... Class X-1 Certificates.
Class A Certificates............................. Class A-1, Class A-2, Class
A-3, Class A-4, Class A-R and
Class A-RL Certificates.
4
Class B Certificates............................. Class B-1, Class B-2 and
Class B-3 Certificates
Class M Certificates............................. Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5 and
Class M-6 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 ▇▇▇▇▇'▇.
Regular Certificates............................. All Classes of Certificates
other than the Class A-R,
Class A-RL and Class X-2
Certificates.
Residual Certificates............................ Class A-R Certificates and
Class A-RL Certificates.
Senior Certificates.............................. Class A-1, Class A-2, Class
A-3, Class A-4, Class 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 M-6, Class B-1, Class
B-2, Class B-3 and Class X-1
Certificates.
Minimum Denominations............................ Class A-1, Class ▇-▇, ▇▇▇▇▇
▇-▇, Class A-4, Class M-1,
Class M-2, Class M-3, Class
M-4, Class M-5, Class M- 6,
Class B-1, Class B-2 and
Class B-3 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 the 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 and (vi) with respect to the Distribution
Date in November 2004, the amount remaining in the Pre-Funding Account at the
end of the Pre-Funding Period; as to clauses (i) through (iv) above, reduced by
amounts in reimbursement for Advances previously made and other amounts as to
which the Servicer is 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 the Servicer's servicing operations are located, or savings and loan
institutions in the States of Illinois, California, Texas, Oregon, New Jersey or
Florida is located are authorized or obligated by law or executive order to be
closed.
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.
Capitalized Interest Deposit: $178,232.79.
7
Capitalized Interest Requirement: 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 multiplied by (y) the Pre-Funded Amount outstanding at the end of
the related Due Period. With respect to the October 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 October 1,
2004, transferred to the Trust during the related Due Period. With respect to
the November 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 November 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.
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
8
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 0.280% 0.560%
A-2 0.150% 0.300%
A-3 0.390% 0.780%
A-4 0.500% 1.000%
M-1 0.580% 0.870%
M-2 0.600% 0.900%
M-3 0.650% 0.975%
M-4 1.050% 1.550%
M-5 1.150% 1.650%
M-6 1.350% 1.850%
B-1 1.800% 2.300%
B-2 1.900% 2.400%
B-3 3.500% 4.000%
_________________
(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 is (x) not an Old Republic Covered Loan or (y) for
which coverage under the Credit Insurance Policy is no longer available, that
has not yet been liquidated,, giving rise to a Realized Loss, on the date on
which the 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 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 August 25, 2004,
1.9100% 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 August 25, 2004,
1.7800% 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 August 25, 2004,
2.0200% 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-4 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
2.1300% 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 September 2004, October 2004 or November 2004, a per annum rate equal to
the Initial Mortgage Loan Net WAC Rate, initially equal to approximately 8.52%
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 September 2004, October 2004 or November 2004, a per annum rate equal to
the Initial Mortgage Loan Net WAC Rate, initially equal to approximately 8.52%
per annum, and with respect to any Distribution Date thereafter, a per annum
rate equal to the Net Funds Cap.
10
Class B-1 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
3.4300% 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-1 Principal Payment Amount: For any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, will be the amount, if any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the Class A-1, Class
A-2, Class A-3, Class A-4, Class P, Class A-R, Class A-RL, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5 and Class M-6 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) 86.00% 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.
Class B-2 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
3.5300% 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 A-4, Class P, Class A-R, Class A-RL, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6 and Class B-1 Certificates, in each
case, after giving effect to payments on such Distribution Date and (ii) the
Class Principal Balance of the Class B-2 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 89.50% 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-3 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
5.1300% 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-3 Principal Payment Amount: For any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, will be the amount, if any, by which (x)
the sum of (i) the aggregate Class Principal Balance of the Class A-1, Class
A-2, Class A-3, Class A-4, Class P, Class A-R, Class A-RL, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 and Class B-2
Certificates, in each case, after giving effect to payments on such Distribution
Date and (ii) the Class Principal Balance of the
11
Class B-3 Certificates immediately prior to such Distribution Date exceeds (y)
the lesser of (A) the product of (i) 91.00% 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.
Class M-1 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
2.2100% 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 A-4, Class P, Class A-R and Class A-RL Certificates after
giving effect to payments on such Distribution Date and (ii) the Class Principal
Balance of the Class M-1 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 57.50% 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-2 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
2.2300% 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 A-3, Class A-4, 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) 65.50% 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 August 25, 2004,
2.2800% 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 A-3, Class A-4, 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
12
Date exceeds (y) the lesser of (A) the product of (i) 70.00% 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.
Class M-4 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
2.6800% 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 A-3, Class A-4, 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) 74.50% 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-5 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
2.7800% 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 A-3, Class A-4, 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) 78.50% 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-6 Pass-Through Rate: With respect to the initial
Interest Accrual Period, based on a LIBOR determination date of August 25, 2004,
2.9800% 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-6 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 A-3, Class A-4, Class P, Class A-R, Class A-RL, Class M-1,
13
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 M-6 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 83.00% 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.
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 September 2004, October 2004 and
November 2004 a per annum rate equal to the Initial Mortgage Loan Net WAC Rate,
initially equal to approximately 8.52% 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 2
Regular Interest MTI-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: August 27, 2004.
Code: The Internal Revenue Code of 1986, as the same may be
amended from time to time (or any successor statute thereto).
Collection Accounts: The accounts established and maintained
by the Servicer in accordance with Section 3.05.
Collection Period: With respect to any Distribution Date, the
period from the second day of the month immediately preceding such Distribution
Date to and including the first day of the month of such Distribution Date.
Combined Loan-to-Value Ratio: With respect to any Mortgage
Loan and as of any date of determination, the fraction (expressed as a
percentage) the numerator of which is the sum of
14
(i) original principal balance of the related Mortgage Loan at such date of
determination and (ii) the unpaid principal balance of the related First
Mortgage Loan as of the date of origination of that Mortgage Loan and the
denominator of which is (a) with respect to a refinanced Mortgage Loan, the
Appraised Value of the related Mortgaged Property at origination and (b) with
respect to all other Mortgage Loans, the lesser of (i) the Appraised Value of
the related Mortgage Property at origination and (ii) the purchase price of the
related Mortgaged Property.
Compensating Interest Payment: For any Distribution Date, an
amount to be paid by the Servicer for such Distribution Date, equal to the
lesser of (i) an amount equal to one half of the monthly Servicing Fee Rate on
the Mortgage Loans otherwise payable to the Servicer on such Distribution Date
(prior to giving effect to any Scheduled Payments due on the Mortgage Loans on
such Due Date) and (ii) the aggregate Prepayment Interest Shortfall for the
Mortgage Loans 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 ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Institutional Trust
Services/Global Debt: Home Equity Mortgage Trust-2004-4.
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-A-4, (vii) REMIC 2 Regular Interest MTI-M-1, (viii) REMIC 2 Regular Interest
MTI-M-2, (ix) REMIC 2 Regular Interest MTI-M-3, (x) REMIC 2 Regular Interest
MTI-M-4, (xi) REMIC 2 Regular Interest MTI-M-5, (xii) REMIC 2 Regular Interest
MTI-M-6, (xiii) REMIC 2 Regular Interest MTI-B-1, (xiv) REMIC 2 Regular Interest
MTI-B-2 and (xii) REMIC 3 Regular Interest MTI-B-3, 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 A-4 Certificates,
(vii) Class M-1 Certificates, (viii) Class M-2 Certificates, (ix) Class M-3
Certificates, (x) Class M-4 Certificates, (xi) Class M-5 Certificates, (xii)
Class M-6 Certificates, (xiii) Class B-1 Certificates, (xiv) Class B-2
Certificates and (xv) Class B-3 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 Insurance Policy: The credit insurance policy provided
by the Credit Insurance Provider with respect to the Old Republic Covered Loans
having an initial amount of coverage equal to $16,348,301.76, and including any
and all related endorsements, copies of which are attached hereto as Exhibit
BB-1, or any replacement obtained by the Servicer pursuant to Section 3.22
hereof.
Credit Insurance Provider: Old Republic Insurance Company, or
any successor thereto or the named insurer in any replacement policy obtained by
the Servicer pursuant to Section 3.22 hereof.
15
Credit Insurance Provider Fee: The amount payable to the
Credit Insurance Provider in order to obtain coverage provided under the Credit
Insurance Policy, such amount being, as to each Old Republic Covered Loan and
any Distribution Date, an amount equal to one-twelfth of the related Credit
Insurance Provider Fee Rate on the Net Proceeds (as defined in the Credit
Insurance Policy) of the Old Republic Covered Loan.
Credit Insurance Provider Fee Rate: 1.32% per annum.
Credit Risk Manager: The Murrayhill Company, a Colorado
corporation.
Credit Risk Management Agreement: The agreement between
Wilshire and the Credit Risk Manager dated as of August 27, 2004.
Credit Risk Manager Fee: As to each Mortgage Loan and any
Distribution Date, an amount equal to one month's interest at the Credit Risk
Manager Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the
Due Date in the month of such Distribution Date (prior to giving effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date).
Credit Risk Manager Fee Rate: 0.0175% per annum.
CSFB: Credit Suisse First Boston LLC, a Delaware limited
liability company, and its successors and assigns.
Cumulative Loss Event: For any Distribution Date, a Cumulative
Loss Event is occurring if Cumulative Net Realized Losses on the Mortgage Loans,
plus the amount by which the total available coverage under the Credit Insurance
Policy has been reduced as of such date, 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
----------------- ------------------------------------------
September 2004 - August 2007 N.A.
September 2007 - August 2008 6.25% for the first month, plus an additional 1/12th of 2.50% for
each month thereafter
September 2008 - August 2009 8.75% for the first month, plus an additional 1/12th of 0.75% for
each month thereafter
September 2009 - August 2010 9.50% for the first month, plus an additional 1/12th of 0.50% for
each month thereafter
September 2010 - August 2011 10.00% for the first month, plus an additional 1/12th of 0.50% for
each month thereafter
September 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.
16
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-J 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.
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, August 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.
17
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.
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, the second
Business Day immediately following the 15th day of the month of such
Distribution Date.
Distribution Date: The 25th day of each month or if such day
is not a Business Day, the first Business Day thereafter, commencing in
September 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 ▇▇▇▇▇'▇ and Fitch in its highest short-term rating category
and by
18
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.
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; ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇
Mae, 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 ▇▇▇▇▇'▇, "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;
19
(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 ▇▇▇▇▇'▇ and
Fitch and rated "A-1+" by S&P at the time of such investment;
(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 ▇▇▇▇▇'▇ and Fitch and or "AAAm" or "AAAm-G" by S&P
at the time of such investment (any such money market funds which
provide for demand withdrawals being conclusively deemed to satisfy any
maturity requirements for Eligible Investments set forth herein)
including money market funds of the Servicer or the Trustee and any
such funds that are managed by the Servicer or the Trustee or their
respective Affiliates or for the Servicer or the Trustee or any
Affiliate of either acts as advisor, as long as such money market funds
satisfy the criteria of this subparagraph (vii); and
(viii) such other investments the investment in which will
not, as evidenced by a letter from each of the Rating Agencies, result
in the downgrading or withdrawal of the Ratings of the Certificates.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Restricted Certificates: As specified in the Preliminary
Statement.
Escrow Account: The separate account or accounts created and
maintained by the Servicer pursuant to Section 3.06.
Escrow Mortgage Loan: Any Mortgage Loan for which the 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.
20
Event of Default: As defined in Section 7.01.
Excess Cashflow Loss Payment: As defined in Section
4.02(b)(iv)(A).
Expense Fees: As to each Mortgage Loan, the sum of the related
Servicing Fee, the Credit Risk Manager Fee, the Credit Insurance Provider Fee
and the Trustee Fee.
Expense Fee Rate: As to each Mortgage Loan, the sum of the
related Servicing Fee Rate, the Credit Risk Manager Fee Rate, the Credit
Insurance Provider Fee Rate and the Trustee Fee Rate.
Fair Market Value: The fair market value of all of the
property of the Trust, as agreed upon between the Optional Termination Holder
and a majority of the Holders of the Class A-RL Certificates; provided, however,
that if the Optional Termination Holder and a majority of the Holders of the
Class A- RL Certificates do not agree upon the fair market value of all the
property of the Trust, the Trustee shall solicit, or cause the solicitation of,
good faith bids for all of the property of the Trust until it has received three
bids from institutions that are regular purchasers and/or sellers in the
secondary market of residential whole mortgage loans similar to the Mortgage
Loans, and the Fair Market Value shall be equal to the highest of such three
bids.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, a federally chartered and privately
owned corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the
▇▇▇▇▇▇ 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 Mortgage Loan that is 60 or
more days delinquent as of the Closing Date, unless such Mortgage Loan has
become current for three consecutive Scheduled Payments after the Closing Date.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ 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
21
priority for payments pursuant to Section 4.02, in the following order of
decreasing priority: Class M-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M- 4, Class M-5,
Class M-6, Class B-1, Class B-2 and Class B-3 Certificates.
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 due under the Credit Insurance
Policy, and proceeds paid under any other 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 and, Class X-1
Certificates, the calendar month prior to the month of such Distribution Date,
(ii) with respect to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and
Class B-3 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 Remittance Amount: For any Distribution Date, an
amount equal to the sum of (1) all interest collected (other than Payaheads and
Simple Interest Excess, if applicable) or advanced in respect of Scheduled
Payments on the Mortgage Loans during the related Due Period, the interest
portion of Payaheads previously received and intended for application in the
related Due Period and the interest portion of all Payoffs and Curtailments
received on the Mortgage Loans during the related Prepayment Period, less (x)
the Expense Fee with respect to such Mortgage Loans and (y) unreimbursed
Advances and other amounts due to the Servicer or the Trustee with respect to
such Mortgage Loans, to the extent allocable to interest, (2) all Compensating
Interest Payments paid by the Servicer with respect to 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, (5)
any amounts withdrawn from the Simple Interest Excess Sub- Account and the
Capitalized Interest Account to pay interest on the Certificates with respect to
such Distribution Date If on any Determination Date the amount deposited into
the Collection Account with respect to Compensating
22
Interest is the amount calculated in clause (ii) of the definition of
Compensating Interest Payment for such Distribution Date, the excess of (x) one
half of the monthly Servicing Fee over (y) the Compensating Interest Payment for
such Distribution Date shall be available to cover any Net Simple Interest
Shortfalls on the Mortgage Loans remaining on such Distribution Date, after
giving effect to the withdrawal from the Simple Interest Excess Sub-Account
pursuant to Section 3.06(f) on 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, (b) payments received under the Credit
Insurance Policy during the related Prepayment Period and (c) Relief Act
Reductions.
Last Scheduled Distribution Date: With respect to each Class
of Certificates, the Distribution Date in December 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
December 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ Telerate Screen Page 3750 as of 11:00 A.M., London, England time, two
LIBOR Business Days prior to the Closing Date. If such rate does not appear on
such page (or such other page as may replace that page on that service, or if
such service is no longer offered, such other service for displaying LIBOR or
comparable rates as may be reasonably selected by the Trustee), the rate will be
the Reference Bank Rate. If no such quotations can be obtained and no Reference
Bank Rate is available, LIBOR will be the LIBOR applicable to the Interest
Accrual Period preceding the next applicable Distribution Date.
LIBOR Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of New York or
in the city of London, England are required or authorized by law to be closed.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which was
liquidated or for which payments under the related private mortgage insurance
policy, hazard insurance policy or any condemnation proceeds were received, in
the calendar month preceding the month of such Distribution Date and as to which
the Servicer has determined (in accordance with this Agreement) that it has
received all amounts it expects to receive in connection with the liquidation of
such Mortgage Loan, including the final disposition of the related REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale,
23
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 ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, MTI-M-1, MTI-M-2, MTI-M-3,
MTI-M-4, ▇▇▇-▇▇, ▇▇▇-▇▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇ and MTI-ZZ, with the rates
on the REMIC 2 Regular Interests ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, MTI-M-1,
MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇ and MTI-B-3,
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-ZZ subject to a cap, for the purpose of this calculation, equal to zero.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS System.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
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 and (2) 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 K. of Section 4.02(b)(i) plus (B) the
Principal Payment Amount remaining after the application of payments pursuant to
clauses A. through K. of Section 4.02(b)(ii) or (iii).
24
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.06.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto. For purposes of Section 10.05(b) the address for notices to Moody's
shall be ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, 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.
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 2.01(f), 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;
25
(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;
(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) a code indicating whether the Mortgage Loan is a MERS
Mortgage Loan and, if so, its corresponding MIN;
(xxi) whether such Mortgage Loan is a Simple Interest Mortgage
Loan; and
(xxii) whether such Mortgage Loan is an Old Republic Covered
Loan.
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.
26
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 and Class P
Certificates, 1/12 and (y) in the case of the Class A-1, Class A-2, Class ▇-▇,
▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Certificates, the actual number of days in
the related Interest Accrual Period divided by 360. For federal income tax
purposes, however, as to any Distribution Date will be the equivalent of the
foregoing, expressed as a per annum rate equal to the weighted average of the
Uncertificated Pass-Through Rates on the REMIC 2 Regular Interests (other than
the REMIC 2 Regular Interest MTI-P and the REMIC 2 Regular Interest MTI-R)
multiplied by (x) in the case of the Class A-R, Class A-RL and Class P
Certificates, 1/12 and (y) in the case of the Class A-1, Class A-2, Class ▇-▇,
▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 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 the Servicer on a
delinquent or Charged Off Loan (including any Liquidation Proceeds received on a
Charged Off Loan), net of any Servicing Fee, Ancillary Income and any other
related expenses.
27
Net Simple Interest Excess: As of any Distribution Date, an
amount equal to the excess, if any, of the aggregate amount of Simple Interest
Excess with respect to the Mortgage Loans over the amount of Simple Interest
Shortfall with respect to the Mortgage Loans.
Net Simple Interest Shortfall: As of any Distribution Date, an
amount equal to the excess, if any, of the aggregate amount of Simple Interest
Shortfall with respect to the Mortgage Loans over the amount of Simple Interest
Excess with respect to the Mortgage Loans.
Nonrecoverable Advance: Any portion of an Advance or Servicing
Advance previously made or proposed to be made by the Servicer that, in the good
faith judgment of the Servicer, will not be ultimately recoverable by the
Servicer from the related Mortgagor, related Liquidation Proceeds or otherwise.
Notional Amount: The Class X-1 Notional Amount.
Notional Amount Certificates: As specified in the Preliminary
Statement.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by the Chairman of
the Board or the Vice Chairman of the Board or the President or a Vice President
or an Assistant Vice President or the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Servicer or the Depositor,
and delivered to the Depositor or the Trustee, as the case may be, as required
by this Agreement.
Old Republic Covered Loan: A Mortgage Loan for which coverage
is available under the Credit Insurance Policy, as indicated on the Mortgage
Loan Schedule.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Servicer, including in-house counsel,
reasonably acceptable to the Trustee; provided, however, that with respect to
the interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Servicer, (ii) not have any
material direct financial interest in the Depositor or the Servicer or in any
affiliate of either, and (iii) not be connected with the Depositor or the
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Optional Termination: The termination of the trust created
hereunder in connection with the purchase of the Mortgage Loans pursuant to
Section 9.01.
Optional Termination Date: The first date on which the
Optional Termination may be exercised.
Optional Termination Holder: Wilshire, as Servicer, or any
successor servicer appointed by the Seller, so long as the Seller is the owner
of the servicing rights.
OTS: The Office of Thrift Supervision.
28
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 and Excess Cashflow Loss Payment for such date is applied on such date in
reduction of the aggregate of the Class Principal Balances of the Certificates
(to an amount not less than zero), exceeds (2) the Targeted
Overcollateralization Amount for such date.
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)
September 27, 2004, (b) October 25, 2004 and (c) November 26, 2004 over (ii) one
month of investment earnings on the amount on deposit in the Capitalized
Interest Account on such date at an annual rate of 1.55%. The assumed weighted
average Pass-Through Rate of the Senior Certificates will be calculated assuming
LIBOR is 1.63% for any Subsequent Transfer Date for the Subsequent Mortgage
Loans prior to the September 2004 Distribution Date, 2.03% for any Subsequent
Transfer Date for the Subsequent Mortgage Loans prior to the October 2004
Distribution Date and 2.43% for any Subsequent Transfer Date for the Subsequent
Mortgage Loans prior to the November 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).
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Pass-Through Rate: With respect to the Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class A-3, Class A-4, Class A-R, Class A-RL, Class P, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, the Class A-1 Pass-Through Rate, Class A-2 Pass- Through Rate,
Class A-3 Pass-Through Rate, Class A-4 Pass-Through Rate, Class A-R Pass-Through
Rate, Class A-RL Pass-Through Rate, Class P Pass-Through Rate, Class M-1
Pass-Through Rate, Class M-2 Pass-Through Rate, Class M-3 Pass-Through Rate,
Class M-4 Pass-Through Rate, Class M-5 Pass- Through Rate, Class M-6
Pass-Through Rate, Class B-1 Pass-Through Rate, Class B-2 Pass-Through Rate and
Class B-3 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 (O)
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-A-4, 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-M-6,
REMIC 2 Regular Interest MTI-B-1, REMIC 2 Regular Interest MTI-B-2, REMIC 2
Regular Interest MTI-B-3 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;
(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-A-4 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest MTI-A-4;
(F) 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;
30
(G) 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;
(H) 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;
(I) 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;
(J) 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;
(K) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-M-6 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest MTI-M-6;
(L) 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;
(M) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-B-2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest MTI-B-2;
(N) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MTI-B-3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 2 Regular Interest MTI-B-3;
(O) 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.
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
31
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 ▇▇▇▇▇▇▇ 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 2004-4." 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 $29,207,772.77.
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) November 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.
32
Prepayment Interest Shortfall: As to any Mortgage Loan,
Distribution Date and Principal Prepayment, other than Principal Prepayments in
full that occur during the portion of the Prepayment Period that is in the same
calendar month as the Distribution Date, the difference between (i) one full
month's interest at the applicable Mortgage Rate (giving effect to any
applicable Relief Act Reduction), as reduced by the Expense Fee Rate, on the
Stated Principal Balance of such Mortgage Loan immediately prior to such
Principal Prepayment and (ii) the amount of interest actually received that
accrued during the month immediately preceding such Distribution Date or, with
respect to any Mortgage Loan with a Due Date other than the first of the month,
the amount of 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 September 2004 Distribution Date), each Mortgage Loan 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
September 2004 Distribution Date and each Payoff, the related "Prepayment
Period" will be August 1, 2004 through September 14, 2004. With respect to each
Distribution Date, each Mortgage Loan and each Curtailment, the related
"Prepayment Period" will be the calendar month preceding the month in which the
related Distribution Date occurs.
Principal Payment Amount: For any Distribution Date, an amount
equal to the Principal Remittance Amount plus any Excess Cashflow Loss Payment
for such date, minus the Overcollateralization Release Amount, if any, for such
date.
Principal Remittance Amount: For any Distribution Date, an
amount equal to the sum of (1) all principal collected (other than Payaheads) or
advanced in respect of Scheduled Payments on the Mortgage Loans during the
related Due Period (less unreimbursed Advances, Servicing Advances and other
amounts due to the Servicer and the Trustee with respect to the Mortgage Loans,
to the extent allocable to principal) and the principal portion of Payaheads
previously received and intended for application in the related Due Period, (2)
all Principal Prepayments on the Mortgage Loans received during the related
Prepayment Period, (3) the outstanding principal balance of each Mortgage Loan
that was repurchased by the Seller, the Optional Termination Holder or the
Majority in Interest Class X-2 Certificateholder during the calendar month
immediately preceding such Distribution Date, (4) the portion of any
Substitution Adjustment Amount paid with respect to any Deleted Mortgage Loans
during the calendar month immediately preceding such Distribution Date allocable
to principal, (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 November 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.
33
Prospectus Supplement: The Prospectus Supplement dated August
26, 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
▇▇▇▇▇▇ ▇▇▇- or ▇▇▇▇▇▇▇ 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. Any replacement
insurer with respect to the Credit Insurance Policy must be acceptable to the
Rating Agencies as evidenced by written acknowledgment from each Rating Agency
that such replacement will not cause a reduction, withdrawal or cancellation of
the ratings of the Certificates.
Qualified Substitute Mortgage Loan: A Mortgage Loan
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, as confirmed in a Request for Release, substantially in the
form of Exhibit M (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution (or,
in the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of, and not more
than 10% less than the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) be accruing interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Combined
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (iv) have
a remaining term to maturity no greater than (and not more than one year less
than that of) the Deleted Mortgage Loan; and (v) comply with each representation
and warranty set forth in Section 2.03(f).
Rating Agency: S&P and ▇▇▇▇▇'▇. If either such organization or
a successor is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating organization, or other comparable Person, as is
designated by the Depositor, notice of which designation shall be given to the
Trustee and the Servicer. References herein to a given rating or rating category
of a Rating Agency shall mean such rating category without giving effect to any
modifiers.
Ratings: As of any date of determination, the ratings, if any,
of the Certificates as assigned by the Rating Agencies.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an amount (not less than zero or greater than the Stated Principal Balance of
the Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Rate from the related Due
Date as to which interest was last paid or advanced (and not reimbursed) to the
related Certificateholders up to the related Due Date in the month in which
Liquidation Proceeds are required to be distributed on the
34
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 A-2, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 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 ▇-▇, ▇▇▇▇▇ ▇-▇,
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2 and Class B-3 Certificates which are Book-Entry
Certificates and any Distribution Date, the close of business on the Business
Day preceding such Distribution Date.
Reference Bank Rate: With respect to any Interest Accrual
Period, as follows: the arithmetic mean (rounded upwards, if necessary, to the
nearest one sixteenth of a percent) of the offered rates for United States
dollar deposits for one month which are offered by the Reference Banks as of
11:00 A.M., London, England time, on the second LIBOR Business Day prior to the
first day of such Interest Accrual Period to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the aggregate
Class Principal Balance of the LIBOR Certificates; provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean of the rates quoted by one
or more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York time, on such date for loans in U.S. Dollars to leading European Banks
for a period of one month in amounts approximately equal to the aggregate Class
Principal Balance of the LIBOR Certificates. If no such quotations can be
obtained, the Reference Bank Rate shall be LIBOR applicable to the preceding
Distribution Date; provided however, that if, under the priorities indicated
above, LIBOR for a Distribution Date would be based on LIBOR for the previous
Payment Date for the third consecutive Distribution Date, the Trustee shall
select an alternative comparable index over which the Trustee has no control,
used for determining one-month Eurodollar lending rates that is calculated and
published or otherwise made available by an independent party.
Reference Banks: Barclays Bank PLC, National Westminster Bank
and Abbey National PLC.
Regular Certificates: As specified in the Preliminary
Statement.
Released Loan: Any Charged Off Loan that is released by
Wilshire to the Class X-2 Certificateholders pursuant to Section 3.11(a),
generally on the date that is six months after the date
35
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 Charges), 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
Credit Insurance Policy, (iv) the Trustee's rights with respect to the Mortgage
Loans under all insurance policies, including any Primary Insurance Policy,
required to be maintained pursuant to this Agreement and any proceeds thereof
and, (v) the Collection Account and the Certificate Account (subject to the last
sentence of this definition) and such assets that are deposited therein from
time to time and any investments thereof. Notwithstanding the foregoing,
however, a REMIC election will not be made with respect to the 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 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
36
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 ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇,
MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇,
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 ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇ and MTI-B-3 and the denominator of which is the aggregate
Uncertificated Principal Balance of REMIC 2 Regular Interests ▇▇▇-▇-▇, ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇, MTI-M-1, MTI-M-2, MTI-M-3, MT-M-4, MTI-M-5, ▇▇▇-▇-▇, ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇ 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.
37
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-A-4: One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest MTI-A-4
shall accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC 2 Regular Interest 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.
38
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-M-6: 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-6
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-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-B-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-B-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-B-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
39
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 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 ▇▇▇-▇-▇, ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, ▇▇▇-▇-▇, ▇▇▇-▇-▇,
▇▇▇-▇-▇ and MTI-B-3, with the rates on REMIC 2 Regular Interests ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇ and MTI-B-3 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 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-A-4, 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-M-6, REMIC 2 Regular Interest MTI-B-1, REMIC 2
Regular Interest MTI-B-2, REMIC 2 Regular Interest MTI-B-3, REMIC 2 Regular
Interest MTI-ZZ, REMIC 2 Regular Interest MTI-P and REMIC 2 Regular Interest
MTI-R.
40
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.
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
41
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Agreement.
Rolling Three Month Delinquency Rate: For any Distribution
Date will be the fraction, expressed as a percentage, equal to the average of
the Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates, respectively) immediately preceding months.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. For purposes of Section 10.05(b) the address for notices to S&P
shall be Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Depositor, the Servicer and the Trustee.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan pursuant to the terms of the related Mortgage Note, as reduced by any
Relief Act Reductions.
Second Mortgage Loan: A Mortgage Loan that is secured by a
second lien on the Mortgaged Property securing the related Mortgage Note.
Securities Act: The Securities Act of 1933, as amended.
Seller: DLJ Mortgage Capital, Inc.
Senior Certificates: As specified in the Preliminary
Statement.
Senior Enhancement Percentage: For any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is the sum of the
aggregate Class Principal Balance of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 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
A-4, Class P, Class A-R and Class A-RL Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 49.00% 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.
42
Servicer: Wilshire, or its successors in interest, or any
successor servicer appointed as provided herein.
Servicer Employee: As defined in Section 3.18.
Servicer Cash Remittance Date: With respect to each
Distribution Date, the Business Day immediately preceding such Distribution
Date.
Servicer Data Remittance Date: With respect to each
Distribution Date, the second Business Day immediately following the 15th day of
the month of such Distribution Date.
Servicing Advance: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost (including
reasonable attorneys' fees and disbursements) of (i) the inspection,
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, and including any
expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS System; (iii) the management and
liquidation of any REO Property (including default management and similar
services, appraisal services and real estate broker services); (iv) any expenses
incurred by the Servicer in connection with obtaining an environmental
inspection or review pursuant to Section 3.11(a)(v) and (vi); (v) compliance
with the obligations under Section 3.01, 3.09 and 3.11(b); (vi) the cost of
obtaining any broker's price opinion in accordance with Section 3.11 hereof;
(vii) the costs of obtaining an Opinion of Counsel pursuant to Section 3.11(c)
hereof; (viii) expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance as described in Section 3.12 hereof; and
(ix) expenses incurred in connection with the recordation of Assignments of
Mortgage.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the Due Date in the month
of such Distribution Date (prior to giving effect to any Scheduled Payments due
on such Mortgage Loan on such Due Date), subject to reduction as provided in
Section 3.05(b)(vi).
Servicing Fee Rate: As to each Mortgage Loan, 0.50% per annum.
Servicing Officer: Any representative of the Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and specimen signature appear on a list of servicing officers
furnished to the Trustee by the 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.
43
Simple Interest Excess: As of any Determination Date for each
Simple Interest Qualifying Loan, the excess, if any, of (i) the portion of the
monthly payment received from the Mortgagor for such Mortgage Loan allocable to
interest with respect to the related Due Period, over (ii) 30 days' interest on
the Stated Principal Balance of such Mortgage Loan at the Mortgage Rate.
Simple Interest Excess Sub-Account: The sub-account of the
Collection Account established by the Servicer pursuant to Section 3.06(d). The
Simple Interest Excess Sub-Account shall be an Eligible Account.
Simple Interest Mortgage Loan: Any Mortgage Loan for which the
interest due thereon is calculated based on the actual number of days elapsed
between the date on which interest was last paid through the date on which the
most current payment is received.
Simple Interest Qualifying Loan: As of any Determination Date,
any Simple Interest Mortgage Loan that was neither prepaid in full during the
related Due Period, nor delinquent with respect to a payment that became due
during the related Due Period as of the close of business on the Determination
Date following such Due Period.
Simple Interest Shortfall: As of any Determination Date for
each Simple Interest Qualifying Loan, the excess, if any, of (i) 30 days'
interest on the Stated Principal Balance of all such Mortgage Loans at the
Mortgage Rate, over (ii) the portion of the monthly payment received from the
Mortgagor for such Mortgage Loan allocable to interest with respect to the
related Due Period.
Startup Day: August 30, 2004.
Stated Principal Balance: As to any Mortgage Loan and Due
Date, the unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period) after giving effect to any previous Curtailments and
Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor;
provided, however, for purposes of calculating the Servicing Fee and the Trustee
Fee, the Stated Principal Balance of any REO will be the unpaid principal
balance immediately prior to foreclosure.
Stepdown Date: The date occurring on the later of (x) the
Distribution Date in September 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 51.00%.
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
44
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 September 2004, October
2004 or November 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 1.97%, 2.44% and
2.93%, 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
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 the Servicer and
a Subservicer for the servicing of the Mortgage Loans.
Substitution Adjustment Amount: As defined in Section 2.03.
Targeted Overcollateralization Amount: For any Distribution
Date prior to the Stepdown Date, 4.50% 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) 9.00% 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
45
enhancement contract. Any credit enhancement contract referred to in the
previous sentence shall be collateralized by cash or mortgage loans, provided
that (i) the aggregate Stated Principal Balance of the mortgage loans
collateralizing any such credit enhancement contract shall not be less than the
excess, if any, of (x) the initial Targeted Overcollateralization Amount over
(y) the then-current Overcollateralization Amount and (ii) the issuance of any
credit enhancement contract supported by mortgage loans shall not result in a
downgrading of the ratings assigned by the Rating Agencies.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d) and
temporary Treasury regulation ss. 301.6231(a)(7)-1T.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Trigger Event: A Trigger Event will be in effect for any
Distribution Date on or after the Stepdown Date if (a) the Rolling Three Month
Delinquency Rate as of the last day of the related Due Period equals or exceeds
16.50% of the Senior Enhancement Percentage for such Distribution Date or (ii) a
Cumulative Loss Event is occurring. The Trigger Event may be amended by the
parties hereto in the future with the consent of the Rating Agencies.
Trust Collateral: As defined in Section 9.01(c).
Trust Fund: Collectively, the assets of REMIC 1, REMIC 2,
REMIC 3, the Pre-Funding Account, the Capitalized Interest Account and the
Subsequent Mortgage Loan Interest.
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
46
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 September 2004, October 2004 and Novemberr 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)
September 2004, (b) October 2004 and (c) November 2004, a per annum rate equal
to (a) 1.97%, (b) 2.44% and (c) 2.93%; 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 Interest MTI-A-2, REMIC 2 Regular Interest MTI-A-3,
REMIC 2 Regular Interest MTI-A-4, 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-M-6, REMIC 2 Regular Interest MTI-B-1, REMIC Regular Interest B-2, REMIC
Regular Interest B-3 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 September 2004, October 2004 and
November 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.
47
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 ▇-▇, ▇▇▇▇▇ ▇-▇,
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2 and Class B-3 Certificates. The portion of such
98% Voting Rights allocated to the Class A-1, Class A-2, Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3 Certificates shall be based on the fraction, expressed
as a percentage, the numerator of which is the aggregate Class Principal Balance
then outstanding and the denominator of which is the Class Principal Balance of
all such Classes then outstanding. The Class 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 Special Servicing: With regard to any Charged Off
Loans, the servicing of such Charged Off Loans using specialized collection
procedures (including foreclosure, if appropriate) to maximize recoveries.
SECTION 1.02 Interest Calculations.
The calculation of the Trustee Fee, the Servicing Fee, the
Credit Risk Manager Fee, the Credit Insurance Provider Fee and interest on the
Class P, Class A-R, Class A-RL 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 ▇-▇, ▇▇▇▇▇
▇-▇, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class B-1,
48
Class B-2 and Class B-3 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 ▇▇▇▇▇ with one-half of one ▇▇▇▇▇ 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.
49
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
Servicer 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 cause the Credit
Insurance Provider to deliver the Credit Insurance Policy to the Trustee.
(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
50
related Mortgage Loan and either language indicating that the Mortgage
Loan is a MOM Loan if the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage
and the assignment thereof to MERS, with evidence of recording
indicated thereon or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded;
(iii) for each Mortgage Loan that is not a MERS Mortgage Loan,
the original Assignment of Mortgage, in blank, which assignment appears
to be in form and substance acceptable for recording and, in the event
that the related Seller acquired the Mortgage Loan in a merger, the
assignment must be by "[Seller], successor by merger to [name of
predecessor]", and in the event that the Mortgage Loan was acquired or
originated by the related Seller while doing business under another
name, the assignment must be by "[Seller], formerly known as [previous
name]";
(iv) for each Mortgage Loan, at any time that such Mortgage
Loan is not a MERS Mortgage Loan, the originals of all intervening
Assignments of Mortgage not included in (iii) above showing a complete
chain of assignment from the originator of such Mortgage Loan to the
Person assigning the Mortgage to the Trustee, including any warehousing
assignment, with evidence of recording on each such Assignment of
Mortgage (or, in lieu of the original of any such intervening
assignment, a duplicate or conformed copy of such intervening
assignment together with a certificate of receipt from the related
Seller or the settlement agent who handled the closing of the Mortgage
Loan, certifying that such copy or copies represent true and correct
copy(ies) of the original(s) and that such original(s) have been or are
currently submitted to be recorded in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is
located) or a certification or receipt of the recording authority
evidencing the same;
(v) an original of any related security agreement (if such
item is a document separate from the Mortgage) and the originals of any
intervening assignments thereof showing a complete chain of assignment
from the originator of the related Mortgage Loan to the last assignee;
(vi) an original assignment of any related security agreement
(if such item is a document separate from the Mortgage) executed by the
last assignee in blank;
(vii) the originals of any assumption, modification, extension
or guaranty agreement with evidence of recording thereon, if applicable
(or, in lieu of the original of any such agreement, a duplicate or
conformed copy of such agreement together with a certificate of receipt
from the related Seller or the settlement agent who handled the closing
of the Mortgage Loan, certifying that such copy(ies) represent true and
correct copy(ies) of the original(s) and that such original(s) have
been or are currently submitted to be recorded in the appropriate
governmental recording office of the jurisdiction where the Mortgaged
Property is located), or a certification or receipt of the recording
authority evidencing the same;
(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
51
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
52
be recorded (a) any assignment referred to in clause (iii) above which relates
to a Mortgage Loan in any jurisdiction under the laws of which, as evidenced by
an Opinion of Counsel delivered to the Trustee (at the Depositor's expense,
provided such expense has been previously approved by the Depositor in writing)
within 180 days of the Closing Date, acceptable to the Rating Agencies, the
recordation of such assignment is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan or (b) if MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as the mortgagee of record solely as nominee for the Seller and its successors
and assigns.
In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Depositor further agrees that it will
cause, at the Depositor's own expense, on or prior to the Closing Date, the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Depositor further agrees that it will not, and will not
permit the Servicer to, and the Servicer agrees that it will not, alter the
codes referenced in this paragraph with respect to any Mortgage Loan during the
term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.
(c) The Trustee is authorized to appoint any bank or trust
company approved by the Depositor as Custodian of the documents or instruments
referred to in this Section 2.01, and to enter into a Custodial Agreement for
such purpose and any documents delivered thereunder shall be delivered to the
Custodian and any Officer's Certificates delivered with respect thereto shall be
delivered to the Trustee and the Custodian.
(d) It is the express intent of the parties to this Agreement
that the conveyance of the Mortgage Loans by the Depositor to the Trustee as
provided in this Section 2.01 be, and be construed as, a sale of the Mortgage
Loans by the Depositor to the Trustee. It is, further, not the intention of the
parties to this Agreement that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor. However, in the event that, notwithstanding the
intent of the parties to this Agreement, the Mortgage Loans are held to be the
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in the Mortgage Loans then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the New York Uniform Commercial Code; (b) the conveyance
provided for in this Section 2.01 shall be deemed to be a grant by the Depositor
to the Trustee for the benefit of the Certificateholders of a security interest
in all of the Depositor's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the 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
53
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;
(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
54
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 5.50% 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 $285,000;
(xi) no Subsequent Mortgage Loan shall have a final maturity
date after November 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 Mortgage Loans as of the Cut-off
Date and the Subsequent Mortgage Loans as of their related Subsequent
Transfer Date) will be as follows:
55
A. a weighted average Mortgage Rate of at least 9.31% per
annum;
B. a weighted average remaining term to stated maturity of
less than 220 months;
C. a weighted average Combined Loan-to-Value Ratio of not more
than 98.89%;
D. a weighted average credit score of at least 684;
E. no more than 80.00% of the Mortgage Loans by aggregate
Cut-off Date Principal Balance are balloon loans;
F. no more than 37.00% of the Mortgage Loans by aggregate
Cut-off Date Principal Balance are concentrated in one state; and
G. no more than 10.19% 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.
Subsequent Mortgage Loans with an aggregate principal balance of at least
$9,721,832 (as of the related Subsequent Transfer Date), to the extent
transferred to the Trust, will meet the eligibility criteria for coverage under
the Credit Insurance Policy.
(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.
56
SECTION 2.02 Acceptance by the Trustee.
The Trustee acknowledges receipt by the Custodian of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit G and declares that the Custodian on its behalf hold and will hold the
documents delivered to the Custodian constituting the Mortgage Files, and that
it or the Custodian holds or will hold such other assets as are included in the
Trust Fund, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that it will maintain possession
through the Custodian of the Mortgage Notes in the State of Texas or the State
of Illinois, as directed by the Seller, unless otherwise permitted by the Rating
Agencies.
The Custodian is required under the Custodial Agreement to
execute and deliver on the Closing Date to the Depositor, the Seller, the
Trustee and the Servicer an Initial Certification in the form annexed hereto as
Exhibit G. Based on its review and examination, and only as to the documents
identified in such Initial Certification, pursuant to the Custodial Agreement,
the Custodian will acknowledge that such documents appear regular on their face
and relate to such Mortgage Loan. Neither the Trustee nor the Custodian shall be
under any duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
Not later than 90 days after the Closing Date, the Custodian
is required to deliver to the Depositor, the Seller, the Trustee and the
Servicer a Final Certification in the form annexed hereto as Exhibit H, with any
applicable exceptions noted thereon.
If, in the course of such review, the Custodian finds any
document constituting a part of a Mortgage File which does not meet the
requirements of Section 2.01, pursuant to the Custodial Agreement, the Custodian
will list such as an exception in the Final Certification; provided, however,
that neither the Trustee nor the Custodian shall make any determination as to
whether (i) any endorsement is sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form or is sufficient
to effect the assignment of and transfer to the assignee thereof under the
mortgage to which the assignment relates.
The Seller shall promptly correct or cure such defect within
120 days from the date it was so notified of such defect and, if the Seller does
not correct or cure such defect within such period and such defect materially
and adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Seller shall either (a) substitute for the related Mortgage
Loan a Qualified Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within 120 days from
the date the Seller was notified of such defect in writing at the Repurchase
Price of such Mortgage Loan; provided, however, that in no event shall such
substitution or repurchase occur more than 540 days from the Closing Date,
except that if the substitution or repurchase of a Mortgage Loan pursuant to
this provision is required by reason of a delay in delivery of any documents by
the appropriate recording office, then such substitution or repurchase shall
occur within 720 days from the Closing Date; and further provided, that the
Seller shall have no liability for recording any
57
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 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
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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
Servicer.
(a) The Seller hereby makes the representations and warranties
applicable to it set forth in Schedule II hereto, and by this reference
incorporated herein, to the Depositor and the Trustee, as of the Closing Date,
or if so specified therein, as of the Cut-off Date or such other date as may be
specified.
(b) Wilshire, in its capacity as Servicer, hereby makes the
representations and warranties applicable to it set forth in Schedule III
hereto, and by this reference incorporated herein, to the Depositor and the
Trustee, as of the Closing Date, or if so specified therein, as of the Cut-off
Date or such other date as may be specified.
(c) Wilshire, in its capacity as Servicer, will use its
reasonable efforts to become a member of MERS in good standing, and will comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans that are registered with MERS.
(d) The Seller hereby makes the representations and warranties
set forth in Schedule IV as applicable hereto, and by this reference
incorporated herein, to the Trustee, as of the Closing Date, or 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.
(e) Upon discovery by any of the parties hereto of a breach of
a representation or warranty made pursuant to Section 2.03(d) 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(d) which
materially and adversely affects the interests of the
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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 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.
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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 A-2,
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2, Class B-3, Class P and Class X-1 Certificates
shall be designated as the "regular interests" in REMIC 3. The Class A-RL
Certificates will constitute the sole class of residual interests in REMIC 1 and
the Class A-R Certificates will represent beneficial ownership of two residual
interests, Class R-2 Interest and Class R-3 Interest, each of which will
constitute the sole class of residual interests in each of REMIC 2 and REMIC 3,
respectively. The Trustee shall not permit the creation of any "interests"
(within the meaning of Section 860G of the Code) in REMIC 1, REMIC 2 or REMIC 3
other than the Certificates, the REMIC 1 Regular Interests or the REMIC 2
Regular Interests. The "tax matters person" with respect to each of REMIC 1,
REMIC 2 and REMIC 3 shall be the Holder of the Class A-R Certificate and Class
A-RL Certificate at any time holding the largest Percentage Interest thereof in
the manner provided under Treasury regulations section 1.860F-4(d) and Treasury
regulations section 301.6231(a)(7)-1. The fiscal year for each REMIC shall be
the calendar year. In addition, the Class X-1 Certificateholders shall be deemed
to have entered into a contractual arrangement with the Class A-R
Certificateholders or Class A-RL Certificateholders whereby the Class A-R
Certificateholders or Class A-RL Certificateholders agree to pay to the Class
X-1 Certificateholders on each Distribution Date amounts that would, in the
absence of such contractual agreement, be
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distributable with respect to the residual interest in REMIC 1, REMIC 2, and
REMIC 3 pursuant to Section 4.02(b)(iv)(N) (which amounts are expected to be
zero).
SECTION 2.08 Covenants of the Servicer.
The Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the Credit Insurance Provider as set forth in the Credit Insurance Policy.
The Servicer hereby covenants to the Depositor and the Trustee
that no written information, certificate of an officer, statement furnished in
writing or written report prepared by the Servicer and delivered to the
Depositor, any affiliate of the Depositor or the Trustee and prepared by the
Servicer pursuant to this Agreement will contain any untrue statement of a
material fact.
SECTION 2.09 Conveyance of REMIC Regular Interests and
Acceptance of REMIC 1, REMIC 2 and REMIC 3 by
the Trustee; Issuance of Certificates.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 1 Regular Interests for the benefit of the Holder
of the REMIC 2 Regular Interests and the Holders of the Class R-2 Interest. The
Trustee acknowledges receipt of the REMIC 1 Regular Interests (each of which is
uncertificated) and declares that it holds and will hold the same in trust for
the exclusive use and benefit of the Holders of the REMIC 2 Regular Interests
and Holder of the Class R-2 Interest. The interests evidenced by the Class R-2
Interest, together with the REMIC 2 Regular Interests, constitute the entire
beneficial ownership interest in REMIC 2.
(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 2 Regular Interests for the benefit of the 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
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acceptance by the Trustee thereof, pursuant to Section 2.01, Section 2.02 and
Section 2.09(a); and (ii) the assignment and delivery to the Trustee of REMIC 2
(including the Residual Interest therein represented by the Class R-2 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.09(b); and
(iii) the assignment and delivery to the Trustee of REMIC 3 (including the
Residual 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 Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer
shall service and administer the Mortgage Loans in accordance with the terms of
this Agreement and with Accepted Servicing Practices. Notwithstanding anything
in this Agreement, any Subservicing Agreement or the Credit Risk Management
Agreement to the contrary, Wilshire shall not have any duty or obligation to
enforce the Credit Risk Management Agreement or to supervise, monitor or oversee
the activities of the Credit Risk Manager under the Credit Risk Management
Agreement with respect to any action taken or not taken by Wilshire pursuant to
a recommendation of the Credit Risk Manager. In connection with such servicing
and administration, the Servicer shall have full power and authority, acting
alone and/or through Subservicers as provided in Section 3.02 hereof, to do or
cause to be done any and all things that it may deem necessary or desirable in
connection with such servicing and administration, including but not limited to,
the power and authority, subject to the terms hereof (i) to execute and deliver,
on behalf of the Certificateholders and the Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of any
Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages
(but only in the manner provided in this Agreement), (iii) to collect any
Insurance Proceeds and other Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan; provided that the Servicer shall not take any action
that is materially inconsistent with or materially prejudices the interests of
the Trust Fund or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor, the Trustee or the Certificateholders under this
Agreement unless such action is specifically called for by the terms hereof. The
Trustee will provide a limited power of attorney to the Servicer, prepared by
the Servicer and reasonably acceptable to the Trustee, to permit the Servicer to
act on behalf of the Trustee under this Agreement. The Servicer hereby
indemnifies the Trustee for all costs and expenses incurred by the Trustee in
connection with the negligent or willful misuse of such power of attorney. The
Servicer shall represent and protect the interests of the Trust Fund in the same
manner as it protects its own interests in mortgage loans in its own portfolio
in any claim, proceeding or litigation regarding a Mortgage Loan. The Servicer
further is hereby authorized and empowered in its own name or in the name of the
Subservicer, when the Servicer or the Subservicer, as the case may be, believes
it is appropriate in its best judgment to register any Mortgage Loan on the
MERS(R) System, or cause the removal from the registration of any Mortgage Loan
on the MERS(R) System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. Any reasonable expenses incurred in connection with the
actions described in the preceding sentence or as a result of MERS discontinuing
or becoming unable to continue operations in connection with the MERS(R) System,
shall be reimbursable by the Trust Fund to the Servicer. Notwithstanding the
foregoing, subject to Section 3.05(a), the Servicer shall not make or permit any
modification, waiver or amendment of any 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
65
thereunder (other than in connection with a proposed conveyance or assumption of
such Mortgage Loan that is treated as a Principal Prepayment in Full pursuant to
Section 3.10 hereof) which would cause any of REMIC 1 , REMIC 2 or REMIC 3 to
fail to qualify as a REMIC. Without limiting the generality of the foregoing,
the Servicer, in its own name or in the name of the Depositor and the Trustee,
is hereby authorized and empowered by the Depositor and the Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect
to the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
either or both of them as are necessary or appropriate to enable the Servicer to
service and administer the Mortgage Loans to the extent that the Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents and a written request signed by an
authorized officer, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Servicer.
In accordance with the standards of the preceding paragraph,
the Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on any Mortgaged
Property (to the extent the Servicer has been notified that such taxes or
assessments have not paid by the related Mortgagor or the owner or the servicer
of the related First Mortgage Loan), which advances shall be reimbursable in the
first instance from related collections from the Mortgagors pursuant to Section
3.06, and further as provided in Section 3.08; provided, however, that the
Servicer shall be required to advance only to the extent that such advances, in
the good faith judgment of the Servicer, will be recoverable by the Servicer out
of Insurance Proceeds, Liquidation Proceeds, or otherwise out of the proceeds of
the related Mortgage Loan; and provided, further, that such payments shall be
advanced within such time period required to avoid the loss of the Mortgaged
Property by foreclosure of a tax or other lien. The costs incurred by the
Servicer, if any, in effecting the timely payments of taxes and assessments on
the Mortgaged Properties and related insurance premiums shall not, for the
purpose of calculating monthly distributions to the Certificateholders, be added
to the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
Subject to the provisions of the first paragraph of this
Section, the Trustee shall execute, at the written request of the Servicer, and
furnish to the Servicer and any Subservicer such documents as are necessary or
appropriate to enable the Servicer or any Subservicer to carry out their
servicing and administrative duties hereunder, and the Trustee hereby grants to
the Servicer a power of attorney, to be completed in the form of Exhibit AA
hereto, to carry out such duties. The Trustee shall not be liable for the
actions of the Servicer or any Subservicers under such powers of attorney.
If the Mortgage relating to a Mortgage Loan had a lien senior
to the Mortgage Loan on the related Mortgaged Property as of the Cut-off Date,
then the Servicer, in such capacity, may consent to the refinancing of the prior
senior lien, provided that the following requirements are met:
(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
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(ii) the interest rate, or, in the case of an adjustable rate
existing senior lien, the maximum interest rate, for the loan
evidencing the refinanced senior lien is no more than 2.0% higher than
the interest rate or the maximum interest rate, as the case may be, on
the loan evidencing the existing senior lien immediately prior to the
date of such refinancing; and
(iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.
With respect to the Mortgage Loans, the Servicer agrees that,
with respect to the Mortgagors of such Mortgage Loans, the Servicer shall
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company on a monthly basis.
SECTION 3.02 Subservicing; Enforcement of the Obligations of
Subservicers.
(a) The Mortgage Loans may be subserviced by a Subservicer on
behalf of the Servicer in accordance with the servicing provisions of this
Agreement, provided that the Subservicer is an approved ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac seller/servicer in good standing. The Servicer may perform any of its
servicing responsibilities hereunder or may cause the Subservicer to perform any
such servicing responsibilities on its behalf, but the use by the Servicer of
the Subservicer shall not release the Servicer from any of its obligations
hereunder and the Servicer shall remain responsible hereunder for all acts and
omissions of the Subservicer as fully as if such acts and omissions were those
of the Servicer. The Servicer shall pay all fees and expenses of any Subservicer
engaged by the Servicer from its own funds.
Notwithstanding the foregoing, the Servicer shall be entitled
to outsource one or more separate servicing functions to a Person (each, an
"Outsourcer") that does not meet the eligibility requirements for a Subservicer,
so long as such outsourcing does not constitute the delegation of the Servicer's
obligation to perform all or substantially all of the servicing of the related
Mortgage Loans to such Outsourcer. In such event, the use by the Servicer of any
such Outsourcer shall not release the Servicer from any of its obligations
hereunder and the Servicer shall remain responsible hereunder for all acts and
omissions of such Outsourcer as fully as if such acts and omissions were those
of the Servicer, and the Servicer shall pay all fees and expenses of the
Outsourcer from the Servicer's own funds.
(b) At the cost and expense of the Servicer, without any right
of reimbursement from the Depositor, Trustee, the Trust Fund, or the Collection
Account, the Servicer shall be entitled to terminate the rights and
responsibilities of its Subservicer and arrange for any servicing
responsibilities to be performed by a successor Subservicer meeting the
requirements set forth in Section 3.02(a), provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Servicer, at the
Servicer's option, from electing to service the related Mortgage Loans itself.
In the event that the Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 7.01, and if requested to do so by
the Trustee, the Servicer shall at its own cost and expense terminate the rights
and responsibilities of its Subservicer as soon as is reasonably possible. The
Servicer shall pay all fees, expenses or penalties necessary in order to
terminate the
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rights and responsibilities of its Subservicer from the Servicer's own funds
without any right of reimbursement from the Depositor, Trustee, the Trust Fund,
or the Collection Account.
(c) Notwithstanding any of the provisions of this Agreement
relating to agreements or arrangements between the Servicer and its Subservicer,
the Servicer and its Outsourcer, or any reference herein to actions taken
through the Subservicer, the Outsourcer, or otherwise, the Servicer shall not 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 Mortgage Loans. The Servicer
shall be entitled to enter into an agreement with its Subservicer and Outsourcer
for indemnification of the Servicer or Outsourcer, as applicable, by such
Subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
For purposes of this Agreement, the Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
related Mortgage Loans that are received by a related Subservicer or Outsourcer,
as applicable, regardless of whether such payments are remitted by the
Subservicer or Outsourcer, as applicable, to the Servicer.
Any Subservicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Subservicer or an Outsourcer
shall be deemed to be between the Subservicer or an Outsourcer, and the Servicer
alone, and the Depositor and the Trustee shall have no obligations, duties or
liabilities with respect to a Subservicer including no obligation, duty or
liability of the Depositor and Trustee or the Trust Fund to pay a Subservicer's
fees and expenses.
SECTION 3.03 [Reserved].
SECTION 3.04 Trustee to Act as Servicer.
(a) In the event that the Servicer shall for any reason no
longer be the Servicer hereunder (including by reason of an Event of Default),
the Trustee or its successor shall thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Servicer pursuant to Section
3.09 hereof or any acts or omissions of the related predecessor Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law or (iii) deemed to have made any representations and warranties
of the Servicer hereunder). Any such assumption shall be subject to Section 7.02
hereof.
The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement or substitute Subservicing Agreement and
the Mortgage Loans then being serviced thereunder and hereunder by the Servicer
and an accounting of amounts collected or held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the substitute
Subservicing Agreement to the assuming party.
(b) [reserved]
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SECTION 3.05 Collection of Mortgage Loans; Collection
Accounts; Certificate Account; Pre-Funding
Account; Capitalized Interest Account.
(a) Continuously from the date hereof until the principal and
interest on all Mortgage Loans have been paid in full or such Mortgage Loans
have become Liquidated Mortgage Loans, the Servicer shall proceed in accordance
with Accepted Servicing Practices to collect all payments due under each of the
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, the 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, the Servicer may also waive, modify or vary any term of any Mortgage
Loan or consent to the postponement of strict compliance with any such term or
in any manner grant indulgence to any Mortgagor if in the Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action);
provided, however, that the Servicer may not modify materially or permit any
Subservicer to modify any Mortgage Loan (unless such Mortgage Loan is in default
or, in the judgment of the 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,
provided, further, no such modification will be granted without the prior
consent of the Credit Insurance Provider if so required in the Credit Insurance
Policy and provided, further, that any such waiver, modification, postponement
or indulgence granted to a Mortgagor by the Servicer in connection with its
servicing of the related First Mortgage Loan shall not be considered relevant to
a determination of whether the Servicer has acted consistently with the terms
and standards of this Agreement, so long as in the Servicer's determination such
action is not materially adverse to the interests of the Certificateholders. In
the event of any such arrangement that permits the deferment of principal and
interest payment on any Mortgage Loan, the Servicer shall make Advances on the
related Mortgage Loan in accordance with the provisions of Section 4.01 during
the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements. The
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
(b) The Servicer shall segregate and hold all funds collected
and received pursuant to a Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Collection
Accounts, 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.,
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Home Equity Mortgage Pass-Through Certificates, Series 2004-4 " or, if
established and maintained by a Subservicer on behalf of the Servicer,
"[Subservicer's name], in trust for [Servicer's name]" or "[Subservicer's name],
as agent, trustee and/or bailee of principal and interest custodial account for
[Servicer's name], its successors and assigns, for various owners of interest in
[Servicer's name] mortgage-backed pools". 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 Servicer in accordance
with Section 3.08.
The Servicer shall deposit in the Collection Account within
two Business Days of receipt and retain therein, the following collections
remitted by Subservicers or payments received by the Servicer and payments made
by the Servicer subsequent to the Cut-off Date, other than 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 (including payments made by the
Credit Insurance Provider under the Credit Insurance Policy) on the
Mortgage Loans including amounts required to be deposited pursuant to
Section 3.09 (other than proceeds to be held in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with Section 3.09);
(v) all Advances made by the Servicer pursuant to Section
4.01;
(vi) with respect to each Principal Prepayment on the Mortgage
Loans, the Compensating Interest Payment, if any, for the related
Prepayment Period;
(vii) any amounts required to be deposited by the Servicer in
respect of net monthly income from REO Property pursuant to Section
3.11; and
(viii) any other amounts required to be deposited hereunder
including all collected Prepayment Charges.
The foregoing requirements for deposit into each Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, Ancillary Income need not be deposited
by the Servicer into such Collection Account. In addition, notwithstanding the
provisions of this Section 3.05, the Servicer may deduct from amounts received
by it, prior to deposit to the applicable Collection Account, any portion of any
Scheduled Payment representing the applicable Servicing Fee. In the event that
the Servicer shall remit any amount not required to be remitted, it may at any
time withdraw or direct the institution maintaining the related
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Collection Account to withdraw such amount from such Collection Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the Trustee or such
other institution maintaining such Collection Account which describes the
amounts deposited in error in such Collection Account. The Servicer shall
maintain adequate records with respect to all withdrawals made by it pursuant to
this Section. All funds deposited in a Collection Account shall be held in trust
for the Certificateholders until withdrawn in accordance with Section 3.08.
(c) On or prior to the Closing Date, the Trustee shall
establish and maintain, on behalf of the Certificateholders, the Certificate
Account. The Trustee shall, promptly upon receipt, deposit in the Certificate
Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee pursuant to Section 3.08(viii);
(ii) any amount deposited by the Trustee pursuant to Section
3.05(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 the Servicer shall remit to the Trustee any
amount not required to be remitted, it may at any time direct the Trustee to
withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering an
Officer's Certificate to the Trustee which describes the amounts deposited in
error in the Certificate Account. All funds deposited in the Certificate Account
shall be held by the Trustee in trust for the Certificateholders until disbursed
in accordance with this Agreement or withdrawn in accordance with Section
3.08(b). In no event shall the Trustee incur liability for withdrawals from the
Certificate Account at the direction of the Servicer.
(d) Each institution at which a Collection Account, 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 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 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 Servicer as servicing compensation and shall be remitted to
it monthly as provided herein. The amount of any realized losses in a Collection
Account incurred in any such account in respect of any such investments shall
promptly be deposited by the Servicer in the related Collection Account. The
Trustee in its fiduciary capacity shall not be liable for the amount of any loss
incurred in respect of any investment or lack of investment of funds held in a
Collection Account 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
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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) The Servicer shall give notice to the Trustee, the Seller,
each Rating Agency and the Depositor of any proposed change of the location of
the related Collection Account prior to any change thereof. The Trustee shall
give notice to the Servicer, the Seller, each Rating Agency and the Depositor of
any proposed change of the location of the Certificate Account prior to any
change thereof.
(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 November 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, Class A-2, Class A-3 and Class A-4 Certificates,
in accordance with the priorities set forth herein, on the November 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 September 2004, October 2004 and November 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 September 2004 and October 2004 Distribution
Dates, the Overfunded Interest Amount shall be withdrawn from the Capitalized
Interest Account and paid to the Depositor. Any funds remaining in the
Capitalized Interest Account immediately after the November 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 Servicer shall segregate and hold all funds
collected and received pursuant to a
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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 2004-4 and various mortgagors"
or, if established and maintained by a Subservicer on behalf of the Servicer,
"[Subservicer's name], in trust for [Servicer's name]" or "[Subservicer's name],
as agent, trustee and/or bailee of taxes and insurance custodial account for
[Servicer's name], its successors and assigns, for various owners of interest in
[Servicer's name] mortgage- backed pools". Funds deposited in the Escrow Account
may be drawn on by the Servicer in accordance with Section 3.06(b). The creation
of any Escrow Account shall be evidenced by a certification in the form of
Exhibit P-1 hereto, in the case of an account established with the Servicer, or
by a letter agreement in the form of Exhibit P-2 hereto, in the case of an
account held by a depository other than the Servicer. A copy of such
certification shall be furnished to the Depositor and Trustee.
(b) The Servicer shall deposit in its Escrow Account or
Accounts on a daily basis within one Business Day of receipt and retain therein:
(i) all Escrow Payments collected on account of the related
Mortgage Loans, for the purpose of effecting timely payment of any such
items as required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds which are to
be applied to the restoration or repair of any Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account
only to effect such payments as are required under this Agreement, as set forth
in Section 3.06(c). The Servicer shall be entitled to retain any interest paid
on funds deposited in the related Escrow Account by the depository institution,
other than interest on escrowed funds required by law to be paid to the
Mortgagor. To the extent required by law, the Servicer shall pay interest on
escrowed funds to the Mortgagor notwithstanding that the Escrow Account may be
non-interest bearing or that interest paid thereon is insufficient for such
purposes.
(c) Withdrawals from the Escrow Account or Accounts may be
made by the Servicer only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting
Escrow Payments for the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advances made
by the Servicer pursuant to this Agreement with respect to a related
Mortgage Loan, but only from amounts received on the related Mortgage
Loan which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage
Loan;
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(iv) for transfer to the related Collection Account to reduce
the principal balance of the related Mortgage Loan in accordance with
the terms of the related Mortgage and Mortgage Note;
(v) for application to restore or repair of the related
Mortgaged Property in accordance with the procedures outlined in
Section 3.09;
(vi) to pay to the Servicer, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in such
Escrow Account;
(vii) to clear and terminate such Escrow Account on the
termination of this Agreement; and
(viii) to remove funds inadvertently placed in the Escrow
Account by the Servicer.
(d) No later than the Closing Date, the Servicer shall
establish and maintain a sub- account of the Collection Account titled
"[Servicer's name], Simple Interest Excess Sub-Account in trust for the Holders
of Credit Suisse First Boston Mortgage Securities Corp., Home Equity Mortgage
Pass- Through Certificates, Series 2004-4 ". The Servicer shall, on each
Determination Date transfer from the Collection Account to the Simple Interest
Excess Sub-Account all Net Simple Interest Excess, if any, pursuant to Section
3.08(ix), and shall maintain a record of all such deposits.
(e) The Servicer shall withdraw amounts on deposit in the
Simple Interest Excess Sub- Account on each Determination Date for deposit to
the Certificate Account in an amount equal to the lesser of (i) the amount on
deposit therein, and (ii) the Net Simple Interest Shortfall for such
Distribution Date.
(f) The Servicer shall remit to the Trustee which shall
thereupon distribute to the Class X-1 Certificateholder, based on the
information provided to it by the Servicer, 90% of the balance in the Simple
Interest Excess Sub-Account on the Distribution Date each year occurring in
December, commencing in December 2004. Such distributions shall be deemed to be
made on a first-in, first-out basis. In addition, the Servicer shall clear and
terminate the Simple Interest Excess Sub-Account upon the termination of this
Agreement and retain any funds remaining therein.
(g) Amounts on deposit in the Simple Interest Excess
Sub-Account may be invested in Eligible Investments. All income and gain net of
any losses realized from any such balances or investment of funds on deposit in
the Simple Interest Excess Sub-Account shall be for the benefit of the Servicer
as servicing compensation and shall be remitted to it monthly. The amount of any
net investment losses in the Simple Interest Excess Sub-Account shall promptly
be deposited by the Servicer in such Simple Interest Excess Sub-Account.
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SECTION 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans; Inspections.
(a) The Servicer shall afford the Depositor 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 the
Servicer.
(b) The Servicer shall inspect the Mortgaged Properties as
often as deemed necessary by the Servicer in the Servicer's sole discretion, to
assure itself that the value of such Mortgaged Property is being preserved. In
addition, if any Mortgage Loan is more than 60 days delinquent, the Servicer
shall conduct subsequent inspections in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage guaranty insurer. The
Servicer shall keep a written or electronic report of each such inspection.
SECTION 3.08 Permitted Withdrawals from the Collection
Accounts and Certificate Account.
The Servicer may (and in the case of clause (viii) below,
shall) from time to time make withdrawals from the related Collection Account
for the following purposes:
(i) to pay to the Servicer (to the extent not previously
retained by the Servicer) the servicing compensation to which it is
entitled pursuant to Section 3.14, and to pay to the Servicer, as
additional servicing compensation, earnings on or investment income
with respect to funds in or credited to such Collection Account;
(ii) to reimburse the Servicer for unreimbursed Advances made
by it, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on the Mortgage Loan(s) in respect of
which any such Advance was made (including without limitation, late
recoveries of payments, Liquidation Proceeds and Insurance Proceeds,
amounts representing proceeds of other insurance policies, if any,
covering the related Mortgaged Property, rental and other income from
REO Property and proceeds of any purchase or repurchase of the related
Mortgage Loan to the extent deposited in the Collection Account);
(iii) to reimburse the Servicer for any Nonrecoverable
Advance;
(iv) to reimburse the Servicer for (A) unreimbursed Servicing
Advances, the Servicer's right to reimbursement pursuant to this clause
(A) with respect to any Mortgage Loan being limited to amounts received
on such Mortgage Loan which represent late payments of principal and/or
interest (including, without limitation, Liquidation Proceeds and
Insurance Proceeds, amounts representing proceeds of other insurance
policies, if any, covering the related Mortgaged Property, rental and
other income from REO Property and proceeds of any purchase or
repurchase of the related Mortgage Loan with respect to such Mortgage
Loan) respecting which any such advance was made and (B) for unpaid
Servicing Fees as provided in Section 3.11;
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(v) to pay to the purchaser, with respect to each Mortgage
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received thereon
after the date of such purchase;
(vi) to reimburse the Servicer or the Depositor for expenses
incurred by any of them and reimbursable pursuant to Section 6.03
hereof;
(vii) to withdraw any amount deposited in such Collection
Account and not required to be deposited therein;
(viii) on or prior to the Servicer Cash Remittance Date, to
withdraw an amount equal to the Available Funds (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 definition of "Available Funds" and remit such
amount to the Trustee for deposit in the Certificate Account;
(ix) to deposit in the Simple Interest Excess Sub-Account any
amount required to be deposited therein pursuant to Section 3.06(d);
(x) to clear and terminate such Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof; and
(xi) to invest funds in certain Eligible Investments and to
transfer funds to another Eligible Account.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan basis for the purpose of justifying any withdrawal from the
Collection Account pursuant to such subclauses (i), (ii), (iv) and (v). Prior to
making any withdrawal from a Collection Account pursuant to subclause (iii), the
Servicer shall deliver to the Trustee a certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loans(s), and their
respective portions of such Nonrecoverable Advance.
The Trustee shall withdraw funds from the Certificate Account
for distributions to the Certificateholders, the Credit Insurance Provider 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 Servicer for deposit to the
Collection Account any amount deposited in the Certificate Account and
not required to be deposited therein; and
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(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.
The Servicer shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the related Mortgage Loans, which policy shall provide
coverage in an amount equal to the amount at least equal to the lesser of (i)
the maximum insurable value of the improvements securing such Mortgage Loan and
(ii) the greater of (A) the outstanding principal balance of the Mortgage Loan
and (B) an amount such that the proceeds of such policy shall be sufficient to
prevent the Mortgagor and/or the mortgagee from becoming co-insurer. Any amounts
collected by the Servicer under any such policy relating to a Mortgage Loan (for
the avoidance of doubt, remaining after application of any such amounts to any
related First Mortgage Loan) shall be deposited in the related Collection
Account subject to withdrawal pursuant to Section 3.08. Such policy may contain
a deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a standard hazard insurance policy,
and there shall have been a loss which would have been covered by such policy,
the Servicer shall deposit in the related Collection Account at the time of such
loss the amount not otherwise payable under the blanket policy because of such
deductible clause which is in excess of a deductible under a standard hazard
insurance policy, such amount to be deposited from the Servicer's funds, without
reimbursement therefor. Upon request of the Trustee, the Servicer shall cause to
be delivered to the Trustee a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to the Trustee. In
connection with its activities as Servicer of the Mortgage Loans, the Servicer
agrees to present, on behalf of itself, the Depositor, and the Trustee for the
benefit of the Certificateholders, claims under any such blanket policy.
Pursuant to Section 3.05, any amounts collected by the
Servicer under any such policies (other than amounts to be deposited in the
related Escrow Account and applied to the restoration or repair of the related
Mortgaged Property, or property acquired in liquidation of the Mortgage Loan, or
to be released to the Mortgagor, in accordance with the Servicer's normal
servicing procedures) shall be deposited in the related Collection Account
(subject to withdrawal pursuant to Section 3.08). Any costs incurred by the
Servicer in maintaining such insurance shall be recoverable by the Servicer as a
Servicing Advance out of payments by the related Mortgagor or out of Insurance
Proceeds or Liquidation Proceeds. Notwithstanding anything to the contrary in
this paragraph, the Servicer shall be required to pay the costs of maintaining
any insurance contemplated by this Section 3.09 only to the extent that such
advances, in the good faith judgment of the Servicer, will be recoverable.
The Servicer need not obtain the approval of the Trustee prior
to releasing any Insurance Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in accordance
with Accepted Servicing Practices. At a minimum, the Servicer shall comply with
the following conditions in connection with any such release of Insurance
Proceeds in excess of $10,000:
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(i) the Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Servicer shall take all steps necessary to preserve
the priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
and
(iii) pending repairs or restoration, the Servicer shall place
the Insurance Proceeds in the related Escrow Account, if any.
If the Trustee is named as an additional loss payee, the
Servicer is hereby empowered to endorse any loss draft issued in respect of such
a claim in the name of the Trustee.
SECTION 3.10 Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
The Servicer shall use its best efforts to enforce any
"due-on-sale" provision contained in any related Mortgage or Mortgage Note and
to deny assumption by the person to whom the Mortgaged Property has been or is
about to be sold whether by absolute conveyance or by contract of sale, and
whether or not the Mortgagor remains liable on the Mortgage and the Mortgage
Note. When the Mortgaged Property has been conveyed by the Mortgagor, the
Servicer shall, to the extent it has knowledge of such conveyance, exercise its
rights to accelerate the maturity of such Mortgage Loan under the "due-on-sale"
clause applicable thereto, provided, however, that the Servicer shall not
exercise such rights if prohibited by law from doing so or if the exercise of
such rights would impair or threaten to impair any recovery under the related
Primary Insurance Policy, if any or, if consistent with Accepted Servicing
Practices, the Servicer believes the collections and other recoveries in respect
of such Mortgage Loans could reasonably be expected to be maximized if the
Mortgage Loan were not accelerated.
If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on- sale" clause or, if any of the other
conditions set forth in the last sentence of the preceding paragraph apply, the
Servicer shall enter into (i) an assumption and modification agreement with the
person to whom such property has been conveyed, pursuant to which such person
becomes liable under the Mortgage Note and the original Mortgagor remains liable
thereon or (ii) in the event the Servicer is unable under applicable law to
require that the original Mortgagor remain liable under the Mortgage Note and
the Servicer has the prior consent of the primary mortgage guaranty insurer, a
substitution of liability agreement with the purchaser of the Mortgaged Property
pursuant to which the original Mortgagor is released from liability and the
purchaser of the Mortgaged Property is substituted as Mortgagor and becomes
liable under the Mortgage Note. Notwithstanding the foregoing, the Servicer
shall not be deemed to be in default under this Section by reason of any
transfer or assumption which the Servicer reasonably believes it is restricted
by law from preventing, for any reason whatsoever. In connection with any such
assumption, no material term of the Mortgage Note, including without limitation,
the Mortgage Rate borne by the related Mortgage Note, the term of the Mortgage
Loan or the outstanding principal amount of the Mortgage Loan shall be changed.
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Subject to the Servicer's duty to enforce any due-on-sale
clause to the extent set forth in this Section 3.10, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Servicer shall prepare and
deliver or cause to be prepared and delivered to the Trustee for signature and
shall direct, in writing, the Trustee to execute the assumption agreement with
the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
may be changed. Together with each such substitution, assumption or other
agreement or instrument delivered to the Trustee for execution by it, the
Servicer shall deliver an Officer's Certificate signed by a Servicing Officer
stating that the requirements of this Section 3.10 have been met in connection
therewith. The Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Servicer for entering into an assumption, modification or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.
SECTION 3.11 Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans.
(a) (i) The Servicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the related Mortgage Loans as come into and continue in default and as to
which no satisfactory arrangements can be made for collection of delinquent
payments. With respect to such of the Mortgage Loans as come into and continue
in default, the Servicer will decide whether to (i) foreclose upon the Mortgaged
Properties securing such Mortgage Loans, (ii) write off the unpaid principal
balance of the Mortgage Loans as bad debt, (iii) take a deed in lieu of
foreclosure, (iv) accept a short sale (a payoff of the Mortgage Loan for an
amount less than the total amount contractually owed in order to facilitate a
sale of the Mortgaged Property by the Mortgagor) or permit a short refinancing
(a payoff of the Mortgage Loan for an amount less than the total amount
contractually owed in order to facilitate refinancing transactions by the
Mortgagor not involving a sale of the Mortgaged Property), (v) arrange for a
repayment plan, or (vi) agree to a modification in accordance with this
Agreement. In connection with such decision, the Servicer shall take such action
as (i) the Servicer would take under similar circumstances with respect to a
similar mortgage loan held for its own account for investment, (ii) shall be
consistent with Accepted Servicing Practices, (iii) the Servicer shall determine
consistently with Accepted Servicing Practices to be in the best interest of the
Trustee and Certificateholders, provided, that actions taken by the Servicer in
connection with its servicing of the related First Mortgage Loan shall not be
considered relevant to a determination of whether the Servicer has met the
standard set forth in this clause (iii), so long as in the Servicer's
determination such action is not materially adverse to the interests of the
Certificateholders and (iv) is consistent with the requirements of the insurer
under any
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Required Insurance Policy and the Credit Insurance Provider under the Credit
Insurance Policy; provided, however, that the 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 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 (x) that is not an Old
Republic Covered Loan or (y) for which coverage under the Credit Insurance
Policy is no longer available that is one hundred twenty (120) days delinquent,
the Servicer shall obtain a broker's price opinion with respect to the related
Mortgaged Property and shall use all reasonable efforts to obtain a total
indebtedness balance (including, but not limited to, unpaid principal, interest,
escrows, taxes and expenses) for any related senior lien. The cost of obtaining
any such broker's price opinion shall be reimbursable to the Servicer as a
Servicing Advance pursuant to Section 3.08(iii) or (iv). After obtaining the
related broker's price opinion, the Servicer will determine whether any
Significant Net Recovery is possible through foreclosure proceedings or other
liquidation of the related Mortgaged Property. If the Servicer determines that
(x) no Significant Net Recovery is possible or (y) the potential Net Recoveries
are anticipated to be an amount, determined by the Servicer in its good faith
judgment and in light of other mitigating circumstances, that is insufficient to
warrant proceeding through foreclosure or other liquidation of the related
Mortgaged Property, it may, at its discretion, charge off such delinquent
Mortgage Loan in accordance with subsections (a)(iii) and (a)(iv) below.
(iii) With respect to any Mortgage Loan (x) that is not an Old
Republic Covered Loan or (y) for which coverage under the Credit Insurance
Policy is no longer available, if the Servicer determines based on the broker's
price opinion obtained under paragraph (a)(ii) above and other relevant
considerations that (x) no Significant Net Recovery is possible through
foreclosure proceedings or other liquidation of the related Mortgaged Property
or (y) the potential Net Recoveries are anticipated to be an amount, determined
by the Servicer in its good faith judgment and in light of other mitigating
circumstances, that is insufficient to warrant proceeding through foreclosure or
other liquidation of the related Mortgaged Property, it will be obligated to
charge off the related Mortgage Loan at the time such Mortgage Loan becomes 180
days delinquent. Once a Mortgage Loan has been charged off, the Servicer will
discontinue making Advances, the Servicer will not be entitled to any additional
servicing compensation (except as described in paragraphs(a)(ii) or (a)(iv) of
this Section 3.11), the Charged Off Loan will give rise to a Realized Loss, and
the Servicer will follow the procedures described in paragraph (a)(iv) below. If
the Servicer determines that (x) a Significant Net Recovery is possible through
foreclosure proceedings or other liquidation of the Mortgaged Property and (y)
the potential Net Recoveries are anticipated to be an amount, determined by the
Servicer in its good faith judgment and in light of other mitigating
circumstances, that is sufficient to warrant proceeding through foreclosure or
other liquidation of the related Mortgaged Property, the Servicer
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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) Any Mortgage Loan that becomes a Charged Off Loan may
continue to be serviced by Wilshire for the Certificateholders using Wilshire
Special Servicing. Wilshire will accrue, but not be entitled to any Servicing
Fees and reimbursement of expenses in connection with such Charged Off Loans,
except to the extent of funds available from the aggregate amount of recoveries
on all Charged Off Loans. Such aggregate recovery amounts on Charged Off Loans
shall be paid to Wilshire first, as reimbursement of any outstanding and unpaid
expenses, and second, as any accrued and unpaid Servicing Fees. Wilshire will
only be entitled to previously accrued Servicing Fees and expenses on any such
Charged Off Loans. Wilshire will not be entitled to receive any future unaccrued
Servicing Fees or expenses from collections on such Charged Off Loans. Any
Charged Off Loan serviced by Wilshire using Wilshire Special Servicing shall be
so serviced until the Release Date described below. Any Net Recoveries on such
Charged Off Loans received prior to the Release Date will be included in
Available Funds.
On the date (the "Release Date") which is no more than six
months after the date on which Wilshire begins servicing any Charged Off Loans
using Wilshire Special Servicing, unless specific Net Recoveries are anticipated
by Wilshire on a particular Charged Off Loan (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 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; 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
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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 Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Trustee otherwise requests, an environmental inspection or review of
such Mortgaged Property conducted by a qualified inspector shall be arranged for
by the Servicer. Upon completion of the inspection, the Servicer shall promptly
provide the Trustee with a written report of environmental inspection. It is
understood by the parties hereto that any cost related to such inspection shall
be advanced by the 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 Servicer shall not proceed with foreclosure or
acceptance of a deed in lieu of foreclosure if the estimated costs of the
environmental clean up, as estimated in the environmental inspection report,
together with the Servicing Advances made by the Servicer and the estimated
costs of foreclosure or acceptance of a deed in lieu of foreclosure exceeds the
estimated value of the Mortgaged Property. If however, the aggregate of such
clean up and foreclosure costs and Servicing Advances are less than or equal to
the estimated value of the Mortgaged Property, then the Servicer may, in its
reasonable judgment and in accordance with Accepted Servicing Practices, choose
to proceed with foreclosure or acceptance of a deed in lieu of foreclosure and
the Servicer shall be reimbursed for all reasonable costs associated with such
foreclosure or acceptance of a deed in lieu of foreclosure and any related
environmental clean up costs, as applicable, from the related Liquidation
Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the
Servicer, the Servicer shall be entitled to be reimbursed from amounts in the
related Collection Account pursuant to Section 3.08 hereof. In the event the
Servicer does not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure pursuant to the first sentence of this paragraph, the Servicer shall
be reimbursed for all Servicing Advances made with respect to the related
Mortgaged Property from the related Collection Account pursuant to Section 3.08
hereof, the Servicer shall have no further obligation to service such Mortgage
Loan under the provisions of this Agreement.
(b) With respect to any REO Property, the deed or certificate
of sale shall be taken in the name of 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 2004-4,
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 Servicer shall in accordance with Accepted Servicing Practices manage,
conserve, protect and operate each REO Property for the
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purpose of its prompt disposition and sale. The Servicer, either itself or
through an agent selected by the Servicer, shall manage, conserve, protect and
operate the REO Property in the same manner that it manages, conserves, protects
and operates other foreclosed property for its own account, and in the same
manner that similar property in the same locality as the REO Property is
managed. The Servicer may rent such property, as the Servicer deems to be in the
best interest of the Trustee and the Certificateholders for the period prior to
the sale of such REO Property on such terms and conditions and for such periods
as the Servicer deems to be in the best interest of the Trustee and the
Certificateholders. The Servicer shall furnish to the Trustee on or before each
Distribution Date a statement with respect to any REO Property covering the
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 Servicer shall
perform the tax reporting and withholding required by Sections 1445 and 6050J of
the Code with respect to foreclosures and abandonments, the tax reporting
required by Section 6050H of the Code with respect to the receipt of mortgage
interest from individuals and any tax reporting required by Section 6050P of the
Code with respect to the cancellation of indebtedness by certain financial
entities, by preparing such tax and information returns as may be required, in
the form required, and delivering the same to the Trustee for filing.
To the extent consistent with Accepted Servicing Practices,
the Servicer shall also maintain on each REO Property fire and hazard insurance
with extended coverage in amount which is equal to the outstanding principal
balance of the related Mortgage Loan (as reduced by any amount applied as a
reduction of principal at the time of acquisition of the REO Property),
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above. Any costs incurred by the Servicer in maintaining such insurance
shall be recoverable by the Servicer as a Servicing Advance out of payments by
the related Mortgagor or out of Insurance Proceeds or Liquidation Proceeds.
Notwithstanding anything to the contrary in this paragraph, the Servicer shall
be required to pay the costs of maintaining any insurance contemplated by this
Section 3.11(b) only to the extent that such advances, in the good faith
judgment of the Servicer, will be recoverable.
(c) In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Servicer shall dispose of such Mortgaged
Property prior to three years after the end of the calendar year of its
acquisition by the Trust Fund unless (i) the Trustee shall have been supplied
with an Opinion of Counsel to the effect that the holding by the Trust Fund of
such Mortgaged Property subsequent to such three-year period will not result in
the imposition of taxes on "prohibited transactions" of any REMIC hereunder as
defined in section 860F of the Code or cause any REMIC hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding, in which
case the Trust Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel) or (ii) the Servicer shall have
applied for, prior to the expiration of such three-year period, an extension of
such three-year period in the manner contemplated by Section 856(e)(3) of the
Code, in which case the three-year period shall be extended by the applicable
extension period. The Servicer shall be entitled to be reimbursed from the
Collection Account, as a Servicing Advance, for any costs incurred in obtaining
such Opinion of Counsel. Notwithstanding any other provision of this
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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 Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of
whose obligor is not a United States Person, as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a
deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on the Mortgage Loan.
(d) The decision of the Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO Properties,
net of reimbursement to the Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
applicable accrued and unpaid Servicing Fees, and unreimbursed Advances and
Servicing Advances, shall be applied to the payment of principal 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.
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(e) The proceeds from any liquidation of a Mortgage Loan, as
well as any income from an REO Property, if applicable, will be applied in the
following order of priority: first, to reimburse the Servicer for any related
unreimbursed Servicing Advances and Servicing Fees; second, to reimburse the
Servicer for any unreimbursed Advances; third, to reimburse the related
Collection Account for any Nonrecoverable Advances (or portions thereof) that
were previously withdrawn by the Servicer pursuant to Section 3.08(iii) that
related to such Mortgage Loan; fourth, to accrued and unpaid interest (to the
extent no Advance has been made for such amount or any such Advance has been
reimbursed) on the Mortgage Loan or related REO Property, at the per annum rate
equal to the related Mortgage Rate reduced by the related Servicing Fee Rate, to
the Due Date occurring in the month in which such amounts are required to be
distributed; and fifth, as a recovery of principal of the Mortgage Loan. Excess
proceeds, if any, from the liquidation of a Liquidated Mortgage Loan will be
retained by the Servicer as additional servicing compensation pursuant to
Section 3.14.
(f) [reserved].
(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 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 the Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Servicer will immediately notify the
Trustee (or the Custodian, as the case may be) by delivering, or causing to be
delivered a "Request for Release" substantially in the form of Exhibit M. Upon
receipt of such request, the Trustee (or the Custodian, as the case may be)
shall within three Business Days release the related Mortgage File to the
Servicer, and the Trustee shall within three Business Days of the Servicer's
direction execute and deliver to the Servicer the request for reconveyance, deed
of reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage in each case provided by the Servicer,
together with the Mortgage Note with written evidence of cancellation thereon.
The Servicer is authorized to cause the removal from the registration on the
MERS(R) System of such Mortgage, if applicable, and to execute and deliver, on
behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation or of partial or full release.
Expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Mortgagor to the extent
permitted by law and otherwise shall constitute a Servicing Advance. From time
to time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under any policy of flood
insurance, any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents
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included in the Mortgage File, the Trustee shall, within three Business Days of
delivery to the Trustee (or the Custodian, as the case may be) of a Request for
Release in the form of Exhibit M signed by a Servicing Officer, release the
Mortgage File to the Servicer. Subject to the further limitations set forth
below, the Servicer shall cause the Mortgage File or documents so released to be
returned to the Trustee (or the Custodian, as the case may be) when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan is
liquidated and the proceeds thereof are deposited in the related Collection
Account, in which case the Servicer shall deliver to the Trustee (or the
Custodian, as the case may be) a Request for Release in the form of Exhibit M,
signed by a Servicing Officer.
If the Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Servicer shall, if applicable, deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents (which, if acceptable by the related court,
may be copies) necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity.
SECTION 3.13 Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Servicer from time to time required to be delivered to the
Trustee pursuant to the terms hereof and shall account fully to the Trustee for
any funds received by the Servicer or which otherwise are collected by the
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan. All Mortgage Files and funds collected or held by, or under the
control of, the Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in a Collection Account,
shall be held by the Servicer for and on behalf of the Trustee and shall be and
remain the sole and exclusive property of the Trustee, subject to the applicable
provisions of this Agreement. The Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
related Collection Account, Certificate Account or any related Escrow Account,
or any funds that otherwise are or may become due or payable to the Trustee for
the benefit of the Certificateholders, to any claim, lien (other than the lien
of a related First Mortgage Loan), security interest, judgment, levy, writ of
attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement.
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SECTION 3.14 Servicing Fee.
As compensation for its services hereunder, the Servicer shall
be entitled to withdraw from the Collection Account or to retain from interest
payments on the related Mortgage Loans the amount of its Servicing Fee for each
Mortgage Loan, less any amounts in respect of its Servicing Fee payable by the
Servicer pursuant to Section 3.05(b)(vi). The Servicing Fee is limited to, and
payable solely from, the interest portion of such Scheduled Payments collected
by the Servicer or as otherwise provided in Section 3.08.
Additional servicing compensation in the form of Ancillary
Income shall be retained by the Servicer. The Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including the payment of any expenses incurred in connection with any
Subservicing Agreement entered into pursuant to Section 3.02) and shall not be
entitled to reimbursement thereof except as specifically provided for in this
Agreement.
SECTION 3.15 Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinate
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation regarding the related
Mortgage Loans required by applicable regulations of the OTS and the FDIC. Such
access shall be afforded without charge, but only upon reasonable and prior
written request and during normal business hours at the offices designated by
the Servicer. Nothing in this Section shall limit the obligation of the Servicer
to observe any applicable law prohibiting disclosure of information regarding
the Mortgagors and the failure of the Servicer to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section. Nothing in this Section 3.15 shall require the Servicer to
collect, create, collate or otherwise generate any information that it does not
generate in its usual course of business.
SECTION 3.16 Annual Statement as to Compliance.
Not later than the earlier of (a) March 15 of each calendar
year (other than the calendar year during which the Closing Date occurs) or (b)
with respect to any calendar year during which the Depositor's annual report on
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, 15 calendar days before the date on
which the Depositor's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission
(or, in each case, if such day is not a Business Day, the immediately preceding
Business Day), the Servicer shall deliver to the Depositor, the Rating Agencies
and the Trustee an Officer's Certificate stating, as to the signer thereof, that
(i) a review of the activities of the Servicer during the preceding calendar
year and of the performance of the Servicer under this Agreement has been made
under such officer's supervision, and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
under this Agreement throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof and the action being taken by the
Servicer to cure such default.
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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), the Servicer at its expense shall cause a nationally or
regionally recognized firm of independent public accountants (who may also
render other services to the Servicer, the Seller or any affiliate thereof)
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee and the Depositor to the effect that such
firm has examined certain documents and records relating to the servicing of
mortgage loans which the Servicer is servicing, which may include the related
Mortgage Loans or similar mortgage loans, and that, on the basis of such
examination, conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Guide for HUD Approved
Title II Approved Mortgagees and Loan Correspondent Programs, nothing has come
to their attention which would indicate that such servicing has not been
conducted in compliance with Accepted Servicing Practices, except for (a) such
exceptions as such firm shall believe to be immaterial, and (b) such other
exceptions as shall be set forth in such statement. In addition, the Servicer
shall disclose to such firm all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards set forth in this
Agreement. In rendering such statement, such firm may rely, as to matters
relating to direct servicing of mortgage loans by Subservicers, upon comparable
statements for examinations conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Guide for
HUD Approved Title II Approved Mortgagees and Loan Correspondent Programs
(rendered within one year of such statement) of independent public accountants
with respect to the related Subservicer. Copies of such statement shall be
provided by the Trustee to any Certificateholder upon request at the Servicer's
expense, provided such statement is delivered by the Servicer to the Trustee.
SECTION 3.18 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.
The Servicer shall maintain with responsible companies, at its
own expense, a blanket Fidelity Bond and an Errors and Omissions Insurance
Policy, with broad coverage on all officers, employees or other persons acting
in any capacity requiring such persons to handle funds, money, documents or
papers relating to the related Mortgage Loans ("Servicer Employees"). The amount
of coverage under any such Fidelity Bond and Errors and Omissions Insurance
Policy shall be at least equal to the coverage maintained by the Servicer in
order to be acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac to service loans for it or
otherwise in an amount as is commercially available at a cost that is generally
not regarded as excessive by industry standards. No provision of this Section
3.18 requiring such Fidelity Bond and Errors and Omissions Insurance Policy
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. The minimum coverage under any such bond and insurance
policy shall be at least equal to the corresponding amounts required by ▇▇▇▇▇▇
Mae. Upon the request of the Trustee, the Servicer shall cause to be delivered
to the Trustee a
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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
Agreement and the Credit Risk Manager shall look solely to the Servicer for all
information and data (including loss and delinquency information and data) and
loan level information and data relating to the servicing of the Mortgage Loans.
Upon receipt of notice from the Credit Insurance Provider with respect to any
claim rejected by the Credit Insurance Provider (the "Claims Report") under the
Credit Insurance Policy, the Credit Risk Manager shall review any such rejected
claim and shall make a recommendation, based on the information provided by the
Credit Insurance Provider, as to whether the claim was rejected due to the
Servicer's failure to comply with the terms of the Credit Insurance Policy or
the claims-filing procedures of the Credit Insurance Provider. The Credit Risk
Manager shall promptly notify the Depositor, the Seller, the Servicer and the
Trustee with written information regarding such recommendation and the basis of
such recommendation along with the related Claims Report. If the Credit Risk
Manager is no longer able to perform its duties hereunder, the Depositor shall
terminate the Credit Risk Manager and cause the appointment of a successor
Credit Risk Manager. Upon any termination of the Credit Risk Manager or the
appointment of a successor Credit Risk Manager, the Depositor shall give written
notice thereof to the Seller, the Servicer, the Trustee and each Rating Agency.
Notwithstanding the foregoing, the termination of the Credit Risk Manager
pursuant to this Section 3.19 shall not become effective until the appointment
of a successor Credit Risk Manager.
SECTION 3.20 Limitation Upon Liability of the Credit Risk
Manager.
Neither the Credit Risk Manager, nor any of the directors,
officers, employees or agents of the Credit Risk Manager, shall be under any
liability to the Trustee, the Certificateholders or the Depositor for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, in reliance upon information provided by the Servicer under the
Credit Risk Management Agreement or of errors in judgment; provided, however,
that this provision shall not protect the Credit Risk Manager or any such person
against liability that would otherwise be imposed by reason of willful
malfeasance, bad faith or gross negligence in its performance of its duties
under this Agreement or the Credit Risk Manager Agreement. The Credit Risk
Manager and any director, officer, employee or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder, and may
rely in good faith upon the accuracy of information furnished by the Servicer
pursuant to the Credit Risk Management Agreement in the performance of its
duties thereunder and hereunder.
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SECTION 3.21 Advance Facility.
(a) Wilshire is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility") under which (1)
Wilshire assigns or pledges to another Person (an "Advancing Person") the
Servicer's rights under this Agreement to be reimbursed for any Advances or
Servicing Advances and/or (2) an Advancing Person agrees to fund some or all
Advances and/or Servicing Advances required to be made by Wilshire pursuant to
this Agreement. No consent of the Trustee, Certificateholders or any other party
is required before Wilshire may enter into an Advance Facility; PROVIDED,
HOWEVER, that the consent of the Trustee (which consent shall not be
unreasonably withheld) shall be required before Wilshire may cause to be
outstanding at one time more than one Advance Facility with respect to Advances
or more than one Advance Facility with respect to Servicing Advances.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund Advances and/or Servicing Advances on the Servicer's
behalf, Wilshire shall remain obligated pursuant to this Agreement to make
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility. If Wilshire enters into an Advance Facility, and for so long as an
Advancing Person remains entitled to receive reimbursement for any Advances or
Servicing Advances outstanding and previously unreimbursed pursuant to this
Agreement, then Wilshire may elect by providing written notice to the Trustee
not to be permitted to reimburse itself for Advances and/or Servicing Advances,
as applicable, pursuant to Section 3.08 of this Agreement, but following any
such election Wilshire shall be required to include amounts collected that would
otherwise be retained by Wilshire to reimburse it for previously unreimbursed
Advances ("Advance Reimbursement Amounts") and/or previously unreimbursed
Servicing Advances ("Servicing Advance Reimbursement Amounts" and together with
Advance Reimbursement Amounts, "Reimbursement Amounts") (in each case to the
extent such type of Reimbursement Amount is included in the Advance Facility) in
the remittance to the Trustee made pursuant to this Agreement to the extent of
amounts on deposit in the Collection Account on the related Servicer Cash
Remittance Date. Notwithstanding anything to the contrary herein, in no event
shall Advance Reimbursement Amounts or Servicing Advance Reimbursement Amounts
be included in Interest Remittance Amounts or Principal Remittance Amounts or
distributed to Certificateholders. Wilshire, if making the election set forth
herein, shall report to the Trustee the portions of the Reimbursement Amounts
that consist of Advance Reimbursement Amounts and Servicing Advance
Reimbursement Amounts, respectively.
(b) If Wilshire enters into an Advance Facility and makes the
election set forth in Section 3.21(a), Wilshire and the related Advancing Person
shall deliver to the Trustee a written notice and payment instruction (an
"Advance Facility Notice"), providing the Trustee with written payment
instructions as to where to remit Advance Reimbursement Amounts and/or Servicing
Advance Reimbursement Amounts (each to the extent such type of Reimbursement
Amount is included within the Advance Facility) on subsequent Distribution
Dates. The payment instruction shall require the applicable Reimbursement
Amounts to be distributed to the Advancing Person or to a trustee or custodian
(an "Advance Facility Trustee") designated in the Advance Facility Notice. An
Advance Facility Notice may only be terminated by the joint written direction of
Wilshire and the related Advancing Person (and any related Advance Facility
Trustee); PROVIDED, HOWEVER, that the provisions of this Section 3.21 shall
cease to be applicable when all Advances and Servicing Advances funded by an
Advancing Person, and when all Advances and Servicing Advances (the
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rights to be reimbursed for which have been assigned or pledged to an Advancing
Person), have been repaid to the related Advancing Person in full.
(c) Reimbursement Amounts shall consist solely of amounts in
respect of Advances and/or Servicing Advances made with respect to the Mortgage
Loans for which Wilshire would be permitted to reimburse itself in accordance
with Section 3.08(ii), (iii) and (iv) hereof, assuming Wilshire had made the
related Advance(s) and/or Servicing Advance(s). Notwithstanding the foregoing,
no Person shall be entitled to reimbursement from funds held in the Collection
Account for future distribution to Certificateholders pursuant to the provisions
of Section 4.01. The Trustee shall not have any duty or liability with respect
to the calculation of any Reimbursement Amount and shall be entitled to rely
without independent investigation on the Advance Facility Notice and on the
Servicer's report of the amount of Advance Reimbursement Amounts and Servicing
Advance Reimbursement Amounts that were included in the remittance from Wilshire
to the Trustee pursuant to Section 3.08(viii). Wilshire shall maintain and
provide to any successor Servicer a detailed accounting on a loan-by-loan basis
as to amounts advanced by, pledged or assigned to, and reimbursed to any
Advancing Person. The successor Servicer shall be entitled to rely on any such
information provided by Wilshire and the successor Servicer shall not be liable
for any errors in such information.
(d) An Advancing Person who receives an assignment or pledge
of the rights to be reimbursed for Advances and/or Servicing Advances, and/or
whose obligations hereunder are limited to the funding of Advances and/or
Servicing Advances shall not be required to meet the criteria for qualification
of a Subservicer set forth in Section 3.02 hereof.
(e) With respect to any Advance Facility pursuant to which
Wilshire has made the election set forth in Section 3.21(a), the documentation
establishing any Advance Facility shall require that Reimbursement Amounts
distributed with respect to each Mortgage Loan be allocated to outstanding
unreimbursed Advances or Servicing Advances (as the case may be) made with
respect to that Mortgage Loan on a "first-in, first-out" (FIFO) basis. Such
documentation shall also require Wilshire to provide to the related Advancing
Person or Advance Facility Trustee loan-by-loan information with respect to each
Reimbursement Amount distributed by the Trustee to such Advancing Person or
Advance Facility Trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility Trustee to make the FIFO allocation of each
Reimbursement Amount with respect to each Mortgage Loan. Wilshire shall remain
entitled to be reimbursed by the Advancing Person or Advance Facility Trustee
for all Advances and Servicing Advances funded by Wilshire to the extent the
related rights to be reimbursed therefor have not been assigned or pledged to an
Advancing Person.
(f) If Wilshire enters into an Advance Facility, Wilshire
shall indemnify the Trustee and the Trust and any successor Servicer, as
applicable, from and against any claims, losses, liabilities or damages
resulting from any claim by the related Advancing Person, except to the extent
that such claim, loss, liability or damage resulted from or arose out of
negligence, recklessness or willful misconduct on the part of the successor
Servicer or the Trustee, or failure by the successor Servicer or the Trustee to
remit funds as required by Section 3.21(b). Any amendment to this Section 3.21
or to any other provision of this Agreement that may be necessary or appropriate
to effect the terms of an Advance Facility as described generally in this
Section 3.21, including amendments to
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add provisions relating to a successor Servicer, may be entered into by the
Trustee, the Seller and Wilshire without the consent of any Certificateholder
notwithstanding anything to the contrary in Section 10.01 of or elsewhere in
this Agreement.
SECTION 3.22 Maintenance of Credit Insurance Policy.
The Servicer shall exercise its commercially reasonable
efforts to maintain and keep the Credit Insurance Policy in full force and
effect throughout the term of this Agreement, unless coverage thereunder has
been exhausted through payment of claims. The Trustee shall pay on each
Distribution Date in accordance with Section 4.02(a) the Credit Insurance
Provider Fee from amounts on deposit in the Certificate Account.
In the event that Credit Insurance Policy is canceled or
terminated for any reason, or the claims-paying ability rating of the Credit
Insurance Provider is reduced below investment grade by both of the Rating
Agencies, the Servicer shall use its commercially reasonable efforts to obtain a
replacement Credit Insurance Policy from a Qualified Insurer that is acceptable
to each Rating Agency. Any such replacement policy will provide for an amount of
coverage equal to the then remaining coverage amount of the Credit Insurance
Policy, provided, however, that if the premium cost of the replacement policy
exceeds the premium cost of the Credit Insurance Policy, the coverage amount of
the replacement policy shall be reduced so that the premium cost therefore will
not exceed 100% of the premium cost of the Credit Insurance Policy.
Alternatively, at its option, the Depositor may provide other credit enhancement
acceptable to each Rating Agency, but is under no obligation to do so. In the
event that the claims-paying ability rating of the Credit Insurance Provider is
reduced to below investment grade by both of the Rating Agencies, upon receipt
by the Trustee of written notice of such downgrade of the Certificates and
written instruction from the Depositor, the Credit Insurance Policy shall be
canceled by the Trustee and the Credit Insurance Provider will not be entitled
to receive any additional premium payments after the related cancellation.
In connection with its activities as administrator and
servicer of the Mortgage Loans, the Servicer agrees to file, on behalf of
itself, the Trustee, the Depositor and the Certificateholders claims and provide
notices and other information to the Credit Insurance Policy in a timely fashion
in accordance with the terms of the Credit Insurance Policy and, in this regard,
to take such action as reasonably shall be necessary to permit recovery under
the Credit Insurance Policy respecting a defaulted Old Republic Covered Loan.
Any amounts collected by the Servicer under the Credit Insurance Policy shall be
deposited in the Collection Account pursuant to Section 3.05. The Servicer shall
comply will all applicable terms of the Credit Insurance Policy and the
claims-filing procedures of the Credit Insurance Provider, to the extent
necessary to avoid any adjustments to claims paid under the Credit Insurance
Policy.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01 Advances by the Servicer.
The Servicer shall deposit in a Collection Account an amount
equal to (i) with respect to the Mortgage Loans other than the Simple Interest
Mortgage Loans, 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 and (ii) with respect to the Simple
Interest Mortgage Loans, 30 day's interest on each such Mortgage Loan for which
the Scheduled Payment was due but not received during the applicable Due Period,
less the Servicing Fee; provided however, that with respect to any Balloon Loan
that is delinquent on its maturity date, the Servicer will not be required to
advance the related balloon payment but will be required to continue to make
Advances in accordance with this Section 4.01 with respect to such Balloon Loan
in an amount equal to an assumed scheduled payment that would otherwise be due
based on the original amortization schedule for that Mortgage Loan (with
interest at the Mortgage Rate less the Servicing Fee Rate). The Servicer's
obligation to make such Advances as to any related Mortgage Loan will continue
through the last Scheduled Payment due prior to the payment in full of such
Mortgage Loan, or through the date that the related Mortgaged Property has, in
the judgment of the Servicer, been completely liquidated; provided however, that
such obligation with respect to any Mortgage Loan shall cease if the Servicer
determines, in its reasonable opinion, that Advances with respect to such
Mortgage Loan are Nonrecoverable Advances; provided that the Servicer will be
required to make Advances until the earlier of (i) (x) if the Mortgage Loan is
an Old Republic Covered Loan and coverage under the Credit Insurance Policy is
available, through the earlier of (A) liquidation of the related Mortgaged
Property and (B) receipt of a payment with respect to such Mortgage Loan under
the Credit Insurance Policy and (y) if the Mortgage Loan is not an Old Republic
Covered Loan or if coverage under the Credit Insurance Policy is not available,
through the time at which the related Mortgage Loan becomes 120 days delinquent
or (ii) the time at which the Servicer determines that such Advances with
respect to such Mortgage Loan are Nonrecoverable Advances. In the event that the
Servicer determines that any such Advances are Nonrecoverable Advances, the
Servicer shall provide the Trustee with a certificate signed by a Servicing
Officer evidencing such determination.
If an Advance is required to be made hereunder, the Servicer
shall on the second Business Day immediately preceding the Distribution Date
immediately following the related Determination Date either (i) deposit in the
Collection Account from its own funds an amount equal to such Advance, (ii)
cause to be made an appropriate entry in the records of the Collection Account
that funds in such account being held for future distribution or withdrawal have
been, as permitted by this Section 4.01, used by the Servicer to make such
Advance or (iii) make Advances in the form of any combination of clauses (i) and
(ii) aggregating the amount of such Advance. Any such funds being held in a
Collection Account for future distribution and so used shall be replaced by the
Servicer from its own funds by deposit in such Collection Account on or before
any future Distribution Date in which such funds would be due. The Servicer
shall be entitled to be reimbursed from the Collection Account for all Advances
of its own funds made pursuant to this Section as provided in Section 3.08.
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SECTION 4.02 Priorities of Distribution.
(a) On each Distribution Date, prior to making distributions
to the holders of the Certificates, the Trustee first, shall pay itself the
Trustee's Fee for such Distribution Date, second, shall pay the Credit Risk
Manager the Credit Risk Manager Fee and third, shall remit to the Credit
Insurance Provider the Credit Insurance Provider Fee for such Distribution Date.
(b) With respect to the Available Funds, including any funds
received from the Credit Insurance Policy, on each Distribution Date, the
Trustee shall withdraw such Available Funds from the Certificate Account and
based on the information provided to it by the Servicer, apply such funds to
distributions on the Certificates in the following order and priority and, in
each case, to the extent of such Available Funds remaining:
(i) On each Distribution Date, the Trustee shall distribute
the Interest Remittance Amount for such date in the following order of
priority:
A. to the Senior Certificates, 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 M-6 Certificates, Current Interest and
any Carryforward Interest for such Class and such
Distribution Date;
H. to the Class B-1 Certificates, Current Interest and
any Carryforward Interest for such Class and such
Distribution Date;
I. to the Class B-2 Certificates, Current Interest and
any Carryforward Interest for such Class and such
Distribution Date;
J. to the Class B-3 Certificates, Current Interest and
any Carryforward Interest for such Class and such
Distribution Date;
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K. On the Distribution Dates occurring in September
2004, October 2004 and November 2004, to the
Depositor an amount equal to the amount received
during the related Due Period which constitutes
Subsequent Mortgage Loan Interest; and
L. 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 K. 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:
A. commencing on the Distribution Date in November 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 as follows: (a) first,
concurrently on a pro rata basis, as follows: (x) to
the Class A-1 Certificates, until the Class Principal
Balance thereof has been reduced to zero and (y) to
the Class A-2 Certificates and Class A-3
Certificates, with the total amount under this clause
(ii)(B)(a)(y) 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 and (b) second, to
the Class A-4 Certificates, 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;
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H. to the Class M-6 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
I. to the Class B-1 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
J. to the Class B-2 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
K. to the Class B-3 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero; and
L. 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 K. 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:
A. commencing on the Distribution Date in November 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 Certificates, the Senior Principal
Payment Amount for such Distribution Date, allocated
as follows: concurrently on a pro rata basis, as
follows: (a) first, concurrently on a pro rata basis,
as follows: (x) to the Class A-1 Certificates, until
the Class Principal Balance thereof has been reduced
to zero and (y) to the Class A-2 Certificates and
Class A-3 Certificates, with the total amount under
this clause (iii)(B)(a)(y) 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 and (b) second, to the Class A-4 Certificates,
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;
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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 M-6 Certificates, the Class M-6
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-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;
J. to the Class B-2 Certificates, the Class B-2
Principal Payment Amount for such Distribution Date,
until the Class Principal Balance of such Class has
been reduced to zero;
K. to the Class B-3 Certificates, the Class B-3
Principal Payment Amount for such Distribution Date,
until the Class Principal Balance of such Class has
been reduced to zero;
L. 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 K. above.
(iv) On each Distribution Date, the Trustee shall distribute
the Monthly Excess Cashflow for such date in the following order of
priority:
A. an amount equal to the aggregate Realized Losses on
the Mortgage Loans incurred during the related
Collection Period, such amount to be added to the
Principal Payment Amount and distributed as set forth
above in Section 4.02(b)(ii) and (iii) (any such
amount, an "Excess Cashflow Loss Payment");
B. on the Distribution Date in September 2004, an amount
equal to the Monthly Excess Cashflow remaining after
the distribution in clause (iv)A. above to the Class
X-1 Certificates;
C. (I) except for the first Distribution Date,
until the Overcollateralization Amount
equals the Targeted Overcollateralization
Amount for such
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date, on each Distribution Date (a) prior to
the Stepdown Date or (b) with respect to
which a Trigger Event has occurred, to the
extent of Monthly Excess Interest for such
Distribution Date, to fund any principal
distributions to the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-R, Class A-RL,
Class P, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3 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-4, Class A- R,
Class A-RL, Class P, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3
Certificates required to be made on such
Distribution Date set forth above in clause
(iii) above, after giving effect to the
distribution of the Principal Payment Amount
for such Distribution Date, in accordance
with the priorities set forth therein;
D. to the Class M-1 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
E. to the Class M-2 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
F. to the Class M-3 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
G. to the Class M-4 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
H. to the Class M-5 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
I. to the Class M-6 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
J. to the Class B-1 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
K. to the Class B-2 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
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L. to the Class B-3 Certificates, any Deferred Amount
for such Class, with interest thereon at the
Pass-Through Rate for such Class;
M. to the Class X-1 Certificate, the Class X-1
Distributable Amount for such Distribution Date
reduced by amounts distributed pursuant to clause L.
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
N. 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 N. shall not
be paid with respect to the Class A-R Certificate or
Class A-RL Certificates, as applicable, but shall be
paid instead with respect to the Class X-1
Certificates pursuant to a contract that exists under
this Agreement between the Class A-R
Certificateholders or Class A-RL Certificateholders
and the Class X-1 Certificateholders.
(v) On each Distribution Date, the Trustee shall distribute to
the Holder of the Class P Certificate, the aggregate of all Prepayment
Charges collected during the preceding Prepayment Period.
(vi) [reserved]
(vii) On each Distribution Date, following the foregoing
distributions, an amount equal to the amount of Net Recoveries included
in the Available Funds for such Distribution Date shall be applied to
increase the Class Principal Balance of the Class of Certificates with
the Highest Priority up to the extent of such Realized Losses
previously allocated to that Class of Certificates pursuant to Section
4.05. An amount equal to the amount of any remaining Net Recoveries
shall be applied to increase the Class Principal Balance of the Class
of Certificates with the next Highest Priority, up to the amount of
such Realized Losses previously allocated to that Class of Certificates
pursuant to Section 4.05, and so on. Holders of such Certificates will
not be entitled to any distribution in respect of interest on the
amount of such increases for any Interest Accrual Period preceding the
Distribution Date on which such increase occurs. Any such increases
shall be applied to the Class Principal Balance of each Certificate of
such Class in accordance with its respective Percentage Interest.
SECTION 4.03 [Reserved]
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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-3 and REMIC 2 Regular Interest MTI-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interests MTI-B-3 have
been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC
2 Regular Interest MTI-AA, REMIC 2 Regular Interest MTI-B-2 and REMIC 2 Regular
Interest MTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC 2 Regular Interest MTI-B-2 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 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-6 and REMIC 2 Regular Interest MTI-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest MTI-M-6 has been reduced to zero; seventh, 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; eighth, 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;
100
ninth, 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; tenth, 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 eleventh, 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
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇, 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 ▇▇▇-▇▇▇-▇▇▇▇. Parties that are unable to use
the website are entitled to have a paper copy mailed to them via first class
mail by written notice to the Trustee at its Corporate Trust Office. The
Trustee's responsibility for disbursing the above information to the
Certificateholders is limited to the availability, timeliness and accuracy of
the information derived from the Servicer. The foregoing information shall be
reported to the Trustee each month on or before the Servicer Data Remittance
Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in, items (i)(c), (i)(d), (i)(g), (i)(j), (i)(k),
(ii)(c), (ii)(d), (ii)(g), (ii)(i), (v)(d), (v)(e) and (v)(s) of Exhibit V
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
SECTION 4.07 Distributions on the REMIC 1 Regular Interests
and REMIC 2 Regular Interests.
(a) Distributions on the REMIC 1 Regular Interests.
On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 1
to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the holders of the Class A-RL
Certificates, as the case may be:
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(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.
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 ▇▇▇-▇▇, ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, MTI-M-1, MTI-M-2, MTI-M-3, MTI-M-4, MTI-M-5, ▇▇▇-▇-▇,
▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, 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
102
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-A-4, 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-M-6, REMIC 2
Regular Interest MTI-B-1, REMIC 2 Regular Interest MTI-B-2 and REMIC 2 Regular
Interest MTI-B-3 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 ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇, MTI-M-1, MTI-M-2,
MTI-M-3, MTI-M-4, MTI-M-5, MTI- ▇-▇, ▇▇▇-▇-▇, ▇▇▇-▇-▇ and MTI-B-3, 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).
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SECTION 4.08 [Reserved].
SECTION 4.09 Prepayment Charges.
Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment of a Mortgage Loan, the Servicer may not
waive any Prepayment Charge or portion thereof required by the terms of the
related Mortgage Note unless (i) the Mortgage Loan is in default or foreseeable
default and such waiver (a) is standard and customary in servicing similar
mortgage loans to the Mortgage Loans and (b) would, in the reasonable judgment
of the Servicer, maximize recovery of total proceeds taking into account the
value of such Prepayment Charge and the related Mortgage Loan or (ii)(A) the
enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium,
receivership, or other similar law relating to creditors' rights generally or
(2) due to acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law. For the avoidance of doubt, the Servicer may waive a Prepayment
Charge in connection with a short sale or short payoff on a defaulted Mortgage
Loan. If the Servicer has waived all or a portion of a Prepayment Charge
relating to a Principal Prepayment, other than as provided above, the Servicer
shall deliver to the Trustee no later than the Business Day immediately
preceding the next Distribution Date, for deposit into the Certificate Account
the amount of such Prepayment Charge (or such portion thereof as had been
waived) for distribution in accordance with the terms of this Agreement;
provided, however, the Servicer shall not have any obligation to pay the amount
of any uncollected Prepayment Charge under this Section 4.09 if the Servicer did
not have a copy of the related Mortgage Note, the Servicer requested via email a
copy of the same from the Trustee and the Trustee failed to provide such a copy
within two (2) Business Days of receipt of such request. If the Servicer has
waived all or a portion of a Prepayment Charge for any reason, it shall promptly
notify the Trustee thereof and shall include such information in any monthly
reports it provides the Trustee. Notwithstanding any provision in this Agreement
to the contrary, in the event the Prepayment Charge payable under the terms of
the Mortgage Note is different from the amount of the Prepayment Charge set
forth in the Mortgage Loan Schedule or other information provided to the
Servicer, the Servicer shall rely conclusively on the Prepayment Charge as set
forth under the terms of the Mortgage Note. To the extent the Prepayment Charge
payable under the terms of the Mortgage Note is less than the amount of the
Prepayment Charge set forth in the Mortgage Loan Schedule or other information
provided to the Servicer, the Servicer shall not have any liability or
obligation with respect to such difference, and in addition shall not have any
liability or obligation to pay the amount of any uncollected Prepayment Charge
if the failure to collect such amount is the direct result of inaccurate or
incomplete information on the Mortgage Loan Schedule.
SECTION 4.10 Servicer to Cooperate.
The Servicer shall provide to the Trustee the information set
forth in Exhibit Z hereto in such form as the Trustee shall reasonably request
with respect to each Mortgage Loan no later than twelve noon on the Servicer
Data Remittance Date to enable the Trustee to calculate the amounts to be
distributed to each Class of Certificates and otherwise perform its
distribution, accounting and reporting requirements hereunder.
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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
105
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
106
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Servicer shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Seller and the Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate or a Residual Certificate, such requirement is satisfied only by the
Trustee's receipt of a representation letter from the transferee substantially
in the form of Exhibit K or Exhibit L, or Exhibit I, as applicable), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code,
nor a person acting on behalf of any such plan or arrangement nor using the
assets of any such plan or arrangement to effect such transfer or (ii) in the
case of any such ERISA- Restricted Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel shall
not be an expense of either the Trustee or the Trust Fund, addressed to the
Trustee for the benefit of the Trustee, the Depositor and the Servicer and on
which they may rely, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee, the Depositor
or the Servicer to any obligation in addition to those expressly undertaken in
this Agreement or to any liability. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA-Restricted Certificate to or
on behalf of an employee benefit plan subject to ERISA or to the Code without
the delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect.
To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of transfer of any ERISA-Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
107
(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,
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which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Seller or the Servicer, to the effect that the elimination of such
restrictions will not cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book- Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Depositor is unable to locate a qualified successor, (y) the Depositor, with the
consent of the Depository Participants, advises the Trustee in writing that it
elects to terminate the book-entry system through the Depository or (z) after
the occurrence of an Event of Default, Certificate Owners representing at least
51% of the Certificate Balance of the Book-Entry Certificates together advise
the Trustee and the Depository through the Depository Participants in writing
that the continuation of a book-entry system through the Depository is no longer
in the best 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 Servicer, the Depositor or the Trustee shall be
liable for any delay in delivery of any instruction required under this section
and each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Trustee with an adequate inventory
of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Trustee such security or indemnity as may be required by it to hold it harmless,
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, countersign and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be 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 Servicer, the Trustee and any agent of the Servicer or the
Trustee may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and none of the
Servicer, the Trustee or any agent of the Servicer or the Trustee shall be
affected by any notice to the contrary.
SECTION 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or the Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.06 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York, New York where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR, THE SELLER AND THE SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the
Sellers and the Servicer.
The Depositor, the Seller and the Servicer shall each be
liable in accordance herewith only to the extent of the obligations specifically
and respectively imposed upon and undertaken by them herein.
SECTION 6.02 Merger or Consolidation of the Depositor, the
Seller or the Servicer.
The Depositor, the Seller and the Servicer will each keep in
full effect its existence, rights and franchises as a corporation under the laws
of the United States or under the laws of one of the states thereof or as a
federally chartered savings bank organized under the laws of the United States
and will each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Mortgage Loans and to perform its respective duties under this Agreement.
Notwithstanding the foregoing, the Seller or the Servicer may be merged or
consolidated into another Person in accordance with the following paragraph.
Any Person into which the Depositor, the Seller or the
Servicer may be merged or consolidated, or any Person resulting from any merger
or consolidation to which the Depositor, the Seller or the Servicer shall be a
party, or any person succeeding to the business of the Depositor, the Seller or
the Servicer, shall be the successor of the Depositor, the Seller or the
Servicer, as the case may be, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor or
surviving Person with respect to a merger or consolidation of the Servicer shall
be an institution which is a ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac approved company in good
standing. In addition to the foregoing, there must be delivered to the Trustee a
letter from each of the Rating Agencies, to the effect that such merger,
conversion or consolidation of the Servicer will not result in a
disqualification, withdrawal or downgrade of the then current rating of any of
the Certificates.
SECTION 6.03 Limitation on Liability of the Depositor, the
Seller, the Servicer and Others.
None of the Depositor, the Seller, the Servicer nor any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Seller, the Servicer or any such
Person against any breach of representations or warranties made by it herein or
protect the Depositor, the Seller, the Servicer or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties
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hereunder. The Depositor, the Seller, the Servicer and any director, officer,
employee or agent of the Depositor, the Seller or the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor, the Seller,
the Trustee, the Servicer and any director, officer, employee or agent of the
Depositor, the Seller, the Trustee, or the Servicer shall be indemnified by the
Trust Fund out of the Collection Account and held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Seller or the
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and which
in its opinion may involve it in any expense or liability; provided, however,
that any of the Depositor, the Seller or the Servicer may in its discretion
undertake any such action that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and interests of
the Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor, the Seller
and the Servicer shall be entitled to be reimbursed therefor out of the
Collection Account. The Servicer's right to indemnity or reimbursement pursuant
to this Section 6.03 shall survive the resignation or termination of the
Servicer as set forth herein.
SECTION 6.04 Limitation on Resignation of the Servicer.
(a) Subject to Section 6.04(b) below, the Servicer shall not
resign from the obligations and duties hereby imposed on it except (a)(i) upon
appointment, pursuant to the provisions of Section 7.02, of a successor servicer
which (x) has a net worth of not less than $10,000,000 and (y) is a ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ 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 the Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a successor servicer
shall have assumed the Servicer's responsibilities, duties, liabilities and
obligations hereunder and the requirements of Section 7.02 have been satisfied.
(b) Notwithstanding the foregoing, at the Seller's request, so
long as it is the owner of the servicing rights, Wilshire shall resign upon the
Seller's selection and appointment of a successor servicer; provided that the
Seller delivers to the Trustee the letter required by Section 6.04(a)(ii) above.
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ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.
"Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to make any deposit or payment
required pursuant to this Agreement which continues unremedied for a
period of one Business Day (or, in the case of any such failure to make
any deposit or payment due to any outbreak or escalation of
hostilities, declaration by the United States of a national emergency
or war or other calamity or crisis or act of god, for a period of three
Business Days) after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer by the Trustee or the Depositor, or to the Servicer and
the Trustee by the Holders of Certificates having not less than 25% of
the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement, which failure or
breach (a) materially affects the rights of the Certificateholders and
(b) continues unremedied for a period of 30 days after the date on
which written notice of such failure or breach, requiring the same to
be remedied, shall have been given to the Servicer by the Trustee or
the Depositor, or to the Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced by
the Certificates; or
(iii) if a representation or warranty set forth in Section
2.03(b) hereof shall prove to be materially incorrect as of the time
made in any respect that materially and adversely affects interests of
the Certificateholders, and the circumstances or condition in respect
of which such representation or warranty was incorrect shall not have
been eliminated or cured, within 30 days (or, if such breach is not
capable of being cured within 30 days and provided that the Servicer
believes in good faith that such breach can be cured and is diligently
pursuing the cure thereof, within 90 days) after the date on which
written notice thereof shall have been given to the Servicer by the
Trustee for the benefit of the Certificateholders or by the Depositor;
or
(iv) failure by the Servicer to maintain, if required, its
license to do business in any jurisdiction where the related Mortgaged
Property is located, to the extent such failure materially and
adversely affects the ability of the 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 the Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60
consecutive days; or
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(vi) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Servicer or of or relating to all or substantially
all of its property; or
(vii) any failure of the Servicer to make any Advance, to the
extent required under Section 4.01 in the manner and at the time
required to be made from its own funds pursuant to this Agreement and
after receipt of notice from the Trustee, which failure continues
unremedied after the close of business on the Business Day immediately
preceding the related Distribution Date; or
(viii) the Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of or commence a voluntary case under, any applicable
insolvency, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for three Business
Days; or
(ix) (a) either (I) the servicer rankings or ratings of the
Servicer are downgraded two or more levels below the level in effect on
the Closing Date by one or more of the Rating Agencies rating the
Certificates or (II) the servicer rankings or ratings for the Servicer
are downgraded to "below average" status by one or more of the Rating
Agencies rating the Certificates or (b) one or more Classes of the
Certificates are downgraded or placed on negative watch due in whole or
in part to the performance or servicing of the Servicer.
Other than an Event of Default resulting from a failure of the
Servicer to make any Advance, if an Event of Default described in clauses (i)
through (viii) of this Section shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, or at the direction of the Holders of Certificates evidencing not less than
51% of the Voting Rights evidenced by the Certificates, the Trustee shall by
notice in writing to the Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Servicer under this Agreement and in
and to the related Mortgage Loans and the proceeds thereof, other than its
rights as a Certificateholder hereunder (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 the Servicer to make an Advance, the Trustee
shall prior to the Distribution Date occurring in the succeeding calendar month,
by notice in writing to the Servicer and the Depositor (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Servicer
under this Agreement prior to the Distribution Date occurring in the succeeding
calendar month and in and to the related Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder 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, at the direction of the Seller, by notice in writing to the
Servicer, terminate all of the rights and obligations of the Servicer under this
Agreement (other than its right to reimburse itself for Advances
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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 the Servicer of such written notice of
termination, all authority and power of the Servicer under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee or its nominee. Upon written request from the Trustee, the
Servicer shall prepare, execute and deliver to the successor entity designated
by the Trustee any and all documents and other instruments, place in such
successor's possession all related Mortgage Files, and do or cause to be done
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, including but not limited to the transfer and endorsement
or assignment of the Mortgage Loans and related documents, at the Servicer's
sole expense. The Servicer shall cooperate with the Trustee and such successor
in effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts, net of unreimbursed Advances and
Servicing Advances and unpaid Servicing Fees which shall at the time be credited
by the Servicer to the Collection Account or Escrow Account or thereafter
received with respect to the Mortgage Loans. The Trustee, as successor Servicer,
shall thereupon make any Advance. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise.
SECTION 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of
termination pursuant to Section 7.01 of this Agreement or the resignation of the
Servicer pursuant to Section 6.04, the Trustee shall, subject to and to the
extent provided herein, be the successor to the Servicer, but only in its
capacity as servicer under this Agreement, and not in any other, and the
transactions set forth herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof and applicable law including the obligation to make Advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all funds relating to the Mortgage Loans that the Servicer would
have been entitled to charge to the Collection Account, provided that the
terminated Servicer shall nonetheless be entitled to payment or reimbursement as
provided in Section 3.08 to the extent that such payment or reimbursement
relates to the period prior to termination of the Servicer. Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in accordance
with Section 7.01, the Trustee may, if it shall be unwilling to so act, or
shall, if it is prohibited by applicable law from making Advances pursuant to
4.01 hereof, or if it is otherwise unable to so act, appoint, or petition a
court of competent jurisdiction to appoint, any established mortgage loan
servicing institution the appointment of which does not adversely affect the
then current rating of the Certificates by each Rating Agency, as the successor
to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the
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Servicer hereunder. Any successor to the Servicer shall be an institution which
is a ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ 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 Servicer (other
than liabilities of the Servicer under Section 6.03 hereof incurred prior to
termination of the Servicer under Section 7.01 hereunder), with like effect as
if originally named as a party to this Agreement; provided that each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such assignment and delegation will not be qualified, withdrawn or
downgraded as a result of such assignment and delegation. Pending appointment of
a successor to the Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to the limitations described
herein, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the 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 Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
In connection with the termination or resignation of the
Servicer hereunder, either (i) the successor servicer, including the Trustee if
the Trustee is acting as successor Servicer, shall represent and warrant that it
is a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, in which case the
predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to revise its records to reflect the transfer of servicing to the successor
Servicer as necessary under MERS' rules and regulations, or (ii) the predecessor
Servicer shall cooperate with the successor Servicer in causing MERS to execute
and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Trustee and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor Servicer. The predecessor Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Servicer shall bear any and all fees of MERS, costs of preparing any
assignments of Mortgage, and fees and costs of filing any assignments of
Mortgage that may be required under this subsection.
Any successor to the Servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to this Agreement.
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SECTION 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to
the Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder actually known to the Trustee, unless such
Event of Default shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) unless an Event of Default actually known to the Trustee
shall have occurred and be continuing, the duties and obligations of
the Trustee shall be determined solely by the express provisions of
this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement which it believed in good faith to be genuine and to
have been duly executed by the proper authorities respecting any
matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be finally proven that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates evidencing not
less than 25% of the Voting Rights of Certificates relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Agreement.
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SECTION 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon and
shall be protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party
or parties;
(ii) the Trustee may consult with counsel, financial advisers
or accountants and the advice of any such counsel, financial advisers
or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(iv) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing so to do by Holders of Certificates evidencing not less than
25% of the Voting Rights allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, affiliates, accountants or attorneys;
(vi) the Trustee shall not be required to risk or expend its
own funds or otherwise incur any financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers
hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it;
(vii) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer of
the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any
of the trusts, rights or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
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 the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
SECTION 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates and may transact business with the
Depositor, the Seller, the Servicer and their affiliates, with the same rights
as it would have if it were not the Trustee.
SECTION 8.05 Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder,
shall be entitled to withdraw from the Certificate Account on each Distribution
Date prior to making distributions pursuant to Section 4.02 an amount equal to
the Trustee Fee for such Distribution Date. The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Depositor
and the Servicer, to the extent such indemnity related to the failure of the
Servicer to perform its servicing obligations in accordance with this Agreement,
and held harmless against any loss, liability or expense (including reasonable
attorney's fees and expenses) (i) incurred in connection with any claim or legal
action relating to (a) this Agreement, (b) the Custodial Agreement, (c) the
Certificates, or (d) the performance of any of the Trustee's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the Trustee's
duties hereunder or incurred by reason of any action of the Trustee taken at the
direction of the Certificateholders and (ii) resulting from any error in any tax
or information return prepared by the Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder. Without limiting the foregoing, the Depositor covenants and agrees,
except as otherwise agreed upon in writing by the Depositor and the Trustee, and
except for any such expense, disbursement or advance as may arise from the
Trustee's negligence, bad faith or willful misconduct, to pay or reimburse the
Trustee, for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Agreement
with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage such persons to perform acts
or services hereunder and (C) printing and engraving expenses in connection with
preparing any Definitive
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Certificates. Except as otherwise provided herein, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar or
agent for the Tax Matters Person hereunder or for any other expenses.
SECTION 8.06 Eligibility Requirements for the Trustee and
Custodian.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current Ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor and
its affiliates or the Servicer and its affiliates; provided, however, that such
entity cannot be an affiliate of the Seller, the Depositor or the Servicer other
than the Trustee in its role as successor to the Servicer.
SECTION 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the Depositor,
the Seller, the Servicer and each Rating Agency not less than 60 days before the
date specified in such notice, when, subject to Section 8.08, such resignation
is to take effect, and acceptance by a successor trustee in accordance with
Section 8.08 meeting the qualifications set forth in Section 8.06. If no
successor trustee meeting such qualifications shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation or removal (as provided below), the resigning or removed Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request thereto by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor may remove the Trustee
and appoint a successor trustee by written instrument, in triplicate, one copy
of which shall be delivered to the Trustee, one copy to the Servicer and the
Seller and one copy to the successor trustee.
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The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer and the Seller, one complete
set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the successor trustee. All costs and expenses incurred by the Trustee
in connection with the removal of the Trustee without cause shall be reimbursed
to the Trustee from amounts on deposit in the Collection Account.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Servicer and the Seller an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Servicer and the predecessor trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.
SECTION 8.09 Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 without the execution or filing of
any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
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SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such
separate trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable for
the payment of reasonable compensation, reimbursement and
indemnification to any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the separate trustees and
co-trustees, when and as effectively as if given to each of
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them. Every instrument appointing any separate trustee or co-trustee shall refer
to this Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11 Tax Matters.
It is intended that the assets with respect to which the REMIC
elections are to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters relating to each such segregated
pool of assets shall be such as to qualify such assets as, a "real estate
mortgage investment conduit" as defined in and in accordance with the Trust Fund
Provisions. In furtherance of such intention, the Trustee covenants and agrees
that it shall act as agent (and the Trustee is hereby appointed to act as agent)
for the Tax Matters Person and on behalf of the Trust Fund and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each of REMIC 1, REMIC 2 and REMIC
3 containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such form, and
update such information at the time or times in the manner required by the Code;
(c) make or cause to be made elections that the assets of each of REMIC 1, REMIC
2 and REMIC 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, the Servicer
shall conduct matters relating to the assets of each REMIC at all times that any
Certificates are outstanding so as to maintain the status of REMIC 1, REMIC 2
and REMIC 3 as a REMIC under the REMIC Provisions. The Servicer shall not
knowingly or intentionally take any action that would cause the termination of
the REMIC status of REMIC 1, REMIC 2 or REMIC 3.
In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten (10) days after the Closing Date all information or data that
the Trustee requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contribution to the Trust Fund after the
Startup Day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Trustee, if any such other tax arises
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out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) the Servicer or the Seller, in the case of any such minimum
tax, if such tax arises out of or results from a breach by the Servicer or the
Seller of any of their obligations under this Agreement or (iii) the Seller, if
any such tax arises out of or results from the Seller's obligation to repurchase
a related Mortgage Loan pursuant to Section 2.02 or 2.03 or (iv) in all other
cases, or in the event that the Trustee, the Servicer or Seller fails to honor
its obligations under the preceding clauses (i), (ii) or (iii), any such tax
will be paid with amounts otherwise to be distributed to the Certificateholders,
as provided in Section 4.02.
Neither the Servicer nor the Trustee shall enter into any
arrangement by which any of REMIC 1, REMIC 2 or REMIC 3 will receive a fee or
other compensation for services nor permit any of REMIC 1, REMIC 2 or REMIC 3 to
receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
SECTION 8.12 Commission Reporting.
(a) The Trustee and the Servicer shall reasonably cooperate
with the Depositor in connection with the Trust's satisfying the reporting
requirements under the Exchange Act. The Trustee shall prepare on behalf of the
Depositor any Forms 8-K and 10-K customary for similar securities as required by
the Exchange Act and the rules and regulations of the Commission thereunder, and
the Depositor shall sign and the Trustee shall file (via ▇▇▇▇▇) such Forms on
behalf of the Depositor. The Depositor hereby grants to the Trustee a limited
power of attorney to execute and file each such document on behalf of the
Depositor. Such power of attorney shall continue until the earlier of (i)
receipt by the Trustee from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust.
(b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 31st of the calendar year following the calendar year during which the
Closing Date occurs (or such earlier date as may be required by the Exchange Act
and the rules and regulations of the Commission), the Trustee shall file a Form
10-K, in substance as required by applicable law or applicable Commission
staff's interpretations. Such Form 10-K shall include as exhibits, the
Servicer's annual statement of compliance described under Section 3.16 and the
accountant's report described under Section 3.17, in each case to the extent
they have been timely delivered to the Trustee. If they are not so timely
delivered, the Trustee shall file an amended Form 10-K including such documents
as exhibits promptly after they are delivered to the Trustee. The Trustee shall
have no liability with respect to any failure to properly or timely prepare or
file such periodic reports resulting from or relating to the Trustee's inability
or failure to obtain any information not resulting from its own negligence or
willful misconduct. The Form 10-K shall also include a certification in the form
attached hereto as Exhibit W (the "Depositor Certification"), which shall be
signed by the senior officer of the Depositor in charge of securitization. The
Trustee shall have no responsibility to file any items other than those
specified in this Section 8.12.
(c) Not later than 15 calendar days before the date on which
the Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules 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), the
Servicer will deliver to the Depositor and the Trustee an Officer's Certificate
for the prior calendar year in substantially the form of Exhibit Y to this
Agreement. The Servicer agrees to indemnify and hold harmless the Depositor, the
Trustee and each Person, if any, who "controls" the Depositor or the Trustee
within the meaning of the Securities Act and their respective officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs, fees and expenses that such Person may sustain arising out of
third party claims based on (i) the failure of the Servicer to deliver or caused
to be delivered when required any Officer's Certificate pursuant to this Section
8.12(d), or (ii) any material misstatement or omission contained in any
Officer's Certificate provided pursuant to this Section 8.12(d). If an event
occurs that would otherwise result in an indemnification obligation under
clauses (i) or (ii) above, but the indemnification provided for in this Section
8.12(d) by the Servicer is unavailable or insufficient to hold harmless such
Persons, then the Servicer shall contribute to the amount paid or payable by
such Persons as a result of the losses, claims, damages or liabilities of such
Persons in such proportion as is appropriate to reflect the relative fault of
the Depositor or Trustee on the one hand and the Servicer on the other. The
Servicer acknowledges that the Depositor and the Trustee are relying on the
Servicer's performance of its obligations under this Agreement in order to
perform their respective obligations under this Section 8.12.
(e) Upon any filing with the Commission, the Trustee shall
promptly deliver to the Depositor a copy of any executed report, statement or
information.
(f) If the Commission issues additional interpretative
guidance or promulgates additional rules or regulations, or if other changes in
applicable law occur, that would require the reporting arrangements, or the
allocation of responsibilities with respect thereto, described in this Section
8.12, to be conducted differently than as described, the Depositor, Servicer and
Trustee will reasonably cooperate to amend the provisions of this Section 8.12
in order to comply with such
128
amended reporting requirements and such amendment of this Section 8.12. Any such
amendment shall be made in accordance with Section 10.01 without the consent of
the Certificateholders, and may result in a change in the reports filed by the
Trustee on behalf of the Trust under the Exchange Act. Notwithstanding the
foregoing, the Depositor, Servicer and Trustee shall not be obligated to enter
into any amendment pursuant to this Section 8.12 that adversely affects its
obligations and immunities under this Agreement.
(g) Prior to January 31 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall file a Form 15D
Suspension Notification with respect to the Trust.
129
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 Servicer 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 the
Servicer and any unreimbursed Advances (made by the Trustee as successor
Servicer), Trustee Fees and expenses payable to the Trustee (the sum of (A), (B)
and (C), collectively, the "Par Value") and (II) the Fair Market Value;
(b) the later of (i) the maturity or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund and
the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement; and
(c) the purchase by the Auction Purchaser of all the Mortgage Loans and
all property acquired in respect of any remaining Mortgage Loan (the "Trust
Collateral"), in each case as described below.
In no event shall the trusts created hereby continue beyond
the expiration of 21 years from the death of the survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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
130
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 Servicer 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)(M) 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 the
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, the Servicer, the Seller and the Trustee without the consent of any
of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct
any defective provision herein or to supplement any provision herein which may
be inconsistent with any other provision herein, (iii) to add to the duties of
the Depositor, the Seller or the Servicer, (iv) to add any other provisions with
respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided that any action pursuant to clauses (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund, but shall be at the expense of
the party proposing such amendment), adversely affect in any material respect
the interests of any Certificateholder; provided, however, that no such Opinion
of Counsel shall be required if the Person requesting the amendment obtains a
letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Seller and the
Servicer also may at any time and from time to time amend this Agreement without
the consent of the Certificateholders to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or helpful to (i) maintain the
qualification of REMIC 1, REMIC 2 and REMIC 3 as a REMIC under the Code, (ii)
avoid or minimize the risk of the imposition of any tax on the Trust Fund
pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of a Majority in Interest of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described 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 the Servicer or the
Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02 and 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies of the following to the extent such items are in its
possession:
(i) Each report to Certificateholders described in Section
4.06 and 3.19;
(ii) Each annual statement as to compliance described in
Section 3.16;
(iii) Each annual independent public accountants' servicing
report described in Section 3.17; and
(iv) Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor and the Seller, Eleven Madison Avenue, 4th Floor, New
York, New York 10010, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ (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 Servicer, (c) in the case of
Wilshire, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ Attention:
▇▇▇ ▇▇▇▇▇▇▇, with a copy to Stoel Rives LLP, ▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇▇ or such other address as may be hereafter furnished
in writing to the Depositor and the Trustee by the Servicer and (d) in the case
of each of the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency. Notices
136
to Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
SECTION 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07 Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided in Sections 6.02 and 6.04, this Agreement may not be assigned
by the Servicer without the prior written consent of the Trustee and Depositor;
provided, however, that neither the Depositor nor the Trustee shall consent to
any such assignment unless each Rating Agency has confirmed in writing that such
assignment will not cause a reduction or withdrawal of the ratings then assigned
by it to any Class of Certificates.
SECTION 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the trust created hereby, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
137
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.09 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
SECTION 10.10 Non-Solicitation
From and after the date of this Agreement, each of the
Depositor, the Seller, the Servicer and the Trustee agrees that it will not take
any action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on any such party's behalf, to
personally, by telephone, by mail, or electronically by e-mail or through the
internet or otherwise, solicit the borrower or obligor under any Mortgage Loan
to refinance the Mortgage Loan, in whole or in part. Notwithstanding the
foregoing, it is understood and agreed that promotions undertaken by the
Depositor, the Seller, the Servicer or the Trustee or any affiliate of any such
party that originates mortgage loans in the normal course, which are directed to
the general public at large, or segments thereof, including, without limitation,
mass mailings based on commercially acquired mailing lists or newspaper,
internet, company website, radio and television advertisements shall not
constitute solicitation under this Section 10.10, provided, that no segment of
the general public shall consist primarily of the borrowers or obligors under
the Mortgage Loans. None of the Depositor, the Seller, the Servicer or the
Trustee shall permit the sale of the name of any Mortgagor or any list of names
that consist primarily of the Mortgages to any Person.
138
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller,
the Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
&&&
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.,
as Depositor
By: ___________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
JPMORGAN CHASE BANK,
as Trustee
By: ___________________________________
Name:
Title:
DLJ MORTGAGE CAPITAL, INC.,
as Seller
By: ___________________________________
Name:
Title:
WILSHIRE CREDIT CORPORATION,
as Servicer
By: ___________________________________
Name:
Title:
[NOTARY PAGES TO BE ATTACHED]
EXHIBIT A
[FORM OF CLASS A CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
A-1
Certificate No. [____] Adjustable Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this Certificate
August 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all Certificates of
September 27, 2004 this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
December 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
Class [_______]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by fixed rate, second lien residential
mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the Servicer
or the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Mortgage Loans
deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned to such terms in the Agreement.
This Certificate is issued under and is subject
A-2
to the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: August 27, 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 Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this Certificate
August 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all Certificates of
September 27, 2004 this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
December 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
Class [_______]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by fixed rate, second lien residential
mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the Servicer
or the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [__________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned to such terms in the Agreement.
This Certificate is issued under and is subject
B-2
to the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
No transfer of a Certificate of this Class shall be made except in
compliance with section 5.02 of the Pooling Servicing Agreement.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: August 27, 2004
JPMORGAN CHASE BANK,
as Trustee
By___________________
Countersigned:
By________________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
B-4
EXHIBIT C
[FORM OF RESIDUAL CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-1
Certificate No. [____] Variable Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this Certificate
August 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all Certificates of
September 27, 2004 this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
December 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
Class [_______]
evidencing the distributions allocable to the Class [A-R][A-RL]
Certificates with respect to a Trust Fund consisting primarily of a
pool of conventional mortgage loans (the "Mortgage Loans") secured by
fixed rate, second lien residential mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the Servicer
or the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [______________________] is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned to such terms in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the
C-2
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class [A-R][A-RL]
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York.
No transfer of a Class [A-R][A-RL] Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, or a person acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee or the Trust Fund
or (ii) in the case of any such 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
Servicer 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: August 27, 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
August 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Notional Amount of all Certificates of
September 27, 2004 this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
December 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust Series 2004-4
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
Class [ ]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by fixed rate, second lien residential
mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
This Certificate is payable solely from the assets of the Trust and
does not evidence an obligation of, or an interest in, and is not guaranteed by
the Depositor, the Seller, the Servicer or the Trustee referred to below or any
of their respective affiliates. This Certificate and the Mortgage Loans are not
guaranteed or insured by any governmental agency or instrumentality.
This certifies that ___________, is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned to such terms in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
D-2
[This Certificate has not been registered under the Securities Act of 1933, as
amended ("the Act"). Any resale or transfer of this Certificate without
registration thereof under the Act may only be made in a transaction exempted
from the registration requirements of the Act and in accordance with the
provisions of the Agreement referred to herein.]
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
D-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: August 27, 2004
JPMORGAN CHASE BANK,
as Trustee
By___________________
Countersigned:
By_________________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
D-4
EXHIBIT E
[FORM OF CLASS P CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
E-1
Certificate No. [____] Variable Pass-Through Rate
Cut-off Date: Initial Certificate Balance of this Certificate
August 1, 2004 ("Denomination"):
$[_________________]
First Distribution Date: Initial Certificate Balances of all Certificates of
September 27, 2004 this Class:
$[_________________]
Maturity Date: CUSIP: [_________________]
December 25, 2034
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
Class [_______]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of conventional mortgage loans (the
"Mortgage Loans") secured by fixed rate, first and second lien
residential mortgage loans.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance of this Class P
Certificate at any time may be less than the Initial Certificate Balance set
forth on the face hereof, as described herein. This Class P Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Servicer or the Trustee referred to below or any of their
respective affiliates.
This certifies that _________________ is the registered owner of the
Percentage Interest evidenced by this Class P Certificate (obtained by dividing
the Denomination of this Class P Certificate by the Initial Class Principal
Balance) in certain distributions with respect to a Trust consisting primarily
of the Mortgage Loans deposited by Credit Suisse First Boston Mortgage
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of August 1, 2004 (the "Agreement") among the
Depositor, DLJ Mortgage Capital Inc., as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire" or the "Servicer") and JPMorgan Chase Bank,
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Class P
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class P
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
E-2
This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Seller, the Servicer or the Depositor; or there shall be
delivered to the Trustee and the Depositor a transferor certificate by the
transferor and an investment letter shall be executed by the transferee. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of a Class P Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, or a person acting
on behalf of any such plan or arrangement or using the assets of any such plan
or arrangement to effect such transfer, which representation letter shall not be
an expense of the Trustee or the Trust Fund or (ii) in the case of any such
Class P Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement, or using such
plan's or arrangement's assets, an Opinion of Counsel addressed to the Trustee,
for the benefit of the Trustee, the Depositor and the Servicer and on which they
may rely, and satisfactory to the Trustee to the effect that the purchase or
holding of such Class P Certificate will not result in the assets of the Trust
Fund being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee to any
obligation in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Trustee or the Trust Fund.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Class P Certificate to or on behalf of an employee benefit plan subject to
ERISA or to the Code without the Opinion of Counsel satisfactory to the Trustee
as described above shall be void and of no effect.
Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
E-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: August 27, 2004
JPMORGAN CHASE BANK,
as Trustee
By___________________
Countersigned:
By__________________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
as Trustee
E-4
EXHIBIT F
[FORM OF REVERSE OF CERTIFICATES]
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
Class [_______]
This Certificate is one of a duly authorized issue of Certificates
designated as Credit Suisse First Boston Mortgage Securities Corp., Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. [The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.][The Record Date applicable to each Distribution Date
is the Business Day immediately preceding the related Distribution Date;
provided that if this Certificate is not a Book-Entry Certificate, then the
Record Date applicable to each Distribution Date is the last Business Day of the
month next preceding such Distribution Date.]
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
F-1
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller and the Trustee and any agent
of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and the Seller,
the Depositor, the Trustee, or any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the sum of the aggregate Stated
Principal Balance of the Mortgage Loans and the appraised value of the REO
Properties at the time of repurchase is less than 10% of the sum of the
Aggregate Collateral Balance of the Mortgage Loans as of the Cut-off Date, the
Optional Termination Holder will have the option to repurchase, in whole, from
the Trust Fund all remaining Mortgage Loans and REO Properties at a purchase
price determined as provided in the Agreement. If the Optional Termination
Holder does not exercise its option to purchase, on any Distribution Date on
which the sum of the aggregate Stated Principal Balance of the Mortgage Loans
and the appraised value of the REO Properties at the time of repurchase is less
than 10% 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
August 27, 2004
____________________________________
____________________________________
Cut-off Date Principal Balance:
$_______________
JPMorgan Chase Bank,
as Trustee, for the
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Custodial Agreement, dated as of August 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: ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
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 August 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: ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
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 2004-4
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
Class [_______]
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________ , the proposed
Transferee of an Ownership Interest in a Class [A-R][A-RL] Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Series, among Credit Suisse First
Boston Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as
seller ("DLJMC"), Wilshire Credit Corporation as servicer ("Wilshire") and
JPMorgan Chase Bank as trustee (the "Trustee"). Capitalized terms used, but not
defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain
I-1
cooperatives and, except as may be provided in Treasury Regulations, persons
holding interests in pass-through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The Transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as EXHIBIT J to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is [_____________].
9. The Transferee is a United States Person.
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. The Transferee is (a) not an employee benefit plan that is subject
to ERISA or a plan that is subject to Section 4975 of the Code, and the
Transferee is not acting on behalf of such a plan or (b) 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 ▇▇▇▇▇▇▇ Mac, a majority of its board of directors is not
selected by such government unit.
"Person": Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
I-1-1
EXHIBIT 2
to
EXHIBIT I
Section 5.02(c) of the Agreement
--------------------------------
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
I.
(iii) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Residual Certificate and (C) not to Transfer its Ownership Interest
in a Residual Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Residual Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit and Transferor Certificate. The Trustee
shall be entitled but not obligated to recover from any Holder of a
Residual Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on
I-2-1
such Residual Certificate at and after either such time. Any such
payments so recovered by the Trustee shall be paid and delivered by the
Trustee to the last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Seller or the Servicer, to the effect that the elimination of such
restrictions will not cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
I-2-2
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Credit Suisse First Boston Mortgage Securities Corp.,
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates,
Series 2004-4, Class [___]
------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (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.
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.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Credit Suisse First Boston Mortgage Securities Corp.,
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates,
Series 2004-4, 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.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Credit Suisse First Boston Mortgage Securities Corp.,
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates,
Series 2004-4, Class [___]
----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, nor are we acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such acquisition,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Act or that would render the disposition of the Certificates a
violation of Section 5 of the Act or require registration pursuant thereto, nor
will act, nor has authorized or will authorize any person to act, in such manner
with respect to the Certificates, (f) we are a "qualified institutional buyer"
as that term is defined in Rule 144A under the Act ("Rule 144A") and have
completed either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2, (g) we are aware that the sale to us is being made in
reliance on Rule 144A, and (h) we are acquiring the Certificates for our own
L-1
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (A) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (B) pursuant to another exemption from registration under the Act.
Very truly yours,
_________________________________
Print Name of Transferee
By:______________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $___________1 in securities (except for the 1
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is attached
hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
--------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in
that case, Buyer must own and/or invest on a discretionary
basis at least $10,000,000 in securities.
L-1-1
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of
1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors Act
of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
L-1-2
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
___________________________________
Print Name of Buyer
By:________________________________
Name:
Title:
Date:______________________________
L-1-3
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or
because one investment adviser is a majority owned subsidiary of the
other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi)
L-2-1
securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be
in reliance on Rule 144A. In addition, the Buyer will only purchase for
the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of
the Certificates will constitute a reaffirmation of this certification
by the undersigned as of the date of such purchase.
__________________________________
Print Name of Buyer or Adviser
By:_______________________________
Name:
Title:
IF AN ADVISER:
__________________________________
Print Name of Buyer
Date:_____________________________
L-2-2
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Home Equity Mortgage Trust 2004-4
Home Equity Mortgage Pass-Through Certificates, Series 2004-4
Loan Information
----------------
Name of Mortgagor: __________________________
Servicer
Loan No.: __________________________
Trustee
Name:
Address: __________________________
__________________________
__________________________
Trustee
Mortgage File No.:
The undersigned Servicer hereby acknowledges that it has received from
LaSalle Bank National Association, as Custodian for the Holders of Mortgage
Pass-Through Certificates, of the above-referenced Series, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series among Credit Suisse First Boston Mortgage Securities
Corp. as depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire
Credit Corporation as servicer ("Wilshire") and JPMorgan Chase Bank as trustee
(the "Trustee").
( ) Mortgage Note dated _____________________, _______, in the original
principal sum of $___________________, made by ____________________.
payable to, or endorsed to the order of, the Trustee.
( ) Mortgage recorded on ________________ as instrument no. ______________
in the County Recorder's Office of the County of ___________________,
State of ___________ in book/reel/docket _________________ of official
records at page/image _____________.
M-1
( ) Deed of Trust recorded on _____________ as instrument no.
______________ in the County Recorder's Office of the County of
_______________, State of ______________ in book/reel/docket
_____________________ of official records at page/image _________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________ as instrument no. ______________ in the County Recorder's
Office of the County of ______, State of ________________ in
book/reel/docket _______________ of official records at page/image
_______________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( )___________________________________________________________________
( )___________________________________________________________________
( )___________________________________________________________________
( )___________________________________________________________________
The undersigned Servicer hereby acknowledges and agrees as follows:
(1) Such Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for
the purposes provided in the Agreement.
(2) Such Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim,
liens, security interest, charges, writs of attachment or
other impositions nor shall the Servicer, if applicable,
assert or seek to assert any claims or rights of setoff to or
against the Documents or any proceeds thereof.
(3) Such Servicer shall return each and every Document
previously requested from the Mortgage File to the Custodian
when the need therefor no longer exists, unless the Mortgage
Loan relating to the Documents has been liquidated and the
proceeds thereof have been remitted to the Certificate Account
and except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of
such Servicer shall at all times be earmarked for the account
of the Custodian, and such Servicer shall keep the Documents
and any proceeds separate and distinct from all other property
in such Servicer's possession, custody or control.
M-2
[Servicer]
By_________________________________
Its________________________________
Date: ____________, 20__
M-3
EXHIBIT N
FORM OF SUBSEQUENT TRANSFER AGREEMENT
THIS SUBSEQUENT TRANSFER AGREEMENT, dated as of _________ ___, 2004
(this "Subsequent Transfer Agreement"), among CREDIT SUISSE FIRST BOSTON
MORTGAGE SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), DLJ MORTGAGE CAPITAL, INC., a Delaware corporation, in its
capacity as seller under the Pooling and Servicing Agreement referred to below
(the "Seller"), WILSHIRE CREDIT CORPORATION, as servicer ("Wilshire" or the
"Servicer") and JPMORGAN CHASE BANK, a national banking association, as trustee
(the "Trustee");
WHEREAS, the parties hereto are also among the parties to the Pooling
and Servicing Agreement among Credit Suisse First Boston Mortgage Securities
Corp., as depositor, Wilshire Credit Corporation, as servicer, DLJ Mortgage
Capital, Inc., as seller and JPMorgan Chase Bank, as trustee, dated as of August
1, 2004 (the "Pooling and Servicing Agreement"), in relation to the Home Equity
Mortgage Pass-Through Certificates, Series 2004-4;
WHEREAS, Sections 2.01(f) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer Agreement
in accordance with the terms and conditions of the Pooling and Servicing
Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged
the parties hereto agree as follows:
(i) The "Subsequent Transfer Date" with respect to this Subsequent
Transfer Agreement shall be ____________, 200__.
(ii) The "Aggregate Subsequent Purchase Amount" with respect to this
Subsequent Transfer Agreement shall be $____________, provided, however, that
such amount shall not exceed the amount on deposit in the Pre-Funding Account.
(iii) The Subsequent Mortgage Loans conveyed on the Subsequent Transfer
Date shall satisfy the pool characteristics for the Trust Fund identified in
Section 2.01(f) of the Pooling and Servicing Agreement.
(iv) In case any provision of this Subsequent Transfer Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions or obligations shall not in any way be affected or
impaired thereby.
(v) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail. Capitalized
terms used herein and not otherwise defined have the meanings in the Pooling and
Servicing Agreement.
N-1
(vi) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for the benefit of the Certificateholders,
without recourse, all right title and interest in the Subsequent Mortgage Loans
identified in Schedule A, including all interest and principal due on or with
respect to such Subsequent Mortgage Loans on or after the Subsequent Cut-off
Date and all interest and principal payments on such Subsequent Mortgage Loans
received prior to the Subsequent Cut-off Date in respect of installments of
interest and principal due thereafter, but not including principal and interest
due on such Subsequent Mortgage Loans prior to the Subsequent Cut-off Date, any
insurance policies in respect of such Subsequent Mortgage Loans and all proceeds
of any of the foregoing.
(vii) This Subsequent Transfer Agreement shall be governed by, and
shall be construed and enforced in accordance with the laws of the State of New
York.
(viii) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
N-2
EXHIBIT O-1
FORM OF COLLECTION ACCOUNT CERTIFICATION
[ ], 20__
[Servicer's name] hereby certifies that it has established the account
described below as a Collection Account pursuant to Section 3.05 of the Pooling
and Servicing Agreement, dated as of August 1, 2004, among Credit Suisse First
Boston Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as
seller ("DLJMC"), Wilshire Credit Corporation as servicer ("Wilshire"), and
JPMorgan Chase Bank as trustee (the "Trustee").
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
2004-4.
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
August 1, 2004, among Credit Suisse First Boston Mortgage Securities Corp. as
depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire") and JPMorgan Chase Bank as trustee (the
"Trustee") (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 2004-4." 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:_________________________________
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
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 August 1, 2004, among Credit Suisse First
Boston Mortgage Securities Corp. as depositor, DLJ Mortgage Capital, Inc. as
seller ("DLJMC"), Wilshire Credit Corporation as servicer ("Wilshire") and
JPMorgan Chase Bank as trustee (the "Trustee").
Title of Account: "[Servicer's Name], in trust for Credit Suisse First
Boston Mortgage Securities Corp., Home Equity
Mortgage Trust 2004-4, Home Equity Mortgage
Pass-Through Certificates, Series 2004-4 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:_____________________________
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
[ ], 20__
To: ______________________________
______________________________
______________________________
(the "Depository")
As Servicer under the Pooling and Servicing Agreement, dated as of
August 1, 2004, among Credit Suisse First Boston Mortgage Securities Corp. as
depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Wilshire Credit
Corporation as servicer ("Wilshire") and JPMorgan Chase Bank as trustee (the
"Trustee") (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 2004-4, Home Equity Mortgage Pass-Through Certificates,
Series 2004-4". 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
[RESERVED]
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 2004-4
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 2004-4 (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 August 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, Wilshire Credit Corporation, as servicer ("Wilshire") and
JPMorgan Chase Bank, as trustee (the "Trustee").
___________________________________
[Name]
[Title]
W-1
[Date]
W-2
EXHIBIT X
FORM OF TRUSTEE CERTIFICATION
Re: Credit Suisse First Boston Mortgage Securities Corp.
Home Equity Mortgage Trust 2004-4
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 August 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, 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 2004-4
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 August 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, 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 ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇.▇. ▇▇▇▇▇, as Trustee (and in no personal or other representative
capacity) under the Pooling and Servicing Agreement, dated as of August 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 2004-4, 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, ▇▇▇ 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 Servicer in the
Agreement, and hereby does ratify and confirm what such Special Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
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IN WITNESS WHEREOF, the Trustee has caused its corporate name and seal to be
hereto signed and affixed and these presents to be acknowledged by its duly
elected and authorized officer this ___ day of ___ , 200_.
JPMORGAN CHASE BANK, as Trustee
By:___________________________
Name:
Title:
WITNESS: WITNESS:
_______________________________ _______________________________
Name: Name:
Title: Title:
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇ ______________, 200_, before me, the undersigned, a Notary Public in
and for said state, personally appeared __________________, personally known to
me to be the person whose name is subscribed to the within instrument and to be
a duly authorized and acting Senior Vice President of JPMorgan Chase Bank, and
such person acknowledged to me that such person executed the within instrument
in such person's authorized capacity as a Senior Vice President of JPMorgan
Chase Bank, and that by such signature on the within instrument the entity upon
behalf of which such person acted executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
AA-3
EXHIBIT BB
CREDIT INSURANCE POLICY
No. 1151
Renewal of
Policy No. _________
CREDIT INSURANCE POLICY
OLD REPUBLIC
INSURANCE COMPANY
GREENSBURG, PENNSYLVANIA
A STOCK COMPANY
(hereinafter called the Company)
In consideration of the stipulations and provisions hereinafter set forth and of
the premium hereinafter specified, does insure ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK AS TRUSTEE
OF HOME EQUITY MORTGAGE TRUST 2004-4 a corporation organized under the laws of
NEW YORK , hereinafter called the Assured, whose address is New York, New York ,
against loss (only as herein defined and limited) due to Default by a Borrower
from the Assured in the repayment to the Assured of Loans evidenced by Eligible
Notes, reported to the Company and insured hereunder which were made to finance
the alteration, repair, conversion, improvement or modernization of real
property.
This Policy shall be effective from the 1 day of August , 2004, at 12:01 A.M.,
at the place of business of the Assured and shall remain in force continuously
until cancelled. The coverage afforded by this Policy shall attach to a
particular loan coincident with the actual disbursement by the Assured of the
Loan during such period.
The Assured shall pay the Company a premium calculated upon the entire term of
the Note at the rate of 1.10 % per annum of the net proceeds (as hereinafter
defined) of any Loan reported for insurance, which premium shall be payable
within 15 days after the close of the month in which the Loan is made or
purchased. In computing the premium, no charge shall be made for a factional
period of a month consisting of 15 days or less and a charge for a full month
shall be made for a fractional period of a month consisting of more than 15
days. Loans shall be reported to the Company for insurance on the form
prescribed by the Company within 15 days after the close of the month in which
the Loan is made or purchased.
The Company's liability for loss with respect to any Insured Loan or Loans to an
individual Borrower who defaults to the Assured hereunder shall be limited to
five thousand dollars ($5,000.00) unless a higher limit is specifically approved
by the Company and is endorsed hereon. The Company's maximum cumulative
liability for Loss under this Policy is further limited to ten percent (l0%) of
the Aggregate net proceeds of loans insured hereunder made by the Assured during
the 12 month period immediately following the effective date of this Policy and
during each succeeding 12 month period in which this Policy is in full force and
effect. The Company's maximum liability under this Policy shall in no event
exceed $16,348,302 during each such 12 month period. This Policy is made and
accepted subject to the foregoing provisions and stipulations and those
hereinafter stated which are hereby made part of this Policy, together with such
other provisions, stipulations and agreements as may be added hereto, as
provided in this Policy.
IN WITNESS WHEREOF, the Company has duly executed these presents; but this
Policy shall not be valid unless countersigned by a duly authorized
representative of the Company.
BB-1
Countersigned this 26 day of
August , 2004 _____________________________
PRESIDENT
OLD REPUBLIC INSURANCE COMPANY
By:__________________________ _____________________________
Authorized Representative SECRETARY
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PROVISIONS AND STIPULATIONS
1. DEFINITIONS
a. "Loan" means an advance of funds, or the purchase of an obligation, evidenced
by an Eligible Note, the proceeds of which have been or are to be used for the
alteration, repair, conversion, improvement or modernization of real property
located within the continental limits of the United States of America.
b. "Eligible Note" or "Note" means any written evidence of obligation, including
a note, bond, mortgage or indenture which:
(1) Bears the genuine signature of the Borrower and all other parties to the
instrument, is complete and regular on its face, and is valid and enforceable
against the Borrower; and
(2) Contains an acceleration clause which provides for acceleration of maturity
either automatically or at the option of the holder, in the event of default in
payment of any installment upon the due date thereof; and
(3) Contains payment and maturity requirements meeting the following
specifications: The Note shall be payable in approximately equal monthly
installments, the first of which shall fall due within six months and the last
within sixty months and 32 days from the date of the Note. If the principal
income of the Borrower is derived from a seasonal operation or business, the
Note may be made payable in installments corresponding with the seasonal
variation in Borrower's income shown on his application for credit; provided the
first installment is payable within twelve months of the date of the Note; and
further provided that the sum of installments to be paid in any year subsequent
to the first year shall not be greater than the proportion of the total debt
which is to be paid in the first year; and further provided that a token payment
is due in each off-season month; and
(4) Is for an amount such that the net proceeds, as defined below, of such note
plus the then unpaid net proceeds of any other loans insured by the Company made
by the Assured to the individual Borrower making the note are not in excess of
$5,000.00, except that specified notes for greater amounts may be insured
hereunder upon endorsement of this policy specifically insuring such notes.
c. "Borrower" means one, whether individual, partnership, corporation or other
legal entity, who applies for and receives a Loan, evidence by an Eligible Note,
and whose interest in the real property to be improved is: (1) A fee title; (2)
a life estate; (3) a leasehold estate having a fixed term expiring after the
maturity of the Note; or (4) an equitable interest under a contract or deed of
trust to create an interest in real property of the character described in (1)
(2) or (3). No such person shall be accepted by the Assured as a Borrower if
such person is past due more than fifteen days as to the payment of an
obligation owed the Assured or any obligation insured by the Company or is past
due more then thirty days as to the payment of any other indebtedness evidenced
by a note, bond or contract signed by such person and the Assured through its
usual credit investigation is placed on notice of such fact or facts, unless
other circumstances known to the Assured make a loan to such person a credit
risk acceptable to a prudent lender.
d. "Payment" or "Installment" means a deposit by the Borrower with the Assured
of funds which represent the full or partial repayment of a Loan according to
the terms of the Note evidencing such Loan.
e. "Default" means the failure of the Borrower to make any payment to the
Assured at the time and in the manner and amount specified in the Note
evidencing the Loan.
f. "Date of Default" means the earliest date upon which an installment or
payment was due which was not paid by the Borrower according to the terms of the
Note.
g. "Loss" means the amount payable to the Assured by the Company as provided in
paragraph 5 hereof.
h. "Net Proceeds" means the amount of the loan actually made or the purchase
price of the note, exclusive of finance charges, fees, and other deductions.
2. CONDITIONS PRECEDENT TO RECOVERY
Prior to making a Loan, the Assured shall obtain a dated credit
application fully executed by the Borrower. The credit application supplemented
by such other information as the Assured deems necessary, must, in the judgment
of the Assured, clearly show the Borrower to be solvent, with reasonable ability
to repay the
BB-3
Loan, and in other respects a reasonable credit risk. If, after the Loan is
made, the Assured discovers any material misstatements in the credit
application, or misuse of the proceeds of the Loan by the Borrower, the Assured
shall promptly report such discovery to the Company.
The Assured shall exercise due diligence in disbursing proceeds of
loans in effecting collections and shall service its Loans in accordance with
acceptable practices of prudent lending institutions.
All payments received on account of the Note, except late charges, must
be applied to the maturing installments in their order, except that any sum
received by the Assured in excess of three advanced monthly payments shall be
credited to the final installments in the absence of specific written
instructions from the Borrower to do otherwise.
Claim may be made after Default provided written demand has been made
on the Borrower for the full unpaid balance of the Note. The Company reserves
the right to require the Assured to reduce the Note to judgment subject to the
limitations of the terms of the Note.
3. NOTICE OF DEFAULT AND FILING OF CLAIMS FOR LOSS
Should a Default continue for a period of 90 days, notice thereof must
be filed with the Company monthly thereafter, on the form prescribed by the
Company until the Default is cured or a claim of Loss filed. A claim for Loss
may be filed as to an individual Loan at any time after Default but in no event
later than six months after Default unless the Company shall grant an extension
of the claim period in writing. Claims shall be filed on Proof of Loss forms
provided by the Company, which shall include an assignment of the Assured's
interest in the defaulted Note to the Company or such other person as may be
designated by the Company as assignee.
4. PAYMENT OF LOSS
All adjusted claims shall be paid or made good within thirty days after
presentation of satisfactory evidence of Loss to the Company.
5. LIMIT OF LOSS
In addition to the limitations heretofore set out, the Company shall be
obligated to pay hereunder only the full unpaid balance of the Note or of the
actual purchase price thereof, whichever is lesser, less the unearned discount
thereon, plus
BB-4
a. uncollected earned interest to date of Default and interest at the rate of 4%
per annum from the date of Default to the date of presentation of Proof of Loss;
plus
b. uncollected court costs (including fees paid for issuing, serving and filing
summons); plus
c. attorneys' fees actually paid, not exceeding:
(1) 25 percent of the amount collected by the attorney on the defaulted
Note provided the Assured does not waive its claim against the Borrower for such
fees; plus
(2) $25.00 or 15 percent of the balance due on the Note, whichever is
the lesser, if a judgment is secured by suit, or $10.00 or 15 percent of the
balance due on the Note, whichever is the lesser, if a judgment is secured by
confession after default; plus
(3) $50.00 plus 5 percent of the balance due on the Note as an
additional fee where the action is contested and judgment is obtained;
less any part of the foregoing amounts which the Assured has collected
from others, or which the Assured can collect from a reserve or holdback funds
in its hands.
6. SUBROGATION
In the event of any payment under this Policy, the Company shall be
subrogated to all of the Assured's rights of recovery against the Borrower and
any other person or organization liable under the terms of the defaulted Note
and against any reserve or holdback funds in its hands, and the Assured shall
execute and deliver at the request of the Company instruments and papers and do
whatever else is necessary to transfer, assign, and secure such rights. The
Assured shall do nothing after Loss to prejudice such rights, and the execution
by the Assured of a release or waiver of the right to collect the unpaid balance
of a Loan shall equally release the Company from any further obligation under
this Policy as to said Loan, anything in this Policy to the contrary
notwithstanding.
7. TRANSFER OR PREPAYMENT OF LOANS REPORTED FOR INSURANCE
All liability under this Policy with respect to any individual loan
shall terminate upon sale or transfer (including without limiting the generality
of application of this section, transfers pursuant to, or resulting from merger
or consolidation of the Assured with any other corporation or company) of such
loan, or the note evidencing same, to any transferee not holding a similar
Policy issued by the Company.
Such sales or transfers may be made to a transferee holding a similar
Policy issued by the Company only with the prior written approval of the
Company. In the event of such a sale or transfer, the continuing liability of
the Company to the transferee with regard to the loan or loans sold or
transferred shall be ten percent of the
BB-5
aggregate unpaid balance of the net proceeds of such loan or loans at the time
of transfer or sale, and the aggregate limit of liability of the Company to the
Assured hereunder shall be reduced by an equal amount.
In no event will the Company refund any premium to the Assured upon the
sale or transfer of any loan or loans insured hereunder.
Nothing contained herein shall be construed to prevent the pledging of
such loans, or the notes evidencing the same, as collateral security under a
bona fide loan agreement.
In the event that the Borrower shall prepay an eligible loan for which
the required premium has been paid by the Assured to the Company, upon receipt
of a report of such prepayment and application for premium refund on the form
prescribed by the Company, the Company shall return to the Assured a premium
refund calculated according to the sum-of-the-digits method, and the aggregate
cumulative liability of the Company hereunder shall be reduced by ten percent of
the original net proceeds of said loan.
8. REPORTS AND EXAMINATION
The Company may at any time call upon the Assured for such reports as
it may deem necessary and may inspect the books or the Accounts of the Assured
as they pertain to the Loans reported for insurance hereunder. All Loans
reported to the Company for insurance bereunder shall be identified by methods
satisfactory to the Company on the records of the Assured.
9. AMENDMENTS
Notice to any agent or knowledge possessed by any agent or by any other
person shall not effect a waiver or a change in any part of this Policy or estop
the Company from asserting any right under the terms of this policy. The terms
of this Policy may be waived or changed only after written approval of the
Company and by an endorsement signed on behalf of the Company by its President,
Vice President or Secretary and countersigned by a duly authorized
representative of the Company.
10. MISREPRESENTATION AND FRAUD
The Policy shall be void if the Assured has concealed or misrepresented
any material fact or circumstance concerning this insurance or the subject
thereof or in case of any fraud, attempted fraud or false swearing by the
BB-6
Assured touching any matter relating to this insurance or the subject thereof
whether before or after a loss, or if the Assured shall make any claim which is
false or fraudulent either in amount or otherwise.
11. OTHER INSURANCE
If at the time of Loss or Default there is any other valid and
collectible insurance which would attach if this insurance had not been
effected, this insurance shall apply only as excess and in no event as
contributing insurance, and then only after all other insurance has been
exhausted.
12. ASSIGNMENT OF POLICY
This Policy shall be void if assigned or transferred without the
written consent of this Company, whether such transfer be voluntary or
involuntary.
13. SUIT AGAINST COMPANY
No suit, action or proceeding for the recovery of any claim under this
Policy shall be instituted or sustainable in any court of law or equity unless
Proof of Loss has been duly filed with respect thereto, and unless such suit,
action or proceeding be commenced within twelve months next after Default;
provided, however, that if by the laws of the State within which this Policy is
issued such limitation is invalid, then any such claims shall be void unless
such action, suit or proceedings be commenced within the shortest limit of time
permitted by the laws of such State to be fixed herein.
14. CANCELLATION
This Policy may be cancelled by the Assured by mailing to the Company
written notice stating when thereafter such cancellation shall be effective.
This Policy may be cancelled by the Company by mailing to the Assured at the
address shown in this Policy or last known address written notice stating when,
not less than five days thereafter, such cancellation shall be effective. The
mailing of notice as aforesaid shall be sufficient proof of notice and the
effective date of cancellation stated in the notice shall become the end of the
policy period. Delivery of such written notice either by the Assured or by the
Company shall be equivalent to mailing.
Cancellation of this Policy shall not affect the insurance privilege of
the Assured with respect to any loan previously reported for insurance.
16. CONFORMITY TO STATUTE
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Terms of this Policy which are in conflict with the statutes of the
State wherein this Policy is issued are hereby amended to conform to such
statutes.
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ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
PAYMENT APPLICATION ENDORSEMENT
The sentence in Paragraph 3, Section 2, of the Provisions and
Stipulations of the policy reading:
All payments received on account of the Note, except late charges, must
be applied to the maturing installments in their order, except that any sum
received by the Assured in excess of three advanced monthly payments shall be
credited to the fatal installments in the absence of specific written
instructions from the Borrower to do otherwise.
Is hereby amended by deleting the last half of the sentence so that it
reads as follows:
All payments received on account of the Note, except late charges, must be
applied to the maturing installments in their order in the absence of specific
written instructions from the Borrower to do otherwise.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ this 26th day of August , 2004
__________________________________________________________________, Authorized
Representative.
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ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is understood and agreed that the word "default" in Section
13 shall be deleted and replaced with "Proof of Loss has been
filed."
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-11
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is understood and agreed that the section sentence of Section 9
shall be amended to read as follows:
"The terms of this Policy may be waived or changed only after written approval
of the Company and by an endorsement signed on behalf of the Company by its
President, Vice President or Secretary and countersigned by a duly authorized
representative of the Company. Such endorsement shall only be effective with
respect to Loans that are reported for insurance after the effective date of
that endorsement."
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
BB-12
__________________________________________________________________, Authorized
Representative.
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is hereby understood and agreed that Paragraph 5.a. is amended to
read as follows: "uncollected earned interest to the date of presentation of
Proof of Loss; plus"
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-13
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
This endorsement is issued in consideration of the Assured's request
for the change in the mode of premium permitted herein.
1. The third paragraph of the first page of this policy is amended to read as
follows: The Assured shall pay the Company a monthly premium calculated at a
rate of .110% on the unpaid balance outstanding at the beginning of every month
of any Loan reported for insurance. The premium shall be payable on the twenty
fifth day of every month in which there is an unpaid balance outstanding on a
Loan reported for insurance. The first premium payment shall be due on the date
upon which the Loan is reported for insurance.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
BB-14
___________________________________________________________________, Authorized
Representative.
BB-15
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
This endorsement is issued in consideration of the Assured's request
for the change in the mode of premium permitted herein.
1. Section 7 entitled "Transfer or Prepayment of Loans Reported for Insurance"
is deleted and the following is substituted therefor:
All liability under this Policy with respect to any individual loan shall
terminate upon sale or transfer (including, without limiting the generality of
application of this section, transfers pursuant to, or resulting from, merger or
consolidation of the Assured with any other corporation or company) of such
loan, or the note evidencing same, to any transferee not holding a similar
policy issued by the Company. In the event of such a sale or transfer, the
aggregate liability of the Company to the Assured hereunder shall be reduced by
ten percent of the original net proceeds of such loan or loans.
Such sales or transfers may be made to a transferee holding a similar Policy
issued by the Company only with the prior written approval of the Company. In
the event of such a sale or transfer, the continuing liability of the Company to
the transferee with regard to the loan or loans sold or transferred shall be ten
percent of the aggregate unpaid balance of the net proceeds of such loan or
loans at the time of transfer or sale, and the aggregate limit of liability of
the Company to the Assured hereunder shall be reduced by an equal amount. In the
event of approved sale or transfer, the Assured shall remain liable for all
monthly premium payments.
Nothing contained herein shall be construed to prevent the pledging of such
loans, or the notes evidencing the same, as collateral security under a bonafide
loan agreement.
2. The second paragraph of Section 14 entitled "Cancellation" is deleted, and
the following is substituted therefor:
Cancellation of this policy shall not affect the insurance coverage on loans
previously reported for insurance, and the Assured shall continue to remit
monthly premium payment with respect to all such loans.
3. All other provisions of the policy shall remain unchanged.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
▇▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-17
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
Notwithstanding any terms to the contrary in the Policy and each
endorsement thereto, Old Republic acknowledges that the duties and obligations
of the Assured under the Policy will be performed by the servicer of the loans
and not by the Assured, other than the duty to pay the premium which shall
remain with the Assured. Old Republic will treat such servicer as the Assured
for all such purposes under the Policy. The Assured shall remain the beneficiary
of any payments made by Old Republic under the Policy.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
▇▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-19
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is understood and agreed that the following wording of the first sentence of
Section 6 "and against any reserve or holdback funds in its hands" is deleted.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
__________________________________________________________________, Authorized
Representative.
BB-20
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is understood and agreed that the term "Loan" in item A under section 1,
Definitions, is hereby amended to mean an advance of funds, evidenced by an
Eligible Note, the proceeds of which have been or are to be used for any
purpose, located within the United States of America.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-21
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
it is understood and agreed that Section 1.c. of the Definitions is deleted and
replaced with "Borrower" means one, whether individual, partnership, corporation
or other legal entity, who applies for and receives a Loan evidenced by an
Eligible Note".
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-22
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is hereby understood and agreed that Section 2 of the Provisions and
Stipulations of the Policy (CONDITIONS PRECEDENT TO RECOVERY) is amended to
waive the right of the Company to require the Assured to reduce a note to
judgment.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-23
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is Understood and agreed that Section 2 of the Provisions and Stipulations of
the Policy (CONDITIONS PRECEDENT TO RECOVERY) is amended to waive the right of
the Company to required the Assured to reduce a note to judgment.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-24
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is understood and agreed that in Section 5 the following wording is deleted
from the first sentence: "or of the actual purchase price thereof, whichever is
lesser, less the unearned discount thereon".
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, COALITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-25
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
LOAN LIMITATION
CREDIT INSURANCE POLICY
The First sentence of the fifth paragraph of the policy is hereby
amended to read as follows: "The Company's liability for loss with respect to
the Insured Loan of any one borrower shall be limited to Two Hundred Fifty
Thousand Dollars ($250,000), provided such Insured Loan meets all of the
qualifications set forth in the Company's 'Qualifying specifications for
Guideline Underwriting' and Company Sanctioned Guidelines in effect on the date
of such Insured Loan, unless a higher limit has been specifically approved by
the Company and endorsed hereon."
EXTENDED TERM
The first sentence in 1.b.(3) of the provisions and Stipulations of the
policy is hereby amended to read as follows:
"Contains payment and maturity requirements meeting the following
specifications: The Note shall be payable, the first of which shall fall due
within six months and the last within 360 months and 32 days from the date of
the Note."
ELIGIBLE NOTE
The sentence in Paragraph 1.b.(4) of the Provisions and Stipulations is
hereby amended to read as follows:
"Is for an amount equal to the net proceeds of such note, as defined below,
provided that the net proceeds of such note, plus the then unpaid net proceeds
of any other loans (a) which have been made by the Assured to the same Borrower
and which are insured by the Company do not exceed Two Hundred Fifty Thousand
Dollars ($250,000), and that (b) such note meets all of the qualifications set
forth in the Company's 'Qualifying Specifications for Guideline Underwriting' in
effect on the date of the Loan, except that notes for greater amounts may be
insured hereunder by endorsement to this policy specifically identifying such
notes."
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
BB-26
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-27
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is understood and agreed that in Section 5, the wording starting with:
"Less any part of the foregoing amounts which the Assured has collected
from others, or which the Assured can collect from a reserve or holdback funds
in its hands" is deleted and replaced with "unless agreed to by the Company"
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-28
ENDORSEMENT
-----------
This endorsement, effective August 1, 2004, forms a part of
Policy No. U 51 issued to JPMORGAN CHASE BANK AS TRUSTEE OF HOME EQUITY MORTGAGE
TRUST 2004-4. by OLD REPUBLIC INSURANCE COMPANY, GREENSBURG, PENNSYLVANIA
It is understood and agreed that Section 4 is deleted in its entirety and is
replaced with:
"All Losses shall be paid within 30 days after presentation of
satisfactory evidence of Loss to the Company".
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY OF
THE TERMS, CONDITIONS, AGREEMENTS OR LIMITATIONS OF THE POLICY OR ANY
ENDORSEMENT ATTACHED THERETO, EXCEPT AS HEREIN SET FORTH. THIS ENDORSEMENT SHALL
NOT BE VALID UNTIL COUNTERSIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE
COMPANY.
Attest:
____________________________________ ___________________________________
President Secretary
Countersigned at Chicago, Illinois this 26th day of August , 2004
___________________________________________________________________, Authorized
Representative.
BB-29
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 III
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.
III-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.
IV-1
(vi) With respect to any first lien Mortgage Loan, the related Mortgage
is a valid, subsisting, enforceable and perfected first lien on the Mortgaged
Property and, with respect to any second lien Mortgage Loan, the related
Mortgage is a valid, subsisting, enforceable and perfected second lien on the
Mortgaged Property, and all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any security interest or other interest or right
thereto. Such lien is free and clear of all 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.
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(x) The Mortgaged Property is not subject to any material damage by
waste, fire, earthquake, windstorm, flood or other casualty. At origination of
the Mortgage Loan there was, and there currently is, no proceeding pending for
the total or partial condemnation of the Mortgaged Property.
(xi) All improvements subject to the Mortgage which were considered in
determining the appraised value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) and no improvements on
adjoining properties encroach upon the Mortgaged Property except those which are
insured against by a title insurance policy and all improvements on the property
comply with all applicable zoning and subdivision laws and ordinances.
(xii) Seller has delivered or caused to be delivered to the Trustee or
the Custodian on behalf of the Trustee the original Mortgage bearing evidence
that such instruments have been recorded in the appropriate jurisdiction where
the Mortgaged Property is located as determined by the Seller (or, in 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
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Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor.
(xvi) With respect to each Mortgage Loan that has a Prepayment Penalty
feature, each such Prepayment Penalty is enforceable and, at the time such
Mortgage Loan was originated, each Prepayment Penalty complied with applicable
federal, state and local law, subject to federal preemption where applicable.
(xvii) As of the Cut-off Date, no Mortgage Loan is (a) a non-performing
loan (i.e. a mortgage loan that is more than 90 days delinquent); (b) a
re-performing loan (i.e. a mortgage loan that was more than 90 days delinquent
within the twelve month period preceding the Cut-off Date but is contractually
current); or (c) a sub-performing loan (i.e. a mortgage loan that is at least 30
days delinquent but subject to a payment plan or agreement pursuant to which the
Mortgagor is contractually current).
(xviii) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application affecting the rights of creditors and by general equitable
principles.
(xix) To the knowledge of the Seller, (i) no proceeds from any Mortgage
Loan were used to finance single-premium credit insurance policies, (ii) no
Mortgage Loan originated prior to October 1, 2002 will impose a Prepayment
Penalty for a term in excess of five years and no Mortgage Loan 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 ▇▇▇▇▇▇▇ 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
IV-4
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees).
(xxii) No Mortgage Loan is a High Cost Loan or Covered Loan as such
terms are defined in Version 5.6 Revised; Appendix E of the Standard & Poor's
LEVELS(R) Glossary.
(xxiii) Each Old Republic Covered Loan is eligible for coverage under
the Credit Insurance Policy as of the Closing Date.
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