EXECUTION COPY
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
JPMORGAN CHASE BANK,
TRUSTEE
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION
SELLER AND COMPANY
------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2004
------------------------------------------------------------
Structured Asset Mortgage Investments II Inc.
Bear Xxxxxxx ALT-A Trust, Mortgage Pass-Through Certificates
Series 2004-7
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee......................38
Section 2.02 Acceptance of Mortgage Loans by Trustee......................40
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement....................................................42
Section 2.04 Substitution of Mortgage Loans...............................43
Section 2.05 Issuance of Certificates.....................................44
Section 2.06 Representations and Warranties Concerning the Depositor......44
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer..............................................46
Section 3.02 REMIC-Related Covenants......................................47
Section 3.03 Monitoring of Servicers......................................47
Section 3.04 Fidelity Bond................................................48
Section 3.05 Power to Act; Procedures.....................................48
Section 3.06 Due-on-Sale Clauses; Assumption Agreements...................49
Section 3.07 Release of Mortgage Files....................................49
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee..............................50
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.......51
Section 3.10 Presentment of Claims and Collection of Proceeds.............51
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.......52
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents.......................................52
Section 3.13 Realization Upon Defaulted Mortgage Loans....................52
Section 3.14 Compensation for the Master Servicer.........................53
Section 3.15 REO Property.................................................53
Section 3.16 Annual Officer's Certificate as to Compliance................54
Section 3.17 Annual Independent Accountant's Servicing Report.............54
Section 3.18 Reports Filed with Securities and Exchange Commission........55
Section 3.19 The Company..................................................55
Section 3.20 UCC..........................................................55
Section 3.21 Optional Purchase of Defaulted Mortgage Loans................56
ARTICLE IV
Accounts
Section 4.01 Protected Accounts...........................................57
Section 4.02 Master Servicer Collection Account...........................58
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account..................................59
Section 4.04 Distribution Account.........................................60
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account.........................................60
ARTICLE V
Certificates
Section 5.01 Certificates.................................................63
Section 5.02 Registration of Transfer and Exchange of Certificates........71
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............75
Section 5.04 Persons Deemed Owners........................................75
Section 5.05 Transfer Restrictions on Residual Certificates...............75
Section 5.06 Restrictions on Transferability of Certificates..............76
Section 5.07 ERISA Restrictions...........................................77
Section 5.08 Rule 144A Information........................................78
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates............................79
Section 6.02 Allocation of Losses.........................................83
Section 6.03 Payments.....................................................85
Section 6.04 Statements to Certificateholders.............................86
Section 6.05 Monthly Advances.............................................88
Section 6.06 Compensating Interest Payments...............................89
Section 6.07 Distributions on REMIC I Regular Interests...................89
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer...........................91
Section 7.02 Merger or Consolidation of the Master Servicer...............91
Section 7.03 Indemnification of the Trustee, the Master Servicer and
the Securities Administrator.................................91
Section 7.04 Limitations on Liability of the Master Servicer and
Others.......................................................92
Section 7.05 Master Servicer Not to Resign................................93
Section 7.06 Successor Master Servicer....................................93
Section 7.07 Sale and Assignment of Master Servicing......................93
ARTICLE VIII
Default
Section 8.01 Events of Default............................................95
Section 8.02 Trustee to Act; Appointment of Successor.....................96
Section 8.03 Notification to Certificateholders...........................97
Section 8.04 Waiver of Defaults...........................................97
Section 8.05 List of Certificateholders...................................98
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee............................................99
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator...............................................101
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans..............................102
Section 9.04 Trustee and Securities Administrator May Own Certificates...103
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses....................................................103
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator...............................................103
Section 9.07 Insurance...................................................104
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator...............................................104
Section 9.09 Successor Trustee and Successor Securities Administrator....105
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator...............................................106
Section 9.11 Appointment of Co-Trustee or Separate Trustee...............106
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration....................107
ARTICLE X
Termination
Xxxxxxx 00.00 Xxxxxxxxxxx Xxxx Xxxxxxxxxx by EMC or its Designee or
Liquidation of the Mortgage Loans...........................110
Section 10.02 Additional Termination Requirements.........................112
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties...........................................114
Section 11.02 Amendment...................................................114
Section 11.03 Recordation of Agreement....................................115
Section 11.04 Limitation on Rights of Certificateholders..................115
Section 11.05 Acts of Certificateholders..................................116
Section 11.06 Governing Law...............................................117
Section 11.07 Notices.....................................................117
Section 11.08 Severability of Provisions..................................118
Section 11.09 Successors and Assigns......................................118
Section 11.10 Article and Section Headings................................118
Section 11.11 Counterparts................................................118
Section 11.12 Notice to Rating Agencies...................................118
APPENDIX
Appendix 1 - Calculation of Class Y Principal Reduction Amount
EXHIBITS
Exhibit A-1 - Form of Class A Certificates
Exhibit A-2 - Form of Class M, X-0, X-0, X-0 Certificates
Exhibit A-3 - Form of Class X-0, X-0, X-0 Certificates
Exhibit A-4 - Form of Class R Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - Bank of America Servicing Agreement
Exhibit H-2 - Chevy Chase Servicing Agreement
Exhibit H-3 - Countrywide Servicing Agreement
Exhibit H-4 - EMC Servicing Agreement
Exhibit H-5 - EverHome Servicing Agreement
Exhibit X-0 - XxxxxXxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxx X-0 - Xxxxxxxxxx Servicing Agreement
Exhibit H-8 - Xxxxx Fargo Servicing Agreement
Exhibit I - Assignment Agreement
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Form of Trustee Limited Power of Attorney
110
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of July 1, 2004, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), JPMorgan Chase Bank, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Trustee"), Xxxxx Fargo Bank, National Association, as master servicer (in
such capacity, the "Master Servicer") and as securities administrator (in
such capacity, the "Securities Administrator"), and EMC Mortgage Corporation,
as seller (in such capacity, the "Seller") and as company (in such capacity,
the "Company").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from the Seller. On the Closing Date, the Depositor will sell the
Mortgage Loans and certain other property to the Trust Fund and receive in
consideration therefor Certificates evidencing the entire beneficial
ownership interest in the Trust Fund.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as
a REMIC. On the Startup Day, the REMIC I Regular Interests will be
designated "regular interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as
a REMIC. On the Startup Day, the REMIC II Regular Certificates will be
designated "regular interests" in such REMIC.
The Class R Certificate will evidence ownership of the "residual
interest" in each REMIC.
The Group I Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $166,489,669.69. The Group II Loans will have an
Outstanding Principal Balance as of the Cut-off Date, after deducting all
Scheduled Principal due on or before the Cut-off Date, of $715,024,349. The
Group III Loans will have an Outstanding Principal Balance as of the Cut-off
Date, after deducting all Scheduled Principal due on or before the Cut-off
Date, of $105,328,453.53.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator, the Seller, the
Company and the Trustee agree as follows:
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage
Loan, as applicable, either (x) those customary mortgage servicing practices
of prudent mortgage servicing institutions that master service mortgage loans
of the same type and quality as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located, to the extent applicable to the
Trustee or the Master Servicer (except in its capacity as successor to a
Servicer), or (y) as provided in the Servicing Agreement, to the extent
applicable to any Servicer, but in no event below the standard set forth in
clause (x).
Account: The Master Servicer Collection Account, the Distribution
Account and the Protected Account as the context may require.
Accrued Certificate Interest: For any Certificate (other than the
Class R Certificates) for any Distribution Date, the interest accrued during
the related Interest Accrual Period at the applicable Pass-Through Rate on
the Current Principal Amount, of such Certificate immediately prior to such
Distribution Date, on the basis of a 360-day year consisting of twelve 30-day
months, less (i) in the case of a Senior Certificate, such Certificate's
share of any Net Interest Shortfall from the related Mortgage Loans and,
after the Cross-Over Date, the interest portion of any Realized Losses on the
related Mortgage Loans, in each case allocated thereto in accordance with
Section 6.02(g) and (ii) in the case of a Subordinate Certificate, such
Certificate's share of any Net Interest Shortfall from the related Mortgage
Loans and the interest portion of any Realized Losses on the related Mortgage
Loans, in each case allocated thereto in accordance with Section 6.02(g).
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to
direct the management and policies of a Person, directly or indirectly,
whether through ownership of voting securities, by contract or otherwise.
"Controlled" and "Controlling" have meanings correlative to the foregoing.
The Trustee may conclusively presume that a Person is not an Affiliate of
another Person unless a Responsible Officer of the Trustee has actual
knowledge to the contrary.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Aggregate Subordinate Optimal Principal Amount: With respect to any
Distribution Date, the sum of the Subordinate Optimal Principal Amounts for
all Loan Groups for such Distribution Date.
Allocable Share: With respect to any Class of Subordinate Certificates
and any Distribution Date, an amount equal to the product of (i) the
Aggregate Subordinate Optimal Principal Amount and (ii) the fraction, the
numerator of which is the Current Principal Amount of such Class and the
denominator of which is the aggregate Current Principal Amount of all Classes
of the Subordinate Certificates; provided, however, that no Class of
Subordinate Certificates (other Class M Certificates, or if the Class M
Certificates are no longer outstanding, the Class of Class B Certificates
with the lowest numerical designation) shall be entitled on any Distribution
Date to receive distributions pursuant to clauses (ii), (iii) and (v) of the
definition of Subordinate Optimal Principal Amount unless the related
Class Prepayment Distribution Trigger for such Distribution Date has been
satisfied (any amount distributable pursuant to clauses (ii), (iii) and (v)
of the definition of Subordinate Optimal Principal Amount shall be
distributed among the Classes entitled thereto, pro rata based on their
respective Current Principal Amounts); provided, further, that if on a
Distribution Date, the Current Principal Amount of any Class of Subordinate
Certificates for which the related Class Prepayment Distribution Trigger has
been satisfied is reduced to zero, such Class's remaining Allocable Share
shall be distributed to the remaining Classes of Subordinate Certificates
which satisfy the related Class Prepayment Distribution Trigger and to the
Class M Certificates (or if the Class M Certificates are no longer
outstanding, the outstanding Class of Class B Certificates with the lowest
numerical designation) in reduction of their respective Current Principal
Amounts, first to the Class M Certificates and then to the Class B
Certificates in the order of their numerical Class designations.
Applicable Credit Rating: For any long-term deposit or security, a
credit rating of AAA in the case of S&P or Aaa in the case of Moody's (or
with respect to investments in money market funds, a credit rating of "AAAm"
or "AAAm-G" in the case of S&P and the highest rating given by Moody's for
money market funds in the case of Moody's). For any short-term deposit or
security, or a rating of A-l+ in the case of S&P or Prime-1 in the case of
Moody's.
Applicable State Law: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other
state law whose applicability shall have been brought to the attention of the
Securities Administrator and the Trustee by either (i) an Opinion of Counsel
reasonably acceptable to the Securities Administrator and the Trustee
delivered to it by the Master Servicer or the Depositor, or (ii) written
notice from the appropriate taxing authority as to the applicability of such
state law.
Appraised Value: For any Mortgaged Property related to a Mortgage
Loan, the amount set forth as the appraised value of such Mortgaged Property
in an appraisal made for the mortgage originator in connection with its
origination of the related Mortgage Loan.
Assignment Agreement: The agreement attached hereto as Exhibit I,
whereby the Servicing Agreement was assigned to the Trustee for the benefit
of the Certificateholders.
Assumed Final Distribution Date: September 25, 2034, or if such day is
not a Business Day, the next succeeding Business Day.
Available Funds: With respect to any Distribution Date and a Loan
Group, an amount equal to the aggregate of the following amounts with respect
to the Mortgage Loans in the related Loan Group: (a) all previously
undistributed payments on account of principal (including the principal
portion of Scheduled Payments, Principal Prepayments and the principal
portion of Net Liquidation Proceeds) and all previously undistributed
payments on account of interest received after the Cut-off Date and on or
prior to the related Determination Date, (b) any Monthly Advances and
Compensating Interest Payments by the Servicer or the Master Servicer with
respect to such Distribution Date, (c) any reimbursed amount in connection
with losses on investments of deposits in an account and (d) any amount
allocated from the Available Funds of another Loan Group in accordance with
Section 6.01(a)(i)(G) under, except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds received after the
applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that represent early
receipt of Scheduled Payments due on a date or dates subsequent to the
related Due Date;
(iv) amounts received on particular Mortgage Loans as late payments of
principal or interest and respecting which, and to the extent that, there are
any unreimbursed Monthly Advances;
(v) amounts representing Monthly Advances determined to be Nonrecoverable
Advances;
(vi) any investment earnings on amounts on deposit in the Master Servicer
Collection Account and the Distribution Account and amounts permitted to be
withdrawn from the Master Servicer Collection Account and the Distribution
Account pursuant to this Agreement;
(vii) amounts needed to pay the Servicing Fees or to reimburse any Servicer
or the Master Servicer for amounts due under the Servicing Agreement and the
Agreement to the extent such amounts have not been retained by, or paid
previously to, such Servicer or the Master Servicer;
(viii) amounts applied to pay any fees with respect to any lender-paid
primary mortgage insurance policy; and
(ix) any expenses or other amounts reimbursable to the Trustee, the
Securities Administrator, the Master Servicer and the Custodian pursuant to
Section 7.04(c) or Section 9.05.
Average Loss Severity Percentage: With respect to any Distribution
Date and each Loan Group, the percentage equivalent of a fraction, the
numerator of which is the sum of the Loss Severity Percentages for each
Mortgage Loan in such Loan Group which had a Realized Loss and the
denominator of which is the number of Mortgage Loans in the related Loan
Group which had Realized Losses.
Bank of America: Bank of America, National Association.
Bank of America Servicing Agreement: The Flow Mortgage Loan Sale and
Servicing Agreement, dated March 1, 2003 between Bank of America and EMC
attached hereto as Exhibit H-1.
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. §§ 101-1330.
Bankruptcy Loss: With respect to any Mortgage Loan, any Deficient
Valuation or Debt Service Reduction related to such Mortgage Loan as reported
by the Servicer to the Master Servicer.
Book-Entry Certificates: Initially, all Classes of Certificates other
than the Private Certificates and the Residual Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, the
Master Servicer, any Servicer or the Securities Administrator are authorized
or obligated by law or executive order to be closed.
Calendar Quarter: January 1 through March 31, April 1 through June 30,
July 1 through September 30, or October 1 through December 31, as applicable.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by
the Trustee in substantially the forms annexed hereto as Exhibits X-0, X-0,
X-0 and A-4 with the blanks therein appropriately completed.
Certificate Group: With respect to Loan Group I, the Group I
Certificates, with respect to Loan Group II, the Group II Certificates and,
with respect to Loan Group III, the Group III Certificates.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
Certificate Register: The register maintained pursuant to
Section 5.02. Certificateholder: A Holder of a Certificate.
Chevy Chase: Chevy Chase Bank, F.S.B., and its successor in interest.
Chevy Chase Servicing Agreement: Purchase, Warranties and Servicing
Agreement, dated as of July 1, 2001 (as amended) by and between EMC and Chevy
Chase, as attached hereto as Exhibit H-2.
Class: With respect to the Certificates, any of Class I-A-1, Class
II-A-1, Class III-A-1, Class R, Class M, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates.
Class A Certificates: The Class I-A-1, Class II-A-1 and Class III-A-1
Certificates.
Class M Certificates: The Class M Certificates.
Class Prepayment Distribution Trigger: For a Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the
numerator of which is the aggregate Current Principal Amount of such
Class and each Class of Subordinate Certificates, respectively, subordinate
thereto, if any, and the denominator of which is the Scheduled Principal
Balance of all of the Mortgage Loans as of the related Due Date, equals or
exceeds such percentage calculated as of the Closing Date.
Class R Certificate: Any one of the Class R Certificates substantially
in the form annexed hereto as Exhibit A-4 and evidencing ownership of
interests designated as "residual interests" in REMIC I and REMIC II for
purposes of the REMIC Provisions. Component I of the Class R Certificates is
designated as the sole class of "residual interest" in REMIC I and
Component II of the Class R Certificates is designated as the sole class of
"residual interest" in REMIC II.
Class R Deposit: The $100 deposit into the Distribution Account by the
Depositor on the Closing Date to pay the Class R Certificates in accordance
with Section 6.01(a) on the Distribution Date occurring in August 2004.
Class Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the Class Y Regular
Interests will be reduced on such Distribution Date by the allocation of
Realized Losses and the distribution of principal, determined as described in
Appendix I
Class Y Regular Interests: The Class Y-1, Class Y-2 and Class Y-3
Regular Interests.
Class Y-1 Principal Distribution Amount: For any Distribution Date,
the excess, if any, of the Class Y-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the Class Y-1 Regular Interest on such Distribution Date.
Class Y-1 Principal Reduction Amount : The Class Y Principal Reduction
Amount for the Class Y-1 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Y-1 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is
entitled to distributions as set forth herein.
Class Y-2 Principal Distribution Amount: For any Distribution Date,
the excess, if any, of the Class Y-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the Class Y-2 Regular Interest on such Distribution Date.
Class Y-2 Principal Reduction Amount : The Class Y Principal Reduction
Amount for the Class Y-2 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Y-2 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is
entitled to distributions as set forth herein.
Class Y-3 Principal Distribution Amount: For any Distribution Date,
the excess, if any, of the Class Y-3 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the Class Y-3 Regular Interest on such Distribution Date.
Class Y-3 Principal Reduction Amount : The Class Y Principal Reduction
Amount for the Class Y-3 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Y-3 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is
entitled to distributions as set forth herein.
Class Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the Class Z Regular
Interests will be reduced on such Distribution Date by the allocation of
Realized Losses and the distribution of principal, which shall be in each
case the excess of (A) the sum of (x) the excess of the REMIC I Available
Distribution Amount for the related Group (i.e. the "related Group" for the
Class Z-1 Regular Interest is the Group I Loans, the "related Group" for the
Class Z-2 Regular Interest is the Group II Loans, and the "related Group" for
the Class Z-3 Regular Interest is the Group III Loans) over the sum of the
amounts thereof distributable (i) in respect of interest on such Class Z
Regular Interest and the related Class Y Regular Interest, (ii) to such Class
Z Regular Interest and the related Class Y Regular Interest pursuant to
clause (c)(ii) of the definition of "REMIC I Distribution Amount" and (iii)
in the case of the Group I Loans, to the Class R Residual Interest and (y)
the amount of Realized Losses allocable to principal for the related Group
over (B) the Class Y Principal Reduction Amount for the related Group.
Class Z Regular Interests: The Class Z-1, Class Z-2 and Class Z-3
Regular Interests.
Class Z-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the Class Z-1 Regular Interest on such Distribution Date.
Class Z-1 Principal Reduction Amount : The Class Z Principal Reduction
Amount for the Class Z-1 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Z-1 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is
entitled to distributions as set forth herein.
Class Z-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the Class Z-2 Regular Interest on such Distribution Date.
Class Z-2 Principal Reduction Amount : The Class Z Principal Reduction
Amount for the Class Z-2 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Z-2 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is
entitled to distributions as set forth herein.
Class Z-3 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-3 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the Class Z-3 Regular Interest on such Distribution Date .
Class Z-3 Principal Reduction Amount : The Class Z Principal Reduction
Amount for the Class Z-3 Regular Interest as determined pursuant to the
provisons of the Appendix 1.
Class Z-3 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is
entitled to distributions as set forth herein.
Closing Date: July 26, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payment: As defined in Section 6.06.
Corporate Trust Office: The designated office of the Trustee where at
any particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of the execution of
this Agreement is located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Institutional Trust Services/Global Debt, Bear Xxxxxxx
ALT-A Trust 2004-7. For the purpose of registration and transfer and
exchange only, the Corporate Trust Office shall be located at 0000 Xxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxx, 00000, Attn: ITS Transfer Department.
Countrywide: Countrywide Home Loans, Inc., and its successor in
interest.
Countrywide Servicing: Countrywide Home Loans Servicing LP and its
successor in interest.
Countrywide Servicing Agreement: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2002, as amended, between Countrywide
Servicing and EMC attached hereto as Exhibit H-3.
Cross-Over Date: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero.
Current Principal Amount: With respect to any Certificate as of any
Distribution Date, the initial principal amount of such Certificate plus, in
the case of a Subordinate Certificates, any Subsequent Recoveries added to
the Current Principal Amount of such Certificates pursuant to Section 6.02(h)
hereof, and reduced by (i) all amounts distributed on previous Distribution
Dates on such Certificate with respect to principal, (ii) the principal
portion of all Realized Losses (other than Realized Losses resulting from
Debt Service Reductions) allocated prior to such Distribution Date to such
Certificate, taking account of the Loss Allocation Limitation and (iii) in
the case of a Subordinate Certificate, such Certificate's pro rata share, if
any, of the applicable Subordinate Certificate Writedown Amount for previous
Distribution Dates. With respect to any Class of Certificates, the Current
Principal Amount thereof will equal the sum of the Current Principal Amounts
of all Certificates in such Class. The initial Current Principal Amount for
each Class of Certificates is set forth in Section 5.01(c)(iv).
Notwithstanding the foregoing, solely for purposes of giving consents,
directions, waivers, approvals, requests and notices, the Class R
Certificates after the Distribution Date on which the principal thereof has
been paid in full shall be deemed to have a Current Principal Amount equal to
the Current Principal Amount thereof on the day immediately preceding such
Distribution Date.
Custodial Agreement: An agreement, dated as of the Closing Date among
the Depositor, the Master Servicer, the Trustee and the Custodian in
substantially the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank, National Association, or any successor
custodian appointed pursuant to the provisions hereof and of the Custodial
Agreement.
Cut-off Date: July 1, 2004.
Cut-off Date Balance: $986,842,472.24
Debt Service Reduction: Any reduction of the Scheduled Payments which
a Mortgagor is obligated to pay with respect to a Mortgage Loan as a result
of any proceeding under the Bankruptcy Code or any other similar state law or
other proceeding.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code or
any other similar state law or other proceeding.
Depositor: Structured Asset Mortgage Investments II Inc., a Delaware
corporation, or its successors in interest.
Depository: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
Depository Agreement: The meaning specified in Section 5.01(a) hereof.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution
(commercial bank, federal savings bank, mutual savings bank or savings and
loan association) or trust company (which may include the Trustee), the
deposits of which are fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the
Determination Date as defined in the Servicing Agreement.
Disqualified Organization: Any of the following: (i) the United
States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing
(other than an instrumentality which is a corporation if all of its
activities are subject to tax and, except for the Xxxxxxx Mac or any
successor thereto, a majority of its board of directors is not selected by
such governmental unit), (ii) any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing,
(iii) any organization (other than certain farmers' cooperatives described in
Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code (including the tax imposed by Section 511 of the Code on unrelated
business taxable income), (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code or (v) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the holding
of an ownership interest in a Residual Certificate by such Person may cause
any 2004-7 REMIC contained in the Trust or any Person having an ownership
interest in the Residual Certificate (other than such Person) to incur a
liability for any federal tax imposed under the Code that would not otherwise
be imposed but for the transfer of an ownership interest in a Residual
Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
Distribution Account: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "JPMorgan
Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage Investments
II Inc., Bear Xxxxxxx ALT-A Trust 2004-7, Mortgage Pass-Through Certificates,
Series 2004-7 - Distribution Account." The Distribution Account shall be an
Eligible Account.
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is
not a Business Day, the Business Day immediately following.
DTC Custodian: JPMorgan Chase Bank, or its successors in interest as
custodian for the Depository.
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 Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the
month in which the Distribution Date occurs and ending at the close of
business on the first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term
obligations of which are rated A-1 or better by Standard & Poor's and P-1 by
Moody's at the time of any deposit therein or (B) insured by the FDIC (to the
limits established by such Corporation), the uninsured deposits in which
account are otherwise secured such that, as evidenced by an Opinion of
Counsel (obtained by the Person requesting that the account be held pursuant
to this clause (i)) delivered to the Trustee prior to the establishment of
such account, the Certificateholders will have a claim with respect to the
funds in such account and a perfected first priority security interest
against any collateral (which shall be limited to Permitted Investments, each
of which shall mature not later than the Business Day immediately preceding
the Distribution Date next following the date of investment in such
collateral or the Distribution Date if such Permitted Investment is an
obligation of the institution that maintains the Distribution Account)
securing such funds that is superior to claims of any other depositors or
general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies that use of any such account as
the Distribution Account will not have an adverse effect on the then-current
ratings assigned to the Classes of Certificates then rated by the Rating
Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation, and any successor thereto.
EMC Servicing Agreement: The Servicing Agreement, dated as of July 1,
2004, between Structured Asset Mortgage Investments II Inc. and EMC as
attached hereto as Exhibit H-5.
Event of Default: As defined in Section 8.01.
EverHome: EverHome Mortgage Company (formerly known as Alliance
Mortgage Corporation), and any successor thereto.
EverHome Servicing Agreement: The Subservicing Agreement, dated as of
August 1, 2002, as amended, between EverHome (as successor to Alliance
Mortgage Company) and EMC attached hereto as Exhibit H-4.
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed
the sum of (i) the Outstanding Principal Balance of such Mortgage Loan and
accrued but unpaid interest at the related Mortgage Interest Rate through the
last day of the month in which the related Liquidation Date occurs, plus
(ii) related Liquidation Expenses.
Xxxxxx Xxx: Federal National Mortgage Association and any successor
thereto.
FDIC: Federal Deposit Insurance Corporation and any successor thereto.
Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
Fractional Undivided Interest: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate
of such Class the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the Current Principal Amount of
such Class. With respect to the Certificates in the aggregate, the
fractional undivided interest evidenced by (i) a Residual Certificate will be
deemed to equal 1.0% and (ii) a Certificate of any other Class will be deemed
to equal 99.0% multiplied by a fraction, the numerator of which is the
Current Principal Amount of such Certificate and the denominator of which is
the aggregate Current Principal Amount of all the Certificates.
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, and any successor thereto.
Global Certificate: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an
account with such Depository (directly or as an indirect participant in
accordance with the rules of such depository).
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule
which percentage is added to the related Index on each Interest Adjustment
Date to determine (subject to rounding, the minimum and maximum Mortgage
Interest Rate and the Periodic Rate Cap) the Mortgage Interest Rate until the
next Interest Adjustment Date.
Group I Certificates: The Class I-A-1 Certificates.
Group I Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
Group II Certificates: The Class II-A-1 Certificates.
Group II Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
Group III Certificates: The Class III-A-1 Certificates.
Group III Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Sections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Master Servicer or
the Trustee or any Affiliate thereof shall be deemed not to be outstanding
and the Fractional Undivided Interest evidenced thereby shall not be taken
into account in determining whether the requisite percentage of Fractional
Undivided Interests necessary to effect any such consent has been obtained.
Indemnified Persons: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the
Master Servicer and of any Affiliate of the Depositor or the Master Servicer,
(b) does not have any direct financial interest or any material indirect
financial interest in the Depositor or the Master Servicer or any Affiliate
of the Depositor or the Master Servicer and (c) is not connected with the
Depositor or the Master Servicer or any Affiliate as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing
similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Institutional Accredited Investor: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act
or any entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses.
Interest Accrual Period: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which
such Distribution Date occurs.
Interest Adjustment Date: With respect to a Mortgage Loan, the date,
if any, specified in the related Mortgage Note on which the Mortgage Interest
Rate is subject to adjustment.
Interest Shortfall: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) Partial principal prepayments received during the relevant Prepayment
Period: The difference between (i) one month's interest at the applicable Net
Rate on the amount of such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment;
(b) Principal prepayments in full received during the relevant Prepayment
Period: The difference between (i) one month's interest at the applicable Net
Rate on the Scheduled Principal Balance of such Mortgage Loan immediately prior
to such prepayment and (ii) the amount of interest for the calendar month of
such prepayment (adjusted to the applicable Net Rate) received at the time of
such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a principal prepayment in
full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a principal prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a principal prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the annual interest rate required to be paid by the
Mortgagor as limited by application of the Relief Act.
Interim Certification: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
Investment Letter: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as
Exhibit F-1 hereto.
Lender-Paid PMI Rate: With respect to each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the
related insurer, as stated in the Mortgage Loan Schedule.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Servicer or the Master Servicer has determined that all amounts it expects to
recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer or the Servicer has certified that such
Mortgage Loan has become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the Servicer in connection with the liquidation of such Mortgage
Loan and the related Mortgage Property, such expenses including (a) property
protection expenses, (b) property sales expenses, (c) foreclosure and sale
costs, including court costs and reasonable attorneys' fees, and (d) similar
expenses reasonably paid or incurred in connection with liquidation.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure
sale, Insurance Proceeds, condemnation proceeds or otherwise and Subsequent
Recoveries.
Loan Group: Loan Group I, Loan Group II, or Loan Group III, as
applicable.
Loan Group I: The group of Mortgage Loans designated as belonging to
Loan Group I on the Mortgage Loan Schedule.
Loan Group II: The group of Mortgage Loans designated as belonging to
Loan Group II on the Mortgage Loan Schedule.
Loan Group III: The group of Mortgage Loans designated as belonging to
Loan Group III on the Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Loss Allocation Limitation: The meaning specified in Section 6.02(c)
hereof.
Loss Severity Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is
the Scheduled Principal Balance of such Mortgage Loan immediately prior to
the liquidation of such Mortgage Loan.
Lost Notes: The original Mortgage Notes that have been lost, as
indicated on the Mortgage Loan Schedule.
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank, National
Association and, thereafter, its respective successors in interest that meet
the qualifications of the Servicing Agreements and this Agreement.
Master Servicer Certification: A written certification covering
servicing of the Mortgage Loans by the Servicers and signed by an officer of
the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the
Staff of the Division of Corporation Finance of the Securities and Exchange
Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act
Rules 13a-14 and 15d-14, as in effect from time to time; provided that if,
after the Closing Date (a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the
Statement referred to in clause (ii) is modified or superceded by any
subsequent statement, rule or regulation of the Securities and Exchange
Commission or any statement of a division thereof, or (c) any future
releases, rules and regulations are published by the Securities and Exchange
Commission from time to time pursuant to the Xxxxxxxx-Xxxxx Act of 2002,
which in any such case affects the form or substance of the required
certification and results in the required certification being, in the
reasonable judgment of the Master Servicer, materially more onerous than the
form of the required certification as of the Closing Date, the Master
Servicer Certification shall be as agreed to by the Master Servicer and the
Depositor following a negotiation in good faith to determine how to comply
with any such new requirements.
Master Servicer Collection Account: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"JPMorgan Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage
Investments II Inc., Bear Xxxxxxx ALT-A Trust 2004-7, Mortgage Pass-Through
Certificates, Series 2004-7, Collection Account." The Master Servicer
Collection Account shall be an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Material Defect: The meaning specified in Section 2.02(a).
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes
in the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS® System: The system of recording transfers of Mortgage Loans
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS® System.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes
in the applicable Index.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Advance: An advance of principal or interest required to be
made by the Servicer pursuant to the Servicing Agreement or the Master
Servicer pursuant to Section 6.05.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first priority lien on an estate in fee simple or leasehold interest in real
property securing a Mortgage Loan.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note,
which rate is initially equal to the "Mortgage Interest Rate" set forth with
respect thereto on the Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust
Fund, as identified in the Mortgage Loan Schedule (which shall include,
without limitation, with respect to each Mortgage Loan, each related Mortgage
Note, Mortgage and Mortgage File and all rights appertaining thereto),
including a mortgage loan the property securing which has become an REO
Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of July 26, 2004, between EMC, as seller, and Structured Asset
Mortgage Investments II Inc., as purchaser, and all amendments thereof and
supplements thereto, attached as Exhibit J.
Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B
with respect to the Mortgage Loans and as amended from time to time to
reflect the repurchase or substitution of Mortgage Loans pursuant to this
Agreement.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Interest Shortfall: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable
therefrom to the Servicer or the Master Servicer in accordance with the
Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
Servicer or the Master Servicer and Monthly Advances.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the sum of (1) the Servicing Fee Rate
and (2) the Lender Paid PMI Rate, if any, attributable thereto, in each case
expressed as a per annum rate.
Non-Offered Subordinate Certificates: The Class B-4, Class B-5 and
Class B-6 Certificates.
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the applicable Servicer and (ii) which, in
the good faith judgment of the Master Servicer, the Trustee or the applicable
Servicer , will not or, in the case of a proposed advance or Monthly Advance,
would not, be ultimately recoverable by the Master Servicer, the Trustee (as
successor Master Servicer) or the applicable Servicer from Liquidation
Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for
which such advance or Monthly Advance was made or is proposed to be made.
Offered Certificates: The Class I-A-1, Class II-A-1, Class III-A-1,
Class R, Class M, Class B-1, Class B-2 and Class B-3 Certificates.
Offered Subordinate Certificates: The Class X-x, Class B-2 and
Class B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer
or the Depositor, as applicable, and delivered to the Trustee, as required by
this Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Company,
the Master Servicer or the Depositor.
Optional Termination Date: The Distribution Date on which the aggregate
Scheduled Principal Balance of the Mortgage Loans is less than 10% of the
Cut-off Date Balance.
Original Subordinate Principal Balance: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Closing Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the
sales price of a Mortgaged Property at the time of origination of a Mortgage
Loan, except in instances where either clauses (i) or (ii) is unavailable,
the other may be used to determine the Original Value, or if both clauses
(i) and (ii) are unavailable, Original Value may be determined from other
sources reasonably acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.
Outstanding Principal Balance: As of the time of any determination,
the principal balance of a Mortgage Loan remaining to be paid by the
Mortgagor, or, in the case of an REO Property, the principal balance of the
related Mortgage Loan remaining to be paid by the Mortgagor at the time such
property was acquired by the Trust Fund less any Net Liquidation Proceeds
with respect thereto to the extent applied to principal.
Pass-Through Rate: As to each Class of Certificates, the REMIC I
Regular Interests and REMIC II Regular Interests, the rate of interest
determined as provided with respect thereto, in Section 5.01(c). Any monthly
calculation of interest at a stated rate shall be based upon annual interest
at such rate divided by twelve.
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment of which are
fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers' acceptances
issued by any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (including the
Trustee or the Master Servicer or its Affiliates acting in its commercial
banking capacity) and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper and/or
the short-term debt rating and/or the long-term unsecured debt obligations of
such depository institution or trust company at the time of such investment
or contractual commitment providing for such investment have the Applicable
Credit Rating or better from each Rating Agency and (b) any other demand or
time deposit or certificate of deposit that is fully insured by the Federal
Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security described in
clause (i) above or (b) any other security issued or guaranteed by an agency
or instrumentality of the United States of America, the obligations of which
are backed by the full faith and credit of the United States of America, in
either case entered into with a depository institution or trust company
(acting as principal) described in clause (ii)(a) above where the Trustee
holds the security therefor;
(iv) securities bearing interest or sold at a discount issued by any
corporation (including the Trustee or the Master Servicer or its Affiliates)
incorporated under the laws of the United States of America or any state
thereof that have the Applicable Credit Rating or better from each Rating
Agency at the time of such investment or contractual commitment providing for
such investment; provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that investments
therein will cause the then outstanding principal amount of securities issued
by such corporation and held as part of the Trust to exceed 10% of the
aggregate Outstanding Principal Balances of all the Mortgage Loans and
Permitted Investments held as part of the Trust;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof)
having the Applicable Credit Rating or better from each Rating Agency at the
time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance company or other
corporation or entity;
(vii) any other demand, money market or time deposit, obligation, security or
investment as may be acceptable to each Rating Agency as evidenced in writing
by each Rating Agency to the Trustee; and
(viii) any money market or common trust fund having the Applicable Credit Rating
or better from each Rating Agency, including any such fund for which the Trustee
or the Master Servicer or any affiliate of the Trustee or the Master Servicer
acts as a manager or an advisor; provided, however, that no instrument or
security shall be a Permitted Investment if such instrument or security
evidences a right to receive only interest payments with respect to the
obligations underlying such instrument or if such security provides for payment
of both principal and interest with a yield to maturity in excess of 120% of the
yield to maturity at par or if such instrument or security is purchased at a
price greater than par.
Permitted Transferee: Any Person other than a Disqualified
Organization or an "electing large partnership" (as defined by Section 775 of
the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Physical Certificates: The Residual Certificates and the Private
Certificates.
Plan: The meaning specified in Section 5.07(a).
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, if any or any
replacement policy therefor through the related Interest Accrual Period for
such Class relating to a Distribution Date.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as
to interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment, including Insurance
Proceeds and Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
Private Certificates: The Class B-4, Class B-5 or Class B-6
Certificate.
Prospectus: The prospectus, dated May 14, 2004, as supplemented by the
prospectus supplement dated July 22, 2004, relating to the offering of the
Offered Certificates.
Protected Account: An account established and maintained for the
benefit of Certificateholders by the Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the Servicing
Agreement.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the
claims paying ability of which is acceptable to the Rating Agencies for
pass-through certificates having the same rating as the Certificates rated by
the Rating Agencies as of the Closing Date.
Rating Agencies: Xxxxx'x and S&P.
Realized Loss: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated
Mortgage Loan plus accrued and unpaid interest thereon at the Mortgage
Interest Rate through the last day of the month of such liquidation, less (y)
the related Net Liquidation Proceeds with respect to such Mortgage Loan and
the related Mortgage Property. In addition, to the extent the Master
Servicer receives Subsequent Recoveries with respect to any Mortgage Loan,
the amount of the Realized Loss with respect to that Mortgage Loan will be
reduced to the extent such recoveries are applied to reduce the Current
Principal Amount of any Class of Certificates on any Distribution Date.
Realized Losses on the Mortgage Loans shall be allocated to the REMIC I
Regular Interests as follows: (1) The interest portion of Realized Losses and
Net Interest Shortfalls on the Group I Loans, if any, shall be allocated
between the Class Y-1 and Class Z-1 Regular Interests pro rata according to
the amount of interest accrued but unpaid thereon, in reduction thereof; (2)
the interest portion of Realized Losses and Net Interest Shortfalls on the
Group II Loans, if any, shall be allocated between the Class Y-2 and Class
Z-2 Regular Interests pro rata according to the amount of interest accrued
but unpaid thereon, in reduction thereof; and (3) the interest portion of
Realized Losses and Net Interest Shortfalls on the Group III Loans, if any,
shall be allocated between the Class Y-3 and Class Z-3 Regular Interests pro
rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof. Any interest portion of such Realized Losses in excess of
the amount allocated pursuant to the preceding sentence shall be treated as a
principal portion of Realized Losses not attributable to any specific
Mortgage Loan in such Group and allocated pursuant to the succeeding
sentences. The principal portion of Realized Losses with respect to the
Mortgage Loans shall be allocated to the REMIC I Regular Interests as
follows: (1) the principal portion of Realized Losses on the Group I Loans
shall be allocated, first, to the Class Y-1 Regular Interest to the extent of
the Class Y-1 Principal Reduction Amount in reduction of the Uncertificated
Principal Balance of such Regular Interest and, second, the remainder, if
any, of such principal portion of such Realized Losses shall be allocated to
the Class Z-1 Regular Interest in reduction of the Uncertificated Principal
Balance thereof; (2) the principal portion of Realized Losses on the Group II
Loans shall be allocated, first, to the Class Y-2 Regular Interest to the
extent of the Class Y-2 Principal Reduction Amount in reduction of the
Uncertificated Principal Balance of such Regular Interest and, second, the
remainder, if any, of such principal portion of such Realized Losses shall be
allocated to the Class Z-2 Regular Interest in reduction of the
Uncertificated Principal Balance thereof; and (3) the principal portion of
Realized Losses on the Group III Loans shall be allocated, first, to the
Class Y-3 Regular Interest to the extent of the Class Y-3 Principal Reduction
Amount in reduction of the Uncertificated Principal Balance of such Regular
Interest and, second, the remainder, if any, of such principal portion of
such Realized Losses shall be allocated to the Class Z-3 Regular Interest in
reduction of the Uncertificated Principal Balance thereof. For any
Distribution Date, reductions in the Uncertificated Principal Balances of the
Class Y and Class Z Regular Interest pursuant to this definition of Realized
Loss shall be determined, and shall be deemed to occur, prior to any
reductions of such Uncertificated Principal Balances by distributions on such
Distribution Date.
Record Date: For each Class of Certificates, the close of business on
the last Business Day of the month immediately preceding the month of such
Distribution Date.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
Relief Act: The Servicemembers Civil Relief Act, as amended, or
similar state law.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Administrator: The Trustee; provided that if the REMIC
Administrator is found by a court of competent jurisdiction to no longer be
able to fulfill its obligations as REMIC Administrator under this Agreement
the Servicer or Trustee acting as Servicer shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator obligations
under this Agreement.
REMIC Interest: Any of REMIC I Interests and REMIC II Interests.
REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions,
(i) cause any 2004-7 REMIC to fail to qualify as a REMIC while any regular
interest in such 2004-7 REMIC is outstanding, (ii) result in a tax on
prohibited transactions with respect to any 2004-7 REMIC or (iii) constitute
a taxable contribution to any 2004-7 REMIC after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code,
and related provisions and regulations promulgated thereunder, as the
foregoing may be in effect from time to time.
REMIC Regular Interest: Any of REMIC I Regular Interests and REMIC II
Regular Interests.
REMIC I: The segregated pool of assets, with respect to which a REMIC
election is made pursuant to this Agreement, consisting of:
(a) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(b) all payments on and collections in respect of the Mortgage Loans
due after the Cut-off Date as shall be on deposit in the Master Servicer
Collection Account or in the Distribution Account and identified as belonging
to the Trust Fund,
(c) property that secured a Mortgage Loan and that has been acquired
for the benefit of the Certificateholders by foreclosure or deed in lieu of
foreclosure,
(d) the hazard insurance policies and Primary Mortgage Insurance
Policy, if any, and
(e) all proceeds of clauses (a) through (d) above.
REMIC I Available Distribution Amount: For each Loan Group for any
Distribution Date, the Available Funds for such Loan Group.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and the Class R Residual Interest in the following amounts and
priority:
(a) To the extent of the REMIC I Available Distribution Amount for Loan
Group I:
(i) first, to Class Y-1 and Class Z-1 Regular Interests and
Component I of the Class R Certificates, concurrently, the
Uncertificated Interest for such Classes remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(ii) second, to the Class Y-1 and Class Z-1 Regular Interests
and Component I of the Class R Certificates, concurrently, the
Uncertificated Interest for such Classes for the current Distribution
Date, pro rata according to their respective Uncertificated Interest;
(iii) third, to Component I of the Class R Certificates, until
the Uncertificated Principal Balance thereof has been reduced to zero;
and
(iv) fourth, to the Class Y-1 and Class Z-1 Regular Interests,
the Class Y-1 Principal Distribution Amount and the Class Z-1 Principal
Distribution Amount, respectively.
(b) To the extent of the REMIC I Available Distribution Amount for
Loan Group II:
(i) first, to the Class Y-2 and Class Z-2 Regular Interests,
concurrently, the Uncertificated Interest for such Classes remaining
unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(ii) second, to the Class Y-2 and Class Z-2 Regular Interests,
concurrently, the Uncertificated Interest for such Classes for the
current Distribution Date, pro rata according to their respective
Uncertificated Interest; and
(iii) third, to the Class Y-2 and Class Z-2 Regular Interests,
the Class Y-2 Principal Distribution Amount and the Class Z-2 Principal
Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amount for
Loan Group III:
(i) first, to the Class Y-3 and Class Z-3 Regular Interests,
concurrently, the Uncertificated Interest for such Classes remaining
unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(ii) second, to the Class Y-3 and Class Z-3 Regular Interests,
concurrently, the Uncertificated Interest for such Classes for the
current Distribution Date, pro rata according to their respective
Uncertificated Interest; and
(iii) third, to the Class Y-3 and Class Z-3 Regular Interests,
the Class Y-3 Principal Distribution Amount and the Class Z-3 Principal
Distribution Amount, respectively.
(d) To the extent of the REMIC I Available Distribution Amounts for
Loan Group I, Loan Group II and Loan Group III for such Distribution Date
remaining after payment of the amounts pursuant to paragraphs (a), (b) and
(c) of this definition of "REMIC I Distribution Amount":
(i) first, to each Class of Class Y and Class Z Regular
Interests, pro rata according to the amount of unreimbursed Realized
Losses allocable to principal previously allocated to each such Class;
provided, however, that any amounts distributed pursuant to this
paragraph (d)(i) of this definition of "REMIC I Distribution Amount"
shall not cause a reduction in the Uncertificated Principal Balances of
any of the Class Y and Class Z Regular Interests; and
(ii) second, to the Component I of the Class R Certificates, the
Residual Distribution Amount for Component I of the Class R
Certificates for such Distribution Date.
REMIC I Interest: The REMIC I Regular Interests and Component I of the
Class R Certificates.
REMIC I Regular Interest: Any of the separate non-certificated
beneficial ownership interests in REMIC I set forth in Section 5.01(c) and
issued hereunder and designated as a "regular interest" in REMIC I. Each
REMIC I Regular Interest shall accrue interest at the Uncertificated
Pass-Through Rate specified for such REMIC I Interest in Section 5.01(c), and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance as set forth in Section 5.01(c). The designations for the
respective REMIC I Regular Interests are set forth in Section 5.01(c).
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests and any proceeds
thereof.
REMIC II Interests: The REMIC II Regular Interests and Component II of
the Class R Certificates.
REMIC II Regular Interests: As defined in Section 5.01(c).
REO Property: A Mortgaged Property acquired in the name of the
Trustee, for the benefit of Certificateholders, by foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller
pursuant to the Mortgage Loan Purchase Agreement or Article II of 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 or to the Master
Servicer and (ii) any costs and damages (if any) incurred by the Trust in
connection with any violation of such Mortgage Loan of any predatory or
abusive lending laws.
Repurchase Proceeds: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller and any cash deposit in
connection with the substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under
this Agreement with respect to such Mortgage Loan.
Residual Certificates: The Class R Certificates.
Responsible Officer: Any officer assigned to the Corporate Trust
Office (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and any other
officer of the Trustee to whom a matter arising hereunder may be referred.
Rule 144A Certificate: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate)
which is a Qualified Institutional Buyer as defined under Rule 144A
promulgated under the Securities Act, substantially in the form set forth as
Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
and its successors in interest.
Scheduled Payment: With respect to any Mortgage Loan and any Due
Period, the scheduled payment or payments of principal and interest due
during such Due Period on such Mortgage Loan which either is payable by a
Mortgagor in such Due Period under the related Mortgage Note or, in the case
of REO Property, would otherwise have been payable under the related Mortgage
Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Scheduled Principal Balance: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as
of the close of business on the related Due Date (taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off
Date (other than a Deficient Valuation) or any moratorium or similar waiver
or grace period) and less (ii) any Principal Prepayments (including the
principal portion of Net Liquidation Proceeds) received during or prior to
the related Prepayment Period; provided that the Scheduled Principal Balance
of a Liquidated Mortgage Loan is zero.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association, or
its successor in interest, or any successor securities administrator
appointed as herein provided.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT
AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (2) IN
CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE
ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH
OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT
BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT (A "PLAN") THAT IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),
or by a person using "PLAN assets" of a Plan, UNLESS THE PROPOSED TRANSFEREE
PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL FOR THE BENEFIT OF THE
TRUSTEE, MASTER SERVICER AND THE SECURITIES ADMINISTRATOR AND ON WHICH THEY
MAY RELY WHICH IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975
OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE
SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.
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.
Seller: EMC, as mortgage loan seller under the Mortgage Loan Purchase
Agreement.
Senior Certificates: The Class I-A-1, Class II-A-1, Class III-A-1
Certificates.
Senior Optimal Principal Amount: With respect to each Distribution
Date and a Certificate Group, an amount equal to the sum, without
duplication, of the following (but in no event greater than the aggregate
Current Principal Amounts of the related Certificate Group immediately prior
to such Distribution Date):
(i) the related Senior Percentage of the principal portion of
all Scheduled Payments due on each Outstanding Mortgage Loan in the related
Loan Group on the related Due Date as specified in the amortization schedule
at the time applicable thereto (after adjustments for previous Principal
Prepayments but before any adjustment to such amortization schedule by reason
of any bankruptcy or similar proceeding or any moratorium or similar waiver
or grace period if the related Distribution Date occurs prior to the
Cross-over Date);
(ii) the related Senior Prepayment Percentage of the Scheduled
Principal Balance of Mortgage Loan in the related Loan Group which was the
subject of a Principal Prepayment in full received by the Master Servicer
during the related Prepayment Period;
(iii) the related Senior Prepayment Percentage of amount of all
Principal Prepayments in part allocated to principal received by the Master
Servicer during the related Prepayment Period in respect to each Mortgage
Loan in the related Loan Group;
(iv) the lesser of (a) the related Senior Prepayment Percentage
of the sum of (A) all Net Liquidation Proceeds allocable to principal
received in respect of each Mortgage Loan in the related Loan Group that
became a Liquidated Mortgage Loan during the related Prepayment Period (other
than Mortgage Loans described in the immediately following clause (B)) and
all Subsequent Recoveries received in respect of each Liquidated Mortgage
Loan in the related Loan Group during the related Due Period and (B) the
Scheduled Principal Balance of each such Mortgage Loan purchased by an
insurer from the Trust during the related Prepayment Period pursuant to the
related Primary Mortgage Insurance Policy, if any, or otherwise and (b) the
related Senior Percentage of the sum of (A) the Scheduled Principal Balance
of each Mortgage Loan in the related Loan Group which became a Liquidated
Mortgage Loan during the related Prepayment Period (other than the Mortgage
Loans described in the immediately following clause (B)) and all Subsequent
Recoveries received in respect of each Liquidated Mortgage Loan in the
related Loan Group during the related Due Period and (B) the Scheduled
Principal Balance of each such Mortgage Loan that was purchased by an insurer
from the Trust during the related Prepayment Period pursuant to the related
Primary Mortgage Insurance Policy, if any or otherwise;
(v) any amount allocated to the Available Funds of the related
Loan Group pursuant to Section 6.01(a)(i)(G); and
(vi) the related Senior Prepayment Percentage of the sum of (a)
the Scheduled Principal Balance of each Mortgage Loan in the related Loan
Group that was repurchased by the Seller in connection with such Distribution
Date and (b) the excess, if any, of the Scheduled Principal Balance of a
Mortgage Loan in the related Loan Group that has been replaced by the Seller
with a substitute Mortgage Loan pursuant to the Mortgage Loan Purchase
Agreement in connection with such Distribution Date over the Scheduled
Principal Balance of such substitute Mortgage Loan.
Senior Percentage: With respect to each Certificate Group, initially
90.00%. With respect to any Distribution Date and a Certificate Group, the
lesser of (i) 100% and (ii) the percentage obtained by dividing the aggregate
Current Principal Amount of the Senior Certificates in such Certificate Group
immediately preceding such Distribution Date by the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan Group as of the
beginning of the related Due Period.
Senior Prepayment Percentage: With respect to a Certificate Group and
any Distribution Date occurring during the periods set forth below, as
follows:
Period (dates inclusive) Senior Prepayment Percentage
August 2004 - July 2011 100%
August 2011 - July 2012 Senior Percentage for the related
Certificate Group plus 70% of the
Subordinate Percentage for the related
Loan Group.
August 2012 - July 2013 Senior Percentage for the related
Certificate Group plus 60% of the
Subordinate Percentage for the related
Loan Group.
August 2013 - July 2014 Senior Percentage for the related
Certificate Group plus 40% of the
Subordinate Percentage for the related
Loan Group.
August 2014 - July 2015 Senior Percentage for the related
Certificate Group plus 20% of the
Subordinate Percentage for the related
Loan Group.
August 2015 and thereafter Senior Percentage for the related
Certificate Group
In addition, no reduction of the Senior Prepayment Percentage shall
occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal
Balance of the Mortgage Loans in all Loan Groups delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the sum of the aggregate Current Principal Amount of the Subordinate
Certificates does not exceed 50%; and (B) cumulative Realized Losses on the
Mortgage Loans in all Loan Groups do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including August 2011 and July 2012, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
August 2012 and July 2013, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including August 2013
and July 2014, (d) 45% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including August 2014 and July 2015, and
(e) 50% of the Original Subordinate Principal Balance if such Distribution
Date occurs during or after August 2015.
In addition, if on any Distribution Date the weighted average of the
Subordinate Percentages is equal to or greater than two times the weighted
average of the initial Subordinate Percentages, and (a) the aggregate
Scheduled Principal Balance of the Mortgage Loans for all Loan Groups
delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and such Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates does not exceed 50% and (b)(i) on or prior to
the Distribution Date in July 2007, cumulative Realized Losses on the
Mortgage Loans for all Loan Groups as of the end of the related Prepayment
Period do not exceed 20% of the Original Subordinate Principal Balance and
(ii) after the Distribution Date in July 2007 cumulative Realized Losses on
the Mortgage Loans for all Loan Groups as of the end of the related
Prepayment Period do not exceed 30% of the Original Subordinate Principal
Balance, then, the Senior Prepayment Percentage for such Distribution Date
will equal the Senior Percentage for the related Loan Group; provided,
however, if on such Distribution Date the Subordinate Percentage is equal to
or greater than two times the initial Subordinate Percentage on or prior to
the Distribution Date occurring in July 2007 and the above delinquency and
loss tests are met, then the Senior Prepayment Percentage for the related
Loan Group for such Distribution Date will equal the related Senior
Percentage plus 50% of the related Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the
percentage, the numerator of which is the aggregate Current Principal Amount
of the Senior Certificates immediately preceding such Distribution Date, and
the denominator of which is the Scheduled Principal Balance of the Mortgage
Loans as of the beginning of the related Due Period, exceeds such percentage
as of the Cut-Off Date, the Senior Prepayment Percentage for the Senior
Certificates will equal 100%.
Servicers: Bank of America, Chevy Chase, Countrywide Servicing, EMC,
EverHome, SouthTrust, Xxxxxxxxxx and Xxxxx Fargo and their respective
permitted successors and assigns.
Servicer Remittance Date: With respect to each Mortgage Loan, the date
set forth in the Servicing Agreement.
Servicing Agreement: Each of the Bank of America Servicing Agreement,
Chevy Chase Servicing Agreement, Countrywide Servicing Agreement, EMC
Servicing Agreement, EverHome Servicing Agreement, SouthTrust Servicing
Agreement, Xxxxxxxxxx Servicing Agreement and Xxxxx Fargo Servicing
Agreement.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an
amount equal to the product of (i) the Scheduled Principal Balance of such
Mortgage Loan as of the Due Date in the preceding calendar month and (ii) the
Servicing Fee Rate.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.
Servicing Officer: The President or a Vice President or Assistant Vice
President or other authorized officer of the Master Servicer having direct
responsibility for the administration of this Agreement, and any other
authorized officer of the Master Servicer to whom a matter arising hereunder
may be referred.
SouthTrust: SouthTrust Mortgage Corporation, and its successor in
interest.
SouthTrust Servicing Agreement: The Purchase, Warranties and Servicing
Agreement dated as of November 1, 2002, between EMC and SouthTrust, attached
hereto as Exhibit H-6.
Startup Day: July 26, 2004.
Subordinate Certificate Writedown Amount: With respect to the
Subordinate Certificates and as to any Distribution Date, the amount by which
(i) the sum of the Current Principal Amounts of the Certificates (after
giving effect to the distribution of principal and the allocation of
applicable Realized Losses in reduction of the Current Principal Amounts of
the Certificates on such Distribution Date) exceeds (y) the aggregate
Scheduled Principal Balances of the Mortgage Loans on the Due Date related to
such Distribution Date.
Subordinate Certificates: The Class M, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.
Subordinate Optimal Principal Amount: With respect to any Distribution
Date and any Loan Group, an amount equal to the sum, without duplication, of
the following (but in no event greater than the aggregate Current Principal
Amount of the Subordinate Certificates immediately prior to such Distribution
Date):
(i) the related Subordinate Percentage of the principal portion of all
Scheduled Payments due on each Outstanding Mortgage Loan in the related Loan
Group on the related Due Date as specified in the amortization schedule at the
time applicable thereto (after adjustment for previous Principal Prepayments but
before any adjustment to such amortization schedule by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace period);
(ii) the related Subordinate Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan in the related Loan Group that was
the subject of a Principal Prepayment in full received by the Master Servicer
during the related Prepayment Period;
(iii) the related Subordinate Prepayment Percentage of the amount of
all Principal Prepayments in part received by the Master Servicer in respect
to the Mortgage Loan in the related Loan Group during the related Prepayment
Period;
(iv) the excess, if any, of (a) all Net Liquidation Proceeds allocable
to principal received during the related Prepayment Period in respect of each
Liquidated Mortgage Loan in the related Loan Group and all Subsequent
Recoveries received in respect of each Liquidated Mortgage Loan during the
related Due Period over (b) the sum of the amounts distributable to the
Senior Certificates in the related Certificate Group pursuant to clause (iv)
of the definition of Senior Optimal Principal Amount on such Distribution
Date;
(v) the related Subordinate Prepayment Percentage of the sum of (a)
the Scheduled Principal Balance of each Mortgage Loan in the related Loan
Group that was purchased by the Seller in connection with such Distribution
Date and (b) the difference, if any, between the Scheduled Principal Balance
of a Mortgage Loan in the related Loan Group that has been replaced by the
Seller with a Substitute Mortgage Loan pursuant to the Mortgage Loan Purchase
Agreement in connection with such Distribution Date over the Scheduled
Principal Balance of such Substitute Mortgage Loan; and
(vi) on the Distribution Date on which the Current Principal Amounts
of the Senior Certificates in the related Certificate Group have all been
reduced to zero, 100% of the Senior Optimal Principal Amount for the related
Loan Group. After the aggregate Current Principal Amount of the Subordinate
Certificates has been reduced to zero, the Subordinate Optimal Principal
Amount shall be zero.
Subordinate Percentage: With respect to a Loan Group on any
Distribution Date, 100% minus the Senior Percentage for the related
Certificate Group.
Subordinate Prepayment Percentage: With respect to a Loan Group on any
Distribution Date, 100% minus the Senior Prepayment Percentage for the
related Certificate Group.
Subsequent Recoveries: As of any Distribution Date, amounts received
during the related Due Period by the Master Servicer or surplus amounts held
by the Master Servicer to cover estimated expenses (including, but not
limited to, recoveries in respect of the representations and warranties made
by the Seller pursuant to the Mortgage Loan Purchase Agreement) specifically
related to a Liquidated Mortgage Loan or disposition of an REO Property prior
to the related Prepayment Period that resulted in a Realized Loss, after
liquidation or disposition of such Mortgage Loan.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to the Servicing Agreement, the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, in each case, (i) which has an
Outstanding Principal Balance not greater nor materially less than the
Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than,
such Mortgage Loan; (iii) which has a maturity date not materially earlier or
later than such Mortgage Loan and not later than the latest maturity date of
any Mortgage Loan; (iv) which is of the same property type and occupancy type
as such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than
the Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in
payment of principal and interest as of the date of substitution; (vii) as to
which the payment terms do not vary in any material respect from the payment
terms of the Mortgage Loan for which it is to be substituted and (viii) which
has a Gross Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no
less than those of such Mortgage Loan, has the same Index and interval
between Interest Adjustment Dates as such Mortgage Loan, and a Minimum
Lifetime Mortgage Rate no lower than that of such Mortgage Loan.
Substitution Adjustment Amount: The amount, if any, required to be paid
by the Mortgage Loan Seller to the Trustee for deposit in the Distribution
Account pursuant to Section 2.04 in connection with the substitution of a
Mortgage Loan.
Tax Administration and Tax Matters Person: The Securities Administrator
and any successor thereto or assignee thereof shall serve as tax
administrator hereunder and as agent for the Tax Matters Person. The Holder
of the largest percentage interest of each Class of Residual Certificates
shall be the Tax Matters Person for the related REMIC, as more particularly
set forth in Section 9.12 hereof.
Termination Purchase Price: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.
Trust Fund or Trust: The corpus of the trust created by this
Agreement, consisting of the Mortgage Loans and the other assets described in
Section 2.01(a).
Trustee: JPMorgan Chase Bank, or its successor in interest, or any
successor trustee appointed as herein provided.
2004-7 REMIC: Any of REMIC I and REMIC II.
Uncertificated Interest: With respect to each REMIC Regular Interest on
each Distribution Date, an amount equal to one month's interest at the
related Uncertificated Pass-Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, for purposes of the
distributions, Uncertificated Interest will be reduced by the interest
portion of any Realized Losses and Net Interest Shortfalls allocated, with
respect to the REMIC I Regular Interests, to such REMIC Regular Interests
pursuant to the definition of Realized Losses and, with respect to the REMIC
II Regular Interests, to the Related Classes of Certificates.
Uncertificated Pass-Through Rate: With respect to any Distribution Date
and REMIC Interest, the Pass-Through Rate of each such REMIC Interest set
forth in Section 5.01(c).
Uncertificated Principal Balance: The amount of any REMIC I Regular
Interest or REMIC II Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Principal Balance
of each REMIC I Regular Interest shall equal the amount set forth in the
Section 5.01(c)(i) hereto as its Initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC I
Regular Interest shall be reduced by the sum of (i) the principal portion of
Realized Losses allocated to the REMIC I Regular Interests in accordance with
the definition of Realized Loss and (ii) the amounts deemed distributed on
each Distribution Date in respect of principal on the REMIC I Regular
Interests pursuant to Section 6.07. As of the Closing Date, the
Uncertificated Principal Balance of each REMIC II Regular Interest shall
equal the amount set forth in Section 5.01(c) as its Initial Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC II Regular Interest shall be reduced, first, by the
portion of Realized Losses allocated in reduction of the Current Principal
Balances of the Related Classes of Certificates on such Distribution Date
and, second, by all distributions of principal made on such Related Classes
of Certificates on such Distribution Date.
Undercollateralized Amount: With respect any Certificate Group and
Distribution Date, the excess of (i) the aggregate Current Principal Balance
of such Certificate Group over (ii) the aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan Group.
Undercollateralized Certificate Group: With respect any Distribution
Date, a Certificate Group for which the related Undercollateralized Amount
(calculated on such Distribution Date after giving effect to distributions to
be made thereon (other than amounts to be distributed pursuant to Section
6.01(a)(i)(H) on such Distribution Date)) exceeds zero.
Uninsured Cause: Any cause of damage to a Mortgaged Property or
related REO Property such that the complete restoration of such Mortgaged
Property or related REO Property is not fully reimbursable by the hazard
insurance policies required to be maintained pursuant the Servicing
Agreement, without regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or
under the laws of, the United States or any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations), provided that, for purposes solely of the Class R Certificates,
no partnership or other entity treated as a partnership for United States
federal income tax purposes shall be treated as a United States Person unless
all persons that own an interest in such partnership either directly or
through any entity that is not a corporation for United States federal income
tax purposes are United States Persons, or an estate whose income is subject
to United States federal income tax regardless of its source, or a trust if a
court within the United States is able to exercise primary supervision over
the administration of the trust and one or more such United States Persons
have the authority to control all substantial decisions of the trust. To the
extent prescribed in regulations by the Secretary of the Treasury, which have
not yet been issued, a trust which was in existence on August 20, 1996 (other
than a trust treated as owned by the grantor under subpart E of part I of
subchapter J of chapter 1 of the Code), and which was treated as a United
States person on August 20, 1996 may elect to continue to be treated as a
United States person notwithstanding the previous sentence.
Xxxxxxxxxx: Union Federal Bank of Indianaopolis and its successor in
interest.
Xxxxxxxxxx Servicing Agreement: Mortgage Origination Services and
Servicing Agreement, dated as of November 13, 1003, between Xxxxxxxxxx and
EMC as attached hereto as Exhibit H-7.
Xxxxx Fargo: Xxxxx Fargo Bank, N.A., as successor by merger to Xxxxx
Fargo Home Mortgage, Inc., and its successor in interest.
Xxxxx Fargo Servicing Agreement: The Master Seller's Warranties and
Servicing Agreement, dated as of April 1, 2003, as amended by the First
Amendment to the Master Seller's Warranties and Servicing Agreement, dated
May 10, 2004, between Xxxxx Fargo and EMC as attached hereto as Exhibit H-8.
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee. (a) The Depositor
concurrently with the execution and delivery of this Agreement, sells,
transfers and assigns to the Trust 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 Master Servicer Collection Account,
(iii) such assets relating to the Mortgage Loans as from time to time may be
held by the Servicers in Protected Accounts, the Master Servicer in the
Master Servicer Collection Account and the Trustee in the Distribution
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 Section 2.03(a), (vii) the rights with
respect to the Servicing Agreements as assigned to the Trustee on behalf of
the Certificateholders by the Assignment Agreement, (viii) the Class R
Deposit and (ix) any proceeds of the foregoing. Although it is the intent of
the parties to this Agreement that the conveyance of the Depositor's right,
title and interest in and to the Mortgage Loans and other assets in the Trust
Fund 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 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 Fund, and that this Agreement
shall constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Seller hereby
deposits with the Trustee or the Custodian, as its agent, with respect to
each Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse to the order of the
Trustee and showing an unbroken chain of endorsements from the originator
thereof to the Person endorsing it to the Trustee, or lost note affidavit
together with a copy of the related Mortgage Note,
(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) to "JPMorgan
Chase Bank, as Trustee", with evidence of recording with respect to each
Mortgage Loan in the name of the 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, Tennessee,
South Carolina, Mississippi and Florida, 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 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.
provided, however, that in lieu of the foregoing, the Depositor may deliver
the following documents, under the circumstances set forth below: (w) in
lieu of the original Security Instrument, assignments to the 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 Depositor
in time to permit their delivery as specified above, the Depositor may
deliver a true copy thereof with a certification by the Depositor, 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, assignment to the 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; and (y) the Depositor shall
not be required to deliver intervening assignments or Mortgage Note
endorsements between the Seller and the Depositor, and between the Depositor
and the 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 Trustee or the Custodian, as its agent, a certification 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
Depositor shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) to the
Trustee or the Custodian, as its agent, promptly after they are received.
The Depositor shall cause the Seller, at its expense, to cause each
assignment of the Security Instrument to the Trustee to be recorded not later
than 180 days after the Closing Date, unless (a) such recordation is not
required by the Rating Agencies or an Opinion of Counsel addressed to the
Trustee has been provided to the Trustee (with a copy to the Custodian) which
states that recordation of such Security Instrument is not required to
protect the interests of the Certificateholders 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, that each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust or the Trustee or the Custodian,
as its agent, upon the earliest to occur of: (i) reasonable direction by the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Trust, (ii) the occurrence of 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 8.02 hereof. Notwithstanding the foregoing, if the Seller fails to
pay the cost of recording the assignments, such expense will be paid by the
Trustee and the Trustee shall be reimbursed for such expenses by the Trust in
accordance with Section 9.05.
Section 2.02 Acceptance of Mortgage Loans by Trustee. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Depositor and receipt of, subject to further review and the exceptions which
may be noted pursuant to the procedures described below, and declares that it
holds, the documents (or certified copies thereof) delivered to it or the
Custodian, as its agent, pursuant to Section 2.01, and declares that it will
continue to hold those documents and any amendments, replacements or
supplements thereto and all other assets of the Trust Fund delivered to it as
Trustee in trust for the use and benefit of all present and future Holders of
the Certificates. On the Closing Date, the Custodian, with respect to the
Mortgage Loans, shall acknowledge with respect to each Mortgage Loan by
delivery to the Depositor and the Trustee 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 Trustee or Custodian thereof), the
Trustee agrees, for the benefit of the Certificateholders, to review or cause
to be reviewed by the Custodian on its behalf (under the Custodial
Agreement), each Mortgage File delivered to it and to execute and deliver, or
cause to be executed and delivered, to the Depositor and the Trustee an
Interim Certification. In conducting such review, the Trustee or Custodian
will ascertain whether all required documents have been executed and
received, and based on the Mortgage Loan Schedule, whether those documents
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 Trustee or
the Custodian, as its agent, may conclusively rely on the purported due
execution and genuineness of any such document and on the purported
genuineness of any signature thereon. If the Trustee or the Custodian, as
its agent, finds any document constituting part of the Mortgage File has not
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 Exhibit B or to appear defective on its face (a "Material
Defect"), the Trustee or the Custodian, as its agent, shall promptly notify
the Seller. In accordance with the Mortgage Loan Purchase Agreement, the
Seller shall correct or cure any such defect within ninety (90) days from the
date of notice from the Trustee or the Custodian, as its agent, of the defect
and if the Seller fails to correct or cure the defect within such period, and
such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Trustee or the
Custodian, as its agent, shall enforce the Seller's obligation pursuant to
the Mortgage Loan Purchase Agreement, within 90 days from the Trustee's or
the Custodian's notification, to purchase such Mortgage Loan at the
Repurchase 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 or repurchase 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 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 Trustee or the Custodian, as its agent, 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 Trustee or the
Custodian, as its agent, will review, for the benefit of the
Certificateholders, the Mortgage Files delivered to it and will execute and
deliver or cause to be executed and delivered to the Depositor and the
Trustee a Final Certification. In conducting such review, the Trustee or the
Custodian, as its agent, 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 Trustee or the Custodian, as its agent, finds a
Material Defect, the Trustee or the Custodian, as its agent, shall promptly
notify the Seller (provided, however, that with respect to those documents
described in Sections 2.01(b)(iv), (v) and (vii), the Trustee's and
Custodian's obligations shall extend only to the documents actually delivered
to the Trustee or the Custodian pursuant to such Sections). In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure
any such defect within 90 days from the date of notice from the Trustee or
the Custodian, as its agent, of the Material Defect and if the Seller is
unable to cure such defect within such period, and if such defect materially
and adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Trustee shall enforce the Seller's obligation under the
Mortgage Loan Purchase Agreement to provide a Substitute Mortgage Loan (if
within two years of the Closing Date) or purchase such Mortgage Loan at the
Repurchase Price; provided, however, 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,
further, 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
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 Trustee or the Custodian, as its agent,
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 Sections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Repurchase Price for deposit in the Master Servicer
Collection Account and the Seller shall provide to the Securities
Administrator and the Trustee written notification detailing the components
of the Repurchase Price. Upon deposit of the Repurchase Price in the Master
Servicer Collection Account, the Depositor shall notify the Trustee and the
Custodian, as agent of the Trustee (upon receipt of a Request for Release in
the form of Exhibit D attached hereto with respect to such Mortgage Loan),
shall release to the Seller the related Mortgage File and the 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 received by the Trustee. The Trustee
shall amend the Mortgage Loan Schedule, which was previously delivered to it
by the Depositor in a form agreed to between the Depositor and the Trustee,
to reflect such repurchase and shall promptly notify the Rating Agencies and
the Master Servicer of such amendment. The obligation of the Seller to
repurchase any Mortgage Loan as to which such a defect in a constituent
document exists shall be the sole remedy respecting such defect available to
the Certificateholders or to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement. (a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, 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 Agreements (noting that the Seller has
retained the right in the event of breach of the representations, warranties
and covenants, if any, with respect to the related Mortgage Loans of the
related Servicer under the related Servicing Agreement to enforce the
provisions thereof and to seek all or any available remedies). The
obligations of the Seller to substitute or repurchase, as applicable, a
Mortgage Loan shall be the Trustee's and the Certificateholders' sole remedy
for any breach thereof. At the request of the Trustee, the Depositor shall
take such actions as may be necessary to enforce the above right, title and
interest on behalf of the Trustee and the Certificateholders or shall execute
such further documents as the Trustee may reasonably require in order to
enable the Trustee to carry out such enforcement.
(b) If the Depositor, the Master Servicer, or the 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 Certificateholders or the 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 or Section 2.04 of this Agreement, as
applicable, shall purchase the Mortgage Loan or any property acquired with
respect thereto from the Trustee; provided, however, that if there is a
breach of any representation set forth in the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, 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 Master Servicer for deposit in
the Master Servicer Collection Account and written notification detailing the
components of such Repurchase Price. The Depositor shall notify the Trustee
and submit to the Trustee or the Custodian, as its agent, a Request for
Release, and the Trustee shall release, or the Trustee shall cause the
Custodian to release, to the Seller the related Mortgage File and the 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 received by the Trustee. The Securities Administrator shall amend the
Mortgage Loan Schedule to reflect such repurchase and shall promptly notify
the Trustee and the Rating Agencies 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 Certificateholders or the 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 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" in the Mortgage Loan
Purchase Agreement or this Agreement, as applicable; provided, however, that
substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04
of this Agreement, as applicable, in lieu of purchase shall not be permitted
after the termination of the two-year period beginning on the Startup Day;
provided, further, that if the breach 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 or substitution must occur within 90 days from the date
the breach was discovered. The Trustee or the Custodian, as its agent, shall
examine the Mortgage File for any Substitute Mortgage Loan in the manner set
forth in Section 2.02(a) and the Trustee or the Custodian, as its agent,
shall notify the Seller, in writing, within five Business Days after receipt,
whether or not the documents relating to the Substitute Mortgage Loan satisfy
the requirements of the fourth sentence of Section 2.02(a). Within two
Business Days after such notification, the Seller shall provide to the
Trustee for deposit in the Distribution 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 such deposit, the 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 Fund 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
Fund. Upon acceptance of the Substitute Mortgage Loan (and delivery to the
Trustee or the Custodian as agent of the Trustee, as applicable, of a Request
for Release for such Mortgage Loan), the Trustee or the Custodian, as agent
for the Trustee, shall 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 the documents related to the Substitute
Mortgage Loan in accordance with the provisions of the Mortgage Loan Purchase
Agreement or Sections 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 Sections.
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 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 Trustee and the Rating Agencies.
Section 2.05 Issuance of Certificates.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans and
the other assets comprising the Trust Fund and, concurrently therewith, has
signed, and countersigned and delivered to the Depositor, in exchange
therefor, Certificates in such authorized denominations representing such
Fractional Undivided Interests as the Depositor has requested. The Trustee
agrees that it will hold the Mortgage Loans and such other assets as may from
time to time be delivered to it segregated on the books of the Trustee in
trust for the benefit of the Certificateholders.
(b) The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC I Regular Interests, and the other assets of REMIC II for
the benefit of the holders of the REMIC II Certificates. The Trustee
acknowledges receipt of the REMIC I Regular Interests (which are
uncertificated) and the other assets of REMIC II and declares that it holds
and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC II Certificates.
Section 2.06 Representations and Warranties Concerning the Depositor.
The Depositor hereby represents and warrants to the Trustee, the Master
Servicer 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 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 (ii) 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
(vii) immediately prior to the transfer and assignment to the Trustee, 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
Trustee free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the
applicable Servicing Agreements and shall have full power and authority to do
any and all things which it may deem necessary or desirable in connection
with such master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with Accepted
Master Servicing Practices. Furthermore, the Master Servicer shall oversee
and consult with each Servicer as necessary from time-to-time to carry out
the Master Servicer's obligations hereunder, shall receive, review and
evaluate all reports, information and other data provided to the Master
Servicer by each Servicer and shall cause each Servicer to perform and
observe the covenants, obligations and conditions to be performed or observed
by such Servicer under its applicable Servicing Agreement. The Master
Servicer shall independently and separately monitor each Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results
of such monitoring with such information provided in the previous sentence on
a monthly basis and coordinate corrective adjustments to the Servicers' and
Master Servicer's records, and based on such reconciled and corrected
information, the Master Servicer shall provide such information to the
Securities Administrator as shall be necessary in order for it to prepare the
statements specified in Section 6.04, and prepare any other information and
statements required to be forwarded by the Master Servicer hereunder. The
Master Servicer shall reconcile the results of its Mortgage Loan monitoring
with the actual remittances of the Servicers pursuant to the applicable
Servicing Agreements.
The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney, in substantially the form attached hereto as Exhibit
K, and other documents in form as provided to it necessary or appropriate to
enable the Servicers and the Master Servicer to service and administer the
related Mortgage Loans and REO Property.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO
Property and the servicing thereof to the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC, such access being afforded
only upon reasonable prior written request and during normal business hours
at the office of the Trustee; provided, however, that, unless otherwise
required by law, the Trustee shall not be required to provide access to such
records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Trustee shall allow representatives
of the above entities to photocopy any of the records and documentation and
shall provide equipment for that purpose at a charge that covers the
Trustee's actual costs.
The Trustee shall execute and deliver to the Servicer and the Master
Servicer any court pleadings, requests for trustee's sale or other documents
necessary or desirable to (i) the foreclosure or trustee's sale with respect
to a Mortgaged Property; (ii) any legal action brought to obtain judgment
against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument
or otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each 2004-7 REMIC
shall exist, the Trustee and the Securities Administrator shall act in
accordance herewith to assure continuing treatment of such 2004-7 REMIC as a
REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Depositor, the related Servicer or the Master Servicer to
assure such continuing treatment. In particular, the Trustee shall not (a)
sell or permit the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee
has received a REMIC Opinion addressed to the Trustee prepared at the expense
of the Trust Fund; and (b) other than with respect to a substitution pursuant
to the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, accept any contribution to any 2004-7 REMIC after the Startup Day
without receipt of a REMIC Opinion addressed to the Trustee .
Section 3.03 Monitoring of Servicers. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Depositor the compliance by
each Servicer with its duties under the related Servicing Agreement. In the
review of each Servicer's activities, the Master Servicer may rely upon an
officer's certificate of the Servicer (or similar document signed by an
officer of the Servicer) with regard to such Servicer's compliance with the
terms of its Servicing Agreement. In the event that the Master Servicer, in
its judgment, determines that a Servicer should be terminated in accordance
with its Servicing Agreement, or that a notice should be sent pursuant to
such Servicing Agreement with respect to the occurrence of an event that,
unless cured, would constitute grounds for such termination, the Master
Servicer shall notify the Depositor and the Trustee thereof and the Master
Servicer shall issue such notice or take such other action as it deems
appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of
such Servicer thereunder and act as servicer of the related Mortgage Loans or
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of
transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor Servicer. Such enforcement,
including, without limitation, the legal prosecution of claims, termination
of Servicing Agreements and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the
Master Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Master Servicer shall pay the
costs of such enforcement at its own expense, provided that the Master
Servicer shall not be required to prosecute or defend any legal action except
to the extent that the Master Servicer shall have received reasonable
indemnity for its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer related
to any termination of a Servicer, appointment of a successor Servicer or the
transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs
and expenses and all due diligence costs and expenses associated with an
evaluation of the potential termination of the Servicer as a result of an
event of default by such Servicer and (ii) all costs and expenses associated
with the complete transfer of servicing, including, but not limited to, all
servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor
servicer to correct any errors or insufficiencies in the servicing data or
otherwise to enable the successor service to service the Mortgage Loans in
accordance with the related Servicing Agreement) are not fully and timely
reimbursed by the terminated Servicer, the Master Servicer shall be entitled
to reimbursement of such costs and expenses from the Master Servicer
Collection Account.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related
Servicing Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume liability for
the representations and warranties of the Servicer, if any, that it replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions
insurance policy, affording coverage with respect to all directors, officers,
employees and other Persons acting on such Master Servicer's behalf, and
covering errors and omissions in the performance of the Master Servicer's
obligations hereunder. The errors and omissions insurance policy and the
fidelity bond shall be in such form and amount generally acceptable for
entities serving as master servicers or trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject
to the REMIC Provisions and the provisions of Article X hereof, to do any and
all things that it may deem necessary or desirable in connection with the
master servicing and administration of the Mortgage Loans, including but not
limited to the power and authority (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and
other instruments and documents, (ii) to consent to transfers of any
Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds,
and (iv) to effectuate foreclosure or other conversion of the ownership of
the Mortgaged Property securing any Mortgage Loan, in each case, in
accordance with the provisions of this Agreement and the Servicing Agreement,
as applicable; provided, however, that the Master Servicer shall not (and,
consistent with its responsibilities under Section 3.03, shall not permit any
Servicer to) knowingly or intentionally take any action, or fail to take (or
fail to cause to be taken) any action reasonably within its control and the
scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, would cause any 2004-7
REMIC to fail to qualify as a REMIC or result in the imposition of a tax upon
the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action would not
cause any 2004-7 REMIC to fail to qualify as a REMIC or result in the
imposition of a tax upon any 2004-7 REMIC. The Trustee shall furnish the
Master Servicer, upon written request from a Servicing Officer, with any
powers of attorney empowering the Master Servicer or any Servicer to execute
and deliver instruments of satisfaction or cancellation, or of partial or
full release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court action
relating to the Mortgage Loans or the Mortgaged Property, in accordance with
the applicable Servicing Agreement and this Agreement, and the Trustee shall
execute and deliver such other documents, as the Master Servicer may request,
to enable the Master Servicer to master service and administer the Mortgage
Loans and carry out its duties hereunder, in each case in accordance with
Accepted Master Servicing Practices (and the Trustee shall have no liability
for misuse of any such powers of attorney by the Master Servicer or any
Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit
such action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if
such action is taken in its name, the Master Servicer shall join with the
Trustee in the appointment of a co-trustee pursuant to Section 9.11 hereof.
In the performance of its duties hereunder, the Master Servicer shall be an
independent contractor and shall not, except in those instances where it is
taking action in the name of the Trustee, be deemed to be the agent of the
Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale
clause or such clause is otherwise not enforced in accordance with the
applicable Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution
Date, the Servicer will, if required under the applicable Servicing Agreement
(or if the Servicer does not, the Master Servicer may), promptly furnish to
the Custodian, on behalf of the Trustee, two copies of a certification
substantially in the form of Exhibit D hereto signed by a Servicing Officer
or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts
received in connection with such payment that are required to be deposited in
the Protected Account maintained by the applicable Servicer pursuant to
Section 4.01 or by the applicable Servicer pursuant to its Servicing
Agreement have been or will be so deposited) and shall request that the
Custodian, on behalf of the Trustee, deliver to the applicable Servicer the
related Mortgage File. Upon receipt of such certification and request, the
Custodian, on behalf of the Trustee, shall promptly release the related
Mortgage File to the applicable Servicer and the Trustee and Custodian shall
have no further responsibility with regard to such Mortgage File. Upon any
such payment in full, each Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan,
an instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the
Person or Persons entitled thereto against receipt therefor of such payment,
it being understood and agreed that no expenses incurred in connection with
such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan and in accordance with the applicable Servicing Agreement,
the Trustee shall execute such documents as shall be prepared and furnished
to the Trustee by a Servicer or the Master Servicer (in form reasonably
acceptable to the Trustee) and as are necessary to the prosecution of any
such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of a Servicer or the Master Servicer, and delivery to the Custodian,
on behalf of the Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form of Exhibit D (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File held
in its possession or control to the Servicer or the Master Servicer, as
applicable. Such trust receipt shall obligate the Servicer or the Master
Servicer to return the Mortgage File to the Custodian on behalf of the
Trustee, when the need therefor by the Servicer or the Master Servicer no
longer exists unless the Mortgage Loan shall be liquidated, in which case,
upon receipt of a certificate of a Servicing Officer similar to that
hereinabove specified, the Mortgage File shall be released by the Custodian,
on behalf of the Trustee, to the Servicer or the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the
terms hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to be delivered to the Trustee or Custodian. Any funds received
by the Master Servicer or by a Servicer in respect of any Mortgage Loan or
which otherwise are collected by the Master Servicer or by a Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan
shall be held for the benefit of the Trustee and the Certificateholders
subject to the Master Servicer's right to retain or withdraw from the Master
Servicer Collection Account the Master Servicing Compensation and other
amounts provided in this Agreement, and to the right of each Servicer to
retain its Servicing Fee and other amounts as provided in the applicable
Servicing Agreement. The Master Servicer shall, and (to the extent provided
in the applicable Servicing Agreement) shall cause each Servicer to, provide
access to information and documentation regarding the Mortgage Loans to the
Trustee, its agents and accountants at any time upon reasonable request and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or
insurance regulatory authority if so required by applicable regulations of
the Office of Thrift Supervision or other regulatory authority, such access
to be afforded without charge but only upon reasonable request in writing and
during normal business hours at the offices of the Master Servicer designated
by it. In fulfilling such a request the Master Servicer shall not be
responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master
Servicer and each Servicer shall be entitled to setoff against, and deduct
from, any such funds any amounts that are properly due and payable to the
Master Servicer or such Servicer under this Agreement or the applicable
Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any obligation
of the Servicers under the related Servicing Agreements to maintain or cause
to be maintained standard fire and casualty insurance and, where applicable,
flood insurance, all in accordance with the provisions of the related
Servicing Agreements. It is understood and agreed that such insurance shall
be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the Servicers
or the Master Servicer, under any insurance policies (other than amounts to
be applied to the restoration or repair of the property subject to the
related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.02 and 4.03.
Any cost incurred by the Master Servicer or any Servicer in maintaining any
such insurance if the Mortgagor defaults in its obligation to do so shall be
added to the amount owing under the Mortgage Loan where the terms of the
Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by
the Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of
the Trustee and the Certificateholders all claims under the Insurance
Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited in
the Master Servicer Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition precedent to the presentation of claims on
the related Mortgage Loan to the insurer under any applicable Insurance
Policy need not be so deposited (or remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the extent
such action is prohibited under the applicable Servicing Agreement) to take,
any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the
Master Servicer or such Servicer, would have been covered thereunder. The
Master Servicer shall use its best reasonable efforts to cause each Servicer
(to the extent required under the related Servicing Agreement) to keep in
force and effect (to the extent that the Mortgage Loan requires the Mortgagor
to maintain such insurance), primary mortgage insurance applicable to each
Mortgage Loan in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable. The Master Servicer shall not,
and shall not permit any Servicer (to the extent required under the related
Servicing Agreement) to, cancel or refuse to renew any such Primary Mortgage
Insurance Policy that is in effect at the date of the initial issuance of the
Mortgage Note and is required to be kept in force hereunder except in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer (to the
extent required under the related Servicing Agreement) to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in
the Master Servicer Collection Account, subject to withdrawal pursuant to
Section 4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of
any Primary Mortgage Insurance Policies, or certificate of insurance if
applicable, and any certificates of renewal as to the foregoing as may be
issued from time to time as contemplated by this Agreement. Until all
amounts distributable in respect of the Certificates have been distributed in
full and the Master Servicer otherwise has fulfilled its obligations under
this Agreement, the Trustee (or its Custodian, if any, as directed by the
Trustee) shall also retain possession and custody of each Mortgage File in
accordance with and subject to the terms and conditions of this Agreement.
The Master Servicer shall promptly deliver or cause to be delivered to the
Trustee (or the Custodian, as directed by the Trustee), upon the execution or
receipt thereof the originals of any Primary Mortgage Insurance Policies, any
certificates of renewal, and such other documents or instruments that
constitute portions of the Mortgage File that come into the possession of the
Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account and the Master
Servicer Collection Account, pursuant to Article IV, for the performance of
its activities hereunder. Servicing compensation in the form of assumption
fees, if any, late payment charges, as collected, if any, or otherwise (but
not including any prepayment premium or penalty) shall be retained by the
applicable Servicer and shall not be deposited in the Protected Account. The
Master Servicer will be entitled to retain, as additional compensation, any
interest remitted by a Servicer in connection with a Principal Prepayment in
full or otherwise in excess of amounts required to be remitted to the
Distribution Account (such amounts together with the amounts specified in the
first sentence of this Section 3.14, the "Master Servicing Compensation").
The Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
Section 3.15 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any
REO Property as expeditiously as possible and in accordance with the
provisions of this Agreement and the related Servicing Agreement, as
applicable. Pursuant to its efforts to sell such REO Property, the Master
Servicer shall cause the applicable Servicer to protect and conserve, such
REO Property in the manner and to the extent required by the applicable
Servicing Agreement, in accordance with the REMIC Provisions and in a manner
that does not result in a tax on "net income from foreclosure property"
(unless such result would maximize the Trust Fund's after-tax return on such
property) or cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property
in the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well
as any unpaid Servicing Fees from Liquidation Proceeds received in connection
with the final disposition of such REO Property; provided, that any such
unreimbursed Monthly Advances as well as any unpaid Servicing Fees may be
reimbursed or paid, as the case may be, prior to final disposition, out of
any net rental income or other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of
any payment to the Master Servicer and the applicable Servicer as provided
above shall be deposited in the Protected Account on or prior to the
Determination Date in the month following receipt thereof and be remitted by
wire transfer in immediately available funds to the Master Servicer for
deposit into the related Master Servicer Collection Account on the next
succeeding Servicer Remittance Date.
Section 3.16 Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the Rating Agencies
on or before March 1 of each year, commencing on March 1, 2005, an Officer's
Certificate, certifying that with respect to the period ending December 31 of
the prior year: (i) such Servicing Officer has reviewed the activities of
such Master Servicer during the preceding calendar year or portion thereof
and its performance under this Agreement, (ii) to the best of such Servicing
Officer's knowledge, based on such review, such Master Servicer has performed
and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of
such Servicing Officer to lead such Servicing Officer to believe that any
Servicer has failed to perform any of its duties, responsibilities and
obligations under its Servicing Agreement in all material respects throughout
such year, or, if there has been a material default in the performance or
fulfillment of any such duties, responsibilities or obligations, specifying
each such default known to such Servicing Officer and the nature and status
thereof.
(b) Copies of such statements shall be provided to any Certificateholder upon
request, by the Master Servicer or by the Trustee at the Master Servicer's
expense if the Master Servicer failed to provide such copies (unless (i) the
Master Servicer shall have failed to provide the Trustee with such statement
or (ii) the Trustee shall be unaware of the Master Servicer's failure to
provide such statement).
Section 3.17 Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced
any of the Mortgage Loans, then the Master Servicer at its expense shall
cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and
the Depositor on or before March 1 of each year, commencing on March 1, 2005
to the effect that, with respect to the most recently ended fiscal year, such
firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to
this Agreement and to each other and that, on the basis of such examination
conducted substantially in compliance with the audit program for mortgages
serviced for Xxxxxxx Mac or the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Master Servicer's
activities have been conducted in compliance with this Agreement, or that
such examination has disclosed no material items of noncompliance except for
(i) such exceptions as such firm believes to be immaterial, (ii) such other
exceptions as are set forth in such statement and (iii) such exceptions that
the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages Serviced by Xxxxxxx Mac requires it to report. Copies
of such statements shall be provided to any Certificateholder upon request by
the Master Servicer, or by the Trustee at the expense of the Master Servicer
if the Master Servicer shall fail to provide such copies. If such report
discloses exceptions that are material, the Master Servicer shall advise the
Trustee whether such exceptions have been or are susceptible of cure, and
will take prompt action to do so.
Section 3.18 Reports Filed with Securities and Exchange Commission.
Within 15 days after each Distribution Date, the Securities Administrator
shall, in accordance with industry standards, file with the Commission via
the Electronic Data Gathering and Retrieval System ("XXXXX"), a Form 8-K (or
other comparable form containing the same or comparable information or other
information mutually agreed upon) with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior
to January 30 of each year, the Securities Administrator shall, in accordance
with industry standards and only if instructed by the Depositor, file a Form
15 Suspension Notice with respect to the Trust Fund, if applicable. Prior to
(i) March 15, 2005 and (ii) unless and until a Form 15 Suspension Notice
shall have been filed, prior to March 15 of each year thereafter, the Master
Servicer shall provide the Securities Administrator with a Master Servicer
Certification, together with a copy of the annual independent accountant's
servicing report and annual statement of compliance of each Servicer, in each
case, required to be delivered pursuant to the related Servicing Agreement,
and, if applicable, the annual independent accountant's servicing report and
annual statement of compliance to be delivered by the Master Servicer
pursuant to Sections 3.16 and 3.17. Prior to (i) March 31, 2005, or such
earlier filing date as may be required by the Commission, and (ii) unless and
until a Form 15 Suspension Notice shall have been filed, March 31 of each
year thereafter, or such earlier filing date as may be required by the
Commission, the Securities Administrator shall prepare and file a Form 10-K,
in substance conforming to industry standards, with respect to the Trust.
Such Form 10-K shall include the Master Servicer Certification and other
documentation provided by the Master Servicer pursuant to the second
preceding sentence. The Depositor hereby grants to the Securities
Administrator a limited power of attorney to execute and file each such
document on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from
the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to
the Securities Administrator, from time to time upon request, such further
information, reports and financial statements within its control related to
this Agreement and the Mortgage Loans as the Securities Administrator
reasonably deems appropriate to prepare and file all necessary reports with
the Commission. The Securities Administrator shall have no responsibility to
file any items other than those specified in this Section 3.18; provided,
however, the Securities Administrator will cooperate with the Depositor in
connection with any additional filings with respect to the Trust Fund as the
Depositor deems necessary under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Fees and expenses incurred by the Securities
Administrator in connection with this Section 3.18 shall not be reimbursable
from the Trust Fund.
Section 3.19 The Company. On the Closing Date, the Company will receive
from the Depositor a payment of $5,000.
Section 3.20 UCC. The Depositor shall inform the Trustee in writing of
any Uniform Commercial Code financing statements that were filed on the
Closing Date in connection with the Trust with stamped recorded copies of
such financing statements to be delivered to the Trustee promptly upon
receipt by the Depositor. The Trustee agrees to monitor and notify the
Depositor if any continuation statements for such Uniform Commercial Code
financing statements need to be filed. If directed by the Depositor in
writing, the Trustee will file any such continuation statements solely at the
expense of the Depositor. The Depositor shall file any financing statements
or amendments thereto required by any change in the Uniform Commercial Code.
Section 3.21 Optional Purchase of Defaulted Mortgage Loans.
(a) With respect to any Mortgage Loan which as of the first day of a Calendar
Quarter is delinquent in payment by 90 days or more or is an REO Property,
the Company shall have the right to purchase such Mortgage Loan from the
Trust at a price equal to the Repurchase Price; provided however (i) that
such Mortgage Loan is still 90 days or more delinquent or is an REO Property
as of the date of such purchase and (ii) this purchase option, if not
theretofore exercised, shall terminate on the date prior to the last day of
the related Calendar Quarter. This purchase option, if not exercised, shall
not be thereafter reinstated unless the delinquency is cured and the Mortgage
Loan thereafter again becomes 90 days or more delinquent or becomes an REO
Property, in which case the option shall again become exercisable as of the
first day of the related Calendar Quarter.
(b) If at any time the Company remits to the Master Servicer a payment for
deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and the Company provides to the
Trustee a certification signed by a Servicing Officer stating that the amount
of such payment has been deposited in the Master Servicer Collection Account,
then the Trustee shall execute the assignment of such Mortgage Loan to the
Company at the request of the Company without recourse, representation or
warranty and the Company shall succeed to all of the Trustee's right, title
and interest in and to such Mortgage Loan, and all security and documents
relative thereto. Such assignment shall be an assignment outright and not
for security. The Company will thereupon own such Mortgage, and all such
security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
ARTICLE IV
Accounts
Section 4.01 Protected Accounts. (a) The Master Servicer shall enforce
the obligation of each Servicer to establish and maintain a Protected Account
in accordance with the applicable Servicing Agreement, with records to be
kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into
which accounts shall be deposited within 48 hours (or as of such other time
specified in the related Servicing Agreement) of receipt, all collections of
principal and interest on any Mortgage Loan and with respect to any REO
Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds and advances made from the Servicer's own
funds (less servicing compensation as permitted by the applicable Servicing
Agreement in the case of any Servicer) and all other amounts to be deposited
in the Protected Account. The Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by this Agreement. To the extent provided in the
related Servicing Agreement, the Protected Account shall be held by a
Designated Depository Institution and segregated on the books of such
institution in the name of the Trustee for the benefit of Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in
the name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds.
Such Permitted Investments shall mature, or shall be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the related
Servicer under the applicable Servicing Agreement, and the risk of loss of
moneys required to be distributed to the Certificateholders resulting from
such investments shall be borne by and be the risk of the related Servicer.
The related Servicer (to the extent provided in the Servicing Agreement)
shall deposit the amount of any such loss in the Protected Account within two
Business Days of receipt of notification of such loss but not later than the
second Business Day prior to the Distribution Date on which the moneys so
invested are required to be distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and subject to
this Article IV, on or before each Servicer Remittance Date, the related
Servicer shall withdraw or shall cause to be withdrawn from its Protected
Accounts and shall immediately deposit or cause to be deposited in the Master
Servicer Collection Account amounts representing the following collections
and payments (other than with respect to principal of or interest on the
Mortgage Loans due on or before the Cut-off Date) with respect to each Loan
Group:
(i) Scheduled Payments on the Mortgage Loans received or any related portion
thereof advanced by such Servicer pursuant to its Servicing Agreement which
were due during or before the related Due Period, net of the amount thereof
comprising its Servicing Fee or any fees with respect to any lender-paid
primary mortgage insurance policy;
(ii) Full Principal Prepayments and any Liquidation Proceeds received by such
Servicer with respect to the Mortgage Loans in the related Prepayment Period,
with interest to the date of prepayment or liquidation, net of the amount
thereof comprising its Servicing Fee;
(iii) Partial Principal Prepayments received by such Servicer for the
Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from an Account only to make remittances as
provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer
or a Servicer for Monthly Advances which have been recovered by subsequent
collections from the related Mortgagor; to remove amounts deposited in error;
to remove fees, charges or other such amounts deposited on a temporary basis;
or to clear and terminate the account at the termination of this Agreement in
accordance with Section 10.01. As provided in Sections 4.01(c) and 4.02(b)
certain amounts otherwise due to the Servicers may be retained by them and
need not be deposited in the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account. (a) The Master
Servicer shall establish and maintain in the name of the Trustee, for the
benefit of the Certificateholders, the Master Servicer Collection Account as
a segregated trust account or accounts. The Master Servicer Collection
Account shall be an Eligible Account. The Master Servicer will deposit in
the Master Servicer Collection Account as identified by the Master Servicer
and as received by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds received by or on
behalf of the Master Servicer or which were not deposited in a Protected
Account;
(iv) The Repurchase Price with respect to any Mortgage Loans purchased by the
Seller pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or
2.03 hereof, any amounts which are to be treated pursuant to Section 2.04 of
this Agreement as the payment of a Repurchase Price in connection with the
tender of a Substitute Mortgage Loan by the Seller, the Repurchase Price with
respect to any Mortgage Loans purchased by the Company pursuant to
Section 3.21, and all proceeds of any Mortgage Loans or property acquired
with respect thereto repurchased by the Depositor or its designee pursuant to
Section 10.01;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master Servicer and
required to be deposited in the Master Servicer Collection Account pursuant
to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account shall be
held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions
of this Agreement. The requirements for crediting the Master Servicer
Collection Account or the Distribution Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the foregoing,
payments in the nature of (i) prepayment or late payment charges or
assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges and (ii) the items
enumerated in Sections 4.05(a)(i) through (iv) and (vi) through (xii) with
respect to the Securities Administrator and the Master Servicer, need not be
credited by the Master Servicer or the Servicer to the Distribution Account
or the Master Servicer Collection Account, as applicable. In the event that
the Master Servicer shall deposit or cause to be deposited to the
Distribution Account any amount not required to be credited thereto, the
Trustee, upon receipt of a written request therefor signed by a Servicing
Officer of the Master Servicer, shall promptly transfer such amount to the
Master Servicer, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection Account
may be invested, in the name of the Trustee, or its nominee, for the benefit
of the Certificateholders, in Permitted Investments as directed by Master
Servicer. All Permitted Investments shall mature or be subject to redemption
or withdrawal on or before, and shall be held until, the next succeeding
Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Account from time to time shall be
for the account of the Master Servicer. The Master Servicer from time to
time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Account. The risk of loss of
moneys required to be distributed to the Certificateholders resulting from
such investments shall be borne by and be the risk of the Master Servicer.
The Master Servicer shall deposit the amount of any such loss in the Master
Servicer Collection Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account. (a) The Master Servicer will, from time to time
on demand of a Servicer or the Securities Administrator, make or cause to be
made such withdrawals or transfers from the Master Servicer Collection
Account as the Master Servicer has designated for such transfer or withdrawal
pursuant to this Agreement and the related Servicing Agreement. The Master
Servicer may clear and terminate the Master Servicer Collection Account
pursuant to Section 10.01 and remove amounts from time to time deposited in
error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer or the Securities Administrator or the Custodian pursuant to
Sections 3.03, 7.04 and 9.05 and (ii) any amounts payable to the Master
Servicer as set forth in Section 3.14.
(c) In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on
deposit in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
Section 4.04 Distribution Account. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the
Certificateholders, the Distribution Account as a segregated trust account or
accounts.
(b) All amounts deposited to the Distribution Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Trustee and held by the Trustee in trust
in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee
or the Master Servicer (whether made directly, or indirectly through a
liquidator or receiver of the Trustee or the Master Servicer). The
Distribution Account shall be an Eligible Account. The amount at any time
credited to the Distribution Account shall be (i) held in cash and fully
insured by the FDIC to the maximum coverage provided thereby or (ii) invested
in the name of the Trustee, in such Permitted Investments selected by the
Master Servicer or deposited in demand deposits with such depository
institutions as selected by the Master Servicer, provided that time deposits
of such depository institutions would be a Permitted Investment. All
Permitted Investments shall mature or be subject to redemption or withdrawal
on or before, and shall be held until, the next succeeding Distribution Date
if the obligor for such Permitted Investment is the Trustee or, if such
obligor is any other Person, the Business Day preceding such Distribution
Date. All investment earnings on amounts on deposit in the Distribution
Account or benefit from funds uninvested therein from time to time shall be
for the account of the Master Servicer. The Master Servicer shall be
permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there
is any loss on a Permitted Investment or demand deposit, the Master Servicer
shall remit the amount of the loss to the Trustee who shall deposit such
amount in the Distribution Account. With respect to the Distribution Account
and the funds deposited therein, the Master Servicer shall take such action
as may be necessary to ensure that the Certificateholders shall be entitled
to the priorities afforded to such a trust account (in addition to a claim
against the estate of the Trustee) as provided by 12 U.S.C. § 92a(e), and
applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account. (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement and
the Servicing Agreements or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account in accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any Monthly Advance
of its own funds, the right of the Master Servicer or a Servicer to
reimbursement pursuant to this subclause (i) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late payments or recoveries of the principal of or interest on such
Mortgage Loan with respect to which such Monthly Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from Insurance Proceeds
or Liquidation Proceeds relating to a particular Mortgage Loan for amounts
expended by the Master Servicer or such Servicer in good faith in connection
with the restoration of the related Mortgaged Property which was damaged by
an Uninsured Cause or in connection with the liquidation of such Mortgage
Loan;
(iii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses incurred
with respect to such Mortgage Loan and to reimburse the Master Servicer or
such Servicer from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to such Mortgage Loan; provided
that the Master Servicer shall not be entitled to reimbursement for
Liquidation Expenses with respect to a Mortgage Loan to the extent that
(i) any amounts with respect to such Mortgage Loan were paid as Excess
Liquidation Proceeds pursuant to clause (xi) of this Section 4.05(a) to the
Master Servicer; and (ii) such Liquidation Expenses were not included in the
computation of such Excess Liquidation Proceeds;
(iv) to pay the Master Servicer or any Servicer, as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with the
liquidation of any Mortgage Loan, the amount which the Master Servicer or
such Servicer would have been entitled to receive under clause (ix) of this
Section 4.05(a) as servicing compensation on account of each defaulted
scheduled payment on such Mortgage Loan if paid in a timely manner by the
related Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Repurchase Price for
any Mortgage Loan, the amount which the Master Servicer or such Servicer
would have been entitled to receive under clause (ix) of this Section 4.05(a)
as servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances of funds
(other than Monthly Advances) made with respect to the Mortgage Loans, and
the right to reimbursement pursuant to this clause being limited to amounts
received on the related Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which
represent late recoveries of the payments for which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any Monthly
Advance or advance, after a Realized Loss has been allocated with respect to
the related Mortgage Loan if the Monthly Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and liabilities
incurred by and reimbursable to it pursuant to Sections 3.03, 7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing compensation, any
Excess Liquidation Proceeds to the extent not retained by the Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are due thereto
under the Servicing Agreement and have not been retained by or paid to the
Servicer, to the extent provided in the Servicing Agreement;
(xii) to reimburse the Trustee, the Securities Administrator or the Custodian
for expenses, costs and liabilities incurred by or reimbursable to it
pursuant to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 10.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to clauses (i) through
(vi) and (viii) or with respect to any such amounts which would have been
covered by such clauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b). Reimbursements made pursuant to clauses (vii), (ix), (xi) and (xii)
will be allocated between the Loan Groups pro rata based on the aggregate
Stated Principal Balances of the Mortgage Loans in each Loan Group.
(c) On each Distribution Date, the Trustee shall distribute the Available
Funds to the extent on deposit in the Distribution Account for each Loan
Group to the Holders of the Certificates in accordance with distribution
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Distribution Date and determined by the
Securities Administrator in accordance with Section 6.01.
ARTICLE V
Certificates
Section 5.01 Certificates. (a) The Depository, the Depositor and the
Trustee have entered into a Depository Agreement dated as of the Closing Date
(the "Depository Agreement"). Except for the Residual Certificates, the
Private Certificates and the Individual Certificates and as provided in
Section 5.01(b), the Certificates shall at all times remain registered in the
name of the Depository or its nominee and at all times: (i) registration of
such Certificates may not be transferred by the Trustee except to a successor
to the Depository; (ii) ownership and transfers of registration of such
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iii) the Depository may collect its
usual and customary fees, charges and expenses from its Depository
Participants; (iv) the Trustee shall deal with the Depository as
representative of such Certificate Owners of the respective Class of
Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Trustee may rely and
shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates
of one or more such Classes request that the Trustee cause such Class to
become Global Certificates, the Trustee and the Depositor will take such
action as may be reasonably required to cause the Depository to accept such
Class or Classes for trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
it represents or of brokerage firms for which it acts as agent in accordance
with the Depository's normal procedures.
(b) If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor within 30 days or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository, the Trustee shall request that the Depository
notify all Certificate Owners of the occurrence of any such event and of the
availability of definitive, fully registered Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall issue the definitive
Certificates.
In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its
option request a definitive Certificate evidencing such Certificate Owner's
interest in the related Class of Certificates. In order to make such
request, such Certificate Owner shall, subject to the rules and procedures
of the Depository, provide the Depository or the related Depository
Participant with directions for the Trustee to exchange or cause the
exchange of the Certificate Owner's interest in such Class of Certificates
for an equivalent interest in fully registered definitive form. Upon
receipt by the Trustee of instructions from the Depository directing the
Trustee to effect such exchange (such instructions to contain information
regarding the Class of Certificates and the Current Principal Balance being
exchanged, the Depository Participant account to be debited with the
decrease, the registered holder of and delivery instructions for the
definitive Certificate, and any other information reasonably required by the
Trustee), (i) the Trustee shall instruct the Depository to reduce the
related Depository Participant's account by the aggregate Current Principal
Balance of the definitive Certificate, (ii) the Trustee shall execute and
deliver, in accordance with the registration and delivery instructions
provided by the Depository, a Definitive Certificate evidencing such
Certificate Owner's interest in such Class of Certificates and (iii) the
Trustee shall execute a new Book-Entry Certificate reflecting the reduction
in the aggregate Current Principal Balance of such Class of Certificates by
the amount of the definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in
the delivery of any instructions required pursuant to this Section 5.01(b)
and may conclusively rely on, and shall be protected in relying on, such
instructions.
(c) (i) As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and
certain other related assets subject to this Agreement as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC I." Component I of the Class R Certificates will represent the sole
Class of "residual interests" in REMIC I for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, pass-through rate (the
"Uncertificated Pass-Through Rate") and initial Uncertificated Principal
Balance for each of the "regular interests" in REMIC I (the "REMIC I Regular
Interests"). The "latest possible maturity date" (determined solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for
each REMIC I Regular Interest shall be the Maturity Date. None of the
REMIC I Regular Interests will be certificated. The REMIC I Regular
Interests and the REMIC I Residual Interest will have the following
designations, initial balances and pass-through rates:
Class
Designation for
each REMIC I
Regular
Interest and Initial
Component I of Type Uncertificated
the Class R of Pass-Through Principal Final Maturity
Certificates Interest Rate Balance Date*
----------------------------------------------------------------------
Class Y-1 Regular Variable(1) $83,244.84 September 2034
Class Y-2 Regular Variable(2) $357,512.15 September 2034
Class Y-3 Regular Variable(3) $52,664.23 September 2034
Class Z-1 Regular Variable(1) $166,406,425.17 September 2034
Class Z-2 Regular Variable(2) $714,666,836.85 September 2034
Class Z-3 Regular Variable(3) $105,275,789.77 September 2034
Component I of
the Class R Residual $0 September 2034
* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Loan Group
matures. For federal income tax purposes, for each Class of REMIC I
Regular and Residual Interests, the "latest possible maturity date" shall
be the Final Maturity Date.
(1) Interest distributed to the REMIC I Regular Interests Y-1 and Z-1
on each Distribution Date will have accrued at the weighted average of the
Net Rates for the Group I Loans on the applicable Uncertificated Principal
Balance outstanding immediately before such Distribution Date.
(2) Interest distributed to the REMIC I Regular Interests Y-2 and Z-2
on each Distribution Date will have accrued at the weighted average of the
Net Rates for the Group II Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(3) Interest distributed to the REMIC I Regular Interests Y-3 and Z-3
on each Distribution Date will have accrued at the weighted average of the
Net Rates for the Group III Loans on the applicable Uncertificated
Principal Balance outstanding immediately before such Distribution Date.
(ii) REMIC II will be evidenced by (x) the REMIC II Regular
Interests (designated below), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests" in
REMIC II and have the principal balances and accrue interest at the
Pass-Through Rates equal to those set forth in this Section 5.01(c)(iii) and
(y) an interest in the Class R Certificates ("REMIC II Residual Interest"),
which is hereby designated as the single "residual interest" in REMIC II.
The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
Designation Initial Pass-Through Rate
Principal
I-A-1 $149,840,700 (1)
II-A-1 $643,521,900 (2)
III-A-1 $94,795,600 (5)
M $32,072,200 (4)
B-1 $22,697,300 (4)
B-2 $15,789,500 (4)
B-3 $11,348,700 (4)
B-4 $6,907,900 (4)
B-5 $5,921,000 (4)
B-6 $3,947,572 (4)
R $100 (5)
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(1) The Class I-A-1 Certificates will bear interest at a variable rate equal
to the weighted average of the Net Rates of the Group I Loans.
(2) The Class II-A-1 Certificates will bear interest at a variable rate equal
to the weighted average of the Net Rates of the Group II Loans.
(3) The Class III-A-1 Certificates will bear interest at a variable rate
equal to the weighted average of the Net Rates of the Group III Mortgage
Loans.
(4) The Class M and Class B Certificates will bear interest at a variable
rate equal to the weighted average of the Net Rate of the Mortgage Loans
in each Mortgage Loan Group weighted in proportion to the results of
subtracting from the aggregate principal balance of each Mortgage Loan
Group, the Current Principal Balance of the related Classes of Senior
Certificates.
(5) The Class R Certificates will not bear interest.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date in the Trust Fund has
been designated as the "latest possible maturity date" for the REMIC II
Regular Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of Certificates shall
accrue interest during the related Interest Accrual Period. With respect to
each Distribution Date and each such Class of Certificates (other than the
Class R Certificates), interest shall be calculated, on the basis of a
360-day year comprised of twelve 30-day months, based upon the respective
Pass-Through Rate set forth, or determined as provided, above and the Current
Principal Amount of such Class applicable to such Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0, X-0 and A-4. On original issuance, the Trustee shall
sign, countersign and shall deliver them at the direction of the Depositor.
Pending the preparation of definitive Certificates of any Class, the Trustee
may sign and countersign temporary Certificates that are printed,
lithographed or typewritten, in authorized denominations for Certificates of
such Class, substantially of the tenor of the definitive Certificates in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers or authorized signatories
executing such Certificates may determine, as evidenced by their execution of
such Certificates. If temporary Certificates are issued, the Depositor will
cause definitive Certificates to be prepared without unreasonable delay.
After the preparation of definitive Certificates, the temporary Certificates
shall be exchangeable for definitive Certificates upon surrender of the
temporary Certificates at the office of the Trustee, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall sign and countersign and deliver in exchange
therefor a like aggregate principal amount, in authorized denominations for
such Class, of definitive Certificates of the same Class. Until so
exchanged, such temporary Certificates shall in all respects be entitled to
the same benefits as definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a single
Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in
the case of the Senior Certificates (other than the Residual Certificates),
$1,000 and in each case increments of $1.00 in excess thereof, and (ii) in
the case of the Offered Subordinate Certificates, $25,000 and increments of
$1.00 in excess thereof, except that one Certificate of each such Class may
be issued in a different amount so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Current Principal
Amount of such Class on the Closing Date. On the Closing Date, the Trustee
shall execute and countersign Physical Certificates all in an aggregate
principal amount that shall equal the Current Principal Amount of such
Class on the Closing Date. The Private Certificates shall be issued in
certificated fully-registered form in minimum dollar denominations of $25,000
and integral multiples of $1.00 in excess thereof, except that one Private
Certificate of each Class may be issued in a different amount so that the sum
of the denominations of all outstanding Private Certificates of such
Class shall equal the Current Principal Amount of such Class on the Closing
Date. The Residual Certificates shall each be issued in certificated
fully-registered form in the denomination of $100. Each Class of Global
Certificates, if any, shall be issued in fully registered form in minimum
dollar denominations of $50,000 and integral multiples of $1.00 in excess
thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute
and countersign (i) in the case of each Class of Offered Certificates, the
Certificate in the entire Current Principal Amount of the respective
Class and (ii) in the case of each Class of Private Certificates, Individual
Certificates all in an aggregate principal amount that shall equal the
Current Principal Amount of each such respective Class on the Closing Date.
The Certificates referred to in clause (i) and if at any time there are to be
Global Certificates, the Global Certificates shall be delivered by the
Depositor to the Depository or pursuant to the Depository's instructions,
shall be delivered by the Depositor on behalf of the Depository to and
deposited with the DTC Custodian. The Trustee shall sign the Certificates by
facsimile or manual signature and countersign them by manual signature on
behalf of the Trustee by one or more authorized signatories, each of whom
shall be Responsible Officers of the Trustee or its agent. A Certificate
bearing the manual and facsimile signatures of individuals who were the
authorized signatories of the Trustee or its agent at the time of issuance
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to hold such positions prior to the delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this Agreement, or
be valid for any purpose, unless there appears on such Certificate the
manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates issued on the Closing Date shall be dated the
Closing Date. All Certificates issued thereafter shall be dated the date of
their countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each 2004-7
REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each 2004-7 REMIC shall have a tax year
that is a calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each 2004-7 REMIC to
timely elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
any Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual Certificates,
whether upon original issuance or upon issuance of any other Certificate of
any such Class in exchange therefor or upon transfer thereof:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO
THE MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A)
THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
POSSESSION OF THE UNITED STATES, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A
CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT FOR
XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY
SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE
FOREGOING, (C) ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS'
COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM
THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS
SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING THE
TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE
INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP
UNDER SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS
A "DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED
TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE
DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall maintain at its Corporate Trust Office a Certificate
Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and
of transfers and exchanges of Certificates as herein provided.
(b) Subject to Section 5.01(a) and, in the case of any Global Certificate or
Physical Certificate upon the satisfaction of the conditions set forth below,
upon surrender for registration of transfer of any Certificate at any office
or agency of the Trustee maintained for such purpose, the Trustee shall sign,
countersign and shall deliver, in the name of the designated transferee or
transferees, a new Certificate of a like Class and aggregate Fractional
Undivided Interest, but bearing a different number.
(c) By acceptance of a Private Certificate or a Residual Certificate, whether
upon original issuance or subsequent transfer, each holder of such
Certificate acknowledges the restrictions on the transfer of such Certificate
set forth in the Securities Legend and agrees that it will transfer such a
Certificate only as provided herein. In addition to the provisions of
Section 5.02(h), the following restrictions shall apply with respect to the
transfer and registration of transfer of an Private Certificate or a Residual
Certificate to a transferee that takes delivery in the form of an Individual
Certificate:
(i) The Trustee shall register the transfer of an Individual Certificate if
the requested transfer is being made to a transferee who has provided the
Trustee with a Rule 144A Certificate or comparable evidence as to its QIB
status.
(ii) The Trustee shall register the transfer of any Individual Certificate if
(x) the transferor has advised the Trustee in writing that the Certificate is
being transferred to an Institutional Accredited Investor along with facts
surrounding the transfer as set forth in Exhibit F-1 hereto; and (y) prior to
the transfer the transferee furnishes to the Trustee an Investment Letter
(and the Trustee shall be fully protected in so doing), provided that, if
based upon an Opinion of Counsel addressed to the Trustee to the effect that
the delivery of (x) and (y) above are not sufficient to confirm that the
proposed transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act and other applicable laws, the Trustee shall as a condition of the
registration of any such transfer require the transferor to furnish such
other certifications, legal opinions or other information prior to
registering the transfer of an Individual Certificate as shall be set forth
in such Opinion of Counsel.
(d) So long as a Global Certificate of such Class is outstanding and is held
by or on behalf of the Depository, transfers of beneficial interests in such
Global Certificate, or transfers by holders of Individual Certificates of
such Class to transferees that take delivery in the form of beneficial
interests in the Global Certificate, may be made only in accordance with
Section 5.02(h), the rules of the Depository and the following:
(i) In the case of a beneficial interest in the Global Certificate being
transferred to an Institutional Accredited Investor, such transferee shall be
required to take delivery in the form of an Individual Certificate or
Certificates and the Trustee shall register such transfer only upon
compliance with the provisions of Section 5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global Certificates
being transferred to a transferee that takes delivery in the form of an
Individual Certificate or Certificates of such Class, except as set forth in
clause (i) above, the Trustee shall register such transfer only upon
compliance with the provisions of Section 5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class being transferred
to a transferee that takes delivery in the form of a beneficial interest in a
Global Certificate of such Class, the Trustee shall register such transfer if
the transferee has provided the Trustee with a Rule 144A Certificate or
comparable evidence as to its QIB status.
(iv) No restrictions shall apply with respect to the transfer or registration
of transfer of a beneficial interest in the Global Certificate of a Class to
a transferee that takes delivery in the form of a beneficial interest in the
Global Certificate of such Class; provided that each such transferee shall be
deemed to have made such representations and warranties contained in the Rule
144A Certificate as are sufficient to establish that it is a QIB.
(e) Subject to Section 5.02(h), an exchange of a beneficial interest in a
Global Certificate of a Class for an Individual Certificate or Certificates
of such Class, an exchange of an Individual Certificate or Certificates of a
Class for a beneficial interest in the Global Certificate of such Class and
an exchange of an Individual Certificate or Certificates of a Class for
another Individual Certificate or Certificates of such Class (in each case,
whether or not such exchange is made in anticipation of subsequent transfer,
and, in the case of the Global Certificate of such Class, so long as such
Certificate is outstanding and is held by or on behalf of the Depository) may
be made only in accordance with Section 5.02(h), the rules of the Depository
and the following:
(i) A holder of a beneficial interest in a Global Certificate of a Class may
at any time exchange such beneficial interest for an Individual Certificate
or Certificates of such Class.
(ii) A holder of an Individual Certificate or Certificates of a Class may
exchange such Certificate or Certificates for a beneficial interest in the
Global Certificate of such Class if such holder furnishes to the Trustee a
Rule 144A Certificate or comparable evidence as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may exchange such
Certificate for an equal aggregate principal amount of Individual
Certificates of such Class in different authorized denominations without any
certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of
such Class as provided herein, the Trustee shall cancel such Individual
Certificate and shall (or shall request the Depository to) endorse on the
schedule affixed to the applicable Global Certificate (or on a continuation
of such schedule affixed to the Global Certificate and made a part thereof)
or otherwise make in its books and records an appropriate notation evidencing
the date of such exchange or transfer and an increase in the certificate
balance of the Global Certificate equal to the certificate balance of such
Individual Certificate exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial interest in a
Global Certificate of a Class for an Individual Certificate of such Class as
provided herein, the Trustee shall (or shall request the Depository to)
endorse on the schedule affixed to such Global Certificate (or on a
continuation of such schedule affixed to such Global Certificate and made a
part thereof) or otherwise make in its books and records an appropriate
notation evidencing the date of such exchange or transfer and a decrease in
the certificate balance of such Global Certificate equal to the certificate
balance of such Individual Certificate issued in exchange therefor or upon
transfer thereof.
(g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or
of a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in this
Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance
equal to the minimum authorized denomination set forth in Section 5.01(g) or
any integral multiple of $1.00 in excess thereof) by surrendering such
Certificate at the Corporate Trust Office, or at the office of any transfer
agent, together with an executed instrument of assignment and transfer
satisfactory in form and substance to the Trustee in the case of transfer and
a written request for exchange in the case of exchange. The holder of a
beneficial interest in a Global Certificate may, subject to the rules and
procedures of the Depository, cause the Depository (or its nominee) to notify
the Trustee in writing of a request for transfer or exchange of such
beneficial interest for an Individual Certificate or Certificates. Following
a proper request for transfer or exchange, the Trustee shall, within five
Business Days of such request made at the Corporate Trust Office, sign,
countersign and deliver at the Corporate Trust Office, to the transferee (in
the case of transfer) or holder (in the case of exchange) or send by first
class mail at the risk of the transferee (in the case of transfer) or holder
(in the case of exchange) to such address as the transferee or holder, as
applicable, may request, an Individual Certificate or Certificates, as the
case may require, for a like aggregate Fractional Undivided Interest and in
such authorized denomination or denominations as may be requested. The
presentation for transfer or exchange of any Individual Certificate shall not
be valid unless made at the Corporate Trust Office by the registered holder
in person, or by a duly authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates
to be exchanged at the Corporate Trust Office; provided, however, that no
Certificate may be exchanged for new Certificates unless the original
Fractional Undivided Interest represented by each such new Certificate (i) is
at least equal to the minimum authorized denomination or (ii) is acceptable
to the Depositor as indicated to the Trustee in writing. Whenever any
Certificates are so surrendered for exchange, the Trustee shall sign and
countersign and the Trustee shall deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or surrendered
for transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer, with a signature guarantee, in form
satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer or
exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record
retention requirements of the Securities Exchange Act of 1934, as amended,
and thereafter may destroy such Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. (a) If
(i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of
any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has
not received notice that such Certificate has been acquired by a third
Person, the Trustee shall sign, countersign and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Fractional Undivided Interest but in each case
bearing a different number. The mutilated, destroyed, lost or stolen
Certificate shall thereupon be canceled of record by the Trustee and shall be
of no further effect and evidence no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith. Any duplicate Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 6.01 and for all other purposes
whatsoever. Neither the Depositor, the Trustee nor any agent of the
Depositor or the Trustee shall be affected by notice to the contrary. No
Certificate shall be deemed duly presented for a transfer effective on any
Record Date unless the Certificate to be transferred is presented no later
than the close of business on the third Business Day preceding such Record
Date.
Section 5.05 Transfer Restrictions on Residual Certificates. (a)
Residual Certificates, or interests therein, may not be transferred without
the prior express written consent of the Tax Matters Person and the Seller,
which cannot be unreasonably withheld. As a prerequisite to such consent, the
proposed transferee must provide the Tax Matters Person, the Seller and the
Trustee with an affidavit that the proposed transferee is a Permitted
Transferee (and, unless the Tax Matters Person and the Seller consent to the
transfer to a person who is not a U.S. Person, an affidavit that it is a U.S.
Person) as provided in Section 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Depositor an affidavit in the form
attached hereto as Exhibit E stating, among other things, that as of the date
of such transfer (i) such transferee is a Permitted Transferee and that
(ii) such transferee is not acquiring such Residual Certificate for the
account of any person who is not a Permitted Transferee. The Tax Matters
Person shall not consent to a transfer of a Residual Certificate if it has
actual knowledge that any statement made in the affidavit issued pursuant to
the preceding sentence is not true. Notwithstanding any transfer, sale or
other disposition of a Residual Certificate to any Person who is not a
Permitted Transferee, such transfer, sale or other disposition shall be
deemed to be of no legal force or effect whatsoever and such Person shall not
be deemed to be a Holder of a Residual Certificate for any purpose hereunder,
including, but not limited to, the receipt of distributions thereon. If any
purported transfer shall be in violation of the provisions of this Section
5.05(b), then the prior Holder thereof shall, upon discovery that the
transfer of such Residual Certificate was not in fact permitted by this
Section 5.05(b), be restored to all rights as a Holder thereof retroactive
to the date of the purported transfer. None of the Trustee, the Tax Matters
Person or the Depositor shall be under any liability to any Person for any
registration or transfer of a Residual Certificate that is not permitted by
this Section 5.05(b) or for making payments due on such Residual Certificate
to the purported Holder thereof or taking any other action with respect to
such purported Holder under the provisions of this Agreement so long as the
written affidavit referred to above was received with respect to such
transfer, and the Tax Matters Person, the Trustee and the Depositor, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that
was in fact not a permitted transferee under this Section 5.05(b) at the
time it became a Holder all payments made on such Residual Certificate. Each
Holder of a Residual Certificate, by acceptance thereof, shall be deemed for
all purposes to have consented to the provisions of this Section 5.05(b) and
to any amendment of this Agreement deemed necessary (whether as a result of
new legislation or otherwise) by counsel of the Tax Matters Person or the
Depositor to ensure that the Residual Certificates are not transferred to any
Person who is not a Permitted Transferee and that any transfer of such
Residual Certificates will not cause the imposition of a tax upon the Trust
or cause any REMIC to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person shall have consented in writing (which
consent may be withheld in the Tax Matters Person's sole discretion), the
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any person who is not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees to be a
Tax Matters Person if it is the Holder of the largest percentage interest of
such Certificate, and appoints the Securities Administrator to act as its
agent with respect to all matters concerning the tax obligations of the Trust.
Section 5.06 Restrictions on Transferability of Certificates. (a) No
offer, sale, transfer or other disposition (including pledge) of any
Certificate shall be made by any Holder thereof unless registered under the
Securities Act, or an exemption from the registration requirements of the
Securities Act and any applicable state securities or "Blue Sky" laws is
available and the prospective transferee (other than the Depositor) of such
Certificate signs and delivers to the Trustee an Investment Letter, if the
transferee is an Institutional Accredited Investor, in the form set forth as
Exhibit F-l hereto, or a Rule 144A Certificate, if the transferee is a QIB,
in the form set forth as Exhibit F-2 hereto. Notwithstanding the provisions
of the immediately preceding sentence, no restrictions shall apply with
respect to the transfer or registration of transfer of a beneficial interest
in any Certificate that is a Global Certificate of a Class to a transferee
that takes delivery in the form of a beneficial interest in the Global
Certificate of such Class provided that each such transferee shall be deemed
to have made such representations and warranties contained in the Rule 144A
Certificate as are sufficient to establish that it is a QIB. In the case of
a proposed transfer of any Certificate to a transferee other than a QIB, the
Trustee may require an Opinion of Counsel addressed to the Trustee that such
transaction is exempt from the registration requirements of the Securities
Act. The cost of such opinion shall not be an expense of the Trustee or the
Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions. (a) Subject to the provisions of
subsection (b), no Residual Certificates or Private Certificates may be
acquired directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement (a "Plan") that is subject to Title I of
ERISA or Section 4975 of the Code, or by a person using "plan assets" of a
Plan, unless the proposed transferee provides the Trustee, with an Opinion of
Counsel addressed to the Trustee, the Master Servicer and the Securities
Administrator (upon which they may rely) that is satisfactory to the Trustee,
which opinion will not be at the expense of the Trustee, the Master Servicer
or the Securities Administrator, that the purchase of such Certificates by or
on behalf of such Plan is permissible under applicable law, will not
constitute or result in a nonexempt prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Depositor, the Master
Servicer, the Securities Administrator or the Trustee to any obligation in
addition to those undertaken in the Agreement.
(b) Unless such Person has provided an Opinion of Counsel in accordance with
Section 5.07(a), any Person acquiring an interest in a Global Certificate
which is a Private Certificate, by acquisition of such Certificate, shall be
deemed to have represented to the Trustee, and any Person acquiring an
interest in a Private Certificate in definitive form shall represent in
writing to the Trustee, that it is not acquiring an interest in such
Certificate directly or indirectly by, or on behalf of, or with "plan assets"
of, an employee benefit plan or other retirement arrangement which is subject
to Title I of ERISA and/or Section 4975 of the Code.
(c) Each beneficial owner of a Class M, Class B-1, Class B-2 or Class B-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of that certificate or interest therein, that either (i) such
Certificate is rated at least "BBB-" or its equivalent by Fitch, S&P or
Xxxxx'x, (ii) such beneficial owner is not a Plan or investing with "plan
assets" of any Plan, or (iii) (1) it is an insurance company, (2) the source
of funds used to acquire or hold the certificate or interest therein is an
"insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in
Sections I and III of PTCE 95-60 have been satisfied.
(d) None of the Trustee, the Master Servicer nor the Securities Administrator
will be required to monitor, determine or inquire as to compliance with the
transfer restrictions with respect to the Global Certificates. Any attempted
or purported transfer of any Certificate in violation of the provisions of
Section s (a), (b) or (c) above shall be void ab initio and such Certificate
shall be considered to have been held continuously by the prior permitted
Certificateholder. Any transferor of any Certificate in violation of such
provisions, shall indemnify and hold harmless the Trustee, the Securities
Administrator and the Master Servicer from and against any and all
liabilities, claims, costs or expenses incurred by the Trustee, the
Securities Administrator or the Master Servicer as a result of such attempted
or purported transfer. The Trustee shall have no liability for transfer of
any such Global Certificates in or through book-entry facilities of any
Depository or between or among Depository Participants or Certificate Owners
made in violation of the transfer restrictions set forth herein.
Section 5.08 Rule 144A Information. For so long as any Private
Certificates are outstanding, (1) the Seller will provide or cause to be
provided to any holder of such Private Certificates and any prospective
purchaser thereof designated by such a holder, upon the request of such
holder or prospective purchaser, the information required to be provided to
such holder or prospective purchaser by Rule 144A(d)(4) under the Securities
Act; and (2) the Seller shall update such information from time to time in
order to prevent such information from becoming false and misleading and will
take such other actions as are necessary to ensure that the safe harbor
exemption from the registration requirements of the Securities Act under Rule
144A is and will be available for resales of such Private Certificates
conducted in accordance with Rule 144A.
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates. (a) Interest and
principal (as applicable) on the Certificates (other than the Class R
Certificates) of each Certificate Group will be distributed monthly on each
Distribution Date, commencing in August 2004, in an amount equal to the
Available Funds for the related Loan Group on deposit in the Distribution
Account for such Distribution Date. In addition, on the Distribution Date
occurring in August 2004, the Class R Deposit will be distributed to the
Holder of the Class R Certificates in reduction of the Current Principal
Amount thereof. On each Distribution Date, the Available Funds for each Loan
Group on deposit in the Distribution Account shall be distributed as follows:
(A) on each Distribution Date, the Available Funds for Loan Group I will be
distributed to the Group I Certificates as follows:
first, to the Class I-A-1 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date;
second, to the Class I-A-1 Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Available Funds for Loan Group I; and
third, to the Class I-A-1 Certificates, in reduction
of the Current Principal Amount thereof, the Senior
Optimal Principal Amount with respect to the
Class I-A-1 Certificates for such Distribution Date,
to the extent of remaining Available Funds for Loan
Group I, until the Current Principal Amount of such
Class has been reduced to zero.
(B) on each Distribution Date, the Available Funds for Loan Group II will be
distributed to the Group II Certificates as follows:
first, to the Class II-A-1 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date;
second, to the Class II-A-1 Certificates, any Accrued
Certificate Interest thereon remaining undistributed
from previous Distribution Dates, to the extent of
remaining Available Funds for Loan Group II; and
third, to the Class II-A-1 Certificates, in reduction
of the Current Principal Amount thereof, the Senior
Optimal Principal Amount with respect to the Group II
Certificates for such Distribution Date, until the
Current Principal Amount of such Class has been
reduced to zero.
(C) on each Distribution Date, the Available Funds for Loan Group III will be
distributed to the Group III Certificates as follows:
first, to the Class III-A-1 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date;
second, to the Class III-A-1 Certificates, any
Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to
the extent of remaining Available Funds for Loan
Group III; and
third, to the Class III-A-1 Certificates , in
reduction of the Current Principal Amount thereof,
the Senior Optimal Principal Amount with respect to
the Class III-A-1 Certificates for such Distribution
Date, to the extent of remaining Available Funds for
Loan Group III, until the Current Principal Amount of
such Class has been reduced to zero.
(D) Except as provided in clauses (E) and (F) below, on each Distribution
Date on or prior to the Cross-Over Date, an amount equal to
the sum of any remaining Available Funds for all Loan
Groups after the distributions in clauses (A) through (C)
above will be distributed sequentially, in the following
order, to the Class M, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates, in each
case up to an amount equal to and in the following order:
(a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest
thereon remaining undistributed from previous Distribution
Dates and (c) such Class's Allocable Share for such
Distribution Date, in each case, to the extent of remaining
Available Funds for all Loan Groups.
(E) On each Distribution Date prior to the Cross-Over Date, but after the
reduction of the aggregate Current Principal Amount of all
of the classes of any of the Group I, Group II or Group III
Certificates to zero, the remaining Certificate Groups will
be entitled to receive in reduction of their Current
Principal Amounts, pro rata based upon aggregate Current
Principal Amount of the Senior Certificates in each
Certificate Group immediately prior to such Distribution
Date, in addition to any Principal Prepayments related to
such remaining Senior Certificates' respective Loan
Group allocated to such Senior Certificates, 100% of the
Principal Prepayments on any Mortgage Loan in the Loan
Group or Loan Groups relating to any fully paid Certificate
Group. Such amounts allocated to Senior Certificates shall
be treated as part of the Available Funds for the related
Loan Group and distributed as part of the related Senior
Optimal Distribution Amount in accordance with priority
third in clauses (A) through (C) above, as applicable, in
reduction of the Current Principal Amounts thereof.
Notwithstanding the foregoing, if (i) the weighted average
of the Subordinate Percentages on such Distribution Date
equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (ii) the aggregate
Scheduled Principal Balance of the Mortgage Loans
delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months,
as a percentage of the aggregate Current Principal Amount
of the Subordinate Certificates does not exceed 100%, then
the additional allocation of Principal Prepayments to the
Certificates in accordance with this clause (E) will not be
made and 100% of the Principal Prepayments on any Mortgage
Loan in the Loan Group relating to the fully paid
Certificate Group or Certificate Groups will be allocated
to the Subordinate Certificates.
(F) For any Undercollateralized Certificate Group on any Distribution Date
prior to the Cross-Over Date, (i) 100% of amounts otherwise
allocable to the Subordinate Certificates in respect of
principal will be distributed to the Senior Certificates of
such Undercollateralized Certificate Group in reduction of
the Current Principal Amounts thereof, until the aggregate
Current Principal Amount of such Senior Certificates is an
amount equal to the aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan Group and (ii)
the Accrued Certificate Interest otherwise allocable to the
Subordinate Certificates on such Distribution Date will be
reduced and distributed to such Senior Certificates, to the
extent of any amount due and unpaid on such Senior
Certificates, in an amount equal to one month's interest at
a rate equal to the related Pass-Through Rate for such
Distribution Date on the related Undercollateralized
Amount. Any such reduction in the Accrued Certificate
Interest on the Subordinate Certificates will be allocated
in reverse order of the Class B Certificates numerical
designations, commencing with the Class B-6 Certificates
and then to the Class M Certificates. If there exists more
than one Undercollateralized Certificate Group on a
Distribution Date, amounts distributable to such
Undercollateralized Certificate Groups pursuant to this
clause will be allocated between such Undercollateralized
Certificate Groups, pro rata, based upon their respective
Undercollateralized Amounts.
(G) If, after distributions have been made pursuant to priorities first and
second of clauses (A), (B) and (C) above on any
Distribution Date, the remaining Available Funds for any
Loan Group is less than the Senior Optimal Principal Amount
for that Loan Group, the Senior Optimal Principal Amount
for such Loan Group shall be reduced by that amount, and
the remaining Available Funds for such Loan Group will be
distributed as principal to the related Class of Senior
Certificates.
(H) On each Distribution Date, any Available Funds remaining after payment of
interest and principal to the Classes of Certificates
entitled thereto, will be distributed to the Class R
Certificates; provided that if on any Distribution Date
there are any Available Funds for any Loan Group remaining
after payment of interest and principal to a Class or
Classes of Certificates entitled thereto, such amounts will
be distributed to the other Classes of Senior Certificates,
pro rata, based upon their Current Principal Amounts, until
all amounts due to all Classes of Senior Certificates have
been paid in full, before any Available Funds are
distributed in accordance with this clause to the Class R
Certificates.
(b) No Accrued Certificate Interest will be payable with respect to any
Class of Certificates after the Distribution Date on which the Current
Principal Amount of such Certificate has been reduced to zero.
(c) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior
to reduction for Net Interest Shortfalls and the interest portion of Realized
Losses, the shortfall will be allocated to the holders of the Class of Senior
Certificates in such Certificate Group. In addition, the amount of any
interest shortfalls will constitute unpaid Accrued Certificate Interest and
will be distributable to holders of the Certificates of the related Classes
entitled to such amounts on subsequent Distribution Dates, to the extent of
the applicable Available Funds after current interest distributions as
required herein. Any such amounts so carried forward will not bear
interest. Shortfalls in interest payments will not be offset by a reduction
in the servicing compensation of the Master Servicer or otherwise, except to
the extent of applicable Compensating Interest Payments.
(d) The expenses and fees of the Trust shall be paid by each of the 2004-7
REMICs, to the extent that such expenses relate to the assets of each of such
respective 2004-7 REMICs, and all other expenses and fees of the Trust shall
be paid pro rata by each of the 2004-7 REMICs.
Section 6.02 Allocation of Losses.(a) On or prior to each Determination
Date, the Master Servicer shall determine the amount of any Realized Loss in
respect of each Mortgage Loan that occurred during the immediately preceding
calendar month, based on information provided by the related Servicer.
(b) With respect to any Certificates any Distribution Date, the principal
portion of each Realized Loss on a Mortgage Loan in a Loan Group shall be
allocated as follows:
first, to the Class B-6 Certificates until the Current Principal
Amount thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Current Principal
Amount thereof has been reduced to zero;
third, to the Class B-4 Certificates until the Current Principal
Amount thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Current Principal
Amount thereof has been reduced to zero;
fifth, to the Class B-2 Certificates until the Current Principal
Amount thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until the Current Principal
Amount thereof has been reduced to zero;
seventh, to the Class M Certificates until the Current Principal
Amount thereof has been reduced to zero; and
eighth, to the Class of Senior Certificates in the related
Certificate Group.
(c) Notwithstanding the foregoing clause (b), no such allocation of any
Realized Loss shall be made on a Distribution Date to any Class of (i)
Subordinated Certificates to the extent that such allocation would result in
the reduction of the aggregate Current Principal Amounts of all Certificates
in as of such Distribution Date, after giving effect to all distributions and
prior allocations of Realized Losses on the Mortgage Loans on such date, to
an amount less than the aggregate Scheduled Principal Balance of all of the
Mortgage Loans as of the first day of the month of such Distribution Date and
(ii) Senior Certificates in a Certificate Group to the extent that such
allocation would result in the reduction of the aggregate Current Principal
Amounts of all the Certificates in such Certificate Group as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Mortgage Loans in the related Loan
Group on such date, to an amount less than the aggregate Scheduled Principal
Balance of all of the Mortgage Loans in such Loan Group as of the first day
of the month of such Distribution Date (each such limitation in clause (i)
and (ii), the "Loss Allocation Limitation").
(d) The principal portion of any Realized Losses allocated to a Class of
Certificates shall be allocated among the Certificates of such Class in
proportion to their respective Current Principal Amounts. The principal
portion of any allocation of Realized Losses shall be accomplished by
reducing the Current Principal Amount of the related Certificates on the
related Distribution Date.
(e) Realized Losses shall be allocated on the Distribution Date in the month
following the month in which such loss was incurred and, in the case of the
principal portion thereof, after giving effect to distributions made on such
Distribution Date.
(f) On each Distribution Date, the Securities Administrator shall determine
and notify the Trustee of the Subordinate Certificate Writedown Amount. Any
Subordinate Certificate Writedown Amount shall effect a corresponding
reduction in the Current Principal Amount of the Class B Certificates in the
reverse order of their numerical Class designations and thereafter of the
Class M Certificates.
(g) The applicable Senior Percentage of Net Interest Shortfalls will be
allocated among the Senior Certificates in the related Certificate Group in
proportion to the amount of Accrued Certificate Interest that would have been
allocated thereto in the absence of such shortfalls. The applicable
Subordinate Percentage of Net Interest Shortfall will be allocated among the
Subordinate Certificates in proportion to the amount of Accrued Certificate
Interest that would have been allocated thereto in the absence of such
shortfalls. The interest portion of any Realized Losses with respect to the
Mortgage Loans occurring on or prior to the Cross-Over Date will be allocated
to the Class B Certificates in inverse order of their numerical
Class designations and then to the Class M Certificates. Following the
Cross-Over Date, the interest portion of Realized Losses on the Mortgage
Loans will be allocated to the Senior Certificates in the related Certificate
Group.
(h) In addition, in the event that the Master Servicer receives any
Subsequent Recoveries from a Servicer, the Master Servicer shall deposit such
funds into the Master Servicer Collection Account pursuant to Section
4.01(c)(ii). If, after taking into account such Subsequent Recoveries, the
amount of a Realized Loss is reduced, the amount of such Subsequent
Recoveries will be applied to increase the Current Principal Amount of the
Class of Subordinate Certificates with the highest payment priority to which
Realized Losses have been allocated, but not by more than the amount of
Realized Losses previously allocated to that Class of Subordinate
Certificates pursuant to this Section 6.02. The amount of any remaining
Subsequent Recoveries will be applied to sequentially increase the Current
Principal Amount of the Subordinate Certificates, beginning with the Class of
Subordinate Certificates with the next highest payment priority, up to the
amount of such Realized Losses previously allocated to such Class or Classes
of Certificates pursuant to this Section 6.02. Holders of such Certificates
will not be entitled to any payments in respect of current interest on the
amount of such increases for any Interest Accrual Period preceding the
Distribution Date on which such increase occurs. Any such increases shall be
applied to the Current Principal Amount of each Subordinate Certificate of
such Class in accordance with its respective Fractional Undivided Interest.
Section 6.03 Payments. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each
Certificateholder of record as of the immediately preceding Record Date the
Certificateholder's pro rata share of its Class (based on the aggregate
Fractional Undivided Interest represented by such Holder's Certificates) of
all amounts required to be distributed on such Distribution Date to such
Class, based on information provided to the Trustee by the Securities
Administrator. The Securities Administrator shall calculate the amount to be
distributed to each Class and, based on such amounts, the Securities
Administrator shall determine the amount to be distributed to each
Certificateholder. All of the Securities Administrator's calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer. Neither the Securities Administrator
nor the Trustee shall be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of
written instructions from a Certificateholder by wire transfer to a United
States dollar account maintained by the payee at any United States depository
institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Trustee specified in
the notice to Certificateholders of such final payment.
Section 6.04 Statements to Certificateholders. (a) On each Distribution
Date, concurrently with each distribution to Certificateholders, the
Securities Administrator shall make available to the parties hereto and each
Certificateholder via the Securities Administrator's internet website as set
forth below, the following information, expressed with respect to clauses
(i) through (vii) in the aggregate and as a Fractional Undivided Interest
representing an initial Current Principal Amount of $1,000, or in the case of
the Residual Certificates, an initial Current Principal Amount of $100:
(i) the Current Principal Amount of each Class of Certificates immediately
prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on each applicable
Class of Certificates;
(iii) the aggregate amount of interest accrued at the related Pass-Through
Rate with respect to each Class during the related Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to interest at the
related Pass-Through Rate necessary to account for any difference between
interest accrued and aggregate interest distributed with respect to each
Class of Certificates;
(v) the amount of the distribution allocable to interest on each Class of
Certificates;
(vi) the Pass-Through Rates for each Class of Certificates with respect to
such Distribution Date;
(vii) the Current Principal Amount of each Class of Certificates after such
Distribution Date;
(viii) the amount of any Monthly Advances, Compensating Interest
Payments and outstanding unreimbursed advances by the Master Servicer or the
Servicer included in such distribution separately stated for each Loan Group;
(ix) the aggregate amount of any Realized Losses (listed separately for each
category of Realized Loss and for each Loan Group) during the related
Prepayment Period and cumulatively since the Cut-off Date and the amount and
source (separately identified) of any distribution in respect thereof
included in such distribution;
(x) with respect to each Mortgage Loan which incurred a Realized Loss during
the related Prepayment Period, (i) the loan number, (ii) the Scheduled
Principal Balance of such Mortgage Loan as of the Cut-off Date, (ii) the
Scheduled Principal Balance of such Mortgage Loan as of the beginning of the
related Due Period, (iii) the Net Liquidation Proceeds with respect to such
Mortgage Loan and (iv) the amount of the Realized Loss with respect to such
Mortgage Loan;
(xi) with respect to each Loan Group, the amount of Scheduled Principal and
Principal Prepayments, (including but separately identifying the principal
amount of Principal Prepayments, Insurance Proceeds, the purchase price in
connection with the purchase of Mortgage Loans, cash deposits in connection
with substitutions of Mortgage Loans and Net Liquidation Proceeds) and the
number and principal balance of Mortgage Loans purchased or substituted for
during the relevant period and cumulatively since the Cut-off Date;
(xii) the number of Mortgage Loans (excluding REO Property) in each Loan
Group remaining in the Trust Fund as of the end of the related Prepayment
Period;
(xiii) information for each Loan Group and in the aggregate regarding
any Mortgage Loan delinquencies as of the end of the related Prepayment
Period, including the aggregate number and aggregate Outstanding Principal
Balance of Mortgage Loans (a) delinquent 30 to 59 days on a contractual
basis, (b) delinquent 60 to 89 days on a contractual basis, and (c)
delinquent 90 or more days on a contractual basis, in each case as of the
close of business on the last Business Day of the immediately preceding month;
(xiv) for each Loan Group, the number of Mortgage Loans in the foreclosure
process as of the end of the related Due Period and the aggregate Outstanding
Principal Balance of such Mortgage Loans;
(xv) for each Loan Group, the number and aggregate Outstanding Principal
Balance of all Mortgage Loans as to which the Mortgaged Property was REO
Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal Balance of the
Mortgage Loan, (B) accrued interest through the date of foreclosure and (C)
foreclosure expenses) of any REO Property in each Loan Group; provided that,
in the event that such information is not available to the Securities
Administrator on the Distribution Date, such information shall be furnished
promptly after it becomes available;
(xvii) the amount of Realized Losses allocated to each Class of
Certificates since the prior Distribution Date and in the aggregate for all
prior Distribution Dates;
(xviii) the Average Loss Severity Percentage for each Loan Group; and
(xix) the Senior Percentage, Senior Prepayment Percentage, Subordinate
Percentage and Subordinate Prepayment Percentage, in each case, for such
Distribution Date.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the
extent of, information provided to the Securities Administrator by the Master
Servicer. The Securities Administrator may conclusively rely on such
information and shall not be required to confirm, verify or recalculate any
such information.
The Securities Administrator may make available each month, to any
interested party, the monthly statement to Certificateholders via the
Securities Administrator's website initially located at "xxx.xxxxxxx.xxx."
Assistance in using the website can be obtained by calling the Securities
Administrator's customer service desk at (000) 000-0000. Parties that are
unable to use the above distribution option are entitled to have a paper copy
mailed to them via first class mail by calling the Securities Administrator's
customer service desk and indicating such. The Securities Administrator
shall have the right to change the way such reports are distributed in order
to make such distribution more convenient and/or more accessible to the
parties, and the Securities Administrator shall provide timely and adequate
notification to all parties regarding any such change.
To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders via the Trustee's internet website. The Trustee's
internet website will initially be located at xxx.xxxxxxxx.xxx/xxx.
Assistance in using the Trustee's website service can be obtained by calling
the Trustee's customer service desk at (000) 000-0000.
(b) Within a reasonable period of time after the end of the preceding
calendar year beginning in 2005, the Trustee will furnish such report to each
Holder of the Certificates of record at any time during the prior calendar
year as to the aggregate of amounts reported pursuant to subclauses (a)(ii)
and (a)(v) above with respect to the Certificates, plus information with
respect to the amount of servicing compensation and such other customary
information as the Securities Administrator may determine and advises the
Trustee to be necessary and/or to be required by the Internal Revenue Service
or by a federal or state law or rules or regulations to enable such Holders
to prepare their tax returns for such calendar year. Such obligations shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator or the Trustee
pursuant to the requirements of the Code.
Section 6.05 Monthly Advances. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date is delinquent other than as a result
of application of the Relief Act and for which the related Servicer was
required to make an advance pursuant to the related Servicing Agreement
exceeds the amount deposited in the Master Servicer Collection Account which
will be used for an advance with respect to such Mortgage Loan, the Master
Servicer will deposit in the Master Servicer Collection Account not later
than the Distribution Account Deposit Date immediately preceding the related
Distribution Date an amount equal to such deficiency, net of the Servicing
Fee for such Mortgage Loan except to the extent the Master Servicer
determines any such advance to be a Nonrecoverable Advance. Subject to the
foregoing, the Master Servicer shall continue to make such advances through
the date that the related Servicer is required to do so under its Servicing
Agreement. If the Master Servicer deems an advance to be a Nonrecoverable
Advance, on the Distribution Account Deposit Date, the Master Servicer shall
present an Officer's Certificate to the Trustee (i) stating that the Master
Servicer elects not to make a Monthly Advance in a stated amount and
(ii) detailing the reason it deems the advance to be a Nonrecoverable Advance.
Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the
sum of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition
of Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicers and (ii) the
Master Servicer Compensation for such Distribution Date (such amount, the
"Compensating Interest Payment"). The Master Servicer shall not be entitled
to any reimbursement of any Compensating Interest Payment.
Section 6.07 Distributions on REMIC I Regular Interests.
On each Distribution Date, the Trustee shall be deemed to distribute to
itself as the holder of the REMIC I Regular Interests, the following to the
extent of the Available Funds reduced by distributions made to the Class R
Certificateholders pursuant to Section 6.01(a): those portions of the REMIC
I Distribution Amount not designated to Component I of the Class R
Certificate, in the amounts and in accordance with the priorities set forth
in the definition of REMIC I Distribution Amount.
Notwithstanding the deemed distributions on the REMIC I Regular
Interests described in this Section 6.07, distributions of funds from the
Certificate Account shall be made only in accordance with Section 6.01.
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02 Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement, the Certificates or any of the Mortgage Loans and to perform its
duties under this Agreement.
(b) Any Person into which the Master Servicer may be merged or consolidated,
or any corporation resulting from any merger or consolidation to which the
Master Servicer shall be a party, or any Person succeeding to the business of
the Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
Section 7.03 Indemnification of the Trustee, the Master Servicer and the
Securities Administrator. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss,
liability or expense (including reasonable legal fees and disbursements of
counsel) incurred on their part that may be sustained in connection with,
arising out of, or relating to, any claim or legal action (including any
pending or threatened claim or legal action) relating to this Agreement, the
Servicing Agreements, the Assignment Agreements or the Certificates or the
powers of attorney delivered by the Trustee hereunder (i) related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or (ii) incurred by reason of the
Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect
to any such claim or legal action (or pending or threatened claim or legal
action), the Trustee shall have given the Master Servicer and the Depositor
written notice thereof promptly after the Trustee shall have with respect to
such claim or legal action knowledge thereof. The Trustee's failure to give
any such notice shall not affect the Trustee's right to indemnification
hereunder, except to the extent the Master Servicer is materially prejudiced
by such failure to give notice. This indemnity shall survive the resignation
or removal of the Trustee, Master Servicer or the Securities Administrator
and the termination of this Agreement.
(a) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Section 7.03(a).
Section 7.04 Limitations on Liability of the Master Servicer and
Others. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers, employees
or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Trust Fund or the Certificateholders
for taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Master Servicer or any such Person
against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of such Person's willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee or
agent of the Master Servicer or the Custodian shall be indemnified by the
Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on
their part that may be sustained in connection with, arising out of, or
related to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, the Certificates or any
Servicing Agreement (except to the extent that the Master Servicer is
indemnified by the Servicer thereunder), other than (i) any such loss,
liability or expense related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement), or to
the Custodian's failure to perform its duties under the Custodial Agreement,
respectively, or (ii) any such loss, liability or expense incurred by reason
of the Master Servicer's or the Custodian's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or under the
Custodial Agreement, as applicable, or by reason of reckless disregard of
obligations and duties hereunder or under the Custodial Agreement, as
applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties
under this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably
withheld), undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Master Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Collection Account as provided by Section 4.03. Nothing in this
Section 7.04(d) shall affect the Master Servicer's obligation to supervise,
or to take such actions as are necessary to ensure, the servicing and
administration of the Mortgage Loans pursuant to Section 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement,
the Master Servicer shall not be required to investigate or make
recommendations concerning potential liabilities which the Trust might incur
as a result of such course of action by reason of the condition of the
Mortgaged Properties but shall give notice to the Trustee if it has notice of
such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of any
Servicer, except as otherwise expressly provided herein.
Section 7.05 Master Servicer Not to Resign. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel addressed to the Trustee to such effect delivered to the
Trustee. No such resignation by the Master Servicer shall become effective
until the Company or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 8.02 hereof. The Trustee shall notify the Rating Agencies of the
resignation of the Master Servicer.
Section 7.06 Successor Master Servicer. In connection with the
appointment of any successor master servicer or the assumption of the duties
of the Master Servicer, the Company or the Trustee may make such arrangements
for the compensation of such successor master servicer out of payments on the
Mortgage Loans as the Company or the Trustee and such successor master
servicer shall agree. If the successor master servicer does not agree that
such market value is a fair price, such successor master servicer shall
obtain two quotations of market value from third parties actively engaged in
the servicing of single-family mortgage loans. Notwithstanding the
foregoing, the compensation payable to a successor master servicer may not
exceed the compensation which the Master Servicer would have been entitled to
retain if the Master Servicer had continued to act as Master Servicer
hereunder.
Section 7.07 Sale and Assignment of Master Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement and the
Company may terminate the Master Servicer without cause and select a new
Master Servicer; provided, however, that: (i) the purchaser or transferee
accepting such assignment and delegation (a) shall be a Person which shall be
qualified to service mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall
have a net worth of not less than $10,000,000 (unless otherwise approved by
each Rating Agency pursuant to clause (ii) below); (c) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the
Trustee); and (d) shall execute and deliver to the Trustee an agreement, in
form and substance reasonably satisfactory to the Trustee, which contains an
assumption by such Person of the due and punctual performance and observance
of each covenant and condition to be performed or observed by it as master
servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given
prior written notice of the identity of the proposed successor to the Master
Servicer and each Rating Agency's rating of the Certificates in effect
immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; (iii) the Master Servicer assigning and selling the
master servicing shall deliver to the Trustee an Officer's Certificate and an
Opinion of Independent Counsel addressed to the Trustee, each stating that
all conditions precedent to such action under this Agreement have been
completed and such action is permitted by and complies with the terms of this
Agreement; and (iv) in the event the Master Servicer is terminated without
cause by the Company, the Company shall pay the terminated Master Servicer a
termination fee equal to 0.25% of the aggregate Scheduled Principal Balance
of the Mortgage Loans at the time the master servicing of the Mortgage Loans
is transferred to the successor Master Servicer. No such assignment or
delegation shall affect any rights or liability of the Master Servicer
arising prior to the effective date thereof.
ARTICLE VIII
Default
Section 8.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body) and only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the Distribution
Account any amount so required to be deposited pursuant to this Agreement
(other than a Monthly Advance), and such failure continues unremedied for a
period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any material respect
any other material covenants and agreements set forth in this Agreement to be
performed by it, which covenants and agreements materially affect the rights
of Certificateholders, and such failure continues unremedied for a period of
60 days after the date on which written notice of such failure, properly
requiring the same to be remedied, shall have been given to the Master
Servicer by the Trustee or to the Master Servicer and the Trustee by the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order is unstayed and in effect for a
period of 60 consecutive days, or an involuntary case is commenced against
the Master Servicer under any applicable insolvency or reorganization statute
and the petition is not dismissed within 60 days after the commencement of
the case; or
(iv) The Master Servicer consents to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or substantially all of its property; or the Master Servicer admits
in writing its inability to pay its debts generally as they become due, files
a petition to take advantage of any applicable insolvency or reorganization
statute, makes an assignment for the benefit of its creditors, or voluntarily
suspends payment of its obligations;
(v) The Master Servicer assigns or delegates its duties or rights under this
Agreement in contravention of the provisions permitting such assignment or
delegation under Sections 7.05 or 7.07; or
(vi) The Master Servicer fails to deposit, or cause to be deposited, in the
Distribution Account any Monthly Advance (other than a Nonrecoverable
Advance) by 5:00 p.m. New York City time on the Distribution Account Deposit
Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of the Company, may
terminate all of the rights and obligations (but not the liabilities) of the
Master Servicer under this Agreement and in and to the Mortgage Loans and/or
the REO Property serviced by the Master Servicer and the proceeds thereof.
Upon the receipt by the Master Servicer of the written notice, all authority
and power of the Master Servicer under this Agreement, whether with respect
to the Certificates, the Mortgage Loans, REO Property or under any other
related agreements (but only to the extent that such other agreements relate
to the Mortgage Loans or related REO Property) shall, subject to
Section 8.02, automatically and without further action pass to and be vested
in the Trustee pursuant to this Section 8.01; and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf
of the Master Servicer as attorney-in-fact or otherwise, any and all
documents and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment
of the Mortgage Loans and related documents, or otherwise. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master Servicer's rights and obligations hereunder, including, without
limitation, the transfer to the Trustee of (i) the property and amounts which
are then or should be part of the Trust or which thereafter become part of
the Trust; and (ii) originals or copies of all documents of the Master
Servicer reasonably requested by the Trustee to enable it to assume the
Master Servicer's duties thereunder. In addition to any other amounts which
are then, or, notwithstanding the termination of its activities under this
Agreement, may become payable to the Master Servicer under this Agreement,
the Master Servicer shall be entitled to receive, out of any amount received
on account of a Mortgage Loan or related REO Property, that portion of such
payments which it would have received as reimbursement under this Agreement
if notice of termination had not been given. The termination of the rights
and obligations of the Master Servicer shall not affect any obligations
incurred by the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy,
immediately terminate all of the rights and obligations of the Master
Servicer thereafter arising under this Agreement, but without prejudice to
any rights it may have as a Certificateholder or to reimbursement of Monthly
Advances and other advances of its own funds, and the Trustee shall act as
provided in Section 8.02 to carry out the duties of the Master Servicer,
including the obligation to make any Monthly Advance the nonpayment of which
was an Event of Default described in clause (vi) of this Section 8.01. Any
such action taken by the Trustee must be prior to the distribution on the
relevant Distribution Date.
Section 8.02 Trustee to Act; Appointment of Successor. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to
Section 8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to
the effect that the Master Servicer is legally unable to act or to delegate
its duties to a Person which is legally able to act, the Trustee shall
automatically become the successor in all respects to the Master Servicer in
its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities,
duties, liabilities and limitations on liabilities relating thereto placed on
the Master Servicer by the terms and provisions hereof; provided, however,
that the Company shall have the right to either (a) immediately assume the
duties of the Master Servicer or (b) select a successor Master Servicer;
provided further, however, that the Trustee shall have no obligation
whatsoever with respect to any liability (other than advances deemed
recoverable and not previously made) incurred by the Master Servicer at or
prior to the time of termination. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to compensation which the Master
Servicer would have been entitled to retain if the Master Servicer had
continued to act hereunder, except for those amounts due the Master Servicer
as reimbursement permitted under this Agreement for advances previously made
or expenses previously incurred. Notwithstanding the above, the Trustee may,
if it shall be unwilling so to act, or shall, if it is legally unable so to
act, appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution which is a Xxxxxx Mae- or
Xxxxxxx Mac-approved servicer, and with respect to a successor to the Master
Servicer only, having a net worth of not less than $10,000,000, as the
successor to the Master Servicer hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Master Servicer
hereunder; provided, that the Trustee shall obtain a letter from each Rating
Agency that the ratings, if any, on each of the Certificates will not be
lowered as a result of the selection of the successor to the Master
Servicer. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on the
Mortgage Loans as it and such successor shall agree; provided, however, that
the provisions of Section 7.06 shall apply, the compensation shall not be in
excess of that which the Master Servicer would have been entitled to if the
Master Servicer had continued to act hereunder, and that such successor shall
undertake and assume the obligations of the Trustee to pay compensation to
any third Person acting as an agent or independent contractor in the
performance of master servicing responsibilities hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession.
(a) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a
separate capacity and not in its capacity as Trustee and, accordingly, the
provisions of Article IX shall be inapplicable to the Trustee in its duties
as the successor to the Master Servicer in the servicing of the Mortgage
Loans (although such provisions shall continue to apply to the Trustee in its
capacity as Trustee); the provisions of Article VII, however, shall apply to
it in its capacity as successor master servicer.
Section 8.03 Notification to Certificateholders. Upon any termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Trustee, unless such
Event of Default shall have been cured, notice of each such Event of
Default. The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may, on behalf of
all Certificateholders, waive any default by the Master Servicer in the
performance of its obligations hereunder and the consequences thereof, except
a default in the making of or the causing to be made any required
distribution on the Certificates, which default may only be waived by Holders
of Certificates evidencing Fractional Undivided Interests aggregating 100% of
the Trust Fund. Upon any such waiver of a past default, such default shall
be deemed to cease to exist, and any Event of Default arising therefrom shall
be deemed to have been timely remedied for every purpose of this Agreement.
No such waiver shall extend to any subsequent or other default or impair any
right consequent thereon except to the extent expressly so waived. The
Trustee shall give notice of any such waiver to the Rating Agencies.
Section 8.05 List of Certificateholders. Upon written request of three
or more Certificateholders of record, for purposes of communicating with
other Certificateholders with respect to their rights under this Agreement,
the Trustee will afford such Certificateholders access during business hours
to the most recent list of Certificateholders held by the Trustee.
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default which may have occurred, and the
Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the
Trustee and the Securities Administrator, respectively. If an Event of
Default has occurred and has not been cured or waived, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and
subject to Section 8.02(b) use the same degree of care and skill in their
exercise, as a prudent person would exercise under the circumstances in the
conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the
accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished hereunder; provided,
further, that neither the Trustee nor the Securities Administrator shall be
responsible for the accuracy or verification of any calculation provided to
it pursuant to this Agreement.
(c) On each Distribution Date, the Trustee shall make monthly distributions
and the final distribution to the Certificateholders from funds in the
Distribution Account as provided in Sections 6.01 and 10.01 herein based
solely on the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the Trustee
or the Securities Administrator from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct; provided,
however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing or
waiver of all such Events of Default which may have occurred, the duties and
obligations of the Trustee and the Securities Administrator shall be
determined solely by the express provisions of this Agreement, neither the
Trustee nor the Securities Administrator shall be liable except for the
performance of their respective duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee or the Securities Administrator
and, in the absence of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities Administrator,
respectively, may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee or the Securities Administrator,
respectively, and conforming to the requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be liable in
its individual capacity for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee or an officer of
the Securities Administrator, respectively, unless it shall be proved that
the Trustee or the Securities Administrator, respectively, was negligent in
ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall be liable
with respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the directions of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25% of
the Trust Fund, if such action or non-action relates to the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
the Securities Administrator, respectively, or exercising any trust or other
power conferred upon the Trustee or the Securities Administrator,
respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any default or Event of Default unless a Responsible
Officer of the Trustee's Corporate Trust Office shall have actual knowledge
thereof. In the absence of such notice, the Trustee may conclusively assume
there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any insufficiency
in any Account held by or in the name of Trustee unless it is determined by a
court of competent jurisdiction that the Trustee's gross negligence or
willful misconduct was the primary cause of such insufficiency (except to the
extent that the Trustee is obligor and has defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Trustee or the Securities Administrator be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including
but not limited to lost profits), even if the Trustee or the Securities
Administrator, respectively, has been advised of the likelihood of such loss
or damage and regardless of the form of action;
(vii) None of the Securities Administrator, the Master Servicer, the
Depositor, the Company or the Trustee shall be responsible for the acts or
omissions of the other, it being understood that this Agreement shall not be
construed to render them partners, joint venturers or agents of one another
and
(viii) Neither the Trustee nor the Securities Administrator shall be
required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it, and none of the provisions
contained in this Agreement shall in any event require the Trustee or the
Securities Administrator to perform, or be responsible for the manner of
performance of, any of the obligations of the Master Servicer under this
Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges
of, the Master Servicer in accordance with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Trustee and required to
be deposited in the Master Servicer Collection Account or Distribution
Account pursuant to this Agreement will be promptly so deposited by the
Master Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities Administrator
is required to take hereunder, neither the Trustee nor the Securities
Administrator shall have any obligation or liability to take any action or to
refrain from taking any action hereunder in the absence of written direction
as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(a) The Trustee and the Securities Administrator may rely and shall be
protected in acting or refraining from acting in reliance on any resolution,
certificate of the Depositor, the Master Servicer or a Servicer, 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;
(b) The Trustee and the Securities Administrator may consult with counsel and
any advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection with respect to any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(c) Neither the Trustee nor the Securities Administrator shall be under any
obligation to exercise any of the trusts or powers vested in it by this
Agreement, other than its obligation to give notices pursuant to this
Agreement, or to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby. Nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default of
which a Responsible Officer of the Trustee has actual knowledge (which has
not been cured or waived), to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care and skill in
their exercise, as a prudent person would exercise under the circumstances in
the conduct of his own affairs;
(d) Prior to the occurrence of an Event of Default hereunder and after the
curing or waiver of all Events of Default which may have occurred, neither
the Trustee nor the Securities Administrator shall be liable in its
individual capacity for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(e) Neither the Trustee nor the Securities Administrator shall be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless requested
in writing to do so by Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund and
provided that the payment within a reasonable time to the Trustee or the
Securities Administrator, as applicable, of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee or the Securities Administrator, as
applicable, reasonably assured to the Trustee or the Securities
Administrator, as applicable, by the security afforded to it by the terms of
this Agreement. The Trustee or the Securities Administrator may require
reasonable indemnity against such expense or liability as a condition to
taking any such action. The reasonable expense of every such examination
shall be paid by the Certificateholders requesting the investigation;
(f) The Trustee and the Securities Administrator may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or
through Affiliates, agents or attorneys; provided, however, that the Trustee
may not appoint any agent to perform its custodial functions with respect to
the Mortgage Files or paying agent functions under this Agreement without the
express written consent of the Master Servicer, which consent will not be
unreasonably withheld. Neither the Trustee nor the Securities Administrator
shall be liable or responsible for the misconduct or negligence of any of the
Trustee's or the Securities Administrator's agents or attorneys or a
custodian or paying agent appointed hereunder by the Trustee or the
Securities Administrator with due care and, when required, with the consent
of the Master Servicer;
(g) Should the Trustee or the Securities Administrator deem the nature of any
action required on its part, other than a payment or transfer under Section
4.01(b) or Section 4.02, to be unclear, the Trustee or the Securities
Administrator, respectively, may require prior to such action that it be
provided by the Depositor with reasonable further instructions;
(h) The right of the Trustee or the Securities Administrator to perform any
discretionary act enumerated in this Agreement shall not be construed as a
duty, and neither the Trustee nor the Securities Administrator shall be
accountable for other than its negligence or willful misconduct in the
performance of any such act;
(i) Neither the Trustee nor the Securities Administrator shall be required to
give any bond or surety with respect to the execution of the trust created
hereby or the powers granted hereunder, except as provided in Section 9.07;
and
(j) Neither the Trustee nor the Securities Administrator shall have any duty
to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Mortgage Loan by the Seller
pursuant to this Agreement or the Mortgage Loan Purchase Agreement, as
applicable, or the eligibility of any Mortgage Loan for purposes of this
Agreement.
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Depositor, and
neither the Trustee nor the Securities Administrator shall have any
responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of
the Certificates (other than the signature and countersignature of the
Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the
foregoing shall not relieve the Trustee of the obligation to review the
Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's signature
and countersignature (or countersignature of its agent) on the Certificates
shall be solely in its capacity as Trustee and shall not constitute the
Certificates an obligation of the Trustee in any other capacity. Neither the
Trustee nor the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall 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
Certificates issued hereunder or intended to be issued hereunder. Neither
the Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and
priority, or for or with respect to the sufficiency of the Trust Fund or its
ability to generate the payments to be distributed to Certificateholders,
under this Agreement. Neither the Trustee nor the Securities Administrator
shall 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 other than any continuation statements
filed by the Trustee pursuant to Section 3.20.
Section 9.04 Trustee and Securities Administrator May Own Certificates.
The Trustee and the Securities Administrator in their individual capacities
or in any capacity other than as Trustee or Securities Administrator
hereunder may become the owner or pledgee of any Certificates with the same
rights it would have if it were not Trustee or the Securities Administrator,
as applicable, and may otherwise deal with the parties hereto.
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses. The fees and expenses of the Trustee and the Securities
Administrator shall be paid in accordance with a side letter agreement
between the Trustee and the Master Servicer. In addition, the Trustee and
the Securities Administrator will be entitled to recover from the Master
Servicer Collection Account pursuant to Section 4.03(b) all reasonable
out-of-pocket expenses, disbursements and advances and the expenses of the
Trustee and the Securities Administrator, respectively, in connection with
any Event of Default, any breach of this Agreement or any claim or legal
action (including any pending or threatened claim or legal action) incurred
or made by the Trustee or the Securities Administrator, respectively, in the
administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or
intentional misconduct or which is the responsibility of the
Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor. Such compensation and
reimbursement obligation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the
entire duration of this Agreement be a state bank or trust company or a
national banking association 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 and
undivided profits of at least $40,000,000 or, in the case of a successor
Trustee, $50,000,000, subject to supervision or examination by federal or
state authority and, in the case of the Trustee, rated "BBB" or higher by S&P
with respect to their long-term rating and rated "BBB" or higher by S&P and
"Baa2" or higher by Xxxxx'x with respect to any outstanding long-term
unsecured unsubordinated debt, and, in the case of a successor Trustee or
successor Securities Administrator other than pursuant to Section 9.10, rated
in one of the two highest long-term debt categories of, or otherwise
acceptable to, each of the Rating Agencies. If the Trustee publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any
time the Trustee or the Securities Administrator shall cease to be eligible
in accordance with the provisions of this Section 9.06, the Trustee or the
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07 Insurance. The Trustee and the Securities Administrator,
at their own expense, shall at all times maintain and keep in full force and
effect: (i) fidelity insurance, (ii) theft of documents insurance and
(iii) forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance
shall be in amounts, with standard coverage and subject to deductibles, as
are customary for insurance typically maintained by banks or their affiliates
which act as custodians for investor-owned mortgage pools. A certificate of
an officer of the Trustee or the Securities Administrator as to the Trustee's
or the Securities Administrator's, respectively, compliance with this
Section 9.07 shall be furnished to any Certificateholder upon reasonable
written request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator.
(a) The Trustee and the Securities Administrator may at any time resign and
be discharged from the Trust hereby created by giving written notice thereof
to the Depositor and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Trustee or successor Securities Administrator,
as applicable, by written instrument, in triplicate, one copy of which
instrument shall be delivered to each of the resigning Trustee or Securities
Administrator, as applicable, the successor Trustee or Securities
Administrator, as applicable. If no successor Trustee or Securities
Administrator shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee or Securities Administrator may petition any court of competent
jurisdiction for the appointment of a successor Trustee or Securities
Administrator.
(b) If at any time the Trustee or the Securities Administrator shall cease to
be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Depositor or if at any time
the Trustee or the Securities Administrator shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or
the Securities Administrator, as applicable, or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee
or the Securities Administrator, as applicable, or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, then the
Depositor shall promptly remove the Trustee, or shall be entitled to remove
the Securities Administrator, as applicable, and appoint a successor Trustee
or Securities Administrator, as applicable, by written instrument, in
triplicate, one copy of which instrument shall be delivered to each of the
Trustee or Securities Administrator, as applicable, so removed, the successor
Trustee or Securities Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may at any time remove the
Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in
quadruplicate, signed by such Holders or their attorneys-in-fact duly
authorized, one complete set of which instruments shall be delivered to the
Depositor, the Master Servicer, the Securities Administrator (if the Trustee
is removed), the Trustee (if the Securities Administrator is removed), and
the Trustee or Securities Administrator so removed and the successor so
appointed. In the event that the Trustee or Securities Administrator is
removed by the Holders of Certificates in accordance with this
Section 9.08(c), the Holders of such Certificates shall be responsible for
paying any compensation payable to a successor Trustee or successor
Securities Administrator, in excess of the amount paid to the predecessor
Trustee or predecessor Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee or the Securities Administrator
and appointment of a successor Trustee or Securities Administrator pursuant
to any of the provisions of this Section 9.08 shall become effective except
upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
(a) Any successor Trustee or Securities Administrator appointed as provided
in Section 9.08 shall execute, acknowledge and deliver to the Depositor and
to its predecessor Trustee or Securities Administrator an instrument
accepting such appointment hereunder. The resignation or removal of the
predecessor Trustee or Securities Administrator shall then become effective
and such successor Trustee or Securities Administrator, without any further
act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect
as if originally named as Trustee or Securities Administrator herein. The
predecessor Trustee or Securities Administrator shall after payment of its
outstanding fees and expenses promptly deliver to the successor Trustee or
Securities Administrator, as applicable, all assets and records of the Trust
held by it hereunder, and the Depositor and the predecessor Trustee or
Securities Administrator, as applicable, shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Trustee or
Securities Administrator, as applicable, all such rights, powers, duties and
obligations.
(b) No successor Trustee or Securities Administrator shall accept appointment
as provided in this Section 9.09 unless at the time of such acceptance such
successor Trustee or Securities Administrator shall be eligible under the
provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee
or Securities Administrator hereunder to all Certificateholders at their
addresses as shown in the Certificate Register and to the Rating Agencies.
The Company shall pay the cost of any mailing by the successor Trustee or
Securities Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking
association into which the Trustee or the Securities Administrator may be
merged or converted or with which it may be consolidated or any state bank or
trust company or national banking association resulting from any merger,
conversion or consolidation to which the Trustee or the Securities
Administrator, respectively, shall be a party, or any state bank or trust
company or national banking association succeeding to all or substantially
all of the corporate trust business of the Trustee or the Securities
Administrator, respectively, shall be the successor of the Trustee or the
Securities Administrator, respectively, hereunder, provided such state bank
or trust company or national banking association shall be eligible under the
provisions of Section 9.06. Such succession shall be valid without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate 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 Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved
by the Trustee and the Depositor to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any
part of the Trust, and to vest in such Person or Persons, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 9.11, such powers, duties, obligations, rights and
trusts as the Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within 15 days
after the receipt by it of a written request so to do, the Trustee shall have
the power to make such appointment without the Depositor.
(c) No co-trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor Trustee under Section 9.06 hereunder and
no notice to Certificateholders of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 9.08 hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by
the Trustee and such separate trustee or co-trustee jointly, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with
full power and authority, to do any lawful act under or with respect to this
Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by reason of
any act or omission of another trustee under this Agreement. The Depositor
and the Trustee acting jointly may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration.
(a) For federal income tax purposes, the taxable year of each 2004-7 REMIC
shall be a calendar year and the Securities Administrator shall maintain or
cause the maintenance of the books of each such 2004-7 REMIC on the accrual
method of accounting.
(b) The Securities Administrator shall prepare and file or cause to be filed
with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect
to each 2004-7 REMIC, the Trust Fund, if applicable, and the Certificates
containing such information and at the times and in the manner as may be
required by the Code or applicable Treasury regulations, and shall furnish to
each Holder of Certificates at any time during the calendar year for which
such returns or reports are made such statements or information at the times
and in the manner as may be required thereby, including, without limitation,
reports relating to mortgaged property that is abandoned or foreclosed,
receipt of mortgage interests in kind in a trade or business, a cancellation
of indebtedness, interest, original issue discount and market discount or
premium (using a constant prepayment assumption of 25% CPR). The Securities
Administrator will apply for an Employee Identification Number from the IRS
under Form SS-4 or any other acceptable method for all tax entities. In
connection with the foregoing, the Securities Administrator shall timely
prepare and file, and the Trustee shall sign, IRS Form 8811, which shall
provide the name and address of the person who can be contacted to obtain
information required to be reported to the holders of regular interests in
each 2004-7 REMIC (the "REMIC Reporting Agent"). The Trustee shall make
elections to treat each 2004-7 REMIC as a REMIC (which elections shall apply
to the taxable period ending December 31, 2004 and each calendar year
thereafter) in such manner as the Code or applicable Treasury regulations may
prescribe, and as described by the Securities Administrator. The Trustee
shall sign all tax information returns filed pursuant to this Section and any
other returns as may be required by the Code. The Holder of the largest
percentage interest in the Class R Certificates is hereby designated as the
"Tax Matters Person" (within the meaning of Treas. Reg. §§1.860F-4(d)) for
each 2004-7 REMIC. The Securities Administrator is hereby designated and
appointed as the agent of each such Tax Matters Person. Any Holder of a
Residual Certificate will by acceptance thereof appoint the Securities
Administrator as agent and attorney-in-fact for the purpose of acting as Tax
Matters Person for each 2004-7 REMIC during such time as the Securities
Administrator does not own any such Residual Certificate. In the event that
the Code or applicable Treasury regulations prohibit the Trustee from signing
tax or information returns or other statements, or the Securities
Administrator from acting as agent for the Tax Matters Person, the Trustee
and the Securities Administrator shall take whatever action that in its sole
good faith judgment is necessary for the proper filing of such information
returns or for the provision of a tax matters person, including designation
of the Holder of the largest percentage interest in a Residual Certificate to
sign such returns or act as tax matters person. Each Holder of a Residual
Certificate shall be bound by this Section.
(c) The Securities Administrator shall provide upon request and receipt of
reasonable compensation, such information as required in
Section 860D(a)(6)(B) of the Code to the Internal Revenue Service, to any
Person purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee
holding an interest in a pass-through entity described in Section 860E(e)(6)
of the Code, any record holder of which is not a transferee permitted by
Section 5.05(b) (or which is deemed by statute to be an entity with a
disqualified member).
(d) The Securities Administrator shall prepare and file or cause to be filed,
and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or
original issue discount on the Mortgage Loans, that the Trustee or the
Securities Administrator reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such
withholding. In the event the Trustee or the Securities Administrator
withholds any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Trustee or the Securities Administrator shall, together
with its monthly report to such Certificateholders, indicate such amount
withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the Trust
Fund and the Depositor for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Depositor or the Master Servicer, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set
forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall be several and not joint and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty
under this Agreement or the breach by the other of any covenant in this
Agreement.
ARTICLE X
Termination
Section 10.01 Termination Upon Repurchase by the Depositor or its
Designee or Liquidation of the Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and responsibilities
of the Depositor, the Trustee, the Master Servicer and the Securities
Administrator created hereby, other than the obligation of the Trustee to
make payments to Certificateholders as hereinafter set forth shall terminate:
(i) the repurchase by or at the direction of the Depositor or its designee of
all of the Mortgage Loans and all related REO Property remaining in the Trust
at a price (the "Termination Purchase Price") equal to the sum of (a) 100% of
the Outstanding Principal Balance of each Mortgage Loan in such Loan
Group (other than a Mortgage Loan related to REO Property) as of the date of
repurchase, net of the principal portion of any unreimbursed Monthly Advances
on the Mortgage Loans unpaid to, but not including, the first day of the
month of repurchase, (b) the appraised value of any related REO Property,
less the good faith estimate of the Depositor of liquidation expenses to be
incurred in connection with its disposal thereof (but not more than the
Outstanding Principal Balance of the related Mortgage Loan, together with
interest at the applicable Mortgage Interest Rate accrued on that balance but
unpaid to, but not including, the first day of the month of repurchase), such
appraisal to be calculated by an appraiser mutually agreed upon by the
Depositor and the Trustee at the expense of the Depositor, (c) unreimbursed
out-of pocket costs of the Master Servicer, including unreimbursed servicing
advances and the principal portion of any unreimbursed Monthly Advances, made
on the Mortgage Loans prior to the exercise of such repurchase right and (d)
any unreimbursed costs and expenses of the Trustee and the Securities
Administrator payable pursuant to Section 9.05;
(ii) the later of the making of the final payment or other liquidation, or
any advance with respect thereto, of the last Mortgage Loan, remaining in the
Trust Fund or the disposition of all property acquired with respect to any
Mortgage Loan; provided, however, that in the event that an advance has been
made, but not yet recovered, at the time of such termination, the Person
having made such advance shall be entitled to receive, notwithstanding such
termination, any payments received subsequent thereto with respect to which
such advance was made; or
(iii) the payment to the Certificateholders of all amounts required to be
paid to them pursuant to this Agreement.
(b) In no event, however, 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 of this Agreement.
(c) (i) The right of the Depositor or its designee to repurchase all the
assets of the Trust Fund described in Section 10.01(a)(i) above shall be
exercisable only if (i) the aggregate Stated Principal Balance of the
Mortgage Loans at the time of any such repurchase is less than 10% of the sum
of the Cut-off Date Balance or (ii) the Depositor, based upon an Opinion of
Counsel addressed to the Depositor, the Trustee and the Sercurities
Administrator has determined that the REMIC status of any 2004-7 REMIC has
been lost or that a substantial risk exists that such REMIC status will be
lost for the then-current taxable year. At any time thereafter, in the case
of (i) or (ii) above, the Depositor may elect to terminate any 2004-7 REMIC
at any time, and upon such election, the Depositor or its designee, shall
purchase in accordance with Section 10.01(a)(i) above all the assets of the
Trust Fund.
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders
shall surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed
not earlier than the l5th day and not later than the 25th day of the month
next preceding the month of such final distribution, and shall specify
(i) the Distribution Date upon which final payment of the Certificates will
be made upon presentation and surrender of the Certificates at the office of
the Trustee therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Distribution Date is
not applicable, payments being made only upon presentation and surrender of
the Certificates at the office of the Trustee therein specified.
(e) If the option of the Depositor to repurchase or cause the repurchase of
all assets of the Trust Fund described in Section 10.01(a)(i) above is
exercised, the Depositor and/or its designee shall deliver to the Trustee for
deposit in the Distribution Account, by the Business Day prior to the
applicable Distribution Date, an amount equal to the Termination Purchase
Price. Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to the Certificateholders as
directed by the Securities Administrator in writing an amount determined as
follows: with respect to each Certificate (other than the Class R
Certificates), the outstanding Current Principal Amount, plus with respect
to each Certificate (other than the Class R Certificates), one month's
interest thereon at the applicable Pass-Through Rate; and with respect to the
Class R Certificates, the percentage interest evidenced thereby multiplied by
the difference, if any, between the above described repurchase price and the
aggregate amount to be distributed to the Holders of the Certificates (other
than the Class R Certificates). If the proceeds with respect to the Mortgage
Loans are not sufficient to pay all of the Certificates in full (other than
the Class R Certificates), any such deficiency will be allocated first, to
the Class B Certificates, in inverse order of their numerical designation,
second, to the Class M Certificates and then to the Senior Certificates, on a
pro rata basis. Upon deposit of the required repurchase price and following
such final Distribution Date, the Trustee shall release promptly (or cause
the Custodian to release) to Depositor and/or its designee the Mortgage Files
for the remaining applicable Mortgage Loans, and the Accounts with respect
thereto shall terminate, subject to the Trustee's obligation to hold any
amounts payable to the Certificateholders in trust without interest pending
final distributions pursuant to Section 10.01(g). Any other amounts
remaining in the Accounts will belong to the Depositor.
(f) In the event that this Agreement is terminated by reason of the payment
or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Section
10.01(a)(ii) above, the Master Servicer shall deliver to the Trustee for
deposit in the Distribution Account all distributable amounts remaining in
the Master Servicer Collection Account. Upon the presentation and surrender
of the Certificates, the Trustee shall distribute to the remaining
Certificateholders, pursuant to the written direction of the Securities
Administrator and in accordance with their respective interests, all
distributable amounts remaining in the Distribution Account. Upon deposit by
the Master Servicer of such distributable amounts, and following such final
Distribution Date, the Trustee shall release promptly to the Depositor or its
designee the Mortgage Files for the remaining Mortgage Loans, and the Master
Servicer Collection Account and the Distribution Account shall terminate,
subject to the Trustee's obligation to hold any amounts payable to the
Certificateholders in trust without interest pending final distributions
pursuant to this Section 10.01(f).
(g) If not all of the Certificateholders shall surrender their Certificates
for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates
for cancellation and receive the final distribution with respect thereto. If
within six months after the second notice, not all the Certificates shall
have been surrendered for cancellation, the Trustee may take appropriate
steps, or appoint any agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets which remain
subject to this Agreement.
Section 10.02 Additional Termination Requirements. (a) If the option of
the Depositor to repurchase all the Mortgage Loans under Section 10.01(a)(i)
above is exercised, the Trust Fund and each 2004-7 REMIC shall be terminated
in accordance with the following additional requirements, unless the Trustee
has been furnished with an Opinion of Counsel addressed to the Trustee to the
effect that the failure of the Trust to comply with the requirements of this
Section 10.02 will not (i) result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code on each 2004-7 REMIC or
(ii) cause any 2004-7 REMIC to fail to qualify as a 2004-7 REMIC at any time
that any Regular Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date, at the written
direction of Depositor, the Trustee, as agent for the respective Tax
Matters Persons, shall adopt a plan of complete liquidation of each
2004-7 REMIC in the case of a termination under Section 10.01(a)(i).
Such plan, which shall be provided to the Trustee by Depositor, shall
meet the requirements of a "qualified liquidation" under Section 860F
of the Code and any regulations thereunder.
(ii) the Depositor shall notify the Trustee at the commencement of such
90-day liquidation period and, at or prior to the time of making of the
final payment on the Certificates, the Trustee shall sell or otherwise
dispose of all of the remaining assets of the Trust Fund in accordance
with the terms hereof; and
(iii) at or after the time of adoption of such a plan of complete liquidation
of any 2004-7 REMIC and at or prior to the final Distribution Date, the
Trustee shall sell for cash all of the assets of the Trust to or at the
direction of the Depositor, and each 2004-7 REMIC, shall terminate at
such time.
(b) By their acceptance of the Residual Certificates, the Holders thereof
hereby (i) agree to adopt such a plan of complete liquidation of the related
2004-7 REMIC upon the written request of the Depositor, and to take such
action in connection therewith as may be reasonably requested by the
Depositor and (ii) appoint the Depositor as their attorney-in-fact, with full
power of substitution, for purposes of adopting such a plan of complete
liquidation. The Trustee shall adopt such plan of liquidation by filing the
appropriate statement on the final tax return of each 2004-7 REMIC. Upon
complete liquidation or final distribution of all of the assets of the Trust
Fund, the Trust Fund and each 2004-7 REMIC shall terminate.
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties. The parties intend that each 2004-7
REMIC shall be treated as a REMIC for federal income tax purposes and that
the provisions of this Agreement should be construed in furtherance of this
intent. Notwithstanding any other express or implied agreement to the
contrary, the Seller, the Master Servicer, the Securities Administrator, the
Depositor, the Trustee, each recipient of the related Prospectus Supplement
and, by its acceptance thereof, each holder of a Certificate, agrees and
acknowledges that each party hereto has agreed that each of them and their
employees, representatives and other agents may disclose, immediately upon
commencement of discussions, to any and all persons the tax treatment and tax
structure of the Certificates and the 2004-7 REMICs, the transactions
described herein and all materials of any kind (including opinions and other
tax analyses) that are provided to any of them relating to such tax treatment
and tax structure except where confidentiality is reasonably necessary to
comply with the securities laws of any applicable jurisdiction. For purposes
of this paragraph, the terms "tax treatment" and "tax structure" have the
meanings set forth in Treasury Regulation Sections 1.6011-4(c), 301.6111-2(c)
and 301.6112-1(d).
Section 11.02 Amendment.
(a) This Agreement may be amended from time to time by the Company, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee,
without notice to or the consent of any of the Certificateholders, to (i)
cure any ambiguity, (ii) correct or supplement any provisions herein that may
be defective or inconsistent with any other provisions herein, (iii) conform
any provisions herein to the provisions in the Prospectus, (iv) comply with
any changes in the Code or (v) make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however, that
with respect to clauses (iv) and (v) of this Section 11.02(a), such action
shall not, as evidenced by an Opinion of Independent Counsel, addressed to
the Trustee, adversely affect in any material respect the interests of any
Certificateholder.
(b) This Agreement may also be amended from time to time by the Company, the
Master Servicer, the Depositor, the Securities Administrator and the Trustee,
with the consent of the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund or of the
applicable Class or Classes, if such amendment affects only such Class or
Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying
in any manner the rights of the Certificateholders; provided, however, that
no such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) reduce the aforesaid percentage of Certificates the Holders
of which are required to consent to any such amendment, without the consent
of the Holders of all Certificates then outstanding, or (iii) cause any
2004-7 REMIC to fail to qualify as a REMIC for federal income tax purposes,
as evidenced by an Opinion of Independent Counsel addressed to the Trustee
which shall be provided to the Trustee other than at the Trustee's expense.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 11.02(b),
Certificates registered in the name of or held for the benefit of the
Depositor, the Securities Administrator, the Master Servicer, or the Trustee
or any Affiliate thereof shall be entitled to vote their Fractional Undivided
Interests with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee shall
furnish a copy of such amendment or written notification of the substance of
such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Section 11.02(b) above, it shall not
be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel addressed to
the Trustee stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee and the Securities Administrator
may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's or the Securities Administrator's own respective
rights, duties or immunities under this Agreement.
Section 11.03 Recordation of Agreement. 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 Mortgaged Properties are
situated, and in any other appropriate public recording office or elsewhere.
The Depositor shall effect such recordation, at the expense of the Trust upon
the request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the
Certificateholders or is required by law.
Section 11.04 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders 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 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, under or with respect to this Agreement against the Depositor, the
Securities Administrator, the Master Servicer or any successor to any such
parties unless (i) such Certificateholder previously shall have given to the
Trustee a written notice of a continuing default, as herein provided,
(ii) the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written
request upon the Trustee to institute such action, suit or proceeding in its
own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs and expenses and
liabilities to be incurred therein or thereby, and (iii) the Trustee, for 60
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.04, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.05 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders
in person or by an agent duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is
expressly required, to the Depositor. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Agreement and conclusive in favor of the Trustee and the
Depositor, if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or
by a certificate of a notary public or other officer authorized by law to
take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her authority. The fact and date of the execution
of any such instrument or writing, or the authority of the individual
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of ownership
or other writing on such Certificates, except an endorsement in accordance
with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Securities Administrator, the Depositor, the Master Servicer nor
any successor to any such parties shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver or
other action of the holder of any Certificate shall bind every future holder
of the same Certificate and the holder of every Certificate issued upon the
registration of transfer or exchange thereof, if applicable, or in lieu
thereof with respect to anything done, omitted or suffered to be done by the
Trustee, the Securities Administrator, the Depositor, the Master Servicer or
any successor to any such party in reliance thereon, whether or not notation
of such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Certificates owned by the Trustee, the Securities Administrator,
the Depositor, the Master Servicer or any Affiliate thereof shall be
disregarded, except as otherwise provided in Section 11.02(b) and except
that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or
waiver, only Certificates which a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded. Certificates which have been
pledged in good faith to the Trustee, the Securities Administrator, the
Depositor, the Master Servicer or any Affiliate thereof may be regarded as
outstanding if the pledgor establishes to the satisfaction of the Trustee the
pledgor's right to act with respect to such Certificates and that the pledgor
is not an Affiliate of the Trustee, the Securities Administrator, the
Depositor, or the Master Servicer, as the case may be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other
address as may hereafter be furnished to the other parties hereto in writing;
(ii) in the case of the Trustee, at its Corporate Trust Office, or such other
address as may hereafter be furnished to the other parties hereto in writing;
(iii) in the case of the Company, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Vice President-Servicing, telecopier number: (212)
272-5591, or to such other address as may hereafter be furnished to the other
parties hereto in writing; (iv) in the case of the Master Servicer or
Securities Administrator, Xxxxx Fargo Bank, National Association, X.X. Xxx
00, Xxxxxxxx Xxxxxxxx 00000 (or, in the case of overnight deliveries, 0000
Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 21045) (Attention: Corporate Trust
Services - BSALTA 2004-7), facsimile no.: (000) 000-0000, or such other
address as may hereafter be furnished to the other parties hereto in writing;
or (v) in the case of the Rating Agencies, Xxxxx'x Investors Service, Inc.,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Standard & Poor's, a division
of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. Any notice delivered to the Depositor, the Master Servicer, the
Securities Administrator or the Trustee under this Agreement shall be
effective only upon receipt. Any notice required or permitted to be mailed
to a Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder
as shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.
Section 11.08 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 severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors
and assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same
instrument.
Section 11.12 Notice to Rating Agencies. The article and section
headings herein are for convenience of reference only, and shall not limited
or otherwise affect the meaning hereof. The Trustee shall promptly provide
notice to each Rating Agency with respect to each of the following of which a
Responsible Officer of the Trustee has actual knowledge:
1. Any material change or amendment to this Agreement or the
Servicing Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the
Trustee or the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection
Account or the Distribution Account.
[PSA]
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and
the Securities Administrator have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year
first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Depositor
By: /s/ Xxxxx Xxxxxxxxxxx
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, as Trustee
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Trust Officer
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Master Servicer
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Securities
Administrator
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Executive Vice President
Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)
in its capacity as Seller
EMC MORTGAGE CORPORATION
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Executive Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23rd day of July, 2004 before me, a notary public in and for
said State, personally appeared Xxxxx Xxxxxxxxxxx, known to me to be a Vice
President of Structured Asset Mortgage Investments II Inc., the corporation
that executed the within instrument, and also known to me to be the person
who executed it on behalf of said corporation, and acknowledged to me that
such 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
/s/ Xxxxxxxx Xxxxxxxx
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23rd day of July, 2004 before me, a notary public in and for
said State, personally appeared Xxxxx Xxxxxxx, known to me to be a Trust
Officer of JPMorgan Chase Bank, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf
of said entity, and acknowledged to me that such entity 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
/s/ Xxxxxxxx X. Xxxxx
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 23rd day of July, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx, known to me to be an Assistant
Vice President of Xxxxx Fargo 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 entity, and acknowledged to me that such entity
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
/s/ Xxxxx X. Xxxxxx
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 23rd day of July, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx, known to me to be a Assistant
Vice President of Xxxxx Fargo 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 entity, and acknowledged to me that such entity
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
/s/ Xxxxx X. Xxxxxx
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 23rd day of July, 2004 before me, a notary public in and for
said State, personally appeared Xxx Xxxxxxxx, known to me to be
Executive Vice President of EMC Mortgage Corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
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
/s/ Xxxxxxx Xxxxxx
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 23rd day of July, 2004 before me, a notary public in and for
said State, personally appeared Xxx Xxxxxxxx, known to me to be
Executive Vice President of EMC Mortgage Corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
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
/s/ Xxxxxxx Xxxxxx
[Notarial Seal]
