EXHIBIT 3.2
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STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
Depositor,
XXXXX FARGO BANK, N.A.
Securities Administrator,
and
U.S. BANK NATIONAL ASSOCIATION,
Grantor Trustee
GRANTOR TRUST AGREEMENT
Dated February 28, 2005
Bear Xxxxxxx ARM Grantor Trust 2005-2
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................2
Section 1.02 Other Definitional Provisions...................................2
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
GRANTOR TRUST CERTIFICATE
Section 2.01 Conveyance of Mortgage Loans....................................3
Section 2.02 Acceptance of the Mortgage Loans by the Grantor Trustee.........6
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement.......................................................8
Section 2.04 Substitution of Mortgage Loans..................................9
Section 2.05 Representations and Warranties Concerning the Depositor........10
Section 2.06 Representations and Warranties of the Seller...................12
Section 2.07 Issuance of Grantor Trust Certificate..........................12
Section 2.08 Grantor Trust..................................................12
Section 2.09 Master Servicer as Agent and Bailee of the Grantor
Trust Certificateholder........................................12
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer.............................14
ARTICLE IV
PAYMENTS TO GRANTOR TRUST CERTIFICATEHOLDERS
Section 4.01 Distributions..................................................15
ARTICLE V
THE GRANTOR TRUST CERTIFICATES
Section 5.01 The Grantor Trust Certificates.................................16
Section 5.02 Registration of Transfer and Exchange of Grantor
Trust Certificates.............................................17
Section 5.03 Mutilated, Destroyed, Lost or Stolen Grantor Trust
Certificate....................................................19
Section 5.04 Persons Deemed Owners..........................................19
ARTICLE VI
CONCERNING THE GRANTOR TRUSTEE
Section 6.01 Duties of Grantor Trustee......................................20
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Section 6.02 Certain Matters Affecting the Grantor Trustee..................22
Section 6.03 Grantor Trustee Not Liable for Grantor Trust Certificate
or Mortgage Loans..............................................23
Section 6.04 Grantor Trustee May Own a Grantor Trust Certificate............24
Section 6.05 Eligibility Requirements for Grantor Trustee...................24
Section 6.06 Resignation and Removal of the Grantor Trustee.................24
Section 6.07 Successor Grantor Trustee......................................25
Section 6.08 Merger or Consolidation of Grantor Trustee.....................26
Section 6.09 Appointment of Co-Grantor Trustee or Separate Grantor
Trustee........................................................26
Section 6.10 Appointment of Custodians......................................27
Section 6.11 Appointment of Office or Agency................................27
Section 6.12 Compliance with Withholding Requirements.......................28
Section 6.13 Grantor Trust Reporting........................................28
Section 6.14 Representations and Warranties.................................28
Section 6.15 Compensation and Indemnity.....................................29
ARTICLE VII
TERMINATION
Section 7.01 Termination Upon Purchase by the Majority Certificateholder
or Liquidation of all Mortgage Loans...........................30
Section 7.02 Termination by Grantor Trust Certificateholder.................30
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment......................................................32
Section 8.02 Recordation of Agreement; Counterparts.........................33
Section 8.03 Limitation on Rights of Grantor Trust Certificateholder........33
Section 8.04 Governing Law..................................................34
Section 8.05 Notices........................................................34
Section 8.06 Severability of Provisions.....................................35
EXHIBITS
Exhibit A Form of Grantor Trust Certificate
Exhibit B Mortgage Loan Schedule
Exhibit C Assignment, Assumption and Recognition Agreement
Exhibit D Mortgage Loan Purchase Agreement
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This Grantor Trust Agreement, dated February 28, 2005 (as
amended from time to time, this "Agreement"), among STRUCTURED ASSET INVESTMENTS
II INC., a Delaware corporation, as depositor (the "Depositor"), XXXXX FARGO
BANK, N.A., as securities administrator (the "Securities Administrator") and
U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Grantor Trustee"),
W I T N E S S E T H T H A T:
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WHEREAS, pursuant to the terms of the Mortgage Loan Purchase
Agreement, EMC Mortgage Corporation (in its capacity as Seller) will sell to the
Depositor the Mortgage Loans together with the Related Documents on the Closing
Date;
WHEREAS, pursuant to this Agreement, the Depositor will
transfer the Mortgage Loans and all of its rights and remedies under the
Mortgage Loan Purchase Agreement to the Grantor Trustee, together with the
Related Documents on the Closing Date, in exchange for the Grantor Trust
Certificates;
WHEREAS, pursuant to the terms of the Trust Agreement, the
Issuer will issue and transfer to or at the direction of the Depositor, the
Certificate;
WHEREAS, pursuant to the terms of the Indenture, the Issuer
will issue and transfer to or at the direction of the Depositor, the Notes;
WHEREAS, pursuant to the terms of the Servicing Agreement, the
Master Servicer will master service the Mortgage Loans; and
WHEREAS, the Mortgage Loans have an aggregate Cut-off Date
Loan Balance equal to $2,633,284,752.83years.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized
terms not otherwise defined herein shall have the meanings assigned to such
terms in Appendix A to the Indenture dated February 28, 2005 (the "Indenture"),
among Bear Xxxxxxx ARM Trust 2005-2, as Issuer, Xxxxx Fargo Bank, N.A., as
Securities Administrator and U.S. Bank National Association, as Indenture
Trustee, which is incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.
Section 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document, to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(d) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as the feminine and neuter genders of such terms.
Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF GRANTOR TRUST CERTIFICATE
Section 2.01 CONVEYANCE OF MORTGAGE LOANS.
(a) The Depositor concurrently with the execution and delivery
of this Agreement, sells, transfers and assigns to the Grantor Trustee without
recourse all its right, title and interest in and to (i) the Mortgage Loans
identified in the Mortgage Loan Schedule, including all interest and principal
due with respect to the Mortgage Loans after the Cut-off Date, but excluding any
payments of principal and interest due on or prior to the Cut-off Date; (ii)
such assets as shall from time to time be credited or are required by the terms
of this Agreement to be credited to the Payment Account, (iii) such assets
relating to the Mortgage Loans as from time to time may be held by the Servicer
in the Protected Account and the Securities Administrator in the Payment
Account, (iv) any REO Property, (v) the Required Insurance Policies and any
amounts paid or payable by the insurer under any Insurance Policy (to the extent
the mortgagee has a claim thereto), (vi) the Mortgage Loan Purchase Agreement to
the extent provided in Subsection 2.03(a), (vii) the rights with respect to the
Servicing Agreement and the Xxxxx Fargo Servicing Agreement, (viii) the proceeds
of any Pledged Assets received by the Master Servicer and (ix) any proceeds of
the foregoing. Although it is the intent of the Depositor and the Grantor
Trustee that the conveyance of the Depositor's right, title and interest in and
to the Mortgage Loans and other assets in the Trust Estate to the Grantor
Trustee pursuant to this Agreement shall constitute a purchase and sale and not
a loan, in the event that such conveyance is deemed to be a loan, it is the
intent of the parties to this Agreement that the Depositor shall be deemed to
have granted to the Grantor Trustee a first priority perfected security interest
in all of the Depositor's right, title and interest in, to and under the
Mortgage Loans and other assets in the Trust Estate, and that this Agreement
shall constitute a security agreement under applicable law. The Depositor agrees
to take or cause to be taken such actions and to execute such documents,
including without limitation the filing of all necessary UCC-1 financing
statements (which shall have been submitted for filing as of the Closing Date),
any continuation statements with respect thereto and any amendments thereto
required to reflect a change in the name or corporate structure of the Depositor
or the filing of any additional UCC-1 financing statements, as are necessary to
perfect and protect the Grantor Trustee's interests in each Mortgage Loan and
the proceeds thereof.
(b) In connection with the above transfer and assignment, the
Depositor hereby delivers to the Custodian, on behalf of the Grantor Trustee,
with respect to each Mortgage Loan:
(i) the original Mortgage Note, endorsed without
recourse in blank or to the order of the Grantor Trustee and showing an
unbroken chain of endorsements from the originator thereof to the
Person endorsing it in blank or to the Grantor Trustee, or lost note
affidavit together with a copy of the related Mortgage Note;
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(ii) the original Mortgage and, if the related
Mortgage Loan is a MOM Loan, noting the presence of the MIN and
language indicating that such Mortgage Loan is a MOM Loan, which shall
have been recorded (or if the original is not available, a copy), with
evidence of such recording indicated thereon (or if clause (w) in the
proviso below applies, shall be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a
certified copy of the assignment (which may be in the form of a blanket
assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) in blank or to "U.S. Bank National Association, as
Grantor Trustee, on behalf of the Grantor Trust Certificateholders",
with evidence of recording with respect to each Mortgage Loan in the
name of the Indenture Trustee thereon (or if clause (w) in the proviso
below applies or for Mortgage Loans with respect to which the related
Mortgaged Property is located in a state other than Maryland or an
Opinion of Counsel has been provided as set forth in this Section
2.01(b), shall be in recordable form);
(iv) all intervening assignments of the Security
Instrument, if applicable and only to the extent available to the
Depositor with evidence of recording thereon;
(v) the original or a copy of the policy or
certificate of primary mortgage guaranty insurance, to the extent
available, if any;
(vi) the original or a copy of the policy of title
insurance or mortgagee's certificate of title insurance or commitment
or binder for title insurance; and
(vii) originals of all modification agreements, if
applicable and available;
(c) PROVIDED, HOWEVER, that in lieu of the foregoing, the
Depositor may deliver to the Custodian, the following documents, under the
circumstances set forth below: (w) in lieu of the original Security Instrument
(including the Mortgage), assignments to the Grantor Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to such documents required to be
included thereon, be delivered to recording offices for recording and have not
been returned to the Depositor in time to permit their delivery as specified
above, the Depositor may deliver a true copy thereof with a certification by the
Servicer, or its agent on its behalf, substantially to the effect that such copy
is a true and correct copy of the original; (x) in lieu of the Security
Instrument, assignment in blank or to the Grantor Trustee or intervening
assignments thereof, if the applicable jurisdiction retains the originals of
such documents (as evidenced by a certification from the Depositor to such
effect) the Depositor may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded or from the Depositor's agent,
escrow agent or closing attorney; (y) in lieu of the Mortgage Notes relating to
the Mortgage Loans, the Depositor may deliver lost note affidavits from the
Seller; and (z) the Depositor shall not be required to deliver intervening
assignments or Mortgage Note endorsements between the Seller and the Depositor
and between
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the Depositor and the Grantor Trustee; and provided, further, however, that in
the case of Mortgage Loans which have been prepaid in full after the Cut-off
Date and prior to the Closing Date, the Depositor, in lieu of delivering the
above documents, may deliver to the Grantor Trustee, a certification to such
effect and shall deposit all amounts paid in respect of such Mortgage Loans in
the Payment Account on the Closing Date. The Depositor shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) to the Custodian, promptly after they are
received. The Depositor shall cause the Seller, at its expense, to cause each
assignment of the Security Instrument to the Grantor Trustee to be recorded not
later than 180 days after the Closing Date, unless (a) such recordation is not
required by the Rating Agencies as evidenced in writing or an Opinion of Counsel
addressed to the Grantor Trustee has been provided to the Grantor Trustee and
the Issuer which states that recordation of such Security Instrument is not
required to protect the interests of the Noteholders in the related Mortgage
Loans or (b) MERS is identified on the Mortgage or on a properly recorded
assignment of the Mortgage as the mortgagee of record solely as nominee for the
Seller and its successor and assigns; provided, however, notwithstanding the
foregoing, each assignment shall be submitted for recording by the Seller in the
manner described above, at no expense to the Issuer or the Grantor Trustee, upon
the earliest to occur of: (i) reasonable direction by the Holders of Notes
aggregating at least 25% of the Note Principal Balance of the Notes, (ii) the
occurrence of a Master Servicer Event of Default or an Event of Default, (iii)
the occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller
and (iv) the occurrence of a servicing transfer as described in Section 2.02 of
the Servicing Agreement. Notwithstanding the foregoing, if the Seller fails to
pay the cost of recording the assignments, such expense will be paid by the
Securities Administrator from funds in the Payment Account in accordance with
Section 3.25 of the Indenture.
(d) The Depositor hereby assigns to the Grantor Trustee its
security interest in and to any Pledged Assets, its right to receive amounts due
or to become due in respect of any Pledged Assets pursuant to the Xxxxx Fargo
Servicing Agreement. With respect to any Pledged Asset Loan, the Depositor shall
cause to be filed in the appropriate recording office a UCC-3 statement giving
notice of the assignment of the related security interest to the Grantor Trust
and shall thereafter cause the timely filing of all necessary continuation
statements with regard to such financing statements.
The Depositor agrees that the sale of each Pledged Asset Loan
pursuant to this Agreement will also constitute the assignment, sale, setting
over, transfer and conveyance to the Grantor Trustee, without recourse (but
subject to the Depositor's covenants, representations and warranties
specifically provided herein), of all of the Depositor's obligations and all of
the Depositor's right, title and interest in, to and under, whether now existing
or hereafter acquired as owner of the Mortgage Loan with respect to all money,
securities, security entitlements, accounts, general intangibles, instruments,
documents, certificates of deposit, commodities contracts, and other investment
property and other property of whatever kind or description consisting of,
arising from or related to (i) the Assigned Contracts, (ii) all rights, powers
and remedies of the Depositor as owner of such Mortgage Loan under or in
connection with the Assigned Contracts, whether arising under the terms of such
Assigned Contracts, by statute, at law or in equity, or otherwise arising out of
any default by the Mortgagor under or in connection with the Assigned Contracts,
including all rights to exercise any election or option or to make
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any decision or determination or to give or receive any notice, consent,
approval or waiver thereunder, (iii) all security interests in and lien of the
Depositor as owner of such Mortgage Loan in the Pledged Amounts and all money,
securities, security entitlements, accounts, general intangibles, instruments,
documents, certificates of deposit, commodities contracts, and other investment
property and other property of whatever kind or description and all cash and non
cash proceeds of the sale, exchange, or redemption of, and all stock or
conversion rights, rights to subscribe, liquidation dividends or preferences,
stock dividends, rights to interest, dividends, earnings, income, rents, issues,
profits, interest payments or other distributions of cash or other property that
is credited to the Master Servicer Collection Account, (iv) all documents, books
and records concerning the foregoing (including all computer programs, tapes,
disks and related items containing any such information) and (v) all insurance
proceeds of any of the foregoing or replacements thereof or substitutions
therefor, proceeds of proceeds and the conversion, voluntary or involuntary, of
any thereof. The foregoing transfer, sale, assignment and conveyance does not
constitute and is not intended to result in the creation, or an assumption by
the Grantor Trustee, of any obligation of the Depositor, or any other person in
connection with the Pledged Assets or under any agreement or instrument relating
thereto, including any obligation to the Mortgagor, other than as owner of the
Mortgage Loan.
(e) The trust created hereunder shall be referred to as the
"Bear Xxxxxxx ARM Grantor Trust 2005-2".
Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS BY THE GRANTOR
TRUSTEE.
(a) The Grantor Trustee acknowledges the sale, transfer and
assignment of the Trust Estate to it by the Depositor and receipt of, subject to
further review by the Custodian, on its behalf, and the exceptions which may be
noted by the Custodian, on its behalf, pursuant to the procedures described
below, and the Grantor Trustee will cause the Custodian to hold, the documents
(or certified copies thereof) delivered to the Custodian, pursuant to Section
2.01, and any amendments, replacements or supplements thereto and all other
assets of the Trust Estate delivered to it, and the rights of the Depositor with
respect to any Pledged Assets, in trust for the use and benefit of all present
and future Holders of the Notes issued pursuant to the Indenture. On the Closing
Date, in accordance with the Custodial Agreement, the Custodian shall
acknowledge with respect to each Mortgage Loan by delivery to the Depositor, the
Seller, the Grantor Trustee and the Issuer of an Initial Certification, receipt
of the Mortgage File, but without review of such Mortgage File, except to the
extent necessary to confirm that such Mortgage File contains the related
Mortgage Note or lost note affidavit. No later than 90 days after the Closing
Date (or, with respect to any Substitute Mortgage Loan, within five Business
Days after the receipt by the Custodian thereof), the Custodian, in accordance
with the Custodial Agreement, shall review each Mortgage File delivered to it
and shall execute and deliver to the Depositor, the Seller, the Grantor Trustee
and the Issuer an Interim Certification. In conducting such review, the
Custodian will ascertain whether all documents required to be reviewed by it
have been executed and received, and based on the Mortgage Loan Schedule,
whether the Mortgage Notes relate, determined on the basis of the Mortgagor
name, original principal balance and loan number, to the Mortgage Loans it has
received, as identified in the Mortgage Loan Schedule. In performing any such
review, the Custodian may conclusively rely on the purported due execution and
genuineness of any such document and on the purported
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genuineness of any signature thereon. If the Custodian finds any document
constituting part of the Mortgage File has not been executed or received, or is
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B or does
not conform on its face to the review criteria specified in this Section (a
"Material Defect"), the Custodian shall note such Material Defect on the
schedule of exceptions attached to the Interim Certification. In accordance with
the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any such
Material Defect within ninety (90) days from the date of receipt of the Interim
Certification from the Custodian and if the Seller fails to correct or cure the
Material Defect within such period, the Grantor Trustee shall enforce the
Seller's obligation under the Mortgage Loan Purchase Agreement to, within 90
days from the Grantor Trustee's notification, provide a Substitute Mortgage Loan
or purchase such Mortgage Loan at the Repurchase Price; provided, however, that
if such Material Defect relates solely to the inability of the Seller to deliver
the original Security Instrument or intervening assignments thereof, or a
certified copy because the originals of such documents, or a certified copy have
not been returned by the applicable jurisdiction, the Seller shall not be
required to purchase such Mortgage Loan if the Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that the Seller cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Seller shall instead deliver a recording receipt of
such recording office or, if such receipt is not available, a certificate
confirming that such documents have been accepted for recording, and delivery to
the Custodian shall be effected by the Seller within thirty days of its receipt
of the original recorded document.
(b) No later than 180 days after the Closing Date, the
Custodian, in accordance with the Custodial Agreement, will review, for the
benefit of the Grantor Trust Certificateholders, the Mortgage Files delivered to
it and will execute and deliver or cause to be executed and delivered to the
Depositor, the Seller, the Grantor Trustee and the Issuer a Final Certification.
In conducting such review, the Custodian will ascertain whether an original of
each document required to be recorded has been returned from the recording
office with evidence of recording thereon or a certified copy has been obtained
from the recording office. If the Custodian finds a Material Defect, the
Custodian shall note such Material Defect on the schedule of exceptions attached
to the Final Certification (provided, however, that with respect to those
documents described in subsections (b)(iv), (v) and (vii) of Section 2.01, the
Custodian's obligations shall extend only to the documents actually delivered to
the Custodian pursuant to such subsections). In accordance with the Mortgage
Loan Purchase Agreement, the Seller shall correct or cure any such Material
Defect within 90 days from the date of receipt of the Final Certification from
the Custodian and if the Seller is unable to cure such Material Defect within
such period, and if such Material Defect materially and adversely affects the
interests of the Grantor Trust Certificateholders in the related Mortgage Loan,
the Grantor Trustee shall enforce the Seller's obligation under the Mortgage
Loan Purchase Agreement to, within 90 days from the Custodian's or Grantor
Trustee's notification, provide a Substitute Mortgage Loan or purchase such
Mortgage Loan at the Repurchase Price; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy, because the
originals of such documents or a certified
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copy, have not been returned by the applicable jurisdiction, the Seller shall
not be required to purchase such Mortgage Loan, if the Seller delivers such
original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Seller cannot deliver such original or
copy of any document submitted for recording to the appropriate recording office
in the applicable jurisdiction because such document has not been returned by
such office; provided that the Seller shall instead deliver a recording receipt
of such recording office or, if such receipt is not available, a certificate
confirming that such documents have been accepted for recording, and delivery to
the Grantor Trustee or the Custodian shall be effected by the Seller within
thirty days of its receipt of the original recorded document.
(c) In the event that a Mortgage Loan is purchased by the
Seller in accordance with Subsections 2.02(a) or (b) above, the Seller shall
remit to Securities Administrator the Repurchase Price for deposit in the
Payment Account and the Seller shall provide to the Securities Administrator and
the Grantor Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Payment Account,
the Seller shall notify the Grantor Trustee and the Custodian and, the Grantor
Trustee (upon receipt of a Request for Release in the form of Exhibit Four
attached to the Custodial Agreement with respect to such Mortgage Loan and
certification that the Repurchase Price has been deposited in the Payment
Account), shall cause the Custodian to release to the Seller the related
Mortgage File and the Grantor Trustee shall execute and deliver all instruments
of transfer or assignment, without recourse, representation or warranty,
furnished to it by the Seller, as are necessary to vest in the Seller title to
and rights under the Mortgage Loan. Such purchase shall be deemed to have
occurred on the date on which the Repurchase Price in available funds is
deposited in the Payment Account. Pursuant to the Servicing Agreement, at the
direction of the Grantor Trustee the Master Servicer shall amend the Mortgage
Loan Schedule, which was previously delivered to it by the Depositor in a form
agreed to between the Depositor, the Grantor Trustee and the Custodian, to
reflect such repurchase and shall promptly deliver to the Rating Agencies, the
Indenture Trustee, the Custodian and the Grantor Trustee a copy of such
amendment. The obligation of the Seller to repurchase or substitute for any
Mortgage Loan a Substitute Mortgage Loan as to which such a Material Defect in a
constituent document exists shall be the sole remedy respecting such Material
Defect available to the Issuer, the Grantor Trust Certificateholders or to the
Grantor Trustee on their behalf.
Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN
PURCHASE AGREEMENT.
(a) Depositor hereby assigns to the Grantor Trustee, all of
its right, title and interest in the Mortgage Loan Purchase Agreement, including
but not limited to the Depositor's rights and obligations pursuant to the
Servicing Agreement. The obligations of the Seller to substitute or repurchase,
as applicable, a Mortgage Loan shall be the Issuer's, the Grantor Trustee's and
the Grantor Trust Certificateholders' sole remedy for any breach thereof. At the
request of the Issuer or the Grantor Trustee, the Depositor shall take such
actions as may be necessary to enforce the above right, title and interest on
behalf of the Issuer, the Grantor Trustee and the Grantor Trust
Certificateholders and shall execute such further documents as the Issuer or the
Grantor Trustee may reasonably require in order to enable the Grantor Trustee to
carry out such enforcement.
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(b) If the Depositor, the Securities Administrator, the Issuer
or the Grantor Trustee discovers a breach of any of the representations and
warranties set forth in the Mortgage Loan Purchase Agreement, which breach
materially and adversely affects the value of the interests of the Issuer, the
Grantor Trust Certificateholders or the Grantor Trustee in the related Mortgage
Loan, the party discovering the breach shall give prompt written notice of the
breach to the other parties. The Seller, within 90 days of its discovery or
receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to the Mortgage Loan
Purchase Agreement and Section 2.04 of this Agreement, shall purchase the
Mortgage Loan or any property acquired with respect thereto from the Issuer;
provided, however, that if there is a breach of any representation set forth in
the Mortgage Loan Purchase Agreement, and the Mortgage Loan or the related
property acquired with respect thereto has been sold, then the Seller shall pay,
in lieu of the Repurchase Price, any excess of the Repurchase Price over the Net
Liquidation Proceeds received upon such sale. If the Net Liquidation Proceeds
exceed the Repurchase Price, any excess shall be paid to the Seller to the
extent not required by law to be paid to the borrower. Any such purchase by the
Seller shall be made by providing an amount equal to the Repurchase Price to the
Securities Administrator for deposit in the Payment Account and written
notification detailing the components of such Repurchase Price. The Depositor
shall submit to the Grantor Trustee and the Custodian a Request for Release, and
the Grantor Trustee shall cause the Custodian to release, upon receipt of
certification from the Securities Administrator that the Repurchase Price has
been deposited in the Payment Account, to the Seller the related Mortgage File
and the Grantor Trustee shall execute and deliver all instruments of transfer or
assignment furnished to it by the Seller, without recourse, representation or
warranty as are necessary to vest in the Seller title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Repurchase Price in
available funds is deposited in the Payment Account. Pursuant to the Servicing
Agreement, at the direction of the Grantor Trustee the Master Servicer shall
amend the Mortgage Loan Schedule to reflect such repurchase and shall promptly
deliver to the Issuer, Grantor Trustee, the Custodian and the Rating Agencies a
copy of such amendment. Enforcement of the obligation of the Seller to purchase
(or substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the Issuer, the
Grantor Trust Certificateholders or the Grantor Trustee on their behalf.
Section 2.04 SUBSTITUTION OF MORTGAGE LOANS.
Notwithstanding anything to the contrary in this Agreement, in
lieu of purchasing a Mortgage Loan pursuant to the Mortgage Loan Purchase
Agreement or Sections 2.02 or 2.03 of this Agreement, the Seller may, no later
than the date by which such purchase by the Seller would otherwise be required,
tender to the Grantor Trustee a Substitute Mortgage Loan accompanied by a
certificate of an authorized officer of the Seller that such Substitute Mortgage
Loan conforms to the requirements set forth in the definition of "Substitute
Mortgage Loan". The Grantor Trustee shall cause the Custodian to examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Grantor Trustee shall cause the Custodian to notify the
Seller, in writing, within five Business Days after receipt, whether or not
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the documents relating to the Substitute Mortgage Loan satisfy the requirements
of Section 2.02. Within two Business Days after such notification, the Seller
shall provide to the Securities Administrator for deposit in the Payment Account
the amount, if any, by which the Outstanding Principal Balance as of the next
preceding Due Date of the Mortgage Loan for which substitution is being made,
after giving effect to the Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by the
Seller of the Repurchase Price for the purchase of a Mortgage Loan by the
Seller. After such notification to the Seller and, if any such excess exists,
upon receipt of certification from the Securities Administrator that such excess
has been deposited in the Payment Account, the Grantor Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage Loan
hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Estate and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property of
the Trust Estate. Upon acceptance of the Substitute Mortgage Loan (and delivery
to the Grantor Trustee and the Custodian of a Request for Release for such
Mortgage Loan), the Grantor Trustee shall cause the Custodian to release to the
Seller the related Mortgage File related to any Mortgage Loan released pursuant
to the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, and shall execute and deliver all instruments of transfer or
assignment, without recourse, representation or warranty in form as provided to
it as are necessary to vest in the Seller title to and rights under any Mortgage
Loan released pursuant to the Mortgage Loan Purchase Agreement or Section 2.04
of this Agreement, as applicable. The Seller shall deliver to the Custodian the
documents related to the Substitute Mortgage Loan in accordance with the
provisions of the Mortgage Loan Purchase Agreement and Subsections 2.01(b) and
2.02(b) of this Agreement, as applicable, with the date of acceptance of the
Substitute Mortgage Loan deemed to be the Closing Date for purposes of the time
periods set forth in those Subsections. The representations and warranties set
forth in the Mortgage Loan Purchase Agreement shall be deemed to have been made
by the Seller with respect to each Substitute Mortgage Loan as of the date of
acceptance of such Mortgage Loan by the Grantor Trustee. The Master Servicer
shall amend the Mortgage Loan Schedule to reflect such substitution and shall
provide a copy of such amended Mortgage Loan Schedule to the Issuer, the Grantor
Trustee, the Custodian and the Rating Agencies.
Section 2.05 REPRESENTATIONS AND WARRANTIES CONCERNING THE
DEPOSITOR.
The Depositor hereby represents and warrants to the Issuer,
the Grantor Trustee and the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and (b) is qualified and in good standing as a
foreign corporation to do business in each jurisdiction where such
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qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse effect on
the Depositor's business as presently conducted or on the Depositor's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(ii) the Depositor has full corporate power to own
its property, to carry on its business as presently conducted and to
enter into and perform its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of
this Agreement have been duly authorized by all necessary corporate
action on the part of the Depositor; and neither the execution and
delivery of this Agreement, nor the consummation of the transactions
herein contemplated, nor compliance with the provisions hereof, will
conflict with or result in a breach of, or constitute a default under,
any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Depositor or its properties or
the articles of incorporation or by-laws of the Depositor, except those
conflicts, breaches or defaults which would not reasonably be expected
to have a material adverse effect on the Depositor's ability to enter
into this Agreement and to consummate the transactions contemplated
hereby;
(iv) the execution, delivery and performance by the
Depositor of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices,
registrations or other actions as have already been obtained, given or
made;
(v) this Agreement has been duly executed and
delivered by the Depositor and, assuming due authorization, execution
and delivery by the other parties hereto, constitutes a valid and
binding obligation of the Depositor enforceable against it in
accordance with its terms (subject to applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of the
rights of creditors generally);
(vi) there are no actions, suits or proceedings
pending or, to the knowledge of the Depositor, threatened against the
Depositor, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions
contemplated by this Agreement or
(vii) with respect to any other matter which in the
judgment of the Depositor will be determined adversely to the Depositor
and will if determined adversely to the Depositor materially and
adversely affect the Depositor's ability to enter into this Agreement
or perform its obligations under this Agreement; and the Depositor is
not in default with respect to any order of any court, administrative
agency, arbitrator or governmental body so as to materially and
adversely affect the transactions contemplated by this Agreement; and
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(viii) immediately prior to the transfer and
assignment to the Issuer, each Mortgage Note and each Mortgage were not
subject to an assignment or pledge, and the Depositor had good and
marketable title to and was the sole owner thereof and had full right
to transfer and sell such Mortgage Loan to the Issuer free and clear of
any encumbrance, equity, lien, pledge, charge, claim or security
interest.
Section 2.06 REPRESENTATIONS AND WARRANTIES OF THE SELLER.
It is understood and agreed that the Seller has made certain
representations and warranties regarding the Mortgage Loans pursuant to the
Mortgage Loan Purchase Agreement, and that, pursuant to Section 2.01(a) hereof,
such representations and warranties and the related remedy provisions, together
with all other rights and remedies of the Depositor under the Mortgage Loan
Purchase Agreement, have been assigned hereunder to, and are enforceable by, the
Grantor Trustee on behalf of the Grantor Trust Certificateholder against the
Seller.
Section 2.07 ISSUANCE OF GRANTOR TRUST CERTIFICATE.
The Grantor Trustee acknowledges the assignment to it of the
Mortgage Loans and the delivery of the Mortgage Files to it, or any Custodian on
its behalf, subject to any exceptions noted, together with the assignment to it
of all other assets included in the Grantor Trust, receipt of which is hereby
acknowledged. Concurrently with such delivery and in exchange therefor, the
Grantor 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 Grantor Trust Certificates.
Section 2.08 GRANTOR TRUST.
The Grantor Trust is intended by the Depositor to qualify as
an "investment trust" within the meaning of Treasury Regulation
ss.301.7701-4(c), and it is neither the purpose nor the intent of the Depositor
to create a partnership, joint venture, or association taxable as a corporation
between or among the Grantor Trust Certificateholders, the Grantor Trustee or
the Depositor. In furtherance of the foregoing, the purpose of the Grantor Trust
shall be to protect and conserve the assets of the Grantor Trust, and the
Grantor Trust shall not at any time engage in or carry on any kind of business
or any kind of commercial or investment activity. In no event shall the Grantor
Trustee or any other person have any power to vary the investment of the Grantor
Trust Certificateholder in the Class A Grantor Trust Certificate or to
substitute new investments or reinvest so as to enable the Grantor Trust to take
advantage of variations in the market to improve the investment of the Grantor
Trust Certificateholder in the Class A Grantor Trust Certificate.
Section 2.09 MASTER SERVICER AS AGENT AND BAILEE OF THE
GRANTOR TRUST CERTIFICATEHOLDER.
Solely for purposes of perfection by possession under the
Uniform Commercial Code or other similar applicable law, rule or regulation of
the state in which such property is held by the Master Servicer, the Grantor
Trustee hereby acknowledges that the Master Servicer is acting as agent and
bailee of the Grantor Trust Certificateholders in holding amounts on deposit
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in the Master Servicer Collection Account pursuant to Section 3.02 of the
Servicing Agreement that are allocable to the Grantor Trust Certificates, as
well as its agent and bailee in holding any Related Documents released to the
Master Servicer pursuant to Section 2.07 of the Servicing Agreement, and any
other items constituting a part of the Trust Estate which from time to time come
into the possession of the Master Servicer. It is intended that, by the Master
Servicer's execution and delivery of the Servicing Agreement, the Grantor
Trustee will be deemed to have possession of such Related Documents, such monies
and such other items for purposes of the Uniform Commercial Code of the state in
which such property is held by the Master Servicer.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 MASTER SERVICER TO ACT AS SERVICER.
It is understood and agreed that the Master Servicer shall
master service and administer the Mortgage Loans in accordance with the terms of
the Servicing Agreement and the Servicer shall service and administer the
Mortgage Loans in accordance with the terms of the Xxxxx Fargo Servicing
Agreement and the respective Mortgage Loans, on behalf of, and subject to the
exclusive control and direction of, the Grantor Trustee for the benefit of the
Grantor Trust Certificateholders. The Class B Grantor Trust Certificateholder
hereby acknowledges and agrees that the Class A Grantor Trust Certificateholder
shall have exclusive control to direct the Grantor Trustee to perform its
obligations under this Agreement.
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ARTICLE IV
PAYMENTS TO GRANTOR TRUST CERTIFICATEHOLDERS
Section 4.01 DISTRIBUTIONS.
(a) On each Payment Date, the Securities Administrator shall,
to the extent such amounts are remitted by the Master Servicer in accordance
with the Servicing Agreement, distribute to each Grantor Trust Certificateholder
of record on the related Record Date (other than as provided in Section 7.01
respecting the final distribution) either in immediately available funds (by
wire transfer or otherwise) to the account of such Grantor Trust
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Grantor Trust Certificateholder have so notified the Grantor
Trustee or the Securities Administrator, as the case may be, or, if such Grantor
Trust Certificateholder have not so notified the Grantor Trustee or the
Securities Administrator by the related Record Date, by check mailed to such
Grantor Trust Certificateholder at the address of such Holder appearing in the
Grantor Trust Certificate Register, (i) in the case of the Class A Grantor Trust
Certificateholders, an amount equal to the sum of the Interest Funds and the
Principal Funds for such Payment Date and (ii) in the case of the Class B
Grantor Trust Certificateholders, an amount equal to the Class B Grantor Trust
Certificate Payment Amount for such Payment Date. For purposes of this
Agreement, all payments made to the Noteholders in accordance with the terms set
forth in the Indenture shall be deemed to have been made first to the Holder of
the Class A Grantor Trust Certificates and then to the Noteholders.
(b) If the Master Servicer anticipates that a final
distribution with respect to the Class A Grantor Trust Certificates will be made
on the next Payment Date, the Master Servicer shall, no later than the
Determination Date in the month of such final distribution, notify the Grantor
Trustee and the Securities Administrator pursuant to the Servicing Agreement.
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ARTICLE V
THE GRANTOR TRUST CERTIFICATES
Section 5.01 THE GRANTOR TRUST CERTIFICATES.
Each class of Grantor Trust Certificates shall be
substantially in the form set forth in Exhibit A and shall, on original issue,
be executed and delivered by the Grantor Trustee to the Grantor Trust
Certificate Registrar for authentication and delivery to or upon the order of
the Depositor upon receipt by the Grantor Trustee or one or more Custodians of
the documents specified in Section 2.01. Each class of Grantor Trust
Certificates shall be issued in a single certificate, in fully registered,
definitive form, representing not less than 100% percentage interest in such
class of Grantor Trust Certificates.
The Class A Grantor Trust Certificate evidences the entire
beneficial ownership of the Mortgage Loans and the proceeds thereof, other than
amounts that are payable in respect of the Class B Grantor Trust Certificates.
The rights of the Grantor Trust Certificateholders to receive distributions from
the proceeds of the Grantor Trust, and all ownership interests of the Grantor
Trust Certificateholder in such distributions, shall be as set forth in this
Agreement.
The Class B Grantor Trust Certificate evidences the right to
receive any and all income and gain realized from any investment of funds in the
Master Servicer Collection Account in excess of the two Business Days of
investment income payable to the Master Servicer pursuant to Section 2.13 of the
Servicing Agreement and the right to receive any and all income and gain
realized from any investment of funds in the Payment Account pursuant to Section
3.01(c) of the Indenture (the sum of such amounts, the "Class B Grantor Trust
Certificate Payment Amount"). The risk of loss of moneys required to be
distributed to the Grantor Trust Certificateholders resulting from such
investments shall be borne by and be the risk of the Class B Grantor Trust
Certificateholder. The Class B Grantor Trust Certificateholder shall remit the
related Loss Allocation Amount to the Securities Administrator for deposit into
the Payment Account not later than 3:00 p.m. New York time on the Business Day
prior to the related Payment Account Deposit Date, and any loss of investment of
funds in the Payment Account no later than 10:00 a.m. New York time on the
related Payment Date.
The Grantor Trust Certificates shall be executed by manual or
facsimile signature on behalf of an authorized officer of the Grantor Trustee.
The Grantor Trust Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Grantor Trustee
shall bind the Grantor Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Grantor Trust Certificates or did not hold such offices at the date of
such Grantor Trust Certificates. No Grantor Trust Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Grantor Trust Certificate a Certificate of Authentication
substantially in the form provided for herein executed by the Grantor Trust
Certificate Registrar by manual signature, and such Certificate of
Authentication upon any Grantor Trust Certificate shall be conclusive evidence,
and the only evidence, that such Grantor
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Trust Certificate has been duly authenticated and delivered hereunder. The
Grantor Trust Certificate shall be dated the date of its authentication.
Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF GRANTOR
TRUST CERTIFICATES.
(a) The Grantor Trustee shall cause to be kept at the
Corporate Trust Office of the Grantor Trust Certificate Registrar a Grantor
Trust Certificate Register in which, subject to such reasonable regulations as
it may prescribe, the Grantor Trust Certificate Registrar shall provide for the
registration of the Grantor Trust Certificates and of transfers and exchanges of
the Grantor Trust Certificates as herein provided. The Securities Administrator
is initially appointed Grantor Trust Certificate Registrar for the purpose of
registering the Grantor Trust Certificates and transfers and exchanges of the
Grantor Trust Certificates as herein provided.
(b) Upon surrender for registration of transfer of a Grantor
Trust Certificate at any office or agency of the Grantor Trust Certificate
Registrar maintained for such purpose pursuant to Section 6.11 and upon
satisfaction of the conditions set forth below, the Grantor Trustee shall
execute and the Grantor Trust Certificate Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, a new Grantor
Trust Certificate representing a 100% Certificate Percentage Interest.
(c) Notwithstanding any other provision hereof, unless an
Event of Default has occurred and is continuing under the Indenture or the
Indenture is otherwise terminated, no transfer of the Grantor Trust Certificates
shall be made. The foregoing provision shall not apply to or in any way limit:
(i) the transfer of the Class A Grantor Trust Certificates to the Issuer
pursuant to the Trust Agreement, (ii) the pledge of the Class A Grantor Trust
Certificates to the Indenture Trustee pursuant to the Indenture, (iii) the
transferability of the Notes, the Owner Trust Certificate or any other
securities secured thereby or representing interests therein, or (iv) the rights
of the Holders of the Grantor Trust Certificates to terminate the Grantor Trust
and take delivery of the Mortgage Loans in accordance with Section 7.02, or any
actions that may be taken thereafter with respect to the Mortgage Loans.
(d) No transfer, sale, pledge or other disposition of a
Grantor Trust 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 "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and laws. Except as otherwise
provided in this Section 5.02, in the event that a transfer of the Grantor Trust
Certificates is to be made without registration under the 1933 Act either (i)(A)
the Grantor Trustee and the Grantor Trust Certificate Registrar shall require a
written Opinion of Counsel acceptable to and in form and substance satisfactory
to the Grantor Trustee, the Grantor Trust Certificate Registrar and the
Depositor that such transfer may 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 Grantor Trustee, the Depositor or the Grantor Trust
Certificate Registrar; provided that such Opinion of Counsel will not be
required in connection with the initial transfers of the Grantor Trust
Certificates by the Depositor or any Affiliate thereof to an Affiliate of the
Depositor or to
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the Issuer or the Indenture Trustee as pledgee of the Issuer and (B) the Grantor
Trustee and Grantor Trust Certificate Registrar shall require the transferee to
execute a representation letter, and the Grantor Trustee and Grantor Trust
Certificate Registrar shall require the transferor to execute a representation
letter, each acceptable to and in form and substance satisfactory to the
Depositor and the Grantor Trustee certifying to the Depositor, the Grantor
Trustee and the Grantor Trust Certificate Registrar the facts surrounding such
transfer, which representation letters shall not be an expense of the Grantor
Trustee, the Depositor or the Grantor Trust Certificate Registrar; provided,
however, that such representation letters will not be required in connection
with initial transfers of any such Grantor Trust Certificate by the Depositor or
any Affiliate thereof to an Affiliate of the Depositor or to the Issuer or to
the Indenture Trustee as pledgee of the Issuer, and the Grantor Trustee and
Grantor Trust Certificate Registrar shall be entitled to conclusively rely upon
a written representation from the Depositor of the status of such transferee as
an Affiliate of the Depositor or (ii) the prospective transferee of such a
Grantor Trust Certificate shall be required to provide the Grantor Trustee, the
Depositor and the Grantor Trust Certificate Registrar with an investment letter
in form and substance satisfactory to the Depositor, the Grantor Trustee and the
Grantor Trust Certificate Registrar, which investment letter shall not be an
expense of the Grantor Trustee, the Depositor, or the Grantor Trust Certificate
Registrar, and which investment letter states that, among other things, such
transferee (A) is a "qualified institutional buyer" as defined under Rule 144A,
acting for its own account or the accounts of other "qualified institutional
buyers" as defined under Rule 144A, and (B) is aware that the proposed
transferor intends to rely on the exemption from registration requirements under
the 1933 Act provided by Rule 144A. The Holder of the Grantor Trust Certificate
desiring to effect any such transfer, sale, pledge or other disposition shall,
and does hereby agree to, indemnify the Grantor Trustee, the Depositor and the
Grantor Trust Certificate Registrar against any liability that may result if the
transfer, sale, pledge or other disposition is not so exempt or is not made in
accordance with such federal and state laws and this Agreement.
(e) In addition to the foregoing, in the case of any Grantor
Trust Certificate presented for registration in the name of any Person, either
(i) the Grantor Trust Certificate Registrar shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Grantor Trustee, the
Depositor and the Grantor Trust Certificate Registrar to the effect that the
purchase or holding of such Grantor Trust Certificate is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under Section 406 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), and will not subject the Grantor
Trustee, the Depositor or the Grantor Trust Certificate Registrar to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Grantor Trustee, the
Depositor or the Grantor Trust Certificate Registrar or (ii) the prospective
transferee shall be required to provide the Grantor Trustee, the Depositor and
the Grantor Trust Certificate Registrar with a certification, which the Grantor
Trustee and Grantor Trust Certificate Registrar may rely upon without further
inquiry or investigation, or such other certifications as the Grantor Trustee
may deem desirable or necessary in order to establish that such transferee or
the Person in whose name such registration is requested is not an employee
benefit plan or other plan subject to the prohibited transaction provisions of
ERISA or Section 4975 of the Code, or any Person (including an investment
manager, a named fiduciary or a
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trustee of any such plan) who is using "plan assets" of any such plan to effect
such acquisition; PROVIDED, HOWEVER, that such Opinion of Counsel or
certification will not be required in connection with the initial transfers of
the Grantor Trust Certificate by the Depositor or any Affiliate thereof to an
Affiliate of the Depositor or to the Issuer or to the Indenture Trustee as
pledgee of the Issuer and the Grantor Trustee (in which case, such transferee
shall have deemed to have represented that such transferee is not a Plan or a
Person investing "plan assets" of any Plan) and, in the case of a transfer to an
Affiliate of the Depositor, the Grantor Trust Certificate Registrar shall be
entitled to conclusively rely upon a representation (which, upon the request of
the Grantor Trustee or the Grantor Trust Certificate Registrar, shall be a
written representation) from the Depositor of the status of such transferee as
an Affiliate of the Depositor.
(f) No service charge shall be made for any transfer or
exchange of the Grantor Trust Certificate, but the Grantor Trustee or the
Grantor Trust Certificate Registrar 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 the Grantor Trust Certificate.
(g) The Grantor Trust Certificate surrendered for transfer and
exchange shall be destroyed by the Grantor Trust Certificate Registrar.
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN GRANTOR
TRUST CERTIFICATE.
If (i) any mutilated Grantor Trust Certificate is surrendered
to the Grantor Trust Certificate Registrar, or the Grantor Trustee and the
Grantor Trust Certificate Registrar receive evidence to their satisfaction of
the destruction, loss or theft of the Grantor Trust Certificate, and (ii) there
is delivered to the Grantor Trustee and the Grantor Trust Certificate Registrar
such security or indemnity as may be required by them to hold each of them
harmless, then, in the absence of notice to the Grantor Trustee or the Grantor
Trust Certificate Registrar that the Grantor Trust Certificate has been acquired
by a bona fide purchaser, the Grantor Trustee shall execute and the Grantor
Trust Certificate Registrar shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Grantor Trust
Certificate, a new Grantor Trust Certificate of like tenor and Certificate
Percentage Interest but bearing a number not contemporaneously outstanding. Upon
the issuance of any new Grantor Trust Certificate under this Section, the
Grantor Trust Certificate Registrar 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 Grantor
Trustee and the Grantor Trust Certificate Registrar) connected therewith. Any
duplicate Grantor Trust Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership interest in the
Grantor Trust, as if originally issued, whether or not the lost, stolen or
destroyed Grantor Trust Certificate shall be found at any time.
Section 5.04 PERSONS DEEMED OWNERS.
Prior to due presentation of the Grantor Trust Certificate for
registration of transfer, the Depositor, the Master Servicer, the Grantor
Trustee, the Grantor Trust Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Grantor Trustee or the Grantor Trust Certificate
Registrar may treat the Person in whose name the Grantor Trust Certificate is
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registered as the owner of the Grantor Trust 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 Grantor Trustee,
the Grantor Trust Certificate Registrar nor any agent of the Depositor, the
Master Servicer, the Grantor Trustee or the Grantor Trust Certificate Registrar
shall be affected by notice to the contrary.
ARTICLE VI
CONCERNING THE GRANTOR TRUSTEE
Section 6.01 DUTIES OF GRANTOR TRUSTEE.
(a) The Grantor Trustee, prior to the occurrence of a Master
Servicer Event of Default and after the curing or waiver of all Master Servicer
Event of Defaults which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. If a Master
Servicer Event of Default has occurred (which has not been cured or waived), the
Grantor 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 investor would exercise or use under the circumstances in the conduct of
such investor's own affairs.
(b) The Grantor Trustee, upon receipt of all resolutions, the
Grantor Trust Certificate, statements, opinions, reports, documents, orders or
other instruments furnished to the Grantor 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. The Grantor Trustee shall notify the Grantor Trust Certificateholders
of any such documents which do not materially conform to the requirements of
this Agreement in the event that the Grantor Trustee, after so requesting, does
not receive satisfactorily corrected documents.
The Grantor Trustee shall furnish in a timely fashion to the
Master Servicer such information as the Master Servicer may reasonably request
from time to time for the Master Servicer to fulfill its duties as set forth in
the Servicing Agreement. The Grantor Trustee shall furnish promptly to the
Indenture Trustee and the Owner Trustee all reports received from the Master
Servicer. The Grantor Trustee covenants and agrees that it shall perform its
obligations hereunder in a manner so as to maintain the status of the Grantor
Trust as a grantor trust under U.S. federal income tax law and to prevent the
imposition of any federal, state or local income, prohibited transaction,
contribution or other tax on the Grantor Trust to the extent that maintaining
such status and avoiding such taxes are reasonably within the control of the
Grantor Trustee and are reasonably within the scope of its duties under this
Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Grantor 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 a Master Servicer
Event of Default, and after the curing or waiver of all such Master
Servicer Event of Defaults which may have occurred, the duties and
obligations of the Grantor Trustee shall be determined solely by the
express provisions of this Agreement, the Grantor Trustee shall not be
liable except
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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 Grantor Trustee and, in the
absence of bad faith on the part of the Grantor Trustee, the Grantor
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any Grantor
Trust Certificate or opinions furnished to the Grantor Trustee by the
Depositor or the Master Servicer and which on their face, do not
contradict the requirements of this Agreement;
(ii) The Grantor Trustee shall not be personally
liable for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Grantor Trustee, unless it shall
be proved that the Grantor Trustee was negligent in ascertaining the
pertinent facts;
(iii) The Grantor 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 the
Grantor Trust Certificateholder as to the time, method and place of
conducting any proceeding for any remedy available to the Grantor
Trustee, or exercising any trust or power conferred upon the Grantor
Trustee, under this Agreement;
(iv) The Grantor Trustee shall not be charged with
knowledge of any failure or event that may give rise to any Master
Servicer Event of Default (other than a default in payment to the
Grantor Trustee) unless a responsible officer of the Grantor Trustee
assigned to and working in the Corporate Trust Office obtains actual
knowledge of such failure or event or the Grantor Trustee receives
written notice of such failure or event at its Corporate Trust Office
from the Master Servicer, the Depositor or any Grantor Trust
Certificateholder which notice shall make specific reference to this
transaction; and
(v) Except to the extent provided in Sections 6.06
and 6.07, no provision of this Agreement shall require the Grantor
Trustee to expend or risk its own funds or otherwise incur any personal
financial liability in the performance of any of its duties as Grantor
Trustee hereunder, or in the exercise of any of its rights or powers,
if the Grantor Trustee shall have reasonable grounds for believing that
repayment of funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(d) As used in this Article, references to the rights, powers,
duties and obligations of the Grantor Trustee under this Agreement include the
rights, powers, duties and obligations of the Grantor Trustee under the
Servicing Agreement.
(e) The Grantor Trustee covenants and agrees that it shall
perform its obligations hereunder in a manner so as to maintain the status of
the Grantor Trust as a grantor trust under subpart E, part I of subchapter J of
the Code and not as an association taxable as a corporation, as a taxable
mortgage pool, or as a partnership and to prevent the imposition of any U.S.
federal, state or local income or other tax on the Grantor Trust.
(f) The Grantor Trustee shall not be deemed to have notice or
knowledge of any Master Servicer Event of Default or an Event of Servicer
Termination unless a Responsible
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Officer of the Grantor Trustee has actual knowledge thereof or unless written
notice of any such event that is in fact a Master Servicer Event of Default or
Event of Servicer Termination is received by the Grantor Trustee at its
Corporate Trust Office and such notice references the Notes or Trust
Certificates generally, the Issuer, the Trust Estate or this Grantor Trust
Agreement.
Section 6.02 CERTAIN MATTERS AFFECTING THE GRANTOR TRUSTEE.
Except as otherwise provided in Section 6.01:
(i) The Grantor Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) The Grantor 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 with such Opinion of Counsel;
(iii) The Grantor Trustee shall be under no
obligation to exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of the Grantor
Trust Certificateholder pursuant to the provisions of this Agreement,
unless the Grantor Trust Certificateholder shall have offered to the
Grantor Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby has
given its consent; nothing contained herein shall, however, relieve the
Grantor Trustee of the obligation, upon the occurrence of a Master
Servicer 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 investor
would exercise or use under the circumstances in the conduct of such
investor's own affairs;
(iv) The Grantor Trustee shall not be personally
liable for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer
Event of Default hereunder and after the curing of any Master Servicer
Event of Default which may have occurred, the Grantor 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 the Grantor Trust
Certificateholder; PROVIDED, HOWEVER, that if the payment within a
reasonable time to the Grantor 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 Grantor Trustee, not reasonably
assured to the Grantor Trustee by the
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security afforded to it by the terms of this Agreement, the Grantor
Trustee may require reasonable indemnity against such expense or
liability as a condition to so proceeding. The reasonable expense of
every such examination shall be paid by the Master Servicer, if a
Master Servicer Event of Default shall have occurred and is continuing,
and otherwise by the Grantor Trust Certificateholder requesting the
investigation;
(vi) The Grantor Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys or a custodian or
nominee, and the Grantor Trustee shall not be responsible for any
misconduct or negligence on the part of, or for the supervision of, any
such agent, attorney, custodian or nominee appointed with due care by
it hereunder;
(vii) The right of the Grantor Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Grantor Trustee shall not be accountable for other
than its negligence or willful misconduct in the performance of any
such act; and
(viii) The Grantor Trustee shall not be required to
give any bond or surety with respect to the execution of the trust
created hereby or the powers granted hereunder.
Section 6.03 GRANTOR TRUSTEE NOT LIABLE FOR GRANTOR TRUST
CERTIFICATE OR MORTGAGE LOANS.
The recitals contained herein and in the Grantor Trust
Certificate (other than the execution and authentication of the Grantor Trust
Certificate and relating to the acceptance and receipt of the Mortgage Loans)
shall be taken as the statements of the Depositor, and the Grantor Trustee
assumes no responsibility for their correctness. The Grantor Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Grantor Trust Certificate (except that the Grantor Trust Certificate shall be
duly and validly executed by it and authenticated by it as Grantor Trust
Certificate Registrar) or of any Mortgage Loan or related document. The Grantor
Trustee shall not be accountable for the use or application by the Depositor of
the Grantor Trust Certificate or of the proceeds of the Grantor Trust
Certificate, or for the use or application of any funds paid to the Depositor in
respect of the Mortgage Loans or deposited in or withdrawn from the Payment
Account. The Grantor Trustee shall not be responsible for the legality or
validity of this Agreement or any document or instrument relating to this
Agreement, the validity of the execution of this Agreement or of any supplement
hereto or instrument of further assurance, or the validity, priority, perfection
or sufficiency of the security for the Grantor Trust Certificates issued
hereunder or intended to be issued hereunder. The Grantor Trustee shall not at
any time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage Loan, or for or with
respect to the sufficiency of the Trust or its ability to generate the payments
to be distributed to the Grantor Trust Certificateholders, under this Agreement.
The Grantor Trustee shall not have any responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to record this Agreement.
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Section 6.04 GRANTOR TRUSTEE MAY OWN A GRANTOR TRUST
CERTIFICATE.
The Grantor Trustee in its individual or any other capacity
may become the owner or pledgee of a Grantor Trust Certificate with the same
rights it would have if it were not Grantor Trustee.
Section 6.05 ELIGIBILITY REQUIREMENTS FOR GRANTOR TRUSTEE.
The Grantor Trustee hereunder shall at all times be a
corporation or a national banking association having its principal office in a
state and city acceptable to the Depositor and organized and doing business
under the laws of such state or the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. If such corporation or national banking association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 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 Grantor Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Grantor Trustee shall resign immediately in the manner and with the effect
specified in Section 6.06.
Section 6.06 RESIGNATION AND REMOVAL OF THE GRANTOR TRUSTEE.
(a) The Grantor Trustee may at any time resign and be
discharged from the trusts hereby created by giving 30 days written notice
thereof to the Depositor. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Grantor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Grantor Trustee and one copy to the successor Grantor Trustee. If no
successor Grantor Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Grantor Trustee may petition any court of competent jurisdiction for
the appointment of a successor Grantor Trustee.
(b) If at any time the Grantor Trustee shall cease to be
eligible in accordance with the provisions of Section 6.05 and shall fail to
resign after written request therefor by the Depositor, or if at any time the
Grantor Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Grantor Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Grantor
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Grantor Trustee
and appoint a successor Grantor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Grantor Trustee so removed
and one copy to the successor Grantor Trustee. In addition, in the event that
the Depositor determines that the Grantor Trustee has failed (i) to distribute
or cause to be distributed to the Grantor Trust Certificateholder any amount
required to be distributed hereunder, if such amount is held by the Grantor
Trustee or the Securities Administrator for distribution or (ii) to otherwise
observe or perform in any material respect any of its covenants, agreements or
obligations hereunder, and such failure shall continue unremedied for a period
of
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5 days (in respect of clause (i) above) or 30 days (in respect of clause (ii)
above) after the date on which written notice of such failure, requiring that
the same be remedied, shall have been given to the Grantor Trustee by the
Depositor, then the Depositor may remove the Grantor Trustee and appoint a
successor Grantor Trustee by written instrument delivered as provided in Section
6.06.
(c) The Holder of the Grantor Trust Certificate may at any
time remove the Grantor Trustee and appoint a successor Grantor Trustee by
written instrument or instruments, in triplicate, signed by such Holder or its
attorney-in-fact duly authorized, one complete set of which instruments shall be
delivered to the Depositor, one complete set to the Grantor Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Grantor Trustee and
appointment of a successor Grantor Trustee pursuant to any of the provisions of
this Section shall become effective upon acceptance of appointment by the
successor Grantor Trustee as provided in Section 6.07. In connection with the
appointment of a successor Grantor Trustee pursuant to the preceding sentence,
the Depositor shall provide notice of the successor Grantor Trustee to the
Securities Administrator, and, on or before the date on which any such
appointment becomes effective, the Depositor shall obtain from each Rating
Agency written confirmation that the appointment of any such successor Grantor
Trustee will not result in the reduction of the ratings on any class of the
Securities below the lesser of the then current or original ratings on such
Securities.
Section 6.07 SUCCESSOR GRANTOR TRUSTEE.
(a) Any successor Grantor Trustee appointed as provided in
Section 6.06 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Grantor Trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Grantor Trustee
shall become effective and such successor Grantor Trustee shall become effective
and such successor Grantor 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
Grantor Trustee herein. The predecessor Grantor Trustee shall deliver to the
successor Grantor Trustee all Mortgage Files and related documents and
statements held by it hereunder (other than any Mortgage Files at the time held
by a Custodian, which shall become the agent of any successor Grantor Trustee
hereunder), and the Depositor, the Securities Administrator and the predecessor
Grantor 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 Grantor Trustee all such rights, powers, duties and
obligations. (b) No successor Grantor Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Grantor Trustee shall be eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor Grantor
Trustee as provided in this Section, the Depositor shall mail notice of the
succession of such Grantor Trustee hereunder to the Holder of the Grantor Trust
Certificate at its address as shown in the
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Grantor Trust Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor Grantor Trustee,
the successor Grantor Trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 6.08 MERGER OR CONSOLIDATION OF GRANTOR TRUSTEE.
Any corporation or national banking association into which the
Grantor Trustee may be merged or converted or with which it may be consolidated
or any corporation or national banking association resulting from any merger,
conversion or consolidation to which the Grantor Trustee shall be a party, or
any corporation or national banking association acquiring all or substantially
all of the business of the Grantor Trustee or succeeding to the business of the
Grantor Trustee, shall be the successor of the Grantor Trustee hereunder,
provided such corporation or national banking association shall be eligible
under the provisions of Section 6.05, 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. The Grantor Trustee shall cause notice
of any such merger or consolidation to be provided to the Grantor Trust
Certificateholder at its address as shown in the Grantor Trust Certificate
Register.
Section 6.09 APPOINTMENT OF CO-GRANTOR TRUSTEE OR SEPARATE
GRANTOR TRUSTEE.
(a) 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 Grantor Trust or property securing the same may at the time be
located, the Securities Administrator and the Grantor Trustee acting jointly
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Grantor Trustee to act as co-Grantor Trustee
or co-Grantor Trustees, jointly with the Grantor Trustee, or separate Grantor
Trustee or separate Grantor Trustees, of all or any part of the Grantor Trust,
and to vest in such Person or Persons, in such capacity, such title to the
Grantor Trust, or any part thereof, and, subject to the other provisions of this
Section 6.09, such powers, duties, obligations, rights and trusts as the
Securities Administrator and the Grantor Trustee may consider necessary or
desirable. If the Securities Administrator 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 Grantor
Trustee alone shall have the power to make such appointment. No co-Grantor
Trustee or separate Grantor Trustee hereunder shall be required to meet the
terms of eligibility as a successor Grantor Trustee under Section 6.05 hereunder
and no notice to the Holder of the Grantor Trust Certificate of the appointment
of co-Grantor Trustee(s) or separate Grantor Trustee(s) shall be required under
Section 6.07 hereof.
(b) In the case of any appointment of a co-Grantor Trustee or
separate Grantor Trustee pursuant to this Section 6.09 all rights, powers,
duties and obligations conferred or imposed upon the Grantor Trustee shall be
conferred or imposed upon and exercised or performed by the Grantor Trustee, and
such separate Grantor Trustee or co-Grantor 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 Grantor Trustee hereunder or as successor
to the Securities Administrator hereunder), the Grantor Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding
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of title to the Grantor Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate Grantor Trustee or co-Grantor
Trustee at the direction of the Grantor Trustee.
(c) Any notice, request or other writing given to the Grantor
Trustee shall be deemed to have been given to each of the then separate Grantor
Trustees and co-Grantor Trustees, as effectively as if given to each of them.
Every instrument appointing any separate Grantor Trustee or co-Grantor Trustee
shall refer to this Agreement and the conditions of this Article VI. Each
separate Grantor Trustee and co-Grantor 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 Grantor 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
Grantor Trustee. Every such instrument shall be filed with the Grantor Trustee.
(d) Any separate Grantor Trustee or co-Grantor Trustee may, at
any time, constitute the Grantor 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 Grantor Trustee or co-Grantor 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 Grantor Trustee, to the extent
permitted by law, without the appointment of a new or successor Grantor Trustee.
Section 6.10 APPOINTMENT OF CUSTODIANS.
The Grantor Trustee has appointed the Custodian to hold all or
a portion of the Mortgage Files as agent for the Grantor Trustee, by entering
into a Custodial Agreement. Subject to Article VII, the Grantor Trustee agrees
to comply with the terms of each Custodial Agreement and to enforce the terms
and provisions thereof against the Custodian for the benefit of the Grantor
Trust Certificateholders; provided, however, the Grantor Trustee shall be under
no obligation to supervise the Custodian. Each Custodian shall be a depository
institution subject to supervision by federal or state authority, shall have a
combined capital and surplus of at least $15,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Loan. Each Custodial
Agreement may be amended only as provided in Section 8.01. The Grantor Trustee
shall notify the Grantor Trust Certificateholders of the appointment of any
Custodian (other than the Custodian appointed as of the Closing Date) pursuant
to this Section 6.10.
Section 6.11 APPOINTMENT OF OFFICE OR AGENCY.
The Grantor Trustee will maintain an office or agency where
the Grantor Trust Certificates may be surrendered for registration of transfer
or exchange, which initially shall be the Corporate Trust Office of the
Securities Administrator. The Grantor Trustee will maintain an office at the
address stated in Section 8.05 hereof where notices and demands to or upon the
Grantor Trustee in respect of this Agreement may be served.
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Section 6.12 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provisions of this Agreement, the
Securities Administrator shall comply with all U.S. federal withholding
requirements with respect to distributions to the Grantor Trust
Certificateholders. The consent of the Grantor Trust Certificateholder shall not
be required for any such withholding; except that no withholding shall be made
to the extent that the Grantor Trust Certificateholders present to the Grantor
Trustee forms evidencing entitlement to elimination or reduction of such
withholding. In the event the Grantor Trustee withholds any amount from the
Grantor Trust Certificateholders pursuant to federal withholding requirements,
the Grantor Trustee shall indicate to the Grantor Trust Certificateholders the
amount so withheld.
Section 6.13 GRANTOR TRUST REPORTING.
The Securities Administrator shall prepare, or cause to be
prepared, and submit to the Grantor Trustee for execution, and shall furnish or
cause to be furnished to the Holder of the Grantor Trust Certificate and shall
file or cause to be filed with the Internal Revenue Service, together with Form
1041 or such other form as may be applicable, such information with respect to
the income and deductions of the Grantor Trust at the time or times and in the
manner required by the Code, including such other customary factual information
as is available to the Securities Administrator to enable the Grantor Trust
Certificateholders to prepare tax returns, including information required with
respect to computing the accrual of original issue and market discount.
The Securities Administrator shall have no duty or obligation
to prepare or file any reports with the Commission with respect to the Grantor
Trust.
Section 6.14 REPRESENTATIONS AND WARRANTIES.
The Grantor Trustee hereby represents that:
(i) The Grantor Trustee is duly organized, validly
existing and in good standing under the laws of the United States with
power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently
conducted.
(ii) The Grantor Trustee has the power and authority
to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement have been
duly authorized by the Grantor Trustee by all necessary corporate
action.
(iii) The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the articles of organization or bylaws of the Grantor
Trustee or any agreement or other instrument to which the Grantor
Trustee is a party or by which it is bound.
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(iv) To the Grantor Trustee's best knowledge, there
are no proceedings or investigations pending or threatened before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Grantor Trustee or its
properties: (A) asserting the invalidity of this Agreement (B) seeking
to prevent the consummation of any of the transactions contemplated by
this Agreement or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Grantor Trustee
of its obligations under, or the validity or enforceability of, this
Agreement.
(v) The Grantor Trustee does not have notice of any
adverse claim (as such terms are used in the applicable UCC) with
respect to the Mortgage Loans.
Section 6.15 COMPENSATION AND INDEMNITY.
An annual fee shall be paid to the Grantor Trustee by the
Master Servicer pursuant to a separate agreement between the Grantor Trustee and
the Master Servicer.
The Grantor Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Depositor shall
reimburse the Grantor Trustee for all reasonable out-of-pocket expenses incurred
or made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Grantor Trustee's agents, counsel,
accountants and experts. The Depositor shall indemnify the Grantor Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Grantor Trustee shall notify the
Depositor promptly of any claim for which it may seek indemnity. Failure by the
Grantor Trustee to so notify the Depositor shall not relieve the Depositor of
its obligations hereunder. The Depositor shall defend any such claim, and the
Grantor Trustee may have separate counsel and the Depositor shall pay the fees
and expenses of such counsel. The Depositor is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Grantor Trustee through the Grantor Trustee's own willful misconduct, negligence
or bad faith.
The Depositor's and the Master Servicer's respective
indemnification and payment obligations to the Grantor Trustee pursuant to this
Section 6.15 shall survive the discharge of this Agreement.
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ARTICLE VII
TERMINATION
Section 7.01 TERMINATION UPON PURCHASE BY THE MAJORITY
CERTIFICATEHOLDER OR LIQUIDATION OF ALL
MORTGAGE LOANS.
(a) Unless earlier terminated pursuant to Section 7.02, the
respective obligations and responsibilities of the Depositor, the Securities
Administrator and the Grantor Trustee created hereby in respect of the Grantor
Trust Certificates (other than the obligation of the Securities Administrator to
make certain payments after the Final Scheduled Payment Date to the Grantor
Trust Certificateholders and the obligation of the Depositor to send certain
notices as hereinafter set forth) shall terminate upon the last action required
to be taken by the Grantor Trustee on the Final Scheduled Payment Date pursuant
to this Article VII following the earlier of:
(i) the final payment or other liquidation of the
last Mortgage Loan remaining in the Grantor Trust, or
(ii) the purchase by the Majority Certificateholder
of all Mortgage Loans pursuant to Section 8.06 of the Indenture;
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 Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. James's, living on the date hereof.
(b) Notice of any termination shall be provided in accordance
with Section 4.01. Upon presentation and surrender of the Grantor Trust
Certificate by the Grantor Trust Certificateholders, (i) if not in connection
with the Majority Certificateholder's election to purchase the Mortgage Loans
pursuant to the Trust Agreement, the Securities Administrator shall distribute
to the Grantor Trust Certificateholders the amounts otherwise distributable on
such Payment Date, or (ii) if the Majority Certificateholder elected to so
purchase the Mortgage Loans, the Securities Administrator shall distribute to
the Noteholders and the Certificateholders the purchase price specified in the
Indenture to the extent received by the Securities Administrator. For purposes
of this agreement, all such distributions shall be deemed to have been made
first to the Holders of the Class B Grantor Trust Certificates and then to the
Noteholders and Certificateholders.
Section 7.02 TERMINATION BY GRANTOR TRUST CERTIFICATEHOLDER.
Upon the occurrence of an Event of Default under the Indenture
and the Indenture is terminated, the Class A Grantor Trust Certificateholder
shall have the right to terminate this Agreement at any time upon 30 days prior
written notice to the Grantor Trustee, with copies to the Securities
Administrator, the Custodian and the Depositor specifying the effective date of
such termination. Upon presentation and surrender of the Class A Grantor Trust
Certificate by
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the Holder thereof to the Grantor Trust Certificate Registrar on
such effective date: (i) the Mortgage Loans and all other property of the
Grantor Trust shall be conveyed to such Holder; (ii) the Grantor Trustee shall
execute and deliver to such Holder all instruments delivered to the Grantor
Trustee and necessary to evidence such conveyance, and shall release all monies
and other property of the Grantor Trust held by the Grantor Trustee to such
Holder; (iii) the Custodian shall deliver all Mortgage Files to, or at the
direction of, the Holder and the Custodial Agreement will terminate; (iv) the
Servicer shall continue to service the Mortgage Loans pursuant to the Xxxxx
Fargo Servicing Agreement, solely for such Holder, and such Holder shall have
all rights of the Grantor Trustee thereunder, until the Xxxxx Fargo Servicing
Agreement is terminated; and (v) such Holder will have full right and authority
to sell, transfer and assign the Mortgage Loans, subject to any applicable
provisions of the Indenture, Trust Agreement and this Agreement.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 AMENDMENT.
(a) This Agreement, the Servicing Agreement or the Custodial
Agreement may be amended from time to time by the Depositor, the Securities
Administrator and the Grantor Trustee, without the consent of the Grantor Trust
Certificateholder:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein
or therein, which may be inconsistent with any other provisions herein
or therein or to correct any error,
(iii) to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or desirable to
maintain the qualification of the Grantor Trust as a grantor trust for
U.S. federal income tax purposes at all times that any Grantor Trust
Certificate is outstanding or to avoid or minimize the risk of the
imposition of any tax on the Grantor Trust pursuant to the Code that
would be a claim against the Grantor Trust, provided that the Grantor
Trustee has received an Opinion of Counsel (at no expense to the
Grantor Trustee) to the effect that (A) such action is necessary or
desirable to maintain such qualification or to avoid or minimize the
risk of the imposition of any such tax and (B) such action will not
adversely affect in any material respect the interests of any Grantor
Trust Certificateholder, or
(iv) to make any other provisions with respect to
matters or questions arising under this Agreement, Servicing Agreement
or such Custodial Agreement which shall not be materially inconsistent
with the provisions of this Agreement, provided that such action shall
not, as evidenced by an Opinion of Counsel (at no expense to the
Grantor Trustee), adversely affect in any material respect the
interests of any Grantor Trust Certificateholder.
(b) This Agreement, the Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor, the Securities
Administrator and the Grantor Trustee with the consent of the Holder of the
Grantor Trust Certificate, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
the Servicing Agreement or such Custodial Agreement or of modifying in any
manner the rights of the Holder of the Grantor Trust Certificate; PROVIDED,
HOWEVER, that any amendment must be accompanied by a letter from the Rating
Agencies that such amendment will not result in a downgrading or withdrawal of
the rating then assigned to the Securities.
(c) Notwithstanding any contrary provision of this Agreement,
the Grantor Trustee shall not consent to any amendment to this Agreement, the
Servicing Agreement or any Custodial Agreement unless it shall have first
received an Opinion of Counsel (at no expense to the Grantor Trustee) to the
effect that such amendment or the exercise of any power granted to
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the Securities Administrator, the Depositor or the Grantor Trustee in accordance
with such amendment (i) is authorized or permitted by the Agreement and (ii)
will not result in the imposition of a tax on the Grantor Trust or cause the
Grantor Trust to fail to be classified as a grantor trust under subpart E, part
I of subchapter J of chapter 1 of the Code. The Grantor 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;
provided however, such consent shall not be unreasonably withheld.
(d) Promptly after the execution of any such amendment the
Grantor Trustee shall furnish written notification of the substance of such
amendment to the Grantor Trust Certificateholders. It shall not be necessary for
the consent of the Grantor Trust Certificateholders under this Section 8.01 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 Grantor Trust Certificateholders shall be subject to such reasonable
regulations as the Grantor Trustee may prescribe.
Section 8.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
(a) 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 Depositor and at its expense on direction by the Grantor Trustee
(pursuant to the request of the Holder of the Class A Grantor Trust
Certificate), but only upon direction accompanied by an Opinion of Counsel (at
no expense to the Grantor Trustee) to the effect that such recordation
materially and beneficially affects the interests of the Grantor Trust
Certificateholders.
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 8.03 LIMITATION ON RIGHTS OF GRANTOR TRUST
CERTIFICATEHOLDER.
(a) The death or incapacity of the Grantor Trust
Certificateholder shall not operate to terminate this Agreement or the Grantor
Trust, nor entitle such Grantor Trust 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 Grantor Trust, nor otherwise affect the
rights, obligations and liabilities of any of the parties hereto.
(b) No Grantor Trust Certificateholder shall have any right to
vote (except as expressly provided herein) or in any manner otherwise control
the operation and management of the Grantor Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Grantor Trust Certificate, be construed so as to constitute the Grantor
Trust Certificateholder from time to time as partners or members of an
association; nor
-33-
shall the Grantor Trust Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(c) No Grantor Trust 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 Grantor Trustee a written
notice of default and of the continuance thereof, as hereinbefore provided, and
unless also the Holder of the Grantor Trust Certificate, shall have made written
request to the Grantor Trustee to institute such action, suit or proceeding in
its own name as Grantor Trustee hereunder and shall have offered to the Grantor
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby shall have given its written
consent, and the Grantor 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. For the protection and enforcement of the
provisions of this Section 8.03, each and every Grantor Trust Certificateholder
and the Grantor Trustee shall be entitled to such relief as can be given either
at law or in equity.
Section 8.04 GOVERNING LAW.
This Agreement and the Grantor Trust Certificate shall be
governed by and 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 8.05 NOTICES.
All demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid (except for notices to the Grantor Trustee
which shall be deemed to have been duly given only when received), to (a) in the
case of the Depositor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such
other address as may hereafter be furnished to the Securities Administrator and
the Grantor Trustee in writing by the Depositor, (b) in the case of the
Securities Administrator, at its Corporate Trust Office, or such other address
as may be hereafter furnished to the Depositor and the Grantor Trustee by the
Securities Administrator in writing, (c) in the case of the Grantor Trustee, Xxx
Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or such other address as
may hereafter be furnished to the Depositor and the Securities Administrator in
writing by the Grantor Trustee, (d) in the case of Standard & Poor's, 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other address as may
hereafter be furnished to the Depositor, the Grantor Trustee and the Securities
Administrator in writing by Standard & Poor's and (e) in the case of Moody's, 00
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other address as may
be hereafter furnished to the Depositor, Grantor Trustee and Securities
Administrator by Moody's. Any notice required or permitted to be mailed to the
Grantor Trust Certificateholder shall be given by first class mail, postage
prepaid, at the address of such holder as shown in the Grantor Trust Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Grantor Trust Certificateholder receives such notice.
-34-
Section 8.06 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 Grantor Trust Certificates or the rights of the Holders
thereof.
-35-
IN WITNESS WHEREOF, the Depositor, the Securities
Administrator and the Grantor Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized and their
respective seals, duly attested, to be hereunto affixed, all as of the date and
year first above written.
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
as Depositor
By: /s/ Xxxx Xxxxxxxx
---------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Authorized Signatory
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By: /s/ Xxxxxx Xxxxxx
---------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Grantor Trustee
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 28th day of February, 2005 before me, a notary public
in and for said State, personally appeared __________________, known to me to be
a _________________ of Structured Asset Mortgage Investments II Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 28th day of February, 2005 before me, a notary public
in and for said State, personally appeared Xxxxxx X. Xxxxxx, known to me to be
an Assistant Vice President of Xxxxx Fargo Bank, N.A., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[Notarial Seal]
STATE OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On the 28th day of February, 2005 before me, a notary public
in and for said State, personally appeared ____________________, known to me to
be a _________________ of U.S. Bank National Association, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[Notarial Seal]
EXHIBIT A
FORM OF GRANTOR TRUST CERTIFICATE
CLASS [A][B]
GRANTOR TRUST CERTIFICATE
SERIES 2005-2
THIS GRANTOR TRUST CERTIFICATE IS NOT TRANSFERABLE EXCEPT UPON
SATISFACTION OF THE CONDITIONS IN SECTION 5.02 OF THE GRANTOR TRUST AGREEMENT.
THIS GRANTOR TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH
ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND
IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
AGREEMENT (AS DEFINED HEREIN).
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS (i) THE
GRANTOR TRUSTEE SHALL HAVE RECEIVED AN OPINION OF COUNSEL ACCEPTABLE TO AND IN
FORM AND SUBSTANCE SATISFACTORY TO THE GRANTOR TRUSTEE, THE GRANTOR TRUST
CERTIFICATE REGISTRAR AND THE DEPOSITOR TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS GRANTOR TRUST CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW,
WILL NOT CONSTITUTE OR RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY
SUBSEQUENT ENACTMENTS), AND WILL NOT SUBJECT THE GRANTOR TRUSTEE, THE DEPOSITOR
OR THE GRANTOR TRUST CERTIFICATE REGISTRAR TO ANY OBLIGATION OR LIABILITY
(INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE)
IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL
NOT BE AN EXPENSE OF THE GRANTOR TRUSTEE, THE DEPOSITOR OR THE GRANTOR TRUST
CERTIFICATE REGISTRAR OR (ii) THE PROSPECTIVE TRANSFEREE SHALL HAVE PROVIDED TO
THE GRANTOR TRUSTEE, THE DEPOSITOR AND THE GRANTOR TRUST CERTIFICATE REGISTRAR A
CERTIFICATION, WHICH SUCH PARTIES MAY RELY UPON WITHOUT FURTHER INQUIRY OR
INVESTIGATION, OR SUCH OTHER CERTIFICATIONS AS THE GRANTOR TRUSTEE MAY DEEM
DESIRABLE OR NECESSARY IN ORDER TO ESTABLISH THAT SUCH TRANSFEREE OR THE PERSON
IN WHOSE NAME SUCH REGISTRATION IS REQUESTED IS NOT AN EMPLOYEE BENEFIT
PLAN OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR
SECTION 4975 OF THE CODE, OR ANY PERSON (INCLUDING AN INVESTMENT MANAGER, A
NAMED FIDUCIARY OR A GRANTOR TRUSTEE OF ANY SUCH PLAN) WHO IS USING "PLAN
ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION; PROVIDED, HOWEVER, THAT
SUCH OPINION OF COUNSEL OR CERTIFICATION WILL NOT BE REQUIRED IN CONNECTION WITH
THE INITIAL TRANSFERS OF THIS GRANTOR TRUST CERTIFICATE BY THE DEPOSITOR OR ANY
AFFILIATE THEREOF TO AN AFFILIATE OF THE DEPOSITOR OR TO THE ISSUER OR THE
INDENTURE TRUSTEE AS PLEDGEE OF THE ISSUER (IN WHICH CASE, SUCH TRANSFEREE SHALL
HAVE DEEMED TO HAVE REPRESENTED THAT SUCH TRANSFEREE IS NOT A PLAN OR A PERSON
INVESTING "PLAN ASSETS" OF ANY PLAN) AND THE GRANTOR TRUSTEE AND THE GRANTOR
TRUST CERTIFICATE REGISTRAR SHALL BE ENTITLED TO CONCLUSIVELY RELY UPON A
REPRESENTATION (WHICH, UPON THE REQUEST OF THE GRANTOR TRUSTEE OR THE GRANTOR
TRUST CERTIFICATE REGISTRAR, SHALL BE A WRITTEN REPRESENTATION) FROM THE
DEPOSITOR OF THE STATUS OF SUCH TRANSFEREE AS AN AFFILIATE OF THE DEPOSITOR.
THIS GRANTOR TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST
IN OR OBLIGATION OF THE SELLER, THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE
GRANTOR TRUSTEE, OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY
PROVIDED IN THE AGREEMENT OR THE BASIC DOCUMENTS.
Class [A][B]
Certificate No. 1
Cut-off Date: Certificate Percentage Interest of
February 1, 2005 this Grantor Trust Certificate: [__]%
First Payment Date:
[______ __], 2005
CLASS [A][B]
GRANTOR TRUST CERTIFICATE
SERIES 2005-2
evidencing an undivided interest in the Grantor Trust, the
property of which consists primarily of the Mortgage Loans,
formed and sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement referred to below).
This Grantor Trust Certificate is payable solely from the assets of the
Grantor Trust, and does not represent an obligation of or interest in the
Depositor, the Seller, the Securities Administrator, the Master Servicer, the
Grantor Trustee or any of their affiliates. Neither this Grantor Trust
Certificate nor any of the Mortgage Loans is guaranteed or insured by any
governmental agency or instrumentality or by the Depositor, the Seller, the
Securities Administrator, the Grantor Trustee or any of their affiliates. None
of the Depositor, the Seller, the Securities Administrator, the Grantor Trustee
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Grantor Trust Certificate.
This certifies that [ ] [For Class A Only: , as Indenture Trustee under
the Indenture, dated February 28, 2005, relating to Bear Xxxxxxx ARM Trust
2005-2,] is the registered owner of the Certificate Percentage Interest
evidenced by this Grantor Trust Certificate (as set forth on the face hereof) in
certain distributions with respect to the Grantor Trust, consisting primarily of
the Mortgage Loans, formed and sold by Structured Asset Mortgage Investments II
Inc. The Grantor Trust was created pursuant to a Grantor Trust Agreement dated
as specified above (as amended and supplemented from time to time, the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as securities
administrator and U.S. Bank National Association, as grantor trustee (the
"Grantor Trustee," which term includes any successor entity under the
Agreement), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Grantor Trust
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Grantor Trust
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
[For Class A Only: the 25th day of each month or, if such 25th day is not a
Business Day, the Business Day immediately following, commencing on the first
Payment Date specified above] [For Class B Only: the third Business Day of each
month, commencing on April 5, 2005] (each, a "Payment Date"), to the Person in
whose name this Grantor Trust Certificate is registered at the close of business
on the last day (or if such last day is not a Business Day, the Business Day
immediately preceding such last day) of the month immediately preceding the
month of such Payment Date (each, a "Record Date"), in an amount equal to [For
Class A only: the sum of the Interest Funds and the Principal Funds] [For Class
B only: the Class B Grantor Trust Certificate Payment Amount]. Distributions on
this Grantor Trust Certificate will be made as provided in the Agreement by the
Securities Administrator by wire transfer or check mailed to the Grantor Trust
Certificateholder of record in the Grantor Trust Certificate Register without
the presentation or surrender of this Grantor Trust Certificate or the making of
any notation hereon.
[The Class B Grantor Trust Certificate evidences the right to the Class
B Grantor Trust Certificate Payment Amount as defined in the Agreement. The
Holder of such Grantor Trust Certificates will be required to remit the amount
of any losses resulting from such investments to the Securities Administrator as
set forth in the Agreement.]
Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Grantor Trust Certificate will be made
after due notice by the Grantor Trustee of the pendency of such distribution and
only upon presentation and surrender of this Grantor Trust Certificate at the
Corporate Trust Office of the Grantor Trust Certificate Registrar.
No transfer, sale, pledge or other disposition of this Grantor Trust
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 "1933 Act"), and any applicable state securities laws
or is made in accordance with said Act and laws. Except as otherwise provided in
Section 5.02 of the Agreement, in the event that a transfer of this Grantor
Trust Certificate is to be made either (i)(A) the Grantor Trustee shall require
a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Grantor Trustee and the Depositor that such transfer may 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 Grantor Trustee, the
Depositor or the Grantor Trust Certificate Registrar; provided that such Opinion
of Counsel will not be required in connection with the initial transfers of this
Grantor Trust Certificate by the Depositor or any Affiliate thereof to an
Affiliate of the Depositor or to the Issuer or the Indenture Trustee as pledgee
of the Issuer and (B) the Grantor Trustee shall require the transferee to
execute a representation letter, and the Grantor Trustee shall require the
transferor to execute a representation letter, each acceptable to and in form
and substance satisfactory to the Depositor and the Grantor Trustee certifying
to the Depositor and the Grantor Trustee the facts surrounding such transfer,
which representation letters shall not be an expense of the Grantor Trustee, the
Depositor or the Grantor Trust Certificate Registrar; provided, however, that
such representation letters will not be required in connection with any
transfers of any such Grantor Trust Certificate by the Depositor or any
Affiliate thereof to an Affiliate of the Depositor or to the Issuer or the
Indenture Trustee as pledgee of the Issuer, and the Grantor Trustee shall be
entitled to conclusively rely upon a representation (which, upon the request of
the Grantor Trustee, shall be
written representation) from the Depositor of the status, of such transferee as
an Affiliate of the Depositor or (ii) the prospective transferee of this Grantor
Trust Certificate shall be required to provide the Grantor Trustee, the
Depositor and the Grantor Trust Certificate Registrar with an investment letter,
which investment letter shall not be an expense of the Grantor Trustee, the
Depositor, or the Grantor Trust Certificate Registrar, and which investment
letter states that, among other things, such transferee (A) is a "qualified
institutional buyer" as defined under Rule 144A, acting for its own account or
the accounts of other "qualified institutional buyers" as defined under Rule
144A, and (B) is aware that the proposed transferor intends to rely on the
exemption from registration requirements under the 1933 Act provided by Rule
144A. The Holder of this Grantor Trust Certificate desiring to effect any such
transfer, sale, pledge or other disposition shall, and does hereby agree to,
indemnify the Grantor Trustee, the Depositor and the Grantor Trust Certificate
Registrar against any liability that may result if the transfer, sale, pledge or
other disposition is not so exempt or is not made in accordance with such
federal and state laws and the Agreement.
In connection with any such transfer, either (i) the Grantor Trustee
shall require an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Grantor Trustee and the Depositor to the effect that the
purchase or holding of this Grantor Trust Certificate is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under Section 406 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), and will not subject the Grantor
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Agreement, which Opinion of Counsel shall
not be an expense of the Grantor Trustee, the Depositor or the Grantor Trust
Certificate Registrar or (ii) the prospective transferee shall be required to
provide the Grantor Trustee, the Depositor and the Grantor Trust Certificate
Registrar with a certification, which the Grantor Trustee and the Grantor Trust
Certificate Registrar may rely upon without further inquiry or investigation, or
such other certifications as the Grantor Trustee or the Grantor Trust
Certificate Registrar may deem desirable or necessary in order to establish that
such transferee or the Person in whose name such registration is requested is
not an employee benefit plan or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code, or any Person (including an
investment manager, a named fiduciary or a Grantor Trustee of any such plan) who
is using "plan assets" of any such plan to effect such acquisition; PROVIDED,
HOWEVER, that such Opinion of Counsel or certification will not be required in
connection with the initial transfers of this Grantor Trust Certificate by the
Depositor or any Affiliate thereof to an Affiliate of the Depositor or to the
Issuer or the Indenture Trustee as pledgee of the Issuer (in which case, such
transferee shall have deemed to have represented that such transferee is not a
Plan or a Person investing "plan assets" of any Plan) and the Grantor Trustee
and the Grantor Trust Certificate Registrar shall be entitled to conclusively
rely upon a written representation from the Depositor of the status of such
transferee as an Affiliate of the Depositor.
The Agreement permits the amendment thereof as specified in the
Agreement.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Grantor Trust Certificate is registerable in the
Grantor Trust Certificate Register upon surrender of this Grantor Trust
Certificate for registration of transfer at the Corporate Trust
Office of the Grantor Trust Certificate Registrar, accompanied by a written
instrument of transfer in form satisfactory to the Grantor Trustee duly executed
by the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one new Grantor Trust Certificate of authorized denomination
evidencing the same aggregate Certificate Percentage Interest will be issued to
the designated transferee. The initial Grantor Trust Certificate Registrar
appointed under the Agreement is the Securities Administrator.
No service charge will be made for any such registration of transfer or
exchange, but the Grantor Trustee or the Grantor Trust Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Grantor Trustee, the Grantor Trust Certificate Registrar and any
agent of the Grantor Trustee or the Grantor Trust Certificate Registrar may
treat the Person in whose name this Grantor Trust Certificate is registered as
the owner hereof for all purposes, and none of the Grantor Trustee, the Grantor
Trust Certificate Registrar or any such agent shall be affected by any notice to
the contrary.
This Grantor Trust Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
The obligations created by the Agreement in respect of the Grantor
Trust Certificate and the Grantor Trust created thereby shall terminate upon the
last action required to be taken by the Grantor Trustee on the Final Scheduled
Payment Date pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation of the last Mortgage Loan remaining in the Grantor
Trust or (ii) the purchase of all of the Mortgage Loans as specified in the
Agreement.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Grantor Trustee, by manual signature,
this Grantor Trust Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Grantor Trustee has caused this Grantor Trust
Certificate to be duly executed.
by U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Grantor Trustee
Dated: February 28, 2005 ____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A][B] Grantor Trust Certificates referred to in the
within mentioned Agreement.
XXXXX FARGO BANK, N.A.,
not in its individual capacity
but solely as Grantor Trust Certificate Registrar
By:____________________________________________
Authorized Signatory
or_____________________________________________,
as Authenticating Agent of the Grantor Trust
By: ___________________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Grantor Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
to transfer said Grantor Trust Certificate on the books of the Grantor Trust
Certificate Registrar, with full power of substitution in the premises.
Dated:
_________________________________________
Signature Guaranteed:
____________________________*/
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Grantor Trust Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock Exchange or
a commercial bank or trust company.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Securities Administrator:
Distribution shall be made by wire transfer in immediately available
funds to ___________________________________________________ for the account of
________________________________________, account number ______________, or, if
mailed by check, to ___________________________________________________________.
Applicable statements should be mailed to_____________________________.
_______________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
EXHIBIT B
MORTGAGE LOAN SCHEDULE
(Available Upon Request)
B-1
EXHIBIT C
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
------------------------------------------------
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (the "Assignment
and Assumption Agreement"), dated as of February 28, 2005, by EMC Mortgage
Corporation, a Delaware corporation (the "Assignor"), U.S. Bank National
Association, not in its individual capacity but solely as Grantor Trustee for
the holders of Bear Xxxxxxx ARM Trust, Grantor Trust Certificates, Series 2005-2
(the "Assignee"), and Xxxxx Fargo Bank, N.A. (the "Company").
Whereas the Assignor purchased certain mortgage loans listed on EXHIBIT
A attached hereto (the "Mortgage Loans") from the Company pursuant to that
certain Master Mortgage Loan Purchase Agreement dated as of October 1, 2004 (the
"Mortgage Loan Purchase Agreement"), by and between the Company and the
Assignor, and that certain Assignment and Conveyance Agreement dated as of
February 23, 2005 between the Company and the Assignor; and
Whereas the Assignor and the Company entered into that certain Master
Seller's Warranties and Servicing Agreement dated as of October 1, 2004 (the
"Warranties and Servicing Agreement"), pursuant to which the Company agreed to
service the Mortgage Loans.
In consideration of the mutual promises and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Mortgage Loans now serviced by the Company for the Assignor and its successors
and assigns pursuant to the Warranties and Servicing Agreement shall be subject
to the terms of this Assignment and Assumption Agreement. Capitalized terms used
herein but not otherwise defined shall have the meanings assigned to them in the
Warranties and Servicing Agreement.
ASSIGNMENT AND ASSUMPTION
1. Except as expressly provided for herein, the Assignor hereby grants,
transfers and assigns to the Assignee all of its right, title and interest in,
to and under (a) the Mortgage Loans and (b) the Warranties and Servicing
Agreement with respect to the Mortgage Loans; provided, however, that the
Assignor is not assigning to the Assignee any of its right, title and interest,
to and under the Warranties and Servicing Agreement with respect to any mortgage
loan other than the Mortgage Loans listed on EXHIBIT A. Notwithstanding anything
to the contrary contained herein, the Assignor specifically reserves and does
not assign to the Assignee any right, title and interest in, to or under the
representations and warranties contained in Section 3.02 of the Warranties and
Servicing Agreement and the Assignor is retaining the right to enforce the
representations and warranties set forth in those sections against the Company.
Except as is otherwise expressly provided herein, the Assignor makes no
representations, warranties or covenants to the Assignee and the Assignee
acknowledges that the Assignor has no obligations to the Assignee under the
terms of the Warranties and Servicing Agreement or otherwise relating
to the transaction contemplated herein (including, but not limited to, any
obligation to indemnify the Assignee).
REPRESENTATIONS WARRANTIES AND COVENANTS
2. The Assignor warrants and represents to, and covenants with, the
Assignee that as of the date hereof:
(a) Attached hereto as EXHIBIT B is a true and accurate
copy of the Warranties and Servicing Agreement, which
agreement is in full force and effect as of the date
hereof and the provisions of which have not been
waived, amended or modified in any respect, nor has
any notice of termination been given thereunder;
(b) The Assignor is the lawful owner of the Mortgage
Loans with full right to transfer the Mortgage Loans
and any and all of its interests, rights and
obligations under the Warranties and Servicing
Agreement as they relate to the Mortgage Loans, free
and clear from any and all claims and encumbrances;
and upon the transfer of the Mortgage Loans to the
Assignee as contemplated herein, Assignee shall have
good title to each and every Mortgage Loan, as well
as any and all of the Assignee's interests, rights
and obligations under the Warranties and Servicing
Agreement as they relate to the Mortgage Loans, free
and clear of any and all liens, claims and
encumbrances;
(c) There are no offsets, counterclaims or other defenses
available to the Company with respect to the Mortgage
Loans or the Warranties and Servicing Agreement;
(d) The Assignor has no knowledge of, and has not
received notice of, any waivers under, or any
modification of, any Mortgage Loan;
(e) The Assignor is duly organized, validly existing and
in good standing under the laws of the jurisdiction
of its incorporation, and has all requisite power and
authority to acquire, own and sell the Mortgage
Loans;
(f) The Assignor has full corporate power and authority
to execute, deliver and perform its obligations under
this Assignment and Assumption Agreement, and to
consummate the transactions set forth herein. The
consummation of the transactions contemplated by this
Assignment and Assumption Agreement is in the
ordinary course of the Assignor's business and will
not conflict with, or result in a breach of, any of
the terms, conditions or provisions of the Assignor's
charter or by-laws or any legal restriction, or any
material agreement or instrument to which the
Assignor is now a party or by which it is bound, or
result in the violation of any law, rule, regulation,
order, judgment or decree to which Assignor or its
property is subject. The execution, delivery and
performance by the Assignor of this Assignment and
Assumption Agreement and the
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consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary
corporate action on part of the Assignor. This
Assignment and Assumption Agreement has been duly
executed and delivered by the Assignor and, upon the
due authorization, execution and delivery by the
Assignee and the Company, will constitute the valid
and legally binding obligation of the Assignor
enforceable against the Assignor in accordance with
its terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or
other similar laws now or hereafter in effect
relating to creditors' rights generally, and by
general principles of equity regardless of whether
enforceability is considered in a proceeding in
equity or at law;
(g) No consent, approval, order or authorization of, or
declaration, filing or registration with, any
governmental entity is required to be obtained or
made by the Assignor in connection with the
execution, delivery or performance by the Assignor of
this Assignment and Assumption Agreement, or the
consummation by it of the transactions contemplated
hereby. Neither the Assignor nor anyone acting on its
behalf has offered, transferred, pledged, sold or
otherwise disposed of the Mortgage Loans or any
interest in the Mortgage Loans, or solicited any
offer to buy or accept a transfer, pledge or other
disposition of the Mortgage Loans, or any interest in
the Mortgage Loans or otherwise approached or
negotiated with respect to the Mortgage Loans, or any
interest in the Mortgage Loans 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 Mortgage Loans under the
Securities Act of 1933, as amended (the "1933 Act")
or which would render the disposition of the Mortgage
Loans a violation of Section 5 of the 1933 Act or
require registration pursuant thereto; and
(h) The Assignor has received from the Company, and has
delivered to the Assignee, all documents required to
be delivered to the Assignor by the Company prior to
the date hereof pursuant to the Warranties and
Servicing Agreement with respect to the Mortgage
Loans and has not received, and has not requested
from the Company, any additional documents.
3. The Assignee warrants and represents to, and covenants with,
Assignor and Company as of the date hereof:
(a) The Assignee is duly organized, validly existing and
in good standing under the laws of the jurisdiction
of its organization and has all requisite power and
authority to hold the Mortgage Loans on behalf of the
holders of Bear Xxxxxxx ARM Trust, Grantor Trust
Certificates, Series 2005-2;
(b) The Assignee has full corporate power and authority
to execute, deliver and perform under this Assignment
and Assumption Agreement, and to consummate the
transactions set forth herein. The consummation of
the
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transactions contemplated by this Assignment and
Assumption Agreement is in the ordinary course of the
Assignee's business and will not conflict with, or
result in a breach of, any of the terms, conditions
or provisions of the Assignee's charter or by-laws or
any legal restriction, or any material agreement or
instrument to which the Assignee is now a party or by
which it is bound, or result in the violation of any
law, rule, regulation, order, judgment or decree to
which the Assignee or its property is subject. The
execution, delivery and performance by the Assignee
of this Assignment and Assumption Agreement and the
consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary
corporate action on part of the Assignee. This
Assignment and Assumption Agreement has been duly
executed and delivered by the Assignee and, upon the
due authorization, execution and delivery by the
Assignor and the Company, will constitute the valid
and legally binding obligation of Assignee
enforceable against the Assignee in accordance with
its terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or
other similar laws now or hereafter in effect
relating to creditors' rights generally, and by
general principles of equity regardless of whether
enforceability is considered in a proceeding in
equity or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any
governmental entity is required to be obtained or
made by the Assignee in connection with the
execution, delivery or performance by the Assignee of
this Assignment and Assumption Agreement, or the
consummation by it of the transactions contemplated
hereby; and
(d) The Assignee assumes all of the rights of the
Purchaser under the Warranties and Servicing
Agreement with respect to the Mortgage Loans other
than the right to enforce the obligations of the
Company under the Warranties and Servicing Agreement.
4. The Company warrants and represents to, and covenants with, the
Assignor and the Assignee as of the date hereof:
(a) Attached hereto as Exhibit B is a true and accurate
copy of the Warranties and Servicing Agreement, which
agreement is in full force and effect as of the date
hereof and the provisions of which have not been
waived, amended or modified in any respect, nor has
any notice of termination been given thereunder;
(b) The Company is a national banking association duly
organized, validly existing and in good standing
under the laws of the United States, and has all
requisite power and authority to service the Mortgage
Loans and otherwise to perform its obligations under
the Warranties and Servicing Agreement;
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(c) The Company has full power and authority to execute,
deliver and perform its obligations under this
Assignment and Assumption Agreement, and to
consummate the transactions set forth herein. The
consummation of the transactions contemplated by this
Assignment and Assumption Agreement is in the
ordinary course of the Company's business and will
not conflict with, or result in a breach of, any of
the terms, conditions or provisions of the Company's
charter or by-laws or any legal restriction, or any
material agreement or instrument to which the Company
is now a party or by which it is bound, or result in
the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its
property is subject. The execution, delivery and
performance by the Company of this Assignment and
Assumption Agreement and the consummation by it of
the transactions contemplated hereby, have been duly
authorized by all necessary action on part of the
Company. This Assignment and Assumption Agreement has
been duly executed and delivered by the Company, and,
upon the due authorization, execution and delivery by
Assignor and Assignee, will constitute the valid and
legally binding obligation of Company, enforceable
against the Company in accordance with its terms
except as enforceability may be limited by the effect
of insolvency, liquidation, conservatorship and other
similar laws administered by the Federal Deposit
Insurance Corporation affecting the enforcement of
contract obligations of insured banks and subject to
the application of the rules of equity;
(d) No consent, approval, order or authorization of, or
declaration, filing or registration with, any
governmental entity is required to be obtained or
made by the Company in connection with the execution,
delivery or performance by the Company of this
Assignment and Assumption Agreement, or the
consummation by it of the transactions contemplated
hereby;
(e) The Company shall establish a Custodial Account and
an Escrow Account under the Warranties and Servicing
Agreement in favor of the Assignee with respect to
the Mortgage Loans separate from the Custodial
Account and Escrow Account previously established
under the Warranties and Servicing Agreement in favor
of Assignor; and
(f) Pursuant to Section 9.01 of the Warranties and
Servicing Agreement, the Company hereby restates the
representations and warranties set forth in Sections
3.01 of the Warranties and Servicing Agreement with
respect to the Company as of the date hereof.
5. Assignor hereby agrees to indemnify and hold the Assignee (and its
successors and assigns) harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that Assignee (and its successors and assigns) may
sustain in any way related to any breach of the representations or
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warranties of Assignor set forth in this Assignment and Assumption Agreement or
the breach of any covenant or condition contained herein.
6. The Company hereby acknowledges that Xxxxx Fargo Bank, N.A. and any
successor thereto has been appointed as master servicer of the Mortgage Loans
pursuant to the Servicing Agreement dated as of February 28, 2005 (the
"Servicing Agreement"), among the Assignee, Structured Asset Mortgage
Investments II Inc., as depositor (the "Depositor"), and Xxxxx Fargo Bank, N.A.,
as master servicer (in such capacity, the "Master Servicer"), and therefore has
the right to enforce all obligations of the Company under the Warranties and
Servicing Agreement. Such right will include, without limitation, the right to
receive all remittances required to be made by the Company under the Warranties
and Servicing Agreement, the right to receive all monthly reports and other data
required to be delivered by the Company under the Warranties and Servicing
Agreement, the right to examine the books and records of the Company,
indemnification rights, and the right to exercise certain rights of consent and
approval relating to actions taken by the Company. The Company hereby
acknowledges that the Master Servicer shall be obligated to notify the Grantor
Trustee in accordance with the Servicing Agreement upon the discovery of an
event of default by the Company of its obligations under the Warranties and
Servicing Agreement and the Grantor Trustee shall have the right to terminate
the Company as servicer under the Warranties and Servicing Agreement upon the
occurrence of such an event of default.
7. Notwithstanding any term hereof to the contrary, the execution and
delivery of this Assignment and Assumption Agreement by the Assignee is solely
in its capacity as trustee for Bear Xxxxxxx ARM Trust, Grantor Trust
Certificates, Series 2005-2 and not individually, and any recourse against the
Assignee in respect of any obligations it may have under or pursuant to the
terms of this Assignment and Assumption Agreement shall be limited solely to the
assets it may hold as trustee of Bear Xxxxxxx ARM Trust, Grantor Trust
Certificates, Series 2005-2.
RECOGNITION OF ASSIGNEE
8. From and after the date hereof, Company shall recognize Assignee as
owner of the Mortgage Loans and will service the Mortgage Loans for Assignee as
if Assignee and Company had entered into a separate servicing agreement for the
servicing of the Mortgage Loans in the form of the Warranties and Servicing
Agreement (as modified herein), the terms of which are incorporated herein by
reference. The Company acknowledges and consents to the assignment by the
Assignor to the Assignee of all of the Assignor's rights against the Company
pursuant to the Warranties and Servicing Agreement, except as is otherwise
expressly provided herein, and to the enforcement or exercise of any such right
or remedy against the Company pursuant to the Warranties and Servicing Agreement
as assigned by the Assignor. It is the intention of Assignor, Company and
Assignee that this Assignment and Assumption Agreement shall be binding upon and
for the benefit of the respective successors and assigns of the parties hereto.
Neither Company nor Assignor shall amend or agree to amend, modify, waive, or
otherwise alter any of the terms or provisions of the Warranties and Servicing
Agreement which amendment, modification, waiver or other alteration would in any
way affect the Mortgage Loans without the prior written consent of Assignee.
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MODIFICATION OF THE WARRANTIES AND SERVICING AGREEMENT
9. The Company and Assignor hereby amend the Warranties and Servicing
Agreement as follows:
(a) The following definitions shall be added to Article I of the
Warranties and Servicing Agreement:
ASSIGNEE: U.S. Bank National Association, not in its individual
capacity but solely as Grantor Trustee for the holders of Bear Xxxxxxx
ARM Trust, Grantor Trust Certificates, Series 2005-2.
CERTIFICATEHOLDER: The beneficial holder of Owner Trust Certificates
issued pursuant to the Amended and Restated Trust Agreement, dated as
of February 28, 2005, between Structured Asset Mortgage Investments II
Inc., as depositor, Wilmington Trust Company, as owner trustee and
Xxxxx Fargo Bank, N.A., not in its individual capacity, but solely in
its capacity as securities administrator, certificate registrar and
certificate paying agent.
MASTER SERVICER: Xxxxx Fargo Bank, N.A. or any successor thereto.
NONRECOVERABLE ADVANCE: Any advance previously made by the Company
pursuant to Section 5.03 or any Servicing Advance which, in the good
faith judgment of the Company, may not be ultimately recoverable by the
Company from Liquidation Proceeds or otherwise. The determination by
the Company that it has made a Nonrecoverable Advance, shall be
evidenced by an Officer's Certificate of the Company delivered to the
Purchaser and the Master Servicer and detailing the reasons for such
determination.
SECURITIES ADMINISTRATOR: Xxxxx Fargo Bank, N.A.
(b) Section 3.02(gg) is deleted in its entirety and replaced with the
following:
"(gg) SERVICEMEMBERS CIVIL RELIEF ACT.
The Mortgagor has not notified the Company, and the Company has no
knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers Civil Relief Act;"
(c) The following is added as clause (x) to Section 4.05 of the
Warranties and Servicing Agreement:
"(x) to make payments to the Certificateholder in the amounts and in
the manner provided for in Section 4.02."
(d) The first sentence of the second paragraph of Section 4.01 of the
Warranties and Servicing Agreement shall be modified by inserting the words "or
capitalize delinquent interest or the amounts of any Servicing Advances" after
the words "(except for actual payments of principal)".
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(e) The second and third sentences of the first paragraph of Section
4.02 of the Warranties and Servicing Agreement shall be modified by deleting the
words "commence foreclosure proceedings, the Company shall notify the Purchaser
in writing of the Company's intention to do so, and the Company shall not
commence foreclosure proceedings if the Purchaser objects to such action within
three (3) Business Days of receiving such notice. In the event the Purchaser"
and replacing them with "provide written notice to the Master Servicer that the
Company intends to proceed with foreclosure. In the event the Certificateholder,
either directly or through the Master Servicer".
(f) The following is added after the third paragraph of Section 4.02 of
the Warranties and Servicing Agreement:
Notwithstanding anything in this Agreement to the contrary,
for so long as the Master Servicer has not notified the Company that
the Certificateholder is no longer entitled to the rights described in
this Section 4.02:
(a) The Company shall not commence foreclosure proceedings with respect
to a Mortgage Loan unless (i) no later than five Business Days prior to
its commencement of such foreclosure proceedings, it notifies the
Master Servicer of its intention to do so, and (ii) the
Certificateholder, either directly or through the Master Servicer, does
not, within such five-Business-Day period, affirmatively object to such
action.
(b) In the event that the Company determines not to proceed with
foreclosure proceedings with respect to a Mortgage Loan that becomes 60
days' or more delinquent and the Company has determined that it is
unable to collect payments due under such Mortgage Loan in accordance
with Accepted Servicing Practices, the Company shall, prior to taking
any action with respect to such Mortgage Loan, promptly provide the
Master Servicer with notice of such determination and a description of
such other action as it intends to take with respect to such Mortgage
Loan; PROVIDED, that the Company shall not be permitted to proceed with
any such action unless the Certificateholder, either directly or
through the Master Servicer, does not, within five Business Days
following such notice, affirmatively object to the Company taking such
action.
(c) If the Certificateholder timely and affirmatively objects to an
action or contemplated action of the Company pursuant to either (a) or
(b) above, then the Certificateholder shall instruct the Master
Servicer to hire, at the Certificateholder's sole cost and expense,
three appraisal firms, selected by the Master Servicer in its sole and
absolute discretion from the list of appraisal firms attached as
Exhibit C, to compute the fair value of the Mortgaged Property relating
to the related Mortgage Loan utilizing the Xxxxxx Xxx Form 2055
Exterior-Only Inspection Residential Appraisal Report (each such
appraisal-firm computation, a "Fair Value Price"), in each case (other
than as set forth in (d) below) no later than 30 days from the date of
such Certificateholder objection. If the Master Servicer shall have
received three Fair Value Prices by the end of such 30-day period, then
the Certificateholder shall, no later than 5 days after the
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expiration of such 30-day period, purchase such Mortgage Loan and the
related Mortgaged Property at an amount equal to the sum of (i) accrued
and unpaid interest on such Mortgage Loan as of such purchase date
("Accrued Interest") and (ii) the highest of such three Fair Value
Prices respectively determined by such appraisal firms, and shall
promptly delivery such amount to the Company for deposit into the
Custodial Account. All costs relating to the computation of the related
Fair Value Prices shall be for the account of the Certificateholder and
shall be paid by the Certificateholder at the time of such Mortgage
Loan and the related Mortgaged Property are purchased by the
Certificateholder.
(d) If the Master Servicer shall not have received three Fair Value
Prices at the end of the 30-day period set forth in (c) above, then:
(i) The Master Servicer shall obtain such three Fair Value
Prices no later than 15 days after the end of such 30-day period.
(ii) If the Master Servicer shall have only received two Fair
Value Prices at the end of such 15-day extension period, then the
Master Servicer will determine, in its sole and absolute discretion,
the fair value of the Mortgaged Property relating to such Mortgage
Loan, related Insurance Proceeds and the current delinquency status of
such Mortgage Loan) (such fair value, the "Master Servicer Fair Value
Price"), and the Certificateholder shall, no later than 5 days after
the expiration of such 15-day extension period, purchase (and deliver
to the Company the purchase price for) such Mortgage Loan and the
related Mortgaged Property at an amount equal to the sum of (A) Accrued
Interest thereon and (B) the higher of (1) the highest of such two Fair
Value Prices determined by such appraisal firms and (2) the Master
Servicer Fair Value Price.
(iii) If the Master Servicer shall have received only one Fair
Value Price at the end of such 15-day extension period, then the Master
Servicer will determine, in its sole and absolute discretion, the
Master Servicer Fair Value Price of the Mortgaged Property related to
such Mortgage Loan, and:
(A) if such Master Servicer Fair Value Price is equal
to or greater than the unpaid principal balance of the related
Mortgage Loan as of such date (the "Unpaid Principal
Balance"), then the Certificateholder shall, no later than 5
days after the expiration of such 15-day extension period,
purchase (and deliver to the Company the purchase price for)
such Mortgage Loan and the related Mortgaged Property at an
amount equal to the sum of (1) Accrued Interest thereon and
(2) such Master Servicer Fair Value Price; and
(B) if such Master Servicer Fair Value Price is less
than the related Unpaid Principal Balance, then the
Certificateholder shall, no later than 5 days after the
expiration of such 15-day extension period, purchase (and
deliver to the Company the purchase price for) such Mortgage
Loan and the related Mortgaged Property at an amount equal to
the sum of (1)
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Accrued Interest thereon and (2) the related Unpaid Principal
Balance (such sum, the "Preliminary Purchase Price");
provided, that the provisions of clause (d)(iv) shall
thereafter apply.
(iv) Following the payment by the Certificateholder of the
Preliminary Purchase Price, the Master Servicer shall continue to hire
appraisal firms at the Certificateholder's sole cost and expense to
compute the Fair Value Price of the Mortgaged Property related to such
Mortgage Loan, and at such time as two such Fair Value Prices shall
have been obtained:
(A) if the sum of (1) Accrued Interest on the related
Mortgage Loan and (2) the higher of (x) the highest of such
two Fair Value Prices determined by such appraisal firms and
(y) the Master Servicers Fair Value Price of the Mortgaged
Property related to such Mortgage Loan (such sum, the "Revised
Fair Value Price") is greater than such Preliminary Purchase
Price, then the Master Servicer shall promptly notify the
Certificateholder and the Company of such calculation, and the
Certificateholder shall, no later than 5 days after such
notice, remit to the Company, for deposit into the Custodial
Account, the difference between such Revised Fair Value Price
and such Preliminary Purchase Price; and
(B) if such Preliminary Purchase Price is greater
than such Revised Fair Value Price, then the Master Servicer
shall promptly notify the Certificateholder and the Company of
such calculation, and the Company shall, no later than 5 days
after such notice, remit to the Certificateholder, from funds
then on deposit in the Custodial Account, the difference
between such Preliminary Purchase Price and such Revised Fair
Value Price.
(e) Notwithstanding anything herein to the contrary, the
Certificateholder shall not be entitled to any of its rights
set forth herein with respect to a Mortgage Loan following its
failure to purchase such Mortgage Loan and the related
Mortgaged Property, at the related purchase price set forth in
this Section 4.02 within the timeframe set forth in this
Section 4.02 following the Certificateholder's objection to an
action of the Company, and the Company shall provide the
Master Servicer written notice of such failure.
(f) Any notice, confirmation, instruction or objection pursuant to
paragraphs (a), (b), (c) and (d) above may be delivered via
facsimile or other written or electronic communication as the
parties hereto and the Certificateholder may agree to from
time to time.
(g) For the avoidance of doubt, the Certificateholder's rights set
forth in this Section 4.02 are intended to provide the
Certificateholder, for so long as it owns 100% of the
Privately Offered Notes and the Trust Certificates (each as
defined in Appendix A of the Indenture) and has not forfeited
its right
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under this Section 4.02 as set forth in clause (e) above, with
the unilateral right to control foreclosure decisions in
respect of delinquent and defaulted Mortgage Loans, and
certain exclusive purchase rights so as to maximize the
recovery value on delinquent and defaulted Mortgage Loans.
(h) To the extent that the Certificateholder purchases any
Mortgage Loan pursuant to this Section 4.02, the Company will
continue to service such Mortgage Loan in accordance with this
Agreement. The parties acknowledge that, in such event, the
Master Servicer will have no duty or responsibility to master
service any such Mortgage Loan."
(g) The following is added as the second paragraph of Section 6.07 of
the Warranties and Servicing Agreement:
"Notwithstanding anything in this Agreement to the contrary, the
Company (a) shall not permit any modification with respect to any Mortgage Loan
that would change the Mortgage Interest Rate and (b) shall not (unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Company, reasonably foreseeable) make or permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both effect an exchange or reissuance of such Mortgage Loan under Section 1001
of the Code (or Treasury regulations promulgated thereunder)."
(h) The definition of "Reconstitution Date" shall be deleted in its
entirety and replaced with the following:
"The date on which any or all of the Mortgage Loans serviced under this
Agreement may be removed from this Agreement and reconstituted as part of a
Pass-Through Transfer, Agency Sale or Whole Loan Transfer pursuant to Section
9.01 hereof. The Reconstitution Date shall be such date which the Purchaser
shall designate. On such date, the Mortgage Loans transferred may cease to be
covered by this Agreement and the Company's servicing responsibilities may cease
under this Agreement with respect to the related transferred Mortgage Loans,
unless otherwise agreed to between the parties."
(i) The following is added as Section 10.01(ix) of the Warranties and
Servicing Agreement:
(ix) failure by the Company to duly perform, within the
required time period, its obligations under Sections 6.04, 6.05, or 9.01(e)
which failure continues unremedied for a period of fifteen (15) days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by any party to this Agreement or by any
master servicer responsible for master servicing the Mortgage Loans pursuant to
a securitization of such Mortgage Loans."
(j) Section 5.02 of the Warranties and Servicing Agreement shall be
modified by deleting the introductory phrase "Not later than the Remittance
Date" and replacing it with the phrase "On or before the tenth (10th) business
day of each month".
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(k) Sections 6.04 and 6.05 of the Warranties and Servicing Agreement
shall be modified by replacing the word "Purchaser" in each instance with the
phrase "Master Servicer".
(l) The first sentence of Section 12.03 of the Warranties and Servicing
Agreement is deleted in its entirety and replaced with the following:
Section 12.03 GOVERNING LAW.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, including Sections
5-1401 and 5-1402 of New York General Obligations Law, without giving
effect to principles of conflicts of laws and except to the extent
preempted by Federal law and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
(m) The following shall be added as Section 12.12 of the Warranties and
Servicing Agreement:
Section 12.12 THIRD PARTY BENEFICIARY.
For purposes of this Agreement, any Master Servicer shall be
considered a third party beneficiary to this Agreement entitled to all
the rights and benefits accruing to any Master Servicer herein as if it
were a direct party to this Agreement.
(n) The following is added as Subsection 4.05(xi) of the Warranties and
Servicing Agreement:
"(xi) to reimburse itself for any Nonrecoverable Advances;"
(o) Section 6.04 of the Warranties and Servicing Agreement shall be
modified by adding the phrase "in a form acceptable for filing with the
Securities and Exchange Commission as an exhibit to a Form 10-K" after the
phrase "an Officer's Certificate".
(p) Section 6.05 of the Warranties and Servicing Agreement shall be
modified by adding the phrase "in a form acceptable for filing with the
Securities and Exchange Commission as an exhibit to a Form 10-K" after the
phrase "to furnish a statement to each Purchaser".
(q) The definition of "Qualified Depository" in the Warranties and
Servicing Agreement shall be modified by deleting the word "A-1" and replacing
it with the word "A-1+".
10. Distributions shall be made by wire transfer of immediately
available funds to:
Bear Xxxxxxx XXXX 2005-2 Master Servicer Collection Account
Xxxxx Fargo Bank, N.A.
ABA# 000000000
Account Name: SAS Clearing
Account # 0000000000
For Further Credit to: BART 2005-2, A/C# 17145200
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and the Company shall deliver all reports required to be delivered under the
Warranties and Servicing Agreement to the Assignee at the address set forth in
Section 11 herein and to the Master Servicer at:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: BART 2005-2
Telecopier No.: (000) 000-0000
11. Notices:
The Assignor's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
EMC Mortgage Corporation
Mac Xxxxxx Xxxxx Illinois
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx, President
With a copy to:
Bear Xxxxxxx Mortgage Capital Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
The Assignee's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
U.S. Bank National Association
as grantor trustee
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
The Company's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
Xxxxx Fargo Bank, N.A.
1 Home Campus
MAC X0000-000
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxx
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With a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel - MAC X2401-06T
MISCELLANEOUS:
12. Each party will pay any commissions it has incurred and the
Assignor shall pay the fees of its attorneys and the reasonable fees of the
attorneys of the Assignee and the Company in connection with the negotiations
for, documenting of and closing of the transactions contemplated by this
Assignment and Assumption Agreement.
13. This Assignment and Assumption Agreement shall be construed in
accordance with the laws of the State of New York, including Sections 5-1401 and
5-1402 of the New York General Obligations Law, but otherwise without regard to
conflicts of law principles, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
14. No term or provision of this Assignment and Assumption Agreement
may be waived or modified unless such waiver or modification is in writing and
signed by the party against whom such waiver or modification is sought to be
enforced.
15. This Assignment and Assumption Agreement shall inure to the benefit
of the successors and assigns of the parties hereto. Any entity into which
Assignor, Assignee or Company may be merged or consolidated shall, without the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
16. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of Warranties and Servicing
Agreement to the extent of the Mortgage Loans by Assignor to Assignee and the
termination of the Warranties and Servicing Agreement.
17. This Assignment and Assumption Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original and all such counterparts shall constitute one and the same
instrument.
18. In the event that any provision of this Assignment and Assumption
Agreement conflicts with any provision of the Warranties and Servicing Agreement
with respect to the Mortgage Loans, the terms of this Assignment and Assumption
Agreement shall control.
19. Any new loan number assigned to a Mortgage Loan by the Assignee
shall be provided to the Company at the following address: Xxxxx Fargo Bank,
N.A., 1 Home Campus, MAC X0000-000, Xxx Xxxxxx, Xxxx 00000-0000 Attention: Xxxx
X. Xxxxx. In addition, if Assignee has changed its document custodian from the
previous custodian, such new custodian's
C-14
name, address and contact information shall be provided to the Company at the
aforementioned address.
20. The Company hereby acknowledges and agrees to the terms set forth
in the Custodial Agreement dated as of February 28, 2005, among the Grantor
Trustee, Xxxxx Fargo Bank, N.A. as custodian, the Depositor, and Xxxxx Fargo
Bank, N.A. as master servicer and as securities administrator.
C-15
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
BEAR XXXXXXX ARM TRUST 2005-2,
as Assignee
By: U.S. Bank National Association,
not in its individual capacity but
solely as Grantor Trustee
By: _______________________________
Name:
Title:
EMC MORTGAGE CORPORATION,
as Assignor
By: _______________________________
Name:
Title
XXXXX FARGO BANK, N.A.,
as Company
By: _______________________________
Name:
Title:
Acknowledged and Agreed
XXXXX FARGO BANK, N.A.,
as Master Servicer
By: _________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Grantor Trustee for the holders of
Bear Xxxxxxx ARM Trust 2005-2,
Grantor Trust Certificates, Series 2005-2
By: _______________________________
Name:
Title:
Exhibit A
---------
Mortgage Loans
[PROVIDED UPON REQUEST]
Exhibit B
---------
Master Seller's Warranties and Servicing Agreement, dated as of October 1, 2004
by and between Xxxxx Fargo and EMC.
[PROVIDED UPON REQUEST]
Exhibit C
---------
List of Appraisal Firms
[PROVIDED UPON REQUEST]
EXHIBIT D
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT
--------------------------------
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of February 28,
2005, as amended and supplemented by any and all amendments hereto
(collectively, the "AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a
Delaware corporation (the "MORTGAGE LOAN SELLER"), and STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., a Delaware corporation (the "PURCHASER").
Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties and individual condominium units
(collectively, the "MORTGAGE Loans") as described herein. The Purchaser has
established Bear Xxxxxxx ARM Trust 2005-2, a Delaware statutory trust (the
"Issuer") pursuant to a Short Form Trust Agreement, dated as of February 24,
2005, as amended and restated on February 28, 2005, among the Purchaser,
Wilmington Trust Company and Xxxxx Fargo Bank, National Association, as
securities administrator, certificate registrar and certificate paying agent
(together, the "Trust Agreement"). The Purchaser intends to sell the Mortgage
Loans to the Grantor Trustee pursuant to a Grantor Trust Agreement, dated as of
February 28, 2005 among the Purchaser, Xxxxx Fargo Bank, National Association,
as securities administrator (in that capacity, the "Securities Administrator")
and U.S. Bank National Association, as grantor trustee (in that capacity, the
"Grantor Trustee") in exchange for the Grantor Trust Certificates. The Purchaser
intends to sell one of the Grantor Trust Certificates to the Issuer pursuant to
the Amended and Restated Trust Agreement, dated as of February 28, 2005 (the
"Trust Agreement"), among the Depositor, Wilmington Trust Company as owner
trustee of Bear Xxxxxxx ARM Trust 2005-2 (the "Issuer") and Xxxxx Fargo Bank,
National Association as securities administrator, certificate registrar and
certificate paying agent. The Issuer, pursuant to an Indenture, dated as of
February 28, 2005 (the "INDENTURE") among the Issuer, the Securities
Administrator and U.S. Bank National Association, as indenture trustee (in that
capacity, the "Indenture Trustee"), intends to pledge the Grantor Trust
Certificate to the Indenture Trustee and, issue and transfer to the Purchaser
the Notes. The Master Servicer will master service the Mortgage Loans on behalf
of the Issuer pursuant to the Servicing Agreement. The servicing of the Mortgage
Loans will be provided by the Servicer as specified in Appendix A to the
Indenture pursuant to its Servicing Agreement as specified in Appendix A to the
Indenture, which (other than with respect to certain rights of the Mortgage Loan
Seller against the Servicer) will be assigned to the Issuer on the Closing Date
pursuant to the Assignment Agreement. The representations and warranties made by
the Underlying Seller and the remedies for breach thereof will be assigned to
the Issuer on the Closing Date pursuant to, and to the extent provided in the
Assignment Agreement.
The Purchaser has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Number
333-120916) relating to its Mortgage-Backed Notes and the offering of certain
series thereof (including certain classes of
D-1
the Notes) from time to time in accordance with Rule 415 under the Securities
Act of 1933, as amended, and the rules and regulations of the Commission
promulgated thereunder (the "Securities Act"). Such registration statement, when
it became effective under the Securities Act, and the prospectus relating to the
public offering of certain classes of the Notes by the Purchaser (the "Public
Offering"), as each may be amended or supplemented from time to time pursuant to
the Securities Act or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus," respectively. The "Prospectus Supplement" shall
mean that supplement, dated February 28, 2005, to the Prospectus, dated December
20, 2004, relating to certain classes of the Notes. With respect to the Public
Offering of certain classes of the Notes, the Purchaser and Bear, Xxxxxxx & Co.
Inc. ("Bear Xxxxxxx") have entered into a terms agreement dated as of February
28, 2005 to an underwriting agreement dated February 28, 2005 between the
Purchaser and Bear Xxxxxxx (together, the "Underwriting Agreement").
Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Appendix A to the Indenture. The following other terms are
defined as follows:
ACQUISITION PRICE: Cash in an amount equal to $______ (plus
$______ in accrued interest).1
BEAR XXXXXXX: Bear, Xxxxxxx & Co. Inc.
CLOSING DATE: February 28, 2005.
CUT-OFF DATE: February 1, 2005.
CUT-OFF DATE BALANCE: $ 2,633,284,752.83.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Substitute Mortgage Loan.
DUE DATE: With respect to each Mortgage Loan, the date in each
month on which its scheduled payment is due if such due date is the first day of
a month and otherwise is deemed to be the first day of the following month or
such other date specified in the related Servicing Agreement.
MASTER SERVICER: Xxxxx Fargo Bank, National Association.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
-----------------------------
1/ Please contact Bear, Xxxxxxx & Co. Inc. for Acquisition Price.
D-2
MOODY'S: Xxxxx'x Investors Service, Inc., or its successors in
interest.
MORTGAGE: The mortgage or deed of trust creating a first lien
on an interest in real property securing a Mortgage Note.
MORTGAGE FILE: The items referred to in EXHIBIT 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.
MORTGAGE INTEREST RATE: The annual rate of interest borne by a
Mortgage Note as stated therein.
MORTGAGOR: The obligor(s) on a Mortgage Note.
NET RATE: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate expressed as a per annum
rate.
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Grantor Trustee.
PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
PURCHASE PRICE: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement, an amount equal to the sum of
(i)(a) 100% of the Outstanding Principal Balance of such Mortgage Loan as of the
date of repurchase (or if the related Mortgaged Property was acquired with
respect thereto, 100% of the Outstanding Principal Balance at the date of the
acquisition), plus (b) accrued but unpaid interest on the Outstanding Principal
Balance at the related Mortgage Interest Rate, through and including the last
day of the month of repurchase, plus (c) any unreimbursed Monthly Advances and
servicing advances payable to the Servicer of the Mortgage Loan and (ii) any
costs and damages (if any) incurred by the Trust in connection with any
violation of such Mortgage Loan of any anti-predatory lending laws.
RATING AGENCIES: Standard & Poor's and Moody's, each a "Rating
Agency."
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITY INSTRUMENT: A written instrument creating a valid
first lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
SERVICING AGREEMENT: Shall have the meaning assigned to such
term in Appendix A to the Indenture.
STANDARD & POOR'S: Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc. or its successors in interest.
D-3
SUBSTITUTE MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.
VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.
SECTION 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.
(b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Notes will take place on the
Closing Date at the office of the Purchaser's counsel in New York, New York or
such other place as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.
(d) In addition to the foregoing, on the Closing Date the
Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the Servicing Agreement (other than its right to enforce the
representations and warranties set forth therein).
SECTION 3. MORTGAGE LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "PRELIMINARY MORTGAGE LOAN SCHEDULE") setting forth
the information listed on EXHIBIT 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "FINAL
MORTGAGE LOAN Schedule") setting forth the information listed on Exhibit 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "AMENDMENT"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.
SECTION 4. MORTGAGE LOAN TRANSFER.
(a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest due on or before the Cut-off Date but received
after the Cut-off Date. The Mortgage Loan Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off
D-4
Date (including payments collected after the Cut-off Date) and all payments
thereon, other than scheduled principal and interest due after the Cut-off Date
but received on or before the Cut-off Date. Such principal amounts and any
interest thereon belonging to the Mortgage Loan Seller as described above will
not be included in the aggregate outstanding principal balance of the Mortgage
Loans as of the Cut-off Date as set forth on the Final Mortgage Loan Schedule.
(b) Pursuant to various conveyancing documents to be executed
on the Closing Sate and pursuant to the Grantor Trust Agreement, the Purchaser
will sell, assign and transfer on the Closing Date all of its right, title and
interest in and to the Mortgage Loans to the Grantor Trustee and, pursuant to
the Indenture, the Issuer will assign all of its right, title and interest to
the Grantor Trust Certificate to the Indenture Trustee for the benefit of the
Noteholders, to secure the Notes issued pursuant to the Indenture. In connection
with such transfers and assignments of the Mortgage Loans, the Mortgage Loan
Seller has delivered or will deliver or cause to be delivered to the Grantor
Trustee by the Closing Date or such later date as is agreed to by the Purchaser
and the Mortgage Loan Seller (each of the Closing Date and such later date is
referred to as a "MORTGAGE FILE DELIVERY DATE"), the items of each Mortgage
File, PROVIDED, HOWEVER, that in lieu of the foregoing, the Mortgage Loan Seller
may deliver the following documents, under the circumstances set forth below:
(w) in lieu of the original Security Instrument (including the Mortgage),
assignments to the Grantor Trustee or intervening assignments thereof which have
been delivered, are being delivered or will, upon receipt of recording
information relating to the Security Instruments required to be included
thereon, be delivered to recording offices for recording and have not been
returned to the Mortgage Loan Seller in time to permit their delivery as
specified above, the Mortgage Loan Seller may deliver a true copy thereof with a
certification by the Mortgage Loan Seller, on the face of such copy,
substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; (x) in lieu of the Security
Instrument, assignments to the Grantor Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such documents
(as evidenced by a certification from the Mortgage Loan Seller to such effect)
the Mortgage Loan Seller may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Grantor Trustee on the Closing Date and attached hereto as
Exhibit 5, the Mortgage Loan Seller may deliver lost note affidavits and
indemnities of the Mortgage Loan Seller; and (z) the Mortgage Loan Seller shall
not be required to deliver intervening assignments or Mortgage Note endorsements
between the related Underlying Seller and the Mortgage Loan Seller, between the
Mortgage Loan Seller and the Depositor, between the Depositor and the Issuer and
between the Issuer and the Grantor Trustee; and provided further, however, that
in the case of Mortgage Loans which have been prepaid in full after the Cut-off
Date and prior to the Closing Date, the Mortgage Loan Seller, in lieu of
delivering the above documents, may deliver to the Grantor Trustee a
certification by the Mortgage Loan Seller or the Master Servicer to such effect
and shall deposit all amounts paid in respect of such Mortgage Loans in the
Master Servicer Collection Account on the Closing Date. The Mortgage Loan Seller
shall deliver such original documents (including any original documents as to
which certified copies had previously been delivered) or such certified copies
to the Grantor Trustee promptly after they are received. The Mortgage Loan
Seller shall cause the Mortgage and intervening assignments, if any, and the
assignment of the Security Instrument to
D-5
be recorded not later than 180 days after the Closing Date, unless such
assignment is not required to be recorded under the terms set forth in Section
6(a) hereof.
(c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser, by the Purchaser to
the Issuer and by the Issuer to the Grantor Trustee in accordance with this
Agreement for the benefit of the Noteholders by including (or deleting, in the
case of Mortgage Loans which are repurchased in accordance with this Agreement)
in such computer files (a) the code in the field which identifies the specific
Grantor Trustee and (b) the code in the field "Pool Field" which identifies the
series of the Notes issued in connection with such Mortgage Loans. The Mortgage
Loan Seller further agrees that it will not, and will not permit any Servicer or
the Master Servicer to, and the Master Servicer agrees that it will not, alter
the codes referenced in this paragraph with respect to any Mortgage Loan during
the term of the Indenture unless and until such Mortgage Loan is repurchased in
accordance with the terms of the Servicing Agreement.
(d) The Mortgage Loan Seller agrees that the sale of each
Pledged Asset Loan pursuant to this Agreement will also constitute the
assignment, sale, setting over, transfer and conveyance to the Purchaser,
without recourse (but subject to the Mortgage Loan Seller's covenants,
representations and warranties specifically provided herein), of all of the
Mortgage Loan Seller's obligations and all of the Mortgage Loan Seller's right,
title and interest in, to and under, whether now existing or hereafter acquired
as owner of the Mortgage Loan with respect to all money, securities, security
entitlements, accounts, general intangibles, instruments, documents,
certificates of deposit, commodities contracts, and other investment property
and other property of whatever kind or description consisting of, arising from
or related to (i) the Assigned Contracts, (ii) all rights, powers and remedies
of the Mortgage Loan Seller as owner of such Mortgage Loan under or in
connection with the Assigned Contracts, whether arising under the terms of such
Assigned Contracts, by statute, at law or in equity, or otherwise arising out of
any default by the Mortgagor under or in connection with the Assigned Contracts,
including all rights to exercise any election or option or to make any decision
or determination or to give or receive any notice, consent, approval or waiver
thereunder, (iii) all security interests in and lien of the Mortgage Loan Seller
as owner of such Mortgage Loan in the Pledged Amounts and all money, securities,
security entitlements, accounts, general intangibles, instruments, documents,
certificates of deposit, commodities contracts, and other investment property
and other property of whatever kind or description and all cash and non cash
proceeds of the sale, exchange, or redemption of, and all stock or conversion
rights, rights to subscribe, liquidation dividends or preferences, stock
dividends, rights to interest, dividends, earnings, income, rents, issues,
profits, interest payments or other distributions of cash or other property that
is credited to the Master Servicer Collection Account, (iv) all documents, books
and records concerning the foregoing (including all computer programs, tapes,
disks and related items containing any such information) and (v) all insurance
proceeds of any of the foregoing or replacements thereof or substitutions
therefor, proceeds of proceeds and the conversion, voluntary or involuntary, of
any thereof. The foregoing transfer, sale, assignment and conveyance does not
constitute and is not intended to result in the creation, or an assumption by
the Purchaser, of any obligation of the Mortgage Loan Seller, or any other
person in connection with the Pledged Assets or under any
D-6
agreement or instrument relating thereto, including any obligation to the
Mortgagor, other than as owner of the Mortgage Loan.
(e) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans and the related servicing will
ultimately be assigned to U.S. Bank National Association, as Grantor Trustee on
behalf of the Noteholders, on the date hereof.
SECTION 5. EXAMINATION OF MORTGAGE FILES.
(a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Grantor Trustee or the
Mortgage Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that
the Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Servicing Agreement. In addition, upon request of the Purchaser, the
Mortgage Loan Seller agrees to provide to the Purchaser, Bear Xxxxxxx and to any
investors or prospective investors in the Notes information regarding the
Mortgage Loans and their servicing, to make the Mortgage Files available to the
Purchaser, Bear Xxxxxxx and to such investors or prospective investors (which
may be at the offices of the Mortgage Loan Seller and/or the Mortgage Loan
Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Xxxxxxx and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Xxxxxxx and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.
(b) Pursuant to the Custodial Agreement, on the Closing Date
the Custodian, on behalf of the Grantor Trustee, for the benefit of the
Noteholders, will acknowledge receipt of each Mortgage Loan, by delivery to the
Mortgage Loan Seller, the Purchaser and the Issuer of an initial certification
in the form attached as Exhibit One to the Custodial Agreement.
(c) Pursuant to the Custodial Agreement, within 90 days of the
Closing Date (or, with respect to any Substitute Mortgage Loan, within five days
after the receipt by the Grantor Trustee or Custodian thereof), the Grantor
Trustee will review or shall cause the Custodian to review items of the Mortgage
Files as set forth on EXHIBIT 1 and will deliver to the Mortgage Loan Seller,
the Purchaser and the Grantor Trustee an interim certification substantially in
the form of Exhibit Two to the Custodial Agreement. If the Grantor Trustee or
the Custodian, as its agent, finds any document listed on EXHIBIT 1 not to have
been executed or received, or to be unrelated, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in the Final Mortgage Loan Schedule or to appear defective on
its face (a "MATERIAL DEFECT"), the Grantor Trustee or the Custodian, in
accordance with the Custodial Agreement, shall promptly notify the Mortgage Loan
Seller of such Material Defect. The Mortgage Loan Seller shall correct or cure
any such Material Defect within 90 days from the date of notice from the Grantor
Trustee or the Custodian, as its agent, of
D-7
the Material Defect and if the Mortgage Loan Seller fails to correct or cure
such Material Defect within such period and such defect materially and adversely
affects the interests of the Noteholders in the related Mortgage Loan, the
Mortgage Loan Seller will, in accordance with the terms of the Custodial
Agreement, within 90 days of the date of notice, provide the Grantor Trustee
with a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase the related Mortgage Loan at the applicable Purchase Price; PROVIDED
THAT, if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure,
repurchase or substitution must occur within 90 days from the date such breach
was discovered; PROVIDED HOWEVER, that if such defect relates solely to the
inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if the Mortgage Loan Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that the Mortgage Loan Seller cannot deliver such original or
copy of any document submitted for recording to the appropriate recording office
in the applicable jurisdiction because such document has not been returned by
such office; provided that the Mortgage Loan Seller shall instead deliver a
recording receipt of such recording office or, if such receipt is not available,
a certificate confirming that such documents have been accepted for recording,
and delivery to the Grantor Trustee or the Custodian, as its agent, shall be
effected by the Mortgage Loan Seller within thirty days of its receipt of the
original recorded document.
(d) Pursuant to the Custodial Agreement, within 180 days of
the Closing Date (or, with respect to any Substitute Mortgage Loan, within five
days after the receipt by the Grantor Trustee thereof) the Grantor Trustee will
review or cause the Custodian to review items of the Mortgage Files as set forth
on EXHIBIT 1 and will deliver to the Mortgage Loan Seller, the Purchaser and the
Trustee a final certification substantially in the form of Exhibit Three to the
Custodial Agreement. If the Grantor Trustee or the Custodian, as its agent,
finds a Material Defect, the Grantor Trustee or the Custodian, as its
agent,shall promptly notify the Mortgage Loan Seller of such Material Defect.
The Mortgage Loan Seller shall correct or cure any such Material Defect within
90 days from the date of notice from the Grantor Trustee or the Custodian, as
its agent, of the Material Defect and if the Mortgage Loan Seller fails to
correct or cure such Material Defect within such period and such defect
materially and adversely affects the interests of the Noteholders in the related
Mortgage Loan, the Mortgage Loan Seller will, in accordance with the terms of
the Grantor Trust Agreement, within 90 days of the date of notice, provide the
Grantor Trustee with a Substitute Mortgage Loan (if within two years of the
Closing Date) or purchase the related Mortgage Loan at the applicable Purchase
Price; PROVIDED THAT, if such defect would cause the Mortgage Loan to be other
than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code, any
such cure, repurchase or substitution must occur within 90 days from the date
such breach was discovered; PROVIDED HOWEVER, that if such defect relates solely
to the inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if the Mortgage Loan Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that the
D-8
Mortgage Loan Seller cannot deliver such original or copy of any document
submitted for recording to the appropriate recording office in the applicable
jurisdiction because such document has not been returned by such office;
provided that the Mortgage Loan Seller shall instead deliver a recording receipt
of such recording office or, if such receipt is not available, a certificate
confirming that such documents have been accepted for recording, and delivery to
the Grantor Trustee or the Custodian, as its agent, shall be effected by the
Mortgage Loan Seller within thirty days of its receipt of the original recorded
document.
(e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Grantor Trust Agreement. At the
time of any purchase or substitution, the Grantor Trustee in accordance with the
terms of the Grantor Trust Agreement will be required (i) assign to the Mortgage
Loan Seller and cause the Custodian to release the documents (including, but not
limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File)
in the possession of the Custodian relating to the Deleted Mortgage Loan and
(ii) execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Mortgage Loan Seller
title to such Deleted Mortgage Loan.
SECTION 6. RECORDATION OF ASSIGNMENTS OF MORTGAGE.
(a) The Mortgage Loan Seller shall cause each assignment of
the Security Instrument from the Mortgage Loan Seller to the Grantor Trustee to
be recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agency or an Opinion of Counsel has
been provided to the Grantor Trustee which states that the recordation of such
assignments is not necessary to protect the interests of the Noteholders in the
related Mortgage Loans or (b) MERS is identified on the Mortgage or a properly
recorded assignment of the Mortgage, as the Mortgagee of record solely as
nominee for the Mortgage Loan Seller and its successors and assigns; PROVIDED,
HOWEVER, notwithstanding the delivery of any Opinion of Counsel, each assignment
shall be submitted for recording by the Mortgage Loan Seller in the manner
described above, at no expense to the Issuer or the Grantor Trustee, upon the
earliest to occur of (i) reasonable direction by the Holders of Notes
aggregating at least 25% of the Note Principal Balance of the Notes, (ii) the
occurrence of a Master Servicer Event of Default or an Event of Default, (iii)
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgage Loan Seller and (iv) the occurrence of a servicing transfer as
described in Section 2.02 of the Servicing Agreement.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
IndentureTrustee a certified copy of such Mortgage or assignment. All customary
recording fees and reasonable expenses relating to the recordation of the
assignments of mortgage to the Grantor Trustee or the Opinion of Counsel, as the
case may be, shall be borne by the Mortgage Loan Seller.
(b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the
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Purchaser to secure a debt or other obligation of the Mortgage Loan Seller.
However, in the event that, notwithstanding the intent of the parties, the
Mortgage Loans are held by a court to continue to be property of the Mortgage
Loan Seller, then (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the applicable Uniform
Commercial Code; (b) the transfer of the Mortgage Loans provided for herein
shall be deemed to be a grant by the Mortgage Loan Seller to the Purchaser of a
security interest in all of the Mortgage Loan Seller's right, title and interest
in and to the Mortgage Loans and all amounts payable to the holders of the
Mortgage Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, to the extent the Purchaser would otherwise be
entitled to own such Mortgage Loans and proceeds pursuant to Section 4 hereof,
including all amounts, other than investment earnings, from time to time held or
invested in any accounts created pursuant to the Indenture or the Servicing
Agreement, whether in the form of cash, instruments, securities or other
property; (c) the possession by the Purchaser, the Issuer or the Grantor Trustee
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" for purposes of perfecting the security interest pursuant
to Section 9-313 (or comparable provision) of the applicable Uniform Commercial
Code; and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to any provision
hereof or pursuant to the Servicing Agreement and any subsequent assignment
pursuant to the Indenture shall also be deemed to be an assignment of any
security interest created hereby. The Mortgage Loan Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
reasonably 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 Indenture.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it, that:
(i) the information set forth in the Mortgage Loan
Schedule hereto is true and correct in all material respects and the
information provided to the Rating Agencies, including the Mortgage
Loan level detail, is true and correct according to the Rating Agency
requirements;
(ii) immediately prior to the transfer to the
Purchaser, the Mortgage Loan Seller was the sole owner of beneficial
title and holder of each Mortgage and Mortgage Note relating to the
Mortgage Loans and is conveying the same free and clear of any and all
liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature and the Mortgage
Loan Seller has full right and authority to sell or assign the same
pursuant to this Agreement;
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(iii) Each Mortgage Loan at the time it was made
complied in all material respects with all applicable laws and
regulations, including, without limitation, usury, equal credit
opportunity, disclosure and recording laws and all applicable
anti-predatory lending laws; and each Mortgage Loan has been serviced
in all material respects in accordance with all applicable laws and
regulations, including, without limitation, usury, equal credit
opportunity, disclosure and recording laws and all applicable
anti-predatory lending laws and the terms of the related Mortgage Note,
the Mortgage and other loan documents;
(iv) there is no monetary default existing under any
Mortgage or the related Mortgage Note and there is no material event
which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach or event
of acceleration; and neither the Mortgage Loan Seller, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any
action to waive any default, breach or event of acceleration; no
foreclosure action is threatened or has been commenced with respect to
the Mortgage Loan;
(v) the terms of the Mortgage Note and the Mortgage
have not been impaired, waived, altered or modified in any respect,
except by written instruments, (i) if required by law in the
jurisdiction where the Mortgaged Property is located, or (ii) to
protect the interests of the Grantor Trustee on behalf of the
Noteholders;
(vi) no selection procedure reasonably believed by
the Mortgage Loan Seller to be adverse to the interests of the
Noteholders was utilized in selecting the Mortgage Loans;
(vii) each Mortgage is a valid and enforceable first
lien on the property securing the related Mortgage Note and each
Mortgaged Property is owned by the Mortgagor in fee simple (except with
respect to common areas in the case of condominiums, PUDs and DE
MINIMIS PUDs) or by leasehold for a term longer than the term of the
related Mortgage, subject only to (i) the lien of current real property
taxes and assessments, (ii) 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 being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender's title insurance
policy delivered to the originator of the related Mortgage Loan and
(iii) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by such Mortgage;
(viii) there is no mechanics' lien or claim for work,
labor or material affecting the premises subject to any Mortgage which
is or may be a lien prior to, or equal with, the lien of such Mortgage
except those which are insured against by the title insurance policy
referred to in (xiii) below;
(ix) as of the Cut-off Date, to the best of the
Mortgage Loan Seller's knowledge, there was no delinquent tax or
assessment lien against the property subject to
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any Mortgage, except where such lien was being contested in good faith
and a stay had been granted against levying on the property;
(x) 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 and interest on such Mortgage
Note;
(xi) to the best of the Mortgage Loan Seller's
knowledge, except to the extent insurance is in place which will cover
such damage, the physical property subject to any Mortgage is free of
material damage and is in good repair and there is no proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property;
(xii) to the best of the Mortgage Loan Seller's
knowledge, the Mortgaged Property and all improvements thereon comply
with all requirements of any applicable zoning and subdivision laws and
ordinances;
(xiii) a lender's title insurance policy (on an ALTA
or CLTA form) or binder, or other assurance of title customary in the
relevant jurisdiction therefor in a form acceptable to Xxxxxx Xxx or
Xxxxxxx Mac, was issued on the date that each Mortgage Loan was created
by a title insurance company which, to the best of the Mortgage Loan
Seller's knowledge, was qualified to do business in the jurisdiction
where the related Mortgaged Property is located, insuring the Mortgage
Loan Seller and its successors and assigns that the Mortgage is a first
priority lien on the related Mortgaged Property in the original
principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
sole insured under such lender's title insurance policy, and such
policy, binder or assurance is valid and remains in full force and
effect, and each such policy, binder or assurance shall contain all
applicable endorsements including a negative amortization endorsement,
if applicable;
(xiv) at the time of origination, each Mortgaged
Property was the subject of an appraisal which conformed to the
underwriting requirements of the originator of the Mortgage Loan and,
the appraisal is in a form acceptable to Xxxxxx Xxx or FHLMC;
(xv) as of the Closing Date, the improvements on each
Mortgaged Property securing a Mortgage Loan are insured (by an insurer
which is acceptable to the Mortgage Loan Seller) against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement in the locale in which the Mortgaged Property is located,
in an amount which is not less than the lesser of the maximum insurable
value of the improvements securing such Mortgage Loan or the
outstanding principal balance of the Mortgage Loan, but in no event in
an amount less than an amount that is required to prevent the Mortgagor
from being deemed to be a co-insurer thereunder; if the improvement on
the Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium project; if
upon origination of the related Mortgage Loan, the improvements on the
Mortgaged Property were in an area identified as a federally designated
flood area, a flood insurance policy is in effect in an amount
representing coverage not less than the least of (i) the outstanding
principal
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balance of the Mortgage Loan, (ii) the restorable cost of improvements
located on such Mortgaged Property or (iii) the maximum coverage
available under federal law; and each Mortgage obligates the Mortgagor
thereunder to maintain the insurance referred to above at the
Mortgagor's cost and expense;
(xvi) each Mortgage Loan constitutes a "qualified
mortgage" under Section 860G(a)(3)(A) of the Code and Treasury
Regulation Section 1.860G 2(a)(1); none of the Mortgage Loans are
secured by an interest in a leasehold estate;
(xvii) each Mortgage Loan was originated or funded by
(a) a savings and loan association, savings bank, commercial bank,
credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority (or originated
by (i) a subsidiary of any of the foregoing institutions which
subsidiary is actually supervised and examined by applicable regulatory
authorities or (ii) a mortgage loan correspondent of any of the
foregoing and that was originated pursuant to the criteria established
by any of the foregoing) or (b) a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act, as amended;
(xviii) none of the Mortgage Loans are (a) loans
subject to 12 CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34
of Regulation Z, the regulation implementing TILA, which implements the
Home Ownership and Equity Protection Act of 1994, as amended or (b)
classified and/or defined as a "high cost home loan" under any federal,
state or local law, including, but not limited to, the States of
Georgia or North Carolina;
(xix) the information set forth in Schedule A of the
Prospectus Supplement with respect to the Mortgage Loans is true and
correct in all material respects;
(xx) no Mortgage Loan is a High Cost Loan or Covered
Loan, as applicable (as such terms are defined in Standard & Poor's
LEVELS(R) Glossary, Version 5.6b Revised, Appendix E, attached hereto
as Exhibit 6) and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the "Georgia Fair Lending
Act."
(xxi) each Mortgage Loan was originated in accordance
with the underwriting guidelines of the related originator;
(xxii) each original Mortgage has been recorded or is
in the process of being recorded in accordance with the requirements of
Section 6.02 of the Servicing Agreement in the appropriate
jurisdictions wherein such recordation is required to perfect the lien
thereof for the benefit of the Trust Fund;
(xxiii) the related Mortgage File contains each of
the documents and instruments listed in Exhibit 2 of this Agreement,
subject to any exceptions, substitutions and qualifications as are set
forth in such Exhibit;
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(xxiv) the Mortgage Loans are currently being
serviced in accordance with accepted servicing practices;
(xxv) at the time of origination, each Mortgaged
Property was the subject of an appraisal which conformed to the
underwriting requirements of the originator of the Mortgage Loan, and
the appraisal is in a form which was acceptable to Xxxxxx Mae or FHLMC
at the time of origination;
(xxvi) none of the Mortgage Loans violate the
Illinois Interest Act; and
(xxvii) Three of the Mortgage Loans are Pledged Asset
Mortgage Loans.
(xxviii) Each Assigned Contract relating to each
Pledged Asset Mortgage Loan is a valid, binding and legally enforceable
obligation of the parties thereto, enforceable in accordance with their
terms, except as limited by bankruptcy, insolvency or other similar
laws affecting generally the enforcement of creditor's rights;
(xxix) The Mortgage Loan Seller is the holder of all
of the right, title and interest as owner of each Pledged Asset
Mortgage Loan in and to each of the Assigned Contracts delivered and
sold to the Purchaser hereunder, and the assignment hereof by the
Mortgage Loan Seller validly transfers such right, title and interest
to the Purchaser free and clear of any pledge, lien, or security
interest or other encumbrance of any Person; and
(xxx) The full amount of the Pledge Amount with
respect to such Pledged Asset Mortgage Loan has been deposited with the
custodian under the applicable Assigned Contract and is on deposit in
the protected account held thereunder as of the date hereof.
It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of
substitution.
Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser, the Issuer or the Grantor Trustee of a breach of any
representation or warranty of the Mortgage Loan Seller set forth in this Section
7 which materially and adversely affects the value of the interests of the
Purchaser, the Issuer, the Noteholders or the Grantor Trustee in any of the
Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party
discovering or receiving notice of such breach shall give prompt written notice
to the others. In the case of any such breach of a representation or warranty
set forth in this Section 7, within 90 days from the date of discovery by the
Mortgage Loan Seller, or the date the Mortgage Loan Seller is notified by the
party discovering or receiving notice of such breach (whichever occurs earlier),
the Mortgage Loan Seller will (i) cure such breach in all material respects,
(ii) purchase the affected Mortgage Loan at the applicable Purchase Price or
(iii) if within two years of the Closing Date, substitute a qualifying
Substitute Mortgage Loan in exchange for such Mortgage Loan. The obligations of
the Mortgage Loan Seller to cure, purchase or substitute a qualifying Substitute
Mortgage Loan shall constitute the Purchaser's, the Issuer's, the Grantor
Trustee's and the Noteholder's sole and exclusive remedy under this Agreement or
otherwise respecting a breach of representations or warranties hereunder with
respect to the Mortgage Loans, except for the obligation of the Mortgage Loan
Seller to indemnify the Purchaser for such breach as set forth in and limited by
Section 13 hereof.
Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.
SECTION 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:
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(a) the Mortgage Loan Seller (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) is qualified and in good standing to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Mortgage Loan Seller's business as presently conducted or on the Mortgage
Loan Sellers ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(b) the Mortgage Loan Seller has full corporate power to own
its property, to carry on its business as presently conducted and to enter into
and perform its obligations under this Agreement;
(c) the execution and delivery by the Mortgage Loan Seller of
this Agreement have been duly authorized by all necessary action on the part of
the Mortgage Loan Seller; and neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Mortgage
Loan Seller or its properties or the charter or by-laws of the Mortgage Loan
Seller, except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Mortgage Loan Seller's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(d) the execution, delivery and performance by the Mortgage
Loan Seller of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have already
been obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
(e) this Agreement has been duly executed and delivered by the
Mortgage Loan Seller and, assuming due authorization, execution and delivery by
the Purchaser, constitutes a valid and binding obligation of the Mortgage Loan
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to
the knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan
Seller, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions contemplated by
this Agreement or (ii) with respect to any other matter which in the judgment of
the Mortgage Loan Seller will be determined adversely to the Mortgage Loan
Seller and will if determined adversely to the Mortgage Loan Seller materially
and adversely affect the Mortgage Loan Seller's ability to perform its
obligations under this Agreement; and the Mortgage Loan Seller is not in default
with respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
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(g) the Mortgage Loan Seller's Information (as defined in
Section 13(a) hereof) does not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
SECTION 9. REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (ii)
is qualified and in good standing as a foreign corporation to do business in
each jurisdiction where such qualification is necessary, except where the
failure so to qualify would not reasonably be expected to have a material
adverse effect on the Purchaser's business as presently conducted or on the
Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(b) the Purchaser has full corporate power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Purchaser; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Purchaser or its properties
or the articles of incorporation or by-laws of the Purchaser, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Purchaser's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(d) the execution, delivery and performance by the Purchaser
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the
Mortgage Loan Seller, constitutes a valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to
the knowledge of the Purchaser, threatened against the Purchaser, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii) with
respect to any other matter which in the judgment of the Purchaser will be
determined adversely to the Purchaser and will if determined adversely to the
Purchaser
D-16
materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement; and the Purchaser is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b)
hereof) does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
SECTION 10. CONDITIONS TO CLOSING.
(a) The obligations of the Purchaser under this Agreement will
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(i) Each of the obligations of the Mortgage Loan
Seller required to be performed at or prior to the Closing Date
pursuant to the terms of this Agreement shall have been duly performed
and complied with in all material respects; all of the representations
and warranties of the Mortgage Loan Seller under this Agreement shall
be true and correct as of the date or dates specified in all material
respects; and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this Agreement, or
the Servicing Agreement; and the Purchaser shall have received
certificates to that effect signed by authorized officers of the
Mortgage Loan Seller.
(ii) The Purchaser shall have received all of the
following closing documents, in such forms as are agreed upon and
reasonably acceptable to the Purchaser, duly executed by all
signatories (other than the Purchaser) as required pursuant to the
respective terms thereof:
(1) If required pursuant to Section 3
hereof, the Amendment dated as of the Closing Date and any
documents referred to therein;
(2) If required pursuant to Section 3
hereof, the Final Mortgage Loan Schedule containing the
information set forth on Exhibit 2 hereto, one copy to be
attached to each counterpart of the Amendment;
(3) The Trust Agreement, in form and
substance reasonably satisfactory to the Purchaser, and all
documents required thereby duly executed by all signatories;
(4) The Servicing Agreement, in form and
substance reasonably satisfactory to the Grantor Trustee, the
Issuer and the Purchaser, and all documents required thereby
duly executed by all signatories;
(5) The Indenture, in form and substance
reasonably satisfactory to the Indenture Trustee, the Issuer
and the Purchaser, and all documents required thereby duly
executed by all signatories;
D-17
(6) A certificate of an officer of the
Mortgage Loan Seller dated as of the Closing Date, in a form
reasonably acceptable to the Purchaser, and attached thereto
the resolutions of the Mortgage Loan Seller authorizing the
transactions contemplated by this Agreement, together with
copies of the charter and by-laws of the Mortgage Loan Seller;
(7) One or more opinions of counsel from the
Mortgage Loan Seller's counsel otherwise in form and substance
reasonably satisfactory to the Purchaser, the Trustee and each
Rating Agency;
(8) A letter from each of the Rating
Agencies giving each Class of Notes set forth on Schedule A
the rating set forth on Schedule A; and
(9) Such other documents, certificates
(including additional representations and warranties) and
opinions as may be reasonably necessary to secure the intended
ratings from each Rating Agency for the Notes.
(iii) The Notes to be sold to Bear Xxxxxxx pursuant
to the Underwriting Agreement and the Purchase Agreement shall have
been issued and sold to Bear Xxxxxxx.
(iv) The Mortgage Loan Seller shall have furnished to
the Purchaser such other certificates of its officers or others and
such other documents and opinions of counsel to evidence fulfillment of
the conditions set forth in this Agreement and the transactions
contemplated hereby as the Purchaser and its counsel may reasonably
request.
(b) The obligations of the Mortgage Loan Seller under this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:
(i) The obligations of the Purchaser required to be
performed by it on or prior to the Closing Date pursuant to the terms
of this Agreement shall have been duly performed and complied with in
all material respects, and all of the representations and warranties of
the Purchaser under this Agreement shall be true and correct in all
material respects as of the date hereof and as of the Closing Date, and
no event shall have occurred which would constitute a breach by it of
the terms of this Agreement, and the Mortgage Loan Seller shall have
received a certificate to that effect signed by an authorized officer
of the Purchaser.
(ii) The Mortgage Loan Seller shall have received
copies of all of the following closing documents, in such forms as are
agreed upon and reasonably acceptable to the Mortgage Loan Seller, duly
executed by all signatories other than the Mortgage Loan Seller as
required pursuant to the respective terms thereof:
(1) If required pursuant to Section 3
hereof, the Amendment dated as of the Closing Date and any
documents referred to therein;
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(2) The Trust Agreement, in form and
substance reasonably satisfactory to the Mortgage Loan Seller,
and all documents required thereby duly executed by all
signatories;
(3) The Servicing Agreement, in form and
substance reasonably satisfactory to the Mortgage Loan Seller,
and all documents required thereby duly executed by all
signatories;
(4) The Indenture, in form and substance
reasonably satisfactory to the Mortgage Loan Seller, and all
documents required thereby duly executed by all signatories;
(5) A certificate of an officer of the
Purchaser dated as of the Closing Date, in a form reasonably
acceptable to the Mortgage Loan Seller, and attached thereto
the resolutions of the Purchaser authorizing the transactions
contemplated by this Agreement and the Servicing Agreement,
together with copies of the Purchaser's articles of
incorporation, and evidence as to the good standing of the
Purchaser dated as of a recent date;
(6) One or more opinions of counsel from the
Purchaser's counsel in form and substance reasonably
satisfactory to the Mortgage Loan Seller; and
(7) Such other documents, certificates
(including additional representations and warranties) and
opinions as may be reasonably necessary to secure the intended
rating from each Rating Agency for the Notes;
SECTION 11. FEES AND EXPENSES. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Notes and the filing fee of the Commission as
in effect on the date on which the Registration Statement was declared
effective, (iv) the fees and expenses including counsel's fees and expenses in
connection with any "blue sky" and legal investment matters, (v) the fees and
expenses of the Grantor Trustee which shall include without limitation the fees
and expenses of the Grantor Trustee (and the fees and disbursements of its
counsel) with respect to (A) legal and document review of this Agreement, the
Trust Agreement, the Indenture, the Servicing Agreement, the Notes and related
agreements, (B) attendance at the Closing and (C) review of the Mortgage Loans
to be performed by the Grantor Trustee, (vi) the expenses for printing or
otherwise reproducing the Notes, the Prospectus and the Prospectus Supplement,
(vii) the fees and expenses of each Rating Agency (both initial and ongoing),
(viii) the fees and expenses relating to the preparation and recordation of
mortgage assignments (including intervening assignments, if any and if
available, to evidence a complete chain of title from the originator to the
Grantor Trustee) from the Mortgage Loan Seller to the Grantor Trustee or the
expenses relating to the Opinion of Counsel referred to in Section 6(a) hereof,
as the case may be, and (ix) Mortgage File due diligence expenses and other
out-of-pocket expenses incurred by
D-19
the Purchaser in connection with the purchase of the Mortgage Loans and by Bear
Xxxxxxx in connection with the sale of the Notes. The Mortgage Loan Seller
additionally agrees to pay directly to any third party on a timely basis the
fees provided for above which are charged by such third party and which are
billed periodically.
SECTION 12. ACCOUNTANTS' LETTERS.
(a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and
will compare those characteristics to the description of the Mortgage Loans
contained in the Prospectus Supplement under the captions "Summary of Prospectus
Supplement--The Mortgage Loans" and "The Mortgage Pool" and in Schedule A
thereto. The Mortgage Loan Seller will cooperate with the Purchaser in making
available all information and taking all steps reasonably necessary to permit
such accountants to complete the review and to deliver the letters required of
them under the Underwriting Agreement. Deloitte & Touche LLP will also confirm
certain calculations as set forth under the caption "Yield On The Notes" in the
Prospectus Supplement.
(b) To the extent statistical information with respect to the
Master Servicer's or a Servicer's servicing portfolio is included in the
Prospectus Supplement under the caption "The Master Servicer and the Servicers,"
a letter from the certified public accountant for the Master Servicer and such
Servicer or Servicers will be delivered to the Purchaser dated the date of the
Prospectus Supplement, in the form previously agreed to by the Mortgage Loan
Seller and the Purchaser, with respect to such statistical information.
SECTION 13. INDEMNIFICATION.
(a) The Mortgage Loan Seller shall indemnify and hold harmless
the Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the MORTGAGE LOAN SELLER'S INFORMATION
as identified in EXHIBIT 3, the omission to state in the Prospectus Supplement
or Prospectus (or any amendment thereof or supplement thereto approved by the
Mortgage Loan Seller and in which additional Mortgage Loan Seller's Information
is identified), in reliance upon and in conformity with Mortgage Loan Seller's
Information a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty assigned or made by the
Mortgage Loan Seller in Section 7 or Section 8 hereof being, or alleged to be,
untrue or incorrect, or (iii) any failure by the Mortgage Loan Seller to perform
its obligations under this Agreement; and the Mortgage Loan Seller shall
reimburse the Purchaser and each other indemnified party for any legal and other
expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action.
The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.
D-20
(b) The Purchaser shall indemnify and hold harmless the
Mortgage Loan Seller and its respective directors, officers and controlling
persons (as defined in Section 15 of the Securities Act) from and against any
loss, claim, damage or liability or action in respect thereof, to which they or
any of them may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement of a material fact contained in the PURCHASER'S
INFORMATION as identified in EXHIBIT 4, the omission to state in the Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Purchaser and in which additional Purchaser's Information is
identified), in reliance upon and in conformity with the Purchaser's
Information, a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty made by the Purchaser in
Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any
failure by the Purchaser to perform its obligations under this Agreement; and
the Purchaser shall reimburse the Mortgage Loan Seller, and each other
indemnified party for any legal and other expenses reasonably incurred by them
in connection with investigating or defending or preparing to defend any such
loss, claim, damage, liability or action. The foregoing indemnity agreement is
in addition to any liability which the Purchaser otherwise may have to the
Mortgage Loan Seller, or any other such indemnified party.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 13 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the
indemnified party promptly (but, in any event, within 30 days) after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have reasonably
concluded that there is a conflict of interest between itself or themselves and
the indemnifying party in the conduct of the defense of any claim or that the
interests of the indemnified party or parties are not substantially co-extensive
with those of the indemnifying party (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties (PROVIDED, HOWEVER, that the
indemnifying party shall be liable only for the fees and expenses of one counsel
in addition to one local counsel in the jurisdiction involved. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
D-21
liable for any settlement or any claim or action effected without its written
consent; PROVIDED, HOWEVER, that such consent was not unreasonably withheld.
(d) If the indemnification provided for in paragraphs (a) and
(b) of this Section 13 shall for any reason be unavailable to an indemnified
party in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to in Section 13, then the indemnifying party shall in
lieu of indemnifying the indemnified party contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, in such proportion as shall be
appropriate to reflect the relative benefits received by the Mortgage Loan
Seller on the one hand and the Purchaser on the other from the purchase and sale
of the Mortgage Loans, the offering of the Notes and the other transactions
contemplated hereunder. No person found liable for a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not also found liable
for such fraudulent misrepresentation.
(e) The parties hereto agree that reliance by an indemnified
party on any publicly available information or any information or directions
furnished by an indemnifying party shall not constitute negligence, bad faith or
willful misconduct by such indemnified party.
SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, Mac Xxxxxx Xxxxx XX, 000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (Telecopy: (972-444-2880)), and notices to
the Purchaser shall be directed to Structured Asset Mortgage Investments II
Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Telecopy: (212-272-7206)),
Attention: Xxxxx Xxxxxxxxxxx; or to any other address as may hereafter be
furnished by one party to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided
that it is received on a business day during normal business hours and, if
received after normal business hours, then it shall be deemed to be received on
the next business day.
SECTION 15. TRANSFER OF MORTGAGE LOANS. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Issuer, with the understanding that the Issuer will then assign
such rights to the Grantor Trustee pursuant to the Grantor Trust Agreement,
without the consent of the Mortgage Loan Seller, and, upon such assignment, the
Grantor Trustee, as the ultimate assignee, shall succeed to the applicable
rights and obligations of the Purchaser hereunder; PROVIDED, HOWEVER, the
Purchaser shall remain entitled to the benefits set forth in Sections 11, 13 and
17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the
sole and exclusive right and remedy of the Issuer or the Grantor Trustee with
respect to a breach of representation or warranty of the Mortgage Loan Seller
shall be the cure, purchase or substitution obligations of the Mortgage Loan
Seller contained in Sections 5 and 7 hereof.
SECTION 16. TERMINATION. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and
D-22
when required to be fulfilled or (c) by the Mortgage Loan Seller, if the
conditions to the Mortgage Loan Seller's obligation to close set forth under
Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In
the event of termination pursuant to clause (b), the Mortgage Loan Seller shall
pay, and in the event of termination pursuant to clause (c), the Purchaser shall
pay, all reasonable out-of-pocket expenses incurred by the other in connection
with the transactions contemplated by this Agreement. In the event of a
termination pursuant to clause (a), each party shall be responsible for its own
expenses.
SECTION 17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser,
delivery by the Purchaser to the Issuer and the pledge by the Issuer to the
Indenture Trustee on behalf of the Noteholders. Subsequent to the delivery of
the Mortgage Loans to the Purchaser, the Mortgage Loan Seller's representations
and warranties contained herein with respect to the Mortgage Loans shall be
deemed to relate to the Mortgage Loans actually delivered to the Purchaser and
included in the Final Mortgage Loan Schedule and any Substitute Mortgage Loan
and not to those Mortgage Loans deleted from the Preliminary Mortgage Loan
Schedule pursuant to Section 3 hereof prior to the Closing.
SECTION 18. SEVERABILITY. If any provision of this Agreement
shall be prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
SECTION 19. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.
SECTION 20. AMENDMENT. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.
SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.
SECTION 22. FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.
SECTION 23. SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Xxxxxxx, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without
D-23
limitation, with respect to the Mortgage Loan Seller's representations and
warranties respecting the Mortgage Loans) to Issuer and that the Issuer may
further assign such rights to the Grantor Trustee. Any person into which the
Mortgage Loan Seller may be merged or consolidated (or any person resulting from
any merger or consolidation involving the Mortgage Loan Seller), any person
resulting from a change in form of the Mortgage Loan Seller or any person
succeeding to the business of the Mortgage Loan Seller, shall be considered the
"successor" of the Mortgage Loan Seller hereunder and shall be considered a
party hereto without the execution or filing of any paper or any further act or
consent on the part of any party hereto. Except as provided in the two preceding
sentences, this Agreement cannot be assigned, pledged or hypothecated by either
party hereto without the written consent of the other parties to this Agreement
and any such assignment or purported assignment shall be deemed null and void.
SECTION 24. THE MORTGAGE LOAN SELLER AND THE PURCHASER. The
Mortgage Loan Seller and the Purchaser will keep in full effect all rights as
are necessary to perform their respective obligations under this Agreement.
SECTION 25. ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.
SECTION 26. NO PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
D-24
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
EMC MORTGAGE CORPORATION
By: ___________________________
Name:
Title:
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC.
By: ___________________________
Name:
Title:
MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT 1
---------
CONTENTS OF MORTGAGE FILE
-------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of the Agreement.
Section 8.07 with respect to each Mortgage Loan:
(a) The original Mortgage Note, endorsed without recourse to
the order of the Grantor Trustee and showing an unbroken chain of
endorsements from the originator thereof to the Person endorsing it to
the Grantor Trustee, or a lost note affidavit together with a copy of
the related Mortgage Note;
(b) The original Mortgage and, if the related Mortgage Loan is
a MOM Loan, noting the presence of the MIN and language indicating that
such Mortgage Loan is a MOM Loan, which shall have been recorded (or if
the original is not available, a copy), with evidence of such recording
indicated thereon (or if the original is not available, a copy), with
evidence of such recording indicated thereon (or if the original
Security Instrument, assignments to the Grantor Trustee or intervening
assignments thereof which have been delivered, are being delivered or
will, upon receipt of recording information relating to the Security
Instrument required to be included thereon, be delivered to recording
offices for recording and have not been returned to the Seller in time
to permit their recording as specified in Section 6.02 of the Servicing
Agreement, shall be in recordable form);
(c) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) in blank or to "U.S. Bank National Association, as Grantor
Trustee", with evidence of recording with respect to each Mortgage Loan
in the name of the Grantor Trustee thereon (or if (A) the original
Security Instrument, assignments to the Grantor Trustee or intervening
assignments thereof which have been delivered, are being delivered or
will, upon receipt of recording information relating to the Security
Instrument required to be included thereon, be delivered to recording
offices for recording and have not been returned to the Seller in time
to permit their delivery as specified in Section 2.01(b) of the Grantor
Trust Agreement, the Seller may deliver a true copy thereof with a
certification by the Seller, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original,
which has been transmitted for recording" or (B) the related Mortgaged
Property is located in a state other than Maryland and an Opinion of
Counsel has been provided as set forth in Section 2.01(b) of the
Grantor Trust Agreement, shall be in recordable form);
(d) all intervening assignments of the Security Instrument, if
applicable and only to the extent available to the Mortgage Loan Seller
with evidence of recording thereon;
D-1-1
(e) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
(f) the original or copy of the policy of title insurance or
mortgagee's certificate of title insurance or commitment or binder for
title insurance; and
(g) originals of all modification agreements, if applicable
and available.
D-1-2
EXHIBIT 2
---------
MORTGAGE LOAN SCHEDULE INFORMATION
----------------------------------
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(a) the loan number;
(b) [Reserved];
(c) the city, state and zip code of the Mortgaged Property;
(d) the property type;
(e) the Mortgage Interest Rate;
(f) the Servicing Fee Rate;
(g) the Net Rate;
(h) the original term to maturity;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the principal and interest payment in effect as of the Cut-off Date;
(n) the unpaid principal balance as of the Cut-off Date;
(o) the Loan-to-Value Ratio at origination;
(p) paid-through date;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) the Gross Margin, if applicable;
(s) the Maximum Lifetime Mortgage Rate, if applicable;
(t) the Minimum Lifetime Mortgage Rate, if applicable;
(u) the Periodic Rate Cap, if applicable;
D-2-1
(v) the number of days delinquent, if any;
(w) which Mortgage Loans adjust after an initial fixed-rate period of three,
five, seven or ten years; and
(x) the Loan Group.
Such schedule also shall set forth for all the Mortgage Loans, the total number
of Mortgage Loans, the total of each of the amounts described under (k) and (n)
above, the weighted average by principal balance as of the Cut-off Date of each
of the rates described under (e), (f) and (g) above, and the weighted average
remaining term to maturity by unpaid principal balance as of the Cut-off Date.
D-2-2
EXHIBIT 3
MORTGAGE LOAN SELLER'S INFORMATION
----------------------------------
All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loans,"
"THE MORTGAGE POOL" and "SCHEDULE A -- CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."
D-3-1
EXHIBIT 4
---------
PURCHASER'S INFORMATION
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
D-4-1
EXHIBIT 5
---------
SCHEDULE OF LOST NOTES
Available Upon Request
D-5-1
EXHIBIT 6
REVISED February 07, 0000
XXXXXXXX X - Standard & Poor's Anti-Predatory Lending Categorization
Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER APPLICABLE
LAW/EFFECTIVE DATE ANTI-PREDATORY LENDING LAW
------------------------------------------------------------------------------------------------------------------
Arkansas Arkansas Home Loan Protection Act, Ark. Code High Cost Home Loan
Xxx. xx.xx. 00-00-000 ET SEQ.
Effective July 16, 2003
------------------------------------------------------------------------------------------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code xx.xx. Covered Loan
757.01 ET SEQ.
Effective June 2, 2003
------------------------------------------------------------------------------------------------------------------
Colorado Consumer Equity Protection, Colo. Stat. Xxx. xx.xx. Covered Loan
5-3.5-101 ET SEQ.
Effective for covered loans offered or entered
into on or after January 1, 2003. Other
provisions of the Act took effect on June 7,
2002
------------------------------------------------------------------------------------------------------------------
Connecticut Connecticut Abusive Home Loan Lending Practices High Cost Home Loan
Act, Conn. Gen. Stat. xx.xx. 36a-746 ET SEQ.
Effective October 1, 2001
------------------------------------------------------------------------------------------------------------------
District of Columbia Home Loan Protection Act, D.C. Code xx.xx. Covered Loan
26-1151.01 ET SEQ.
Effective for loans closed on or after January
28, 2003
------------------------------------------------------------------------------------------------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. xx.xx. 494.0078 High Cost Home Loan
ET SEQ.
Effective October 2, 2002
------------------------------------------------------------------------------------------------------------------
D-6-1
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER APPLICABLE
LAW/EFFECTIVE DATE ANTI-PREDATORY LENDING LAW
------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Xxx. xx.xx. High Cost Home Loan
Mar. 6, 2003) 7-6A-1 ET SEQ.
Effective October 1, 2002 - March 6, 2003
------------------------------------------------------------------------------------------------------------------
Georgia as amended Georgia Fair Lending Act, Ga. Code Xxx. xx.xx. High Cost Home Loan
(Mar. 7, 2003 - current) 7-6A-1 ET SEQ.
Effective for loans closed on or after March 7,
2003
------------------------------------------------------------------------------------------------------------------
HOEPA Section 32 Home Ownership and Equity Protection Act of High Cost Loan
1994, 15 U.S.C. ss. 1639, 12 C.F.R. xx.xx.
226.32 and 226.34
Effective October 1, 1995, amendments October
1, 2002
------------------------------------------------------------------------------------------------------------------
Illinois High Risk Home Loan Act, Ill. Comp. Stat. tit. High Risk Home Loan
815, xx.xx. 137/5 ET SEQ.
Effective January 1, 2004 (prior to this
date, regulations under Residential Mortgage
License Act effective from May 14, 2001)
------------------------------------------------------------------------------------------------------------------
Indiana Indiana Home Loan Practices Act, Ind. Code Xxx. High Cost Home Loan
xx.xx. 24-9-1-1 ET SEQ.
Effective for loans originated on or after
January 1, 2005.
------------------------------------------------------------------------------------------------------------------
Kansas Consumer Credit Code, Kan. Stat. Xxx. xx.xx. High Loan to Value Consumer
16a-1-101 ET SEQ. Loan (ID. ss. 16a-3-207) and;
Sections 16a-1-301 and 16a-3-207 became High APR Consumer Loan (ID. ss.
effective April 14, 1999; Section 16a-3-308a 16a-3-308a)
became effective July 1, 1999
------------------------------------------------------------------------------------------------------------------
Kentucky 2003 KY H.B. 000 - Xxxx Xxxx Xxxx Xxxx Xxx, Xx. High Cost Home Loan
Rev. Stat. xx.xx. 360.100 ET SEQ.
Effective June 24, 2003
------------------------------------------------------------------------------------------------------------------
D-6-2
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER APPLICABLE
LAW/EFFECTIVE DATE ANTI-PREDATORY LENDING LAW
------------------------------------------------------------------------------------------------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. 9-A, xx.xx. High Rate High Fee Mortgage
8-101 ET SEQ.
Effective September 29, 1995 and as amended
from time to time
------------------------------------------------------------------------------------------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. xx.xx. 32.00 ET High Cost Home Loan
SEQ. and 209 C.M.R. xx.xx. 40.01 ET SEQ.
Effective March 22, 2001 and amended from
time to time
Massachusetts Predatory Home Loan Practices Act High Cost Home Mortgage Loan
Mass. Gen. Laws ch. 183C, xx.xx. 1 ET SEQ.
Effective November 7, 2004
------------------------------------------------------------------------------------------------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Stat. xx.xx. Home Loan
598D.010 ET SEQ.
Effective October 1, 2003
------------------------------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, High Cost Home Loan
N.J. Rev. Stat. xx.xx. 46:10B-22 ET SEQ.
Effective for loans closed on or after November
27, 2003
------------------------------------------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Stat. xx.xx. High Cost Home Loan
58-21A-1 ET SEQ.
Effective as of January 1, 2004; Revised as of
February 26, 2004
------------------------------------------------------------------------------------------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on or after
April 1, 2003
------------------------------------------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on High Cost Home High Cost Home Loan
Loans, N.C. Gen. Stat. xx.xx. 24-1.1E ET SEQ.
Effective July 1, 2000; amended October 1,
2003 (adding open-end lines of credit)
D-6-3
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER APPLICABLE
LAW/EFFECTIVE DATE ANTI-PREDATORY LENDING LAW
------------------------------------------------------------------------------------------------------------------
Ohio H.B. 386 (codified in various sections of the Covered Loan
Ohio Code), Ohio Rev. Code Xxx. xx.xx. 1349.25
ET SEQ.
Effective May 24, 2002
------------------------------------------------------------------------------------------------------------------
Oklahoma Consumer Credit Code (codified in various Subsection 10 Mortgage
sections of Title 14A)
Effective July 1, 2000; amended effective
January 1, 2004
------------------------------------------------------------------------------------------------------------------
South Carolina South Carolina High Cost and Consumer Home High Cost Home Loan
Loans Act, S.C. Code Xxx. xx.xx. 37-23-10 ET SEQ.
Effective for loans taken on or after January
1, 2004
------------------------------------------------------------------------------------------------------------------
West Virginia West Virginia Residential Mortgage Lender, West Virginia Mortgage
Broker and Servicer Act, W. Va. Code Xxx. xx.xx. Loan Act Loan
31-17-1 ET SEQ.
Effective June 5, 2002
------------------------------------------------------------------------------------------------------------------
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
---------------------------------------------
---------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER APPLICABLE
LAW/EFFECTIVE DATE ANTI-PREDATORY LENDING LAW
---------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - Mar. 0, Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Xxx. xx.xx. Covered Loan
2003) 7-6A-1 ET SEQ.
Effective October 1, 2002 - March 6, 2003
---------------------------------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, Covered Home Loan
N.J. Rev. Stat. xx.xx. 46:10B-22 ET SEQ.
Effective November 27, 2003 - July 5, 2004
---------------------------------------------------------------------------------------------------------------------
D-6-4
STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------
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STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING LAW/EFFECTIVE CATEGORY UNDER APPLICABLE
DATE ANTI-PREDATORY LENDING LAW
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Georgia (Oct. 1, 2002 - Mar. 0, Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Xxx. xx.xx. Home Loan
2003) 7-6A-1 ET SEQ.
Effective October 1, 2002 - March 6, 2003
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New Jersey New Jersey Home Ownership Security Act of 2002, Home Loan
N.J. Rev. Stat. xx.xx. 46:10B-22 ET SEQ.
Effective for loans closed on or after November
27, 2003
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New Mexico Home Loan Protection Act, N.M. Rev. Stat. xx.xx. Home Loan
58-21A-1 ET SEQ.
Effective as of January 1, 2004; Revised as of
February 26, 2004
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North Carolina Restrictions and Limitations on High Cost Home Consumer Home Loan
Loans, N.C. Gen. Stat. xx.xx. 24-1.1E ET SEQ.
Effective July 1, 2000; amended October 1,
2003 (adding open-end lines of credit)
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South Carolina South Carolina High Cost and Consumer Home Consumer Home Loan
Loans Act, S.C. Code Xxx. xx.xx. 37-23-10 ET SEQ.
Effective for loans taken on or after January
1, 2004
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SCHEDULE A
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
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Public Notes
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Class S&P Xxxxx'x
------------------------------- ------------ --------------
Class A-1...................... AAA Aaa
Class A-2...................... AAA Aaa
None of the above ratings has been lowered since the respective dates of such
letters.
Private Notes
-------------
Class S&P Xxxxx'x
------------------------------- ------------ --------------
Class A-3...................... AAA Aaa
Class A-4...................... AAA Aaa
Class B-1...................... NR Aa2
Class B-2...................... NR A2
Class B-3...................... NR Baa2
Class B-4...................... NR Ba2
Class B-5...................... NR B2
Class B-6...................... NR NR
Class X-1...................... NR Baa3
None of the above ratings has been lowered since the respective dates of such
letters.
D-A-1
SCHEDULE B
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MORTGAGE LOAN SCHEDULE
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[Provided upon request]
D-B-1
