SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 22, 1995
DLJ MORTGAGE ACCEPTANCE CORP.
(as depositor under a Pooling and Servicing Agreement, dated as of November 1,
1995, providing for, among other things, the issuance of Mortgage Pass-Through
Certificates, Series 1995-QE9)
DLJ Mortgage Acceptance Corp.
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(Exact name of registrant as specified in its charter)
Delaware 33-37812 13-3460894
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
140 Broadway
NEW YORK, NEW YORK 10005
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code, is (212) 504-3000
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
------------------------------------
For a description of the Certificates and the Mortgage Pool, refer to
the Pooling and Servicing Agreement.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(a) Not applicable
(b) Not applicable
(c) Exhibits:
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 Pooling and Servicing Agreement,
dated as of November 1, 1995, among
DLJ Mortgage Acceptance Corp., as
depositor, Temple-Inland Mortgage
Corporation, as master servicer, and
Bankers Trust Company, as trustee,
Mortgage Pass-Through Certificates,
Series 1995-QE9.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DLJ MORTGAGE ACCEPTANCE CORP.
By: N. Dante LaRocca
Senior Vice President
Dated: November 22, 1995
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION FORMAT
- ---------- ----------- ------
4.1 Pooling and Servicing Agreement, dated as of P*
November 1, 1995, among DLJ Mortgage
Acceptance Corp., as depositor, Temple-Inland
Mortgage Corporation, as master servicer, and
Bankers Trust Company, as trustee, Mortgage
Pass-Through Certificates, Series 1995-QE9.
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* The Mortgage Loan Schedule attached as an exhibit to the Pooling and
Servicing Agreement has been filed on paper pursuant to a continuing
hardship exemption from certain electronic filing requirements.
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DLJ MORTGAGE ACCEPTANCE CORP.,
Depositor,
TEMPLE-INLAND MORTGAGE CORPORATION
Master Servicer,
and
BANKERS TRUST COMPANY,
Trustee
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1995
---------------------------------
Mortgage Pass-Through Certificates
Series 1995-QE9
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- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms................................................. 2
Accretion Termination Date................................................... 2
Accrual Period............................................................... 2
Accrued Certificate Interest................................................. 2
Adjustment Date.............................................................. 3
Advance...................................................................... 3
Agreement.................................................................... 3
Anniversary.................................................................. 3
Assignment................................................................... 3
Assignment Agreement......................................................... 3
Available Distribution Amount................................................ 3
Available Funds Pass-Through Rate............................................ 4
Bankruptcy Amount............................................................ 4
Bankruptcy Code.............................................................. 4
Bankruptcy Loss.............................................................. 4
Book-Entry Certificate....................................................... 4
Business Day................................................................. 4
Cash Liquidation............................................................. 5
Certificate.................................................................. 5
Certificate Account.......................................................... 5
Certificate Account Deposit Date............................................. 5
Certificateholder" or "Holder................................................ 5
Certificate Owner............................................................ 5
Certificate Principal Balance................................................ 5
Certificate Register......................................................... 6
Class........................................................................ 6
Class A-1 Certificate........................................................ 6
Class A-1 Percentage......................................................... 6
Class A-2 Certificate........................................................ 6
Class A-2 Percentage......................................................... 7
Class B Certificate.......................................................... 7
Class B Percentage........................................................... 7
Class B Prepayment Percentage................................................ 7
Class R Certificate.......................................................... 7
Class R Component............................................................ 7
Class R Fixed Strip Accrual Amount........................................... 7
Class R Fixed Strip Component................................................ 7
Class R P&I Component........................................................ 7
Class R Percentage........................................................... 8
Class S Certificate.......................................................... 8
Closing Date................................................................. 8
Code......................................................................... 8
Collateral Value............................................................. 8
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Corporate Trust Office....................................................... 8
Custodial Account............................................................ 8
Cut-off Date................................................................. 8
Debt Service Reduction....................................................... 8
Deficient Valuation.......................................................... 8
Definitive Certificate....................................................... 9
Depositor.................................................................... 9
Depository................................................................... 9
Depository Participant....................................................... 9
Determination Date........................................................... 9
Disqualified Organization.................................................... 9
Distribution Date............................................................ 9
DLJMCI....................................................................... 9
Due Date..................................................................... 10
Due Period................................................................... 10
Eligible Account............................................................. 10
Event of Default............................................................. 10
Excess Bankruptcy Loss....................................................... 10
Excess Fraud Loss............................................................ 10
Excess Proceeds.............................................................. 10
Excess Proceeds Account...................................................... 10
Excess Special Hazard Loss................................................... 10
Extraordinary Events......................................................... 11
Extraordinary Losses......................................................... 11
FDIC......................................................................... 11
FHLMC........................................................................ 11
Fixed Strip Rate............................................................. 11
FNMA......................................................................... 11
Fraud Loss Amount............................................................ 11
Fraud Losses................................................................. 12
Funding Date................................................................. 12
Gross Margin................................................................. 12
Index........................................................................ 12
Initial Certificate Principal Balance........................................ 12
Insurance Policy............................................................. 12
Insurance Proceeds........................................................... 12
Interest Determination Date.................................................. 13
Interim Servicing Agreement.................................................. 13
Interim Servicing Period..................................................... 13
Interim Subservicer.......................................................... 13
Late Collections............................................................. 13
LIBOR"....................................................................... 13
Liquidation Proceeds......................................................... 13
Loan-to-Value Ratio.......................................................... 14
London Business Day.......................................................... 14
Master Servicer.............................................................. 14
Maximum Rate................................................................. 14
Minimum Rate................................................................. 14
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Monthly Payment.............................................................. 14
Moody's...................................................................... 14
Mortgage..................................................................... 14
Mortgage File................................................................ 14
Mortgage Loan................................................................ 14
Mortgage Loan Purchase Agreement............................................. 14
Mortgage Loan Schedule....................................................... 15
Mortgage Note................................................................ 16
Mortgage Rate................................................................ 16
Mortgaged Property........................................................... 16
Mortgagor.................................................................... 16
Net Mortgage Rate............................................................ 16
Nonrecoverable Advance....................................................... 16
Non-United States Person..................................................... 16
Notional Amount.............................................................. 17
Officers' Certificate........................................................ 17
Opinion of Counsel........................................................... 17
Original Senior Percentage................................................... 17
OTS.......................................................................... 17
Outstanding Mortgage Loan.................................................... 17
Ownership Interest........................................................... 17
Pass-Through Rate............................................................ 17
Percentage Interest.......................................................... 18
Periodic Rate Cap............................................................ 18
Permitted Instruments........................................................ 18
Permitted Transferee......................................................... 19
Person....................................................................... 19
Prepayment Assumption........................................................ 19
Prepayment Interest Shortfall................................................ 19
Prepayment Period............................................................ 19
Primary Hazard Insurance Policy.............................................. 19
Principal Prepayment......................................................... 19
Purchase Price............................................................... 19
Rating Agency................................................................ 20
Realized Loss................................................................ 20
Record Date.................................................................. 20
Reference Banks.............................................................. 20
Regular Certificate.......................................................... 21
REMIC........................................................................ 21
REMIC Provisions............................................................. 21
Remittance Report............................................................ 21
REO Acquisition.............................................................. 21
REO Disposition.............................................................. 21
REO Imputed Interest......................................................... 21
REO Proceeds................................................................. 21
REO Property................................................................. 21
Request for Release.......................................................... 21
Reserve Interest Rate........................................................ 21
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Residual Certificate......................................................... 22
Responsible Officer.......................................................... 22
Rule 144A.................................................................... 22
Scheduled Principal and Net Recoveries....................................... 22
Seller....................................................................... 22
Seller's Warranty Certificate................................................ 23
Senior Certificate........................................................... 23
Senior Percentage............................................................ 23
Senior Prepayment Percentage................................................. 23
Servicing Account............................................................ 24
Servicing Advances........................................................... 24
Servicing Fee................................................................ 24
Servicing Fee Rate........................................................... 24
Servicing Officer............................................................ 24
Single Certificate........................................................... 24
Special Hazard Amount........................................................ 25
Special Hazard Loss.......................................................... 25
Special Hazard Percentage.................................................... 25
Standard & Poor's............................................................ 25
Startup Day.................................................................. 25
Stated Principal Balance..................................................... 25
Sub-Servicer................................................................. 25
Sub-Servicer Remittance Date................................................. 26
Sub-Servicing Account........................................................ 26
Sub-Servicing Agreement...................................................... 26
Tax Returns.................................................................. 26
Transfer..................................................................... 26
Transferor................................................................... 26
Trust Fund................................................................... 26
Trustee...................................................................... 26
Uninsured Cause.............................................................. 26
United States Person......................................................... 27
Voting Rights................................................................ 27
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans........................................ 28
2.02. Acceptance of the Trust Fund by the Trustee......................... 31
2.03. Representations, Warranties and Covenants of the Master
Servicer and the Depositor.......................................... 32
2.04. Representations and Warranties of the Seller........................ 34
2.05. Issuance of Certificates Evidencing Interests in the Trust
Fund................................................................ 34
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
3.01. Master Servicer to Act as Master Servicer........................... 35
3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers....................................................... 36
3.03. Successor Sub-Servicers............................................. 37
3.04. Liability of the Master Servicer.................................... 37
3.05. No Contractual Relationship Between Sub-Servicers and
Trustee or Certificateholders....................................... 37
3.06. Assumption or Termination of Sub-Servicing Agreements
by Trustee.......................................................... 38
3.07. Collection of Certain Mortgage Loan Payments........................ 38
3.08. Sub-Servicing Accounts.............................................. 38
3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.................................................. 39
3.10. Custodial Account................................................... 39
3.11. Permitted Withdrawals From the Custodial Account.................... 41
3.12. Permitted Instruments............................................... 42
3.13. Maintenance of Primary Hazard Insurance. ........................... 42
3.14. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.......................................................... 43
3.15. Realization Upon Defaulted Mortgage Loans........................... 44
3.16. Trustee to Cooperate; Release of Mortgage Files..................... 45
3.17. Servicing Compensation.............................................. 46
3.18. Maintenance of Certain Servicing Policies........................... 47
3.19. Annual Statement as to Compliance................................... 47
3.20. Annual Independent Public Accountants' Servicing
Statement........................................................... 47
3.21. Access to Certain Documentation..................................... 48
3.22. Title, Conservation and Disposition of REO Property................. 48
3.23. Additional Obligations of the Master Servicer....................... 51
3.24. Additional Obligations of the Depositor............................. 51
3.25 Excess Proceeds Account............................................. 51
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
4.01. Certificate Account; Distributions.................................. 54
4.02. Statements to Certificateholders.................................... 61
4.03. Remittance Reports; Advances by the Master Servicer................. 62
4.04. Allocation of Realized Losses....................................... 64
4.05. Information Reports to be Filed by the Master Servicer.............. 65
4.06. Compliance with Withholding Requirements............................ 65
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ARTICLE V
THE CERTIFICATES
5.01. The Certificates.................................................... 66
5.02. Registration of Transfer and Exchange of Certificates............... 68
5.03. Mutilated, Destroyed, Lost or Stolen Certificates................... 72
5.04. Persons Deemed Owners............................................... 72
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
6.01. Liability of the Depositor and the Master Servicer.................. 73
6.02. Merger, Consolidation or Conversion of the Depositor or
the Master Servicer................................................. 73
6.03. Limitation on Liability of the Depositor, the Master
Servicer and Others................................................. 73
6.04. Limitation on Resignation of the Master Servicer.................... 74
ARTICLE VII
DEFAULT
7.01. Events of Default................................................... 75
7.02. Trustee to Act; Appointment of Successor............................ 77
7.03. Notification to Certificateholders.................................. 77
7.04. Waiver of Events of Default......................................... 78
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of Trustee................................................... 79
8.02. Certain Matters Affecting the Trustee............................... 80
8.03. Trustee Not Liable for Certificates or Mortgage Loans............... 81
8.04. Trustee May Own Certificates........................................ 81
8.05. Master Servicer to Pay Trustee's Fees............................... 81
8.06. Eligibility Requirements for Trustee................................ 82
8.07. Resignation and Removal of the Trustee.............................. 82
8.08. Successor Trustee................................................... 83
8.09. Merger or Consolidation of Trustee.................................. 84
8.10. Appointment of Co-Trustee or Separate Trustee....................... 84
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ARTICLE IX
TERMINATION
9.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans...................................................... 86
9.02. Additional Termination Requirements................................. 87
ARTICLE X
REMIC PROVISIONS
10.01. REMIC Administration................................................ 89
10.02. Prohibited Transactions and Activities.............................. 91
10.03. Master Servicer and Trustee Indemnification......................... 92
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment........................................................... 93
11.02. Recordation of Agreement; Counterparts.............................. 94
11.03. Limitation on Rights of Certificateholders.......................... 94
11.04. Governing Law....................................................... 95
11.05. Notices............................................................. 95
11.06. Severability of Provisions.......................................... 96
11.07. Successors and Assigns; Third Party
Beneficiary......................................................... 96
11.08. Article and Section Headings........................................ 96
11.09. Notice to Rating Agency............................................. 96
Signatures
Acknowledgments
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<PAGE>
EXHIBITS
Exhibit A Form of Senior Certificate
Exhibit B-1 Form of Class B Certificate
Exhibit B-2 Form of Class R Certificate
Exhibit C Form of Trustee Initial Certification
Exhibit D Form of Trustee Final Certification
Exhibit E [Reserved.]
Exhibit F-1 Request for Release
Exhibit F-2 Request for Release for Mortgage Loans Paid in
Full
Exhibit G-1 Form of Investor Representation Letter
Exhibit G-2 Form of Transferor Representation Letter
Exhibit G-3 Transferor Affidavit and Agreement for
Transfers
to Non-United States Persons
Exhibit G-4 Transferee Affidavit and Agreement for
Transfers
to Non-United States Persons
Exhibit G-5 Form of Investor Representation Letter for
Insurance Companies
Exhibit H Form of Rule 144A Investment Representation
Exhibit I Mortgage Loan Schedule
Exhibit J Seller Representations and Warranties
Exhibit K Form of Notice Under Section 3.24
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<PAGE>
This Pooling and Servicing Agreement, dated and effective as of
November 1, 1995, among DLJ Mortgage Acceptance Corp., as Depositor (the
"Depositor"), Temple-Inland Mortgage Corporation, as Master Servicer (the
"Master Servicer"), and Bankers Trust Company, as Trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans (as defined herein). As provided herein, the Trustee will
cause an election to be made to treat the entire segregated pool of assets
subject to this Agreement (including the Mortgage Loans) as a real estate
mortgage investment conduit (a "REMIC") for federal income tax purposes and such
segregated pool of assets will be designated as the "Trust Fund." The Class S
Certificates, the Class A-1 Certificates, the Class A-2 Certificates and the
Class B Certificates, will be the "regular interests" in the Trust Fund, and the
Class R Certificates will be the "residual interests" in the Trust Fund, for
purposes of the REMIC Provisions (as defined herein) under federal income tax
law.
The following table sets forth the designation, initial Pass-Through
Rate, aggregate Initial Certificate Principal Balance (as defined herein) and
the initial percentage for each Class of Certificates comprising the
certificated interests in the Trust Fund created hereunder.
INITIAL AGGREGATE
PASS- CERTIFICATE APPROXIMATE
THROUGH PRINCIPAL INITIAL CLASS
DESIGNATION TYPE RATE BALANCE PERCENTAGE
- ----------- ---- ------- ----------- -------------
Class S .............. Senior 5.127 N/A N/A
Class A-1 ............ Senior 6.4625% $42,945,936.00 83.00%
Class A-2 ............ Senior 6.4625% $ 4,915,499.00 9.50%
Class B .............. Subordinate 6.4625% $ 3,880,657.72 7.50%
Class R
P&I Component ....... Residual 6.4626% $ 0.00 0.00%
Fixed Strip Component Residual 1.250 N/A N/A
As of the Cut-off Date, the Mortgage Loans have an aggregate Stated
Principal Balance equal to $51,742,092.72.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer and the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Article.
"Accretion Termination Date": With respect to the Class R Fixed Strip
Component, the Distribution Date on which the aggregate Class R Fixed Strip
Accrual Amount distributed to the Class A-1 Certificates, the Class A-2
Certificates and the Class B Certificates on such Distribution Date and all
preceding Distribution Dates equals 3.25% times the aggregate Certificate
Principal Balance of all Classes of the Certificates as of the Cut-off Date.
With respect to the Class R P&I Component, the Distribution Date on which the
Certificate Principal Balance of the Class B Certificates is reduced to zero.
"Accrual Period": With respect to any Distribution Date, the period
commencing on the 25th day of the month immediatley preceding the month in which
such Distribution Date occurs and ending on the 24th day of the month in which
such Distribution Date occurs.
"Accrued Certificate Interest": With respect to each Distribution
Date, as to any Class A-1 Certificate, Class A-2 Certificate, Class B
Certificate or Class R Certificate, to the extent of the Class R P&I Component,
one month's interest accrued during the related Accrual Period at the then
applicable Pass-Through Rate on the Certificate Principal Balance thereof
immediately prior to such Distribution Date. With respect to each Distribution
Date, as to the Class S Certificates and the Class R Certificates, to the extent
of the Class R Fixed Strip Component, one month's interest accrued during the
related Accrual Period at the then applicable Pass-Through Rate on the Notional
Amount immediately prior to such Distribution Date. Accrued Certificate Interest
for each Accrual Period will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. In each case Accrued Certificate Interest on
any such Class of Certificates will be reduced by the amount of (i) Prepayment
Interest Shortfalls, if any, which are not covered by payments by the Master
Servicer pursuant to Section 3.23 with respect to such Distribution Date, (ii)
the interest portion (adjusted to the Net Mortgage Rate) of Realized Losses
(including Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses and Extraordinary Losses) not allocated solely to the Class A-2
Certificates, the Class B Certificates or the Class R Certificates pursuant to
Section 4.04, (iii) the interest portion of Advances previously made with
respect to a Mortgage Loan or REO Property which remained unreimbursed following
the Cash Liquidation or REO Disposition of such Mortgage Loan or REO Property
that were made with respect to delinquencies that ultimately constituted Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, and (iv) any other interest shortfalls not covered by the
subordination provided by the Class A-2 Certificates, the Class B Certificates
and the Class R Certificates, including interest that is not collectible from
the Mortgagor pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended, or similar legislation or regulations as in effect from time to
time, with all such reductions allocated among all of the Certificates on a
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pro rata basis in proportion to their respective amounts of Accrued Certificate
Interest which would have resulted absent such reductions. In addition to that
portion of the reductions described in the preceding sentence that are allocated
to the Class A-2 Certificates, the Class B Certificates or the Class R
Certificates, Accrued Certificate Interest on the Class A-2 Certificates, the
Class B Certificates or the Class R Certificates, as applicable, will be reduced
by the interest portion (adjusted to the Net Mortgage Rate) of the portion of
Realized Losses that are allocated solely to the Class A-2 Certificates, the
Class B Certificates or the Class R Certificates, as applicable, pursuant to
Section 4.04. Furthermore, Accrued Certificate Interest on the Class R
Certificates will be further reduced by any payments made to the
Certificateholders pursuant to Sections 4.01(b)(x), (xi) and (xii). Any of the
foregoing reductions in Accrued Certificate Interest allocated to the Class R
Certificates shall be allocated between the Class R Components thereof in
proportion to their respective amounts of Accrued Certificate Interest which
would have resulted absent such reductions.
"Adjustment Date": With respect to each Mortgage Loan, the date set
forth in the related Mortgage Note on which the Mortgage Rate may change and
each semi-annual anniversary of such date. The first Adjustment Date as to each
Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan, any advance made by the Master
Servicer on any Distribution Date pursuant to Section 4.03.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof.
"Anniversary": Each anniversary of November 1, 1995.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Assignment Agreement": The assignment agreement dated the Closing
Date between DLJMCI and the Depositor.
"Available Distribution Amount": With respect to any Distribution
Date, an amount equal to (a) the sum of (i) the balance on deposit in the
Custodial Account as of the close of business on the related Determination Date
and (ii) the aggregate amount of any Advances made, all required transfers
pursuant to Section 3.22 and all amounts required to be paid by the Master
Servicer pursuant to Sections 3.13 and 3.23 by deposits into the Certificate
Account on the immediately preceding Certificate Account Deposit Date, reduced
by (b) the sum, as of the close of business on the related Determination Date,
of (i) Monthly Payments collected but due during a Due Period subsequent to the
Due Period ending on the first day of the month of the related Distribution
Date, (ii) all interest or other income earned on deposits in the Custodial
Account, (iii) any other amounts reimbursable or payable to the Master Servicer
or any SubServicer pursuant to Section 3.11, and (iv) Insurance Proceeds,
Liquidation Proceeds, Principal Prepayments, REO Proceeds and the proceeds of
Mortgage Loan purchases made pursuant to
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Section 2.02, 2.04 or 3.22, in each case received or made in the month of such
Distribution Date.
"Available Funds Pass-Through Rate": As of any Distribution Date, an
annual rate, expressed as a percentage, equal to (i) the weighted average of the
Net Mortgage Rates of all Mortgage Loans included in the Trust Fund as of the
Due Date in the month next preceding the month in which such Distribution Date
occurs, weighted on the basis of the respective Stated Principal Balances of
such Mortgage Loans, which Stated Principal Balances shall be the Stated
Principal Balances of such Mortgage Loans at the close of business on the
immediately preceding Distribution Date after giving effect to distributions
thereon allocable to principal (or, in the case of the Available Funds
Pass-Through Rate for the initial Distribution Date, at the close of business on
the Cut-off Date), minus (ii) the Fixed Strip Rate.
"Bankruptcy Amount": As of any date of determination prior to the
first Anniversary, an amount, equal to the excess, if any, of (A) $100,000.00
(the initial "Bankruptcy Amount"), over (B) the aggregate amount of Bankruptcy
Losses allocated solely to the Class A-2 Certificates, the Class B Certificates
or the Class R Certificates in accordance with Section 4.04. As of any date of
determination on or after the first Anniversary, an amount equal to the excess,
if any, of (1) the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most recent
Anniversary (for purposes of this definition, the "Relevant Anniversary") and
(b) the greater of (i) 0.15% times the aggregate principal balance of the
Mortgage Loans as of the Relevant Anniversary; and (ii) $100,000.00 over (2) the
aggregate amount of Bankruptcy Losses allocated solely to the Class A-2
Certificates, the Class B Certificates and the Class R Certificates, in
accordance with Section 4.04 since the Relevant Anniversary.
The Bankruptcy Amount may be further reduced by the Depositor
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Depositor shall obtain written
confirmation from the Rating Agency that such reduction shall not adversely
affect the then-current rating assigned to the Certificates by the Rating Agency
and shall provide a copy of such written confirmation to the Trustee.
"Bankruptcy Code": The Bankruptcy Code of 1978, as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificate": Any Certificate registered in the name of
the Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in California, New York or Texas (and such other
state or states in which the Custodial Account or the Certificate Account are at
the time located) or in the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to
close.
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"Cash Liquidation": As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, the final receipt by or
on behalf of the Master Servicer of all Insurance Proceeds, Liquidation Proceeds
and other payments or cash recoveries which the Master Servicer reasonably and
in good faith expects to be finally recoverable with respect to such Mortgage
Loan.
"Certificate": Any Class S Certificate, Class A-1 Certificate, Class
A-2 Certificate, Class B Certificate or Class R Certificate.
"Certificate Account": The trust account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled "Bankers Trust
Company, in trust for registered holders of Mortgage Pass-Through Certificates,
Series 1995-QE9, and which account or accounts must each be an Eligible Account.
"Certificate Account Deposit Date": As to any Distribution Date, the
Business Day prior thereto.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that, neither a
Disqualified Organization nor a nonUnited States Person shall be a Holder of a
Class R Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee shall be entitled to rely upon
a certification of the Depositor or the Master Servicer in determining if any
Certificates are registered in the name of a respective affiliate. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as the may indirectly exercise such rights through the
Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee shall be required to recognize as a
"Holder" or "Certificateholder" only the Person in whose name a Certificate is
registered in the Certificate Register.
"Certificate Owner": With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
"Certificate Principal Balance": With respect to each Class A-1
Certificate and Class A-2 Certificate, on any date of determination, an amount
equal to (i) the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, minus (ii) the sum of (a) the aggregate of all
amounts previously distributed with respect to such Certificates (or any
predecessor Certificate) and applied to reduce the Certificate Principal Balance
thereof pursuant to Section 4.01(b), and (b) the aggregate of all reductions in
Certificate Principal Balance deemed to have occurred in connection with
Realized Losses which were previously allocated to such Certificate (or any
predecessor Certificate) pursuant to Section 4.04; provided, that if
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the Certificate Principal Balances of the Class B Certificates and the Class R
Certificates have been reduced to zero, the Certificate Principal Balance of
each Class A-2 Certificate, at any given time, shall thereafter be an amount
equal to (i) the Percentage Interest evidenced by such Certificate times (ii)
the excess, if any of (a) the then aggregate Stated Principal Balance of the
Mortgage Loans (or related REO Properties) over (b) the aggregate Certificate
Principal Balance of the Class A-1 Certificates. With respect to each Class B
Certificate, on any date of determination, an amount equal to (i) the initial
Certificate Principal Balance of such Class B Certificate, as specified on the
face thereof, minus (ii) the sum of (a) the aggregate of all amounts previously
distributed with respect to such Certificate (or any predecessor Certificate)
and applied to reduce the Certificate Principal Balance thereof pursuant to
Section 4.01(b), and (b) the aggregate of all reductions in Certificate
Principal Balance deemed to have occurred in connection with Realized Losses
which were previously allocated to such Certificate (or any predecessor
Certificate) pursuant to Section 4.04; provided that if the Certificate
Principal Balance of the Class R Certificates has been reduced to zero, the
Certificate Principal Balance of each Class B Certificate, at any given time,
shall thereafter be an amount equal to (i) the Percentage Interest evidenced by
such Certificate times (ii) the excess, if any, of (a) the then aggregate Stated
Principal Balance of the Mortgage Loans (or related REO Properties) over (b) the
sum of the then aggregate Certificate Principal Balance of all of the Class A-1
Certificates and the Class A-2 Certificates. With respect to each Class R
Certificate, on any date of determination, an amount equal to the Percentage
Interest evidenced thereby multiplied by the excess, if any, of (x) the then
aggregate Stated Principal Balance of the Mortgage Loans over (y) the then
aggregate Certificate Principal Balances of the Senior Certificates and the
Class B Certificates. The Class S Certificates have no principal balances.
"Certificate Register": The register maintained pursuant to Section
5.02(a).
"Class": Collectively, all of the Certificates bearing the same
designation.
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit A, senior with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.04, and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class A-1 Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class A-1 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed, authenticated and delivered by the Trustee substantially in the form
annexed hereto as Exhibit A, subordinate to the Class S and Class A-1
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.04, and evidencing an interest designated as a
"regular interest" in the REMIC for purposes of the REMIC Provisions.
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"Class A-2 Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class A-2 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date; provided, that if the
Certificate Principal Balances of the Class B and Class R Certificates are
reduced to zero, then thereafter the Class A-2 Percentage as of any date of
determination shall be 100% minus the then applicable Class A-1 Percentage.
"Class B Certificate": Any one of the Class B Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B-1, subordinate to the Senior Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.04, and evidencing an interest designated as a "regular interest" in the REMIC
for purposes of the REMIC Provisions.
"Class B Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class B Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date; provided, that if the
Certificate Principal Balance of the Class R Certificates is zero on such
Distribution Date, then the Class B Percentage as of such date of determination
shall be 100% minus the then applicable Senior Percentage.
"Class B Prepayment Percentage": With respect to any Distribution
Date, 100% minus the Senior Prepayment Percentage for such Distribution Date.
"Class R Certificate": Any one of the Class R Certificates, executed,
authenticated and delivered hereunder by the Trustee substantially in the form
annexed hereto as Exhibit B-2, as further described in the recitals hereto,
evidencing an interest designated as a "residual interest" in the REMIC for
purposes of the REMIC Provisions.
"Class R Component": Either of the Class R Fixed Strip Component and
the Class R P&I Component.
"Class R Fixed Strip Accrual Amount": With respect to any Distribution
Date, the amount of interest added to the Certificate Principal Balance of the
Class R Certificates on such Distribution Date in accordance with Section
4.01(d), to the extent attributable to the Class R Fixed Strip Component.
"Class R Fixed Strip Component": With respect to the Class R
Certificates, the interest in the Trust Fund represented by such Certificates
that has no Certificate Principal Balance and accrues interest at the related
Pass-Through Rate on the Notional Amount.
"Class R P&I Component": With respect to the Class R Certificates, the
interest in the Trust Fund represented by such Certificates that has an
aggregate Certificate Principal
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Balance equal to that of the Class R Certificates and accrues interest thereon
at the related PassThrough Rate.
"Class R Percentage": With respect to any Distribution Date, a
percentage equal to 100% minus the sum of the then-applicable Senior Percentage
and the then-applicable Class B Percentage.
"Class S Certificate": Any one of the Class S Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit A, senior with respect to distributions and to the allocation
of Realized Losses as set forth in Section 4.04, and evidencing an interest
designated as a "regular interest" in the REMIC for purposes of the REMIC
Provisions.
"Closing Date": November 22, 1995.
"Code": The Internal Revenue Code of 1986.
"Collateral Value": The appraised value of a Mortgaged Property based
upon the lesser of (i) the appraisal (as reviewed and approved by the Seller)
made at the time of the origination of the related Mortgage Loan, or (ii) the
sales price of such Mortgaged Property at such time of origination. With respect
to a Mortgage Loan the proceeds of which were used to refinance an existing
mortgage loan, the appraised (as reviewed and approved by the Seller) value of
the Mortgaged Property based upon the appraisal (as reviewed and approved by the
Seller) obtained at the time of refinancing.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business related to
this Agreement shall be administered, which office at the date of the execution
of this Agreement is located at Four Albany Street, New York, New York 10006,
Attention: DLJ/Quality 1995-QE9.
"Custodial Account": The custodial account or accounts created and
maintained pursuant to Section 3.10 in the name of a depository institution, as
custodian for the holders of the Certificates, for the holders of certain other
interests in mortgage loans serviced or sold by the Master Servicer and for the
Master Servicer, into which the amounts set forth in Section 3.10 shall be
deposited directly. Any such account or accounts shall be an Eligible Account.
"Cut-off Date": November 1, 1995.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding
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indebtedness under the Mortgage Loan, which valuation results from a proceeding
initiated by the Mortgagor under the Bankruptcy Code.
"Definitive Certificate": Any definitive, fully registered
Certificate.
"Depositor": DLJ Mortgage Acceptance Corp., or its successor in
interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those Certificates that are to be Book-Entry Certificates is Cede
& Co. The Depository shall at all times be a "clearing corporation" as defined
in Section 8-102(3) of the Uniform Commercial Code of the State of New York and
a "clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
"Depository Participant": A broker, dealer, bank or other financial
institutions 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": The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the month
of the related Distribution Date.
"Disqualified Organization": Any of (i) the United States, any State
or political subdivision thereof, any possession of the United States, or any
agency or instrumentality of any of the foregoing (other than an instrumentality
which is a corporation if all of its activities are subject to tax and, except
for the FHLMC, a majority of its board of directors is not selected by such
governmental unit), (ii) any foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (unless such
organization is subject to the tax imposed by Section 511 of the Code on
unrelated business taxable income), or rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code and (iv) any other Person so
designated by the Trustee based upon an Opinion of Counsel provided to the
Trustee that the holding of an ownership interest in a Residual Certificate by
such Person may cause the Trust Fund or any Person having an ownership interest
in any Class of Certificates (other than such Person) to incur liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the transfer of an ownership interest in the Residual Certificate to such
Person. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code.
"Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing on December 26, 1995.
"DLJMCI": DLJ Mortgage Capital, Inc., a Delaware corporation.
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"Due Date": The first day of the month of the related Distribution
Date.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month of such
Distribution Date (or, with respect to the first Due Period, the day following
the Cut-off Date) and ending on the related Due Date.
"Eligible Account": An account maintained with a federal or state
chartered depository institution (i) the short-term obligations of which are
rated by the Rating Agency in its highest rating at the time of any deposit
therein, or (ii) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel (obtained by the Person requesting
that the account be held pursuant to this clause (ii)) delivered to the Trustee
prior to the establishment of such account, the Certificateholders will have a
claim with respect to the funds in such account and a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Instruments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Instrument is an obligation of the institution that maintains the Certificate
Account or Custodial Account) securing such funds that is superior to claims of
any other depositors or general creditors of the depository institution with
which such account is maintained or (iii) a trust account or accounts maintained
with a federal or state chartered depository institution or trust company with
trust powers acting in its fiduciary capacity or (iv) an account or accounts of
a depository institution acceptable to the Rating Agency (as evidenced in
writing by the Rating Agency that use of any such account as the Custodial
Account, the Excess Proceeds Account or the Certificate Account will not have an
adverse effect on the then-current ratings assigned to the Classes of the
Certificates then rated by the Rating Agency). Eligible Accounts may bear
interest.
"Event of Default": One or more of the events described in Section
7.01.
"Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion thereof,
which exceeds the then applicable Bankruptcy Amount.
"Excess Fraud Loss": Any Fraud Loss, or portion thereof, which exceeds
the then applicable Fraud Loss Amount.
"Excess Proceeds": With respect to each Mortgage Loan as to which an
REO Disposition has occurred, the proceeds that are specified as being "Excess
Proceeds" in Section 3.22.
"Excess Proceeds Account": The separate account or accounts created
and maintained pursuant to Section 3.25, which shall be entitled "Bankers Trust
Company, in trust for registered holders of Mortgage Pass-Through Certificates,
Series 1995-QE9, Excess Proceeds Account," and which account or accounts shall
be an Eligible Account.
"Excess Special Hazard Loss": Any Special Hazard Loss, or portion
thereof, that exceeds the then applicable Special Hazard Amount.
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"Extraordinary Events": Any of the following conditions with respect
to a Mortgaged Property or Mortgage Loan causing or resulting in a loss which
causes the liquidation of such Mortgage Loan:
(a) losses which are of a type that would be covered by the fidelity
bond and the errors and omissions insurance policy required to be
maintained pursuant to Section 3.18, but are in excess of the coverage
maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all whether controlled or uncontrolled, or remote or be in
whole or in part caused by, contributed to or aggravated by a peril covered
by the definition of the term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war, including
action in hindering, combatting or defending against an actual, impending
or expected attack;
1. by any government or sovereign power, de jure or de facto, or
by any authority maintaining or using military, naval or air forces;
or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(d) any weapon of war employing atomic fission or radioactive force
whether in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combatting or
defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any government
or public authority; or risks of contraband or illegal transportation or
trade.
"Extraordinary Losses": Any Realized Loss incurred on a Mortgage Loan
caused by or resulting from an Extraordinary Event.
"FDIC": Federal Deposit Insurance Corporation or any successor.
"FHLMC": Federal Home Loan Mortgage Corporation or any successor.
"Fixed Strip Rate": 1.250% per annum.
"FNMA": Federal National Mortgage Association or any successor.
"Fraud Loss Amount": With respect to any date of determination after
the Cut-off Date an amount equal to: (X) prior to the first Anniversary, an
amount equal to 3.00% of the aggregate outstanding principal balance of all of
the Mortgage Loans as of the Cut-off Date
<PAGE>
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minus the aggregate amount of Fraud Losses allocated solely to the Class A-2
Certificates, the Class B Certificates or the Class R Certificates in accordance
with Section 4.04 since the Cut-off Date, (Y) from and including the first
Anniversary to but not including the second Anniversary, an amount equal to (1)
the lesser of (a) the Fraud Loss Amount as of the day immediately preceding the
first Anniversary and (b) 2.00% of the aggregate outstanding principal balance
of all of the Mortgage Loans as of the first Anniversary minus (2) the Fraud
Losses allocated solely to the Class A-2 Certificates, the Class B Certificates
or the Class R Certificates, in accordance with Section 4.04 since the first
Anniversary, and (Z) from and including the second Anniversary to but not
including the fifth Anniversary, an amount equal to (1) the lesser of (a) the
Fraud Loss Amount as of the most recent Anniversary and (b) 1.00% of the
aggregate outstanding principal balance of all of the Mortgage Loans, as of the
most recent Anniversary minus (2) the Fraud Losses allocated solely to the Class
A-2 Certificates, the Class B Certificates or the Class R Certificates, in
accordance with Section 4.04 since the most recent Anniversary. On and after the
fifth Anniversary the Fraud Loss Amount shall be zero.
"Fraud Losses": Realized Losses on Mortgage Loans as to which there
was fraud in the origination of such Mortgage Loan.
"Funding Date": With respect to each Mortgage Loan, the date on which
funds were advanced by or on behalf of the Seller and interest began to accrue
thereunder.
"Gross Margin": With respect to each Mortgage Loan, the fixed rate set
forth in the related Mortgage Note to be added to the Index on each Adjustment
Date in accordance with the terms of the related Mortgage Note used to determine
the Mortgage Rate for such Mortgage Loan. The Gross Margin as to each Mortgage
Loan is set forth on the Mortgage Loan Schedule.
"Index": The average of the interbank offered rates for six months
United States dollar deposits in the London market based on quotations of major
banks, as published in the Western Edition of THE WALL STREET JOURNAL, as most
recently available as of the date 45 days prior to any Adjustment Date. If such
Index is not so published or is otherwise unavailable, the Master Servicer shall
select an alternate index for mortgage loans on single family residential
properties that is calculated and published or otherwise made available by an
independent third party.
"Initial Certificate Principal Balance": With respect to each Class of
Certificates, the Certificate Principal Balance of such Class of Certificates as
of the Cut-off Date as set forth in the Preliminary Statement hereto.
"Insurance Policy": With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
in respect of such Mortgage Loan.
"Insurance Proceeds": Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Hazard Insurance Policy, any title insurance policy or
any other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not applied to the restoration of the
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related Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing mortgage loans
held for its own account.
"Interest Determination Date": With respect to any Distribution Date,
the second London Business Day prior to the preceding Distribution Date.
"Interim Servicing Agreement": With respect to any Mortgage Loan, the
SubServicing Agreement between the related Interim Subservicer and the Master
Servicer, as assignee, which is in existence on the Closing Date and pursuant to
which such Interim Subservicer shall be obligated to service such Mortgage Loan
during the related Interim Servicing Period and to transfer the servicing for
such Mortgage Loan to the Master Servicer at the end of such Interim Servicing
Period.
"Interim Servicing Period": With respect to any Mortgage Loan, the
period from the Closing Date through the close of business on November 29, 1995
during which the related Interim Subservicer shall service such Mortgage Loan
for the Master Servicer pursuant to the corresponding Interim Servicing
Agreement.
"Interim Subservicer": With respect to any Mortgage Loan, either the
Seller or Lomas Mortgage USA, Inc.
"Late Collections": With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
"LIBOR": With respect to any Distribution Date, the rate determined by
the Trustee on the related Interest Determination Date on the basis of the
offered rates of the Reference Banks for one-month U.S. dollar deposits, as such
rates appear on the Reuters Screen LIBO Page, as of 11:00 A.M. (London time) on
such Interest Determination Date. On each Interest Determination Date, LIBOR
will be established by the Trustee as follows:
(i) If, on such Interest Determination Date, two or more Reference
Banks provide such offered quotations, LIBOR shall be the
arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16 of 1%).
(ii) If, on such Interest Determination Date, fewer than two Reference
Banks provide such offered quotations, LIBOR shall be the higher
of (i) LIBOR, as determined on the previous Interest
Determination Date, and (ii) the Reserve Interest Rate.
"Liquidation Proceeds": Amounts (other than Insurance Proceeds)
received by the Master Servicer in connection with the taking of an entire
Mortgaged Property by exercise of the power of eminent domain or condemnation or
in connection with the liquidation of a
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defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise,
other than amounts received in respect of any REO Property.
"Loan-to-Value Ratio": As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Collateral Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the City of London
are open and conducting transactions in U.S. dollars.
"Master Servicer": Temple-Inland Mortgage Corporation or any successor
master servicer appointed as herein provided.
"Maximum Rate": With respect to each Mortgage Loan, the amount set
forth in the Mortgage Note as the maximum Mortgage Rate thereunder.
"Minimum Rate": With respect to each Mortgage Loan, the amount set
forth in the Mortgage Note as the minimum Mortgage Rate thereunder.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by a Mortgagor from time to time under the related Mortgage Note as originally
executed (after adjustment, if any, for Principal Prepayments and for Deficient
Valuations occurring prior to such Due Date, and after any adjustment by reason
of any bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period).
"Moody's": Moody's Investors Service, Inc. or its successor in
interest.
"Mortgage": The mortgage, deed of trust or any other instrument
securing the Mortgage Loan.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement; provided, that
whenever the term "Mortgage File" is used to refer to documents actually
received by the Trustee, such term shall not be deemed to include such
additional documents required to be added unless they are actually so added.
"Mortgage Loan": Each of the mortgage loans, transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03 and from time to time
held in the Trust Fund, the Mortgage Loans originally so transferred, assigned
and held being identified in the Mortgage Loan Schedule. As used herein, the
term "Mortgage Loan" includes the related Mortgage Note and Mortgage.
"Mortgage Loan Purchase Agreement": With respect to any Mortgage Loan,
the mortgage loan purchase agreement between the Seller and DLJMCI pursuant to
which the Seller
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sold such Mortgage Loan to DLJMCI and DLJMCI purchased such Mortgage Loan from
the Seller.
"Mortgage Loan Schedule": As of any date of determination, the
schedule of Mortgage Loans included in the Trust Fund. The initial schedule of
Mortgage Loans with accompanying information transferred on the Closing Date to
the Trustee as part of the Trust Fund for the Certificates, attached hereto as
Exhibit I (and, for purposes of the Trustee's review of the Mortgage Files
pursuant to Section 2.02, in computer-readable form as delivered to the
Trustee), which list shall set forth the following information with respect to
each Mortgage Loan:
(i) the loan number and name of the Mortgagor;
(ii) the street address, city, state and zip code of the
Mortgaged Property;
(iii) the initial Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the first payment date;
(vii) the type of Mortgaged Property;
(viii) the Monthly Payment in effect as of the Cut-off Date;
(ix) the principal balance as of the Cut-off Date;
(x) the Gross Margin;
(xi) the next Adjustment Date;
(xii) the Periodic Rate Cap;
(xiii) the Adjustment Date frequency;
(xiv) the Mortgage Rate as of the Cut-off Date;
(xv) the occupancy status;
(xvi) the purpose of the Mortgage Loan;
(xvii) the Collateral Value of the Mortgaged Property;
(xviii) the original term to maturity;
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(xix) whether or not the Mortgage Loan provides for a Principal
Prepayment penalty;
(xx) the first Adjustment Date;
(xxi) the Minimum Rate and Maximum Rate;
(xxii) the paid-through date of the Mortgage Loan;
(xxiii) the credit grade of the Mortgagor;
(xxiv) the number of units in the Mortgaged Property; and
(xxv) the Interim Subservicer.
The Mortgage Loan Schedule shall also set forth the total of the
amounts described under (ix) above for all of the Mortgage Loans. The Mortgage
Loan Schedule may be in the form of more than one schedule, collectively setting
forth all of the information required.
"Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to any Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan, as adjusted from time to time in
accordance with the provisions of the Mortgage Note.
"Mortgaged Property": The underlying property securing a Mortgage
Loan.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Net Mortgage Rate": As to each Mortgage Loan, a per annum rate of
interest equal to the Mortgage Rate as in effect from time to time minus the
Servicing Fee Rate.
"Nonrecoverable Advance": Any Advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Master Servicer, will not or, in the case of a proposed Advance, would not be
ultimately recoverable from related Late Collections, Insurance Proceeds,
Liquidation Proceeds, REO Proceeds or amounts reimbursable to the Master
Servicer pursuant to Section 4.01(b). The determination by the Master Servicer
that it has made a Nonrecoverable Advance or that any proposed Advance would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Depositor and the Trustee.
"Non-United States Person": Any Person other than a United States
Person.
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"Notional Amount": As of any Distribution Date, the aggregate
Certificate Principal Balance of all Classes of Certificates immediately prior
to such date, except that the initial Notional Amount shall be rounded down to
the nearest multiple of $1.00.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president and by
the Treasurer, the Secretary, or one of the assistant treasurers or assistant
secretaries of the Master Servicer or of the Sub-Servicer and delivered to the
Depositor and Trustee.
"Opinion of Counsel": A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to the Trustee;
except that any opinion of counsel relating to (a) the qualification of any
account required to be maintained pursuant to this Agreement as an Eligible
Account, (b) qualification of the Trust Fund as a REMIC, (c) compliance with the
REMIC Provisions or (d) resignation of the Master Servicer pursuant to Section
6.04 must be an opinion of counsel who (i) is in fact independent of the
Depositor and the Master Servicer, (ii) does not have any direct financial
interest or any material indirect financial interest in the Depositor or the
Master Servicer or in an affiliate of either and (iii) is not connected with the
Depositor or the Master Servicer as an officer, employee, director or person
performing similar functions.
"Original Senior Percentage": 92.50%, which is the fraction, expressed
as a percentage, the numerator of which is the aggregate Certificate Principal
Balance of the Class A-1 Certificates and the Class A-2 Certificates as of the
Closing Date and the denominator of which is the aggregate Stated Principal
Balance of all of the Mortgage Loans as of the Closing Date.
"OTS": Office of Thrift Supervision or any successor.
"Outstanding Mortgage Loan": As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in full, Cash Liquidation or REO Disposition and which was not purchased prior
to such Due Date pursuant to Sections 2.02, 2.03 or 2.04.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A-1 Certificates, the
Class A-2 Certificates, the Class B Certificates and the Class R P&I Component,
and for any Distribution Date, an annual rate equal to the least of: (i) LIBOR
for such Distribution Date plus 0.65%, (ii) 12.00% and (iii) the Available Funds
Pass-Through Rate for such Distribution Date. With respect to the Class S
Certificates, and for any Distribution Date, a rate equal to the excess, if any,
of the Available Funds Pass-Through Rate for such Distribution Date over the
PassThrough Rate on the Class A-1 Certificates, the Class A-2 Certificates, the
Class B Certificates and the Class R P&I Component for such Distribution Date.
With respect to the Class R Fixed Strip Component, and for any Distribution
Date, a rate equal to the Fixed Strip Rate. With
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respect to the initial Distribution Date, the Pass-Through Rate on the Class A-1
Certificates, the Class A-2 Certificates, the Class B Certificates and the Class
R P&I Component will be equal to 6.4625% per annum and the Pass-Through Rate on
the Class S Certificates will be equal to 5.1275% per annum.
"Percentage Interest": With respect to any Certificate (other than a
Residual Certificate), the undivided beneficial ownership interest in the
related Class evidenced by such Certificate, which as to each such Certificate
shall be equal to the initial Certificate Principal Balance (or Notional Amount,
as applicable) thereof divided by the aggregate initial Certificate Principal
Balance (or Notional Amount, as applicable) of all of the Certificates of the
same Class, expressed as a percentage carried to four decimal places. With
respect to a Residual Certificate, the interest in distributions to be made with
respect to such Class evidenced thereby, expressed as a percentage carried to
four decimal places, as stated on the face of such Certificate.
"Periodic Rate Cap": The provision in each Mortgage Note that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than 1%.
"Permitted Instruments": Any one or more of the following:
(i) direct obligations of, or obligations fully guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the full
faith and credit of the United States;
(ii) repurchase obligations (the collateral for which is held by a
third party or the Trustee) with respect to any security described in
clause (i) above, provided that the long-term unsecured obligations of the
party agreeing to repurchase such obligations are at the time rated by the
Rating Agency in one of its two highest long-term rating categories;
(iii) certificates of deposit, time deposits, demand deposits and
bankers' acceptances of any bank or trust company incorporated under the
laws of the United States or any state thereof or the District of Columbia,
provided that the short-term commercial paper of such bank or trust company
at the date of acquisition thereof has been rated by the Rating Agency in
its highest short-term rating;
(iv) mutual funds organized under the Investment Company Act of 1940
rated not less than "A-1" by Standard & Poor's and not less than "P-1" by
Moody's;
(v) commercial paper (having original maturities of not more than nine
months) of any corporation incorporated under the laws of the United States
or any state thereof or the District of Columbia which on the date of
acquisition has been rated by the Rating Agency in its highest short-term
rating; and
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(vi) any other obligation or security acceptable to the Rating Agency
(as certified by a letter from the Rating Agency to the Trustee) in respect
of mortgage pass-through certificates rated in one of its two highest
rating categories;
provided, that no such instrument shall be a Permitted Instrument if such
instrument evidences either (a) the right to receive interest only payments with
respect to the obligations underlying such instrument or (b) both principal and
interest payments derived from obligations underlying such instrument where the
principal and interest payments with respect to such instrument provide a yield
to maturity exceeding 120% of the yield to maturity at par of such underlying
obligation.
"Permitted Transferee": Any transferee of a Class R Certificate other
than a Non- United States Person or Disqualified Organization.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Prepayment Assumption": A constant prepayment rate ("CPR") of 27% per
annum, used solely for determining the rate of accrual of original issue
discount, market discount and amortizable premium on the Certificates for
federal income tax purposes. A CPR represents an annualized constant assumed
rate of prepayment each month of a pool of mortgage loans relative to its then
outstanding principal balance for the life of such mortgage loans.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a partial Principal
Prepayment or a Principal Prepayment in full during the related Prepayment
Period, an amount equal to the amount of interest that would have accrued at the
applicable Net Mortgage Rate on the principal balance of such Mortgage Loan
immediately prior to such prepayment, or in the case of a partial Principal
Prepayment on the amount of such prepayment, during the period commencing on the
date of prepayment, or in the case of a Principal Prepayment in full the date as
of which the prepayment is applied, and ending on the last day of the month of
prepayment.
"Prepayment Period": As to any Distribution Date, the calendar month
preceding the month in which such Distribution Date occurs.
"Primary Hazard Insurance Policy": Each primary hazard insurance
policy required to be maintained pursuant to the first or the second paragraph
of Section 3.13.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.
"Purchase Price": With respect to any Mortgage Loan (or REO Property)
required to be purchased pursuant to Section 2.02 or 2.04 or that the Master
Servicer is entitled
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to repurchase pursuant to Section 3.22, an amount equal to the sum of (i) 100%
of the Stated Principal Balance thereof, (ii) unpaid accrued interest (or REO
Imputed Interest) at the applicable Net Mortgage Rate on the Stated Principal
Balance thereof outstanding during each Due Period that such interest was not
paid or advanced, from the date through which interest was last paid by the
Mortgagor or advanced and distributed to Certificateholders together with unpaid
Servicing Fees from the date through which interest was last paid by the
Mortgagor, in each case to the first day of the month in which such Purchase
Price is to be distributed, plus (iii) the aggregate of all Advances made in
respect thereof that were not previously reimbursed.
"Rating Agency": Moody's, however, if Moody's shall no longer be in
existence, "Rating Agency" shall be such nationally recognized statistical
rating agency, or other comparable Person, designated by the Depositor, notice
of which designation shall be given to the Trustee and Master Servicer.
References herein to the two highest long term debt rating categories of the
Rating Agency shall mean "Aa2" or better and references herein to the highest
short-term debt rating of a Rating Agency shall mean "Prime - 1" or better and
in the case of any other Rating Agency such references shall mean such rating
categories without regard to any plus or minus.
"Realized Loss": With respect to each Mortgage Loan or REO Property as
to which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan as of
the date of Cash Liquidation or REO Disposition, plus (ii) interest (and REO
Imputed Interest, if any) at the Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced to Certificateholders up to the last day of
the month in which the Cash Liquidation or REO Disposition occurred on the
Stated Principal Balance of such Mortgage Loan outstanding during each Due
Period that such interest was not paid or advanced, minus (iii) the proceeds, if
any, received during the month in which such Cash Liquidation or REO Disposition
occurred, to the extent applied as recoveries of interest at the Net Mortgage
Rate and to principal of the Mortgage Loan, net of the portion thereof
reimbursable to the Master Servicer or any Sub-Servicer with respect to related
Advances not previously reimbursed. With respect to each Mortgage Loan which has
become the subject of a Deficient Valuation, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the amount of such Debt Service Reduction.
"Record Date": The last Business Day of the month immediately
preceding the month of the related Distribution Date.
"Reference Banks": Bankers Trust Company, Barclay's Bank PLC, The Bank
of Tokyo and National Westminster Bank PLC, and their respective successors in
interest; PROVIDED that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks selected by the Trustee (i) which
are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, (ii) which have an established place of business in London,
(iii) which are not controlling, under the control of or under common control
with the Company
<PAGE>
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or any Affiliate thereof, (iv) whose quotations appear on the Reuters Screen
LIBO Page on the relevant Interest Determination Date and (v) which have been
designated as such by the Trustee.
"Regular Certificate": Any of the Certificates other than the Class R
Certificates.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
"Remittance Report": A report prepared by the Master Servicer
providing the information set forth in Section 4.02.
"REO Acquisition": The acquisition by the Master Servicer on behalf of
the Trustee for the benefit of the Certificateholders of any REO Property
pursuant to Section 3.15.
"REO Disposition": The final receipt by or on behalf of the Master
Servicer of all Insurance Proceeds, Liquidation Proceeds, REO Proceeds and other
payments and recoveries (including proceeds of a final sale) which the Master
Servicer expects to be finally recoverable from the sale or other disposition of
the REO Property.
"REO Imputed Interest": As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate that would have been
applicable to the related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof (as
such balance is reduced pursuant to Section 3.15 by any income from the REO
Property treated as a recovery of principal).
"REO Proceeds": Proceeds, net of directly related expenses, received
in respect of any REO Property (including, without limitation, proceeds from the
rental of the related Mortgaged Property and of any REO Disposition) which
proceeds are required to be deposited into the Custodial Account as and when
received.
"REO Property": A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibits F-1 or F-2 attached hereto.
"Reserve Interest Rate: With respect to any Distribution Date, the
rate per annum that the Trustee determines to be either (i) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 1/16 of 1%) of
the one-month U.S. dollar lending rates which New York City banks selected by
the Trustee are quoting on the related Interest Determination
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Date to the principal London offices of leading banks in the London interbank
market or (ii) in the event that the Trustee can determine no such arithmetic
mean, the lowest one-month U.S. dollar lending rate which New York City banks
selected by the Trustee are quoting on such Interest Determination Date to
leading European banks.
"Residual Certificate": Any of the Class R Certificates.
"Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
vice president, any assistant vice president, the Secretary, any assistant
secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant
cashier, any trust officer, any assistant trust officer, the Controller and any
assistant controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Rule 144A": Rule 144A under the Securities Act of 1933, as amended,
as in effect from time to time.
"Scheduled Principal and Net Recoveries": With respect to any
Distribution Date, an amount equal to the aggregate of the following:
(1) the principal portion of each Monthly Payment on the Outstanding
Mortgage Loans due on the related Due Date, whether or not received on or
prior to the related Determination Date, less the principal portion of
related Debt Service Reductions which constitute Excess Bankruptcy Losses;
(2) the Stated Principal Balance of any Mortgage Loan repurchased
during the related Prepayment Period; and
(3) the principal portion of all Insurance Proceeds, Liquidation
Proceeds and REO Proceeds received during the related Prepayment Period
minus the aggregate amount of expenses incurred by the Master Servicer in
connection with the liquidation of the related Mortgage Loans to the extent
such expenses are not otherwise recoverable from such Insurance Proceeds,
Liquidation Proceeds or REO Proceeds; but only to the extent that any such
amounts either (A) were not received in connection with a Cash Liquidation
or REO Disposition, or (B) were received in connection with a Cash
Liquidation or REO Disposition which resulted in an Excess Special Hazard
Loss, Excess Bankruptcy Loss, Excess Fraud Loss or Extraordinary Loss.
"Seller": Quality Mortgage USA, Inc., and its successors and assigns.
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"Seller's Warranty Certificate": The Seller's Warranty Certificate
dated the Closing Date and executed by the Seller with respect to the Mortgage
Loans pursuant to the related Mortgage Loan Purchase Agreements.
"Senior Certificate": Any of the Class S Certificates, the Class A-1
Certificates or the Class A-2 Certificates.
"Senior Percentage": With respect to any Distribution Date, the sum of
the then applicable Class A-1 Percentage and the then applicable Class A-2
Percentage.
"Senior Prepayment Percentage": With respect to any Distribution Date,
the percentage indicated below for the time period indicated during which such
Distribution Date occurs:
DISTRIBUTION DATE SENIOR PREPAYMENT PERCENTAGE
- ----------------- ----------------------------
December 1995 through 100%
November 2005
December 2005 through Senior Percentage, plus 70% of
November 2006 the difference between 100%
and the Senior Percentage
December 2006 through Senior Percentage, plus 60% of
November 2007 the difference between 100%
and the Senior Percentage
December 2007 through Senior Percentage, plus 40% of
November 2008 the difference between 100%
and the Senior Percentage
December 2008 through Senior Percentage, plus 20% of
November 2009 the difference between 100%
and the Senior Percentage
December 2009 and Senior Percentage
thereafter
provided, however, that any scheduled reduction to the Senior Prepayment
Percentage described above shall not occur as of any Distribution Date unless
either (a)(1) the outstanding principal balance of Mortgage Loans delinquent 60
days or more averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date, if occurring during the eleventh, twelfth,
thirteenth, fourteenth or fifteenth year (or any year thereafter) after November
1995, are less than 30%, 35%, 40%, 45% and 50%, respectively, of the sum of the
Initial Certificate Principal Balance of the Class B Certificates and 3.25% of
the aggregate initial Certificate Principal Balance of the Class A-1
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Certificates, the Class A-2 Certificates and the Class B Certificates or (b)(1)
the outstanding principal balance of the Mortgage Loans delinquent 60 days or
more averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date are less than 10% of the sum of the Initial
Certificate Principal Balance of the Class B Certificates and 3.25% of the
aggregate initial Certificate Principal Balance of the Class A-1 Certificates,
the Class A-2 Certificates and the Class B Certificates. For purposes of the
foregoing, the percentage of the Mortgage Loans that are delinquent as of any
Distribution Date shall be deemed to be such percentages as are to be specified
in the report pursuant to Section 4.02 with respect to such Distribution Date.
Notwithstanding the foregoing, upon the reduction of the aggregate Certificate
Principal Balance of the Class A-1 Certificates and the Class A-2 Certificates
to zero, the Senior Prepayment Percentage shall thereafter be 0%. In addition,
with respect to any Distribution Date on which the Senior Percentage is greater
than the Original Senior Percentage, the Senior Prepayment Percentage for such
Distribution shall be 100%.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event by the Master Servicer in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under the second paragraph of Section 3.01 and Section 3.09.
"Servicing Fee": As to each Mortgage Loan, an amount, payable out of
any payment of interest on the Mortgage Loan, equal to interest at the
applicable Servicing Fee Rate on the Stated Principal Balance of such Mortgage
Loan for the calendar month preceding the month in which the payment is due
(alternatively, in the event such payment of interest accompanies a Principal
Prepayment in full made by the Mortgagor, interest for the number of days
covered by such payment of interest).
"Servicing Fee Rate": With respect to each Mortgage Loan, the per
annum rate of 0.7500%.
"Servicing Officer": Any officer of the Master Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans,
whose name appears on a list of servicing officers furnished to the Trustee by
the Master Servicer, as such list may from time to time be amended.
"Single Certificate": A Certificate of any Class evidencing an initial
Certificate Principal Balance equal to $1,000.
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"Special Hazard Amount": As of any Distribution Date, an amount equal
to $699,858.64 minus the sum of (i) the aggregate amount of Special Hazard
Losses allocated solely to the Class A-2 Certificates, the Class B Certificates
or the Class R Certificates in accordance with Section 4.04 and (ii) the
Adjustment Amount (as defined below) as most recently calculated. For each
Anniversary, the Adjustment Amount shall be calculated and shall be equal to the
amount, if any, by which the amount calculated in accordance with the preceding
sentence (without giving effect to the deduction of the Adjustment Amount for
such Anniversary) exceeds the greater of (A) the product of the Special Hazard
Percentage for such Anniversary multiplied by the outstanding principal balance
of all the Mortgage Loans on such Anniversary and (B) twice the outstanding
principal balance of the Mortgage Loan in the Trust Fund which has the largest
outstanding principal balance on such Anniversary.
"Special Hazard Loss": Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss, but not including (i) any loss of a
type covered by a hazard insurance policy or a flood insurance policy required
to be maintained in respect to such Mortgaged Property pursuant to Section 3.13
to the extent of the amount of such loss covered thereby, or (ii) any
Extraordinary Loss.
"Special Hazard Percentage": As of each Anniversary, the greater of
(i) 1% (or, if greater than 1%, the highest percentage of Mortgage Loans, by
principal balance, in any California zip code area) times the aggregate
principal balance of all of the Mortgage Loans on such Anniversary and (ii)
twice the principal balance of the single Mortgage Loan having the largest
principal balance.
"Standard & Poor's": Standard & Poor's Ratings Services or its
successor in interest.
"Startup Day": The day designated as such pursuant to Article X
hereof.
"Stated Principal Balance": With respect to any Mortgage Loan or
related REO Property at any given time, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut-off Date, after application of principal
payments due on or before such date, whether or not received, minus (ii) the sum
of (a) the principal portion of the Monthly Payments due with respect to such
Mortgage Loan or REO Property during each Due Period ending prior to the most
recent Distribution Date which were distributed or with respect to which an
Advance was distributed, and (b) all Principal Prepayments with respect to such
Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation Proceeds
and net income from a REO Property to the extent applied by the Master Servicer
as recoveries of principal in accordance with Section 3.15 with respect to such
Mortgage Loan or REO Property, which were distributed pursuant to Section 4.01
on any previous Distribution Date, and (c) any Realized Loss with respect
thereto allocated pursuant to Section 4.04 for any previous Distribution Date.
"Sub-Servicer": Any Person with which the Master Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
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"Sub-Servicer Remittance Date": The 18th day of each month, or if such
day is not a Business Day, the immediately preceding Business Day.
"Sub-Servicing Account": An account established by a Sub-Servicer
which meets the requirements set forth in Section 3.08 and is otherwise
acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer and any successor Sub-Servicer relating to servicing
and administration of certain Mortgage Loans as provided in Section 3.02.
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information, reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) the
Mortgage Loans (exclusive of payments of principal and interest due on or before
the Cut-off Date, if any) as from time to time are subject to this Agreement and
all payments under and proceeds of the Mortgage Loans (exclusive of any
prepayment fees and late payment charges received on the Mortgage Loans),
together with all documents included in the related Mortgage File, subject to
Section 2.01; (ii) such funds or assets as from time to time are deposited in
the Custodial Account, the Excess Proceeds Account or the Certificate Account;
(iii) any REO Property; (iv) the Primary Hazard Insurance Policies, if any, and
all other Insurance Policies with respect to the Mortgage Loans; and (v) the
Depositor's interest in respect of the representations and warranties made by
the Seller in each Mortgage Loan Purchase Agreement and in the Seller's Warranty
Certificate, as assigned to the Trustee pursuant to Section 2.04 hereof.
"Trustee": Bankers Trust Company, or its successor in interest, or any
successor trustee appointed as herein provided.
"Uninsured Cause": Any cause of damage to property subject to a
Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 3.13.
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"United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times during the term
of this Agreement, 94% of all of the Voting Rights shall be allocated among
Holders of the Class A-1 Certificates, the Class A-2 Certificates and the Class
B Certificates in proportion to the initial Certificate Principal Balances of
their respective Certificates; and the Holders of the Class S Certificates and
the Class R Certificates, shall be entitled to 3% and 3%, respectively, of all
of the Voting Rights, allocated among the Certificates of each such Class in
accordance with their respective Percentage Interests.
<PAGE>
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign, transfer, sell, set over and
otherwise convey to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Mortgage Loans identified on the
Mortgage Loan Schedule (exclusive of any prepayment fees and late payment
charges received thereon) and all other assets included or to be included in the
Trust Fund for the benefit of the Certificateholders. Such assignment includes
all principal and interest received by the Master Servicer on or with respect to
the Mortgage Loans (other than payment of principal and interest due on or
before the Cut-off Date).
In connection with such transfer and assignment, the Depositor has
requested the Seller pursuant to the Mortgage Loan Purchase Agreements to
deliver to, and deposit with the Trustee, the following documents or
instruments:
(i) the original Mortgage Note, endorsed without recourse to the order
of "Bankers Trust Company, as trustee" with all intervening endorsements
showing a complete chain of endorsements from the originator to the Person
endorsing it to the Trustee;
(ii) the original recorded Mortgage or, if the original Mortgage has
not been returned from the applicable public recording office, a copy of
the Mortgage certified by the Seller to be a true and complete copy of the
original Mortgage submitted to the title insurance company for recording;
(iii) a duly executed original Assignment of the Mortgage in
recordable form to "Bankers Trust Company, as trustee for the holders of
DLJ Mortgage Acceptance Corp. Mortgage Pass-Through Certificates" or to
"Bankers Trust Company, as trustee";
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator thereof to the
Person assigning it to the Trustee or, if any such Assignment has not been
returned from the applicable public recording office, a copy of such
Assignment certified by the Seller to be a true and complete copy of the
original Assignment submitted to the title insurance company for recording;
(v) the original lender's title insurance policy, or, if such policy
has not been issued and if the Mortgage Loan was funded through a title
insurance company pursuant to escrow or closing instructions precluding the
title insurance company or other comparable escrow or closing agent from
funding until it is prepared to issue the required title insurance
coverage, a copy of such escrow or closing instructions;
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(vi) the original of any assumption, modification, extension or
guaranty agreement;
(vii) the original or a copy of the preliminary title report (or
equivalent thereof) on the Mortgage Property; and
(viii) if any of the documents or instruments referred to above was
executed on behalf of the Mortgagor by another Person, the original power
of attorney or other instrument that authorized and empowered such Person
to sign, or a copy thereof certified by the Seller (or by an officer of the
applicable title insurance or escrow company) to be a true and correct copy
of the original.
The Seller is obligated pursuant to each Mortgage Loan Purchase
Agreement to deliver to the Trustee: (a) either the original recorded Mortgage,
or in the event such original cannot be delivered by the Seller, a copy of such
Mortgage certified as true and complete by the appropriate recording office, in
those instances where a copy thereof certified by the Seller was delivered to
the Trustee pursuant to clause (ii) above; and (b) either the original
Assignment or Assignments of the Mortgage, with evidence of recording thereon,
showing a complete chain of assignment from the originator to the Seller, or in
the event such original cannot be delivered by the Seller, a copy of such
Assignment or Assignments certified as true and complete by the appropriate
recording office, in those instances where copies thereof certified by the
Seller were delivered to the Trustee pursuant to clause (iv) above.
Notwithstanding anything to the contrary contained in this Section 2.01, in
those instances where the public recording office retains the original Mortgage
after it has been recorded, the Seller shall be deemed to have satisfied its
obligations hereunder upon delivery to the Trustee of a copy of such Mortgage
certified by the public recording office to be a true and complete copy of the
recorded original thereof.
As promptly as practicable after the Closing Date, the Seller shall
cause to be delivered to the appropriate public office for recordation in the
real property records the Assignment referred to in clause (iii) and to the
extent necessary in clause (iv) of this Section 2.01. While such Assignment to
be recorded is being recorded, the Trustee shall retain a photocopy of such
Assignment. If any Assignment is lost or returned unrecorded to the Trustee
because of any defect therein, the Seller is required to prepare a substitute
Assignment or cure such defect, as the case may be, and the Trustee shall cause
such Assignment to be recorded in accordance with this paragraph.
The Seller is required under each Mortgage Loan Purchase Agreement to
exercise its best reasonable efforts to deliver or cause to be delivered to the
Trustee within 120 days of the Closing Date, or such other date as is set forth
in such Mortgage Loan Purchase Agreement, the original or a photocopy of the
title insurance policy with respect to each of the related Mortgage Loans
assigned to the Trustee pursuant to this Section 2.01.
All original documents relating to the Mortgage Loans which are not
delivered to the Trustee, to the extent delivered by the Seller to the Master
Servicer, are and shall be held by the Master Servicer in trust for the benefit
of the Trustee on behalf of the Certificateholders.
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Except as may otherwise expressly be provided herein, neither the
Depositor, the Master Servicer nor the Trustee shall (and the Master Servicer
shall ensure that no Sub-Servicer shall) assign, sell, dispose of or transfer
any interest in the Trust Fund or any portion thereof, or permit the Trust Fund
or any portion thereof to be subject to any lien, claim, mortgage, security
interest, pledge or other encumbrance of, any other Person.
It is intended that the conveyance of the Mortgage Loans by the
Depositor to the Trustee as provided in this Section be, and be construed as, a
sale of the Mortgage Loans by the Depositor to the Trustee for the benefit of
the Certificateholders. It is, further, not intended that such conveyance be
deemed a pledge of the Mortgage Loans by the Depositor to the Trustee to secure
a debt or other obligation of the Depositor. However, in the event that the
Mortgage Loans are held to be property of the Depositor, or if for any reason
this Agreement is held or deemed to create a security interest in the Mortgage
Loans, then it is intended that, (a) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in this Section shall be deemed to
be (1) a grant by the Depositor to the Trustee of a security interest in all of
the Depositor's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (A) the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related insurance
policies and all other documents in the related Mortgage Files, (B) all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof and (C) all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Depositor
to the Trustee of any security interest in any and all of the Seller's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the property described in the foregoing
clauses (1)(A) through (C) granted by the Seller to the Depositor pursuant to
the related Mortgage Loan Purchase Agreements or granted by DLJMCI to the
Depositor pursuant to the Assignment Agreement; (c) the possession by the
Trustee or its agent of Mortgage Notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" or possession by a purchaser or a
person designated by such secured party, for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction (including, without
limitation, Sections 9-305, 8-313 or 8-321 thereof); and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. The Depositor and the Trustee
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.
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SECTION 2.02. Acceptance of the Trust Fund by the Trustee.
The Trustee acknowledges receipt (subject to any exceptions noted in
the Initial Certification described below) of the documents referred to in
Section 2.01 above and all other assets included in the Trust Fund and declares
that it holds and will hold such documents and the other documents delivered to
it constituting the Mortgage Files, and that it holds or will hold such other
assets included in the Trust Fund (to the extent delivered or assigned to the
Trustee), in trust for the exclusive use and benefit of all present and future
Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review each Mortgage File on or before the Closing Date to ascertain that all
documents required to be delivered to it are in its possession, and the Trustee
agrees to execute and deliver to the Depositor and the Master Servicer on the
Closing Date an Initial Certification in the form annexed hereto as Exhibit C to
the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (i) all
documents required to be delivered to it pursuant to this Agreement with respect
to such Mortgage Loan are in its possession, (ii) such documents have been
reviewed by it and appear regular on their face and relate to such Mortgage Loan
and (iii) based on its examination and only as to the foregoing documents, the
information set forth in items (i) - (vi) and (x) - (xiii) of the definition of
the "Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. Neither the Trustee nor the Master Servicer shall be under any
duty to determine whether any Mortgage File should include any of the documents
specified in clause (vi) of Section 2.01. Neither the Trustee nor the Master
Servicer shall be under any duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable or appropriate for the represented purpose or that
they have actually been recorded or that they are other than what they purport
to be on their face.
Within 90 days of the Closing Date the Trustee shall deliver to the
Depositor and the Master Servicer a Final Certification in the form annexed
hereto as Exhibit D evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and preparing the
certifications referred to above the Trustee finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, the Trustee shall promptly notify the Seller, the Master
Servicer and the Depositor. The Trustee shall promptly notify the Seller of such
defect and request that the Seller cure any such defect within 60 days from the
date on which the Seller was notified of such defect, and if the Seller does not
cure such defect in all material respects during such period, request that the
Seller purchase such Mortgage Loan from the Trust Fund on behalf of the
Certificateholders at the Purchase Price within 90 days after the date on which
the Seller was notified of such defect. It is understood and agreed that the
obligation of the Seller to cure a material defect in, or purchase any Mortgage
Loan as to which a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders. The Purchase
Price for the purchased Mortgage Loan shall be deposited or caused to be
deposited upon receipt by the Master Servicer in the Custodial Account and, upon
receipt by the Trustee
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of written notification of such deposit signed by a Servicing Officer, the
Trustee shall release or cause to be released to the Seller the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as the Seller shall require as necessary to vest
in the Seller ownership of any Mortgage Loan released pursuant hereto and at
such time the Trustee shall have no further responsibility with respect to the
related Mortgage File.
SECTION 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Depositor.
(a) The Master Servicer hereby represents and warrants to and
covenants with the Depositor and the Trustee for the benefit of
Certificateholders that:
(i) The Master Servicer is, and throughout the term hereof shall
remain, a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada (except as otherwise permitted
pursuant to Section 6.02), the Master Servicer is, and shall remain, in
compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to perform its obligations under this
Agreement, and the Master Servicer is, and shall remain, approved to sell
mortgage loans to and service mortgage loans for FNMA and FHLMC;
(ii) The execution and delivery of this Agreement by the Master
Servicer, and the performance and compliance with the terms of this
Agreement by the Master Servicer, will not violate the Master Servicer's
charter or bylaws or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or result in
the breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets;
(iii) The Master Servicer has the full power and authority to
enter into and consummate all transactions contemplated by this Agreement,
has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and
delivery by the Depositor and the Trustee, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against the Master
Servicer in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
the enforcement of creditors' rights generally, and (B) general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(v) The Master Servicer is not in violation of, and its execution
and delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation is likely to affect materially and adversely either
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the ability of the Master Servicer to perform its obligations under this
Agreement or the financial condition of the Master Servicer;
(vi) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement or is likely to affect materially and adversely either
the ability of the Master Servicer to perform its obligations under this
Agreement or the financial condition of the Master Servicer;
(vii) The Master Servicer will comply in all material respects in
the performance of this Agreement with all reasonable rules and
requirements of each insurer under each Insurance Policy;
(viii) The execution of this Agreement and the performance of the
Master Servicer's obligations hereunder do not require any license, consent
or approval of any state or federal court, agency, regulatory authority or
other governmental body having jurisdiction over the Master Servicer, other
than such as have been obtained; and
(ix) No information, certificate of an officer, statement
furnished in writing or report delivered to the Depositor, any affiliate of
the Depositor or the Trustee by the Master Servicer will, to the knowledge
of the Master Servicer, contain any untrue statement of a material fact or
omit a material fact necessary to make the information, certificate,
statement or report not misleading.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.03(a) shall survive the execution and
delivery of this Agreement, and shall inure to the benefit of the Depositor, the
Trustee and the Certificateholders. Upon discovery by the Depositor, the Trustee
or the Master Servicer of a breach of any of the foregoing representations,
warranties and covenants that materially and adversely affects the interests of
the Depositor or the Trustee, the party discovering such breach shall give
prompt written notice to the other parties.
(b) The Depositor hereby represents and warrants to the Master
Servicer and the Trustee for the benefit of Certificateholders that as of the
Closing Date (or, if otherwise specified below, as of the date so specified):
(i) Assuming that representation (v) of the Seller set forth in
Exhibit J hereto is true and correct, then immediately prior to the
assignment of the Mortgage Loans to the Trustee, the Depositor had good
title to, and was the sole owner of, each Mortgage Loan free and clear of
any pledge, lien, encumbrance or security interest (other than rights to
servicing and related compensation) and such assignment validly transfers
ownership of the Mortgage Loans to the Trustee free and clear of any
pledge, lien, encumbrance or security interest; and
(ii) The representations and warranties of the Seller with
respect to the Mortgage Loans and the remedies therefor that are contained
in the related
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Mortgage Loan Purchase Agreements and in the Seller's Warranty Certificate
are as set forth in Exhibit J hereto.
It is understood and agreed that the representations and warranties set forth in
this Section 2.03(b) shall survive delivery of the respective Mortgage Files to
the Trustee.
Upon discovery by either the Depositor, the Master Servicer or the
Trustee of a breach of any representation or warranty set forth in this Section
2.03 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties.
SECTION 2.04. Representations and Warranties of the Seller.
The Depositor hereby assigns to the Trustee for the benefit of
Certificateholders its interest in respect of the representations and warranties
made by the Seller in each Mortgage Loan Purchase Agreement or the exhibits
thereto and in the Seller's Warranty Certificate. Insofar as any Mortgage Loan
Purchase Agreement or the Seller's Warranty Certificate relates to any such
representations and warranties and any remedies provided thereunder for any
breach of such representations and warranties, such right, title and interest
may be enforced by the Trustee on behalf of the Certificateholders. Upon the
discovery by the Depositor, the Master Servicer or the Trustee of a breach of
any of the representations and warranties made in any Mortgage Loan Purchase
Agreement or in the Seller's Warranty Certificate in respect of any Mortgage
Loan which are set forth in Exhibit J attached hereto which materially and
adversely affects the interests of the Certificateholders in such Mortgage Loan,
the party discovering such breach shall give prompt written notice to the other
parties. The Trustee shall promptly notify the Seller of such breach and request
that such Seller shall, within 90 days from the date that the Depositor, the
Master Servicer or the Trustee was notified of such breach, either (i) cure such
breach in all material respects or (ii) purchase such Mortgage Loan from the
Trust Fund at the Purchase Price and in the manner set forth in Section 2.02.
Except as expressly set forth herein neither the Trustee nor the Master Servicer
is under any obligation to discover any breach of the above mentioned
representations and warranties. It is understood and agreed that the obligation
of the Seller to cure such breach or purchase such Mortgage Loan as to which
such a breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to Certificateholders or the Trustee on behalf
of Certificateholders.
SECTION 2.05. Issuance of Certificates Evidencing Interests in the
Trust Fund.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery of the Mortgage Files to it together with the assignment to it
of all other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor has executed and caused to be authenticated and delivered to,
or upon the order of, the Depositor the Certificates in authorized denominations
which evidence ownership of the entire Trust Fund.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans in
accordance with this Agreement, the related Mortgage Notes and Mortgages and the
customary and usual standards of practice of prudent mortgage lenders in the
respective states in which the Mortgaged Properties are located, and shall have
full power and authority, acting alone and/or through Sub-Servicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration that it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Master Servicer in its own
name or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee when the Master Servicer believes it appropriate in its best judgment,
to (i) execute and deliver, on behalf of the Certificateholders and the Trustee
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Mortgage Loans and the Mortgaged Properties, (ii) institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert
the ownership of such properties, and (iii) hold or cause to be held title to
such properties, on behalf of the Trustee and Certificateholders. The Master
Servicer shall service and administer the Mortgage Loans in accordance with
applicable state and federal law and shall provide to the Mortgagors any reports
required to be provided to them thereby. Subject to Section 3.16, the Trustee
shall execute based on the written request of the Master Servicer, and furnish
to the Master Servicer and any Sub-Servicer, any special or limited powers of
attorney and other documents necessary or appropriate to enable the Master
Servicer and any Sub-Servicer to carry out their servicing and administrative
duties hereunder. The Trustee shall not be liable for any action taken by the
Master Servicer or any Sub-Servicer pursuant to the application of such special
or limited powers of attorney.
In accordance with the standards of the preceding paragraph, the
Master Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. No costs incurred by the Master Servicer or by
Sub-Servicers in effecting the payment of taxes and assessments on the Mortgaged
Properties shall, for the purpose of calculating distributions to
Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loans so permit.
It is expressly understood and agreed that in light of the
underwriting criteria applicable to the Mortgage Loans, special servicing
procedures are desirable in order to minimize the delinquency and loss
experience of the Mortgage Loans. The Master Servicer hereby covenants that it
will use reasonable efforts to prevent and to resolve delinquencies promptly and
appropriately in light of the underwriting criteria applicable to the Mortgage
Loans
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and that it will modify its procedures from time to time in accordance with the
reasonable written request of the Depositor. Notwithstanding anything in this
Agreement to the contrary, the Master Servicer shall not (unless the Mortgagor
is in default with respect to the Mortgage Loan or such default is, in the
judgment of the Master Servicer, reasonably foreseeable) make or permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (i) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and cause to fail to qualify as a REMIC under the Code
or (ii) cause the imposition of any tax on "prohibited transactions" or
"contributions" after the Startup Day under the REMIC Provisions.
The relationship of the Master Servicer (and of any successor to the
Master Servicer under this Agreement) to the Trustee under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements with
SubServicers for the servicing and administration of the Mortgage Loans and for
the performance of any and all other activities of the Master Servicer
hereunder. Each Sub-Servicer shall be either (i) an institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall be
authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the SubServicer to perform its obligations
hereunder and under the Sub-Servicing Agreement, and in either case shall be a
FHLMC or FNMA approved mortgage servicer. Each Sub-Servicing Agreement must
impose on the Sub-Servicer requirements conforming to the provisions set forth
in Section 3.08 and provide for servicing of the Mortgage Loans consistent with
the terms of this Agreement. With the consent of the Trustee, which consent
shall not be unreasonably withheld, the Master Servicer and the Sub-Servicers
may enter into Sub-Servicing Agreements and make amendments to the Sub-Servicing
Agreements or enter into different forms of Sub-Servicing Agreements; provided,
however, that any such amendments or different forms shall be consistent with
and not violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders, without the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights. Notwithstanding any inconsistent or contrary provision of this
Agreement, neither any Interim Subservicer nor any Interim Servicing Agreement
shall be subject to the foregoing provisions during the Interim Servicing Period
for any related Mortgage Loan.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each SubServicer under the related Sub-Servicing
Agreement, including, without limitation, any obligation to make advances in
respect of delinquent payments as required by a Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form
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and carried out to such an extent and at such time as the Master Servicer, in
its good faith business judgment, would require were it the owner of the related
Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at
its own expense, but shall be reimbursed therefor only (i) from a general
recovery resulting from such enforcement only to the extent, if any, that such
recovery exceeds all amounts due in respect of the related Mortgage Loans or
(ii) from a specific recovery of costs, expenses or attorneys' fees against the
party against whom such enforcement is directed.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02. Each Sub-Servicing
Agreement, if any, shall include the provision that such agreement may be
immediately terminated by any successor Master Servicer without cause and
without payment of any fee or penalty in the event that the Master Servicer
shall, for any reason, no longer be the Master Servicer (including by reason of
an Event of Default).
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a SubServicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and Certificateholders for the servicing and administering of the
Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. For purposes
of this Agreement, the Master Servicer shall be deemed to have received payments
on Mortgage Loans when the Sub-Servicer has received such payments. The Master
Servicer shall be entitled to enter into any agreement with a SubServicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and
Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no
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claims, rights, obligations, duties or liabilities with respect to the
Sub-Servicer except as set forth in Section 3.06.
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trustee.
In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of an Event of Default), the Trustee or its
designee shall thereupon assume all of the rights and obligations of the Master
Servicer under each Sub-Servicing Agreement that the Master Servicer may have
entered into, unless the Trustee is then permitted and elects to terminate any
Sub-Servicing Agreement in accordance with its terms. Subject to Section 3.03,
the Trustee, its designee or the successor servicer for the Trustee shall be
deemed to have assumed all of the Master Servicer's interest therein and to have
replaced the Master Servicer as a party to each Sub-Servicing Agreement to the
same extent as if the Sub-Servicing Agreements had been assigned to the assuming
party, except that the Master Servicer shall not thereby be relieved of any
liability or obligations under the Sub-Servicing Agreements, and the Master
Servicer shall continue to be entitled to any rights or benefits which arose
prior to its termination as master servicer.
The Master Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.
SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Insurance Policy, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. The Master Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note, Primary Hazard Insurance
Policy or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that it is prohibited by
applicable law from enforcing the provision of the Mortgage or other instrument
pursuant to which such payment is required. Notwithstanding the foregoing, the
Master Servicer may not waive any late payment charge or any prepayment charge
or penalty interest in connection with the prepayment of a Mortgage Loan without
the express written consent of the Seller, except as otherwise required under
applicable law or under the provisions of the Mortgage or Mortgage Note, and
except as otherwise provided in any agreement among the Depositor, the Seller
and the Master Servicer. The Master Servicer shall be responsible for preparing
and distributing all information statements relating to payments on the Mortgage
Loans, in accordance with all applicable federal and state tax laws and
regulations.
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SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Master Servicer. All amounts held in a
Sub-Servicing Account shall be held in trust for the Trustee for the benefit of
the Certificateholders. The Sub-Servicer will be required to deposit into the
Sub-Servicing Account no later than the first Business Day after receipt all
proceeds of Mortgage Loans received by the Sub-Servicer, less its servicing
compensation and any unreimbursed expenses and advances, to the extent permitted
by the Sub-Servicing Agreement. On each Sub-Servicer Remittance Date the
Sub-Servicer will be required to remit to the Master Servicer all funds held in
the SubServicing Account with respect to any Mortgage Loan as of the
Sub-Servicer Remittance Date, after deducting from such remittance an amount
equal to the servicing compensation and unreimbursed expenses and advances to
which it is then entitled pursuant to the related SubServicing Agreement, to the
extent not previously paid to or retained by it. In addition, on each
Sub-Servicer Remittance Date the Sub-Servicer will be required to remit to the
Master Servicer any amounts required to be advanced pursuant to the related
Sub-Servicing Agreement. The Sub-Servicer will also be required to remit to the
Master Servicer, within one Business Day of receipt, the proceeds of any
Principal Prepayment made by the Mortgagor and any Insurance Proceeds or
Liquidation Proceeds.
SECTION 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
The Master Servicer and the Sub-Servicers shall establish and maintain
one or more accounts (the "Servicing Accounts"), and shall deposit and retain
therein all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, Primary Hazard Insurance
Policy premiums, and comparable items for the account of the Mortgagors, to the
extent that the Master Servicer customarily escrows for such amounts.
Withdrawals of amounts so collected from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, Primary Hazard Insurance Policy
premiums and comparable items; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out
of related collections for any payments made pursuant to Sections 3.01 (with
respect to taxes and assessments), and 3.13 (with respect to Primary Hazard
Insurance Policies); (iii) refund to Mortgagors any sums as may be determined to
be overages; or (iv) clear and terminate the Servicing Account at the
termination of this Agreement pursuant to Section 9.01. As part of its servicing
duties, the Master Servicer or Sub-Servicers shall, if and to the extent
required by law, pay to the Mortgagors interest on funds in Servicing Accounts
from its or their own funds, without any reimbursement therefor.
SECTION 3.10. Custodial Account.
(a) The Master Servicer shall establish and maintain one or more
accounts (collectively, the "Custodial Account") in which the Master Servicer
shall deposit or cause to be deposited on a daily basis, or as and when received
from the Sub-Servicers, the following
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payments and collections received or made by or on behalf of it subsequent to
the Cut-off Date, or received by it prior to the Cut-off Date but allocable to a
period subsequent thereto (other than in respect of principal and interest on
the Mortgage Loans due on or before the Cut-off Date):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans,
exclusive of any portion thereof representing interest in excess of the
related Net Mortgage Rate;
(iii) all Insurance Proceeds, other than proceeds that represent
reimbursement of costs and expenses incurred by the Master Servicer in
connection with presenting claims under the related Insurance Policies,
Liquidation Proceeds and REO Proceeds;
(iv) all proceeds of any Mortgage Loan or REO Property repurchased or
purchased in accordance with Sections 2.02, 2.04, 3.22 or 9.01;
(v) any amounts required to be deposited pursuant to Sections 3.12 or
3.13; and
(vi) all amounts transferred from the Certificate Account to the
Custodial Account in accordance with Section 4.01(b).
The foregoing requirements for deposit in the Custodial Account shall
be exclusive. In the event the Master Servicer shall deposit in the Custodial
Account any amount not required to be deposited therein, it may withdraw such
amount from the Custodial Account, any provision herein to the contrary
notwithstanding. The Custodial Account shall be maintained as a segregated
account, separate and apart from trust funds created for mortgage pass-through
certificates of other series, and the other accounts of the Master Servicer.
(b) Funds in the Custodial Account may be invested in Permitted
Instruments in accordance with the provisions set forth in Section 3.12. The
Master Servicer shall give notice to the Trustee and the Depositor of the
location of the Custodial Account after any change thereof.
(c) Payments in the nature of prepayment fees and late payment charges
received on the Mortgage Loans shall not be deposited in the Custodial Account,
but rather shall be received and held by the Master Servicer solely for the
benefit of and at the direction of the Seller. Upon receipt, such amounts shall
be deposited by the Master Servicer into a separate account meeting the
requirements for an Eligible Account, and such amounts shall be distributed by
the Master Servicer to the Seller on a monthly basis. Such amounts shall not be
applied or made available by the Master Servicer for any other purpose.
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SECTION 3.11. Permitted Withdrawals From the Custodial Account.
The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein pursuant to
Section 3.10 that are attributable to the Mortgage Loans for the following
purposes:
(i) to make deposits into the Certificate Account in the amounts
and in the manner provided for in Section 4.01;
(ii) to pay to itself, the Depositor, the Seller or any other
appropriate person, as the case may be, with respect to each Mortgage Loan
that has previously been purchased or repurchased pursuant to Sections
2.02, 2.04 or 9.01 all amounts received thereon and not yet distributed as
of the date of purchase or repurchase;
(iii) to reimburse itself or any Sub-Servicer for Advances not
previously reimbursed, the Master Servicer's or any Sub-Servicer's right to
reimbursement pursuant to this clause (iii) being limited to amounts
received which represent Late Collections (net of the Servicing Fees) of
Monthly Payments on Mortgage Loans or REO Property with respect to which
such Advances were made and as further provided in Section 3.15;
(iv) to reimburse itself, the Trustee or the Depositor for
expenses incurred by or reimbursable to the Master Servicer, the Trustee or
the Depositor pursuant to Sections 3.22, 6.03 or 10.01(c), except as
otherwise provided in such Sections;
(v) to reimburse itself or any Sub-Servicer for costs and
expenses incurred by or reimbursable to it relating to the prosecution of
any claims pursuant to Section 3.13 that are in excess of the amounts so
recovered;
(vi) to reimburse itself or any Sub-Servicer for unpaid Servicing
Fees and unreimbursed Servicing Advances, the Master Servicer's or any
Sub-Servicer's right to reimbursement pursuant to this clause (vi) with
respect to any Mortgage Loan being limited to late recoveries of the
payments for which such advances were made pursuant to Section 3.01 or
Section 3.09 and any other related Late Collections;
(vii) to pay itself as servicing compensation (in addition to the
Servicing Fee), on or after each Distribution Date, any interest or
investment income earned on funds deposited in the Custodial Account for
the period ending on such Distribution Date, subject to Section 8.05;
(viii) to reimburse itself or any Sub-Servicer for any Advance
previously made which the Master Servicer has determined to be a
Nonrecoverable Advance, provided that either (a) such Advance was made with
respect to a delinquency that ultimately constituted an Excess Special
Hazard Loss, Excess Fraud Loss, Excess Bankruptcy Loss or Extraordinary
Loss or (b) the Certificate Principal Balances of the
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Class A-2 Certificates, the Class B Certificates or the Class R
Certificates have been reduced to zero; and
(ix) to clear and terminate the Custodial Account at the
termination of this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate accounting
records on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying
any withdrawal from the Custodial Account pursuant to such clauses (ii), (iii),
(iv), (vi), (vii) and (viii).
In connection with clause (viii) above, the Trustee shall notify the
Master Servicer if and when the Certificate Principal Balances of the Class A-2
Certificates, the Class B Certificates or the Class R Certificates have been
reduced to zero.
SECTION 3.12. Permitted Instruments.
Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Instruments, each of which shall mature not later than the Business Day
immediately preceding the Certificate Account Deposit Date next following the
date of such investment (except that if such Permitted Instrument is an
obligation of the institution that maintains such account, then such Permitted
Instrument shall mature not later than such Certificate Account Deposit Date)
and shall not be sold or disposed of prior to its maturity. All income and gain
realized from any such investment as well as any interest earned on deposits in
the Custodial Account shall be for the benefit of the Master Servicer. The
Master Servicer shall deposit in the Custodial Account (with respect to
investments made hereunder of funds held therein) an amount equal to the amount
of any loss incurred in respect of any such investment immediately upon
realization of such loss without right of reimbursement.
SECTION 3.13. Maintenance of Primary Hazard Insurance.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan primary hazard insurance with extended coverage on the related Mortgaged
Property in an amount equal to the replacement value of the improvements, as
determined by the insurance company, on such Mortgaged Property. The Master
Servicer shall also cause to be maintained on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount equal to the replacement value of
the improvements thereon. Pursuant to Section 3.10, any amounts collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.11. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to Certificateholders, be added to the
amount owing under the Mortgage Loan, notwithstanding that the terms of the
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor or
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maintained on property acquired in respect of a Mortgage Loan other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. Whenever the improvements
securing a Mortgage Loan are located in a federally designated special flood
hazard area, the Master Servicer shall cause flood insurance (to the extent
available) to be maintained in respect thereof. Such flood insurance shall be in
an amount equal to the lesser of (i) the replacement value of the improvements,
which are part of such Mortgaged Property on a replacement cost basis and (ii)
the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program).
In the event that the Master Servicer shall obtain and maintain a
blanket fire insurance policy with extended coverage insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first two sentences of this Section 3.13 and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master Servicer shall
be made on the Certificate Account Deposit Date next preceding the Distribution
Date which occurs in the month following the month in which payments under any
such policy would have been deposited in the Custodial Account. In connection
with its activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.
SECTION 3.14. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged Property
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note or the
Mortgage), exercise or cause to be exercised its rights to accelerate the
maturity of such Mortgage Loan under any "due-on-sale" clause applicable
thereto; provided, however, that the Master Servicer shall not exercise any such
rights if it reasonably believes that it is prohibited by law from doing so. If
the Master Servicer is unable to enforce such "due-on-sale" clause (as provided
in the previous sentence) or if no "due-on-sale" clause is applicable, the
Master Servicer or the Sub-Servicer will enter into an assumption and
modification agreement with the Person to whom such property has been conveyed
or is proposed to be conveyed, pursuant to which such Person becomes liable
under the Mortgage Note and, to the extent permitted by applicable state law,
the Mortgagor remains liable thereon. The Master Servicer is also authorized to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as the Mortgagor and becomes liable under the Mortgage Note. Any fee
collected by or on behalf of the Master Servicer for entering into an assumption
or substitution of liability agreement will be retained by or on behalf of the
Master Servicer as additional servicing
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compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the Mortgage Rate, the amount of the
Monthly Payment, the Maximum Rate, the Minimum Rate, the Gross Margin, the
Periodic Rate Cap and any other term affecting the amount or timing of payment
on the Mortgage Loan) may be changed. The Master Servicer shall not enter into
any substitution or assumption if such substitution or assumption shall (i) both
constitute a "significant modification" effecting an exchange or reissuance of
such Mortgage Loan under the Code (or final, temporary or proposed Treasury
regulations promulgated thereunder) and cause the Trust Fund to fail to qualify
as a REMIC under the REMIC Provisions or (ii) cause the imposition of any tax on
"prohibited transactions" or "contributions" after the Startup Day under the
REMIC Provisions. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original copy of such substitution or assumption agreement, which
copy shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption that the Master Servicer
may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 3.14, the term "assumption" is deemed to also include a
sale of a Mortgaged Property that is not accompanied by an assumption or
substitution of liability agreement.
SECTION 3.15. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall exercise reasonable efforts, consistent with
the procedures that the Master Servicer would use in servicing loans for its own
account, to foreclose upon or otherwise comparably convert (which may include an
REO Acquisition) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from the Trust Fund pursuant to any
other provision hereof. The Master Servicer shall use reasonable efforts to
realize upon such defaulted Mortgage Loans in such manner as will maximize the
receipt of principal and interest by Certificateholders, taking into account,
among other things, the timing of foreclosure proceedings. The foregoing is
subject to the provisions that, in any case in which Mortgaged Property shall
have suffered damage from an Uninsured Cause, the Master Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its sole discretion (i) that such restoration will
increase the net proceeds of liquidation of the related Mortgage Loan to
Certificateholders after reimbursement to itself for such expenses, and (ii)
that such expenses will be recoverable by the Master Servicer through Insurance
Proceeds or Liquidation Proceeds from the related Mortgaged Property, as
contemplated in Section 3.11. The Master Servicer shall be responsible for all
other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the related
property, as contemplated in Section 3.11.
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The proceeds of any Cash Liquidation or REO Disposition, as well as
any recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be applied in the
following order of priority: first, to reimburse the Master Servicer or any
Sub-Servicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11(vi) or 3.22; second, to accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the Mortgage Rate, to the last day of the month
in which the Cash Liquidation or REO Disposition occurred, or to the Due Date
prior to the Distribution Date on which such amounts are to be distributed if
not in connection with a Cash Liquidation or REO Disposition; and third, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, to interest
at the Net Mortgage Rate. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(vi). The portions of the recovery so allocated to
interest at the Net Mortgage Rate and to principal of the Mortgage Loan shall be
applied as follows: first, to reimburse the Master Servicer or any SubServicer
for any related unreimbursed Advances in accordance with Section 3.11(iii) or
3.22, and second, for distribution in accordance with the provisions of Section
4.01(b), subject to Section 3.22 with respect to certain recoveries from an REO
Disposition constituting Excess Proceeds.
SECTION 3.16. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Mortgage File in the form of the Request for
Release attached hereto as Exhibit F-2. Upon receipt of such certification and
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. Subject to the receipt by the Master Servicer of the proceeds
of such payment in full and the payment of all related fees and expenses, the
Master Servicer shall arrange for the release to the Mortgagor of the original
cancelled Mortgage Note. All other documents in the Mortgage File shall be
retained by the Master Servicer to the extent required by applicable law. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Custodial Account, the Excess Proceeds
Account or the Certificate Account.
From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any
insurance policy relating to the Mortgage Loan, the Trustee shall, upon request
of the Master Servicer and delivery to the Trustee of a Request for Release in
the form attached hereto as Exhibit F-1, release the related Mortgage File to
the Master Servicer, and the Trustee shall execute such documents as the Master
Servicer shall prepare and request as being necessary to the prosecution of any
such proceedings. Such Request for Release shall obligate the Master Servicer to
return each document previously requested from the Mortgage File to the Trustee
when the need therefor
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by the Master Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Custodial Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certification of a
Servicing Officer in the form of the Request for Release attached hereto as
Exhibit F-1, stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation which are
required to be deposited into the Custodial Account have been or will be so
deposited, or that such Mortgage Loan has become an REO Property, a copy of such
Request for Release shall be released by the Trustee to the Master Servicer.
Upon written request of a Servicing Officer, the Trustee shall execute
and deliver to the Master Servicer any court pleadings, requests for trustee's
sale or other documents prepared by the Master Servicer that are necessary to
the foreclosure or trustee's sale in respect of a Mortgaged Property or to any
legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or Mortgage or to obtain a deficiency judgment, or to enforce any other
remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Each such request that such pleadings or
documents be executed by the Trustee shall include a certification as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.
SECTION 3.17. Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain, from deposits to the Custodial Account of amounts
representing payments or recoveries of interest, the Servicing Fees with respect
to each Mortgage Loan (less any portion of such amounts retained by any
Sub-Servicer). In addition, the Master Servicer shall be entitled to recover
unpaid Servicing Fees out of related Late Collections to the extent permitted in
Section 3.11.
The Master Servicer also shall be entitled pursuant to Section 3.11 to
receive from the Custodial Account as additional servicing compensation interest
or other income earned on deposits therein, subject to Section 3.23, as well as
any assumption fees and reconveyance fees. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its servicing activities
hereunder (including payment of the premiums for any blanket policy insuring
against hazard losses pursuant to Section 3.13, servicing compensation of the
SubServicers to the extent not retained by it and the fees and expenses of the
Trustee), and shall not be entitled to reimbursement therefor except as
specifically provided in Section 3.11. The Servicing Fee may not be transferred
in whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.
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SECTION 3.18. Maintenance of Certain Servicing Policies.
During the term of its service as Master Servicer, the Master Servicer
shall maintain in force (i) a policy or policies of insurance covering errors
and omissions in the performance of its obligations as servicer hereunder and
(ii) a fidelity bond in respect of its officers, employees or agents. Each such
policy or policies and bond shall, together, comply with the requirements from
time to time of FNMA or FHLMC for persons performing servicing for mortgage
loans purchased by such corporation. The Master Servicer shall prepare and
present, on behalf of itself, the Trustee and Certificateholders, claims under
any such errors and omissions policy or policies or fidelity bond in a timely
fashion in accordance with the terms of such policy or bond, and upon the filing
of any claim on any policy or bond described in this Section, the Master
Servicer shall promptly notify the Trustee of any such claims and the Trustee
shall notify the Rating Agency of such claim.
SECTION 3.19. Annual Statement as to Compliance.
The Master Servicer will deliver to the Trustee and the Depositor on
or before April 30th of each year, beginning with April 30, 1995, an Officers'
Certificate stating, as to each signatory thereof, that (i) a review of the
activities of the Master Servicer during the preceding fiscal year and of its
performance under this Agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of 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 officers and the
nature and status thereof.
SECTION 3.20. Annual Independent Public Accountants' Servicing
Statement.
On or before April 30th of each year, beginning with April 30, 1995,
the Master Servicer at its expense shall furnish to the Depositor, the Trustee
and the Seller (i) an opinion by a firm of independent certified public
accountants on the financial position of the Master Servicer at the end of its
fiscal year and the results of operations and changes in financial position of
the Master Servicer for such year then ended on the basis of an examination
conducted in accordance with generally accepted auditing standards, and (ii) if
the Master Servicer is then servicing any Mortgage Loans, a statement from such
independent certified public accountants to the effect that based on an
examination of certain specified documents and records relating to the servicing
of the Master Servicer's mortgage loan portfolio conducted substantially in
compliance with the audit program for mortgages serviced for FNMA and FHLMC, the
United States Department of Housing and Urban Development Mortgage Audit
Standards, or the Uniform Single Audit Program for Mortgage Bankers (the
"Applicable Accounting Standards"), such firm is of the opinion that such
servicing has been conducted in compliance with the Applicable Accounting
Standards 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 rendering such statement, such firm may rely, as to matters
relating to direct servicing of mortgage loans by Sub-Servicers, upon comparable
statements for examinations conducted substantially in compliance with the
Uniform Single Audit Program for Mortgage
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Bankers or the audit program for mortgages serviced for FHLMC (rendered within
one year of such statement) of independent public accountants with respect to
the related Sub-Servicer. Copies of such statement shall be provided by the
Trustee to any Certificateholder upon request at the Master Servicer's expense,
provided such statement is delivered by the Master Servicer to the Trustee.
SECTION 3.21. Access to Certain Documentation.
(a) The Master Servicer shall provide to the OTS, the FDIC and other
federal banking regulatory agencies, and their respective examiners, access to
the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS, the FDIC and such other agencies. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices of the Master Servicer designated by
it. Nothing in this Section shall derogate from the obligation of the Master
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Master Servicer to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this section.
(b) The Master Servicer shall afford the Depositor and the Trustee,
upon reasonable notice, during normal business hours access to all records
maintained by the Master Servicer in respect of its rights and obligations
hereunder and access to officers of the Master Servicer responsible for such
obligations. Upon request, the Master Servicer shall furnish the Depositor and
the Trustee with its most recent financial statements and such other information
as the Master Servicer possesses regarding its business, affairs, property and
condition, financial or otherwise to the extent related to the servicing of the
Mortgage Loans. The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer hereunder and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer hereunder or exercise the rights of the Master Servicer hereunder;
provided that the Master Servicer shall not be relieved of any of its
obligations hereunder by virtue of such performance by the Depositor or its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
SECTION 3.22. Title, Conservation and Disposition of REO Property.
This Section shall apply only to REO Properties acquired for the
account of the Trust Fund, and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from the Trust Fund pursuant to
any provision hereof. In the event that title to any such REO Property is
acquired, the deed or certificate of sale shall be issued to the Trustee, or to
its nominee, on behalf of the Certificateholders. The Master Servicer, on behalf
of the Trust Fund, shall either sell any REO Property within two years after the
Trust Fund acquires ownership of such REO Property for purposes of Section
860G(a)(8) of the Code or, at the expense of the Trust Fund, request, more than
60 days before the day on which the two-year grace period would otherwise
expire, an extension of the two-year grace period, unless the Master Servicer
has delivered to the Trustee an Opinion of Counsel, addressed to the Trustee and
the Master Servicer, to the effect that the holding by the Trust Fund of such
REO Property
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subsequent to two years after its acquisition will not result in the imposition
on the Trust Fund of taxes on "prohibited transactions" thereof, as defined in
Section 860F of the Code, or cause the Trust Fund to fail to qualify as a REMIC
under the REMIC Provisions or comparable provisions of the laws of the State of
California at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) or result in the
receipt by the Trust Fund of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" which is subject to taxation under the REMIC Provisions. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall either itself
or through an agent selected by the Master Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as the Master Servicer deems to be in the best
interest of the Certificateholders for the period prior to the sale of such REO
Property.
Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets. The Master Servicer shall deposit, or
cause to be deposited, on a daily basis in the Custodial Account all revenues
received with respect to the REO Properties, net of any directly related
expenses incurred and funds withheld therefrom that are necessary for the proper
operation, management and maintenance of the REO Property.
If as of the date of acquisition of title to any REO Property there
remain outstanding unreimbursed Servicing Advances with respect to such REO
Property or any outstanding Advances allocated thereto the Master Servicer, upon
an REO Disposition, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances and any unreimbursed related Advances as well as
any unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.15.
The REO Disposition shall be carried out by the Master Servicer at
such price and upon such terms and conditions as the Master Servicer shall
determine.
The Master Servicer shall deposit the proceeds from the REO
Disposition, net of any payment to the Master Servicer as provided above, in the
Custodial Account upon receipt thereof for distribution in accordance with
Section 4.01; provided that any such net proceeds which are in excess of the
applicable Stated Principal Balance plus all unpaid REO Imputed Interest thereon
through the last day of the month in which the REO Disposition occurred ("Excess
Proceeds") shall be deposited into the Excess Proceeds Account in accordance
with the provisions of Section 3.25(a).
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Notwithstanding the foregoing provisions of this Section 3.22, with
respect to any Mortgage Loan as to which the Master Servicer has received notice
of, or has actual knowledge of, the presence of any toxic or hazardous substance
on the Mortgaged Property, the Master Servicer shall promptly request the
Depositor to provide directions and instructions with respect to such Mortgage
Loan and shall act in accordance with any such directions and instructions
provided by the Depositor. Notwithstanding the preceding sentence of this
Section 3.22, with respect to any Mortgage Loan described by such sentence, the
Master Servicer shall not, on behalf of the Trustee, either (i) obtain title to
the related Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, the related Mortgaged
Property, unless (i) the Depositor and the Trustee jointly direct the Master
Servicer to take such action and (ii) either (A) the Master Servicer has, at
least 30 days prior to taking such action, obtained and delivered to the
Depositor an environmental audit report prepared by a Person who regularly
conducts environmental audits using customary industry standards or (B) the
Depositor has directed the Master Servicer not to obtain an environmental audit
report. If the Depositor has not provided directions and instructions to the
Master Servicer in connection with any such Mortgage Loan within 30 days of a
request by the Master Servicer for such directions and instructions, then the
Master Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund (other than proceeding against the Mortgaged
Property) and is hereby authorized at such time as it deems appropriate to
release such Mortgaged Property from the lien of the related Mortgage.
The cost of the environmental audit report contemplated by this
Section 3.22 shall be advanced by the Master Servicer as an expense of the Trust
Fund, and the Master Servicer shall be reimbursed therefor from the Custodial
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of the Certificateholders to receive any amount in the Custodial
Account.
If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property in compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Master Servicer as
an expense of the Trust Fund, and the Master Servicer shall be entitled to be
reimbursed therefor from the Custodial Account as provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Custodial Account.
The Master Servicer shall have the option to purchase from the Trust
Fund any Mortgage Loan that is 90 days or more delinquent (I.E., any Mortgage
Loan on which the related Mortgagor has failed to make four or more consecutive
Monthly Payments) and that the Master Servicer determines in good faith will
otherwise become subject to foreclosure proceedings (such determination to be
evidenced by an Officer's Certificate of the Master Servicer delivered to the
Trustee prior to purchase) for an amount equal to the Purchase Price. The
Purchase Price for any Mortgage Loan purchased pursuant to this Section 3.22
shall be
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deposited in the Custodial Account, and upon receipt of written certification
from the Master Servicer of such deposit, the Trustee shall release or cause to
be released to the Master Servicer the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Master Servicer shall furnish and as shall be necessary to vest
in the Master Servicer title to any Mortgage Loan released pursuant to this
Section 3.22.
SECTION 3.23. Additional Obligations of the Master Servicer.
On each Certificate Account Deposit Date, the Master Servicer shall
deliver to the Trustee for deposit in the Certificate Account from its own funds
and without any right of reimbursement therefor, a total amount equal to the
aggregate of the Prepayment Interest Shortfalls for such Distribution Date;
provided that the Master Servicer's obligations under this subsection on any
Distribution Date shall not be more than the total amount of its servicing
compensation payable in such month.
SECTION 3.24. Additional Obligations of the Depositor.
The Depositor agrees that on or prior to the tenth day after the
Closing Date, the Depositor shall provide the Trustee with a written
notification, substantially in the form of Exhibit K attached hereto, relating
to each Class of Certificates, setting forth (i) in the case of each Class of
such Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance of such Class of Certificates has been sold as of such date, the value
calculated pursuant to clause (b)(iii) of Exhibit K hereto, or, (b) if 10% or
more of such Class of Certificates has been sold as of such date but no single
price is paid for at least 10% of the aggregate Certificate Principal Balance of
such Class of Certificates, then the weighted average price at which the
Certificates of such Class were sold and the aggregate percentage of
Certificates of such Class sold, (c) the first single price at which at least
10% of the aggregate Certificate Principal Balance of such class of Certificates
was sold, or (d) if any Certificates of each Class of Certificates are retained
by the Depositor or an affiliate corporation, or are delivered to the Seller,
the fair market value of such Certificates as of the Closing Date, (ii) the
prepayment assumption used in pricing the Certificates, and (iii) such other
information as to matters of fact as the Trustee may reasonably request to
enable it to comply with its reporting requirements with respect to each Class
of such Certificates to the extent such information can in the good faith
judgment of the Depositor be determined by it.
SECTION 3.25 Excess Proceeds Account
(a) The Trustee shall establish and maintain one or more accounts
(collectively, the "Excess Proceeds Account") in which the Master Servicer
shall, on behalf of the Trust Fund, deposit or cause to be deposited on a daily
basis, or as and when received from the Sub-Servicers, the Excess Proceeds, if
any, with respect to each Mortgage Loan as to which an REO Disposition occurs.
The Excess Proceeds Account shall be maintained as a segregated account,
separate and apart from trust funds created for mortgage pass-through
certificates of other series, from funds of investors, from funds or other
assets of the Trustee, and from the other accounts of the Trustee.
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(b) On or before 2:00 P.M. Los Angeles time on each Certificate
Account Deposit Date, the Trustee shall withdraw or cause to be withdrawn from
the Excess Proceeds Account, to the extent of the amount on deposit therein at
such time, and deposit or cause to be deposited in the Certificate Account, by
wire transfer of immediately available funds, an amount equal to the lesser of
(i) the amount, if any, on deposit in the Excess Proceeds Account as of the
close of business on the related Determination Date and (ii)(A) the sum of the
aggregate amount of all Realized Losses allocated among the Certificates on any
previous Distribution Date pursuant to Section 4.04 and the aggregate amount of
all Realized Losses to be allocated among the Certificates on the related
Distribution Date pursuant to Section 4.04 minus (B) the aggregate amount of all
distributions allocated among the Certificateholders on any previous
Distribution Date in accordance with Section 4.01(b)(xx), (xxi), or (xxii) or in
accordance with Section 4.01(f).
(c) If the amount on deposit in the Excess Proceeds Account as of the
close of business on any Determination Date would exceed the product of 1.00%
and the aggregate Certificate Principal Balance of all of the Certificates
outstanding immediately after the close of business on the related Distribution
Date, the Trustee shall, on or before 2:00 P.M. Los Angeles time on the related
Certificate Account Deposit Date, withdraw or cause to be withdrawn from the
Excess Proceeds Account, to the extent of the amount on deposit therein at such
time, and deposit or cause to be deposited in the Certificate Account, by wire
transfer of immediately available funds, the excess of such amount over such
product.
(d) The Excess Proceeds Account shall be an Eligible Account in
accordance with the definition of "Excess Proceeds Account" in Section 1.01. The
Trustee shall, upon written request from the Master Servicer, invest or cause
the institution maintaining the Excess Proceeds Account to invest the funds in
the Excess Proceeds Account in one or more Permitted Instruments designated in
the name of the Trustee for the benefit of the Certificateholders, each of which
Permitted Instruments shall be held to maturity, unless payable on demand, and
shall mature, unless payable on demand, not later than the Business Day
immediately preceding the Certificate Account Deposit Date next following the
date of such investment (except that if such Permitted Instrument is an
obligation of the institution with which the Excess Proceeds Account is
maintained, then such Permitted Instrument shall mature not later than such
Certificate Account Deposit Date). All income and gain realized from any such
investment as well as any interest earned on deposits in the Excess Proceeds
Account shall be for the benefit of the Certificateholders and shall be held in
the Excess Proceeds Account (or in Permitted Instruments in which the funds in
the Excess Proceeds Account are invested) until transferred from the Excess
Proceeds Account to the Certificate Account in accordance with Section 3.25(b)
or (c). The amount of any loss incurred in respect of any such investment shall
be borne by the Certificateholders without any right of reimbursement.
(e) As part of each Determination Date Report delivered to the Trustee
in accordance with Section 4.03(a), the Master Servicer shall provide
information with respect to the amount, if any, of Excess Proceeds deposited in
the Excess Proceeds Account in respect of each Mortgage Loan as to which an REO
Disposition occurred during the related Prepayment Period.
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(f) The Trustee shall promptly provide notice to the Depositor and the
Master Servicer of the initial location of the Excess Proceeds Account and shall
promptly provide notice to the Depositor and the Master Servicer of the location
of the Excess Proceeds Account after any change in location of the Excess
Proceeds Account.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Certificate Account; Distributions.
(a) The Trustee shall establish and maintain a Certificate Account, in
which the Master Servicer shall cause to be deposited on behalf of the Trustee
on or before 2:00 P.M. Los Angeles time on each Certificate Account Deposit Date
by wire transfer of immediately available funds an amount equal to the sum of
(i) any Advance for the immediately succeeding Distribution Date, (ii) any
amount required to be deposited in the Certificate Account pursuant to Sections
3.13, 3.22 or 3.23 and (iii) all other amounts constituting the Available
Distribution Amount for the immediately succeeding Distribution Date.
(b) On each Distribution Date the Trustee shall distribute to the
Master Servicer, in the case of a distribution pursuant to Sections
4.01(b)(iii), (vi) or (ix), and to each Certificateholder of record on the next
preceding Record Date (other than as provided in Section 9.01 respecting the
final distribution) either in immediately available funds (by wire transfer or
otherwise) to the account of such Certificateholder at a bank or other entity
having appropriate facilities therefor, if such Certificateholder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and such Certificateholder is the registered owner of Certificates the aggregate
Initial Certificate Principal Balance of which is not less than $2,500,000 (or,
with respect to the Class S Certificates, is the registered owner of an
aggregate initial Notional Amount of not less than $10,000,000 of such
Certificates), or otherwise by check mailed to such Certificateholder at the
address of such Holder appearing in the Certificate Register, such
Certificateholder's share (based on the aggregate of the Percentage Interests
represented by Certificates of the applicable Class held by such Holder) of the
following amounts, in the following order of priority, in each case to the
extent of the Available Distribution Amount:
(i) to the Class S Certificateholders and Class A-1
Certificateholders, on a pro rata basis, based on Accrued Certificate
Interest payable thereon, Accrued Certificate Interest on such Class of
Certificates for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date;
(ii) to the Class A-1 Certificateholders, the sum of the following
amounts applied to reduce the Certificate Principal Balance thereof:
(A) the Class A-1 Percentage for such Distribution Date times the
Scheduled Principal and Net Recoveries for such Distribution Date;
(B) an amount equal to (1) the Class A-1 Percentage for such
Distribution Date divided by the Senior Percentage for such
Distribution Date times (2) the Senior Prepayment Percentage for such
Distribution Date times the aggregate of all Principal Prepayments
received in the related Prepayment Period;
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(C) with respect to each Mortgage Loan for which a Cash
Liquidation or an REO Disposition occurred during the related
Prepayment Period and did not result in any Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
Losses, an amount equal to the lesser of (i) the then applicable Class
A-1 Percentage of the Stated Principal Balance of such Mortgage Loan
and (ii)(a) the Class A-1 Percentage for such Distribution Date
divided by the Senior Percentage for such Distribution Date times (b)
the Senior Prepayment Percentage for such Distribution Date times the
related collections (including without limitation Insurance Proceeds,
Liquidation Proceeds and REO Proceeds) to the extent applied by the
Master Servicer as recoveries of principal of the related Mortgage
Loan pursuant to Section 3.15; and
(D) any amounts described in this Section 4.01(b)(ii), as
determined for any previous Distribution Date, which remain unpaid
after application of amounts previously distributed pursuant to this
clause (D) to the extent that any such amounts are not attributable to
Realized Losses that were allocated to the Class A-2 Certificates, the
Class B Certificates or the Class R Certificates;
(iii) if the Certificate Principal Balances of the Class B
Certificates and the Class R Certificates have been reduced to zero, to the
Master Servicer or a Sub-Servicer, by remitting for deposit to the
Custodial Account, to the extent of and in reimbursement for any Advances
previously made with respect to any Mortgage Loan or REO Property which
remain unreimbursed in whole or in part following the Cash Liquidation or
REO Disposition of such Mortgage Loan or REO Property, minus any such
Advances that were made with respect to delinquencies that ultimately
constituted Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses;
(iv) to the Class A-2 Certificateholders, Accrued Certificate Interest
on such Certificates for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date;
(v) to the Class A-2 Certificateholders, the sum of the following
amounts applied to reduce the Certificate Principal Balance thereof:
(A) the Class A-2 Percentage for such Distribution Date times the
Scheduled Principal and Net Recoveries for such Distribution Date;
(B) an amount equal to (1) the Class A-2 Percentage for such
Distribution Date divided by the Senior Percentage for such
Distribution Date times (2) the Senior Prepayment Percentage for such
Distribution Date times the aggregate of all Principal Prepayments
received in the related Prepayment Period;
(C) with respect to each Mortgage Loan for which a Cash
Liquidation or an REO Disposition occurred during the related
Prepayment Period and did not result in any Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
Losses, an amount equal to the lesser of (i)
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the then applicable Class A-2 Percentage of the Stated Principal
Balance of such Mortgage Loan and (ii)(a) the Class A-2 Percentage for
such Distribution Date divided by the Senior Percentage for such
Distribution Date times (b) the Senior Prepayment Percentage for such
Distribution Date times the related collections (including without
limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds)
to the extent applied by the Master Servicer as recoveries of
principal of the related Mortgage Loan pursuant to Section 3.15; and
(D) any amounts described in this Section 4.01(b)(v), as
determined for any previous Distribution Date, which remain unpaid
after application of amounts previously distributed pursuant to this
clause (D) to the extent that any such amounts are not attributable to
Realized Losses that were allocated to the Class B Certificates or the
Class R Certificates;
(vi) if the Certificate Principal Balance of the Class R Certificates
has been reduced to zero, to the Master Servicer or a Sub-Servicer, by
remitting for deposit to the Custodial Account, to the extent of and in
reimbursement for any Advances previously made with respect to any Mortgage
Loan or REO Property which remain unreimbursed in whole or in part
following the Cash Liquidation or REO Disposition of such Mortgage Loan or
REO Property, minus any such Advances that were made with respect to
delinquencies that ultimately constituted Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses;
(vii) to the Class B Certificateholders, Accrued Certificate Interest
on the Class B Certificates for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date;
(viii) to the Class B Certificateholders, the sum of the following
amount applied to reduce the Certificate Principal Balance thereof:
(A) the Class B Percentage for such Distribution Date times the
Scheduled Principal and Net Recoveries for such Distribution Date;
(B) an amount equal to the product of the Class B Prepayment
Percentage times the aggregate of all Principal Prepayments received
during the related Prepayment Period;
(C) such Class's pro rata share, based on the Certificate
Principal Balance of the Class B Certificates and Class R
Certificates, of all amounts received in connection with a Cash
Liquidation or an REO Disposition (x) that occurred during the
preceding calendar month and (y) that did not result in any Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses
or Extraordinary Losses, to the extent applied as recoveries of
principal and to the extent not otherwise payable to the Senior
Certificates; and
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(D) any amounts described in this Section 4.01(b)(viii), as
determined for any previous Distribution Date, which remain unpaid
after application of amounts previously distributed pursuant to this
clause (D) to the extent that such amounts are not attributable to
Realized Losses which have been allocated to the Class R Certificates.
(ix) to the Master Servicer or a Sub-Servicer, by remitting for
deposit to the Custodial Account, to the extent of and in reimbursement for
any Advances previously made with respect to any Mortgage Loan or REO
Property which remain unreimbursed in whole or in part following the Cash
Liquidation or REO Disposition of such Mortgage Loan or REO Property, minus
any such Advances that were made with respect to delinquencies that
ultimately constituted Excess Special Hazard Losses, Excess Fraud Losses,
Excess Bankruptcy Losses or Extraordinary Losses;
(x) to the holders of the Class A-1 Certificates, the portion, if any,
of the Available Distribution Amount remaining, but in no event more than
the lesser of (A) the Accrued Certificate Interest otherwise payable on the
Class R Certificates, to the extent attributable to the Class R Fixed Strip
Component, prior to the application of payments required under Sections
4.01(b)(x), (xi) and (xii) hereof and (B) the principal portion of Realized
Losses previously allocated thereto and not previously reimbursed;
(xi) to the holders of the Class A-2 Certificates, the portion, if
any, of the Available Distribution Amount remaining, but in no event more
than the lesser of (A) the Accrued Certificate Interest otherwise payable
on the Class R Certificates, to the extent attributable to the Class R
Fixed Strip Component, prior to the application of payments required under
Sections 4.01(b)(x), (xi) and (xii) hereof and (B) the principal portion of
Realized Losses previously allocated thereto and not previously reimbursed;
(xii) to the holders of the Class B Certificates, the portion, if any,
of the Available Distribution Amount remaining, but in no event more than
the lesser of (A) the Accrued Certificate Interest otherwise payable on the
Class R Certificates, to the extent attributable to the Class R Fixed Strip
Component, prior to the application of payments required under Sections
4.01(b)(x), (xi) and (xii) hereof and (B) the principal portion of Realized
Losses previously allocated thereto and not previously reimbursed;
(xiii) to the Class A-1 Certificateholders, an amount, applied to
reduce the Certificate Principal Balance thereof, equal to the Class A-1
Percentage for such Distribution Date divided by the Senior Percentage for
such Distribution Date times the Class R Fixed Strip Accrual Amount for
such Distribution Date;
(xiv) to the Class A-2 Certificateholders, an amount, applied to
reduce the Certificate Principal Balance thereof, equal to the Class A-2
Percentage for such Distribution Date divided by the Senior Percentage for
such Distribution Date times the Class R Fixed Strip Accrual Amount for
such Distribution Date;
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(xv) if the Certificate Principal Balances of the Class A-1
Certificates and Class A-2 Certificates have been reduced to zero, to the
Class B Certificateholders the Class R Fixed Strip Accrual Amount for such
Distribution Date, to the extent not distributed to the Class A-1
Certificates and Class A-2 Certificates;
(xvi) on and after the related Accretion Termination Date, to the
Class R Certificateholders, Accrued Certificate Interest thereon for such
Distribution Date to the extent attributable to the Class R Fixed Strip
Component and to the extent not added to the Certificate Principal Balance
thereof on such Distribution Date in accordance with Section 4.01(d), plus
any such Accrued Certificate Interest thereon remaining unpaid pursuant to
this clause from any previous Distribution Date occurring on and after the
related Accretion Termination Date;
(xvii) to the Class B Certificateholders, the portion, if any, of the
Available Distribution Amount remaining after the foregoing distributions,
applied to reduce the Certificate Principal Balance of the Class B
Certificates, but in no event more than the outstanding Certificate
Principal Balance of the Class B Certificates;
(xviii) on and after the related Accretion Termination Date, to the
Class R Certificateholders, Accrued Certificate Interest thereon to the
extent attributable to the Class R P&I Component, and to the extent not
added to the Certificate Principal Balance thereof on such Distribution
Date in accordance with Section 4.01(d), plus any such Accrued Certificate
Interest remaining unpaid from any previous Distribution Date occurring on
and after the related Accretion Termination Date;
(xix) on and after the related Accretion Termination Date with respect
to the Class R P&I Component, to the Class R Certificates the portion, if
any, of the Available Distribution Amount remaining after the foregoing
distributions, applied to reduce the Certificate Principal Balance of the
Class R Certificates, but in no event more than the outstanding Certificate
Principal Balance of the Class R Certificates;
(xx) to the Class A-1 Certificateholders, the portion, if any, of the
Available Distribution Amount remaining, but in no event more than the
principal portion of Realized Losses previously allocated thereto and not
previously reimbursed;
(xxi) to the Class A-2 Certificateholders, the portion, if any, of the
Available Distribution Amount remaining, but in no event more than the
principal portion of Realized Losses previously allocated thereto and not
previously reimbursed;
(xxii) to the Class B Certificateholders, the portion, if any, of the
Available Distribution Amount remaining, but in no event more than the
principal portion of Realized Losses previously allocated thereto and not
previously reimbursed; and
(xxiii) to the Class R Certificateholders, the balance, if any, of the
Available Distribution Amount.
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(c) The Trustee shall, upon written request from the Master Servicer,
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Instruments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment (except that (i) any investment in
obligations of the institution with which the Certificate Account is maintained
may mature on such Distribution Date and (ii) any other investment may mature on
such Distribution Date if the Trustee shall agree to advance funds on such
Distribution Date to the Certificate Account in the amount payable on such
investment on such Distribution Date, pending receipt thereof to the extent
necessary to make distributions on the Certificates) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments shall be deposited in the Certificate Account
by the Master Servicer out of its own funds immediately as realized without
right of reimbursement.
(d) On each Distribution Date prior to the related Accretion
Termination Date, Accrued Certificate Interest on the Class R Components for
such Distribution Date that would otherwise be distributed on such Certificates
on such Distribution Date shall instead be added to the Certificate Principal
Balance thereof, to the extent provided by operation of the definition of
Certificate Principal Balance. On and after the related Accretion Termination
Date, the entire amount of Accrued Certificate Interest on the Class R
Certificates for such Distribution Date shall be payable to the Class R
Certificateholders to the extent, (1) in the case of such interest attributable
to the Class R P&I Component, that any portion of such Accrued Certificate
Interest is not required to retire the Class B Certificates after application of
all other amounts distributable under Section 4.01(b)(xvii) and (2) in the case
of such interest attributable to the Class R Fixed Strip Component, that any
portion of such Accrued Certificate Interest is not required to render such date
the related Accretion Termination Date in accordance with the definition
thereof; any such portion of Accrued Certificate Interest not payable to the
Class R Certificates on an Accretion Termination Date in accordance with the
foregoing shall be added to the Certificate Principal Balance thereof on such
date.
(e) Except as otherwise provided in Section 9.01, whenever the Trustee
expects that the final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Trustee shall, no later than
five days after the Determination Date, mail to each Holder on such date of such
Class of Certificates a notice to the effect that:
(i) the Trustee expects that the final distribution with respect to
such Class of Certificates will be made on such Distribution Date but only
upon presentation and surrender of such Certificates at the office of the
Trustee therein specified, and
(ii) no interest shall accrue on such Certificates from and after the
end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder
or Holders to tender their
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Certificates shall, on such date, be set aside and held in trust and credited to
the account of the appropriate non-tendering Holder or Holders. If any
Certificates as to which notice has been given pursuant to this Section 4.01(e)
shall not have been surrendered for cancellation within six months after the
time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within six months after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall take reasonable steps as
directed by the Depositor, or appoint an agent to take reasonable steps, to
contact the remaining non-tendering Certificateholders concerning surrender of
their Certificates. The costs and expenses of maintaining the funds in trust and
of contacting such Certificateholders shall be paid out of the assets remaining
in the Trust Fund. If within nine months after the second notice any such
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e).
(f) On each Distribution Date, the Trustee shall distribute to each
Certificateholder of record on the next preceding Record Date (other than
as provided in Section 9.01 respecting the final distribution), in the
manner set forth in Section 4.01(b), such Certificateholder's share (based
on the aggregate of the Percentage Interests represented by the
Certificates of the applicable Class held by such Certificateholder) of the
amount transferred from the Excess Proceeds Account to the Certificate
Account on the related Certificate Account Deposit Date in accordance with
Section 3.25(b), in the following order of priority: first, to the Holders
of the Class S Certificates and the Class A-1 Certificates on a pro rata
basis, to the extent of and in proportion to the interest portion of the
aggregate amount of all Realized Losses allocated to the Certificates of
such Classes on such Distribution Date or any previous Distribution Date in
accordance with Section 4.04 and not subsequently recovered through any
distribution in accordance with this Section 4.01(f), and then second, to
the Holders of the Class A-1 Certificates, third, to the Holders of the
Class A-2 Certificates, and fourth, to the Holders of the Class B
Certificates, in each case to the extent of the aggregate amount of all
Realized Losses allocated to the Certificates of such Class on such
Distribution Date or any previous Distribution Date in accordance with
Section 4.04 and not subsequently recovered through any distribution in
accordance with Section 4.01(b)(xx), (xxi) or (xxii) or in accordance with
this Section 4.01(f), and then fifth, to the Holders of the Class R
Certificates. The distribution of any amount in accordance with this
Section 4.01(f) shall not have the effect of reducing the Certificate
Principal Balance of any Certificate to which such distribution is
allocated.
(g) On each Distribution Date, the Trustee shall distribute to each
Class R Certificateholder of record on the next preceding Record Date
(other than as provided in Section 9.01 respecting the final distribution),
in the manner set forth in Section 4.01(b), such Class R
Certificateholder's share (based on the aggregate of the Percentage
Interests represented by the Class R Certificates held by such Class R
Certificateholder) of the amount transferred from the Excess Proceeds
Account to the Certificate Account on the related Certificate Account
Deposit Date in accordance with Section 3.25(c). The distribution of any
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amount in accordance with this Section 4.01(g) shall not have the effect of
reducing the Certificate Principal Balance of any Class R Certificate to which
such distribution is allocated.
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Senior Certificate, a Class B Certificate
or a Class R Certificate and to the Depositor and the Master Servicer a
statement as to such distribution setting forth:
(i) (a) the amount of such distribution to each Class of the
Certificates applied to reduce the Certificate Principal Balances thereof,
(b) the aggregate amount included therein representing Principal
Prepayments, and (c) the Senior Prepayment Percentage with respect to the
Class A-1 Certificates and the Class A-2 Certificates and the Class B
Prepayment Percentage applicable to such distribution;
(ii) the amount of such distribution to the Certificateholders of each
Class allocable to interest, and the Class R Fixed Strip Accrual Amount and
Class R P&I Accrual Amount for such Distribution Date;
(iii) the amount of related servicing compensation received by or on
behalf of the Master Servicer and any Sub-Servicers with respect to such
Distribution Date and such other customary information as the Master
Servicer deems necessary or desirable and supplies to the Trustee, or which
a Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;
(iv) the aggregate amount of Advances included in such distribution on
such Distribution Date;
(v) the number and aggregate Stated Principal Balance of the Mortgage
Loans at the close of business on such Distribution Date;
(vi) the Certificate Principal Balance of a Single Certificate of each
Class, the aggregate Certificate Principal Balance of the Class A-1
Certificates, the Class A-2 Certificates, the Class B Certificates and the
Class R Certificates, respectively, and the Senior Percentage, Class A-1
Percentage, Class A-2 Percentage, Class B Percentage and Class R
Percentage, after giving effect to the amounts distributed on such
Distribution Date separately identifying any reduction thereof due to
Realized Losses other than pursuant to an actual distribution of principal;
(vii) the number and aggregate Stated Principal Balance of Mortgage
Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90 days, (c)
delinquent 91 days or more;
(viii) the number and aggregate Stated Principal Balance of Mortgage
Loans as to which foreclosure proceedings have been commenced in each case
as of the
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related Determination Date and which are (a) delinquent 31 to 60 days, (b)
delinquent 61 to 90 days, (c) delinquent 91 days or more;
(ix) the number and aggregate Stated Principal Balance of Mortgage
Loans as to which bankruptcy proceedings have been commenced in each case
as of the related Determination Date and which are (a) delinquent 31 to 60
days, (b) delinquent 61 to 90 days, (c) delinquent 91 days or more;
(x) with respect to any Mortgage Loan that became a REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the
Distribution Date in such month and the date of acquisition thereof;
(xi) the book value of any REO Property as of the close of business on
the last Business Day of the calendar month preceding the Distribution
Date;
(xii) the Pass-Through Rate in effect for the preceding calendar month
with respect to the Class S Certificates, the Class A-1 Certificates, the
Class A-2 Certificates and the Class B Certificates and the Class R P&I
Component;
(xiii) the aggregate Accrued Certificate Interest remaining unpaid, if
any, for each Class of Certificates, after giving effect to the
distribution made on such Distribution Date;
(xiv) the Special Hazard Amount, Fraud Loss Amount and Bankruptcy
Amount remaining available immediately after such Distribution Date;
(xv) the aggregate Realized Losses incurred since the Cut-off Date;
and
(xvi) the amount of any Excess Proceeds distributed to each class of
Certificates.
In the case of information furnished pursuant to subclauses (i)-(iii)
above, the amounts shall also be expressed as a dollar amount per Single
Certificate.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall prepare and forward, to each Person who at any time
during the calendar year was a Holder of a Senior Certificate, a Class B
Certificate or a Class R Certificate a statement containing the information set
forth in subclauses (i) - (iii) above, aggregated for such calendar year or
applicable portion thereof during which such person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Code and regulations thereunder as
from time to time are in force.
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SECTION 4.03. Remittance Reports; Advances by the Master Servicer.
(a) On the second Business Day following each Determination Date, the
Master Servicer shall deliver to the Trustee a report, prepared as of the close
of business on the Determination Date (the "Determination Date Report"), in the
form of an electromagnetic tape or disk. The Determination Date Report and any
written information supplemental thereto shall include such information with
respect to the Mortgage Loans that is reasonably available to the Master
Servicer and that is required by the Trustee for purposes of making the
calculations referred to in the following paragraph, as set forth in written
specifications or guidelines issued by the Trustee from time to time. Not later
than 10:00 A.M. Los Angeles time on the Business Day preceding each Certificate
Account Deposit Date, the Trustee shall furnish by telecopy to the Master
Servicer a statement (the information in such statement to be made available to
Certificateholders or the Depositor by the Master Servicer on request) setting
forth (i) the Available Distribution Amount and (ii) the amounts required to be
withdrawn from the Custodial Account and deposited into the Certificate Account
on the immediately succeeding Certificate Account Deposit Date pursuant to
clause (iii) of Section 4.01(a). The Trustee shall have no obligation to
recompute, recalculate or verify any information provided to it by the Master
Servicer. The determination by the Trustee of such amounts shall, in the absence
of obvious error, be presumptively deemed to be correct for all purposes
hereunder.
(b) Prior to the close of business on the Business Day preceding each
Certificate Account Deposit Date, the Trustee shall notify the Master Servicer
of the aggregate amount of Advances required to be made for the related
Distribution Date, which shall be in an aggregate amount equal to the aggregate
amount of Monthly Payments (with each interest portion thereof adjusted to the
Net Mortgage Rate), less the amount of any related Debt Service Reductions or
reductions in the amount of interest collectable from the Mortgagor pursuant to
the Soldiers' and Sailors' Civil Relief Act of 1940, on the Outstanding Mortgage
Loans as of the related Due Date, which Monthly Payments were delinquent as of
the close of business as of the related Determination Date; provided that
following the reduction of the Certificate Principal Balances of the Class A-2
Certificates, the Class B Certificates and the Class R Certificates to zero, no
Advance shall be made if it would be a Nonrecoverable Advance. On or before 2:00
P.M. Los Angeles time on each Certificate Account Deposit Date, the Master
Servicer shall either (i) deposit in the Certificate Account from its own funds,
or funds received therefor from the Sub-Servicers, an amount equal to the
Advances to be made by the Master Servicer in respect of the related
Distribution Date, (ii) withdraw from amounts on deposit in the Custodial
Account and deposit in the Certificate Account all or a portion of the amounts
held for future distribution in discharge of any such Advance, or (iii) make
advances in the form of any combination of (i) and (ii) aggregating the amount
of such Advance. Any portion of the amounts held for future distribution so used
shall be replaced by the Master Servicer by deposit in the Certificate Account
on or before 11:00 A.M. Los Angeles time on any future Certificate Account
Deposit Date to the extent that funds attributable to the Mortgage Loans that
are available in the Custodial Account for deposit in the Certificate Account on
such Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
amount of any reimbursement pursuant to any clause under Section 4.01(b), in
respect of outstanding Advances on any Distribution Date shall be allocated to
specific Monthly Payments due but delinquent for previous Due Periods, which
allocation shall be made, to the extent practicable, to Monthly Payments which
have been delinquent for the longest period of time. Such allocations shall be
conclusive for purposes of reimbursement
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to the Master Servicer from recoveries on related Mortgage Loans pursuant to
Section 3.11. The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by a certificate of a Servicing
Officer delivered to the Seller and the Trustee. The Trustee shall deposit all
funds it receives pursuant to this Section 4.03 into the Certificate Account.
(c) In the event that the Master Servicer determines as of the
Business Day preceding any Certificate Account Deposit Date that it will be
unable to deposit in the Certificate Account an amount equal to the Advance
required to be made for the immediately succeeding Distribution Date in the
amount determined by the Trustee pursuant to paragraph (b) above, it shall give
notice to the Trustee of its inability to advance (such notice may be given by
telecopy), not later than 3:00 P.M., Los Angeles time, on such Business Day,
specifying the portion of such amount that it will be unable to deposit. Not
later than 5:30 P.M., Los Angeles time, on the Certificate Account Deposit Date,
unless by such time the Master Servicer shall have directly or indirectly
deposited in the Certificate Account the entire amount of the Advances required
to be made for the related Distribution Date, pursuant to Section 7.01, the
Trustee shall (a) terminate all of the rights and obligations of the Master
Servicer under this Agreement in accordance with Section 7.01 and (b) assume the
rights and obligations of the Master Servicer hereunder, including the
obligation to deposit in the Certificate Account an amount equal to the Advance
for the immediately succeeding Distribution Date; provided, however, that the
Trustee's obligation to advance such amounts shall be as of the related
Distribution Date.
SECTION 4.04. Allocation of Realized Losses.
Prior to each Distribution Date, the Master Servicer shall determine
the total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition that
occurred during the related Prepayment Period. The amount of each Realized Loss
shall be evidenced by an Officers' Certificate by the Master Servicer. Realized
Losses shall be allocated among the various Classes of Certificates as
determined by the Trustee in accordance with the following provisions. All
Realized Losses other than Excess Special Hazard Losses, Extraordinary Losses,
Excess Bankruptcy Losses or Excess Fraud Losses, shall be allocated first to the
Class R Certificates, then to the Class B Certificates, then to the Class A-2
Certificates, in each case until the Certificate Principal Balance thereof has
been reduced to zero, and then the principal portion thereof to the Class A-1
Certificates and the interest portion thereof to the Class S Certificates and
the Class A-1 Certificates on a pro rata basis. Any Excess Special Hazard
Losses, Excess Bankruptcy Losses, Excess Fraud Losses and Extraordinary Losses
shall be allocated to the Class S Certificates, the Class A-1 Certificates, the
Class A-2 Certificates, the Class B Certificates and the Class R Certificates on
a pro rata basis, as described below. As used herein, an allocation of a
Realized Loss on a "pro rata basis" among two or more specified Classes of
Certificates means an allocation on a pro rata basis, without priority among the
various Classes so specified, to each such Class of Certificates on the basis of
the then outstanding Certificate Principal Balances thereof in the case of the
principal portion of a Realized Loss or based on the Accrued Certificate
Interest thereon in the case of an interest portion of a Realized Loss. The
interest portion of any such Realized Loss allocated to the Class R Certificates
shall be allocated between the Class R Components thereof on a pro rata basis
based on the Accrued Certificate Interest
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thereon. Any allocation of the principal portion of Realized Losses (other than
Debt Service Reductions) to a Certificate (except as follows) shall be made by
reducing the Certificate Principal Balance thereof by the amount so allocated,
which allocation shall be deemed to have occurred at the close of business on
such Distribution Date. Any allocation of the principal portion of Realized
Losses (other than Debt Service Reductions) to the most subordinate Class of
Certificates outstanding, shall be made by operation of the definition of
"Certificate Principal Balance," and by operation of the provisions of Section
4.01(b). Allocations of the interest portions of Realized Losses shall be made
by operation of the definition of "Accrued Certificate Interest" and by
operation of the provisions of Section 4.01(b). Allocations of the principal
portion of Debt Service Reductions shall be made by operation of the provisions
of Section 4.01(b). All Realized Losses and all other losses allocated to a
Class of Certificates hereunder will be allocated among the Certificates of such
Class in proportion to the Percentage Interests evidenced thereby. For purposes
of the foregoing, the Trustee shall maintain records relating to the Bankruptcy
Amount, Fraud Loss Amount and Special Hazard Amount as in effect from time to
time.
SECTION 4.05. Information Reports to be Filed by the Master Servicer.
The Master Servicer or Sub-Servicers shall file information returns
with respect to the receipt of mortgage interest received in a trade or
business, reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively, and
promptly deliver upon such filing to the Trustee an Officer's Certificate
stating that such reports have been filed. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by such Sections
6050H, 6050J and 6050P of the Code.
SECTION 4.06. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
and payments of interest or discount on amounts invested by the Trustee as agent
for Certificateholders pursuant to an election made under Section 4.01 hereof,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders pursuant to Section 4.02 hereof, indicate such amount
withheld.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates shall be substantially in the respective forms
annexed hereto as Exhibits A, B-1 and B-2. The Certificates shall be issuable in
registered form only. Except as provided in Section 5.01(b), the Class A-1
Certificates shall be issuable in denominations evidencing initial Certificate
Principal Balances of not less than $1.00 and integral multiples of $1.00 in
excess thereof. The Class A-2 Certificates and the Class B Certificates shall be
issuable in denominations evidencing initial Certificate Principal Balances of
not less than $25,000 and $250,000, respectively, and integral multiples of
$1,000 in excess thereof, except that one Certificate of each of the Class A-2
Certificates and the Class B Certificates may be issued in an amount evidencing
the sum of the authorized minimum denomination thereof and the remainder of the
aggregate initial Certificate Principal Balance of such Class. Except as
provided in Section 5.01(b), the Class S Certificates shall be issuable in
denominations evidencing an initial Notional Amount of not less than $1.00 and
integral multiples of $1.00 in excess thereof. The Class R Certificates shall be
issuable in denominations of any Percentage Interest representing 5.00% and
multiples of 0.01% in excess thereof; provided, however, that one Certificate of
such Class may be issued to the "tax matters person" pursuant to Article X, in a
minimum denomination representing a Percentage Interest of not less than 0.01%.
Upon original issue, the Certificates shall, upon the written request
of the Depositor executed by an officer of the Depositor, be executed and
delivered by the Trustee, authenticated by the Trustee and delivered to or upon
the order of the Depositor upon receipt by the Trustee of the documents
specified in Section 2.01. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee in its capacity as trustee
hereunder by a Responsible Officer. Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates issued on the Closing Date shall be dated the Closing Date and any
Certificates delivered thereafter shall be dated the date of their
authentication.
(b) The Class S Certificates and the Class A-1 Certificates shall
initially be issued as one or more Certificates registered in the name of the
Depository or its nominee and, except as provided below, registration of such
Certificates may not be transferred by the Trustee except to another Depository
that agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
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Ownership Interests in and to each of the Class S Certificates and the Class A-1
Certificates through the book-entry facilities of the Depository and, except as
provided below, shall not be entitled to Definitive Certificates in respect of
such Ownership Interests. All transfers by Certificate Owners of their
respective Ownership Interests in the Book-Entry Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owner. Each Depository Participant
shall transfer the Ownership Interests only in the Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the respective Classes of
Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes
of Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect to
the respective Classes of Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book-Entry Certificates with respect to any particular
matter shall not be deemed inconsistent if they are made with respect to
different Certificate Owners. The Trustee shall utilize the next available
record date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor or (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall, at the Depositor's expense, issue the Definitive
Certificates. The Definitive Certificates shall be issuable in denominations
evidencing initial Certificate Principal Balances or Notional Amounts, as
applicable, of $1,000 and integral multiples of $1.00 in excess thereof, except
that any such Definitive Certificate that was represented by a Book-Entry
Certificate evidencing an initial Certificate Principal Balance or Notional
Amount of less than $1,000 immediately prior to the issuance of such Definitive
Certificate shall be issued in a denomination equal to the initial Certificate
Principal Balance or Notional Amount, as the case may be, evidenced by such
Book-Entry Certificate. Neither the Depositor, the Master Servicer nor the
Trustee shall be liable for any actions taken by the Depository or its nominee,
including, without limitation, any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Depository in
connection with the issuance of the Definitive Certificates pursuant to this
Section 5.01 shall be deemed to be imposed upon and performed by the Trustee,
and the Trustee and the Master
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Servicer shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
SECTION 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Class R Components shall not be separately
transferable.
(b) Except as provided in Section 5.02(c), no transfer, sale, pledge
or other disposition of a Class R Certificate shall be made unless such
transfer, sale, pledge or other disposition is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), and any
applicable state securities laws or is made in accordance with said Act and
laws. In the event that a transfer of a Class R Certificate is to be made under
this Section 5.02(b), (i) the Depositor may direct the Trustee to require an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee and the Depositor that such transfer shall be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from said
Act and laws or is being made pursuant to said Act and laws, which Opinion of
Counsel shall not be an expense of the Trustee, the Depositor or the Master
Servicer, provided that such Opinion of Counsel will not be required in
connection with the initial transfer of any such Certificate by the Depositor or
any affiliate thereof, to a non-affiliate of the Depositor and (ii) the Trustee
shall require the transferee to execute a representation letter, substantially
in the form of Exhibit G-1 hereto, and the Trustee shall require the transferor
to execute a representation letter, substantially in the form of Exhibit G-2
hereto, each acceptable to and in form and substance satisfactory to the
Depositor and the Trustee certifying to the Depositor and the Trustee the facts
surrounding such transfer, which representation letters shall not be an expense
of the Trustee, the Depositor or the Master Servicer; provided however that such
representation letters will not be required in connection with any transfer of
any such Certificate by the Depositor to an affiliate of the Depositor and the
Trustee shall be entitled to conclusively rely upon a representation (which,
upon the request of the Trustee, shall be a written representation) from the
Depositor of the status of such transferee as an affiliate of the Depositor. Any
such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositor and the Master Servicer against
any liability that may result if the transfer is not so exempt or is not made in
accordance with such applicable federal and state laws.
(c) Transfers of Certificates may be made in accordance with this
Section 5.02(c) if the transferor and prospective transferee of a Certificate
provide the Trustee and the Depositor with an investment letter substantially in
the form of Exhibit H attached hereto, which investment letter shall not be an
expense of the Trustee, the Depositor or the Master Servicer, and which
investment letter states that, among other things, such transferee is a
"qualified institutional buyer" as defined under Rule 144A. Such transfers shall
be deemed to have complied with the requirements of Section 5.02(b) hereof;
provided, however, that no Transfer of any of the Certificates may be made
pursuant to this Section 5.02(c) by the Depositor. Any Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
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Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
applicable federal and state laws.
(d) The Trustee shall require an Opinion of Counsel from a prospective
transferee prior to the transfer of any Class A-2 Certificate, Class B
Certificate or Class R Certificate to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and Keogh
plans, that is subject to Section 406 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or Section 4975 of the Code (any of the
foregoing, a "Plan"), to a trustee or other Person acting on behalf of any Plan,
or to any other person who is using "plan assets" of any Plan to effect such
acquisition (including any insurance company using funds in its general or
separate accounts that may constitute "plan assets"). Such Opinion of Counsel
must establish to the satisfaction of the Depositor and the Trustee or the
Certificate Registrar that such disposition will not violate the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code.
Neither the Depositor, the Master Servicer nor the Trustee will be required to
obtain such Opinion of Counsel on behalf of any prospective transferee. In the
case of any transfer of the foregoing Certificates to an insurance company, in
lieu of such Opinion of Counsel, the Trustee shall require a certification in
the form of Exhibit G-5 (or in such other form as shall be mutually agreed upon
by the Depositor and the Trustee) substantially to the effect that the source of
the funds used by such transferee to purchase such Certificates is an "insurance
company general account," among other things, provided however that such
certification will not be required in connection with any transfer of any such
Certificate by the Depositor to an affiliate of the Depositor and the Trustee
shall be entitled to conclusively rely upon a representation (which, upon the
request of the Trustee, shall be a written representation) from the Depositor of
the status of such transferee as an affiliate of the Depositor. The permission
of any transfer in violation of the restriction on transfer set forth in this
paragraph shall not constitute a default or an Event of Default.
(e)(i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as
a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of any Class R Certificate
until its receipt of (I) an affidavit and agreement (a "Transfer
Affidavit and Agreement" in the form attached hereto as Exhibit G-3)
from the proposed Transferee, in form and substance satisfactory to
the Master Servicer and the Trustee representing and warranting, among
other things, that it is a Permitted
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Transferee, that it is not acquiring its Ownership Interest in the
Class R Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person who is not a Permitted
Transferee, that for so long as it retains its Ownership Interest in a
Class R Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of this Section
5.02 and agrees to be bound by them, and (II) a certificate, in the
form attached hereto as Exhibit G-4, from the Holder wishing to
transfer the Class R Certificate, in form and substance satisfactory
to the Master Servicer and the Trustee representing and warranting,
among other things, that no purpose of the proposed Transfer is to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee assigned to this transaction has
actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Class R
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (x) to require a Transfer Affidavit
and Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Class R Certificate and (y) not
to transfer its Ownership Interest unless it provides a certificate to
the Trustee in the form attached hereto as Exhibit G-4.
(E) Each Person holding or acquiring an Ownership Interest in a
Class R Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary
Treasury Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Class R Certificate, if it is "a
pass-through interest holder", or is holding an Ownership Interest in
a Class R Certificate on behalf of a "pass-through interest holder."
(ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have received the Transfer Affidavit and Agreement in the
form attached hereto as Exhibit G-3, a certificate of the Holder requesting
such transfer in the form attached hereto as Exhibit G-4 and all of such
other documents as shall have been reasonably required by the Trustee as a
condition to such registration. Transfers of the Class R Certificates to
Non-United States Persons and Disqualified Organizations are prohibited.
(iii) (A) If any Disqualified Organization shall become a Holder of a
Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a
Holder of a Class R Certificate, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law, to all rights
and obligations as Holder thereof retroactive to the date of registration
of such Transfer of such Class R Certificate. If a transfer of a Class R
Certificate is disregarded pursuant to the provisions of Treasury
Regulations Section 1.860E-1 or Section 1.860G-3, then the last preceding
Permitted Transferee shall be restored, to the extent permitted
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by law, to all rights and obligations as Holder thereof retroactive to the
date of registration of such Transfer of such Class R Certificate. The
Trustee shall be under no liability to any Person for any registration of
Transfer of a Class R Certificate that is in fact not permitted by this
Section 5.02 or for making any payments due on such Certificate to the
holder thereof or for taking any other action with respect to such holder
under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class
R Certificate in violation of the restrictions in this Section 5.02
and to the extent that the retroactive restoration of the rights of
the Holder of such Class R Certificate as described in clause (iii)(A)
above shall be invalid, illegal or unenforceable, then the Trustee
shall have the right, without notice to the holder or any prior holder
of such Class R Certificate, to sell such Class R Certificate to a
purchaser selected by the Trustee on such terms as the Trustee may
choose. Such purported Transferee shall promptly endorse and deliver
each Class R Certificate in accordance with the instructions of the
Trustee. Such purchaser may be the Trustee itself. The proceeds of
such sale, net of the commissions (which may include commissions
payable to the Trustee), expenses and taxes due, if any, will be
remitted by the Trustee to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be determined
in the sole discretion of the Trustee, and the Trustee shall not be
liable to any Person having an Ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions, all information
necessary to compute any tax imposed (A) as a result of the transfer of an
ownership interest in a Class R Certificate to any Person who is a
Disqualified Organization, including the information regarding "excess
inclusions" of such Class R Certificates required to be provided to the
Internal Revenue Service and certain Persons as described in Treasury
Regulations Sections 1.860D-1(b)(5) and 1.860E- 2(a)(5), and (B) as a
result of any regulated investment company, real estate investment trust,
common trust fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a Class R
Certificate having as among its record holders at any time any Person who
is a Disqualified Organization. The Trustee may charge and shall be
entitled to reasonable compensation for providing such information as may
be required from those Persons which may have had a tax imposed upon them
as specified in clauses (A) and (B) of this paragraph for providing such
information.
(f) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee or the
Authenticating Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class of a like aggregate initial Certificate Principal Balance. Every
Certificate surrendered for transfer shall be accompanied by notification of the
account of the designated transferee or transferees for the purpose of receiving
distributions pursuant to Section 4.01 by wire transfer, if any such transferee
desires and is eligible for distribution by wire transfer.
(g) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of the same Class
of a like aggregate initial Certificate Principal Balance, upon surrender of the
Certificates to be exchanged at the office
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of the Certificate Registrar. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute, authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee or the Certificate Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer in the form satisfactory to the
Trustee or the Certificate Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing.
(h) No service charge shall be made to the Certificateholders for any
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(i) All Certificates surrendered for transfer and exchange shall be
canceled and retained by the Trustee in accordance with the Trustee's standard
procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and initial Certificate Principal Balance. Upon
the issuance of any new Certificate under this Section, the Trustee may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
SECTION 5.04. Persons Deemed Owners.
The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and neither the Depositor,
the Master Servicer, the Trustee nor any agent of any of them shall be affected
by notice to the contrary.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the Master Servicer.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor and the Master Servicer herein.
SECTION 6.02. Merger, Consolidation or Conversion of the Depositor or
the Master Servicer.
The Depositor and the Master Servicer each will keep in full effect
its existence, rights and franchises as a corporation under the laws of the
state of its incorporation, and each will obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
Any Person into which the Depositor may be merged, consolidated or
converted, or any corporation resulting from any merger or consolidation to
which the Depositor shall be a party, or any Person succeeding to the business
of the Depositor, shall be the successor of the Depositor hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Any Person into which the Master Servicer may be merged, consolidated
or converted, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer (including by a transfer of servicing portfolio
or operations by the Master Servicer), shall be the successor of the Master
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, however, that the
successor or surviving Person to the Master Servicer must meet the criteria set
forth in Section 7.03 for a successor Master Servicer and shall be qualified to
sell mortgage loans to and service mortgage loans for FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the Master
Servicer and Others.
Neither the Depositor, the Master Servicer nor any of the directors,
officers, employees or agents of the Depositor or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Master Servicer pursuant to Section 3.01
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or any other Section hereof; and provided further that this provision shall not
protect the Depositor, the Master Servicer or any such person, against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind PRIMA FACIE
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
and held harmless by the Trust Fund against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to Master
Servicer's servicing obligations with respect to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or related to the Master Servicer's
obligations under Section 3.01, or any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. Neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its respective duties under this Agreement and which in its
opinion may involve it in any expense or liability; provided, however, that the
Depositor or the Master Servicer may in its sole discretion undertake any such
action which it may deem necessary or desirable with respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Depositor and the
Master Servicer shall be entitled to be reimbursed therefor from the Certificate
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of Certificateholders to receive any amount in the Certificate
Account.
SECTION 6.04. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer and
receipt by the Trustee of a letter from the Rating Agency that such a
resignation and appointment will not, in and of itself, result in a downgrading
of the Certificates or (b) upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor servicer shall have assumed the
Master Servicer's responsibilities, duties, liabilities and obligations
hereunder.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to remit to the Trustee for
distribution to the Certificateholders any payment (other than an Advance)
required to be made under the terms of the Certificates or this Agreement
which continues unremedied for a period of five days after the date upon
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Depositor (with a copy
to the Trustee) or the Trustee, or to the Master Servicer, the Depositor
and the Trustee by the Holders of Certificates entitled to at least 25% of
the Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on
the part of the Master Servicer contained in the Certificates or in this
Agreement (including any breach of the Master Servicer's representations
and warranties pursuant to Section 2.03(a) which materially and adversely
affects the interests of the Certificateholders) which continues unremedied
for a period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Master Servicer by the Depositor (with a copy to the Trustee) or the
Trustee, or to the Master Servicer, the Depositor and the Trustee by the
Holders of Certificates entitled to at least 25% of the Voting Rights; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future
federal or state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or substantially
all of its property; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of or otherwise voluntarily commence a case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar statute,
make an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
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(vi) the Master Servicer shall fail to deposit in the Certificate
Account on any Certificate Account Deposit Date an amount equal to any
required Advance.
If an Event of Default described in clauses (i) - (v) of this Section shall
occur, then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Depositor or the Trustee may, and at the
direction of the Holders of Certificates entitled to at least 51% of the Voting
Rights, the Trustee shall, by notice to the Master Servicer (and to the
Depositor if given by the Trustee or to the Trustee if given by the Depositor)
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder. If an Event of Default described in clause (vi)
hereof shall occur, the Trustee shall, by notice to the Master Servicer and the
Depositor, terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that if the Trustee determines
that the failure by the Master Servicer to make any required Advance was due to
circumstances beyond its control, and the required Advance was otherwise made,
the Trustee shall not terminate the Master Servicer. On or after the receipt by
the Master Servicer of such notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates (other
than as a holder thereof) or the Mortgage Loans or otherwise, shall pass to and
be vested in the Trustee pursuant to and under this Section, and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee or its appointed agent for administration by it of
all cash amounts which shall at the time be deposited by the Master Servicer or
should have been deposited to the Custodial Account, the Excess Proceeds Account
or the Certificate Account or thereafter be received with respect to the
Mortgage Loans. The Trustee shall not be deemed to have breached any obligation
hereunder as a result of a failure to make or delay in making any distribution
as and when required hereunder caused by the failure of the Master Servicer to
remit any amounts received on it or to deliver any documents held by it with
respect to the Mortgage Loans. For purposes of this Section 7.01, the Trustee
shall not be deemed to have knowledge of an Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Division has actual knowledge thereof or unless notice of any
event which is in fact such an Event of Default is received by the Trustee and
such notice references the Certificates, the Trust Fund or this Agreement.
Notwithstanding any termination of the activities of Temple-Inland
Mortgage Corporation ("TIMC") in its capacity as Master Servicer hereunder, TIMC
shall be entitled to receive, out of any Late Collection of a Monthly Payment on
a Mortgage Loan which was due prior to the notice terminating TIMC's rights and
obligations as Master Servicer hereunder and received after such notice, that
portion to which TIMC would have been entitled pursuant to Sections 3.11(ii),
(iii), (iv), (v) and (viii) and Sections 4.01(b)(iii), (vi) and (ix) as well as
its
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Servicing Fee in respect thereof, and any other amounts payable to TIMC
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, the Trustee or its appointed agent shall
be the successor in all respects to the Master Servicer in its capacity as
Master Servicer under this Agreement and the transactions set forth or provided
for herein and shall be subject thereafter to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer including the
obligation to make Advances which have been or will be required to be made
(except for the responsibilities, duties and liabilities contained in Section
2.03 and its obligations to deposit amounts in respect of losses pursuant to
Sections 3.12 and 4.01(c)) by the terms and provisions hereof; and provided
further, that any failure to perform such duties or responsibilities caused by
the Master Servicer's failure to provide information required by Section 4.03
shall not be considered a default by the Trustee hereunder. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans which the Master Servicer would have been entitled to charge to the
Custodial Account and the Certificate Account if the Master Servicer had
continued to act hereunder. Notwithstanding the above, the Trustee may, if it
shall be unwilling to so act, or shall, if it is unable to so act (exclusive of
the obligations set forth in Section 4.03) or if the Holders of Certificates
entitled to at least 51% of the Voting Rights so request in writing to the
Trustee, appoint, or petition a court of competent jurisdiction to appoint, any
mortgage loan servicing institution (acceptable to the Rating Agencies) having a
net worth of not less than $10,000,000 (or other amount acceptable to the Rating
Agencies) as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer hereunder.
The Seller, the Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Any successor, including the Trustee, to the Master Servicer shall
maintain in force during its term as master servicer hereunder policies and
fidelity bonds to the same extent as the Master Servicer is so required pursuant
to Section 3.18.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the
Master Servicer, the Trustee shall give prompt notice thereof to
Certificateholders.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
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SECTION 7.04. Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder, may waive such
default or Event of Default; PROVIDED, HOWEVER, that (a) a default or Event of
Default under clause (i) of Section 7.01 may be waived only by all of the
Holders of Certificates affected by such default or Event of Default and (b) no
waiver pursuant to this Section 7.04 shall affect the Holders of Certificates in
the manner set forth in the third paragraph of Section 11.01. Upon any such
waiver of a default or Event of Default by the Holders representing the
requisite percentage of Voting Rights of Certificates affected by such default
or Event of Default, such default or Event of Default shall cease to exist and
shall be deemed to have been remedied for every purpose hereunder. No such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon except to the extent expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Default occurs and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs. Any
permissive right of the Trustee enumerated in this Agreement shall not be
construed as a duty.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take action as it deems appropriate to have the instrument
corrected.
The Trustee shall sign on behalf of the Trust Fund any tax return that
the Trustee is required to sign pursuant to applicable federal, state or local
tax laws.
The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of the Trust Fund as a REMIC
under the REMIC Provisions and to prevent the imposition of any federal, state
or local income, prohibited transaction, contribution or other tax on the Trust
Fund to the extent that maintaining such status and avoiding such taxes are
reasonably within the control of the Trustee and are reasonably within the scope
of its duties under this Agreement.
The Trustee shall cooperate to the extent practicable, with the
Depositor in the preparation of any information, for the Holder of any
Certificate, which the Depositor in its sole discretion deems necessary and
appropriate for purposes of satisfying applicable information reporting
requirements under Rule 144A or otherwise.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such 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
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and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates entitled to at
least 25% of the Voting Rights relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(a) The Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
therewith;
(c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to make any investigation of
matters arising hereunder or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default (which has not
been cured), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs;
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(d) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates entitled to at least
25% of the Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to taking any such action. The
reasonable expense of every such reasonable examination shall be paid by the
Master Servicer or, if paid by the Trustee, shall be repaid by the Master
Servicer upon demand; and
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates, other than the
signature of the Trustee on the Certificates and the certificate of
authentication, shall be taken as the statements of the Depositor or the Master
Servicer, as the case may be, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document, other than the signature of the Trustee on
the Certificates and the Certificate of Authentication. The Trustee shall not be
accountable for the use or application by the Depositor or the Master Servicer
of any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid to the Seller in respect of the Mortgage
Loans or deposited in or withdrawn from the Custodial Account, the Excess
Proceeds Account or the Certificate Account or any other account by or on behalf
of the Depositor or the Master Servicer, other than any funds held by or on
behalf of the Trustee in accordance with Section 3.10.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights it would have if it were
not Trustee.
SECTION 8.05. Master Servicer to Pay Trustee's Fees.
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The Master Servicer covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder or of the Trustee. Except
as otherwise provided in this Agreement, the Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Trust Fund and held
harmless against any claim, loss, liability or expense incurred in connection
with any Event of Default, any breach of this Agreement, any claim or legal
action, including any pending or threatened claim or legal action relating to
the acceptance or administration of its trusts hereunder or the Certificates,
other than any claim, loss, liability or expense incurred in connection with a
breach constituting willful misfeasance, bad faith or negligence of the Trustee
in the performance of its duties hereunder or by reason of reckless disregard of
its obligations and duties hereunder. The provisions of this Section 8.05 shall
survive the termination of this Agreement.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a
national banking association organized and doing business under the laws of any
state or the United States of America or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. In addition, the Trustee shall at all times be
acceptable to the Rating Agency rating the Certificates. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07. The corporation or national banking association serving as Trustee
may have normal banking and trust relationships with the Seller and its
affiliates or the Master Servicer and its affiliates; provided, however, that
such corporation cannot be an affiliate of the Master Servicer other than the
Trustee in its role as successor to the Master Servicer.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving notice thereof to the Depositor, the Master Servicer
and to all Certificateholders; provided, that such resignation shall not be
effective until a successor trustee is appointed and accepts appointment in
accordance with the following provisions. Upon receiving such notice of
resignation, the Master Servicer shall promptly appoint a successor trustee who
meets the eligibility requirements of Section 8.06 by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor. If no successor
trustee shall have been so appointed and have accepted appointment within 60
days after the giving of such notice of resignation, the resigning Trustee may
petition
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any court of competent jurisdiction for the appointment of a successor trustee;
provided, however, that the resigning Trustee shall not resign and be discharged
from the trusts hereby created until such time as the Rating Agency rating the
Certificates approves the successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Master Servicer, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or if
the rating of the long-term debt obligations of the Trustee is not acceptable to
the Rating Agency in respect of mortgage pass-through certificates having a
rating equal to the then current rating on the Certificates, then the Master
Servicer may remove the Trustee and appoint a successor trustee who meets the
eligibility requirements of Section 8.06 by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor trustee. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders and the Master Servicer
by the Depositor.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Master Servicer and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements held by it hereunder, and
the Master Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06.
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Upon acceptance of appointment by a successor trustee as provided in
this Section, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register. If the Master Servicer fails to mail such notice
within ten days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Master Servicer.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Depositor and
the Trustee may consider necessary or desirable. If the Depositor shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each
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of them. Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article VIII. Each separate
trustee and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans
Subject to Section 9.02, the respective obligations and
responsibilities of the Depositor, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Master Servicer of all Mortgage
Loans and each REO Property in respect thereof remaining in the Trust Fund at a
price equal to (a) 100% of the unpaid principal balance of each Mortgage Loan
(other than one as to which a REO Property was acquired) on the day of
repurchase together with accrued interest on such unpaid principal balance at
the Net Mortgage Rate to the first day of the month in which the proceeds of
such repurchase are to be distributed, plus (b) the appraised value of any REO
Property (but not more than the unpaid principal balance of the related Mortgage
Loan, together with accrued interest on that balance at the Net Mortgage Rate to
the first day of the month of repurchase), less the good faith estimate of the
Master Servicer of liquidation expenses to be incurred in connection with its
disposal thereof, such appraisal to be conducted by an appraiser mutually agreed
upon by the Master Servicer and the Trustee; and (ii) the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund (or the disposition of all REO Property in respect
thereof); provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late ambassador of the United
States to the Court of St. James, living on the date hereof. In the case of any
repurchase by the Master Servicer pursuant to clause (i), the Master Servicer
shall include in such repurchase price the amount of any Advances that will be
reimbursed to the Master Servicer pursuant to Section 3.11(iii) and the Master
Servicer shall exercise reasonable efforts to cooperate fully with the Trustee
in effecting such repurchase and the transfer of the Mortgage Loans and related
Mortgage Files and related records to the Master Servicer.
The right of the Master Servicer to repurchase all Mortgage Loans
pursuant to (i) above shall be conditioned upon the aggregate Stated Principal
Balance of such Mortgage Loans at the time of any such repurchase aggregating an
amount equal to or less than 5% of the aggregate Stated Principal Balance of the
Mortgage Loans at the Cut-off Date. If such right is exercised, the Master
Servicer upon such repurchase shall provide to the Trustee, the certification
required by Section 3.16.
Notice of any termination, specifying the Distribution Date upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Master Servicer by letter to the Trustee and the Certificateholders mailed
(a) in the event such notice is given in connection with the
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Master Servicer's election to repurchase, not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution or (b) otherwise during the month of such final distribution on or
before the Determination Date in such month, in each case specifying (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of Certificates at the office of the Certificate
Registrar therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Certificate Registrar therein specified. In
the event such notice is given in connection with the Master Servicer's election
to repurchase, the Master Servicer shall deliver to the Trustee for deposit in
the Certificate Account on the Business Day immediately preceding the
Distribution Date specified in such notice an amount equal to the
above-described repurchase price payable out of its own funds. Upon presentation
and surrender of the Certificates by the Certificateholders, the Trustee shall
distribute to the Certificateholders (i) the amount otherwise distributable on
such Distribution Date, if not in connection with the Master Servicer's election
to repurchase, or (ii) if the Master Servicer elected to so repurchase, an
amount determined as follows: with respect to each Class A-1 Certificate, each
Class A-2 Certificate and each Class B Certificate, the outstanding Certificate
Principal Balance thereof, plus one month's interest thereon at the applicable
PassThrough Rate and any previously unpaid Accrued Certificate Interest; with
respect to each Class S Certificate, one month's interest at the applicable
Pass-Through Rate based upon the Notional Amount and any previously unpaid
Accrued Certificate Interest; and with respect to each Class R Certificate, the
Percentage Interest evidenced thereby multiplied by the difference, if any,
between the above described repurchase price and the aggregate amount to be
distributed to the Class S Certificateholders, the Class A-1 Certificateholders,
the Class A-2 Certificateholders and the Class B Certificateholders. Upon
certification to the Trustee by a Servicing Officer, following such final
deposit, the Trustee shall promptly release the Mortgage Files as directed by
the Master Servicer for the remaining Mortgage Loans, and the Trustee shall
execute all assignments, endorsements and other instruments required by the
Master Servicer as being necessary to effectuate such transfer.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned notice, the Trustee shall give a second notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within six months
after the second notice all of the Certificates shall not have been surrendered
for cancellation, the Trustee shall take reasonable steps as directed by the
Depositor, or appoint an agent to take reasonable steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets which remain
subject hereto. If, within nine months after the second notice, all of the
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto.
SECTION 9.02. Additional Termination Requirements.
(a) In the event the Master Servicer repurchases the Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following
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additional requirements, unless the Master Servicer, at its own expense, obtains
for the Trustee an Opinion of Counsel to the effect that the failure of the
Trust Fund to comply with the requirements of this Section 9.02 will not (i)
result in the imposition of taxes on the net income derived from "prohibited
transactions" of the Trust Fund as defined in Section 860F of the Code or (ii)
cause the Trust Fund to fail to qualify as a REMIC under the REMIC Provisions at
any time that any Certificates are outstanding:
(i) The Trustee shall establish a 90-day liquidation period for the
Trust Fund and specify the first day of such period in a statement attached
to the Trust Fund's final Tax Return pursuant to Treasury Regulation
Section 1.860F-1. The Trustee shall satisfy all the requirements of a
qualified liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained at the expense
of the Master Servicer;
(ii) During such 90-day liquidation period, and at or prior to the
time of making of the final payment on the Certificates, the Trustee shall
sell all of the assets of the Trust Fund for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Class R Certificates all
cash on hand in the Trust Fund (other than cash retained to meet claims),
and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Class R Certificates, the Holders
thereof hereby agree to authorize the Trustee to specify the 90-day liquidation
period for the Trust Fund, which authorization shall be binding upon all
successor Class R Certificateholders.
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ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee shall make an election to treat the Trust Fund as a
REMIC under the Code, and if necessary, under applicable state law. Such
election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
purposes of the REMIC election in respect of the Trust Fund, the Class S, Class
A-1, Class A-2 and Class B Certificates shall be designated as the "regular
interests" and the Class R Certificates shall be designated as the sole Class of
"residual interest" in the Trust Fund. The Trustee shall not permit the creation
of any "interests" in the Trust Fund (within the meaning of Section 860G of the
Code) other than the Trust Fund regular interests and the interests represented
by the Certificates.
(b) The Closing Date is hereby designated as the Startup Day of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the Trust Fund
(including, but not limited to, any professional fees or any administrative or
judicial proceedings with respect thereto that involved the Internal Revenue
Service or state tax authorities), other than the expense of obtaining any tax
related Opinion of Counsel not obtained in connection with such an audit and
other than taxes, in either case except as specified herein; provided, however,
that if such audit resulted from the negligence of the Master Servicer or the
Depositor, then the Master Servicer or the Depositor, as the case may be, shall
pay such expenses. The Trustee shall hold a Class R Certificate representing a
0.01% Percentage Interest of all Class R Certificates and shall be designated as
the tax matters person of the Trust Fund in the manner provided under Treasury
Regulations Section 1.860F-4(d) and Temporary Treasury Regulations Section
301.6231(a)(7)-1T. The Trustee, as tax matters person, shall (i) act on behalf
of the Trust Fund in relation to any tax matter or controversy involving the
Trust Fund and (ii) represent the Trust Fund in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto. To the extent authorized under the Code and the
regulations promulgated thereunder, each Holder of a Class R Certificate, hereby
irrevocably appoints and authorizes the Trustee to be its attorney-in-fact for
purposes of signing any Tax Returns required to be filed on behalf of the Trust
Fund.
(d) The Trustee shall prepare or cause to be prepared, sign and file
all of the Tax Returns in respect of the Trust Fund created hereunder, other
than Tax Returns required to be filed by the Master Servicer pursuant to Section
4.05. The expenses of preparing and filing such returns shall be borne by the
Trustee without any right of reimbursement therefor.
(e) The Trustee shall perform on behalf of the Trust Fund all
reporting and other tax compliance duties that are the responsibility of the
Trust Fund under the Code, REMIC
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Provisions or other compliance guidance issued by the Internal Revenue Service
or any state or local taxing authority. Among its other duties, as required by
the Code, the REMIC Provisions or other such compliance guidance, the Trustee
shall provide (i) to any Transferor of a Class R Certificate such information as
is necessary for the application of any tax relating to the transfer of a Class
R Certificate to any Person who is not a Disqualified Organization, (ii) to
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption) and
(iii) to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of the Trust Fund. In
addition, the Depositor shall provide or cause to be provided to the Trustee,
within ten (10) days after the Closing Date, all information or data that the
Trustee reasonably determines to be relevant for tax purposes as to the
valuations and issue prices of the Certificates, including, without limitation,
the price, yield, prepayment assumption and projected cash flow of the
Certificates.
(f) The Trustee shall take such action and shall cause the Trust Fund
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the Trust Fund as a REMIC or (ii) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee received an Opinion of
Counsel (at the expense of the party seeking to take such action but in no event
shall such Opinion of Counsel be an expense of the Trustee) to the effect that
the contemplated action will not, with respect to the Trust Fund created
hereunder, endanger such status or result in the imposition of such a tax. The
Master Servicer shall not take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel (which such Opinion of Counsel shall not be
an expense of the Trustee) to the effect that an Adverse REMIC Event could occur
with respect to such action. In addition, prior to taking any action with
respect to the Trust Fund or its assets, or causing the Trust Fund to take any
action which is not expressly permitted under the terms of this Agreement, the
Master Servicer will consult with the Trustee or its designee, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to the Trust Fund, and the Master Servicer shall not take any such
action or cause the Trust Fund to take any such action as to which the Trustee
has advised it in writing that an Adverse REMIC Event could occur. The Trustee
may consult with counsel to make such written advice, and the cost of same shall
be borne by the party seeking to take the action not permitted by this Agreement
(but in no event shall such cost be an expense of the Trustee). At all times as
may be required by the Code, the Trustee will ensure that substantially all of
the assets of the Trust Fund will consist of "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
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(g) In the event that any tax is imposed on "prohibited transactions"
of the Trust Fund created hereunder as defined in Section 860F(a)(2) of the
Code, on "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contributions to the Trust Fund after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Certificate Account and
shall be paid by withdrawal therefrom.
(h) On or before April 15 of each calendar year, commencing April 15,
1996, the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating the Trustee's
compliance with this Article X.
(i) The Master Servicer and the Trustee shall, for federal income tax
purposes, maintain books and records with respect to the Trust Fund on a
calendar year and on an accrual basis.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the Trust Fund unless it shall have received an
Opinion of Counsel (which such Opinion of Counsel shall not be an expense of the
Trustee) to the effect that the inclusion of such assets in the Trust Fund will
not cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject the Trust Fund to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which the Trust Fund will receive a fee or other compensation for
services nor permit either such REMIC to receive any income from assets other
than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(l) Solely for purposes of satisfying Section 1.860G-1(a)(4)(iii) of
the Treasury Regulations, the "latest possible maturity date" by which the
Certificate Principal Balances of each Class of Certificates representing a
regular interest in the Trust Fund would be reduced to zero is the Distribution
Date in November, 2025, which is the Distribution Date immediately following the
latest scheduled maturity of any Mortgage Loan.
SECTION 10.02. Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans, except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of the
Trust Fund pursuant to Article IX of this Agreement, or (iv) a purchase of
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Mortgage Loans pursuant to Article II or III of this Agreement nor acquire any
assets for the Trust Fund, nor sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain, nor accept any
contributions to the Trust Fund after the Closing Date unless it has received an
Opinion of Counsel (at the expense of the party seeking to cause such sale,
disposition, substitution or acquisition but in no event shall such Opinion of
Counsel be an expense of the Trustee) that such sale, disposition, substitution
or acquisition will not (a) affect adversely the status of the Trust Fund as a
REMIC or (b) cause the Trust Fund to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
SECTION 10.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor and
the Master Servicer for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor or the Master Servicer, as a result of a breach of the Trustee's
covenants set forth in this Article X.
(b) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor and the Trustee for any taxes and costs (including, without
limitation, any reasonable attorneys' fees) imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in this Article X or in Article III with respect
to compliance with the REMIC Provisions, including without limitation, any
penalties arising from the Trustee's execution of Tax Returns prepared by the
Master Servicer that contain errors or omissions.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein, (iii) to amend this Agreement in any respect subject to the
provisions below, or (iv) if such amendment, as evidenced by an Opinion of
Counsel (provided by the Person requesting such amendment) delivered to the
Trustee, is reasonably necessary to comply with any requirements imposed by the
Code or any successor or amendatory statute or any temporary or final
regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any
proposed such action which, if made effective, would apply retroactively to the
Trust Fund at least from the effective date of such amendment; provided that
such action (except any amendment described in (iv) above) shall not, as
evidenced by an Opinion of Counsel (provided by the Person requesting such
amendment) delivered to the Trustee, adversely affect in any material respect
the interests of any Certificateholder (other than Certificateholders who shall
consent to such amendment).
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Trustee with the consent of the Holders of
Certificates entitled to at least 66-2/3% of the Voting Rights for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66-2/3% of the Voting Rights of
such Class, or (iii) reduce the aforesaid percentage of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Seller or the Master Servicer or any affiliate thereof shall be entitled to
Voting Rights with respect to matters described in (i), (ii) and (iii) of this
paragraph.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (provided by the Person requesting such
amendment) to the effect that such amendment will not result in the imposition
of any tax on the Trust Fund pursuant to the REMIC Provisions or cause the Trust
Fund to fail to qualify as a REMIC at any time that any of the Certificates are
outstanding.
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Promptly after the execution of any such amendment the Trustee shall
furnish a statement describing the amendment to each Certificateholder.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Prior to executing any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel (provided by the Person
requesting such amendment) to the effect that such amendment is authorized or
permitted by this Agreement. The cost of an Opinion of Counsel delivered
pursuant to this Section 11.01 shall be an expense of the party requesting such
amendment, but in any case shall not be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer and at the expense of the Depositor on direction by the Trustee,
but only upon direction accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability
<PAGE>
-95-
to any third party by reason of any action taken by the parties to this
Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a notice of an Event of Default, or
of a default by the Seller or the Trustee in the performance of any obligation
hereunder, and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates entitled to at least 25% of the Voting Rights
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.
SECTION 11.05. Notices.
All demands, notices and direction hereunder shall be in writing and
shall be deemed effective upon receipt when delivered to (a) in the case of the
Depositor, 140 Broadway, 43rd Floor, New York, New York 10005, Attention: N.
Dante LaRocca, or such other address as may hereafter be furnished to the
Trustee and the Master Servicer in writing by the Depositor, (b) in the case of
the Trustee, Four Albany Street, New York, New York 10006, Attention:
DLJ/Quality Series 1995-QE9, or such other address as may hereafter be furnished
to the Master Servicer and the Depositor in writing by the Trustee, (c) in the
case of the Master Servicer, Temple-Inland Mortgage Corporation, 1300 Mo-Pac
Expressway South, Austin, Texas 78746, Attention: Contract Manager, or such
other address as may hereafter be furnished to the Depositor and the Trustee in
writing and (d) in the case of the Seller, Quality Mortgage USA, Inc., 16800
Aston Street, Irvine, California 92714, Attention: President, or such other
address as may hereafter be furnished to the Trustee, the Master Servicer and
the Depositor in writing. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any
<PAGE>
-96-
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Successors and Assigns; Third Party Beneficiary.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto, and
all such provisions shall inure to the benefit of the Trustee and the
Certificateholders. The parties hereto agree that the Seller is the intended
third party beneficiary of Sections 3.07 and 3.10 hereof, and that the Seller
may enforce such provisions to the same extent as if the Seller were a party to
this Agreement.
SECTION 11.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.09. Notice to Rating Agency.
The Trustee shall use its best efforts to promptly provide notice to
the Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer or the
Trustee;
4. The repurchase of Mortgage Loans pursuant to Section 2.03;
5. The final payment to Certificateholders; and
6. Any change in the location of the Custodial Account, the Excess
Proceeds Account or the Certificate Account.
In addition, the Trustee shall promptly furnish to the Rating Agency
copies of the following:
<PAGE>
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1. Each report to Certificateholders described in Section 4.02; and
2. Each annual independent public accountants' servicing report
described in Section 3.20.
Any such notice pursuant to this Section 11.09 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention:
Residential Pass-Through Monitoring, or such other address as the Rating Agency
may designate in writing to the parties thereto.
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized all as of the day and year first above written.
DLJ MORTGAGE ACCEPTANCE CORP.,
Depositor
By: N. Dante LaRocca
Senior Vice President
TEMPLE-INLAND MORTGAGE CORPORATION,
Master Servicer
By: Joe Farr
Executive Vice President
Chief Financial Officer and Treasurer
BANKERS TRUST COMPANY,
Trustee
By: Michelle A. Lambott
Assistant Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 22nd day of November, 1995 before me, a notary public in and
for said State, personally appeared N. Dante LaRocca, known to me to be a(n)
Senior Vice President of DLJ Mortgage Acceptance Corp., a corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation as a duly authorized officer of said
corporation, and acknowledged to me that said corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
JOSEPH B. BUONANNO
Notary Public, State of New York
No. 02-BU5017342
Qualified in Nassau County
Commission Expires Aug. 30, 1997
[Notarial Seal]
<PAGE>
STATE OF _______ )
) ss.:
COUNTY OF _______ )
On the 22nd day of November, 1995 before me, a notary public in and
for said State, personally appeared Joe Farr, known to me to be Executive Vice
President, Chief Financial Officer and Treasurer of Temple-Inland Mortgage
Corporation, a corporation that executed the within instrument, and also known
to me to be the person who executed it on behalf of said corporation as a duly
authorized officer of said corporation, and acknowledged to me that said
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
NETTIE A. WEBB
Notary Public
State of Texas
My Comm. Exp. 10-17-98
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 22nd day of November, 1995 before me, a notary public in and
for said State, personally appeared Michelle A. Lambott, known to me to be a(n)
Assistant Vice President of Bankers Trust Company, a corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation as a duly authorized officer of said corporation, and
acknowledged to me that said corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
GINA M. D'ALESSANDRO
Notary Public, State of New York
No. 24-4976392
Qualified in Queens County
Cert. Filed in New York County
Commission Expires Jan. 14, 1997
[Notarial Seal]
<PAGE>
EXHIBIT A
FORM OF SENIOR CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE")) CREATED BY THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN (THE "AGREEMENT").
[THIS CERTIFICATE IS SUBORDINATE TO THE CLASS ___ CERTIFICATES OF
THE SAME SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE
AGREEMENT.]
[NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN, OR
PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING ANY
INSURANCE COMPANY UNDER THE CIRCUMSTANCES DESCRIBED IN THE AGREEMENT), SUBJECT
TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE CODE UNLESS THE TRANSFEREE PROVIDES AN OPINION
OF COUNSEL OR CERTIFICATION OF FACTS (UNDER THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR THE
CERTIFICATE REGISTRAR THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED
TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE.]
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF
PREPAYMENT USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES EQUAL TO A CONSTANT PREPAYMENT RATE OF __% PER ANNUM (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$______ OF OID PER [$100,000] [$1,000] OF INITIAL [NOTIONAL AMOUNT] [CERTIFICATE
PRINCIPAL BALANCE], THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $___ PER [$100,000]
[$1,000] OF INITIAL [NOTIONAL AMOUNT] [CERTIFICATE PRINCIPAL BALANCE] COMPUTED
USING THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.]
<PAGE>
-2-
Series 1995-QE9 Aggregate Initial [Certificate Principal
Balance] [Notional Amount] of the Class ___
Certificates: $
Class ___ Initial [Certificate Principal Balance]
[Notional Amount] of this Certificate:
$_________________
[Adjustable][Variable] Initial Pass-Through Rate: %
Pass-Through Rate
Date of Pooling and Servicing Percentage Interest Evidenced
Agreement and Cut-off Date: by this Certificate: _________%
November 1, 1995
First Distribution Date: Issue Date:
December 26, 1995 November 22, 1995
Master Servicer: Trustee:
Temple-Inland Mortgage Bankers Trust Company
Corporation
No. ___ CUSIP:
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1995-QE9, CLASS [S] [A-1] [A-2]
evidencing a beneficial ownership interest in a trust fund consisting
primarily of a pool of adjustable rate residential mortgage loans sold by
DLJ MORTGAGE ACCEPTANCE CORP.
This certifies that ____________________ is the registered owner of
the Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all of the Class __ Certificates in the Trust Fund (as
defined herein) established under a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among DLJ Mortgage Acceptance Corp.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), Temple-Inland Mortgage Corporation (the "Master Servicer")
and Bankers Trust Company (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. The Percentage Interest evidenced
hereby is equal to the initial [Notional Amount] [Certificate Principal Balance]
of this Certificate divided by the aggregate initial [Notional Amount]
[Certificate Principal Balance] of all of the Class __ Certificates as specified
above. The Certificates of the Series specified above (collectively, the
"Certificates") evidence in the aggregate the entire beneficial ownership
interest in a segregated pool of assets created pursuant to the Agreement
comprised of conventional one- to four-family residential first lien mortgage
loans (the "Mortgage Loans"), or interests therein, and certain other assets as
described herein. To the extent not defined herein, the capitalized terms used
herein have the
<PAGE>
-3-
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
The Trustee shall distribute or cause to be distributed on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), from
the Available Distribution Amount an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class __ Certificates on such Distribution Date
pursuant to the Agreement. [The Notional Amount of the Class S Certificates as
of any date of determination will be determined pursuant to the Agreement. The
Class S Certificates have no Certificate Principal Balance.] Reference is hereby
made to the further provisions of this Certificate and the Agreement set forth
herein, which further provisions shall for all purposes have the same effect as
though fully set forth at this place.
All distributions will be made or caused to be made by the Trustee in
immediately available funds either (i) by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, or (ii) by wire transfer to the account of such person at
the request of the Person entitled thereto if such Person shall have so notified
the Trustee in writing by 5 Business Days prior to the applicable Record Date
and such Certificateholder is the registered holder of Certificates the
aggregate Initial Certificate Principal Balance of which is not less than
$2,500,000 (or, with respect to the Class S Certificates, is the registered
holder of an aggregate initial Notional Amount of not less than $10,000,000 of
such Certificates). Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Master Servicer of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee. [The Certificate Principal Balance
hereof will be reduced to the extent of distributions allocable to principal and
the principal portions of any Realized Losses allocable hereto.]
This Certificate is one of a duly authorized issue of Certificates of
the series and class specified on the face hereof. The Certificates in the
aggregate represent the entire beneficial ownership interest in: (i) the
Mortgage Loans (exclusive of payments of principal and interest due on or before
the Cut-off Date) as from time to time are subject to the Agreement and all
payments under and proceeds of the Mortgage Loans (exclusive of any prepayment
fees and late payment changes received on the Mortgage Loans), together with all
documents included in the related Mortgage File; (ii) such funds or assets as
from time to time are deposited in the Custodial Account, the Excess Proceeds
Account or the Certificate Account; (iii) any REO Property; (iv) the Primary
Hazard Insurance Policies, if any, and all other Insurance Policies with respect
to the Mortgage Loans required to be maintained pursuant to the Agreement; and
(v) the Depositor's interest in respect of the representations and warranties
made by the Seller in each Mortgage Loan Purchase Agreement and the Seller's
Warranty Certificate (all of the foregoing being hereinafter collectively called
the "Trust Fund").
<PAGE>
-4-
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Master Servicer, the Trustee or any Sub-Servicer and are not
insured or guaranteed by any governmental agency or instrumentality or by any
other person or entity. The Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Custodial Account or Certificate Account may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement to
the Master Servicer of advances made, or certain expenses incurred, by it, by
the Depositor, by the Trustee or by any Sub-Servicer.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer, and the Trustee with the consent of the Holders of Certificates
entitled to at least 66-2/3% of the Voting Rights. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
initial [Notional Amount] [Certificate Principal Balance] will be issued to the
designated transferee or transferees.
[No transfer of any Class A-2 Certificate shall be made to any
employee benefit plan or other retirement arrangement including individual
retirement accounts and Keogh plans, that is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (any of foregoing, a "Plan"),
to any Person acting on behalf of a Plan, or to any other person who is using
"plan assets" to effect such acquisition (including any insurance company using
funds in its general or separate accounts that may constitute "plan assets"),
unless the prospective transferee of a Certificateholder desiring to transfer
its Certificates provides to the Trustee or the Certificate Registrar an Opinion
of Counsel (or, in the limited circumstances described in the Agreement, a
certification of facts) which establishes to the satisfaction of the Depositor
and the Trustee or the Certificate Registrar that such disposition will not
violate the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Internal Revenue Code of 1986, as amended. In the case of
any transfer of the foregoing Certificates to an insurance company, in lieu of
such Opinion of Counsel, the Trustee shall require a certification in the form
of Exhibit G-5 to the Agreement.]
<PAGE>
-5-
The Certificates are issuable in fully registered form only, without
coupons and in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate initial [Notional Amount]
[Certificate Principal Balance], as requested by the Holder surrendering the
same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor, the Master Servicer and the Trustee and any agent of
the Depositor, the Master Servicer or the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Depositor, the Master Servicer, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the purchase by the Master Servicer
of all Mortgage Loans and each REO Property in respect thereof, or (ii) the
final payment on, or other liquidation (or any advance with respect thereto) of,
the last Mortgage Loan remaining in the Trust Fund (or the disposition of all
REO Property in respect thereof). The Agreement permits, but does not require,
the Master Servicer to purchase from the Trust Fund all Mortgage Loans and all
property acquired in respect of any Mortgage Loan at a price determined as
provided in the Agreement. The exercise of the Master Servicer's right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than or equal to 5% of the aggregate Stated
Principal Balance of the Mortgage Loans at the Cut-off Date.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be.
<PAGE>
IN WITNESS WHEREOF, the Trustee in its capacity as trustee under the
Agreement has caused this Certificate to be duly executed.
Dated: November 22, 1995 BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class ______________ Certificates referred to in
the within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Social Security or other identifying number of assignee:
(Please print or typewrite name and address including postal zip code
of assignee)
the beneficial interest evidenced by the within Class ___ Certificate and hereby
authorizes the registration of transfer of such interest to the above-named
assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Class ___ Certificate
of a like initial [Certificate Principal Balance] [Notional Amount] to the above
named assignee and deliver such Certificate(s) to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________________________________________________________
for the account of _________________________, account number ______________, or,
if mailed by check, to _____________. Applicable statements should be mailed to
______________________________. This information is provided by ______________,
the assignee named above, or _________________________________, as its agent.
<PAGE>
EXHIBIT B-1
FORM OF CLASS B CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," (AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE")) CREATED BY THE POLING AND SERVICING AGREEMENT REFERRED TO
HEREIN (THE "AGREEMENT").
THIS CLASS B CERTIFICATE IS SUBORDINATE TO THE CLASS A-2 CERTIFICATES, THE CLASS
A-1 CERTIFICATES AND THE CLASS S CERTIFICATES OF THE SAME SERIES TO THE EXTENT
DESCRIBED HEREIN AND IN THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN, OR
PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING ANY
INSURANCE COMPANY UNDER THE CIRCUMSTANCES DESCRIBED IN THE AGREEMENT), SUBJECT
TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, UNLESS THE TRANSFEREE PROVIDES
AN OPINION OF COUNSEL OR CERTIFICATION OF FACTS (UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR
THE CERTIFICATE REGISTRAR, THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED
TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF
PREPAYMENT USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES EQUAL TO A CONSTANT PREPAYMENT RATE OF __% PER ANNUM (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$______ OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE AMOUNT, THE
YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $___ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL
BALANCE COMPUTED USING THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT
ANY OTHER RATE.]
<PAGE>
-2-
Series 1995-QE9 Aggregate Initial Certificate Principal
Balance of the Class B Certificates:
$______________
Class B Initial Certificate Principal Balance of this
Certificate: $_______________
Adjustable Pass-Through Rate Initial Pass-Through Rate: %
Date of Pooling and Servicing Percentage Interest Evidenced
Agreement and Cut-off Date: by this Certificate: _________%
November 1, 1995
First Distribution Date: Issue Date:
December 26, 1995 November 22, 1995
Master Servicer: Trustee:
Temple-Inland Mortgage Bankers Trust Company
Corporation
No. ___ CUSIP:__________
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1995-QE9, CLASS B
evidencing a beneficial ownership interest in a trust fund consisting
primarily of a pool of adjustable rate residential mortgage loans sold by
DLJ MORTGAGE ACCEPTANCE CORP.
This certifies that ____________________ is the registered owner of
the Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all of the Class B Certificates in the Trust Fund
established under a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), between DLJ Mortgage Acceptance Corp. (hereinafter called the
"Depositor", which term includes any successor entity under the Agreement),
Temple-Inland Mortgage Corporation (the "Master Servicer"), and Bankers Trust
Company (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. The Percentage Interest evidenced hereby is equal
to the initial Certificate Principal Balance of this Certificate divided by the
aggregate initial Certificate Principal Balance of all of the Class B
Certificates as specified above. The Certificates of the Series specified above
(collectively, the "Certificates") evidence in the aggregate the entire
beneficial ownership interest in a segregated pool of assets created pursuant to
the Agreement comprised of conventional one- to four-family residential first
lien mortgage loans (the "Mortgage Loans"), or interests therein, and certain
other assets as described herein. To the extent not defined herein, the
capitalized terms used
<PAGE>
-3-
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
The Trustee shall distribute or cause to be distributed on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), from
the Available Distribution Amount an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class B Certificates on such Distribution Date
pursuant to the Agreement. Reference is hereby made to the further provisions of
this Certificate and the Agreement set forth herein, which further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
All distributions will be made or caused to be made by the Trustee in
immediately available funds either (i) by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, or (ii) by wire transfer to the account of such person at
the request of the Person entitled thereto if such Person shall have so notified
the Trustee in writing by 5 Business Days prior to the applicable Record Date
and such Certificateholder is the registered holder of Certificates the
aggregate Initial Certificate Principal Balance of which is not less than
$2,500,000 (or, with respect to the Class S Certificates, is the registered
holder of an aggregate initial Notional Amount of not less than $10,000,000 of
such Certificates). Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Master Servicer of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee. The Certificate Principal Balance
hereof will be reduced to the extent of distributions allocable to the principal
and the principal portions of any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates of
the series and class specified on the face hereof. The Certificates in the
aggregate represent the entire beneficial ownership interest in: (i) the
Mortgage Loans (exclusive of payments of principal and interest due on or before
the Cut-off Date) as from time to time are subject to the Agreement and all
payments under and proceeds of the Mortgage Loans (exclusive of any prepayment
fees and late payment changes received on the Mortgage Loans), together with all
documents included in the related Mortgage File; (ii) such funds or assets as
from time to time are deposited in the Custodial Account, the Excess Proceeds
Account or the Certificate Account; (iii) any REO Property; (iv) the Primary
Hazard Insurance Policies, if any, and all other Insurance Policies with respect
to the Mortgage Loans required to be maintained pursuant to the Agreement; and
(v) the Depositor's interest in respect of the representations and warranties
made by the Seller in each Mortgage Loan Purchase Agreement and the Seller's
Warranty Certificate (all of the foregoing being hereinafter collectively called
the "Trust Fund").
<PAGE>
-4-
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Master Servicer, the Trustee or any Sub-Servicer and are not
insured or guaranteed by any governmental agency or instrumentality or by any
other person or entity. The Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Custodial Account or Certificate Account may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement to
the Master Servicer of advances made, or certain expenses incurred, by it, the
Depositor, by the Trustee or by any Sub-Servicer.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer, and the Trustee with the consent of the Holders of Certificates
entitled to at least 66-2/3% of the Voting Rights. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
initial Certificate Principal Balance will be issued to the designated
transferee or transferees.
No transfer of any Class B Certificate shall be made to any employee
benefit plan or other retirement arrangement including individual retirement
accounts and Keogh plans, that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (any of foregoing, a "Plan"), to any
Person acting on behalf of a Plan, or to any other person who is using "plan
assets" to effect such acquisition (including any insurance company using funds
in its general or separate accounts that may constitute "plan assets"), unless
the prospective transferee of a Certificateholder desiring to transfer its
Certificates provides to the Trustee or the Certificate Registrar an Opinion of
Counsel (or, in the limited circumstances described in the Agreement, a
certification of facts) which establishes to the satisfaction of the Depositor
and the Trustee or the Certificate Registrar that such disposition will not
violate the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Internal Revenue Code of 1986, as amended. In the case of
any transfer of the foregoing Certificates to an insurance company, in lieu of
such Opinion of Counsel, the Trustee shall require a certification in the form
of Exhibit G-5 to the Agreement.
<PAGE>
-5-
The Certificates are issuable in fully registered form only, without
coupons and in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate initial Certificate Principal
Balance, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor, the Master Servicer and the Trustee and any agent of
the Depositor, the Master Servicer or the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Depositor, the Master Servicer, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the purchase by the Master Servicer
of all Mortgage Loans and each REO Property in respect thereof, or (ii) the
final payment on, or other liquidation (or any advance with respect thereto), of
the last Mortgage Loan remaining in the Trust Fund (or the disposition of all
REO Property in respect thereof). The Agreement permits, but does not require,
the Master Servicer to purchase from the Trust Fund all Mortgage Loans and all
property acquired in respect of any Mortgage Loan at a price determined as
provided in the Agreement. The exercise of the Master Servicer's right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than or equal to 5% of the aggregate Stated
Principal Balance of the Mortgage Loans at the Cut-off Date.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be.
<PAGE>
IN WITNESS WHEREOF, the Trustee in its capacity as trustee under the
Agreement has caused this Certificate to be duly executed.
Dated: November 22, 1995
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Social Security or other identifying number of assignee:
(Please print or typewrite name and address including postal zip code of
assignee)
the initial Certificate Principal Balance evidenced by the within Class B
Certificate and hereby authorizes the registration of transfer of such interest
to the above-named assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Class B Certificate
of a like initial Certificate Principal Balance to the above named assignee and
deliver such Certificate to the following address:______________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________________________________________________________
for the account of _________________________, account number ______________, or,
if mailed by check, to _____________. Applicable statements should be mailed to
______________________________. This information is provided by ______________,
the assignee named above, or _________________________________, as its agent.
<PAGE>
EXHIBIT B-2
FORM OF CLASS R CERTIFICATE
THIS CLASS R CERTIFICATE HAS BEEN DESIGNATED BY THE DEPOSITOR REFERRED TO BELOW
AS A "RESIDUAL INTEREST" IN A REAL ESTATE MORTGAGE INVESTMENT CONDUIT ("REMIC")
CREATED BY THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN (THE
"AGREEMENT") PURSUANT TO THE RELATED PROVISIONS OF INTERNAL REVENUE CODE OF 1986
("THE CODE").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE CLASS B CERTIFICATES, THE CLASS
A-2 CERTIFICATES, THE CLASS A-1 CERTIFICATES AND THE CLASS S CERTIFICATES OF THE
SAME SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT.
THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN, OR
PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING ANY
INSURANCE COMPANY UNDER THE CIRCUMSTANCES DESCRIBED IN THE AGREEMENT), SUBJECT
TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, UNLESS THE TRANSFEREE PROVIDES
AN OPINION OF COUNSEL OR CERTIFICATION OF FACTS (UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR
THE CERTIFICATE REGISTRAR, THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED
TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND SECTION 4975 OF THE CODE.
THE CLASS R CERTIFICATES WILL NOT BE ENTITLED TO RECEIVE DISTRIBUTIONS IN
RESPECT OF INTEREST OR PRINCIPAL WITH RESPECT TO THE COMPONENTS THEREOF UNTIL
THE RELATED ACCRETION TERMINATION DATE, AS DESCRIBED HEREIN AND IN THE
AGREEMENT.
THIS CERTIFICATE AND THE AGREEMENT MAY BE AMENDED WITHOUT THE CONSENT OF THE
HOLDER HEREOF, AND IN A MANNER THAT MAY ADVERSELY AFFECT THE INTERESTS OF THE
HOLDER HEREOF, IF NECESSARY TO PREVENT THE DISQUALIFICATION OF THE TRUST FUND AS
A REMIC.
<PAGE>
-2-
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES AN AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT EITHER (1) (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE
UNITED STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER
THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE
SUBJECT TO TAX AND, EXCEPT FOR THE FEDERAL HOME LOAN MORTGAGE CORPORATION, A
MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT),
(B) ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (C) ANY ORGANIZATION (OTHER THAN
CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE (UNLESS SUCH ORGANIZATION
IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) A RURAL ELECTRIC AND TELEPHONE COOPERATIVE DESCRIBED IN
SECTION 1381(A)(2)(C) OF THE CODE OR (E) ANY OTHER PERSON SO DESIGNATED BY THE
TRUSTEE BASED ON AN OPINION OF COUNSEL, (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION") OR (2) AN AGENT OF A DISQUALIFIED ORGANIZATION.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
A CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
IF ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE IS MADE
TO ANY OF CERTAIN "PASS-THROUGH ENTITIES" DESCRIBED IN SECTION 860E(E)(6) OF THE
CODE, AND A DISQUALIFIED ORGANIZATION IS THE RECORD HOLDER OF AN INTEREST IN
SUCH ENTITY, THEN A TAX MAY BE IMPOSED ON SUCH ENTITY.
NO TRANSFER OF THE CERTIFICATE MAY BE MADE TO A NON-UNITED STATES PERSON AS
DEFINED IN THE AGREEMENT.
<PAGE>
-3-
Series 1995-QE9 Aggregate unpaid principal balance
of the Mortgage Loans after
Class R deducting payments due on or before
the Cut-OffDate: $_____________
No. __ Aggregate Initial Certificate
Principal Balance of the Class R
Certificates: $0.00
Pass-Through Rate of the Initial Certificate Principal
Class R P&I Component: Adjustable Balance of this Certificate: $0.00
Initial Pass-Through Rate of the Pass-Through Rate of the Class R
Class R P&I Component: _______% Fixed Strip Component: _________%
Date of Pooling and Servicing Initial Notional Amount of the
Agreement and Cut-off Date: November 1, Class R Fixed Strip Components of
1995 all of the Class R Certificates:
$_______________
First Distribution Date: Percentage Interest Evidenced by
December 26, 1995 this Certificate: _________%
Master Servicer: Issue Date: November 22, 1995
Temple-Inland Mortgage Corporation
Trustee:
Bankers Trust Company
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1995-QE9, CLASS R
evidencing a beneficial ownership interest in a trust fund consisting
primarily of a pool of adjustable rate residential mortgage loans sold by
DLJ MORTGAGE ACCEPTANCE CORP.
This certifies that ____________________________ is the registered
owner of the Percentage Interest evidenced by this Certificate as specified
above in that certain beneficial ownership interest evidenced by all of the
Class R Certificates in the Trust Fund (as defined herein) established under a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
between DLJ Mortgage Acceptance Corp. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), Temple-Inland Mortgage
Corporation (the "Master Servicer"), and Bankers Trust Company (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. The Certificates of the Series specified above (collectively, the
"Certificates") evidence in the aggregate the entire beneficial ownership
interest in a segregated pool of assets created pursuant to the Agreement
comprised of conventional one- to four-family residential first lien mortgage
loans (the
<PAGE>
-4-
"Mortgage Loans") or interests therein, and certain other assets as described
herein. To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
The Trustee shall distribute or cause to be distributed on the 25th
day of each month, or if such 25th day is not a Business Day, the Business Day
immediately following (each a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), from
the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class R Certificates on such Distribution Date
pursuant to the Agreement. Reference is hereby made to the further provisions of
this Certificate and the Agreement, which further provisions shall for all
purchases have the same effect as though fully set forth at this place.
The Class R Certificates consist of two components (the "Class R
Components"), designated as the "Class R Fixed Strip Component" and the "Class R
P&I Component." The Class R Components are not separately transferable. With
respect to each Class R Component, on each Distribution Date preceding the
related Accretion Termination Date and, as and to the extent provided in the
Agreement, on such Accretion Termination Date, Accrued Certificate Interest on
such Class R Component for such Distribution Date will be added to the
Certificate Principal Balance of the Class R Certificates. The Notional Amount
of the Class R Fixed Strip Component as of any Distribution Date is equal to the
aggregate Certificate Principal Balance of all of the Certificates immediately
prior to such date. The Class R Fixed Strip Component has no principal balance.
All distributions will be made or caused to be made by the Trustee in
immediately available funds either (i) by check mailed to the address of the
Person entitled thereto as such name and address shall appear on the Certificate
Register, or (ii) by wire transfer to the account of such person at the request
of the Person entitled thereto if such Person shall have so notified the Trustee
in writing by 5 Business Days prior to the applicable Record Date and such
Certificateholder is the registered holder of Certificates the aggregate Initial
Certificate Principal Balance of which is not less than $2,500,000 (or, with
respect to the Class S Certificates, is the registered holder of an aggregate
initial Notional Amount of not less than $10,000,000 of such Certificates).
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Master Servicer of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Trustee. The Certificate Principal Balance hereof will be reduced
to the extent of distributions allocable to the principal and the principal
portions of any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates of
the series and class specified on the face hereof. The Certificates in the
aggregate represent the entire beneficial ownership interest in: (i) the
Mortgage Loans (exclusive of payments of principal and interest due on or before
the Cut-off Date) as from time to time are subject to the Agreement
<PAGE>
-5-
and all payments under and proceeds of the Mortgage Loans (exclusive of any
prepayment fees and late payment changes received on the Mortgage Loans),
together with all documents included in the related Mortgage File; (ii) such
funds or assets as from time to time are deposited in the Custodial Account, the
Excess Proceeds Account or the Certificate Account; (iii) any REO Property; (iv)
the Primary Hazard Insurance Policies, if any, and all other Insurance Policies
with respect to the Mortgage Loans required to be maintained pursuant to the
Agreement; and (v) the Depositor's interest in respect of the representations
and warranties made by the Seller in each Mortgage Loan Purchase Agreement and
the Seller's Warranty Certificate (all of the foregoing being hereinafter
collectively called the "Trust Fund").
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Master Servicer, the Trustee or any Sub-Servicer and are not
insured or guaranteed by any governmental agency or instrumentality or by any
other person or entity. The Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Custodial Account or Certificate Account may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement to
the Master Servicer of advances made, or certain expenses incurred, by it, the
Depositor, by the Trustee or by any Sub-Servicer.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66-2/3% of the Voting Rights. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
No transfer of any R Certificate shall be made unless that transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act") and effective registration or qualification
under applicable state securities laws, or is made in a transaction which does
not require such registration or qualification. In the event that a transfer is
to be made without such registration or qualification, (a) the Trustee and the
Depositor shall require the transferee to execute an investment letter in
substantially the form
<PAGE>
-6-
attached as either Exhibit G-1 or Exhibit H, as applicable to the Agreement,
which investment letter shall not be an expense of the Depositor, the Master
Servicer or the Trustee and (b) in the event that such a transfer is not made
pursuant to Rule 144A under the 1933 Act, the Depositor may direct the Trustee
to require an Opinion of Counsel satisfactory to the Trustee and the Depositor
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Master Servicer. Neither the Depositor nor the Trustee is obligated to register
or qualify any of the Class R Certificates under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Depositor and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of any Class R Certificate shall be made to any employee
benefit plan or other retirement arrangement including individual retirement
accounts and Keogh plans, that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (any of foregoing, a "Plan"), to any
Person acting on behalf of a Plan, or to any other person who is using "plan
assets" to effect such acquisition (including any insurance company using funds
in its general or separate accounts that may constitute "plan assets"), unless
the prospective transferee of a Certificateholder desiring to transfer its
Certificates provides to the Trustee or the Certificate Registrar an Opinion of
Counsel (or, in the limited circumstances described in the Agreement, a
certification of facts) which establishes to the satisfaction of the Depositor
and the Trustee or the Certificate Registrar that such disposition will not
violate the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Internal Revenue Code of 1986, as amended. In the case of
any transfer of the foregoing Certificates to an insurance company, in lieu of
such Opinion of Counsel, the Trustee shall require a certification in the form
of Exhibit G-5 to the Agreement.
The Certificates are issuable in fully registered form only, without
coupons and in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor, the Master Servicer and the Trustee and any agent of
the Depositor, the Master Servicer or the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Depositor, the Master Servicer, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the
<PAGE>
-7-
Trustee and required to be paid to them pursuant to the Agreement following the
earlier of (i) the purchase by the Master Servicer of all Mortgage Loans and
each REO Property in respect thereof or (ii) the final payment on, or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund (or the disposition of all REO Property in respect
thereof). The Agreement permits, but does not require, the Master Servicer to
purchase from the Trust Fund all Mortgage Loans and all property acquired in
respect of any Mortgage Loan at a price determined as provided in the Agreement.
The exercise of the Master Servicer's right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 5% of the aggregate Stated Principal Balance of the Mortgage Loans
at the Cut-off Date.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be.
<PAGE>
IN WITNESS WHEREOF, the Trustee in its capacity as trustee under the
Agreement has caused this Certificate to be duly executed.
Dated: November 22, 1995
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Social Security or other identifying number of assignee:
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Class R Mortgage Pass-Through
Certificate and hereby authorizes the registration of transfer of such interest
to the above-named assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Class R Certificate
of a like Percentage Interest to the above named assignee and deliver such
Certificate to the following address:
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________________________________________________________
for the account of _________________________, account number ______________, or,
if mailed by check, to _____________. Applicable statements should be mailed to
______________________________. This information is provided by ______________,
the assignee named above, or _________________________________, as its agent.
<PAGE>
EXHIBIT C
FORM OF TRUSTEE INITIAL CERTIFICATION
[Closing Date]
[Master Servicer]
[Depositor]
_________________________
_________________________
Re: Pooling and Servicing Agreement dated as of November 1, 1995
among DLJ Mortgage Acceptance Corp., Temple-Inland Mortgage
Corporation and Bankers Trust Company, Mortgage Pass-Through
CERTIFICATES, SERIES 1995-QE9
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it has reviewed the
Mortgage File and the Mortgage Loan Schedule and has determined that: (i) all
documents required to be included in the Mortgage File are in its possession;
(ii) such documents have been reviewed by it and appear regular on their face
and relate to such Mortgage Loan; and (iii) based on examination by it, and only
as to such documents, the information set forth in items (i) - (vi) and (x) -
(xiii) of the definition or description of "Mortgage Loan Schedule" is correct.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan, or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.
<PAGE>
-2-
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
BANKERS TRUST COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE>
EXHIBIT D
FORM OF TRUSTEE FINAL CERTIFICATION
[date]
[Master Servicer]
[Depositor]
_________________________
_________________________
Re: Pooling and Servicing Agreement dated as of November 1, 1995
among DLJ Mortgage Acceptance Corp., Temple-Inland Mortgage
Corporation and Bankers Trust Company, Mortgage Pass-Through
CERTIFICATES, SERIES 1995-QE9
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it has received the
documents set forth in Section 2.01.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
____________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE>
EXHIBIT E
[RESERVED]
<PAGE>
EXHIBIT F-1
REQUEST FOR RELEASE
(for Trustee)
LOAN INFORMATION
Name of Mortgagor: _____________________________
Master Servicer
Loan No.: _____________________________
TRUSTEE
Name: _____________________________
Address: _____________________________
_____________________________
Trustee
Mortgage File No.: _____________________________
REQUEST FOR REQUESTING DOCUMENTS (check one):
1. Mortgage Loan Liquidated.
(The Master Servicer hereby certifies that all proceeds of
foreclosure, insurance or other liquidation have been finally
received and deposited into the Custodial Account to the extent
required pursuant to the Pooling and Servicing Agreement.)
2. Mortgage Loan in Foreclosure.
3. Mortgage Loan Repurchased Pursuant to Section 9.01 of the Pooling and
Servicing Agreement.
4. Mortgage Loan Repurchased Pursuant to Article II of the Pooling and
Servicing Agreement.
(The Master Servicer hereby certifies that the repurchase price
has been deposited into the Custodial Account pursuant to the
Pooling and Servicing Agreement.)
5. Other (explain).
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
-2-
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _____________________________________, as Trustee for the Holders
of Mortgage PassThrough Certificates, Series 1995-QE9, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of November 1, 1995 (the "Pooling and Servicing
Agreement"), between the Trustee, DLJ Mortgage Acceptance Corp. and
Temple-Inland Mortgage Corporation.
( ) Promissory Note dated _______________, 19__, in the original principal
sum of $__________, made by _____________________, payable to, or
endorsed to the order of, the Trustee.
( ) Mortgage recorded on _____________________ as instrument no.
____________________ in the County Recorder's Office of the County of
_________________, State of __________________ in book/reel/docket
_________________ of official records at page/image _____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of __________________ in book/reel/docket
_________________ of official records at page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County
Recorder's Office of the County of __________, State of
_______________ in book/reel/docket ____________ of official records
at page/image ____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) _____________________________________________
( ) _____________________________________________
( ) _____________________________________________
( ) _____________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
<PAGE>
-3-
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the
purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions
nor shall the Master Servicer assert or seek to assert any claims or
rights of setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Custodial Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trustee, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
TEMPLE-INLAND MORTGAGE CORPORATION
By:_________________________________
Its:________________________________
Date: _____________________, 19__
<PAGE>
EXHIBIT F-2
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1995-QE9
______________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER: _______________ BORROWER'S NAME:_____________
COUNTY:_____________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE CUSTODIAL ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
___________ ______________________ DATED:______________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT G-1
FORM OF INVESTOR REPRESENTATION LETTER
_________, 19__
[Depositor]
Bankers Trust Company
Four Albany Street
New York, New York 10020
Attention: Corporate Trust
Re: DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates,
SERIES 1995-QE9, CLASS __
Dear Sirs:
____________________ (the "Purchaser") intends to purchase from (the
"Seller") $_______________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 1995-QE9, Class R (the "Certificates"), issued
pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of November 1, 1995 among DLJ Mortgage Acceptance Corp.,
as depositor (the "Company"), Temple-Inland Mortgage Corporation, as master
servicer, and Bankers Trust Company, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. The Purchaser understands that (a) the Certificates have not
been and will not be registered or qualified under the Securities Act
of 1933, as amended (the "Act") or any state securities law, (b) the
Company is not required to so register or qualify the Certificates,
(c) the Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities law, or
if an exemption from such registration and qualification is available,
(d) the Pooling and Servicing Agreement contains restrictions
regarding the transfer of the Certificates and (e) the Certificates
will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
<PAGE>
-2-
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Certificates, such that it is
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) a copy of the Private Placement Memorandum,
dated November 22, 1995 relating to the Certificates, (b) a copy of
the Pooling and Servicing Agreement and (c) such other information
concerning the Certificates, the Mortgage Loans and the Company as has
been requested by the Purchaser from the Company or the Seller and is
relevant to the Purchaser's decision to purchase the Certificates. The
Purchaser has had any questions arising from such review answered by
the Company or the Seller to the satisfaction of the Purchaser. If the
Purchaser did not purchase the Certificates from the Seller in
connection with the initial distribution of the Certificates and was
provided with a copy of the Private Placement Memorandum (the
"Memorandum") relating to the original sale (the "Original Sale") of
the Certificates by the Company, the Purchaser acknowledges that such
Memorandum was provided to it by the Seller, that the Memorandum was
prepared by the Company solely for use in connection with the Original
Sale and the Company did not participate in or facilitate in any way
the purchase of the Certificates by the Purchaser from the Seller, and
the Purchaser agrees that it will look solely to the Seller and not to
the Company with respect to any damage, liability, claim or expense
arising out of, resulting from or in connection with (a) error or
omission, or alleged error or omission, contained in the Memorandum,
or (b) any information, development or event arising after the date of
the Memorandum.
5. The Purchaser has not and will not nor has it authorized or
will it authorize any person to (a) offer, pledge, sell, dispose of or
otherwise transfer any Certificate, any interest in any Certificate or
any other similar security to any person in any manner, (b) solicit
any offer to buy or to accept a pledge, disposition of other transfer
of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) otherwise approach
or negotiate with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any
manner, (d) make any general solicitation by means of general
advertising or in any other manner or (e) take any other action, that
(as to any of (a) through (e) above) would constitute a distribution
of any Certificate under the Act, that would render the disposition of
any Certificate a violation of Section 5 of the Act or any state
securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
<PAGE>
-3-
[6.* The Purchaser is not any employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the Internal Revenue Code of 1986, (the "Code"), nor a
Person acting, directly or indirectly, on behalf of any such plan, and
understands that registration of transfer of any Certificate to any
such employee benefit plan, or to any person acting on behalf of such
plan, will not be made unless such employee benefit plan delivers an
opinion of its counsel, addressed and satisfactory to the Trustee, the
Company and the Master Servicer, to the effect that the purchase and
holding of a Certificate by or on behalf of such employee benefit plan
would not result in the assets of the Trust Estate being deemed to be
"plan assets" and subject to the fiduciary responsibility provisions
of ERISA or the prohibited transaction provisions of the Code (or
comparable provisions of any subsequent enactments), would not
constitute or result in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code, and would not subject the Company,
the Master Servicer or the Trustee to any obligation or liability
(including liabilities under ERISA or Section 4975 of the Code) in
addition to those undertaken in the Pooling and Servicing Agreement or
any other liability. The Purchaser understands that under current law
such an opinion cannot be rendered.]
Very truly yours,
_______________________________
By:____________________________
Name:__________________________
Title:_________________________
- --------
* In the case of the transfer of the Class A-2 Certificates, the Class B
Certificates or the Class R Certificates to an insurance company, the above
paragraph 6 shall be deleted and a certification in the form of Exhibit G-5
shall be executed.
<PAGE>
EXHIBIT G-2
Form of Transferor Representation Letter
_______, 19__
[Depositor]
Bankers Trust Company
Four Albany Street
New York, New York 10020
Attention: Corporate Trust
Re: DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates,
SERIES 1995-QE9, CLASS R
Dear Sirs:
In connection with the sale by _________(the "Seller") to
__________________ (the "Purchaser") of $__________ Initial Certificate
Principal Balance of Mortgage Pass-Through Certificates, Series 1995-QE9, Class
R (the "Certificates"), issued pursuant to the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of November 1, 1995, among DLJ
Mortgage Acceptance Corp., as depositor (the "Company"), Temple-Inland Mortgage
Corporation, as master servicer, and Bankers Trust Company, as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act, in any
manner set forth in the foregoing sentence with
<PAGE>
-2-
respect to any Certificate. The Seller has not and will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
Very truly yours,
____________________________________
(Seller)
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE>
EXHIBIT G-3
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
___________________, being first duly sworn, deposes, represents and
warrants:
1. That he is [Title of Officer] of [Name of Owner], a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ___________] [the United States], (the "Owner"), (record or beneficial
owner of the Class R Certificates on behalf of which he makes this affidavit and
agreement. This Class R Certificate was issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") dated as of November
1, 1995 among DLJ Mortgage Acceptance Corp., as depositor, Temple-Inland
Mortgage Corporation, as master servicer (the "Master Servicer"), and Bankers
Trust Company, as trustee (the "Trustee").
2. That the Owner (i) is and will be a "Permitted Transferee" as of
________, 199__ and (ii) is acquiring the Class R Certificates for its own
account or for the account of another owner from which it has received an
affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
Non-United States Person. For this purpose, a "disqualified organization" means
any of the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the FHLMC, a majority
of its board of directors is not selected by such governmental unit), (ii) a
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Internal Revenue
Code of 1986) (the "Code") which is exempt from the tax imposed by Chapter 1 of
the Code (unless such organization is subject to the tax imposed by Section 511
of the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code and (v)
any other Person so designated based upon an Opinion of Counsel that the holding
of an Ownership Interest in a Class R Certificate by such Person may cause the
Trust Fund or any Person having an Ownership Interest in any Class of
Certificates, other than such Person, to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Class R Certificate to such Person. The terms
"United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
<PAGE>
-2-
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Code that applies to all transfers of the Class R Certificates after March 31,
1988; (ii) that such tax would be on the transferor, or, if such transfer is
through an agent (which person includes a broker, nominee or middleman) for a
disqualified organization Transferee, on the agent; (iii) that the person
otherwise liable for the tax shall be relieved of liability for the tax if the
transferee furnishes to such person an affidavit that the transferee is not a
disqualified organization and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false and; (iv) that the Residual
Certificates may be "noneconomic residual interests" within the meaning of
Treasury Regulation Section 1.860E-1(c)(2) and that the transferor of a
"noneconomic residual interest" will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer is to enable the transferor to impede the assessment or
collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if at any time during the taxable year
of the pass-through entity a non-Permitted Transferee is the record holder of an
interest in such entity. For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.
5. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by Owners that are Permitted Transferees.
7. That the Owner's taxpayer identification number is __________.
8. That the Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section 5.02 of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (and,
in particular, the Owner is aware that such Section authorizes the Trustee to
deliver payments to a person other than the Owner and negotiate a mandatory sale
by the Trustee in the event that the Owner holds such Certificate in violation
of Section 5.02); and that the Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.
9. That the Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.
<PAGE>
-3-
10. That the Owner anticipates that it will, so long as it holds the
Class R Certificates, have sufficient assets to pay any taxes owed by the holder
of such Class R Certificates.
11. That the Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.
12. That the Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the Person from whom it acquired the Class R Certificates
that the Owner intends to pay taxes associated with holding the Class R
Certificates as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class R Certificates.
13. That the Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or entity that will
not have sufficient assets to pay any taxes owed by the holder of such Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.
14. That Owner will, in connection with any transfer that it makes of
the Class R Certificates, obtain from its transferee the representations
required by Section 5.02(d) of the Pooling and Servicing Agreement under which
the Class R Certificates were issued and will not consummate any such transfer
if it knows, or knows facts that should lead it to believe, that any such
representations are false.
15. That Owner will, in connection with any transfer that it makes of
the Class R Certificates, deliver to the Trustee an affidavit, which represents
and warrants that it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual knowledge that the
proposed transferee: (i) has insufficient assets to pay any taxes owed by such
transferee as holder of the Class R Certificates; (ii) may become insolvent or
subject to a bankruptcy proceeding, for so long as the Class R Certificates
remain outstanding and; (iii) is not a "Permitted Transferee".
16. That the Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, by its [Title of Officer] and its corporate seal to be
hereunto attached, attested by its [Assistant] Secretary, this ____ day of
____________, 1995.
[NAME OF OWNER]
By:_________________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
_______________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Owner, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Owner.
Subscribed and sworn before me this ___ day of _____________, 1995.
____________________________________
NOTARY PUBLIC
COUNTY OF___________________________
STATE OF____________________________
My Commission expires the ____ day
of _______, 19__.
<PAGE>
EXHIBIT G-4
Form of Transferor Certificates
___________________, 19__
[Depositor]
Bankers Trust Company
Four Albany Street
New York, New York 10020
Attention: Corporate Trust
Re: DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates,
SERIES 1995-QE9, CLASS R
Dear Sirs:
This letter is delivered to you in connection with the sale by
______________________ (the "Seller") to _________________________ (the
"Purchaser") of a ___% Interest in the Mortgage Pass-Through Certificates,
Series 1995-QE9, Class R (the "Certificates"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of November 1, 1995 among DLJ Mortgage Acceptance Corp., as depositor (the
"Company"), Temple-Inland Mortgage Corporation, as master servicer, and Bankers
Trust Company, as trustee (the "Trustee"). All terms used herein and not
otherwise defined shall have the meaning set forth in the Pooling and Servicing
Agreement. The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the sale of the Certificates
by the Seller to the Purchaser is or will be to impede the assessment or
collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee and the Master Servicer a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit G-3. The Seller does
not know or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debt as they become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of the Certificates
may not be respected for United States income tax purposes (and the Seller may
continue to be liable for United States income taxes associated therewith)
unless the Seller has conducted such an investigation.
<PAGE>
-2-
4. The Seller has no actual knowledge that the proposed Transferee is
a Disqualified Organization, an agent of a Disqualified Organization or a
Non-United States Person.
Very truly yours,
____________________________________
(Seller)
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE>
EXHIBIT G-5
FORM OF INVESTOR REPRESENTATION LETTER FOR INSURANCE COMPANIES
________, 199__
[Depositor]
Bankers Trust Company
Four Albany Street
New York, New York 10020
Attention: Corporate Trust
Re: DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates,
SERIES 1995-QE9, CLASS R
Dear Sirs:
_______________ (the "Purchaser") intends to purchase from __________
(the "Seller") $____________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 1995-QE9, Class R (the "Certificate"), issued
pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as November 1, 1995, among DLJ Mortgage Acceptance Corp., as
depositor (the "Company"), Temple-Inland Mortgage Corporation, as master
servicer, and Bankers Trust Company, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. The Certificates purchased pursuant hereto will not be
transferred to any employee benefit plan or other retirement
arrangement including individual retirement accounts and Keogh plans
that is subject to Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the
Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan").
2. The Purchaser is an insurance company and the source of funds
used to purchase the Certificates is an "insurance company general
account" (as such term is defined in Prohibited Transaction Class
Exemption 95-60 issued by the U.S. Department of Labor ("PTCE 95-60"))
and there is no Plan with respect to which the amount of such general
account's reserves and liabilities for the contract(s) held by or on
behalf of such Plan and all other Plans maintained by the same
employer (or affiliate thereof as defined in PTCE 95-60) or by the
same
<PAGE>
-1-
employee organization, exceed 10% of the total of all reserves and
liabilities of such general account (as such amounts are determined
under PTCE 95-60) as of the date of acquisition of such Certificates.
Very truly yours,
____________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE>
EXHIBIT H
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates
Series 1995-QE9, Class R, No. __
The undersigned seller, as registered holder (the "Transferor"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the
Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of the
Pooling and Servicing Agreement as follows:
a. The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Transferor, the
Trustee or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest
<PAGE>
-2-
in the Rule 144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933 Act or that would render
the disposition of the Rule 144A Securities a violation of Section 5 of the 1933
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with respect
to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on Rule
144A. The Buyer is acquiring the Rule 144A Securities for its own account
or the account of other qualified institutional buyers, understands that
such Rule 144A Securities may be resold, pledged or transferred only (i) to
a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the 1933 Act.
3. The Buyer warrants and represents to, and covenants with, the
Transferor, the Servicer and the Depositor that either (1) the Buyer is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer's
purchase of the Rule 144A Securities will not result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code.
4. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
<PAGE>
-3-
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
______________________________________ ____________________________________
Print Name of Transferor Print Name of Buyer
By:___________________________________ By:_________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No._________________________ No._________________________________
Date:_______________________ Date:_______________________________
<PAGE>
-4-
ANNEX 1 TO EXHIBIT H
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $______________________** in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial 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.
- --------
** 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.
<PAGE>
-5-
___ BROKER-DEALER. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
___ ERISA PLAN. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
___ INVESTMENT ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and
<PAGE>
-6-
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.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
____________________________________
Print Name of Buyer
By: ____________________________
Name:
Title:
Date:_______________________________
<PAGE>
-7-
ANNEX 2 TO EXHIBIT H
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than
the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made
<PAGE>
-8-
herein because one or more sales to the Buyer will be in reliance on Rule 144A.
In addition, the Buyer will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
____________________________________
Print Name of Buyer
By:_________________________________
Name:
Title:
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date:_______________________________
<PAGE>
EXHIBIT I
MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT J
SELLER REPRESENTATIONS AND WARRANTIES
Seller's Representations Assigned by Depositor to Trustee
REPRESENTATIONS AND WARRANTIES. Pursuant to the Mortgage Loan Purchase
Agreement, the Seller has made certain representations and warranties to the
Depositor. The Seller shall confirm such representations and warranties and
shall deliver the Seller's Warranty Certificate and an Officers' Certificate on
the Closing Date (i) reaffirming such representations and warranties and (ii)
specifically restating and reaffirming the following representations and
warranties as of such date. The following representations are, pursuant to the
Pooling and Servicing Agreement, assigned by the Depositor to the Trustee for
the benefit of the Certificateholders, together with the related repurchase
rights specified in the Mortgage Loan Purchase Agreement and in the Seller's
Warranty Certificate. Pursuant to the Mortgage Loan Purchase Agreement, the
Seller's Warranty Certificate and an Officer's Certificate, the Seller affirms
each such representation and warranty and agrees, consents to and acknowledges
the assignment thereof to the Trustee. All capitalized terms herein shall have
the meanings assigned in the Pooling and Servicing Agreement.
The Seller hereby represents and warrants to and for the benefit of
the Depositor and the Trustee, as to each Mortgage Loan, that as of the Closing
Date or as of such other date specifically provided herein:
(i) The information set forth on the Mortgage Loan Schedule with
respect to each Mortgage Loan is true and correct in all material respects as of
the Closing Date;
(ii) Each Mortgage Note is directly secured by the Mortgage, and each
Mortgaged Property consists of a single parcel of real estate. Each Mortgage
secures the outstanding principal balance of the Mortgage Note and is a valid
and enforceable first lien on the Mortgaged Property subject only to (1) the
lien of nondelinquent current real property taxes and assessments, (2)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, and (3) other matters to which like
properties are commonly subject that do not materially interfere with the
benefits of the security intended to be provided by such Mortgage;
(iii) All of the Mortgage Loans were originated or acquired under the
Seller's "equity lending program";
(iv) As of the Closing Date, no Mortgage Loan is sixty (60) or more
days delinquent in payment of principal or interest;
(v) No Mortgage Loan had a Loan-to-Value Ratio at origination in
excess of 75% and no Mortgage Loan had a combined Loan-to-Value Ratio at
origination, including any second deed of trust subordinated to the lien of the
Mortgage, in excess of 90%;
<PAGE>
-2-
(vi) Immediately prior to the delivery of the Mortgage Loan to DLJMCI,
the Seller had good title to, and was the sole owner of, such Mortgage Loan free
and clear of any mortgage, pledge, lien, security interest, charge or other
encumbrance (other than any junior lien on the Mortgaged Property encumbered by
the related Mortgage) and had full right and authority, subject to no interest
or participation of, or agreement with, any other party, to sell and assign the
Mortgage Loan pursuant to the Purchase Agreements;
(vii) There was no delinquent tax or assessment lien against any
Mortgaged Property at the time of the origination of the related Mortgage Loan;
(viii) There is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay the
unpaid principal of or interest on such Mortgage Note, and any applicable right
of rescission has expired as of the Closing Date;
(ix) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property that are or may be a lien prior to, or
equal with, the lien of such Mortgage, except those that are insured against by
the title insurance policy referred to in clause (xiii) below;
(x) Each Mortgaged Property is free of material damage and is in at
least adequate repair;
(xi) Each Mortgage Loan at origination complied in all respects with
applicable state and federal laws, including, without limitation, usury, equal
credit opportunity, real estate settlement procedures, truth-in-lending and
disclosure laws, and consummation of the transactions contemplated hereby will
not involve the violation of any such laws;
(xii) At the Closing Date, neither the Seller nor any prior holder of
any Mortgage has, except as the Mortgage File may reflect, (1) modified the
Mortgage in any material respect, (2) satisfied, canceled or subordinated such
Mortgage in whole or in part, (3) released the related Mortgaged Property in
whole or in part from the lien of such Mortgage or (4) executed any instrument
of release, cancellation, modification or satisfaction with respect thereto;
(xiii) A lender's policy of title insurance or a commitment (binder)
to issue the same was effective on the date of the origination of each Mortgage
Loan, each such policy is valid and remains in full force and effect and each
such policy was issued by a title insurer acceptable to the Federal National
Mortgage Association ("FNMA") or the Federal Home Loan Mortgage Corporation
("FHLMC") and in a form acceptable to FNMA or FHLMC;
(xiv) Each Mortgage Loan was originated or acquired (1) by the Seller
either directly or indirectly through loan brokers or a correspondent lender
specifically approved by the Seller and DLJMCI, such that (a) the Mortgage Loan
was originated in conformity with the Seller's underwriting guidelines, (b)
DLJMCI approved the Mortgage Loan either prior to the funding thereof or, in the
case of a Mortgage Loan originated pursuant to the Seller's delegated
<PAGE>
-3-
underwriting guidelines, approved the Mortgage Loan after the funding thereof
and (c) the Seller funded the Mortgage Loan on the date of origination thereof
with its own funds or with funds obtained by it or, in the case of a Mortgage
Loan originated by a correspondent lender approved by the Seller and DLJMCI, the
Mortgage Loan was approved by the Seller prior to origination and was purchased
by the Seller from such correspondent lender within 30 days of the date of
origination pursuant to a mandatory purchase commitment in effect at
origination, (2) by a savings and loan association, savings bank, commercial
bank, credit union, insurance company or similar institution that is supervised
and examined by a federal or state authority or (3) by a mortgagee approved by
the Secretary of HUD pursuant to Sections 203 and 211 of the National Housing
Act, as amended;
(xv) Each Mortgage Loan is a semi-annual adjustable rate mortgage loan
having an original term to maturity from the date on which the first monthly
payment is due of not less than approximately 15 years and not more than 30
years. On each Adjustment Date, the Mortgage Rate will be adjusted to equal the
Index plus the Gross Margin, rounded to the nearest 0.125%, subject to the
Periodic Rate Cap, the Maximum Rate and the Minimum Rate. The related Mortgage
Note is payable on the first day of each month in self-amortizing monthly
installments of principal and interest, with interest payable in arrears, and
requires a monthly payment which is sufficient (a) to fully amortize the
outstanding principal balance of the Mortgage Loan over its remaining term and
to pay interest at the applicable Mortgage Rate, and (b) during the period
following each Adjustment Date, to fully amortize the original principal balance
as of the first day of such period over the then remaining term of such Mortgage
Loan and to pay interest at the applicable Mortgage Rate. No Mortgage Loan is
subject to negative amortization or is a graduated payment or is a growth equity
mortgage loan. Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(xvi) All of the improvements that were included for the purpose of
determining the appraised value of the Mortgaged Property are insured to lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property, unless, in either case, an agreement permitting such encroachment is
recorded in the applicable real property records and such agreement was taken
into account in conducting the appraisal of the Mortgaged Property;
(xvii) No improvement considered in determining the related appraised
value located on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation. All inspections, licenses and certificates
required to be made or issued with respect to the use and occupancy of the
Mortgaged Property, including but not limited to certificates of occupancy and
fire underwriting certificates, have been made or obtained from the appropriate
authorities and the Mortgaged Property is lawfully occupied under applicable
law;
(xviii) All parties that have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are, or, during the period
in which they held and disposed of such interest, were (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2)(a) organized under the laws of such
state, (b) qualified to do business in such state, (c) federal
<PAGE>
-4-
savings associations or national banks having principal offices in such state or
(d) not doing business in such state;
(xix) The Mortgage Note and the related Mortgage are genuine, and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms. All parties to the Mortgage Note and the Mortgage had
legal capacity to execute the Mortgage Note and the Mortgage and each Mortgage
Note and Mortgage has been duly and properly executed and delivered by such
parties;
(xx) The proceeds of the Mortgage Loan have been fully disbursed by
the Seller, there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor (including any escrow funds held
to make monthly payments pending completion of such improvements) have been
complied with. All costs, fees and expenses incurred in making, closing or
recording the Mortgage Loans were paid;
(xxi) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including (1) in the case of a Mortgage designated as a deed of trust,
by trustee's sale, and (2) otherwise by judicial foreclosure. There is no
homestead or other exemption available to the Mortgagor that would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;
(xxii) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the holder of the Mortgage Loan to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(xxiii) Each Mortgaged Property is suitable for year-round occupancy;
(xxiv) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for repayment
thereof have not been made, and no escrow deposits or payments of other charges
or payments due with respect to the Mortgage Loan (other than origination points
and fees) have been capitalized under the Mortgage or the related Mortgage Note;
(xxv) The origination practices used by the Seller with respect to
each Mortgage Loan have been in all respects legal, proper, prudent and
customary in the mortgage origination business;
(xxvi) There is no pledged account or other security other than real
estate securing the Mortgagor's obligations;
(xxvii) No Mortgage Loan has a shared appreciation feature or other
contingent interest feature;
<PAGE>
-5-
(xxviii) No Mortgage Loan is subject to any temporary buydown
provisions;
(xxix) With respect to each Mortgage Loan in which the Mortgagor has a
leasehold interest in the related Mortgaged Property:
(a) The leasehold created by direct lease of the freehold estate,
the ground lease or memorandum thereof has been recorded, and by its
terms permits the leasehold estate to be mortgaged. The ground lease
grants any leasehold mortgagee standard protection necessary to
protect the security of a leasehold mortgagee including the right of
the leasehold mortgagee to receive notice of the lessee's default
under the ground lease; the right of the leasehold mortgagee, with
adequate time, to cure such default; and, in the case of incurable
defaults of the lessee, the right of the leasehold mortgagee to enter
into a new ground lease with the lessor on terms financially identical
and otherwise substantially identical to the existing ground lease;
(b) The ground lease was at the origination of the Mortgage Loan,
and is, to the best of Seller's knowledge, in full force and effect
without any outstanding defaults, and was and is not subject to liens
and encumbrances;
(c) The ground lease shall be automatically renewable for at
least thirty (30) years or at least ten (10) years beyond the
scheduled date for the final payment on the Mortgage Loan; and
(d) The fee estate of the lessor under the ground lease is
encumbered by the ground lease, and any lien of any present or future
fee mortgagee is and will be subject to and subordinate to the ground
lease. The foreclosure of the fee mortgage will not terminate the
leasehold estate or the rights of the sub-tenants, and the fee
mortgage is subject to the ground lease;
(xxx) Pursuant to the terms of the related Mortgage, all buildings or
other improvements upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the Mortgaged Property is
located pursuant to insurance policies conforming to the requirements of Section
3.13 of the Pooling and Servicing Agreement. If the Mortgaged Property is in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and such flood insurance has been made
available) a flood insurance policy is in effect which policy conforms to the
requirements of FNMA and FHLMC;
(xxxi) An appraisal of each Mortgaged Property is on a form approved
by FNMA or FHLMC with such riders as have been approved by FNMA or FHLMC, as the
case may be, and each appraiser meets the minimum qualifications of FNMA or
FHLMC for appraisers;
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(xxxii) The Seller has not provided financing on any Mortgaged
Property that is subordinate to the lien of the related Mortgage Loan;
(xxxiii) Each Mortgage Loan contains a customary "due-on-sale" clause;
(xxxiv) Except for the criteria for eligible Mortgagors set forth in
the Seller's underwriting guidelines, the Seller knows of nothing involving any
Mortgage File, Mortgaged Property or Mortgagor's credit standing that could
reasonably be expected (1) to cause private institutional investors to regard
the Mortgage Loan as an unacceptable investment, (2) to cause the Mortgage Loan
to become delinquent or (3) to affect adversely the value or marketability of
the Mortgage Loan;
(xxxv) The Mortgage Loans were not selected for inclusion under this
Agreement from the Seller's portfolio of mortgage loans originated under its
"equity lending program" on any basis which would have a material adverse effect
on the Certificateholders;
(xxxvi) There are no condemnation proceedings pending with respect to
any Mortgaged Property, and no Mortgaged Property has been condemned either in
whole or in part;
(xxxvii) The collection practices used by the Seller with respect to
each Mortgage Note and Mortgage serviced by the Seller have been in all material
respects legal, proper, prudent and customary in the mortgage origination and
servicing industry; and the Mortgage Loans have been serviced by the Seller in
accordance with the terms of the Mortgage Loan documents, any applicable
mortgage insurance contract requirements and applicable law in all material
respects; and
(xxxviii) None of the Mortgage Loans are subject to the provisions
that were added to the Truth in Lending Act by the Homeownership and Equity
Protection Act of 1994.
<PAGE>
EXHIBIT K
Form of Notice Under Section 3.24
________, 1995
[Trustee]
Re: MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1995-QE9
Pursuant to Section 3.24 of the Pooling and Servicing Agreement, dated
as of November 1, 1995, relating to the Certificates referenced above, the
undersigned does hereby notify you that:
(a) The prepayment assumption used in pricing the Certificates was __%
CPR.
(b) With respect to each Class of the captioned Certificates, set
forth below is (i), the first price, as a percentage of the Certificate
Principal Balance of each Class of Certificates, at which __% of the aggregate
Certificate Principal Balance of each such Class of Certificates was first sold
at a single price, if applicable, or (ii) if more than __% of a Class of
Certificates have been sold but no single price is paid for at least __% of the
aggregate Certificate Principal Balance of such Class of Certificates, then the
weighted average price at which the Certificates of such Class were sold
expressed as a percentage of the Certificate Principal Balance of such Class of
Certificates, (iii) if less than __% of the aggregate Certificate Principal
Balance of a Class of Certificates has been sold, the purchase price for each
such Class of Certificates paid by Donaldson, Lufkin & Jenrette Securities
Corporation (the "Underwriter") expressed as a percentage of the Certificate
Principal Balance of such Class of Certificates calculated by: (1) estimating
the fair market value of each such Class of Certificates as of ___________,
1995; (2) adding such estimated fair market value to the aggregate purchase
prices of each Class of Certificates described in clause (i) or (ii) above; (3)
dividing each of the fair market values determined in clause (1) by the sum
obtained in clause (2); (4) multiplying the quotient obtained for each Class of
Certificates in clause (3) by the purchase price paid by the Underwriter for all
the Certificates purchased by it; and (5) for each Class of Certificates,
dividing the product obtained from such Class of Certificates in clause (4) by
the initial Principal Balance of such Class of Certificates or (iv) the fair
market value (but not less than zero) as of the Closing Date of each Certificate
of each Class of Certificates retained by the Depositor or an affiliate
corporation, or delivered to the seller:
Class S:
Class A-1:
Class A-2:
Class B:
Class R:
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The prices and values set forth above do not include accrued interest
with respect to periods before the closing.
[DEPOSITOR]
By:_________________________________
Name:
Title:
