STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR,
JPMORGAN CHASE BANK, N.A.,
TRUSTEE,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
MASTER SERVICER,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
SECURITIES ADMINISTRATOR,
and
EMC MORTGAGE CORPORATION
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2005
Structured Asset Mortgage Investments II Trust 2005-AR4
Mortgage Pass-Through Certificates
Series 2005-AR4
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................................1
SECTION 1.01. DEFINITIONS....................................................1
SECTION 1.02. CALCULATION OF LIBOR..........................................36
SECTION 1.03. CALCULATION OF ONE-YEAR MTA...................................37
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE
OF CERTIFICATES..................................................38
SECTION 2.01. CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE.......................38
SECTION 2.02. ACCEPTANCE OF TRUST FUND 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......................................45
SECTION 2.06. REPRESENTATIONS AND WARRANTIES CONCERNING THE DEPOSITOR.......45
SECTION 2.07. COVENANTS OF THE MASTER SERVICER..............................46
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...................48
SECTION 3.01. MASTER SERVICER...............................................48
SECTION 3.02. REMIC-RELATED COVENANTS.......................................49
SECTION 3.03. MONITORING OF THE SERVICER....................................49
SECTION 3.04. FIDELITY BOND.................................................50
SECTION 3.05. POWER TO ACT; PROCEDURES......................................50
SECTION 3.06. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS....................52
SECTION 3.07. RELEASE OF MORTGAGE FILES.....................................52
SECTION 3.08. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR TRUSTEE...............................53
SECTION 3.09. STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES........54
SECTION 3.10. PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS..............54
SECTION 3.11. MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES........54
SECTION 3.12. TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE
POLICIES AND DOCUMENTS........................................55
SECTION 3.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS.....................55
SECTION 3.14. COMPENSATION FOR THE SERVICER AND THE MASTER SERVICER.........55
SECTION 3.15. REO PROPERTY..................................................56
SECTION 3.16. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.................56
SECTION 3.17. ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT..............57
SECTION 3.18. REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.........57
SECTION 3.19. EMC...........................................................59
SECTION 3.20. UCC...........................................................59
SECTION 3.21. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.................59
ARTICLE IV ACCOUNTS......................................................60
SECTION 4.01. PROTECTED ACCOUNTS............................................60
SECTION 4.02. DISTRIBUTION ACCOUNT..........................................61
SECTION 4.03. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE
DISTRIBUTION ACCOUNT..........................................62
SECTION 4.04. DISTRIBUTION OF SENIOR CARRYOVER SHORTFALL AMOUNT;
SENIOR CARRYOVER SHORTFALL RESERVE FUND.......................64
SECTION 4.05. DISTRIBUTION OF SUBORDINATE CARRYOVER SHORTFALL AMOUNT;
SUBORDINATE CARRYOVER SHORTFALL RESERVE FUND..................65
SECTION 4.06. THE YIELD MAINTENANCE ACCOUNT AND THE YIELD
MAINTENANCE AGREEMENT.........................................66
SECTION 4.07. CLASS A-1 SUPPLEMENTAL FUND...................................68
SECTION 4.08. CLASS A-2 SUPPLEMENTAL FUND...................................69
ARTICLE V CERTIFICATES.....................................................70
SECTION 5.01. CERTIFICATES..................................................70
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SECTION 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.........80
SECTION 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.............84
SECTION 5.04. PERSONS DEEMED OWNERS.........................................84
SECTION 5.05. TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES................85
SECTION 5.06. RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES...............86
SECTION 5.07. ERISA RESTRICTIONS............................................86
SECTION 5.08. RULE 144A INFORMATION.........................................88
SECTION 5.09. APPOINTMENT OF PAYING AGENT AND CERTIFICATE REGISTRAR.........88
ARTICLE VI PAYMENTS TO CERTIFICATEHOLDERS...................................89
SECTION 6.01. DISTRIBUTIONS ON THE CERTIFICATES.............................89
SECTION 6.02. ALLOCATION OF LOSSES AND SUBSEQUENT RECOVERIES................92
SECTION 6.03. PAYMENTS......................................................95
SECTION 6.04. STATEMENTS TO CERTIFICATEHOLDERS..............................95
SECTION 6.05. MONTHLY ADVANCES..............................................98
SECTION 6.06. COMPENSATING INTEREST PAYMENTS................................99
ARTICLE VII THE MASTER SERVICER.............................................100
SECTION 7.01. LIABILITIES OF THE MASTER SERVICER...........................100
SECTION 7.02. MERGER OR CONSOLIDATION OF THE MASTER SERVICER...............100
SECTION 7.03. INDEMNIFICATION OF THE TRUSTEE, THE CUSTODIAN AND THE
SECURITIES ADMINISTRATOR.....................................100
SECTION 7.04. LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS...101
SECTION 7.05. MASTER SERVICER NOT TO RESIGN................................102
SECTION 7.06. SUCCESSOR MASTER SERVICER....................................102
SECTION 7.07. SALE AND ASSIGNMENT OF MASTER SERVICING......................103
ARTICLE VIII DEFAULT.........................................................104
SECTION 8.01. "EVENT OF DEFAULT"...........................................104
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SECTION 8.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.....................106
SECTION 8.03. NOTIFICATION TO CERTIFICATEHOLDERS...........................107
SECTION 8.04. WAIVER OF DEFAULTS...........................................107
SECTION 8.05. LIST OF CERTIFICATEHOLDERS...................................107
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR.........108
SECTION 9.01. DUTIES OF TRUSTEE............................................108
SECTION 9.02. CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE
SECURITIES ADMINISTRATOR.....................................110
SECTION 9.03. TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS...............................112
SECTION 9.04. TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES....113
SECTION 9.05. TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND EXPENSES...113
SECTION 9.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE, PAYING AGENT
AND SECURITIES ADMINISTRATOR.................................113
SECTION 9.07. INSURANCE....................................................114
SECTION 9.08. RESIGNATION AND REMOVAL OF THE TRUSTEE AND SECURITIES
ADMINISTRATOR................................................114
SECTION 9.09. SUCCESSOR TRUSTEE, PAYING AGENT AND SUCCESSOR
SECURITIES ADMINISTRATOR.....................................115
SECTION 9.10. MERGER OR CONSOLIDATION OF TRUSTEE, PAYING AGENT OR
SECURITIES ADMINISTRATOR.....................................116
SECTION 9.11. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE................116
SECTION 9.12. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; REMIC ADMINISTRATION.....................117
ARTICLE X TERMINATION.....................................................120
SECTION 10.01. TERMINATION UPON REPURCHASE BY THE DEPOSITOR OR ITS
DESIGNEE OR LIQUIDATION OF THE MORTGAGE LOANS................120
SECTION 10.02. ADDITIONAL TERMINATION REQUIREMENTS..........................122
ARTICLE XI MISCELLANEOUS PROVISIONS........................................124
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SECTION 11.01. INTENT OF PARTIES............................................124
SECTION 11.02. AMENDMENT....................................................124
SECTION 11.03. RECORDATION OF AGREEMENT.....................................126
SECTION 11.04. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...................126
SECTION 11.05. ACTS OF CERTIFICATEHOLDERS...................................127
SECTION 11.06. GOVERNING LAW................................................128
SECTION 11.07. NOTICES......................................................128
SECTION 11.08. SEVERABILITY OF PROVISIONS...................................128
SECTION 11.09. SUCCESSORS AND ASSIGNS.......................................129
SECTION 11.10. ARTICLE AND SECTION HEADINGS.................................129
SECTION 11.11. COUNTERPARTS.................................................129
SECTION 11.12. NOTICE TO RATING AGENCIES....................................129
EXHIBITS
Exhibit A-1 - Form of Class A and Class X Certificates
Exhibit A-2 - Form of Class M Certificates
Exhibit A-3 - Form of Class B 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 - Countrywide Servicing Agreement
Exhibit I - Assignment Agreement
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Form of Trustee Limited Power of Attorney
SCHEDULES
Schedule A - Schedule of Strike Prices and Projected Principal Balances
(Yield Maintenance Agreement)
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POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement, dated as of July 1, 2005, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), JPMorgan Chase Bank, N.A., a banking association
organized under the laws of the United States of America, 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 ("EMC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor has acquired the
Mortgage Loans from EMC. 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 and the Class R-I Certificate will be
designated the "residual 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 and the Class R-II Certificate will be
designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC III to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III Regular Certificates will be designated
"regular interests" in such REMIC and the Class R-III Certificate will be
designated the "residual interests" in such REMIC.
The aggregate Outstanding Principal Balance of the Mortgage Loans as of
the Cut-off Date, after application of scheduled payments due whether or not
received, is approximately $909,708,325.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator, EMC and the
Trustee agree as follows:
Article I
Definitions
Section 1.01. 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, those customary mortgage master servicing practices of prudent
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 the Servicer).
Account: The Distribution Account, the Class A-1 Supplemental Fund, the
Class A-2 Supplemental Fund, the Senior Carryover Shortfall Reserve Fund, the
Subordinate Carryover Shortfall Reserve Fund, the Yield Maintenance Account and
the Protected Account, as the context may require.
Accrued Certificate Interest: For any Certificate (other than a
Residual Certificate) on any Distribution Date, the amount of interest accrued
during the related Interest Accrual Period at the applicable Pass-Through Rate
on the Current Principal Amount (or Notional Amount, with respect to the Class
X-1 Certificates, the Class X-2 Certificates and the Class M-X Certificates) of
such Certificate immediately prior to such Distribution Date, less (i) in the
case of a Senior Certificate (other than a Residual Certificate), such
Certificate's share of (a) any Net Interest Shortfall from the Mortgage Loans,
(b) any interest shortfall on the Mortgage Loans resulting from the application
of the Relief Act or similar state law, (c) any shortfalls resulting from Net
Deferred Interest on the Mortgage Loans and (d) after the Cross-Over Date, the
interest portion of any Realized Losses on the Mortgage Loans to the extent
allocated thereto in accordance with Section 6.02(g), and (ii) in the case of a
Subordinate Certificate, such Certificate's share of (a) any Net Interest
Shortfall from the Mortgage Loans, (b) any interest shortfall on the Mortgage
Loans resulting from the application of the Relief Act or similar state law, and
(c) shortfalls resulting from Net Deferred Interest on the Mortgage Loans and
the interest portion of any Realized Losses on the Mortgage Loans allocated to
that Class of Certificates, to the extent allocated thereto in accordance with
Section 6.02(g). The Accrued Certificate Interest on the Class X-1 Certificates
and the Class M-X Certificates on any Distribution Date will be reduced by any
amounts necessary to fund the Senior Carryover Shortfall Reserve Fund and the
Subordinate Carryover Reserve Fund, respectively, on the related Distribution
Date with respect to the payment of any Senior Carryover Shortfall Amount and
any Subordination Carryover Shortfall Amount, as the case may be, and, until the
date that the Class A-1 Supplemental Fund is terminated, the Accrued Certificate
Interest on the Class X-1 Certificates on any Distribution Date will be reduced
by any amounts necessary to replenish the Class A-1 Supplemental Fund on the
related Distribution Date, in each such instance in the manner and priority set
forth herein. The Senior Percentage of Prepayment Interest Shortfalls and
interest shortfalls resulting from the application of the Relief Act or similar
state law will be allocated among the Senior Certificates (other than the
Residual Certificates) in proportion to the amount of Accrued Certificate
Interest that would have been allocated thereto in the absence of such
shortfalls. The Subordinate Percentage of Prepayment Interest Shortfalls and
interest shortfalls resulting from the application of the Relief Act and similar
state law 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 Realized
Losses for the Mortgage Loans will be allocated sequentially, in the following
order, to the Class B-6, Class B-5, Class B-4, Class B-3, Class B-2, Class B-1,
Class M-6, Class M-5, Class M-4, Class M-3, Class M-2, Class M-1 and Class M-X
Certificates and, following the Cross-Over Date, the interest portion of
Realized Losses on the Mortgage Loans will be allocated on a pro rata basis to
the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates and the Class X-1 Certificates. Accrued
Certificate Interest on the Certificates (other than the Class
2
X Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the
Residual Certificates) shall be calculated on the basis of a 360 day year and
the actual number of days elapsed in the related Interest Accrual Period.
Accrued Certificate Interest on the Class X Certificates, the Class A-2
Certificates and the Class A-3 Certificates is calculated on the basis of a
360-day year consisting of twelve 30 day months. The Residual Certificates do
not have a Pass-Through Rate and will not bear interest. No Accrued Certificate
Interest will be payable with respect to any Class or Classes of Certificates
that bear interest after the Distribution Date on which the outstanding Current
Principal Amount or Notional Amount of such Certificate or Certificates has been
reduced to zero.
Adjustable Rate Certificates: The Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class B-1
Certificates, Class B-2 Certificates, Class B-3 Certificates, Class B-4
Certificates, Class B-5 Certificates and Class B-6 Certificates.
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 made in accordance with the terms herein.
Allocable Share: With respect to any Class of Subordinate Certificates
(other than the Class M-X Certificates):
(a) as to any Distribution Date and amounts distributable
pursuant to clauses (1) and (4) of the definition of Subordinate Optimal
Principal Amount, the fraction, expressed as a percentage, the numerator of
which is the Current Principal Amount of such Class of Certificates and the
denominator of which is the aggregate Current Principal Amount of all Classes of
the Subordinate Certificates (other than the Class M-X Certificates); and
(b) as to any Distribution Date and amounts distributable
pursuant to clauses (2), (3), (5) and (6) of the definition of Subordinate
Optimal Principal Amount, after giving effect to the reduction of the Current
Principal Amount of the principal component of the Class M-X Certificates on
such Distribution Date,
(1) for any Distribution Date on which the Loss and
Delinquency Test has been satisfied, as to each Class of Subordinate
Certificates for which (x) the related Class Prepayment Distribution
Trigger has been satisfied on such Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the Current
Principal Amount of such Class of Certificates and the denominator of
which is the aggregate Current Principal Amount of all such Classes of
Subordinate Certificates for which the related Class Prepayment
Distribution Trigger has been satisfied and (y) the related Class
3
Prepayment Distribution Trigger has not been satisfied on such
Distribution Date, 0%; provided that if on a Distribution Date, the
Current Principal Amount of any Class of Subordinate Certificates for
which the related Class Prepayment Distribution Trigger was satisfied
on such Distribution Date is reduced to zero, any amounts distributed
pursuant to this clause (b)(1), to the extent of such Class's remaining
Allocable Share, shall be distributed to the Class of Subordinate
Certificates having the highest payment priority and to the Subordinate
Certificates which satisfy the related Class Prepayment Distribution
Trigger in reduction of their respective Current Principal Amounts, in
the order of their payment priority; and
(2) for any Distribution Date on which the Loss and
Delinquency Test has not been satisfied, as to the Subordinate
Certificates, 0%; provided that on a Distribution Date, any remaining
amounts distributed pursuant to this clause (b)(2) shall be distributed
to the Classes of Subordinate Certificates which satisfy the related
Class Prepayment Distribution Trigger and to the Class of Subordinate
Certificates having the highest payment priority in reduction of their
respective Current Principal Amounts in the order of their payment
priority.
Applicable Credit Rating: For any long-term deposit or security, a
credit rating of AAA in the case of S&P and 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, a
rating of A-l+ in the case of S&P and P-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: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the related Mortgaged
Property based upon the appraisal made at the time of such refinancing or, with
respect to any other Mortgage Loan, the amount set forth as the appraised value
of the related 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 Assigned Loans (as defined therein) and the Countrywide Servicing
Agreement were assigned to the Trustee for the benefit of the
Certificateholders.
Assumed Final Distribution Date: December 25, 2035, or if such day is
not a Business Day, then the next succeeding Business Day.
Available Funds: With respect to any Distribution Date, an amount equal
to the aggregate of the following amounts with respect to the Mortgage Loans:
(a) all previously undistributed payments on account of principal collections on
the Mortgage Loans (including the
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principal portion of Scheduled Payments, Principal Prepayments and the principal
amount of Net Liquidation Proceeds and Subsequent Recoveries on the Mortgage
Loans) and all previously undistributed payments on account of interest
collections on the Mortgage Loans 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 (or by the
Trustee, as successor master servicer) with respect to the Mortgage Loans and
such Distribution Date, (c) any other miscellaneous amounts remitted by the
Master Servicer or the Servicer pursuant to the Countrywide Servicing Agreement,
(d) any amounts deposited into the Distribution Account from the Class A-1
Supplemental Fund, the Class A-2 Supplemental Fund or the Yield Maintenance
Account pursuant to this Agreement, and (e) any amount reimbursed by the Master
Servicer for such Distribution Date in connection with losses on certain
eligible investments, except:
(i) all payments that were due on or before the
Cut-off Date with respect to the Mortgage Loans;
(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; and
(vi) any investment earnings on amounts on deposit in
the Distribution Account, the Yield Maintenance Account, the
Class A-1 Supplemental Fund, the Class A-2 Supplemental Fund,
the Senior Carryover Shortfall Reserve Fund and the
Subordinate Carryover Shortfall Reserve Fund, and amounts
permitted to be withdrawn (other than as a distribution of
principal, interest or Carryover Shortfall Amounts or Yield
Maintenance Payments on the related Certificates) from the
Distribution Account, the Yield Maintenance Account, the Class
A-1 Supplemental Fund, the Class A-2 Supplemental Fund, the
Senior Carryover Shortfall Reserve Fund and the Subordinate
Carryover Shortfall Reserve Fund, and amounts to pay the
Servicing Fees or to reimburse the Servicer, the Securities
Administrator, the Trustee, the Custodian or the Master
Servicer for fees and reimbursable expenses as are due under
the Countrywide Servicing Agreement, this Agreement or the
Custodial Agreement and that have not been retained by or paid
to the Servicer, the Securities Administrator, the Trustee,
the Custodian or the Master Servicer.
5
Average Loss Severity Percentage: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the sum
of the Loss Severity Percentages for each Mortgage Loan and the denominator of
which is the number of Mortgage Loans.
Bankruptcy Code: The United States Bankruptcy Code, as amended, as
codified in 11 U.S.C. ss.ss.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 applicable 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 the Federal Reserve is closed or on
which banking institutions in New York City or in any of the jurisdictions in
which the Trustee, the Master Servicer, the Servicer or the Securities
Administrator is located are authorized or obligated by law or executive order
to be closed.
Carryover Shortfall: A Senior Carryover Shortfall or Subordinate
Carryover Shortfall, as applicable.
Carryover Shortfall Amount: A Senior Carryover Shortfall Amount or a
Subordinate Carryover Shortfall Amount, as applicable.
Carryover Shortfall Reserve Fund: The Senior Carryover Shortfall
Reserve Fund or the Subordinate Carryover Shortfall Reserve Fund, as applicable.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed by the Trustee and
countersigned by the Certificate Registrar in substantially the forms annexed
hereto as Exhibits X-0, X-0, X-0 and A-4 with the blanks therein appropriately
completed.
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.
Certificate Registrar: The Securities Administrator or any successor
certificate registrar appointed hereunder.
Certificate Registrar Office: The office of the Certificate Registrar
located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: XXXX XX Series 2005-AR4.
Certificateholder: A Holder of a Certificate.
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Class: With respect to the Certificates, X-0, X-0, X-0, X-0, X-0, X-0,
M-X, X-0, X-0, X-0, X-0, X-0, X-0, R-I, R-II, R-III, X-0, X-0, X-0, X-0, B-5 and
B-6.
Class A Certificates: The Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates and the Class A-4 Certificates.
Class A-1 Supplemental Fund: An "outside reserve fund" within the
meaning of Treasury Regulation Section 1.860G-2(h), which is not an asset of any
REMIC and which is established and maintained pursuant to Section 4.07.
Class A-2 Supplemental Fund: An "outside reserve fund" within the
meaning of Treasury Regulation Section 1.860G-2(h), which is not an asset of any
REMIC and which is established and maintained pursuant to Section 4.08.
Class B Certificates: The Class B-1 Certificates, the Class B-2
Certificates, the Class B-3 Certificates, the Class B-4 Certificates, the Class
B-5 Certificates and the Class B-6 Certificates.
Class M Certificates: The Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class
M-5 Certificates and the Class M-6 Certificates.
Class Prepayment Distribution Trigger: For a Class of Subordinate
Certificates (other than the principal component of the Class M-X 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 of Certificates and each
Class of Certificates subordinate thereto, if any, and the denominator of which
is the aggregate 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. If on any Distribution Date the Current Principal Amount of any
Class of Subordinate Certificates (other than the principal component of the
Class M-X Certificates) for which the related Class Prepayment Distribution
Trigger was satisfied on such Distribution Date is reduced to zero, any amounts
distributable to such Class of Certificates pursuant to clauses (2), (3), (5)
and (6) of the definition of "Subordinate Optimal Principal Amount," to the
extent of such Class' remaining Allocable Share, shall be distributed to the
remaining Class or Classes of Subordinate Certificates (other than the principal
component of the Class M-X Certificates) in reduction of their respective
Current Principal Amounts, sequentially, in the order of their payment priority.
Class R Certificates: The Class R-I, Class R-II and Class R-III
Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A-4 and evidencing an interest designated as
a "residual interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A-4 and evidencing an interest designated as
a "residual interest" in REMIC II for purposes of the REMIC Provisions.
7
Class R-III Certificate: Any one of the Class R-III Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-4 and evidencing an
interest designated as a "residual interest" in REMIC III for purposes of the
REMIC Provisions.
Class X Certificates: The Class X-1 Certificates, the Class X-2
Certificates and the Class M-X Certificates.
Closing Date: July 29, 2005.
Code: The Internal Revenue Code of 1986, as amended.
Combined Loan-to-Value Ratio: The fraction, expressed as a percentage,
the numerator of which is the sum of the original principal balance of the
related Mortgage Loan at the date of origination and the principal balance of
the related secondary financing and the denominator of which is the lesser of
the selling price of the Mortgaged Property and its Appraised Value.
Commission: The United States Securities and Exchange Commission.
Compensating Interest Payment: As defined in Section 6.06.
Corporate Trust Office: The office of the Trustee at which at any
particular time its corporate trust business is 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: Worldwide Securities Services-Global
Debt, SAMI Series II 2005-AR4. With respect to the Certificate Registrar and the
presentment of Certificates for registration of transfer, exchange or final
payment, Xxxxx Fargo Bank, National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust, XXXX XX Series
2005-AR4, and for all other purposes, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or
for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000),
Attention: Corporate Trust, XXXX XX Series 2005-AR4.
Corresponding Certificate: With respect to (i) REMIC I Regular Interest
A-1, REMIC II Regular Interest A-1, (ii) REMIC I Regular Interest A-2, REMIC II
Regular Interest A-2, (iii) REMIC I Regular Interest A-3, REMIC II Regular
Interest A-3, (iv) REMIC I Regular Interest A-4, REMIC II Regular Interest A-4,
(v) REMIC I Regular Interest M-1, REMIC II Regular Interest M-1, (vi) REMIC I
Regular Interest M-2, REMIC II Regular Interest M-2, (vii) REMIC I Regular
Interest M-3, REMIC II Regular Interest M-3, (viii) REMIC I Regular Interest
M-4, REMIC II Regular Interest M-4, (ix) REMIC I Regular Interest M-5, REMIC II
Regular Interest M-5, (x) REMIC I Regular Interest M-6, REMIC II Regular
Interest M-6, (xi) REMIC I Regular Interest B-1, REMIC II Regular Interest B-1,
(xii) REMIC I Regular Interest B-2, REMIC II Regular Interest B-2, (xiii) REMIC
I Regular Interest B-3, REMIC II Regular Interest B-3, (xiv) REMIC I Regular
Interest B-4, REMIC II Regular Interest B-4, (xv) REMIC I Regular Interest B-5,
REMIC II Regular Interest B-5, (xvi) REMIC I Regular Interest B-6, REMIC II
Regular Interest B-6, and (xvii) REMIC I Regular Interest LT-R, REMIC II Regular
Interest MT-R.
Countrywide AAR: That certain Assignment, Assumption and Recognition
Agreement, entered into as of July 29, 2005, among Countrywide Home Loans,
Countrywide Servicing,
8
EMC and the Trustee, as acknowledged and agreed to by the Depositor, the Master
Servicer and the Securities Administrator.
Countrywide Home Loans: Countrywide Home Loans, Inc. and its successor
in interest.
Countrywide Servicing: Countrywide Home Loans Servicing LP and its
successor in interest.
Countrywide Servicing Agreement: That certain Seller's Warranties and
Servicing Agreement, dated as of September 1, 2002, by and between Countrywide
Home Loans and EMC, as amended, as attached hereto as Exhibit H-1, as modified
pursuant to the Countrywide AAR.
Cross-Over Date: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero (after giving effect to all related distributions on such Distribution
Date).
Current Principal Amount: With respect to any Certificate as of any
Distribution Date, an amount equal to the initial principal amount of such
Certificate on the Closing Date (or, with respect to a Class of the Class X
Certificates, the initial principal amount of the principal component of such
Certificate on the Closing Date) plus the amount of any Net Deferred Interest on
the Mortgage Loans allocated thereto on such Distribution Date and on previous
Distribution Dates, plus, in the case of a Subordinate Certificate, any
Subsequent Recoveries on the Mortgage Loans added to the Current Principal
Amount of such Certificate pursuant to Section 6.02(h) hereof, as reduced by (i)
all amounts allocable to principal previously distributed with respect to such
Certificate (or, with respect to a Class of the Class X Certificates, all
amounts allocable to principal previously distributed with respect to the
principal component of such Certificate), (ii) the principal portion of all
Realized Losses on the Mortgage Loans (other than Realized Losses on the
Mortgage Loans resulting from Debt Service Reductions) previously allocated (as
applicable) to such Certificate (or, with respect to a Class of the Class X
Certificates, previously allocated (as applicable) to the principal component of
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, as applicable,
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. Notwithstanding the foregoing, solely
for purposes of giving consents, directions, waivers, approvals, requests and
notices, the Class R-I, Class R-II and Class R-III Certificates after the
Distribution Date on which they each receive the distribution of the last dollar
of their respective original principal amount shall be deemed to have Current
Principal Amounts equal to their respective Current Principal Amounts 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.
9
Cut-off Date: July 1, 2005.
Cut-off Date Balance: $909,708,325.
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.
Deferred Interest: The amount of interest which is deferred and added
to the Outstanding Principal Balance of the Mortgage Loans due to negative
amortization with respect to the Mortgage Loans, as described in the Prospectus
Supplement.
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 such Mortgage Loan secured by such
Mortgage Property, which valuation results from a proceeding initiated under the
Bankruptcy Code or any other similar state law or other proceeding.
Deposit Amount: The amount of $150.00 deposited by the Depositor on the
Closing Date into the Distribution Account.
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., and any successor thereto.
Depository Agreement: The meaning specified in Subsection 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 any Distribution Date and each
Mortgage Loan, the Determination Date as defined in the Countrywide 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 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)
10
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, (v) any Person with respect to which income on any Residual
Certificate is attributable to a foreign permanent establishment or fixed base,
within the meaning of an applicable income tax treaty, of such Person or any
other Person, (vi) any Person that does not satisfy the requirements of United
States Treasury Department Regulation Section 1.860E-1(c) with respect to a
transfer of a noneconomic residual interest, as defined therein, or (vii) any
other Person so designated by the Trustee and the Certificate Registrar based
upon an Opinion of Counsel that the holding of an ownership interest in a
Residual Certificate by such Person may cause any 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 4.02, which shall be denominated "Xxxxx Fargo
Bank, National Association, as Paying Agent, for the benefit of the registered
holders of Structured Asset Mortgage Investments II Trust 2005-AR4, Mortgage
Pass-Through Certificates, Series 2005-AR4 - Distribution Account," and which
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: The Securities Administrator, and 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 Countrywide Servicing Agreement. For purposes
of calculating the Net Rates of the Mortgage Loans for the first Distribution
Date, the second preceding Due Date with respect to the first Distribution Date
will be the Cut-off Date.
Due Period: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month immediately preceding
the month in which such Distribution Date occurs and ending at the close of
business on the first day of the month in which such 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 S&P and P-1 by Xxxxx'x 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
11
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)(B)) 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 the Certificates then rated by the respective Rating
Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation and its successor in interest.
ERISA: The Employee Retirement Income Security Act of 1974,
as amended.
Event of Default: An event of default described in Section 8.01.
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 the sum of any Liquidation Proceeds with respect to a Liquidated Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan exceeds the sum of (i) the Scheduled Principal Balance
of such Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage
Interest Rate from the Due Date as to which interest was last paid or advanced
(and not reimbursed) to the related Certificateholders up to the Due Date
applicable to the Distribution Date immediately following the calendar month
during which such liquidation occurred plus (iii) related Liquidation Expenses.
Exchange Act: As defined in Section 3.18.
Xxxxxx Xxx: Xxxxxx Xxx (also known as Federal National Mortgage
Association) or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
Fiscal Quarter: December 1 through the last day of February, March 1
through May 31, June 1 through August 31, or September 1 through November 30, as
applicable.
Fractional Undivided Interest: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class of Certificates the numerator of
12
which is the Current Principal Amount, or Notional Amount in the case of the
Class X Certificates, of such Certificate and the denominator of which is the
Current Principal Amount, or Notional Amount in the case of the Class X
Certificates, of such Class of Certificates. With respect to the Certificates in
the aggregate, the fractional undivided interest evidenced by (i) each Class of
Residual Certificates will be deemed to equal 0.25%, (ii) each Class of Class X
Certificates will be deemed to equal 1.0% multiplied by a fraction, the
numerator of which is the Notional Amount of such Certificate and the
denominator of which is the aggregate Notional Amount of such respective Class
of Certificates and (iii) a Certificate of any other Class will be deemed to
equal 96.25% 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; provided, however,
the percentage in clause (iii) above shall be increased by 1% upon the
retirement of each Class of Class X Certificates.
Xxxxxxx Mac: Xxxxxxx Mac (also known as Federal Home Loan Mortgage
Corporation), or 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 Lifetime Mortgage Rate, the Maximum
Lifetime Mortgage Rate and the Periodic Rate Cap) the Mortgage Interest Rate
from such Interest Adjustment Date until the next Interest Adjustment Date.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 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 respective 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 of the Depositor or the Master Servicer as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
13
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 Primary
Mortgage Insurance Policy or Insurance Policy covering any Mortgage Loan or
Mortgaged Property, other than amounts required to be paid over to the related
Mortgagor pursuant to law or the related Mortgage Note or Security Instrument,
and other than amounts used to repair or restore the related Mortgaged Property
or to reimburse insured expenses, including the Servicer's costs and expenses
incurred in connection with presenting claims under the related Insurance
Policies.
Interest Accrual Period: With respect to each Distribution Date, for
each Class of Certificates (other than the Residual Certificates and the
Subordinate Certificates), the calendar month preceding the month in which such
Distribution Date occurs. With respect to each Distribution Date and the
Subordinate Certificates, the period commencing on the Distribution Date of the
preceding calendar month (or in the case of the first Distribution Date, the
Closing Date) and ending on the day prior to the related Distribution Date. The
Residual Certificates shall not bear interest.
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 Determination Date: With respect to each Distribution Date and
the Adjustable Rate Certificates, the second LIBOR Business Day immediately
preceding the commencement of the related Interest Accrual Period.
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;
14
(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 Net Rate required
to be paid by the Mortgagor as limited by application of the Relief Act or
similar state laws.
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 any Mortgage Loan covered by a
lender-paid Primary Mortgage Insurance Policy, the premium to be paid by the
Servicer out of interest collections on the related Mortgage Loan, as stated in
the Mortgage Loan Schedule.
LIBOR: With respect to any Distribution Date, the arithmetic mean of
the London interbank offered rate quotations for one-month U.S. dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.
LIBOR Business Day: A day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Servicer has certified (in
accordance with Section 3.07) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which 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 Servicer or
the Master Servicer in connection with the liquidation of such Mortgage Loan and
the related Mortgaged Property, such expenses including (a) property protection
expenses, (b) property sales expenses, (c) foreclosure
15
and sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with the liquidation
of a Mortgage Loan.
Liquidation Proceeds: Amounts received by the Servicer in connection
with the liquidation of a defaulted Mortgage Loan, whether through trustee's
sale, foreclosure sale, Insurance Proceeds, condemnation proceeds or otherwise.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at origination 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 and Delinquency Test: On any Distribution Date, the Loss and
Delinquency Test is satisfied if, as of the last day of the month preceding such
Distribution Date, (A) 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 50%; and (B) cumulative Realized
Losses on the Mortgage Loans do not exceed (a) 30% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including August
2015 and July 2016, (b) 35% of the Original Subordinate Principal Balance if
such Distribution Date occurs between and including August 2016 and July 2017,
(c) 40% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including August 2017 and July 2018, (d) 45% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including August 2018 and July 2019, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs on or after August 25, 2019.
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.
Margin: With respect to the Class X-0, Xxxxx X-0, Class X-0, Xxxxx X-0,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, initially
0.310%, 2.300%, 1.400%, 0.430%, 0.530%, 0.580%, 0.630%, 0.750%, 0.770%, 0.820%,
1.400%, 1.550%, 2.100%, 2.150%, 2.150% and 2.150%, respectively, per annum, and
starting on the first Distribution Date after the first possible Optional
Termination Date and on each Distribution Date thereafter, 0.620%, 2.300%,
1.400%, 0.860%, 0.795%, 0.870%, 0.945%, 1.125%, 1.155%, 1.230%, 2.100%, 2.325%,
3.150%, 3.225%, 3.225% and 3.225%, respectively, per annum.
16
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank, National
Association and, thereafter, its respective successors in interest who meet the
qualifications of a successor Master Servicer as set forth in this Agreement.
Master Servicer Certification: A written certification covering
servicing of the Mortgage Loans by the Servicer 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 Commission or any statement of a division thereof, or (c) any
future releases, rules and regulations are published by the 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 Servicing Compensation: The meaning specified in Section 3.14.
Maximum Lifetime Mortgage Rate: As to each Mortgage Loan, the rate, if
any, set forth in the related Mortgage Note and indicated on the Mortgage Loan
Schedule, that is 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, and any
successor thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
Minimum Lifetime Mortgage Rate: As to each Mortgage Loan, the rate, if
any, set forth in the related Mortgage Note and indicated on the Mortgage Loan
Schedule, that is 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, or as
nominee for any subsequent assignee of the originator pursuant to an assignment
of mortgage to MERS.
Monthly Advance: The aggregate of all payments of principal and
interest, net of the Servicing Fee, that were due during the related Due Period
on the Mortgage Loans serviced by
17
the Servicer and that were delinquent on the related Due Date (other than
shortfalls in interest due to the application of the Relief Act or similar state
law).
Monthly Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note, or in the case of an REO Property, would otherwise
have been payable under the related Mortgage Note.
Moody's: Xxxxx'x Investors Service, Inc. and its successor in
interest.
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 or the Mortgage Loan
Purchase 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 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 attached hereto as Exhibit B,
including a mortgage loan the property securing which has become an REO
Property. Any Mortgage Loan that was intended by the parties hereto to be
transferred to the Trust Fund as indicated by the Mortgage Loan Schedule which
is in fact not so transferred for any reason including, without limitation, a
breach of a representation or warranty with respect thereto, shall continue to
be a Mortgage Loan hereunder until the Repurchase Price with respect thereto has
been paid to the Trust Fund.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement,
dated as of July 29, 2005, between EMC, as seller, and Structured Asset Mortgage
Investments II Inc., as purchaser, and all amendments thereof and supplements
thereto, attached hereto as Exhibit J.
Mortgage Loan Schedule: The schedule attached hereto as Exhibit B, as
amended from time to time to reflect the repurchase or substitution of Mortgage
Loans pursuant to this Agreement or the Mortgage Loan Purchase 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 Deferred Interest: On any Distribution Date, Deferred Interest on
the Mortgage Loans during the related Due Period net of Principal Prepayments in
full, partial Principal Prepayments, Net Liquidation Proceeds, Repurchase
Proceeds and Scheduled Principal, in that order, included in the related
Available Funds for such Distribution Date and available to be distributed on
the related Certificates on that Distribution Date.
18
Net Interest Shortfall: With respect to any Distribution Date,
Prepayment Interest Shortfalls, 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 in accordance with the Countrywide Servicing Agreement or this
Agreement, (ii) unreimbursed advances by the Servicer and Monthly Advances made
with respect to such Mortgage Loan and the related Mortgaged Property, and (iii)
any other amounts payable to the Servicer under the Countrywide Servicing
Agreement.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate (to the extent applicable, as adjusted to an effective rate reflecting the
accrual of interest on an actual/360 basis) less the Servicing Fee Rate, the
Master Servicing Fee Rate and the Lender-Paid PMI Rate, if any, attributable
thereto, in each case expressed as per annum rate.
Net Rate Cap: The weighted average of the Net Rates of the Mortgage
Loans (to the extent applicable, as adjusted to an effective rate reflecting the
accrual of interest on an actual/360 basis).
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 Servicer and (ii) which, in the good faith
judgment of the Master Servicer, the Trustee or the Servicer, as the case may
be, 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 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.
Notional Amount: On any Distribution Date, the Notional Amount of the
Class X-1 Certificates is equal to the sum of the aggregate Current Principal
Amount of the Class A-1 and Class A-4 Certificates and the Current Principal
Amount of the principal component of the Class X-1 Certificates (before taking
into account the payment of principal on such Classes of Certificates (or, in
the case of the Class X-1 Certificates, the payment of principal on the
principal component of such Class of Certificates) on such Distribution Date).
On any Distribution Date, the Notional Amount of the Class X-2 Certificates is
equal to the sum of the aggregate Current Principal Amount of the Class A-2 and
Class A-3 Certificates and the Current Principal Amount of the principal
component of the Class X-2 Certificates (before taking into account the payment
of principal on such Classes of Certificates (or, in the case of the Class X-2
Certificates, the payment of principal on the principal component of such Class
of Certificates) on such Distribution Date). On any Distribution Date, the
Notional Amount of the Class M-X Certificates is equal to the sum of the
aggregate Current Principal Amount of the Class M Certificates and the Class B
Certificates and the Current Principal Amount of the principal component of the
Class M-X Certificates (before taking into account the payment of principal on
such Classes of Certificates (or, in the case of the Class M-X Certificates, the
payment of principal on the principal component of such Class of Certificates)
on such Distribution Date).
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Offered Certificate: Any Senior Certificate or any Offered Subordinate
Certificate.
Offered Subordinate Certificates: The Class M-X, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates.
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.
One-Month LIBOR: A per annum rate equal to the average of interbank
offered rates for one-month U.S. dollar-denominated deposits in the London
market based on quotations of major banks as published in The Wall Street
Journal and most recently available as of the time specified in the related
Mortgage Note.
One-Year MTA: A per annum rate equal to the twelve-month moving average
monthly yield on United States Treasury Securities adjusted to a constant
maturity of one year as published by the Federal Reserve Board in the Federal
Reserve Statistical Release "Selected Interest Rates (H.15)," determined by
averaging the monthly yields for the most recently available twelve months.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to each addressee of such opinion and who, unless required to be
Independent (an "Opinion of Independent Counsel"), may be internal counsel for
EMC, the Master Servicer or the Depositor.
Optional Termination Date: Any Distribution Date on or after which the
Scheduled Principal Balance (before giving effect to distributions to be made on
such Distribution Date) of the Mortgage Loans is less than or equal to 10% of
the Cut-off Date Balance.
Original Subordinate Principal Balance: The aggregate Current Principal
Amount of the 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 if either clause (i) or clause (ii) is unavailable, then the other may be
used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, then 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 with a Scheduled Principal Balance greater than zero 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.
20
Pass-Through Rate: As to each Class of Certificates (other than the
Residual Certificates) and the REMIC I Regular Interests and the REMIC II
Regular Interests, the rate of interest determined as provided with respect
thereto, in Section 5.01(c). The Residual Certificates do not have a
Pass-Through Rate and shall not bear interest.
Paying Agent: The Securities Administrator or any successor paying
agent appointed hereunder.
Periodic Rate Cap: As to each Mortgage Loan, the rate, if any, set
forth in the related Mortgage Note and indicated on the Mortgage Loan Schedule,
that is 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 (which shall each have a maturity of not more than 90 days
and, in the case of bankers' acceptances, shall in no event have an
original maturity of more than 365 days or a remaining maturity of more
than 30 days) 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; provided that such repurchase obligations shall have a
remaining maturity of not more than 365 days;
(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
21
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; provided, that such
commercial paper shall have a remaining maturity of not more than 365
days;
(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) interests in any money market fund (including any such
fund managed or advised by the Trustee or the Master Servicer or any
affiliate thereof) which at the date of acquisition of the interests in
such fund and throughout the time such interests are held in such fund
has the highest applicable short term rating by each Rating Agency
rating such funds or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency, as evidenced in writing; 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; provided, further, that, if rated, any such
obligation or security shall not have an "r" highlighter affixed to its
rating.
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.
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 of the related Mortgage Note.
22
Prepayment Interest Shortfalls: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment or
a Principal Prepayment in full during the related Prepayment Period, the amount,
if any, by which (i) one month's interest at the applicable Net Rate on the
Scheduled Principal Balance of such Mortgage Loan immediately prior to such
prepayment, or, in the case of a partial Principal Prepayment, on the amount of
such prepayment, exceeds (ii) the amount of interest paid or collected in
connection with such Principal Prepayment less the sum of (a) any Prepayment
Charges relating to such Mortgage Loan and (b) the Servicing Fee.
Prepayment Period: As to any Distribution Date and the Mortgage Loans
serviced by the Servicer, the prepayment period specified in the Countrywide
Servicing Agreement.
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 (or proceeds with respect to) 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 received at the time a Mortgage
Loan becomes a Liquidated Mortgage Loan.
Private Certificates: Any Class B-4, Class B-5 or Class B-6
Certificate.
Projected Principal Balance: For each specified Distribution Date, as
set forth on Schedule A to this Agreement.
Prospectus: The Prospectus, dated December 20, 2004, relating to the
offering of the Offered Certificates.
Prospectus Supplement: The Prospectus Supplement, dated July 27, 2005,
relating to the offering of the Offered Certificates.
Protected Account: An account or accounts established and maintained
for the benefit of Certificateholders by the Servicer with respect to the
Mortgage Loans and with respect to REO Property serviced by the Servicer
pursuant to the Countrywide Servicing Agreement, and which is an Eligible
Account.
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
23
which it is engaged and approved as an insurer by the Master Servicer, so long
as its claims-paying ability 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: Each of S&P and Moody's. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (i) a Mortgage Loan, a Bankruptcy Loss,
and (ii) a Liquidated Mortgage Loan, an amount (not less than zero nor greater
than the Scheduled Principal Balance of such Mortgage Loan) equal to (x) the
Outstanding Principal Balance of such Liquidated Mortgage Loan plus accrued and
unpaid interest thereon at the related Mortgage Interest Rate through the last
day of the month of such liquidation, less (y) the Net Liquidation Proceeds with
respect to such Liquidated Mortgage Loan and the related Mortgaged Property that
are allocated to principal. In addition, to the extent the Paying Agent receives
from the Servicer 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 or Classes of Certificates (other than the Residual Certificates)
on any Distribution Date. As to any Mortgage Loan which has become the subject
of a Deficient Valuation, if the principal amount due under the related Mortgage
Note has been reduced, then "Realized Loss" is the difference between the
principal balance of such Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of such Mortgage Loan as reduced
by the Deficient Valuation.
Record Date: With respect to each Distribution Date and each Class of
Certificates (other than the Residual Certificates, the Class A-1 Certificates,
the Class A-4 Certificates and the Subordinate Certificates), the close of
business on the last Business Day of the month next preceding the month in which
the related Distribution Date occurs. With respect to each Distribution Date and
the Class A-1 Certificates, the Class A-4 Certificates and the Subordinate
Certificates, the 24th day of the month of such Distribution Date. With respect
to the Residual Certificates, the Closing 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 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 or
similar state laws.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) all of the Depositor's right, title and interest in
and to the Mortgage Loans, the related Mortgage Notes, Mortgages and other
related documents, including all interest and
24
principal due after the Cut-off Date with respect to the Mortgage Loans, but
excluding any payments of principal or interest due on or prior to the Cut-off
Date with respect to the Mortgage Loans, (ii) such assets relating to the
Mortgage Loans as from time to time may be held in the Protected Accounts, (iii)
any REO Property relating to the Mortgage Loans, and any revenues received
thereon, (iv) the rights of the Depositor under the Mortgage Loan Purchase
Agreement, (v) the rights with respect to the Countrywide Servicing Agreement,
to the extent assigned to the Trustee, (vi) the rights of the Depositor with
respect to the Yield Maintenance Agreement and the Assignment Agreement, (vii)
such funds or assets relating to the Mortgage Loans as from time to time are
credited in the Distribution Account (or are required by the terms of this
Agreement to be credited to the Distribution Account) and belonging to the Trust
Fund (exclusive of the Class A-1 Supplemental Fund, the Class A-2 Supplemental
Fund, the Senior Carryover Shortfall Reserve Fund, the Subordinate Carryover
Shortfall Reserve Fund, and the Yield Maintenance Account), (viii) the rights of
the Trustee under all insurance policies required to be maintained pursuant to
this Agreement, and any amounts paid or payable by the related insurer under any
such insurance policy (to the extent the related mortgagee has a claim thereto),
and (ix) any proceeds of the foregoing.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Regular Interests: The REMIC I Regular Interests, with such
terms as described in Section 5.01(c).
REMIC I Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A", equal to the ratio between, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of
the Mortgage Loans over (y) the aggregate Current Principal Amount of the Senior
Certificates (other than the Residual Certificates).
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests.
REMIC II Interests: The REMIC II Regular Interests and the Class R-II
Certificates.
REMIC II Regular Interests: The REMIC II Regular Interests, with such
terms as described in Section 5.01(c).
REMIC III: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC II Regular Interests.
REMIC III Interests: The REMIC III Regular Certificates and the Class
R-III Certificates.
REMIC III Regular Certificates: The REMIC III Regular Interests, with
such terms as described in Section 5.01(c).
REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC while any
regular interest in such REMIC is
25
outstanding, (ii) result in a tax on prohibited transactions with respect to any
REMIC or (iii) constitute a taxable contribution to any 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.
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 or permitted to be repurchased by the
Seller pursuant to the Mortgage Loan Purchase Agreement or Article II or Section
3.21 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 of such Mortgage Loan as of the date of the
acquisition), plus (B) accrued but unpaid interest on the Outstanding Principal
Balance of such Mortgage Loan at the related Mortgage Interest Rate from the
date through which interest was last paid on such Mortgage Loan by the related
Mortgagor or advanced with respect to such Mortgage Loan to the first day of the
month in which such amount is to be distributed, through and including the last
day of the month of repurchase, and reduced by (C) any portion of the Master
Servicing Compensation, Servicing Fee and Monthly Advances relating to such
Mortgage Loan and advances payable to the purchaser of such Mortgage Loan, and
(ii) any costs and damages incurred by the Trust and the Trustee 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 or 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 or the Countrywide Servicing Agreement with respect to such Mortgage
Loan.
Residual Certificates: Any of 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: Rule 144A promulgated under the Securities Act.
26
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 month 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 or
related REO Property on any Distribution Date, the principal balance thereof as
of the Cut-off Date plus any Deferred Interest that is added to the Outstanding
Principal Balance of such Mortgage Loan, and minus the sum of (1) the principal
portion of the scheduled Monthly Payments due from Mortgagors with respect to
such Mortgage Loan during each Due Period ending prior to such Distribution
Date, 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), (2) all Principal Prepayments
with respect to such Mortgage Loan received prior to or during the related
Prepayment Period, and all Net Liquidation Proceeds relating to such Mortgage
Loan, to the extent applied by the Servicer as recoveries of principal in
accordance with this Agreement or the Countrywide Servicing Agreement, that were
received by the Servicer as of the close of business on the last day of the
Prepayment Period related to such Distribution Date and (3) any Realized Loss
thereon incurred prior to or during the related Prepayment Period; provided that
the Scheduled Principal Balance of any Liquidated Mortgage Loan is zero.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association, and
its successor in interest, and 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"),
27
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, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) 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 SECURITIES 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 AND THE CERTIFICATE
REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR 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 WHICH IS SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED [in the case of a Residual
Certificate or a Private Certificate] UNLESS THE OPINION OF COUNSEL REQUIRED BY
SECTION 5.07 OF THE POOLING AND SERVICING AGREEMENT IS PROVIDED [in the case of
the Class B-4, Class B-5 and Class B-6 Certificates]:, UNLESS THE TRANSFEREE
CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE
AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I)
WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED
TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX 00-0, XXX
95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
DUTIES ON THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER
SERVICER, THE SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN
OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED
BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF
AN INSTITUTIONAL ACCREDITED INVESTOR."
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 Mortgage Corporation, as seller under the Mortgage Loan
Purchase Agreement.
28
Senior Carryover Shortfall: With respect to the Class A-1 Certificates
and the Class A-4 Certificates, respectively, and any Distribution Date for
which the respective Pass-Through Rate for such Certificates is equal to the
weighted average of the Net Rates on the Mortgage Loans, the excess, if any, of
(x) Accrued Certificate Interest on the Class A-1 Certificates and the Class A-4
Certificates, respectively, for such Distribution Date, using a per annum rate
of One-Month LIBOR plus the related Margin, as calculated for such Distribution
Date, over (y) Accrued Certificate Interest on the Class A-1 Certificates and
the Class A-4 Certificates, respectively, for such Distribution Date at the
weighted average of the Net Rates on the Mortgage Loans.
Senior Carryover Shortfall Amount: With respect to the Class A-1
Certificates and the Class A-4 Certificates, respectively, and each Distribution
Date, the sum of (a) the aggregate amount of Senior Carryover Shortfall for such
Classes of Certificates on such Distribution Date which is not covered on such
Distribution Date by payments made thereon from the Senior Carryover Shortfall
Reserve Fund, plus (b) any Senior Carryover Shortfall Amount for such Classes of
Certificates remaining unpaid from the preceding Distribution Date, plus (c) one
month's interest on the amount in clause (b) (based on the number of days in the
preceding Interest Accrual Period) at a per annum rate equal to One-Month LIBOR
plus the related Margin for such Distribution Date.
Senior Carryover Shortfall Reserve Fund: An "outside reserve fund"
within the meaning of Treasury Regulation Section 1.860G-2(h), which is not an
asset of any REMIC, ownership of which is evidenced by the Class X-1
Certificates, and which is established and maintained pursuant to Section 4.04.
Senior Certificates: The Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class
X-1 Certificates, the Class X-2 Certificates, the Class R-I Certificates, the
Class R-II Certificates and the Class R-III Certificates.
Senior Optimal Principal Amount: With respect to each Distribution Date
and the Senior Certificates (other than the Residual Certificates), an amount
equal to the sum, without duplication, of the following (after giving effect to
the application of such amounts to cover Deferred Interest on the Mortgage
Loans, but in no event greater than the aggregate Current Principal Amount of
such Senior Certificates immediately prior to such Distribution Date):
(1) the Senior Percentage of all scheduled payments of
principal allocated to the Scheduled Principal Balance due on each
Outstanding Mortgage Loan 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
Distribution Date occurs prior to the Cross-over Date);
(2) the Senior Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan which was the subject of a
Principal Prepayment in full received by the Master Servicer during the
related Prepayment Period;
29
(3) the Senior Prepayment Percentage of all Principal
Prepayments in part received by the Master Servicer during the related
Prepayment Period with respect to each Mortgage Loan;
(4) the lesser of (a) the Senior Prepayment Percentage of the
sum of (i) all Net Liquidation Proceeds allocable to principal received
in respect of each Mortgage Loan which became a Liquidated Mortgage
Loan during the related Prepayment Period (other than Mortgage Loans
described in the immediately following clause (ii)) and all Subsequent
Recoveries received in respect of each Liquidated Mortgage Loan during
the related Due Period and (ii) the Scheduled Principal Balance of each
such Mortgage Loan purchased by an insurer from the Trustee during the
related Prepayment Period pursuant to the related Primary Mortgage
Insurance Policy, if any, or otherwise; and (b) the Senior Percentage
of the sum of (i) the Scheduled Principal Balance of each Mortgage Loan
which became a Liquidated Mortgage Loan during the related Prepayment
Period (other than the Mortgage Loans described in the immediately
following clause (ii)) and all Subsequent Recoveries received in
respect of each Liquidated Mortgage Loan during the related Due Period
and (ii) the Scheduled Principal Balance of each such Mortgage Loan
that was purchased by an insurer from the Trustee during the related
Prepayment Period pursuant to the related Primary Mortgage Insurance
Policy, if any, or otherwise; and
(5) the Senior Prepayment Percentage of the sum of (a) the
Scheduled Principal Balance of each Mortgage Loan which 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
that has been replaced by the Seller with a Substitute Mortgage Loan
pursuant to the Agreement or the Mortgage Loan Purchase Agreement in
connection with such Distribution Date over the Scheduled Principal
Balance of such Substitute Mortgage Loan.
Senior Percentage: Initially, 90.95%. On any Distribution Date, the
lesser of (i) 100% and (ii) the percentage (carried to six places rounded up)
obtained by dividing the aggregate Current Principal Amount of the Senior
Certificates (other than the Residual Certificates) (or, with respect to the
Class X-1 Certificates and the Class X-2 Certificates, the Current Principal
Amount of the principal component of such respective Class of Certificates),
immediately preceding such Distribution Date by the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the beginning of the related Due
Period.
Senior Prepayment Percentage: The Senior Prepayment Percentage for the
Senior Certificates (other than the Residual Certificates) on any Distribution
Date occurring during the periods set forth below will be as follows:
------------------------------------------------------------------------
Period (dates inclusive) Senior Prepayment Percentage
------------------------------------------------------------------------
August 25, 2005 - July 25, 2015 100%
August 25, 2015 - July 25, 2016 Senior Percentage plus 70% of the
Subordinate Percentage
August 25, 2016 - July 25, 2017 Senior Percentage plus 60% of the
Subordinate Percentage
August 25, 2017 - July 25, 2018 Senior Percentage plus 40% of the
Subordinate Percentage
30
August 25, 2018 - July 25, 2019 Senior Percentage plus 20% of the
Subordinate Percentage
August 25, 2019 and thereafter Senior Percentage
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 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 do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including August 2015 and July 2016, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including August
2016 and July 2017, (c) 40% of the Original Subordinate Principal Balance if
such Distribution Date occurs between and including August 2017 and July 2018,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including August 2018 and July 2019, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after August 2019.
In addition, if on any Distribution Date after the Distribution Date
occurring in July 2008 the current weighted average of the Subordinate
Percentage for such Distribution Date is equal to or greater than two times the
initial weighted average of the Subordinate Percentage and (a) the aggregate
Scheduled Principal Balances of the Mortgage Loans 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 sum 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 2008, cumulative Realized Losses on the Mortgage Loans 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 2008,
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 30% of the Original Subordinate Principal
Balance, then, in each case, the Senior Prepayment Percentage for such
Distribution Date will equal the Senior Percentage; provided, however, if on a
Distribution Date prior to the Distribution Date in July 2008 the current
Subordinate Percentage is equal to or greater than two times the initial
Subordinate Percentage for the Senior Certificates and the above delinquency and
loss tests are met, then the Senior Prepayment Percentage for such Distribution
Date will equal the Senior Percentage plus 50% of the 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 (other than the Residual Certificates) immediately
preceding such Distribution Date, and the denominator of which is the aggregate
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, then the
Senior Prepayment Percentage for such Distribution Date will equal 100%.
Servicer: With respect to each Mortgage Loan, Countrywide Home Loans
Servicing LP.
31
Servicer Remittance Date: With respect to each Mortgage Loan, the 18th
day of each month, or if such day is not a Business Day, then the following
Business Day.
Servicing Agreement: The Countrywide Servicing Agreement.
Servicing Fee: As to any Mortgage Loan and a 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 month preceding the month in which such
Distribution Date occurs and (ii) the applicable Servicing Fee Rate, or, in the
event of any payment of interest that accompanies a Principal Prepayment in full
during the related Due Period made by the Mortgagor immediately prior to such
prepayment, interest at the Servicing Fee Rate on the Scheduled Principal
Balance of such Mortgage Loan for the period covered by such payment of
interest.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate
(including, as applicable, any additional servicing fees) as set forth in the
Mortgage Loan Schedule.
Servicing Officer: As defined in the Countrywide Servicing Agreement.
Startup Day: July 29, 2005.
Strike Price: With respect to the Yield Maintenance Agreement, for the
respective Distribution Dates occurring during the term of such Agreement, as
set forth with respect thereto on Schedule A hereto.
Subordinate Carryover Shortfall: With respect to the Subordinate
Certificates (other than the Class M-X Certificates) and any Distribution Date
for which the respective Pass-Through Rate for such Certificates is equal to the
weighted average of the Net Rates on the Mortgage Loans, the excess, if any, of
(x) Accrued Certificate Interest on the Subordinate Certificates (other than the
Class M-X Certificates) for such Distribution Date, using a per annum rate of
the lesser of (a) One-Month LIBOR plus the related Margin, as calculated for
such Distribution Date, and (b) 10.50%, over (y) Accrued Certificate Interest on
the Subordinate Certificates (other than the Class M-X Certificates) for such
Distribution Date at the weighted average of the Net Rates on the Mortgage
Loans.
Subordinate Carryover Shortfall Amount: With respect to the Subordinate
Certificates (other than the Class M-X Certificates) and each Distribution Date,
the sum of (a) the aggregate amount of Subordinate Carryover Shortfall for such
Classes of Certificates on such Distribution Date which is not covered on such
Distribution Date by payments made thereon from the Subordinate Carryover
Shortfall Reserve Fund, plus (b) any Subordinate Carryover Shortfall Amount for
such Classes of Certificates remaining unpaid from the preceding Distribution
Date, plus (c) one month's interest on the amount in clause (b) (based on the
number of days in the preceding Interest Accrual Period) at a per annum rate
equal to the lesser of (i) One-Month LIBOR plus the related Margin for such
Distribution Date and (ii) 10.50%.
Subordinate Carryover Shortfall Reserve Fund: An "outside reserve fund"
within the meaning of Treasury Regulation Section 1.860G-2(h), which is not an
asset of any REMIC, ownership of which is evidenced by the Class M-X
Certificates, and which is established and maintained pursuant to Section 4.05.
32
Subordinate Certificates: The Class M-X, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
Subordinate Certificate Writedown Amount: With respect to the
Subordinate Certificates, the amount by which (a) the sum of the aggregate
Current Principal Amount of all of the Certificates other than the Residual
Certificates (after giving effect to the distribution of principal collections
on the Mortgage Loans and the allocation of applicable Realized Losses on the
Mortgage Loans on a pro rata basis in reduction of the respective Current
Principal Amount of such Certificates on such Distribution Date) exceeds (b) the
aggregate Scheduled Principal Balance of the Mortgage Loans on the Due Date
related to such Distribution Date.
Subordinate Optimal Principal Amount: With respect to the Subordinate
Certificates and each Distribution Date will be an amount equal to the sum,
without duplication, of the following (after giving effect to the application of
such amounts to cover Deferred Interest on the Mortgage Loans, but in no event
greater than the aggregate Current Principal Amount of the Subordinate
Certificates immediately prior to such Distribution Date):
(1) the Subordinate Percentage of the principal portion of all
Monthly Payments due on each Mortgage Loan 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);
(2) the Subordinate Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan which was the subject of a
prepayment in full received by the Master Servicer during the
applicable Prepayment Period;
(3) the Subordinate Prepayment Percentage of all partial
prepayments of principal received by the Master Servicer during the
applicable Prepayment Period for each Mortgage Loan;
(4) the excess, if any, of (a) the Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage Loan that
became a Liquidated Mortgage Loan during the related Prepayment Period
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 holders of the Senior Certificates on such
Distribution Date pursuant to clause (4) of the definition of "Senior
Optimal Principal Amount";
(5) the Subordinate Prepayment Percentage of the sum of (a)
the Scheduled Principal Balance of each Mortgage Loan or related REO
Property which was repurchased by the Seller in connection with such
Distribution Date and (b) the amount, if any, by which the Scheduled
Principal Balance of a Mortgage Loan that has been replaced by the
Seller with a substitute Mortgage Loan pursuant to this Agreement or
the Mortgage Loan Purchase Agreement in connection with such
Distribution Date exceeds the Scheduled Principal Balance of such
substitute Mortgage Loan; and
33
(6) on the Distribution Date on which the Current Principal
Amount of each of the Senior Certificates (other than the Residual
Certificates) has been reduced to zero, 100% of any Senior Optimal
Principal Amount.
After the aggregate Current Principal Amount of the Subordinate
Certificates has been reduced to zero, the Subordinate Optimal Principal Amount
will be zero.
Subordinate Percentage: As of any Distribution Date, 100% minus the
Senior Percentage. The initial Subordinate Percentage is equal to 9.05%.
Subordinate Prepayment Percentage: For the Subordinate Certificates and
as of any Distribution Date, will equal 100% minus the Senior Prepayment
Percentage except that on any Distribution Date after the Current Principal
Amount of each Class of Senior Certificates (other than the Residual
Certificates) has been reduced to zero, the Subordinate Prepayment Percentage
for the Subordinate Certificates will equal 100%.
Subsequent Recoveries: As of any Distribution Date, amounts received
during the related Due Period by the 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)
specifically related to a Liquidated Mortgage Loan or disposition of an REO
property prior to the related Prepayment Period that result in a Realized Loss
on a Mortgage Loan, after liquidation or disposition of such Mortgage Loan.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to the Countrywide 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 (to the extent applicable)
has a Combined Loan-to-Value Ratio not greater than the Combined Loan-to-Value
Ratio of such Mortgage Loan; (vii) which is current in payment of principal and
interest as of the date of substitution; (viii) 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; (ix) 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 has a Minimum Lifetime Mortgage Rate no lower than that of such
Mortgage Loan; and (x) which is not secured by Mortgaged Property located in (A)
the State of New Jersey, if such Mortgage Loan was originated on or after
November 27, 2003 or (B) the State of New Mexico, if such Mortgage Loan was
originated on or after January 1, 2004.
Tax Administration and Tax Matters Person: The person designated as
"tax matters person" in the manner provided under Treasury regulation ss.
1.860F-4(d) and temporary Treasury regulation ss. 301.6231(a)(7)-1T. The
Securities Administrator or any successor thereto or assignee thereof shall
serve as tax administrator hereunder and as agent for the Tax Matters Person.
The Holder of each Class of Residual Certificates shall be the Tax Matters
34
Person for the related REMIC, as more particularly set forth in Section 9.12
hereof.
Termination Costs: The costs and expenses related to the termination of
the Servicer, the appointment of a successor servicer or the transfer and
assumption of servicing with respect to the Countrywide Servicing Agreement,
including, without limitation, the items set forth in Section 3.03(c).
Termination Purchase Price: As defined in 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, N.A., and its successor in interest, or
any successor trustee appointed as herein provided.
Uncertificated Principal Balance: With respect to any REMIC I Regular
Interest or REMIC II Regular Interest as of any Distribution Date, the initial
principal amount of such Regular Interest, reduced by (i) all amounts
distributed on previous Distribution Dates on such Regular Interest with respect
to principal, (ii) the principal portion of all Realized Losses on the Mortgage
Loans allocated prior to such Distribution Date to such Regular Interest, taking
account of the Loss Allocation Limitation and (iii) in the case of a REMIC II
Regular Interest for which the Corresponding Certificate is a Subordinate
Certificate, such Regular Interest's pro rata share, if any, of the applicable
Subordinate Certificate Writedown Amount allocated to such Corresponding
Certificate for previous Distribution Dates.
Underlying Seller: With respect to each Mortgage Loan, Countrywide Home
Loans.
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
or flood insurance policies required to be maintained pursuant to the
Countrywide Servicing Agreement, without regard to whether or not such policy is
maintained.
United States Person: A citizen or individual 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
such trust and one or more such United States Persons have the authority to
control all substantial decisions of such trust or if the Trust was in existence
on August 20, 1996 and properly elected to continue to be treated as such a
United States Person.
35
Yield Maintenance Account: The account to be established and maintained
pursuant to the Yield Maintenance Agreement, which account will be an asset of
the Trust but not of any REMIC.
Yield Maintenance Agreement: The Interest Rate Corridor Letter
Agreement, dated July 29, 2005, entered into by the Yield Maintenance Provider
and the Trustee on behalf of the Trust and relating to the Class A-1
Certificates, the Class A-4 Certificates, the Class M Certificates and the Class
B Certificates.
Yield Maintenance Payment: An amount equal to the result of multiplying
(A) the actual number of days in the applicable Interest Accrual Period divided
by 360 by (B) the product of (i) the per annum rate equal to the excess of (x)
the lesser of then-current One-Month LIBOR and 10.50% over (y) the applicable
Strike Price and (ii) an amount equal to the lesser of the principal balance of
the applicable Class of Certificates and the Projected Principal Balance for
such Class of Certificates for such Distribution Date.
Yield Maintenance Provider: Xxxxx Fargo Bank, National Association.
Section 1.02. Calculation of LIBOR(a) . LIBOR applicable to the
calculation of the Pass-Through Rate on the applicable Adjustable Rate
Certificates for any Interest Accrual Period will be determined on each Interest
Determination Date. On each Interest Determination Date, LIBOR shall be
established by the Securities Administrator and, as to any Interest Accrual
Period, will equal the rate for one month United States dollar deposits that
appears on the Telerate Screen Page 3750 as of 11:00 a.m., London time, on such
Interest Determination Date. "Telerate Screen Page 3750" means the display
designated as page 3750 on the Telerate Service (or such other page as may
replace page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks). If such rate does not appear on such page (or
such other page as may replace that page on that service, or if such service is
no longer offered, LIBOR shall be so established by use of such other service
for displaying LIBOR or comparable rates as may be reasonably selected by the
Securities Administrator), the rate will be the Reference Bank Rate. The
"Reference Bank Rate" will be determined on the basis of the rates at which
deposits in U.S. dollars are offered by the reference banks (which shall be any
three major banks that are engaged in transactions in the London interbank
market, selected by the Securities Administrator) as of 11:00 a.m., London time,
on the Interest Determination Date to prime banks in the London interbank market
for a period of one month in amounts approximately equal to the aggregate
Current Principal Amounts of the applicable Adjustable Rate Certificates, then
outstanding. The Securities Administrator will request the principal London
office of each of the reference banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate will be the arithmetic mean of
the quotations rounded up to the nearest whole multiple of 0.03125%. If on such
date fewer than two quotations are provided as requested, the rate will be the
arithmetic mean of the rates quoted by one or more major banks in New York City,
selected by the Securities Administrator, as of 11:00 a.m., New York City time,
on such date for loans in U.S. dollars to leading European banks for a period of
one month in amounts approximately equal to the aggregate Current Principal
Amounts of the applicable Adjustable Rate Certificates, then outstanding. If no
such quotations can be obtained, the rate will be LIBOR for the prior
Distribution Date; provided, however, if, under the priorities described above,
LIBOR for a Distribution Date would be based on LIBOR for the previous
Distribution Date for the third
36
consecutive Distribution Date, the Securities Administrator shall select an
alternative comparable index (over which the Securities Administrator has no
control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of LIBOR by the Securities Administrator on any Interest
Determination Date and the Securities Administrator's subsequent calculation of
the Pass-Through Rate applicable to the Adjustable Rate Certificates that are
based on One-Month LIBOR for the relevant Interest Accrual Period, in the
absence of manifest error, will be final and binding. Promptly following each
Interest Determination Date, the Securities Administrator shall supply the
Master Servicer with the results of its determination of LIBOR on such date.
Section 1.03. Calculation of One-Year MTA. One-Year MTA applicable to
the calculation of the Pass-Through Rate on the applicable Adjustable Rate
Certificates for any Interest Accrual Period will be determined on each Interest
Determination Date. On each Interest Determination Date, One-Year MTA shall be
established by the Securities Administrator and, as to any Interest Accrual
Period, will equal the one-year MTA rate published by the Federal Reserve Board
in the Federal Reserve Statistical Release `Selected Interest Rates (H.15)',
determined by averaging the monthly yields for the most recently available
twelve months. The One-Year MTA figure used for each Interest Rate Adjustment
Date will be the most recent One-Year MTA figure available as of fifteen
Business Days before such date. If such rate is no longer available, then the
Index used to determine the certificate interest rate on the Class A-2
Certificates and the Class A-3 Certificates will be the same Index selected to
determine the Mortgage Interest Rate on the Mortgage Loans. The establishment of
One-Year MTA by the Securities Administrator on any Interest Determination Date
and the Securities Administrator's subsequent calculation of the Pass-Through
Rate applicable to the Adjustable Rate Certificates that are based on One-Year
MTA for the relevant Interest Accrual Period, in the absence of manifest error,
will be final and binding. Promptly following each Interest Determination Date,
the Securities Administrator shall supply the Master Servicer with the results
of its determination of One-Year MTA on such date.
37
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, and the related Mortgage Notes,
mortgages and other related documents, 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 with
respect to the Mortgage Loans, (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
Distribution Account, (iii) such assets relating to the Mortgage Loans as from
time to time may be held by the Servicer in Protected Accounts and the Paying
Agent in the Senior Carryover Shortfall Reserve Fund, the Class A-1 Supplemental
Fund, the Class A-2 Supplemental Fund, the Subordinate Carryover Shortfall
Reserve Fund, the Yield Maintenance Account and the Distribution Account for the
benefit of the Paying Agent on behalf of the Certificateholders, (iv) any REO
Property, and any revenues received thereon, (v) the Required Insurance Policies
and any amounts paid or payable by the related insurer under any Insurance
Policy (to the extent the related mortgagee has a claim thereto), (vi) the
Mortgage Loan Purchase Agreement to the extent provided in Subsection 2.03(a),
(vii) the rights with respect to the Countrywide Servicing Agreement as assigned
to the Trustee on behalf of the Certificateholders by the Assignment Agreement,
(viii) the rights of the Depositor with respect to the Yield Maintenance
Agreement, 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 sale, transfer and assignment,
the Depositor hereby deposits with the Trustee, or the Custodian, as its agent,
as described in the Mortgage Loan Purchase Agreement, with respect to each
Mortgage Loan, (i) the original Mortgage Note, including any riders thereto,
endorsed without recourse (A) to the order of the Trustee, or (B) in the case of
a Mortgage Loan registered on the MERS(R) System, in blank, and in each case
showing an unbroken chain of endorsements from the original payee thereof to the
Person endorsing it to the Trustee, or a lost note affidavit with indemnity,
together with a copy of the related Mortgage Note, (ii) the original Security
Instrument (noting the presence of the MIN of the Mortgage Loan and language
indicating that the Mortgage Loan is a MOM Loan if the 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 (x) in
the proviso below applies, shall be in recordable form), (iii) unless the
Mortgage Loan is registered on the MERS(R) System, a certified copy of the
assignment (which may be in the form of a
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blanket assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) to "JPMorgan Chase Bank, N.A., as Trustee," with evidence
of recording with respect to each Mortgage Loan in the name of the Trustee
thereon (or if clause (x) in the proviso below applies or for Mortgage Loans
with respect to which the related Mortgaged Property is located in a state other
than Maryland or an Opinion of Counsel has been provided as set forth in this
Section 2.01(b), shall be in recordable form), (iv) all intervening assignments
of the Security Instrument, if applicable and only to the extent available to
the Depositor with evidence of recording thereon, (v) the original or a copy of
the policy or certificate of primary mortgage guaranty insurance, to the extent
available, if any, (vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance and
(vii) originals of all assumption and 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: (x) 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, or cause to be
delivered, a true copy thereof with a certification by the Depositor, the
applicable Servicer or the title company issuing the related commitment for
title insurance, 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"; (y) 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, or cause to be delivered, photocopies
of such documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were recorded;
and (z) the Depositor shall not be required to deliver intervening assignments
or Mortgage Note endorsements between the related Underlying Seller and EMC
Mortgage Corporation, between EMC Mortgage Corporation 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 Distribution 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, at its expense, the assignment of the related Security
Instrument to the Trustee to be recorded not later than 180 days after the
Closing Date, unless (1) such recordation is not required by the Rating
Agencies, (2) an Opinion of Counsel 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
Mortgage Loans or (3) MERS is identified on the related Security Instrument or
on a properly recorded assignment of such Security Instrument as mortgagee of
record solely as nominee for Depositor and its successors and assigns; provided,
however, that each assignment shall be submitted for recording by the Depositor
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
39
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
Depositor, (iv) the rating of The Bear Xxxxxxx Companies Inc. falls below Baa3,
(v) the occurrence of a servicing transfer as described in Section 8.02 hereof,
or (vi) with respect to any one assignment of Mortgage, the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage. Notwithstanding the foregoing, if the Depositor 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 Trust Fund 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 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 shall acknowledge, with respect to each Mortgage
Loan by an Initial Certification substantially in the form of Exhibit One to the
Custodial Agreement, 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 a lost note affidavit in lieu thereof. 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 substantially in the form annexed as
Exhibit Two to the Custodial Agreement. 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 not to have been executed or
received, or to be unrelated to the Mortgage Loans identified on Exhibit B or to
appear to be defective on its face, then 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 to, within 90 days from the Trustee's or
the Custodian's notification, provide a Substitute Mortgage Loan (if within two
years of the Closing Date) or 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)(A)
40
of the Code and Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6),
(7) and (9), without reliance on the provisions of Treasury Regulation Section
1.860G-2(a)(3) or Treasury Regulation Section 1.860G 2(f)(2) or any other
provision that would allow a Mortgage Loan to be treated as a "qualified
mortgage" notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1), (2),
(4), (5), (6), (7) and (9), 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
thereof, because the originals of such documents or a certified copy have not
been returned by the applicable jurisdiction, then 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
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 of the
Seller or a Servicing Officer 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 (or
with respect to any Substitute Mortgage Loan, within five Business Days after
the receipt by the Trustee or the Custodian thereof), 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
substantially in the form annexed as Exhibit Three to the Custodial Agreement.
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 any document constituting part of the
Mortgage File has not been received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified on Exhibit B or to appear defective on its face, the
Trustee or the Custodian, as its agent, shall promptly notify the Seller
(provided, however, that with respect to those documents described in subsection
(b)(iv), (b)(v) and (b)(vii) of Section 2.01, the Trustee's and the Custodian's
obligations shall extend only to the documents actually delivered to the Trustee
or Custodian pursuant to such subsections). In accordance with the Mortgage Loan
Purchase Agreement, the Seller shall correct or cure any such defect or EMC
shall deliver to the Trustee an Opinion of Counsel to the effect that such
defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 90 days from the date of notice
from the Trustee of the 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, then the
Trustee shall enforce the Seller's obligation under the Mortgage Loan Purchase
Agreement to, within 90 days from the Trustee's or Custodian's notification,
provide a Substitute Mortgage Loan (if within two years of the Closing Date) or
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)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1), (2), (4),
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(5), (6), (7) and (9), without reliance on the provisions of Treasury Regulation
Section 1.860G-2(a)(3) or Treasury Regulation Section 1.860G 2(f)(2) or any
other provision that would allow a Mortgage Loan to be treated as a "qualified
mortgage" notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1), (2),
(4), (5), (6), (7) and (9), any such cure, repurchase or substitution must occur
within 90 days from the date such breach was discovered; provided, further,
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 thereof, because the originals of such documents or a certified
copy have not been returned by the applicable jurisdiction, then 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 Subsections 2.02(a) or (b) above, the Seller shall
remit to the Paying Agent the applicable Repurchase Price for deposit in the
Distribution Account and the Seller shall provide to the Master Servicer, the
Paying Agent and the Trustee written notification detailing the components of
the Repurchase Price. Upon deposit of the Repurchase Price in the Distribution
Account, the Depositor shall notify the Trustee and the Trustee or the
Custodian, as its agent (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, furnished to it by
the Seller as are necessary to vest in the Seller title to and rights under the
related 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 Paying
Agent. 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 Countrywide Servicing Agreement (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 Mortgage
Loans under the Countrywide 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
42
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 Securities Administrator 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 related
borrower.) Any such purchase by the Seller shall be made by providing an amount
equal to the Repurchase Price to the Paying Agent for deposit in the
Distribution Account and written notification detailing the components of such
Repurchase Price to the Trustee, the Paying Agent and the Master Servicer. The
Depositor shall notify the Trustee and submit to the Trustee or the Custodian,
as its agent, a Request for Release in the form of Exhibit D attached hereto,
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, 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 Securities Administrator.
The Trustee shall amend the Mortgage Loan Schedule to reflect such repurchase
and shall promptly notify the Master Servicer 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.
(a) 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
43
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 of a
Mortgage Loan representation or warranty would cause such Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3)(A) of the
Code and Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6), (7) and
(9), without reliance on the provisions of Treasury Regulation Section
1.860G-2(a)(3) or Treasury Regulation Section 1.860G 2(f)(2) or any other
provision that would allow a Mortgage Loan to be treated as a "qualified
mortgage" notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1), (2),
(4), (5), (6), (7) and (9), then any such 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 Subsection 2.02(a). Within
two Business Days after such notification, the Seller shall provide to the
Paying Agent 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
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 Custodian of a Request
for Release for such Mortgage Loan), the Trustee (or the Custodian, as its
agent) shall release to the Seller the 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 the Trustee shall execute and deliver all
instruments of transfer or assignment, without recourse, 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 Subsections 2.01(b) and 2.02(b) of this
Agreement, as applicable, with the date of acceptance of the Substitute Mortgage
Loan deemed to be the Closing Date for purposes of the time periods set forth in
those Subsections. The representations and warranties set forth in the Mortgage
Loan Purchase Agreement shall be deemed to have been made by the Seller with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Trustee.
44
The Securities Administrator shall amend the Mortgage Loan Schedule to reflect
such substitution and shall provide a copy of such amended Mortgage Loan
Schedule to the Master Servicer, the Trustee and the Rating Agencies.
Section 2.05. Issuance of Certificates 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 the Certificate
Registrar has 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.
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 Interests. 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.
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 II Regular Interests, and the other assets of REMIC III for the
benefit of the holders of the REMIC III Certificates. The Trustee acknowledges
receipt of the REMIC II Regular Interests (which are uncertificated) and the
other assets of REMIC III and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC III
Certificates.
Section 2.06. Representations and Warranties Concerning the Depositor(a) . 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
45
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 thereof
to the Trustee, each Mortgage Note and each Mortgage was 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 the Mortgage Loans to the Trustee free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest.
Section 2.07. Covenants of the Master Servicer(a). The Master Servicer
covenants to the Depositor, the Securities Administrator and the Trustee, as
follows:
(i) it shall comply in the performance of its obligations
under this Agreement;
(ii) no written information, certificate of an officer,
statement furnished in writing or written report prepared by the Master
Servicer pursuant to this Agreement and delivered to the Securities
Administrator, the Depositor, any affiliate of the Depositor or the
Trustee will contain any untrue statement of a material
46
fact or omit to state a material fact necessary to make the
information, certificate, statement or report not misleading; and
(iii) it shall (only in its capacity as successor servicer
pursuant to the Countrywide Servicing Agreement) accurately and fully
provide information regarding payment performance of the Mortgagors to
the nationally recognized credit repositories, to the extent such
reporting remains customary and prudent in the servicing of mortgage
loans similar to the Mortgage Loans.
Nothing in this Section shall derogate from the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors, and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
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Article III
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer. The Master Servicer shall, from and
after the Closing Date, supervise, monitor and oversee the obligation of the
Servicer to service and administer the Mortgage Loans in accordance with the
terms of the Countrywide Servicing Agreement 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 the 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 the Servicer and shall cause the Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by the
Servicer under the Countrywide Servicing Agreement. The Master Servicer shall
independently and separately monitor the Servicer's servicing activities with
respect to each 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 Servicer's 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
Servicer to the Distribution Account pursuant to the Countrywide Servicing
Agreement.
The Trustee shall furnish the Servicer 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
Servicer and the Master Servicer to service and administer the Mortgage Loans
and REO Property.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the 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
48
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(a). For as long as each REMIC
shall exist, the Trustee and the Securities Administrator shall act in
accordance herewith to assure continuing treatment of such REMIC as a REMIC, and
the Trustee and the Securities Administrator shall comply with any directions of
the Depositor, the 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, 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 REMIC after the
Startup Day without receipt of a REMIC Opinion. In addition, the Trustee shall
comply with all of the requirements of Treasury Regulation ss. 1.860F-2(a)(2),
including, without limitation, the requirement that each REMIC account for items
of income and ownership of assets in a manner that respects the separate
existence of each REMIC.
Section 3.03. Monitoring of the Servicer.
(a) The Master Servicer shall be responsible for reporting to the
Trustee and the Depositor the compliance by the Servicer with its duties under
the Countrywide Servicing Agreement. In the review of the 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 the
Servicer's compliance with the terms of the Countrywide Servicing Agreement. In
the event that the Master Servicer, in its judgment, determines that the
Servicer should be terminated in accordance with the Countrywide Servicing
Agreement, or that a notice should be sent pursuant to the Countrywide 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 the Servicer under the
Countrywide Servicing Agreement, and shall, in the event that the Servicer
fails to perform its obligations in accordance with the Countrywide Servicing
Agreement, subject to the preceding paragraph, terminate the rights and
obligations of the Servicer thereunder and act as servicer of the Mortgage Loans
or cause the Trustee to enter into 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 the Countrywide
Servicing Agreement 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 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
49
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 the Servicer, appointment of a successor
Servicer or the transfer and assumption of servicing by the Master Servicer with
respect to the Countrywide 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 the Servicer and (ii) all costs and expenses
associated with the complete transfer of servicing, including 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 servicer to service the Mortgage Loans in accordance with the
Countrywide 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 Distribution Account.
(d) The Master Servicer shall require the Servicer to comply
with the remittance requirements and other obligations set forth in the
Countrywide Servicing Agreement, including the Assignment Agreement. The Master
Servicer shall enforce the obligation of the Servicer pursuant to the
Countrywide Servicing Agreement to provide it with the annual officer's
certificate of compliance and annual independent accountants' servicing reports,
as well as back-up certifications to each Master Servicer Certification pursuant
to Section 3.18.
(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 amount of coverage to be maintained by the Master
Servicer with respect to the blanket fidelity bond policy shall be $50,000,000
per occurrence, and, with respect to the errors and omissions insurance policy,
shall be $20,000,000 per occurrence.
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 Countrywide Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities
50
under Section 3.03, shall not permit the 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 REMIC hereunder 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
will not cause any REMIC hereunder to fail to qualify as a REMIC or result in
the imposition of a tax upon any REMIC hereunder. The Trustee shall furnish the
Master Servicer, upon written request from a Servicing Officer, with any powers
of attorney empowering the Master Servicer or the 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 appear in, prosecute or defend any court action relating to the
Mortgage Loans or the Mortgaged Property, in accordance with the Countrywide
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 the 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, then
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.
The Trustee shall execute and deliver to the Servicer any court
pleadings, requests for trustee's sale or other documents necessary or desirable
or relating 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 related Mortgage Note or related Mortgage; (iii) obtaining a deficiency
judgment against the related Mortgagor; or (iv) enforcing any other rights or
remedies provided by a Mortgage Note or related Mortgage or otherwise available
at law or equity.
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Section 3.06. Due-on-Sale Clauses; Assumption Agreements(a) . To the
extent provided in the Countrywide Servicing Agreement, to the extent Mortgage
Loans contain enforceable due-on-sale clauses, the Master Servicer shall cause
the Servicer to enforce such clauses in accordance with the Countrywide
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 Countrywide Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the Countrywide 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 the 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 (and if the
Servicer does not, then the Master Servicer may), if required under the
Countrywide Servicing Agreement, 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 Servicer pursuant to
Section 4.01 or by the Servicer pursuant to the Countrywide Servicing Agreement
have been or will be so deposited) and shall request that the Custodian, on
behalf of the Trustee, deliver to the 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 Servicer, and
the Trustee and Custodian shall have no further responsibility with regard to
such Mortgage File. Upon any such payment in full, the 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 Countrywide
Servicing Agreement, the Trustee shall execute such documents as shall be
prepared and furnished to the Trustee by the 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 the 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
52
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.
(c) The Master Servicer hereby covenants that it shall not alter
the codes referenced in Section 4(c) of the Mortgage Loan Purchase Agreement
with respect to any Mortgage Loan during the term of this Agreement, unless and
until such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
Section 3.08. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit and the Servicer (to the
extent required by the Countrywide Servicing Agreement) shall transmit to the
Trustee or Custodian such documents and instruments coming into the
possession of the Master Servicer or the Servicer from time to time as are
required by the terms hereof, or in the case of the Servicer, the Countrywide
Servicing Agreement, to be delivered to the Trustee or Custodian. Any funds
received by the Master Servicer or by the Servicer in respect of any Mortgage
Loan or which otherwise are collected by the Master Servicer or by the 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 the Master Servicing Compensation and
other amounts provided in this Agreement, and to the right of the Servicer to
retain its Servicing Fee and other amounts as provided in the Countrywide
Servicing Agreement. The Master Servicer shall, and (to the extent provided in
the Countrywide Servicing Agreement) shall cause the Servicer to, provide access
to information and documentation regarding the Mortgage Loans to the Trustee,
the Securities Administrator and their respective 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 the 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 the Servicer under this Agreement or the Countrywide
Servicing Agreement.
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Section 3.09. Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce
any obligation of the Servicer under the Countrywide Servicing Agreement 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
Countrywide Servicing Agreement. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
Countrywide 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 Mortgage Loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
(b) Pursuant to Section 4.01, any amounts collected by the
Servicer 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
Countrywide Servicing Agreement) shall be deposited into the Distribution
Account, subject to withdrawal pursuant to Section 4.03. Any cost incurred by
the Master Servicer or the 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 the
Servicer pursuant to Sections 4.01 and 4.03.
Section 3.10. Presentment of Claims and Collection of Proceeds(a) . The
Master Servicer shall (to the extent provided in the Countrywide Servicing
Agreement) cause the 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 the Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Distribution 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 the Servicer
(to the extent such action is prohibited under the Countrywide 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 such Master Servicer or the Servicer, would have been covered
thereunder. The Master Servicer shall use its best reasonable efforts to cause
the Servicer (to the extent required under the Countrywide 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
Countrywide Servicing Agreement, as applicable. The Master Servicer shall
54
not, and shall not permit the Servicer (to the extent required under the
Countrywide 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 Countrywide Servicing
Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause the
Servicer (to the extent required under the Countrywide 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. Any
amounts collected by the Master Servicer or the Servicer under any Primary
Mortgage Insurance Policies shall be deposited in the Distribution 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 the Servicer (to the extent required under the Countrywide
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 Countrywide Servicing Agreement.
Section 3.14. Compensation for the Servicer and the Master Servicer(a)
.. The Master Servicer will be entitled to all income and gain realized from any
investment of funds in the Distribution Account from the Servicer Remittance
Date in each calendar month to the related Distribution Date (the "Master
Servicing Compensation"). Servicing compensation in the form of assumption fees,
if any, late payment charges, as collected, if any, or otherwise (including any
prepayment premium or penalty) shall be retained by the 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 the Servicer in
connection with a Principal Prepayment in full or otherwise in excess of amounts
required to be remitted to the Distribution Account. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its
55
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
Countrywide Servicing Agreement, cause the Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the Countrywide Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
Servicer to protect and conserve such REO Property in the manner and to the
extent required by the Countrywide 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" 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
Countrywide Servicing Agreement, cause the 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 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 Countrywide Servicing
Agreement, the Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the 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 Distribution 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,
2006, an Officer's Certificate, certifying that with respect to the year 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
56
status thereof, and (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that the Servicer has failed
to perform any of its duties, responsibilities and obligations under the
Countrywide 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(a) . 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, 2006, 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 by the Master Servicer to
any Certificateholder upon request, 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.
(a) 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 in any 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, 2006 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
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with a copy of the annual independent accountant's servicing report and annual
statement of compliance of the Servicer, in each case, required to be delivered
pursuant to the Countrywide Servicing Agreement, and, if applicable, the annual
statement of compliance and the annual independent accountant's servicing report
to be delivered by the Master Servicer pursuant to Sections 3.16 and 3.17. Prior
to (i) March 31, 2006, 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").
(b) The Master Servicer shall indemnify and hold harmless
the Depositor, the Trustee and their respective officers, directors and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach of the Master Servicer's
obligations under this Section 3.18 or the Master Servicer's negligence, bad
faith or willful misconduct in connection therewith. Fees and expenses incurred
by the Master Servicer in connection with this Section 3.18 shall not be
reimbursable from the Trust Fund.
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Section 3.19. EMC. On the Closing Date, EMC 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 Fiscal Quarter is
delinquent in payment by 90 days or more or is an REO Property, EMC 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 Fiscal 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 Fiscal Quarter.
In addition, EMC shall, at its option, purchase any Mortgage Loan from
the Trust if the first Due Date for such Mortgage Loan is subsequent to the
Cut-off Date, and the initial Monthly Payment with respect to such Mortgage Loan
is not made within thirty (30) days of such Due Date. Such purchase shall be
made at a price equal to the Repurchase Price.
If at any time EMC remits to the Paying Agent a payment for deposit in
the Distribution Account covering the amount of the Repurchase Price for such a
Mortgage Loan, and EMC provides to the Trustee and the Master Servicer a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Distribution Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of EMC, without
recourse, to EMC which shall succeed to all 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.
EMC will thereupon own such Mortgage Loan, and all such security and documents,
free of any further obligation to the Trustee or the Certificateholders with
respect thereto.
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Article IV
Accounts
Section 4.01. Protected Accounts.
(a) The Master Servicer shall enforce the obligation of the
Servicer to establish and maintain a Protected Account in accordance with
the Countrywide Servicing Agreement, with records to be kept with respect
thereto on a Mortgage Loan by Mortgage Loan basis, into which Protected Account
shall be deposited, within 48 hours (or as of such other time specified in the
Countrywide Servicing Agreement) of receipt thereof, all collections of
principal and interest on any Mortgage Loan and with respect to any REO Property
received by the Servicer, including Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds, and advances made from the Servicer's own funds (less
servicing compensation as permitted by the Countrywide Servicing Agreement) and
all other amounts to be deposited in the Protected Account. The Servicer is
hereby authorized to make withdrawals from and deposits to the Protected Account
for purposes required or permitted by this Agreement. To the extent provided in
the Countrywide Servicing Agreement, the Protected Account shall be held in a
Designated Depository Institution and segregated as a trust account on the books
of such institution in the name of the Trustee for the benefit of
Certificateholders.
(b) To the extent provided in the Countrywide Servicing
Agreement, amounts on deposit in the 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 to mature, or to be
subject to redemption or withdrawal, no later than the date on which such funds
are required to be withdrawn for deposit in the Distribution 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 Servicer
under the Countrywide 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 Servicer. The Servicer (to
the extent provided in the Countrywide 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 Countrywide Servicing
Agreement and subject to this Article IV, on or before each Servicer Remittance
Date, the Master Servicer shall (if acting as a successor servicer to the
Servicer), or shall cause the Servicer to, withdraw or shall cause to be
withdrawn from the Protected Account, and shall immediately deposit or cause to
be deposited in the Distribution 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
Mortgage Loan serviced by it:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Servicer pursuant to the
Countrywide
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Servicing Agreement which were due on or before the related Due
Date, net of the amount thereof comprising the related 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 the Servicer with respect to such Mortgage Loans in
the related Prepayment Period (or, in the case of Subsequent
Recoveries, during the related Due Period), with interest to the
date of prepayment or liquidation, net of the amount thereof
comprising the related Servicing Fee and Prepayment Charges;
(iii) Partial Principal Prepayments received by the Servicer
for such Mortgage Loans in the related Prepayment Period;
(iv) All funds collected and received in connection with the
operation of any REO Property, and Liquidation Proceeds received
upon the final disposition of any REO Property (net of any
unreimbursed Monthly Advances, other advances of the Servicer or
Master Servicer with respect thereto, and unpaid Servicing Fees
with respect thereto); and
(v) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from a Protected Account only to
make remittances as provided in Section 4.01(c); to reimburse the Master
Servicer or the Servicer for Monthly Advances which have been recovered by
subsequent collection 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 Section 4.01(c),
certain amounts otherwise due to the Servicer may be retained by the Servicer
and need not be deposited in the Distribution Account.
Section 4.02. Distribution Account.
(a) The Paying Agent shall establish and maintain in the
name of the Paying Agent, for the benefit of the Certificateholders, the
Distribution Account as a segregated trust account or accounts. On the Closing
Date, the Depositor shall deposit the Deposit Amount into the Distribution
Account.
(b) All amounts deposited to the Distribution Account shall be
held by the Paying Agent in the name of the Paying Agent 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 Paying Agent. The Distribution
Account shall be an Eligible Account. 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,
the Paying Agent, the Securities Administrator or the Master Servicer
(whether made directly, or indirectly through a liquidator or receiver of the
Trustee, the Paying Agent, the Securities Administrator or the Master Servicer).
The amount at any time credited to the
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Distribution Account shall, if invested, be invested in the name of the Trustee,
in such Permitted Investments selected by the 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 Date if the obligor
for such Permitted Investment is the Paying Agent or, if such obligor is any
other Person, the Business Day preceding such Distribution Date. All investment
earnings from Permitted Investments in the Distribution Account 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
promptly remit the amount of the loss to the Paying Agent, who shall deposit
such amount in the Distribution Account. With respect to the Distribution
Account and the funds deposited therein, the Paying Agent 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 Paying Agent) as provided by 12 U.S.C. ss. 92a(e), and
applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.03. Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Paying Agent 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 the
Countrywide Servicing Agreement or this Agreement or as the Securities
Administrator has instructed hereunder for the following purposes:
(i) to reimburse the Master Servicer or the Servicer for any
Monthly Advance of its own funds or any advance of such Master
Servicer's or the Servicer's own funds, the right of the Master
Servicer or the 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 respecting which such Monthly
Advance or advance was made;
(ii) to reimburse the Master Servicer or the Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master
Servicer or the 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 the 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 the Servicer from Liquidation
Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to such Mortgage Loan; provided that
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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 (x)
of this Subsection 4.03(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 the 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 the Servicer would have
been entitled to receive under subclause (xi) of this Subsection
4.03(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 Servicer from the Repurchase Price for any
Mortgage Loan, the amount which the Servicer would have been
entitled to receive under subclause (xi) of this Subsection
4.03(a) as servicing compensation;
(vi) to reimburse the Master Servicer or the Servicer for
advances of funds, and the right to reimbursement pursuant to
this subclause 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 the Servicer for
any Nonrecoverable Advance that 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 7.04 (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 the Servicer any such amounts as
are due thereto under the Countrywide Servicing Agreement and
have not been retained by or paid to the Servicer, to the extent
provided in the Countrywide Servicing Agreement;
(xii) to reimburse or pay the Trustee, the Securities
Administrator or the Custodian for fees, expenses, costs and
liabilities incurred by and reimbursable or payable to it
pursuant to this Agreement and not otherwise reimbursable or
payable to it;
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(xiii) to remove amounts deposited in error;
(xiv) to clear and terminate the Distribution Account
pursuant to Section 10.01; and
(xv) on the first Distribution Date, to withdraw an amount
equal to the Deposit Amount from the Distribution Account and
distribute such amount to the holders of the Class R-I, Class
R-II and Class R-III Certificates, pro rata, until their
respective Current Principal Amounts have been reduced to zero.
(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
subclauses (i) through (vii), inclusive, and (x).
(c) On each Distribution Date, the Paying Agent shall
distribute the Available Funds to the extent on deposit in the Distribution
Account to the Holders of the Certificates (other than the Residual
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.
Section 4.04. Distribution of Senior Carryover Shortfall Amount; Senior
Carryover Shortfall Reserve Fund.
(a) On the Closing Date, the Paying Agent shall establish
and maintain, in trust for the benefit of the holders of the Class A-1
Certificates and the Class A-4 Certificates, a segregated trust account or
sub-account of a trust account, which shall be titled "Senior Carryover
Shortfall Reserve Fund, Xxxxx Fargo Bank, N.A., as Paying Agent for the benefit
of holders of Structured Asset Mortgage Investments II Trust 2005-AR4, Mortgage
Pass-Through Certificates, Series 2005-AR4, Class A-1 and Class A-4" (the
"Senior Carryover Shortfall Reserve Fund"). The Paying Agent shall, promptly
upon receipt, deposit in the Senior Carryover Shortfall Reserve Fund an amount
equal to $5,000 to be remitted on the Closing Date to the Paying Agent by the
Depositor. On each Distribution Date, the Paying Agent shall transfer from the
Distribution Account to the Senior Carryover Shortfall Reserve Fund the amounts
specified pursuant to Section 6.01(a)(A). On each Distribution Date, to the
extent required, the Paying Agent shall make withdrawals from the Senior
Carryover Shortfall Reserve Fund and use the amounts in the Senior Carryover
Shortfall Reserve Fund to make distributions pro rata to the Class A-1
Certificates and the Class A-4 Certificates, in an amount equal to the amount of
any Senior Carryover Shortfall Amount on such Certificates, pursuant to Section
6.01(a)(C). Any such amounts transferred shall be treated for federal tax
purposes as amounts distributed by REMIC III to the Class X-1 Certificateholders
as transferee thereof. For federal tax return and information reporting
purposes, the rights of the Holders of the Class A-1 Certificates and the Class
A-4 Certificates to receive such distributions shall be assigned a value
determined by the Depositor and reported by it to the Securities Administrator.
(b) The Senior Carryover Shortfall Reserve Fund shall be
an Eligible Account. Amounts held in the
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Senior Carryover Shortfall Reserve Fund from time to time shall continue to
constitute assets of the Trust Fund, but not of the REMICs, until released from
the Senior Carryover Shortfall Reserve Fund pursuant to this Section 4.04 and
Section 6.01(a)(C). The Senior Carryover Shortfall Reserve Fund constitutes an
"outside reserve fund" within the meaning of Treasury Regulation ss. 1.860G-2(h)
and is not an asset of the REMICs. The Class X-1 Certificateholders shall be the
owners of the Senior Carryover Shortfall Reserve Fund, and for all federal tax
purposes, amounts transferred by the REMICs to the Senior Carryover Shortfall
Reserve Fund shall be treated as amounts distributed by the REMICs to the Class
X-1 Certificateholders. The Paying Agent shall keep records that accurately
reflect the funds on deposit in the Senior Carryover Shortfall Reserve Fund.
(c) The Paying Agent will invest funds deposited in the
Senior Carryover Shortfall Reserve Fund as directed by the Class X-1
Certificateholders in writing in Permitted Investments with a maturity date (i)
no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from the Senior Carryover Shortfall Reserve
Fund pursuant to this Agreement, if a Person other than the Paying Agent or an
Affiliate of the Paying Agent manages or advises such Permitted Investment, or
(ii) no later than the date on which such funds are required to be withdrawn
from the Senior Carryover Shortfall Reserve Fund pursuant to this Agreement, if
the Paying Agent or an Affiliate of the Paying Agent manages or advises such
Permitted Investment. If no written direction with respect to such Permitted
Investment shall be received by the Paying Agent from the Class X-1
Certificateholders, then funds in the Senior Carryover Shortfall Reserve Fund
shall remain uninvested. All income and gain realized from investment of funds
deposited in the Senior Carryover Shortfall Reserve Fund shall be for the sole
and exclusive benefit of the Class X-1 Certificateholders and shall be remitted
by the Paying Agent to the Class X-1 Certificateholders no later than the first
Business Day following receipt of such income and gain by the Paying Agent. The
Class X-1 Certificateholders shall deposit in the Senior Carryover Shortfall
Reserve Fund the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss, without any
right of reimbursement therefor.
Section 4.05. Distribution of Subordinate Carryover Shortfall Amount;
Subordinate Carryover Shortfall Reserve Fund.
(a) On the Closing Date, the Paying Agent shall establish
and maintain in its name, in trust for the benefit of Class X-0, Xxxxx X-0,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates, a segregated trust account or
sub-account of a trust account, which shall be titled "Subordinate Carryover
Shortfall Reserve Fund, Xxxxx Fargo Bank, N.A., as Paying Agent for the benefit
of holders of Structured Asset Mortgage Investments II Trust 2005-AR4, Mortgage
Pass-Through Certificates, Series 2005-AR4, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6" (the "Subordinate Carryover Shortfall Reserve Fund").
The Paying Agent shall, promptly upon receipt, deposit in the Subordinate
Carryover Shortfall Reserve Fund an amount equal to $5,000 to be remitted on the
Closing Date to the Paying Agent by the Depositor. On each Distribution Date,
the Paying Agent shall transfer from the Distribution Account to the Subordinate
Carryover Shortfall Reserve Fund the amounts specified pursuant to Section
6.01(a)(D). On each Distribution Date, to the extent required, the Paying Agent
shall make withdrawals from the Subordinate Carryover Shortfall Reserve Fund and
use the amounts in the Subordinate Carryover Shortfall Reserve Fund to make
distributions sequentially to the Class M-1, Class M-2, Class M-3, Class M-4,
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Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates, in an amount equal to the amount of any Subordinate
Carryover Shortfall Amount on such Certificates, pursuant to Section 6.01(a)(D).
Any such amounts transferred shall be treated for federal tax purposes as
amounts distributed by REMIC III to the Class M-X Certificateholders as
transferee thereof. For federal tax return and information reporting purposes,
the rights of the Holders of the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates to receive such distributions shall be assigned a value
determined by the Depositor and reported by it to the Securities Administrator.
(b) The Subordinate Carryover Shortfall Reserve Fund shall be
an Eligible Account. Amounts held in the Subordinate Carryover Shortfall Reserve
Fund from time to time shall continue to constitute assets of the Trust Fund,
but not of the REMICs, until released from the Subordinate Carryover Shortfall
Reserve Fund pursuant to this Section 4.05 and Section 6.01(a)(D). The
Subordinate Carryover Shortfall Reserve Fund constitutes an "outside reserve
fund" within the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an
asset of the REMICs. The Class M-X Certificateholders shall be the owners of the
Subordinate Carryover Shortfall Reserve Fund, and for all federal tax purposes,
amounts transferred by the REMICs to the Subordinate Carryover Shortfall Reserve
Fund shall be treated as amounts distributed by the REMICs to the Class M-X
Certificateholders. The Paying Agent shall keep records that accurately reflect
the funds on deposit in the Subordinate Carryover Shortfall Reserve Fund.
(c) The Paying Agent will invest funds deposited in the
Subordinate Carryover Shortfall Reserve Fund as directed by the Class M-X
Certificateholders in writing in Permitted Investments with a maturity date (i)
no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from the Subordinate Carryover Shortfall
Reserve Fund pursuant to this Agreement, if a Person other than the Paying Agent
or an Affiliate of the Paying Agent manages or advises such Permitted
Investment, or (ii) no later than the date on which such funds are required to
be withdrawn from the Subordinate Carryover Shortfall Reserve Fund pursuant to
this Agreement, if the Paying Agent or an Affiliate of the Paying Agent manages
or advises such Permitted Investment. If no written direction with respect to
such Permitted Investment shall be received by the Paying Agent from the Class
M-X Certificateholders, then funds in the Subordinate Carryover Shortfall
Reserve Fund shall remain uninvested. All income and gain realized from
investment of funds deposited in the Subordinate Carryover Shortfall Reserve
Fund shall be for the sole and exclusive benefit of the Class M-X
Certificateholders and shall be remitted by the Paying Agent to the Class M-X
Certificateholders no later than the first Business Day following receipt of
such income and gain by the Paying Agent. The Class M-X Certificateholders shall
deposit in the Subordinate Carryover Shortfall Reserve Fund the amount of any
net loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss, without any right of reimbursement therefor.
Section 4.06. The Yield Maintenance Account and the Yield Maintenance
Agreement.
The Trustee is hereby directed to execute the Yield Maintenance
Agreement on behalf of the Trust Fund. Amounts payable by the Trust Fund on the
Closing Date pursuant to the Yield Maintenance Agreement shall be paid by the
Seller. The Trustee in its individual capacity shall
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have no responsibility for any of the undertakings, agreements or
representations with respect to the Yield Maintenance Agreement, including,
without limitation, for making any payments thereunder.
The Paying Agent shall establish and maintain in the name of the Paying
Agent, for the benefit of the Class A-1 Certificateholders, the Class A-4
Certificateholders, the Class M Certificateholders and the Class B
Certificateholders, the Yield Maintenance Account as a segregated trust account.
The Yield Maintenance Account constitutes an "outside reserve fund" within the
meaning of Treasury Regulation ss. 1.860G-2(h) and is not an asset of the
REMICs. The Class X-1 Certificateholders shall be the owners of the Yield
Maintenance Account, and for all federal tax purposes, amounts transferred by
the REMICs to the Yield Maintenance Account shall be treated as amounts
distributed by the REMICs to the Class X-1 Certificateholders. The Paying Agent
shall keep records that accurately reflect the funds on deposit in the Yield
Maintenance Account.
The Paying Agent will invest funds deposited in the Yield Maintenance
Account as directed by the Class X-1 Certificateholders in writing in Permitted
Investments with a maturity date (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from the
Yield Maintenance Account pursuant to this Agreement, if a Person other than the
Paying Agent or an Affiliate of the Paying Agent manages or advises such
Permitted Investment, or (ii) no later than the date on which such funds are
required to be withdrawn from the Yield Maintenance Account pursuant to this
Agreement, if the Paying Agent or an Affiliate of the Paying Agent manages or
advises such Permitted Investment. If no written direction with respect to such
Permitted Investment shall be received by the Paying Agent from the Class X-1
Certificateholders, then funds in the Yield Maintenance Account shall remain
uninvested. All income and gain realized from investment of funds deposited in
the Yield Maintenance Account shall be for the sole and exclusive benefit of the
Class X-1 Certificateholders and shall be remitted by the Paying Agent to the
Class X-1 Certificateholders no later than the first Business Day following
receipt of such income and gain by the Paying Agent. The Class X-1
Certificateholders shall deposit in the Yield Maintenance Account their pro rata
share of the amount of any net loss incurred in respect of any such Permitted
Investment immediately upon realization of such loss, without any right of
reimbursement therefor.
Any Yield Maintenance Payments made by the Yield Maintenance Provider
pursuant to the Yield Maintenance Agreement with respect to a Distribution Date
shall be deposited by the Paying Agent into the Yield Maintenance Account and
distributed by the Paying Agent on the related Distribution Date to the Class
A-1 Certificateholders and the Class A-4 Certificateholders, on a pro rata
basis, and thereafter to the Class M Certificateholders and the Class B
Certificateholders, sequentially in the order of their payment priority, in an
amount equal to the lesser of the respective Class of Certificates' pro rata
share of (1) the amount of such Yield Maintenance Payment made with respect to
such Distribution Date, and (2) the Accrued Certificate Interest that the
related Class of Certificates would have been entitled to receive on such
Distribution Date had the applicable per annum Pass-Through Rate on such Class
of Certificates been calculated at One-Month LIBOR for the related Distribution
Date plus the related Margin for the related Interest Accrual Period, to the
extent that such Accrued Certificate Interest was not otherwise paid from the
Available Funds on such Distribution Date to the related Class of Certificates.
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Section 4.07. Class A-1 Supplemental Fund.
(a) No later than the Closing Date, the Securities Administrator
shall establish and maintain, in trust for the benefit of the holders of the
Class A-1 Certificates, a segregated trust account or sub-account of a trust
account, which shall be titled "Class A-1 Supplemental Fund, Xxxxx Fargo Bank,
N.A., as Paying Agent for the benefit of holders of Structured Asset Mortgage
Investments II Trust 2005-AR4, Mortgage Pass-Through Certificates, Series
2005-AR4, Class A-1" (the "Class A-1 Supplemental Fund"). The Class A-1
Supplemental Fund shall be an Eligible Account or a sub-account of an Eligible
Account. On the Closing Date, the Depositor shall pay to the Securities
Administrator an amount equal to $400,000.00 which shall be deposited by the
Securities Administrator into the Class A-1 Supplemental Fund. Pursuant to
Section 6.01, on the initial Distribution Date, amounts on deposit in the Class
A-1 Supplemental Fund will be withdrawn from the Class A-1 Supplemental Fund and
paid to the Class A-1 Certificates to the extent that Accrued Certificate
Interest on the Class A-1 Certificates on the initial Distribution Date is
reduced by application of the related Net Rate Cap on such initial Distribution
Date. Following the deposit on a Distribution Date (if and as applicable) into
the Senior Carryover Shortfall Reserve Fund, from the Available Funds otherwise
payable as interest on the Class X-1 Certificates, of any Senior Carryover
Shortfall Amounts relating to the Class A-1 Certificates and the Class A-4
Certificates and such Distribution Date, the Class A-1 Supplemental Fund will be
entitled to be replenished on each future Distribution Date from the Available
Funds otherwise payable as interest on such Distribution Date to the Class X-1
Certificates, until the Class A-1 Supplemental Fund has been replenished to the
extent of the amount paid from the Class A-1 Supplemental Fund on the initial
Distribution Date. On each Distribution Date, all amounts deposited into the
Class A-1 Supplemental Fund as set forth in the preceding sentence will be
distributed to the Depositor or its designee. On the Distribution Date on which
the Class A-1 Supplemental Fund has been replenished in full, all amounts then
on deposit in the Class A-1 Supplemental Fund will (as set forth in the
preceding sentence) be distributed to the Depositor or its designee, and
following such distribution the Class I-A Supplemental Fund will be terminated.
(b) The Securities Administrator will invest funds deposited in
the Class A-1 Supplemental Fund as directed by the Depositor or its designee in
writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from the Class A-1 Supplemental Fund pursuant to this Agreement, if
a Person other than the Securities Administrator or an Affiliate of the
Securities Administrator is the obligor for such Permitted Investment, or (ii)
no later than the date on which such funds are required to be withdrawn from the
Class A-1 Supplemental Fund pursuant to this Agreement, if the Securities
Administrator or an affiliate of the Securities Administrator is the obligor for
such Permitted Investment (or, if no written direction is received by the
Securities Administrator from the Depositor, then funds in the Class A-1
Supplemental Fund shall remain uninvested). For federal income tax purposes, the
Depositor shall be the owner of the Class A-1 Supplemental Fund and shall report
all items of income, deduction, gain or loss arising therefrom. At no time will
the Class A-1 Supplemental Fund be an asset of any REMIC created hereunder. All
income and gain realized from investment of funds deposited in the Class A-1
Supplemental Fund, which investment shall be made solely upon the written
direction of the Depositor, shall be for the sole and exclusive benefit of the
Depositor and shall be remitted by the Securities Administrator to the Depositor
within one Business Day after the termination of
68
the Class A-1 Supplemental Fund. The Depositor shall deposit in the Class A-1
Supplemental Fund the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss, without any
right of reimbursement therefor.
Section 4.08. Class A-2 Supplemental Fund.
(a) No later than the Closing Date, the Securities
Administrator shall establish and maintain, in trust for the benefit of the
holders of the Class A-2 Certificates, a segregated trust account or sub-account
of a trust account, which shall be titled "Class A-2 Supplemental Fund, Xxxxx
Fargo Bank, N.A., as Securities Administrator for the benefit of holders of
Structured Asset Mortgage Investments II Trust 2005-AR4, Mortgage Pass-Through
Certificates, Series 2005-AR4, Class A-2" (the "Class A-2 Supplemental Fund").
The Class A-2 Supplemental Fund shall be an Eligible Account or a sub-account of
an Eligible Account. On the Closing Date, the Depositor shall pay to the
Securities Administrator an amount equal to $515,000.00 which shall be deposited
by the Securities Administrator into the Class A-2 Supplemental Fund. Pursuant
to Section 6.01, on each Distribution Date occurring on or prior to November 25,
2005, amounts on deposit in the Class A-2 Supplemental Fund will be withdrawn
from the Class A-2 Supplemental Fund and paid to the Class A-2 Certificates to
the extent that Accrued Certificate Interest on the Class A-2 Certificates on
each Distribution Date occurring on or prior to November 25, 2005 is reduced by
application of the Net Rate Cap on such Distribution Date. Any amounts remaining
in the Class A-2 Supplemental Fund after distributions are made from such fund
on November 25, 2005 will be distributed to the Depositor or its designee on the
immediately following Distribution Date, and following such distribution the
Class A-2 Supplemental Fund will be terminated.
(b) The Securities Administrator will invest funds deposited in
the Class A-2 Supplemental Fund as directed by the Depositor or its designee
in writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from the Class A-2 Supplemental Fund pursuant to this Agreement, if
a Person other than the Securities Administrator or an Affiliate of the
Securities Administrator is the obligor for such Permitted Investment, or (ii)
no later than the date on which such funds are required to be withdrawn from the
Class A-2 Supplemental Fund pursuant to this Agreement, if the Securities
Administrator or an affiliate of the Securities Administrator is the obligor for
such Permitted Investment (or, if no written direction is received by the
Securities Administrator from the Depositor, then funds in the Class A-2
Supplemental Fund shall remain uninvested). For federal income tax purposes, the
Depositor shall be the owner of the Class A-2 Supplemental Fund and shall report
all items of income, deduction, gain or loss arising therefrom. At no time will
the Class A-2 Supplemental Fund be an asset of any REMIC created hereunder. All
income and gain realized from investment of funds deposited in the Class A-2
Supplemental Fund, which investment shall be made solely upon the written
direction of the Depositor, shall be for the sole and exclusive benefit of the
Depositor and shall be remitted by the Securities Administrator to the Depositor
within one Business Day after the termination of the Class A-2 Supplemental
Fund. The Depositor shall deposit in the Class A-2 Supplemental Fund the amount
of any net loss incurred in respect of any such Permitted Investment immediately
upon realization of such loss, without any right of reimbursement therefor.
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Article V
Certificates
Section 5.01. Certificates.
(a) The Depository and the Depositor 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 Subsection 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 Certificate Registrar 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 Certificate
Registrar, as agent of the Depositor, 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 Certificate Registrar, as agent of the
Depositor, 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 Certificate Registrar cause such Class
to become Global Certificates, the Certificate Registrar and the Depositor will
take such action as may be reasonably required to cause the Depository to accept
such Class or Classes of Certificates 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 Certificate Registrar in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository and (B) the Certificate Registrar or the
Depositor is unable to locate a qualified successor within 30 days or (ii) the
Depositor at its option advises the Certificate Registrar, as agent of the
Depositor, in writing that it elects to terminate the book-entry system through
the Depository, the Certificate Registrar, as agent of the Depositor, 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
Certificate Registrar, as agent of the Depositor, of the Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Certificate Registrar shall issue the definitive Certificates.
70
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 Certificate Registrar 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 Certificate Registrar, as
agent of the Depositor, of instructions from the Depository directing the
Certificate Registrar to effect such exchange (such instructions to contain
information regarding the Class of Certificates and the Current Principal
Balance or Notional Amount, as applicable, being exchanged, the registered
holder of and delivery instructions for the definitive Certificate, and any
other information reasonably required by the Certificate Registrar), (i) the
Certificate Registrar 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 (ii) the Certificate Registrar shall execute a new Book-Entry
Certificate reflecting the reduction in the aggregate Current Principal Balance
or Notional Amount, as applicable, of such Class of Certificates by the amount
of the definitive Certificates.
Neither the Depositor nor the Certificate Registrar 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) REMIC I will be evidenced by (x) the REMIC I Regular
Interests (designated below), which will be uncertificated and non-transferable
and are hereby designated as the "regular interests" in REMIC I and have the
principal balances and accrue interest at the Pass-Through Rates equal to those
set forth in this Section 5.01(c)(i) and (y) the Class R-I Certificates, which
are hereby designated as the single "residual interest" in REMIC I.
The REMIC I Regular Interests and the Class R-I Certificate will have
the following designations, initial balances and pass-through rates:
REMIC I Interest Initial Balance Pass-Through Rate
A-1 $492,085,000 (1)
A-2 $200,000,000 (1)
A-3 $115,000,000 (1)
A-4 $20,295,000 (1)
LT-R $50 N/A
M-1 $13,646.000 (1)
M-2 $11,826,000 (1)
M-3 $7,278,000 (1)
M-4 $6,823,000 (1)
M-5 $5,913.000 (1)
M-6 $5,458,000 (1)
B-1 $4,549,000 (1)
B-2 $4,094,000 (1)
B-3 $2,274,000 (1)
B-4 $7,733.000 (1)
B-5 $7,278,000 (1)
B-6 $5,456,325 (1)
R-I $50 N/A
71
(1) The weighted average of the Net Rates of the Mortgage Loans (as of the
second preceding Due Date) as adjusted (to the extent applicable) to an
effective rate reflecting the accrual of interest on an 30/360 basis (24 day
delay), weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.
Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC I Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.
(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)(ii) and (y) the Class R-II Certificate,
which is hereby designated as the single "residual interest" in
REMIC II.
The REMIC II Regular Interests and the Class R-II Certificate will have
the following designations, initial balances and pass-through rates:
================================================================================
REMIC II Interest Initial Balance Pass-Through
Rate
--------------------------------------------------------------------------------
A-1 $492,085,000 (1)
A-2 $200,000,000 (1)
A-3 $115,000,000 (1)
A-4 $20,295,000 (1)
MT-R $50 N/A
M-1 $13,646.000 (1)
M-2 $11,826,000 (1)
M-3 $7,278,000 (1)
M-4 $6,823,000 (1)
M-5 $5,913.000 (1)
M-6 $5,458,000 (1)
B-1 $4,549,000 (1)
B-2 $4,094,000 (1)
B-3 $2,274,000 (1)
B-4 $7,733.000 (1)
B-5 $7,278,000 (1)
B-6 $5,456,325 (1)
R-II $50 N/A
================================================================================
(1) The weighted average of the Net Rates of the Mortgage Loans (as of
the second preceding Due Date) as adjusted (to the extent applicable) to an
effective rate reflecting the accrual of interest on an actual/360 basis,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC II Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.
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(iii) The Classes of the Certificates shall have the
following designations, initial principal amounts and
Pass-Through Rates:
Designation Initial Principal/ Pass-Through Rate
Notional Amount
A-1 $492,085,000 (1)
A-2 $200,000,000 (2)
A-3 $115,000,000 (3)
A-4 $20,295,000 (4)
X-1 $512,838,000 (5)
X-2 $315,000,000 (6)
M-X $82,328,325 (7)
R-I $50 (8)
R-II $50 (8)
R-III $50 (8)
M-1 $13,646,000 (9)
M-2 $11,826,000 (10)
M-3 $7,278,000 (11)
M-4 $6,823,000 (12)
M-5 $5,913,000 (13)
M-6 $5,458,000 (14)
B-1 $4,549,000 (15)
B-2 $4,094,000 (16)
B-3 $2,274,000 (17)
B-4 $7,733,000 (18)
B-5 $7,278,000 (18)
B-6 $5,456,325 (18)
(1) The Class A-1 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.310%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date), as adjusted
to an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted on the basis of the respective Scheduled Principal Balances of each
such Mortgage Loan as of the beginning of the Due Period immediately preceding
the related Distribution Date; provided that, on such Distribution Dates, for
federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of the
Mortgage Loans expressed as the weighted average of the Pass-Through Rate on
REMIC II Regular Interest A-1, weighted on the basis of the Uncertificated
Principal Balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate for the Class A-1 Certificates
with respect to the first Interest Accrual Period is 3.800% per annum, which
includes amounts payable from the Class A-1 Supplemental Fund.
(2) The Class A-2 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the lesser of (i) One-Year MTA plus a margin
initially equal to 2.300% and (ii) the weighted average of the Net Rates of the
Mortgage Loans (as of the second preceding Due Date), weighted on the basis of
the respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date;
provided that, on such Distribution Dates, for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of the Mortgage Loans expressed as the
weighted average of the Pass-Through Rate on REMIC II Regular Interest A-2,
weighted on the basis of the Uncertificated Principal Balance of such REMIC II
Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate for the Class A-2 Certificates with respect to the first
Interest Accrual Period is 5.037% per annum, which includes amounts payable from
the Class A-2 Supplemental Fund.
73
(3) The Class A-3 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the lesser of (i) One-Year MTA plus a margin
initially equal to 1.400% and (ii) the weighted average of the Net Rates of the
Mortgage Loans (as of the second preceding Due Date), weighted on the basis of
the respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date;
provided that, on such Distribution Dates, for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of the Mortgage Loans expressed as the
weighted average of the Pass-Through Rate on REMIC II Regular Interest A-3,
weighted on the basis of the Uncertificated Principal Balance of such REMIC II
Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate for the Class A-3 Certificates with respect to the first
Interest Accrual Period is 4.137% per annum.
(4) The Class A-4 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.430%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date), weighted on
the basis of the respective Scheduled Principal Balances of each such Mortgage
Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date, as adjusted to an effective rate reflecting the accrual of
interest on an actual/360 basis; provided that, on such Distribution Dates, for
federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of the
Mortgage Loans expressed as the weighted average of the Pass-Through Rate on
REMIC II Regular Interest A-4, weighted on the basis of the Uncertificated
Principal Balance of such REMIC II Regular Interest immediately preceding the
related Distribution Date. The Pass-Through Rate for the Class A-4 Certificates
with respect to the first Interest Accrual Period is 3.920% per annum.
(5) The Class X-1 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the greater of (i) zero and (ii) the excess of
(x) the weighted average of the Net Rates of the Mortgage Loans (as of the
second preceding Due Date), over (y) the weighted average of the Pass-Through
Rates on the Class A-1 Certificates and the Class A-4 Certificates, based on a
Notional Amount equal to the sum of the aggregate Current Principal Amount of
the Class A-1 Certificates and the Class A-4 Certificates and the Current
Principal Amount of the principal component of the Class X-1 Certificates and
calculated on the basis of a year of 360 days with twelve 30-day months. The
amount of interest payable to the Class X-1 Certificates on a Distribution Date
will be reduced by any amounts necessary to fund the Senior Carryover Shortfall
Reserve Fund on such Distribution Date to pay any Senior Carryover Shortfall
Amounts relating to such Distribution Date and the Class A-1 Certificates and
the Class A-4 Certificates, and, until the date that the Class A-1 Supplemental
Fund is terminated, will also be reduced by any amounts necessary to replenish
the Class A-1 Supplemental Fund on the related Distribution Date to the extent
of the amount paid from the Class A-1 Supplemental Fund on the initial
Distribution Date, in the manner and the priority set forth in this Agreement.
The initial principal balance of the principal component of the Class
X-1 Certificates equals zero. In the event that interest accrued on the Notional
Amount of the Class X-1 Certificates is reduced as a result of the allocation of
Net Deferred Interest on the Mortgage Loans, the principal balance on the
principal component of the Class X-1 Certificates will increase by the amount of
such reduction.
Interest will not accrue on the principal component of the Class X-1
Certificates. Principal will not be payable on the Notional Amount of the Class
X-1 Certificates.
(6) The Class X-2 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the greater of (i) zero and (ii) the excess of
(x) the weighted average of the Net Rates of the Mortgage Loans (as of the
second preceding Due Date), over (y) the weighted average of the Pass-Through
Rates on the Class A-2 Certificates and the Class A-3 Certificates, based on a
Notional Amount equal to the sum of the aggregate Current Principal Amount of
the Class A-2 Certificates and the Class A-3 Certificates and the Current
Principal Amount of the principal component of the Class X-2 Certificates and
calculated on the basis of a year of 360 days with twelve 30-day months.
The initial principal balance of the principal component of the Class
X-2 Certificates equals zero. In the event that interest accrued on the Notional
Amount of the Class X-2 Certificates is reduced as a result of the
74
allocation of Net Deferred Interest on the Mortgage Loans, the principal balance
on the principal component of the Class X-2 Certificates will increase by the
amount of such reduction.
Interest will not accrue on the principal component of the Class X-2
Certificates. Principal will not be payable on the Notional Amount of the Class
X-2 Certificates.
(7) The Class M-X Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the greater of (i) zero and (ii) the excess of
(x) the weighted average of the Net Rates of the Mortgage Loans (as of the
second preceding Due Date), over (y) the weighted average of the Pass-Through
Rates on the Class M Certificates and the Class B Certificates, based on a
Notional Amount equal to the sum of the aggregate Current Principal Amount of
the Class M Certificates and the Class B Certificates and the Current Principal
Amount of the principal component of the Class M-X Certificates and calculated
on the basis of a year of 360 days with twelve 30-day months. The amount of
interest payable to the Class M-X Certificates on a Distribution Date will be
reduced by any amounts necessary to fund the Subordinate Carryover Shortfall
Reserve Fund on such Distribution Date to pay any Subordinate Carryover
Shortfall Amounts relating to such Distribution Date and the Class M
Certificates and the Class B Certificates, in the manner and the priority set
forth in this Agreement.
The initial principal balance of the principal component of the Class
M-X Certificates equals zero. In the event that interest accrued on the Notional
Amount of the Class M-X Certificates is reduced as a result of the allocation of
Net Deferred Interest on the Mortgage Loans, the principal balance on the
principal component of the Class M-X Certificates will increase by the amount of
such reduction.
Interest will not accrue on the principal component of the Class M-X
Certificates. Principal will not be payable on the Notional Amount of the Class
M-X Certificates.
(8) The Class R-I, Class R-II and Class R-III Certificates do not have
a Pass-Through Rate and will not bear interest.
(9) The Class M-1 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.530%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date) as adjusted to
an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans the aggregate Current Principal Amount
of the Senior Certificates (other than the Residual Certificates) immediately
prior to the related Distribution Date; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, with the weighted average of the Net Rates of the Mortgage Loans
expressed as the weighted average of the Pass-Through Rates on REMIC II Regular
Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5 and B-6,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
II Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate for the Class M-1 Certificates with respect to the first
Interest Accrual Period is 4.020% per annum.
(10) The Class M-2 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.580%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date) as adjusted to
an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans the aggregate Current Principal Amount
of the Senior Certificates (other than the Residual Certificates) immediately
prior to the related Distribution Date; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, with the weighted average of the Net Rates of the Mortgage Loans
expressed as the weighted average of the Pass-Through Rates on REMIC II Regular
Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5 and B-6,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
II Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate for the Class M-2 Certificates with respect to the first
Interest Accrual Period is 4.070% per annum.
(11) The Class M-3 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.630%, (ii) 10.50% and (iii) the weighted
75
average of the Net Rates of the Mortgage Loans (as of the second preceding Due
Date) as adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted in proportion to the results of subtracting from the
aggregate principal balance of the Mortgage Loans the aggregate Current
Principal Amount of the Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date; provided that
for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of the
Mortgage Loans expressed as the weighted average of the Pass-Through Rates on
REMIC II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class M-3 Certificates with respect to the
first Interest Accrual Period is 4.120% per annum.
(12) The Class M-4 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.750%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date) as adjusted to
an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans the aggregate Current Principal Amount
of the Senior Certificates (other than the Residual Certificates) immediately
prior to the related Distribution Date; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, with the weighted average of the Net Rates of the Mortgage Loans
expressed as the weighted average of the Pass-Through Rates on REMIC II Regular
Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5 and B-6,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
II Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate for the Class M-4 Certificates with respect to the first
Interest Accrual Period is 4.240% per annum.
(13) The Class M-5 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.770%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date) as adjusted to
an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans the aggregate Current Principal Amount
of the Senior Certificates (other than the Residual Certificates) immediately
prior to the related Distribution Date; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, with the weighted average of the Net Rates of the Mortgage Loans
expressed as the weighted average of the Pass-Through Rates on REMIC II Regular
Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5 and B-6,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
II Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate for the Class M-5 Certificates with respect to the first
Interest Accrual Period is 4.260% per annum.
(14) The Class M-6 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.820%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date) as adjusted to
an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans the aggregate Current Principal Amount
of the Senior Certificates (other than the Residual Certificates) immediately
prior to the related Distribution Date; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, with the weighted average of the Net Rates of the Mortgage Loans
expressed as the weighted average of the Pass-Through Rates on REMIC II Regular
Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5 and B-6,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
II Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate for the Class M-6 Certificates with respect to the first
Interest Accrual Period is 4.310% per annum.
(15) The Class B-1 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 1.400%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date) as adjusted to
an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans the aggregate Current Principal Amount
of the Senior Certificates (other than the Residual Certificates) immediately
prior to the related Distribution Date; provided that
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for federal income tax purposes such Certificates will bear interest at a rate
equivalent to the foregoing, with the weighted average of the Net Rates of the
Mortgage Loans, expressed as the weighted average of the Pass-Through Rates on
REMIC II Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5
and B-6, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate for the Class B-1 Certificates with respect to the
first Interest Accrual Period is 4.890% per annum.
(16) The Class B-2 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 1.550%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date) as adjusted to
an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans the aggregate Current Principal Amount
of the Senior Certificates (other than the Residual Certificates) immediately
prior to the related Distribution Date; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, with the weighted average of the Net Rates of the Mortgage Loans,
expressed as the weighted average of the Pass-Through Rates on REMIC II Regular
Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5 and B-6,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
II Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate with respect to the first Interest Accrual Period is 5.040%
per annum.
(17) The Class B-3 Certificates will bear interest at a variable per
annum Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 2.100%, (ii) 10.50% and (iii) the weighted average of the Net
Rates of the Mortgage Loans (as of the second preceding Due Date) as adjusted to
an effective rate reflecting the accrual of interest on an actual/360 basis,
weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans the aggregate Current Principal Amount
of the Senior Certificates (other than the Residual Certificates) immediately
prior to the related Distribution Date; provided that for federal income tax
purposes such Certificates will bear interest at a rate equivalent to the
foregoing, with the weighted average of the Net Rates of the Mortgage Loans,
expressed as the weighted average of the Pass-Through Rate on REMIC II Regular
Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5 and B-6,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
II Regular Interest immediately preceding the related Distribution Date. The
Pass-Through Rate with respect to the first Interest Accrual Period is 5.590%
per annum.
(18) The Class B-4, Class B-5 and Class B-6 Certificates will bear
interest at a variable per annum Pass-Through Rate equal to the least of (i)
One-Month LIBOR plus a margin initially equal to 2.150%, (ii) 10.50% and (iii)
the weighted average of the Net Rates of the Mortgage Loans (as of the second
preceding Due Date) as adjusted to an effective rate reflecting the accrual of
interest on an actual/360 basis, weighted in proportion to the results of
subtracting from the aggregate principal balance of the Mortgage Loans the
aggregate Current Principal Amount of the Senior Certificates (other than the
Residual Certificates) immediately prior to the related Distribution Date;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rates on REMIC II Regular Interests X-0, X-0, X-0,
X-0, X-0, X-0, X-0, X-0, B-3, B-4, B-5 and B-6, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate for
the Class B-4, Class B-5 and Class B-6 Certificates with respect to the first
Interest Accrual Period is 5.640% per annum. STOP
(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 I
Regular Interests, REMIC II Regular Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of
Certificates (other than the Residual Certificates) shall accrue interest during
the related Interest Accrual Period.
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With respect to each Distribution Date and each such Class of Certificates
(other than the Residual Certificates, the Class A-2 Certificates, the Class A-3
Certificates and the Class X Certificates), interest shall be calculated on the
basis of a 360-day year and the actual number of days elapsed in the related
Interest Accrual Period, and with respect to each Distribution Date and the
Class A-2 Certificates, the Class A-3 Certificates and the Class X Certificates,
interest is calculated on the basis of a 360-day year consisting of twelve 30
day months, based upon the respective Pass-Through Rate set forth, or determined
as provided, above and the Current Principal Amount (or Notional Amount, in the
case of the Class X Certificates) of such Class of Certificates applicable to
such Distribution Date. The Residual Certificates do not have a Pass-Through
Rate and shall not bear interest.
(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, and the Certificate Registrar shall countersign and deliver the
Certificates at the direction of the Depositor. Pending the preparation of
definitive Certificates of any Class, the Trustee may sign and the Certificate
Registrar may 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 Certificate Registrar Office, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and the Certificate Registrar shall 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 or Notional
Amount, as the case may be, of such Class of Certificates on the Closing Date.
On the Closing Date, the Trustee shall execute, and the Certificate
Registrar shall countersign, Physical Certificates all in an aggregate principal
amount that shall equal the Current Principal Amount or Notional Amount, as the
case may be, of such Class of Certificates 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 such Class may be issued in
a different amount so that
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the sum of the denominations of all outstanding Private Certificates of such
Class shall equal the Current Principal Amount or Notional Amount, as the case
may be, of such Class of Certificates on the Closing Date. The Residual
Certificates shall each be issued in certificated fully-registered form in the
denomination of $50, $50 and $50, respectively. 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 or Notional Amount, as the case may be,
of such Class of Certificates on the Closing Date.
On the Closing Date, the Trustee shall execute and the Certificate
Registrar shall countersign (i) in the case of each Class of Offered
Certificates, the Certificate in the entire Current Principal Amount or Notional
Amount, as the case may be, of the respective Class of Certificates and (ii) in
the case of each Class of Private Certificates, Individual Certificates all in
an aggregate principal amount or notional amount, as the case may be, that shall
equal the Current Principal Amount or Notional Amount, as the case may be, of
each such respective Class of Certificates 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 the Certificate Registrar shall 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 and the
Certificate Registrar or its agent, as applicable. A Certificate bearing the
manual and facsimile signatures of individuals who were the authorized
signatories of the Trustee or its agent or the Certificate Registrar or its
agent, as applicable, at the time of issuance shall bind the Trustee and the
Certificate Registrar, 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 Certificate Registrar
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 REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each 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
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.
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(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:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL
ADDRESSED TO THE TRUSTEE, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER AND THE
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE
TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT
RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER
APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART
OF THE DEPOSITOR, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR OR THE TRUSTEE.
The following legend shall be placed upon the Private Certificates,
whether upon original issuance or upon issuance of any other Certificate of any
such Class In exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED
TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
EXEMPTION ("PTCE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II)
WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE OR UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS
PROVIDED.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall maintain at its
Certificate Registrar Office a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided.
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(b) Subject to Subsection 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 Certificate Registrar maintained for
such purpose, the Trustee shall sign, and the Certificate Registrar shall
countersign and 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 an Individual Certificate, whether
upon original issuance or subsequent transfer, each holder of such a 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 Subsection 5.02(h), the
following restrictions shall apply with respect to the transfer and registration
of transfer of an Individual Certificate to a transferee that takes delivery in
the form of an Individual Certificate:
(i) The Certificate Registrar shall register the transfer of
an Individual Certificate if the requested transfer is being made
to a transferee who has provided the Certificate Registrar with a
Rule 144A Certificate or comparable evidence as to its QIB
status.
(ii) The Certificate Registrar shall register the transfer
of any Individual Certificate if (x) the transferor has advised
the Certificate Registrar in writing that the Certificate is
being transferred to an Institutional Accredited Investor, and
(y) prior to the transfer the transferee furnishes to the
Certificate Registrar an Investment Letter (and the Certificate
Registrar shall be fully protected in so doing), provided that,
if based upon an Opinion of Counsel 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
Certificate Registrar 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) Subject to Subsection 5.02(h), 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 this Subsection 5.02(d) and in
accordance with the rules of the Depository:
(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
Certificate Registrar shall register such transfer only upon
compliance with the provisions of Subsection 5.02(c)(ii).
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(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
Certificate Registrar shall register such transfer only upon
compliance with the provisions of Subsection 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 Certificate Registrar 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 Subsection 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 this Subsection 5.02(e) and
in accordance with the rules of the Depository:
(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 Certificate Registrar 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 Certificate Registrar 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
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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
Certificate Registrar 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) above or any integral multiple of $1.00 in excess thereof) by
surrendering such Certificate at the Certificate Registrar 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 Certificate Registrar 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 Certificate Registrar (as agent of the Depositor) 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 Certificate Registrar shall, within five Business Days of such
request made at such the Certificate Registrar Office, sign, countersign and
deliver at the Certificate Registrar 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
Certificate Registrar 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 any such office or agency; 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
83
Trustee shall sign and the Certificate Registrar shall countersign and deliver
the Certificates which the Certificateholder making the exchange is entitled to
receive.
(j) If the Certificate Registrar 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 Certificate Registrar, 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 Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(l) The Certificate Registrar 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 Exchange Act, 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
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Certificate Registrar, the Master Servicer, the
Securities Administrator and the Trustee such security or indemnity as it may
require to save it harmless, and (iii) the Certificate Registrar has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign and the Certificate Registrar shall 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 Certificate
Registrar 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 Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Certificate Registrar) 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 Paying Agent, the
Certificate Registrar, the Trustee and any agent of the Depositor, the Paying
Agent, the Certificate Registrar, 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 Paying Agent, the Certificate
Registrar the Trustee nor any agent of the Depositor, the Paying Agent, the
Certificate Registrar or the Trustee shall be affected by notice to the
contrary. No Certificate shall be deemed duly presented for a transfer
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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 Depositor. As a prerequisite to such consent, the proposed
transferee must provide the Tax Matters Person, the Depositor, the Certificate
Registrar and the Trustee with an affidavit that the proposed transferee is a
Permitted Transferee (and, unless the Tax Matters Person and the Depositor
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 Subsection 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 Certificate Registrar, 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 Subsection 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 Subsection 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 Certificate Registrar, 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 Subsection
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
Subsection 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 Subsection 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.
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(c) Unless the Tax Matters Person and the Depositor shall have
consented in writing (which consent may be withheld in the Tax Matters
Person's or the Depositor'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, 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 Certificate Registrar an
Investment Letter, if the transferee is an Institutional Accredited Investor, in
the form set forth as Exhibit F-1 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 Certificate Registrar may require an Opinion of Counsel
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. The Trustee and the Securities Administrator shall comply with the
requirements of Treasury Regulations xx.xx. 1.860D-1(b)(5) and 1.860E-2(a)(5)
with respect to the furnishing of information.
Section 5.07. ERISA Restrictions.
(a) Subject to the provisions of Subsection 5.07(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 which
is subject to Title I of ERISA and/or Section 4975 of the Code, unless the
proposed transferee provides either (i) the Trustee, the Certificate Registrar,
the Master Servicer and the Securities Administrator with an Opinion of Counsel
satisfactory to the Trustee, the Certificate Registrar, the Master Servicer and
the Securities Administrator, 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 the assets of the Trust being
deemed to be "plan assets" subject to the prohibited transaction provisions of
ERISA or Section 4975 of the Code, will not result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Trustee, the Certificate Registrar, the Master Servicer, the
Depositor, the Servicer or the Securities Administrator to any obligation
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in addition to those undertaken in the Agreement or (ii) in the case of the
Class B-4, Class B-5 and Class B-6 Certificates, a representation or
certification to the Trustee and the Certificate Registrar (upon which each of
the Trustee and the Certificate Registrar is authorized to rely) to the effect
that the proposed transfer and/or holding of such a Certificate and the
servicing, management and operation of the Trust: (I) will not result in a
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
unless it is covered under an individual or class prohibited transaction
exemption, including but not limited to Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 84-14 (Class Exemption for Plan Asset
Transactions Determined by Independent Qualified Professional Asset Managers);
PTCE 91-38 (Class Exemption for Certain Transactions Involving Bank Collective
Investment Funds); PTCE 90-1 (Class Exemption for Certain Transactions Involving
Insurance Company Pooled Separate Accounts), PTCE 95-60 (Class Exemption for
Certain Transactions Involving Insurance Company General Accounts), and PTCE
96-23 (Class Exemption for Plan Asset Transactions Determined by In-House Asset
Managers), or Section 401(c) of ERISA and the regulations promulgated
thereunder; (II) will not constitute or result in the assets of the Trust being
deemed to be "plan assets" subject to the prohibited transaction provisions of
ERISA or Section 4975 of the Code; and (III) will not subject the Depositor, the
Certificate Registrar, the Securities Administrator, the Servicer, the Master
Servicer or the Trustee to any obligation in addition to those undertaken in the
Agreement.
(b) 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
interest therein, that either (i) it is not a Plan or investing with "Plan
Assets", (ii) it has acquired and is holding such Certificate in reliance on
Prohibited Transaction Exemption 97-34, as amended (the "Exemption"), and that
it understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch or Xxxxx'x
Investors Service, Inc., and the certificate is so rated 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 applicable conditions of PTCE 95-60 have been satisfied.
(c) 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 that, in the case of the Class B-4,
Class B-5 and Class B-6 Certificates, either: (i) it is not acquiring an
interest in such Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of ERISA and/or Section 4975 of the Code, or (ii) the transfer and/or holding
of an interest in such Certificate to that Person and the subsequent servicing,
management and/or operation of the Trust and its assets: (I) will not result in
any prohibited transaction unless it is covered under an individual or class
prohibited transaction exemption, including, but not limited to, XXXX 00-00,
XXXX 00-00, XXXX 00-0, XXXX 95-60 or PTCE 96-23, or Section 401(c) of ERISA and
the regulations promulgated thereunder; (II) will not constitute or result in
the assets of the Trust being deemed to be "plan assets" subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code; and
(III) will not subject the Depositor, the Certificate Registrar, the Securities
Administrator,
87
the Servicer, the Master Servicer or the Trustee to any obligation in addition
to those undertaken in the Agreement.
(d) Neither the Trustee, the Certificate Registrar, 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 or any Book-Entry Certificate. Any attempted
or purported transfer of any Certificate in violation of the provisions of
Subsections (a) or (b) 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 Certificate
Registrar, the Securities Administrator and the Master Servicer from and against
any and all liabilities, claims, costs or expenses incurred by the Trustee, the
Certificate Registrar, the Securities Administrator or the Master Servicer as a
result of such attempted or purported transfer. Neither the Trustee nor the
Certificate Registrar shall have any liability for transfer of any such Global
Certificates or any Book-Entry 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 Certificates are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) of the Securities Act: (1) the
Depositor will provide or cause to be provided to any holder of such
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 Depositor 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
Certificates conducted in accordance with Rule 144A.
Section 5.09. Appointment of Paying Agent and Certificate Registrar.
Xxxxx Fargo Bank, National Association, as Securities Administrator,
shall act as the initial Paying Agent and Certificate Registrar. Each of the
Paying Agent and the Certificate Registrar may resign upon thirty (30) days'
prior written notice to the Trustee; provided hereto that no such resignation
shall be effective until the appointment of a successor paying agent or
certificate registrar. In the event the Paying Agent and/or the Certificate
Registrar resigns or is removed by the Trustee for cause, the Trustee may
appoint a successor paying agent or certificate registrar, as applicable. The
Trustee shall cause such successor paying agent, if other than the Trustee or
the Master Servicer or the Securities Administrator, to execute and deliver to
the Trustee an instrument in which such paying agent shall agree with the
Trustee that such paying agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums have been paid to the Certificateholders.
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Article VI
Payments to Certificateholders
Section 6.01. Distributions on the Certificates.
(a) Interest and (as applicable) principal on the Certificates
(other than the Residual Certificates) will be distributed monthly on each
Distribution Date, commencing in August 2005, in an aggregate amount equal to
the Available Funds for such Distribution Date.
On the first Distribution Date, an amount equal to the Deposit Amount
shall be distributed to the Residual Certificates, pro rata, in reduction of
their Current Principal Amounts, until their respective Current Principal
Amounts are reduced to zero.
(A) On each Distribution Date, the Available Funds will be distributed
to the Senior Certificates (other than the Residual Certificates) as follows:
first, to the Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class X-1 Certificates
and the Class X-2 Certificates, the Accrued Certificate Interest on each such
Class of Certificates for such Distribution Date, pro rata, based on the Accrued
Certificate Interest owed to each such Class of Certificates; provided, however,
that the amount of Accrued Certificate Interest paid to the Class X-1
Certificates pursuant to this clause will be reduced by the aggregate amount of
any Senior Carryover Shortfall Amounts for that Distribution Date on the Class
A-1 Certificates, and the Class A-4 Certificates, which amount will be deposited
on such Distribution Date in the Senior Carryover Shortfall Reserve Fund for
distribution to the Class A-1 Certificates and the Class A-4 Certificates, as
set forth in subparagraph second below and in clause (B) below; and provided
further, that the amount of Accrued Certificate Interest paid to the Class X-1
Certificates pursuant to this clause on each Distribution Date will be reduced
by the amount necessary to replenish the Class A-1 Supplemental Fund (to the
extent of the amount paid from such fund on the initial Distribution Date) which
amounts will be deposited on such Distribution Date into the Class A-1
Supplemental Fund for distribution as set forth in Section 4.07. In addition,
Accrued Certificate Interest on the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class
X-1 Certificates and the Class X-2 Certificates is subject to reduction in the
event of certain Net Interest Shortfalls, the interest portion of Realized
Losses and Net Deferred Interest on the Mortgage Loans allocable thereto. Any
Net Interest Shortfalls and Net Deferred Interest on the Mortgage Loans shall be
allocated among the Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class X-1 Certificates
and the Class X-2 Certificates in accordance with the provisions of Section
6.02(g);
second, to the Class A-1 Certificates and the Class A-4 Certificates,
any Senior Carryover Shortfall Amounts due to each such Class of Certificates
(in accordance with Section 6.01(a)(C) below) to the extent such amount was
deducted from the Accrued Certificate Interest on the Class X-1 Certificates for
such Distribution Date;
89
third, to the extent of remaining Available Funds, to the Class A-1
Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class
A-4 Certificates, the Class X-1 Certificates and the Class X-2 Certificates, any
Accrued Certificate Interest thereon pursuant to clause first remaining
undistributed from previous Distribution Dates (other than, with respect to the
Class X-1 Certificates, any amounts pursuant to clause first deposited into the
Senior Carryover Shortfall Reserve Fund and the Class A-1 Supplemental Fund),
pro rata, based on the undistributed Accrued Certificate Interest owed to each
such Class of Certificates; and
fourth, to the extent of remaining Available Funds, to the Class A-1
Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class
A-4 Certificates and the principal components of the Class X-1 Certificates and
the Class X-2 Certificates, pro rata, in reduction of the respective Current
Principal Amount thereof, the remaining Senior Optimal Principal Amount for such
Distribution Date, until the respective Current Principal Amount of each such
Class of Certificates (or, with respect to the Class X-1 Certificates and the
Class X-2 Certificates, the Current Principal Amount of the principal component
of each such Class of Certificates) has been reduced to zero.
(B) On each Distribution Date on or prior to the Cross-Over Date, an
amount equal to the sum of the remaining Available Funds after the distributions
in paragraph (A) above will be distributed with respect to clause (d) below, to
the Class M-X Certificates, and will be distributed with respect to clauses (a),
(b), (c) and (e) below, sequentially, in the following order, to the Class M-X,
Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, 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) the Subordinate
Carryover Shortfall Amount due such class of Class M Certificates and Class B
Certificates (in accordance with Section 6.01(a)(D) below) to the extent such
amount was deducted from the Accrued Certificate Interest on the Class M-X
Certificates for such Distribution Date, (c) any Accrued Certificate Interest
thereon remaining undistributed from previous Distribution Dates, (d) in
reduction of the Current Principal Amount of the principal component of the
Class M-X Certificates, in an amount not to exceed the Subordinate Optimal
Principal Amount for such Distribution Date, until the Current Principal Amount
of the principal component of the Class M-X Certificates has been reduced to
zero and (e) such Class of Certificates' Allocable Share for such Distribution
Date, in each case, to the extent of the remaining Available Funds.
(C) On each Distribution Date, any amounts in the Senior Carryover
Shortfall Reserve Fund will be distributed to the Class A-1 Certificates and the
Class A-4 Certificates, pro rata based on unpaid Senior Carryover Shortfall
Amounts on each such Class of Certificates, up to an amount equal to any unpaid
Senior Carryover Shortfall Amounts with respect to the respective Classes of
Certificates.
(D) (a) On each Distribution Date, any amounts in the Subordinate
Carryover Shortfall Reserve Fund will be distributed sequentially to the Class
X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5 and Class B-6 certificates, up to an amount
equal to any unpaid Subordinate Carryover Shortfall Amounts with respect to such
Class or Classes of Certificates, to the extent of the amounts deducted from the
Accrued Certificate Interest on the Class M-X Certificates.
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(b) If, after distributions have been made pursuant to
priorities first, second and third of clause (A) above on any Distribution Date,
the remaining Available Funds are less than the Senior Optimal Principal Amount,
then such Senior Optimal Principal Amount shall be reduced, and such remaining
Available Funds will be distributed as principal to the Senior Certificates
(other than the Residual Certificates), pro rata, based on their respective
Current Principal Amount.
(c) "Pro rata" principal distributions among Classes of
Certificates will be made in proportion to the then Current Principal Amounts of
such Classes of Certificates. "Pro rata" interest distributions among Classes of
Certificates that bear interest on any Distribution Date will be made in
proportion to the Accrued Certificate Interest payable on such Distribution
Date.
(d) On each Distribution Date, any Available Funds remaining
after payment of interest and principal to the Classes of Certificates entitled
thereto, as described above, will be distributed to the Class R-III
Certificates; provided that if on any Distribution Date there are any Available
Funds 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 (other than the Residual Certificates), pro rata,
based upon their respective Current Principal Amount, until all amounts due to
all such Classes of Senior Certificates (other than the Residual Certificates)
have been paid in full, before any amounts are distributed to the Class R-III
Certificates.
(e) [Reserved.]
(f) No Accrued Certificate Interest will be payable with
respect to any Class or Classes of Certificates that bears interest after the
Distribution Date on which the Current Principal Amount of such Certificate or
Certificates or Notional Amount of such Certificate or Certificates has been
reduced to zero.
(g) If on any Distribution Date the Available Funds for
the Senior Certificates (other than the Residual Certificates) are less than the
Accrued Certificate Interest on the Senior Certificates for such Distribution
Date prior to reduction for Net Interest Shortfalls, Net Deferred Interest and
the interest portion of Realized Losses on the Mortgage Loans, then the
shortfall and any Net Deferred Interest will be allocated among the holders of
each Class of Senior Certificates (other than the Residual Certificates) in
proportion to the respective amounts of Accrued Certificate Interest for such
Distribution Date that would have been allocated thereto in the absence of such
Net Interest Shortfall, Net Deferred Interest and/or Realized Losses on the
Mortgage Loans for such Distribution Date. In addition, the amount of any
interest shortfalls (not including Interest Shortfalls) will constitute unpaid
Accrued Certificate Interest and will be distributable to holders of the
Certificates of the related Classes (other than the Residual Certificates)
entitled to such amounts on subsequent Distribution Dates, to the extent of the
Available Funds remaining after current interest distributions as required
herein. Any such amounts so carried forward will not bear interest. Any interest
shortfalls will not be offset by a reduction in the servicing compensation of
the Master Servicer, the Servicer or otherwise, except to the extent of
applicable Compensating Interest Payments.
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(h) The expenses and fees of the Trust shall be paid by each of
the REMICs, to the extent that such expenses relate to the assets of each of
such respective REMICs, and all other expenses and fees of the Trust shall be
paid pro rata by each of the REMICs.
Section 6.02. Allocation of Losses and Subsequent Recoveries.
(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.
(b) With respect to any Certificates (other than the
Residual Certificates) on any Distribution Date, the principal portion of each
Realized Loss on a Mortgage Loan 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-6 Certificates until the Current Principal
Amount thereof has been reduced to zero;
eighth, to the Class M-5 Certificates until the Current Principal
Amount thereof has been reduced to zero;
ninth, to the Class M-4 Certificates until the Current Principal Amount
thereof has been reduced to zero;
tenth, to the Class M-3 Certificates until the Current Principal Amount
thereof has been reduced to zero;
eleventh, to the Class M-2 Certificates until the Current Principal
Amount thereof has been reduced to zero;
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twelfth, to the Class M-1 Certificates until the Current Principal
Amount thereof has been reduced to zero; and
thirteenth, after the Cross-over Date, the principal portion of
Realized Losses on the Mortgage Loans will be allocated on any Distribution Date
after the Cross-Over Date, concurrently, to (A) the principal component of each
of the Class X-1 Certificates and the Class X-2 Certificates, pro rata, until
the Current Principal Amount of the principal component of each such respective
Class of Certificates has been reduced to zero, (B) the Class A-2 Certificates
and the Class A-1 Certificates, sequentially in that order, until the Current
Principal Amount of each such respective Class of Certificates has been reduced
to zero, and (C) the Class A-4 Certificates and the Class A-3 Certificates,
sequentially in that order, until the Current Principal Amount thereof has been
reduced to zero.
(c) Notwithstanding the foregoing clause (b), no reduction of the
Current Principal Amount of any Class of Subordinate Certificates shall be made
on any Distribution Date on account of Realized Losses on the Mortgage Loans to
the extent that such reduction would have the effect of reducing the aggregate
Current Principal Amount of all Certificates 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
during which such Distribution Date occurs (such limitation, the "Loss
Allocation Limitation").
(d) Within each Class of Certificates, the principal portion of
any Realized Losses on the Mortgage Loans will be allocated to each Certificate
pro rata based upon the respective Current Principal Amount of such Certificate.
The principal portion of any allocation of Realized Losses on the Mortgage Loans
shall be accomplished by reducing the Current Principal Amount of the
Certificates on the related Distribution Date.
(e) Realized Losses on the Mortgage Loans 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 Paying Agent of the Subordinate Certificate Writedown
Amount. Any such Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of (i) with respect to
the Subordinate Certificate Writedown Amount, if prior to the Cross-Over Date,
the Subordinate Certificates, in the reverse order of their payment priority and
(ii) from and after the Cross-Over Date, the Senior Certificates (other than the
Residual Certificates), which reduction shall occur on such Distribution Date
after giving effect to distributions made on such Distribution Date.
(g) (i) The Senior Percentage of any Prepayment Interest
Shortfalls and interest shortfalls resulting from the application of the Relief
Act or similar state law will be allocated among the Senior Certificates (other
than the Residual Certificates) in proportion to the amount of Accrued
Certificate Interest that would have been allocated thereto in the absence of
such shortfalls. The Subordinate Percentage of any Prepayment Interest
Shortfalls and interest
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shortfalls resulting from the application of the Relief Act or similar state law
will be allocated sequentially to the Subordinate Certificates, beginning with
the Subordinate Certificates with the highest payment priority, in proportion to
the respective amounts of Accrued Certificate Interest that would have been
allocated thereto in the absence of such shortfalls. The principal portion of
any Realized Losses with respect to the Mortgage Loans occurring on or prior to
the Cross-Over Date will not be allocated among any Senior Certificates, but
will reduce the amount of Available Funds available for distribution on the
related Distribution Date. As a result of the subordination of the Subordinate
Certificates in right of distribution, such Realized Losses on the Mortgage
Loans will be borne by the Subordinate Certificates in inverse order of their
payment priority. Following the Cross-Over Date, the principal portion of
Realized Losses on the Mortgage Loans will be allocated as set forth in Section
6.02(b) above.
(ii) The principal portion of Debt Service Reductions will
not be allocated in reduction of the Current Principal Amount of
any Class of Certificates. However, after the Cross-over Date,
the amounts distributable to the Senior Certificates (other than
the Residual Certificates) under clause (1) of the definition of
Senior Optimal Principal Amount for the Senior Certificates
(other than the Residual Certificates) and distributable to the
Subordinate Certificates under clause (1) of the definition of
Subordinate Optimal Principal Amount will be reduced by the
amount of any Debt Service Reductions applicable to the Mortgage
Loans. Regardless of when they occur, Debt Service Reductions may
reduce the amount of Available Funds that would otherwise be
available for distribution on a Distribution Date. As a result of
the subordination of the Subordinate Certificates in right of
distribution to the Senior Certificates, any Debt Service
Reductions relating to the Mortgage Loans prior to the Cross-over
Date will be borne by the Subordinate Certificates (to the extent
then outstanding) in inverse order of their respective payment
priority.
(iii) In addition, in the event that the Paying Agent
receives any Subsequent Recoveries on the Mortgage Loans from the
Servicer, the Paying Agent shall deposit such funds into the
Distribution Account pursuant to Section 4.01(c)(ii). If, after
taking into account such Subsequent Recoveries on the Mortgage
Loans, the amount of a Realized Loss on a Mortgage Loan is
reduced, the amount of such Subsequent Recoveries will be applied
to increase the Current Principal Amount of the Class or Classes
of Subordinate Certificates with the highest payment priority, to
which Realized Losses on the Mortgage Loans have been allocated,
but not by more than the amount of Realized Losses on the
Mortgage Loans previously allocated to that Class or Classes of
Subordinate Certificates pursuant to Section 6.02. The amount of
any Subsequent Recoveries on the Mortgage Loans following the
application set forth in the immediately preceding sentence 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 on the Mortgage Loans
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 Accrued Certificate
Interest on the amount of such increases for any Interest Accrual
Period preceding the
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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 of Certificates, in
accordance with its respective Fractional Undivided Interest.
Section 6.03. Payments.
(a) On each Distribution Date, other than the final Distribution
Date, the Paying Agent shall distribute, to the extent of funds then on deposit
in the Distribution Account, to each Certificateholder of record on the directly
preceding Record Date (other than each Certificateholder of record of the
Residual Certificates) the Certificateholder's pro rata share of its Class of
Certificates (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 of Certificates, based on information provided
to the Securities Administrator by the Master Servicer. The Securities
Administrator shall calculate the amount to be distributed to each Class of
Certificates 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. The
Securities Administrator shall not 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 Paying
Agent 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 Paying Agent specified in the notice to
Certificateholders of such final payment.
Section 6.04. Statements to Certificateholders.
(a) 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, in the case of the
Class X Certificates, a Notional Amount of $1,000, or in the case of the
Residual Certificates, an initial Current Principal Amount of $50:
(i) the Current Principal Amount or Notional Amount, as
applicable, 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;
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(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) any Carryover Shortfall, any Carryover Shortfall
Amounts, 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
(other than the Residual Certificates);
(v) the amount of the distribution allocable to interest on
each Class of Certificates that bears interest;
(vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;
(vii) the Current Principal Amount or Notional 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 Trustee included in such distribution;
(ix) the aggregate amount of any Realized Losses on the
Mortgage Loans (listed separately for each category of Realized
Loss) and Subsequent Recoveries on the Mortgage Loans 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, (a) the loan
number, (b) the Scheduled Principal Balance of such Mortgage Loan
as of the Cut-off Date, (c) the Scheduled Principal Balance of
such Mortgage Loan as of the beginning of the related Due Period,
(d) the Net Liquidation Proceeds with respect to such Mortgage
Loan and (e) the amount of the Realized Loss with respect to such
Mortgage Loan;
(xi) 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;
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(xii) the number of Mortgage Loans (excluding REO Property)
remaining in the Trust Fund as of the end of the related
Prepayment Period;
(xiii) information 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 day of the
immediately preceding month;
(xiv) 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) 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 related Mortgage Loan and (B) accrued
interest through the date of foreclosure, minus (C) foreclosure
expenses) of any REO Property; 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 on the Mortgage Loans
allocated to each Class of Certificates (other than the Residual
Certificates) since the prior Distribution Date and in the
aggregate for all prior Distribution Dates;
(xviii) the Average Loss Severity Percentage;
(xix) the then applicable Senior Percentage, Senior
Prepayment Percentage, Subordinate Percentage and Subordinate
Prepayment Percentage; and
(xx) the amount of any Subsequent Recovery on the Mortgage
Loans for such Distribution Date, and the amount by which the
Current Principal Amount of each Class of Subordinate
Certificates was increased as a result thereof.
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
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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) By March 31 of each year beginning in 2006, 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 advise
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
pursuant to the requirements of the Code.
Section 6.05. Monthly Advances. Pursuant to the Countrywide
Servicing Agreement, the Servicer will make Monthly Advances. Each such Monthly
Advance shall be remitted to the Distribution Account no later than 1:00 p.m.
Eastern time on the Distribution Account Deposit Date in immediately available
funds. Subject to the Master Servicer's recoverability determination, in the
event that the Servicer fails to make a required Monthly Advance, the Master
Servicer shall be required to remit the amount of such Monthly Advance to the
Distribution Account. The Master Servicer shall be obligated to make any such
Monthly Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it has
made a Nonrecoverable Advance or that a proposed Monthly Advance or a lesser
portion of such Monthly Advance would constitute a Nonrecoverable Advance, on
the related Distribution Account Deposit Date the Master Servicer shall deliver
(i) to the Paying Agent for the benefit of the Certificateholders funds
constituting the remaining portion of such Monthly Advance, if applicable, and
(ii) to the Trustee an Officer's Certificate setting forth the basis for such
determination.
The Master Servicer and the Servicer shall be entitled to be reimbursed
from the Distribution Account for all Monthly Advances of its own funds made
pursuant to this Section as provided in Section 4.03. The obligation to make
Monthly Advances with respect to any Mortgage Loan shall continue until such
Mortgage Loan is paid in full or the related Mortgaged Property or related REO
Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trust Fund pursuant to any applicable provision
of this Agreement, except as otherwise provided in this Section 6.05.
Subject to and in accordance with the provisions of Article VIII
hereof, in the event the Master Servicer fails to make such Monthly Advance,
then the Trustee, as the successor Master
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Servicer, shall be obligated to make such Monthly Advance, subject to the
provisions of this Section 6.05.
Section 6.06. Compensating Interest Payments. Upon timely notice
by the Securities Administrator, the Master Servicer shall deposit in the
Distribution Account not later than each Distribution Account Deposit Date an
amount equal to the lesser of (i) the sum of the amounts required to be paid by
the Servicer under the Countrywide Servicing Agreement 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
Servicer and (ii) the Master Servicing 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.
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Article VII
The Master Servicer
Section 7.01. Liabilities of the Master Servicer(a) . 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 Custodian 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 or the Certificates (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 Indemnified Person
shall have given the Master Servicer and the Depositor written notice thereof
promptly after the Indemnified Person shall have, with respect to such claim or
legal action, knowledge thereof. The Indemnified Person's failure to give such
notice shall not affect the Indemnified Person's right to indemnification
hereunder, except to the extent that the Master Servicer is materially
prejudiced by such failure to give notice. This indemnity shall survive the
resignation or removal of the Trustee, the Master Servicer, the Custodian or the
Securities Administrator and the termination of this Agreement.
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(b) 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 Subsection (a) above.
(c) The Securities Administrator agrees to indemnify the
Indemnified Persons (other than the Securities Administrator) for, and to hold
them harmless against, any loss, liability or expense (including reasonable
legal fees and disbursements of counsel) incurred on their part (i) in
connection with, arising out of, or relating to the Securities Administrator's
failure to prepare and file a Form 10-K in accordance with Section 3.18, (ii) by
reason of the Securities Administrator's willful misfeasance, bad faith or gross
negligence in the performance of its obligations pursuant to Section 3.18 or
(iii) by reason of the Securities Administrator's reckless disregard of its
obligations pursuant to Section 3.18 (including, without limitation, in respect
of any powers of attorney furnished to the Securities Administrator), provided,
in each case, that with respect to any such claim or legal action (or pending or
threatened claim or legal action), an Indemnified Person shall have given the
Securities Administrator written notice thereof promptly after such Indemnified
Person shall have knowledge with respect to such claim or legal action. The
Indemnified Person's failure to give such notice shall not affect the
Indemnified Person's right to indemnification hereunder. This indemnity shall
survive the resignation or removal of the Trustee, the Master Servicer or the
Securities Administrator and the termination of this Agreement.
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 the Countrywide
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
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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
Distribution Account as provided by Section 4.03. Nothing in this Subsection
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.
(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 the 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 to such effect delivered to the Trustee. No such resignation
by the Master Servicer shall become effective until EMC 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, EMC or the Trustee may make such arrangements for the
compensation of such successor Master Servicer out of payments on the Mortgage
Loans as EMC 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
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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 EMC 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 or shall be an Affiliate of 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 and 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 delegating its rights and obligations hereunder shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
Counsel, 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 EMC, EMC 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 liability of the Master Servicer arising prior to the effective
date thereof.
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Article VIII
Default
Section 8.01. "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 deposit in the Distribution
Account any amount so required by it to be deposited pursuant to
this Agreement (other than any 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 (or, in the case of a breach of its obligation
to provide a Master Servicer Certification pursuant to Section
3.18, for a period of five days) after the date on which written
notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the 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; or
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(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, on the Distribution Date in the Distribution Account
any Monthly Advance (other than a Nonrecoverable Advance)
required to be made with respect to such Distribution 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
EMC, 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 such 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 and
to bankruptcy, insolvency or similar laws, if applicable, 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 hereunder. 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
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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 taken 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 EMC 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 all funds relating to the Mortgage Loans 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 Xxx- 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, of such Rating Agency on each of the Certificates will not
be downgraded, qualified or withdrawn 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, no such compensation shall be in
excess of that permitted the Trustee under this Subsection 8.02(a), 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.
(b) 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);
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the provisions of all other provisions of this Agreement and the respective
Servicing Agreements relating to the Master Servicer, including 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 known to the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. 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 of 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.
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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 by the Master Servicer; and 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 Paying Agent 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 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
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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; and
(vii) None of the Securities Administrator, EMC or the
Trustee shall be responsible for the acts or omissions of the
other, the Master Servicer or the Servicer, it being understood
that this Agreement shall not be construed to render them
partners, joint venturers or agents of one another.
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
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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 the Countrywide Servicing 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.
(a) All funds received by the Master Servicer, the Securities
Administrator and the Paying Agent and required to be deposited in the
Distribution Account, the Class A-1 Supplemental Fund, the Yield Maintenance
Account, the Senior Carryover Shortfall Reserve Fund and the Subordinate
Carryover Shortfall Reserve Fund, as the case may be, pursuant to this Agreement
will be promptly so deposited by the Master Servicer, the Securities
Administrator or the Paying Agent, as applicable.
(b) 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:
(i) 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 a Depositor, Master
Servicer or 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;
(ii) 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:
(iii) 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's Corporate Trust Office has
actual knowledge (which has not been cured or waived), subject to
Section 8.02(b), to exercise such of the rights and powers vested
in it by this
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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;
(iv) 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;
(v) 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;
(vi) 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 or delayed. 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;
(vii) Should the Trustee or the Securities Administrator
deem the nature of any action required on its part, other than a
payment or transfer under Subsection 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;
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(viii) 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, negligent failure to act or willful
misconduct in the performance of any such act;
(ix) 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 Subsection 9.07; and
(x) 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, 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 of the Trustee, and the countersignature of the Certificate Registrar,
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 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 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 or 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
required to be filed by the Trustee pursuant to Section 3.20.
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Section 9.04. Trustee and Securities Administrator May Own
Certificates.
Each of the Trustee and the Securities Administrator, in its individual
capacity 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 the 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. In addition, the
Trustee and the Securities Administrator will be entitled to recover from the
Distribution Account pursuant to Section 4.03 all reasonable out-of-pocket
expenses, disbursements and advances and the expenses of the Trustee and the
Securities Administrator, respectively, or any of their respective directors,
officers, employees or agents 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, or any of their respective directors,
officers, employees or agents 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
or their negligence, negligent failure to act or intentional misconduct or which
is the responsibility of the Certificateholders or the Trust Fund hereunder. If
funds in the Distribution 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, Paying Agent
and Securities Administrator.
The Trustee and any successor Trustee, the Paying Agent and any
successor Paying Agent 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,
successor Paying Agent 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, the Paying Agent or the Securities Administrator
shall cease to be eligible in accordance with the provisions of this
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Section 9.06, the Trustee, the Paying Agent or the Securities Administrator, as
applicable, shall resign immediately in the manner and with the effect specified
in Section 9.08.
Section 9.07. Insurance. The Trustee, the Paying Agent 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, the Paying Agent or the Securities
Administrator as to the Trustee's, the Paying Agent'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, and 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 (i) the Trustee, the Paying Agent 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, (ii) the Trustee, the Paying Agent or the Securities
Administrator shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee, the Paying Agent 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, the Paying Agent or
the Securities Administrator, as applicable, or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, or (iii)(A) a tax is
imposed with respect to the Trust Fund by any state in which the Trustee or the
Securities Administrator or the Trust Fund is located, and (B) the imposition of
such tax would be avoided by the appointment of a different trustee or
securities administrator, then the Depositor shall promptly remove the Trustee,
or shall be entitled to remove the Paying Agent or the Securities Administrator,
as applicable, and appoint a successor Trustee, Paying Agent or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Master Servicer, the Trustee,
the Paying Agent or Securities Administrator, as applicable, so removed, and the
successor Trustee, Paying Agent or Securities Administrator, as applicable.
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(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, the Paying Agent or the Securities Administrator and appoint a
successor Trustee, Paying Agent or Securities Administrator by written
instrument or instruments, in sextuplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, the Paying Agent, the Master Servicer, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator or the Paying Agent is removed), and the Trustee,
Paying Agent or Securities Administrator so removed and the successor so
appointed. Notice of any removal of the Trustee or the Securities Administrator
shall be given to each Rating Agency by the Master Servicer or the successor
trustee, or by the Securities Administrator or the successor securities
administrator, as applicable. In the event that the Trustee, the Paying Agent or
the 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,
successor Paying Agent or successor Securities Administrator, in excess of the
amount paid to the predecessor Trustee, predecessor Paying Agent or predecessor
Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee, the Paying Agent or
the Securities Administrator and appointment of a successor Trustee, Paying
Agent 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, Paying Agent or Securities
Administrator as provided in Section 9.09.
Section 9.09. Successor Trustee, Paying Agent and Successor
Securities Administrator.
(a) Any successor Trustee, Paying Agent or Securities
Administrator appointed as provided in Section 9.08 shall execute, acknowledge
and deliver to the Depositor and to its predecessor Trustee, Paying Agent or
Securities Administrator, as applicable, and the Master Servicer an instrument
accepting such appointment hereunder. The resignation or removal of the
predecessor Trustee, Paying Agent or Securities Administrator shall then become
effective and such successor Trustee, Paying Agent 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, Paying Agent or Securities
Administrator herein. The predecessor Trustee, Paying Agent or Securities
Administrator shall, after its receipt of payment of its outstanding fees and
expenses with respect hereunder, promptly deliver to the successor Trustee,
Paying Agent or Securities Administrator, as applicable, all assets and records
of the Trust held by it hereunder, and the Depositor and the predecessor
Trustee, Paying Agent 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, Paying Agent or Securities Administrator, as applicable, all such
rights, powers, duties and obligations.
(b) No successor Trustee, Paying Agent or Securities Administrator
shall accept appointment as provided in this Section 9.09 unless at the time of
such acceptance such successor Trustee, Paying Agent or Securities Administrator
shall be eligible under the provisions of Section 9.06.
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(c) Upon acceptance of appointment by a successor Trustee, Paying
Agent or Securities Administrator as provided in this Section 9.09, the
successor Trustee, Paying Agent or Securities Administrator shall mail notice of
the succession of such Trustee, Paying Agent or Securities Administrator
hereunder to all Certificateholders at their addresses as shown in the
Certificate Register and to the Rating Agencies. EMC shall pay the cost of any
such mailing by the successor Trustee, Paying Agent or Securities Administrator.
Section 9.10. Merger or Consolidation of Trustee, Paying Agent or
Securities Administrator. Any state bank or trust company or national banking
association into which the Trustee, the Paying Agent 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, the Paying
Agent 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, the Paying
Agent or the Securities Administrator, respectively, shall be the successor of
the Trustee, the Paying Agent 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 and for the
benefit of the Certificateholders 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 (except for the obligation of
the Trustee under this Agreement to advance funds on behalf of the Master
Servicer) and required to be conferred on such co-trustee shall be conferred
116
or imposed upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the 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, or 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 of
REMIC I, REMIC II and REMIC III shall be a calendar year and the Securities
Administrator shall maintain or cause the maintenance of the books of each such
REMIC on the accrual method of accounting.
(b) (i) 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 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,
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including, without limitation, reports relating to interest, original issue
discount and market discount or premium (using a constant prepayment assumption
of 25% CPR). The Securities Administrator shall 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, and updated versions thereof, as required, 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 REMIC. The
Trustee shall make elections to treat each REMIC hereunder as a REMIC (which
elections shall apply to the taxable period ending December 31, 2005 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe (and, if applicable, under applicable state and local
law), and as described by the Securities Administrator. The Trustee shall sign
all tax information returns filed pursuant to this Section 9.12 and any other
returns as may be required by the Code. The Holder of the largest percentage
interest of the Class R-I Certificate is hereby designated as the "Tax Matters
Person" (within the meaning of Treas. Reg. ss.1.860F-4(d)) for REMIC I, the
Holder of the largest percentage interest of the Class R-II Certificate is
hereby designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
ss. 1.860F-4(d)) for REMIC II, and the Holder of the largest percentage interest
of the Class R-III Certificate is hereby designated as the "Tax Matters Person"
(within the meaning of Treas. Reg. ss. 1.860F-4(d)) for REMIC III. 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 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, each of 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 for each REMIC, including
designation of the Holder of a Residual Certificate to sign such returns or act
as Tax Matters Person for each REMIC. Each Holder of a Residual Certificate
shall be bound by this Section.
(ii) The Securities Administrator shall, to the extent that
they are under its control, conduct matters relating to the
assets of any REMIC hereunder at all times that any Certificates
are outstanding so as to maintain its status as a REMIC under the
REMIC Provisions. The Securities Administrator shall not
knowingly or intentionally take any action or omit to take any
action that would cause the termination of the REMIC status of
any REMIC hereunder. The Securities Administrator shall not
permit the creation of any interests in REMIC III other than the
Certificates. The Securities Administrator shall not receive any
amount representing a fee or other compensation for services
(except as otherwise permitted by this Agreement). The Securities
Administrator shall not receive any income attributable to any
asset which is neither a "qualified mortgage" nor a "permitted
investment" within the meaning of the REMIC Provisions. The
Securities Administrator shall not receive any contributions to
any REMIC hereunder after the Startup Day that would be subject
to tax under Section 860G(d) of the Code. The Securities
Administrator shall not dispose of any assets
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of any REMIC hereunder at a gain if such disposition would be a
"prohibited transaction" within the meaning of Section 860F(a)(2)
of the Code. As agent of each Tax Matters Person, the Securities
Administrator shall, as and when necessary and appropriate,
represent the related REMIC in any administrative or judicial
proceedings relating to an examination or audit by any
governmental taxing authority, request an administrative
adjustment as to any taxable year of such REMIC, enter into
settlement agreements with any governmental taxing agency, extend
any statute of limitations relating to any tax item of such
REMIC, and otherwise act on behalf of such REMIC in relation to
any tax matter or controversy involving it.
(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, or 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) and otherwise shall comply with all of the requirements of Section
860E(e) of the Code.
(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 or 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 not be joint and several 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.
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Article X
Termination
Xxxxxxx 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx 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 Paying Agent, the Master
Servicer, EMC and the Securities Administrator created hereby, other than the
obligation of the Paying Agent to make payments to Certificateholders as
hereinafter set forth, shall terminate upon the earlier of:
(i) in accordance with Section 10.01(c), 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 (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 made by the
purchaser, together with interest at the applicable Mortgage
Interest Rate accrued but 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 Master
Servicer 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 Servicer and 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, (d) any costs and
damages incurred by the Trust and the Trustee in connection with
any violation of such Mortgage Loan of any predatory or abusive
lending laws and (e) any unreimbursed costs and expenses of the
Trustee, the Master Servicer and the Securities Administrator
payable pursuant to Section 9.05; or
(ii) the later of (A) 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 and (B) the
disposition of all property acquired upon foreclosure or
acceptance of a deed in lieu of foreclosure 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
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(iii) the payment to 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) The right of the Depositor or its designee to repurchase all
of the assets of the Trust Fund pursuant to Subsection 10.01(a)(i) above shall
be exercisable only if (i) the aggregate Scheduled Principal Balance of the
Mortgage Loans at the time of any such repurchase is 5% or less of the Cut-off
Date Balance, and related REO Property remaining in the Trust, or (ii) the
Depositor, based upon an Opinion of Counsel addressed to the Depositor, the
Trustee and the Securities Administrator, has determined that the REMIC status
of a REMIC hereunder 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 REMIC I, REMIC II or REMIC III at any time, and upon such election,
the Depositor or its designee shall repurchase all of the assets of the Trust
Fund as described in Subsection 10.01(a)(i) above.
(d) The Paying Agent 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 Paying Agent for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the 15th 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 Paying Agent
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 Paying Agent therein specified.
(e) If the option of the Depositor to repurchase or cause the
repurchase of all of the assets of the Trust Fund as described in Subsection
10.01 (a)(i) above is exercised, the Depositor and/or its designee shall deliver
to the Paying Agent for deposit in the Distribution Account, by the Business Day
prior to the applicable Distribution Date, an amount equal to the Termination
Purchase Price of the Mortgage Loans being repurchased on the related
Distribution Date. Upon presentation and surrender of the Certificates by the
Certificateholders, the Paying Agent 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 Senior Certificates (other than the Residual
Certificates) in full, any such deficiency will be
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allocated first, to the Subordinate Certificates, in inverse order of their
payment priority, and then to the Senior Certificates (other than the Residual
Certificates), in each case on a pro rata basis. Upon deposit of the required
repurchase price and following such final Distribution Date relating thereto,
the Trustee shall release promptly to the 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 Paying Agent's obligation
to hold any amounts payable to Certificateholders in trust without interest
pending final distributions pursuant to Subsection 10.01(f) and (g). After final
distributions pursuant to Section 10.01(f) and (g) to all Certificateholders,
any other amounts remaining in the Accounts will belong to the Depositor.
(f) Upon the presentation and surrender of the Certificates, the
Paying Agent 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.
(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 Paying Agent 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 Paying Agent 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 Subsection 10.01(a)(i) above is exercised, the Trust Fund and each
of REMIC I, REMIC II and REMIC III shall be terminated in accordance with the
following additional requirements, unless the Trustee has been furnished with an
Opinion of Counsel 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
REMIC I, REMIC II or REMIC III or (ii) cause any REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date, at
the written direction of the Depositor, the Trustee, as agent for
the respective Tax Matters Persons, shall adopt a plan of
complete liquidation of REMIC I, REMIC II and REMIC III provided
to it by the Depositor meeting 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
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(iii) at or after the time of adoption of such a plan of
complete liquidation of any of REMIC I, REMIC II and REMIC III
and at or prior to the final Distribution Date relating thereto,
the Trustee shall sell for cash all of the assets of the Trust to
or at the direction of the Depositor, and REMIC I, REMIC II and
REMIC III, as applicable, 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 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 REMIC. Upon complete liquidation or final
distribution of all of the assets of the Trust Fund, the Trust Fund and each of
REMIC I, REMIC II and REMIC III shall terminate.
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Article XI
Miscellaneous Provisions
Section 11.01. Intent of Parties. The parties intend that each of
REMIC I, REMIC II and REMIC III 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.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the Seller
to the Depositor, and by the Depositor to the Trust be, and be construed as, an
absolute sale thereof to the Depositor or the Trust, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the Trust.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York, (ii) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Seller or the
Depositor, as applicable, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired, (iii) the possession by the Trustee or the
Custodian of the Mortgage Notes and such other items of property as may be
perfected by possession pursuant to Section 9-313 (or comparable provision) of
the applicable Uniform Commercial Code shall be deemed to be "possession by the
secured party" for purposes of effecting the security interest pursuant to such
section of the applicable Uniform Commercial Code and other applicable law. Any
assignment of the Seller and the Depositor shall also be deemed to be an
assignment of any security interest created hereby.
Each of the Seller and the Depositor for the benefit of the
Certificateholders shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the assets of the Trust Fund, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Agreement.
Section 11.02. Amendment.
(a) This Agreement may be amended from time to time by EMC, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee,
and the Countrywide Servicing Agreement may be amended from time to time by EMC,
the Master Servicer and the Trustee, without notice to or the consent of any of
the Certificateholders, to (i) cure any ambiguity, (ii) conform the terms hereof
to the disclosure in the Prospectus or the Prospectus Supplement, (iii) correct
or supplement any provisions herein that may be defective or inconsistent with
any other provisions herein, (iv) comply with any changes in the Code or (v)
make any other provisions with respect to matters or questions arising under
this Agreement or the Countrywide Servicing Agreement which shall not be
inconsistent with the provisions of this
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Agreement; provided, however, that with regard 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 EMC,
the Master Servicer, the Depositor, the Securities Administrator and the
Trustee, and the Countrywide Servicing Agreement may also be amended from time
to time by the Master Servicer 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 of
Certificates, if such amendment affects only such Class or Classes of
Certificates, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or the Countrywide
Servicing 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 REMIC I, REMIC II or REMIC III to fail to qualify as
a REMIC for federal income tax purposes, as evidenced by an Opinion of
Independent Counsel 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 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 Subsection 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 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.
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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.
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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 Depositor, the Securities Administrator, 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 the
Trustee 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
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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 EMC Mortgage Xxxxxxxxxxx, XXX Mortgage Corporation, 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; (iv) in the case of the Master Servicer,
Paying Agent or Securities Administrator, Xxxxx Fargo Bank, National
Association, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 and for overnight delivery to
0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (Attention: XXXX XX 2005-AR4),
telecopier no.: (000) 000-0000, or such other address as may hereafter be
furnished to the other parties hereto in writing; (v) in the case of the
Certificate Registrar, the Certificate Registrar Office; or (vi) in the case of
the Rating Agencies, Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: Residential Mortgage Surveillance, or such other address as
may be furnished to the parties hereto in writing. Any notice delivered to the
Depositor, the Master Servicer, the Securities Administrator, EMC 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.
128
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 Trustee shall
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
(1) Any material change or amendment to this
Agreement or the Countrywide Servicing Agreement;
(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 Distribution
Account.
[Signature page follows]
129
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer,
the Securities Administrator and EMC Mortgage Corporation 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, N.A., as Trustee
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
` Name: Xxxxxx Xxxxxx
Title: Vice President
EMC MORTGAGE CORPORATION
By: /s/ Xxxxx Xxxx
-------------------------------------
Name: Xxxxx Xxxx
Title: Senior` Vice President
130
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, as Seller
By: /s/ Xxxxx Xxxx
----------------------------------
Name: Xxxxx Xxxx
Title: Senior Vice President
/s/ Xxxxxxx Xxxxxx
------------------------------
Notary Public
[Notarial Seal]
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 29th day of July 2005 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.
/s/ Xxxxxxxx Xxxxxxxx
------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 29th day of July 2005 before me, a notary public in and for said
State, personally appeared Xxxxx X. Xxxx, known to me to be an Assistant Vice
President of JPMorgan Chase Bank, N.A., the banking association that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said banking association, and acknowledged to me that such banking
association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxx
------------------------------
Notary Public
[Notarial Seal]
2
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 29th day of July 2005 before me, a notary public in and for said
State, personally appeared Xxxxx Xxxx, known to me to be a Senior 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.
/s/ Xxxxxxx Xxxxxx
------------------------------
Notary Public
[Notarial Seal]
3
STATE OF MARYLAND )
) ss.:
CITY OF BALTIMORE )
On the 29th day of July 2005 before me, a notary public in and for said
State, personally appeared Xxxxxx Xxxxxx, known to me to be a Vice President of
Xxxxx Fargo Bank, National Association, 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.
/s/Xxxxxx X. Xxxxxx
------------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
CITY OF BALTIMORE )
On the 29th day of July 2005 before me, a notary public in and for said
State, personally appeared Xxxxxx Xxxxxx, known to me to be a Vice President of
Xxxxx Fargo Bank, National Association, 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.
/s/Xxxxxx X. Xxxxxx
------------------------------
Notary Public
[Notarial Seal]
5
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 29th day of July 2005 before me, a notary public in and for said
State, personally appeared Xxxxx Xxxx, known to me to be a Senior 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.
/S/Xxxxxxx Xxxxxx
------------------------------
Notary Public
[Notarial Seal]
6
EXHIBIT A-1
FORM OF CLASS [__-A-__] [__-X] CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
[THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ON THE MORTGAGE LOANS AS SET
FORTH IN THE AGREEMENT (AS DEFINED BELOW).] [THE PRINCIPAL BALANCE OF THE
PRINCIPAL COMPONENT OF THIS CERTIFICATE WILL BE DECREASED TO THE EXTENT OF
DISTRIBUTIONS ALLOCABLE TO PRINCIPAL HEREON AND TO REALIZED LOSSES ALLOCABLE
HERETO. IN ADDITION, IN THE EVENT THAT INTEREST ACCRUED ON THE NOTIONAL AMOUNT
OF THIS CERTIFICATE IS REDUCED AS A RESULT OF THE ALLOCATION OF NET DEFERRED
INTEREST ON THE RELATED MORTGAGE LOANS, AS DESCRIBED IN THE AGREEMENT, THE
PRINCIPAL BALANCE OF THE PRINCIPAL COMPONENT OF THIS CERTIFICATE WILL INCREASE
BY THE AMOUNT OF SUCH REDUCTION.] ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF
THE CERTIFICATES, THE [CURRENT PRINCIPAL] [NOTIONAL] [AND PRINCIPAL BALANCE]
AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS [CURRENT PRINCIPAL]
[NOTIONAL] AMOUNT [AND PRINCIPAL BALANCE] BY INQUIRY OF XXXXX FARGO BANK,
NATIONAL ASSOCIATION, AS CERTIFICATE REGISTRAR (THE "CERTIFICATE REGISTRAR")
WITH RESPECT HERETO.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]
A-1-1
Certificate No.__ Pass-Through Rate: Variable
Class [__-A-__] [__-X] [Senior]
Date of Pooling and Servicing Agreement Aggregate Initial [Current Principal]
and Cut-off Date: [Notional] Amount of this Class of
June 1, 2005 Certificates as of the Cut-off Date:
$_______________
First Distribution Date: Initial [Current Principal] [Notional
July 25, 0000 Xxxxxx] of this Certificate as of the
Cut-off Date: $____________
[Initial Principal Balance of the
Principal Component of this Certifi-
cate as of the Cut-off Date: $0]
Master Servicer: CUSIP: 86359L____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
August 25, 2035
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-AR3
evidencing a fractional undivided interest in the
distributions allocable to the Class [__-A-__] [__-X]
Certificates with respect to a Trust Fund consisting primarily
of a pool of adjustable rate mortgage loans secured by first
liens on one- to four-family residential properties sold by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
A-1-2
This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of adjustable rate mortgage loans secured by
first lien on one- to four-family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc. ("XXXX
XX"). The Initial Mortgage Loans were sold on the Closing Date, and the
Subsequent Mortgage Loans will be sold on the related Subsequent Transfer Date,
by EMC Mortgage Corporation ("EMC") to XXXX XX. Xxxxx Fargo Bank, National
Association ("Xxxxx Fargo") will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among XXXX XX, as depositor (the "Depositor"), EMC Mortgage
Corporation, Xxxxx Fargo, as Master Servicer and securities administrator and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
[Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at the per annum Pass-Through Rate set forth in
the Agreement.]
[Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as defined below) occurs on the Notional
Amount hereof at a per-annum Pass-Through Rate equal to the greater of (i) zero
and (ii) the excess of (x) the weighted average of the Net Rates of the Mortgage
Loans in the related Loan Group or Loan Groups (as of the second preceding Due
Date), [weighted in proportion to the results of subtracting from the aggregate
Principal Balance of each Loan Group the aggregate Current Principal Amount of
the related Classes of Senior Certificates (other than the Residual
Certificates) immediately prior to the related Distribution Date,] over (y) the
weighted average of the Pass-Through Rates on the related Classes of
Certificates, based on a Notional Amount equal to the aggregate Current
Principal Amount of the related Classes of Certificates and calculated on the
basis of a year of 360 days with twelve 30-day months.]
The Paying Agent will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered [at
the close of business on the last Business Day of the calendar month preceding
the month] [on the 24th day of the month] of such Distribution Date, an amount
equal to the product of the Fractional Undivided Interest evidenced by this
Certificate and the amount (of interest and principal, if any) required to be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the first Distribution Date
in the month immediately following the month of the latest scheduled maturity
date of any Mortgage Loan and is not likely to be the date on which the [Current
Principal] [Notional] Amount of this Class of Certificates will be reduced to
zero.
A-1-3
Distributions on this Certificate will be made by the Paying Agent by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests,
by notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial [Current Principal] [Notional] Amount of this Certificate is
set forth above. The Current [Principal] [Notional] Amount hereof will be
reduced to the extent of distributions allocable to principal hereon and any
Realized Losses allocable hereto as set forth in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-one Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee, the Master Servicer nor the Certificate Registrar is liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee, the Master Servicer and the Certificate
Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor 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 in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof whether or
not notation of such action is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
A-1-4
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor , the Master Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of Depositor, the Master Servicer, the Trustee, the Certificate Registrar
or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon (i) the later
of the (A) final payment or other liquidation (or Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and (B) disposition of all
property acquired with respect to any Mortgage Loan, (ii) the payment to
Certificateholders of all amounts required to be paid to them under the
Agreement, or (iii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only (A) if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than or equal to 10% of the Cut-off Date Balance,
(y) the Group I Pre-Funded Amount and (z) the Group II Pre-Funded Amount or (ii)
the Depositor, based upon an Opinion of Counsel, has determined that the REMIC
status of any REMIC under the Agreement has been lost or a substantial risk
exists that such REMIC status will be lost for the then-current taxable year,
and (B) following the satisfaction of certain additional termination
requirements specified in the Agreement. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
Fund created by the Agreement continue beyond the expiration of 21 years after
the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
[Signature page follows]
A-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 30, 2005 JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Trustee
By:__________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [__-A-__] [__-X] Certificates referred to in
the within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:__________________________________
Authorized Signatory
A-1-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: __________________________________________________________
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-0
XXXXXXX X-0
CLASS [M-__] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES [AND][,] THE CLASS M-X CERTIFICATES [AND THE CLASS M-___
CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS
CERTIFICATE REGISTRAR (THE "CERTIFICATE REGISTRAR") WITH RESPECT HERETO.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL
BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS
CERTIFICATE OR INTEREST HEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR
INVESTING WITH ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH
CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED
FROM TIME TO TIME ("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN
CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION, INCLUDING THAT
A-2-1
THE CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN "BBB-"
(OR ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH, INC. OR XXXXX'X INVESTORS
SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE
COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
INTEREST HEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT", AS SUCH TERM IS
DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-50, AND (3) THE
CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
A-2-2
Certificate No.__ Pass-Through Rate: Variable
Class [M-__]
Date of Pooling and Servicing Agreement Aggregate Initial [Current Principal]
and Cut-off Date: [Notional] Amount of this Class of
June 1, 2005 Certificates as of the Cut-off Date:
$_______________
First Distribution Date: Initial [Current Principal] [Notional
July 25, 0000 Xxxxxx] of this Certificate as of the
Cut-off Date: $____________
[Initial Principal Balance of the
Principal Component of this Certifi-
cate as of the Cut-off Date: $0]
Master Servicer: CUSIP: 86359L____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
August 25, 2035
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-AR3
evidencing a fractional undivided interest in the
distributions allocable to the Class [M-__] Certificates with
respect to a Trust Fund consisting primarily of a pool of
adjustable rate mortgage loans secured by first liens on one-
to four-family residential properties sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer or the Certificate Registrar referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any
governmental entity or by Structured Asset Mortgage Investments II Inc., the
Master Servicer or the Certificate Registrar or any of their affiliates or any
other person. None of Structured Asset Mortgage Investments II Inc., the Master
Servicer, the Certificate Registrar or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this
A-2-3
Certificate in a trust (the "Trust Fund") generally consisting of adjustable
rate mortgage loans secured by first lien on one- to four-family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments II Inc. ("XXXX XX"). The Initial Mortgage Loans were sold
on the Closing Date, and the Subsequent Mortgage Loans will be sold on the
related Subsequent Transfer Date, by EMC Mortgage Corporation ("EMC") to XXXX
XX. Xxxxx Fargo Bank, National Association ("Xxxxx Fargo") will act as master
servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement, dated as of the Cut-off
Date specified above (the "Agreement"), among XXXX XX, as depositor (the
"Depositor"), EMC Mortgage Corporation, Xxxxx Fargo, as Master Servicer and
securities administrator and JPMorgan Chase Bank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum Pass-Through Rate set forth in
the Agreement.
The Paying Agent will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered on
the 24th day of the month of such Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate and
the amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Paying Agent by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests,
by notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial Current Principal Amount of this Certificate is set forth
above. The Current Principal Amount hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-one Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
A-2-4
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee nor the Certificate Registrar is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor 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 in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof, whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Depositor, the Master Servicer, the Trustee, the Certificate
Registrar or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the
A-2-5
Agreement) shall terminate upon (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired with
respect to any Mortgage Loan, (ii) the payment to Certificateholders of all
amounts required to be paid to them under the Agreement, or (iii) the optional
repurchase by the party named in the Agreement of all the Mortgage Loans and
other assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only (A) if (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans at the time of any such repurchase is
less than or equal to 10% of the sum of (x) the of the Cut-off Date Balance, (y)
the Group I Pre-Funded Amount and (z) the Group II Pre-Funded Amount, or (ii)
the Depositor, based upon an Opinion of Counsel, has determined that the REMIC
status of any REMIC under the Agreement has been lost or a substantial risk
exists that such REMIC status will be lost for the then-current taxable year,
and (B) following the satisfaction of certain additional termination
requirements specified in the Agreement. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
Fund created by the Agreement continue beyond the expiration of 21 years after
the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
[Signature page follows]
A-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 30, 2005 JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Trustee
By:__________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class [M-__] Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:__________________________________
Authorized Signatory
A-2-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:_____________
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to____________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-0
XXXXXXX X-0
CLASS B-__ CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, THE CLASS M-X CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS
M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE
CLASS M-5 CERTIFICATES AND THE CLASS M-6 CERTIFICATES [AND THE CLASS B-_
CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS
CERTIFICATE REGISTRAR (THE "CERTIFICATE REGISTRAR") WITH RESPECT HERETO.
[FOR CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES] [UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[FOR CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES] [EACH BENEFICIAL
OWNER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE OR
INTEREST HEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR INVESTING WITH
ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-
A-3-1
30, AS AMENDED FROM TIME TO TIME ("EXEMPTION"), AND THAT IT UNDERSTANDS THAT
THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION, INCLUDING
THAT THE CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN
"BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH, INC. OR XXXXX'X
INVESTORS SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST HEREIN 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.]
[FOR CLASS B-4, CLASS B-5 AND CLASS B-6 CERTIFICATES] [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, (2) PURSUANT TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) 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 SECURITIES 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 AND THE CERTIFICATE
REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR 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.]
[FOR CLASS B-4, CLASS B-5 AND CLASS B-6 CERTIFICATES] [THIS CERTIFICATE
MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE
BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF
THE INTERNAL REVENUE
A-3-2
CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE
PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 84-14, XXXX 00-00, XXXX 00-0, XXXX 95-60 OR PTCE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE
DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, THE CERTIFICATE
REGISTRAR, ANY SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN
OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE, OR UNLESS THE OPINION
SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.]
A-3-3
Pass-Through Rate: Variable
Class B-__Subordinate
Date of Pooling and Servicing Agreement Aggregate Initial [Current Principal]
and Cut-off Date: [Notional] Amount of this Class of
June 1, 2005 Certificates as of the Cut-off Date:
$_______________
First Distribution Date: Initial [Current Principal] [Notional
July 25, 0000 Xxxxxx] of this Certificate as of the
Cut-off Date: $____________
[Initial Principal Balance of the
Principal Component of this Certifi-
cate as of the Cut-off Date: $0]
Master Servicer: CUSIP: 86359L____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
August 25, 2035
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-AR3
evidencing a fractional undivided interest in the
distributions allocable to the Class B-__ Certificates with
respect to a Trust Fund consisting primarily of a pool of
adjustable rate mortgage loans secured by first liens on one-
to four-family residential properties sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that [Cede & Co.] [Bear, Xxxxxxx Securities Corp.] is
the registered owner of the Fractional Undivided Interest evidenced hereby in
the beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") generally consisting
A-3-4
of adjustable rate mortgage loans secured by first liens on one- to four-family
residential properties (collectively, the "Mortgage Loans") sold by Structured
Asset Mortgage Investments II Inc. ("XXXX XX"). The Initial Mortgage Loans were
sold on the Closing Date, and the Subsequent Mortgage Loans will be sold on the
related Subsequent Transfer Date, by EMC Mortgage Corporation ("EMC") to XXXX
XX. Xxxxx Fargo Bank, National Association ("Xxxxx Fargo") will act as master
servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement, dated as of the Cut-off
Date specified above (the "Agreement"), among XXXX XX, as depositor (the
"Depositor"), EMC Mortgage Corporation, Xxxxx Fargo, as Master Servicer and
securities administrator and JPMorgan Chase Bank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at the per annum Pass-Through Rate set forth in
the Agreement. The Paying Agent will distribute on the 25th day of each month,
or, if such 25th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered [on
the last Business Day of the month next preceding] [on the 24th day of] the
month of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount (of
interest and principal, if any) required to be distributed to the Holders of
Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Paying Agent by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests,
by notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial Current Principal Amount of this Certificate is set forth
above. The Current Principal Amount hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
[For Class B-1, Class B-2 and Class B-3 Certificates] [Each beneficial
owner of this Certificate or any interest herein shall be deemed to have
represented, by virtue of its acquisition or holding of this certificate or
interest herein, that either (i) it is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended or section 4975
of the Internal Revenue Code of 1986, as amended ("Plan"), or investing with
assets of a Plan or (ii) it has acquired and is holding such certificate in
reliance on Prohibited Transaction Exemption 90-30, as amended from time to time
("Exemption"), and that it understands that
A-3-5
there are certain conditions to the availability of the Exemption, including
that the certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by Standard & Poor's, Fitch, Inc. or Xxxxx'x
Investors Service, Inc., and the certificate is so rated 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.]
[For Class B-4, Class B-5 and Class B-6 Certificates] [No transfer of
this Certificate shall be made unless the transfer is made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification, and is made in accordance with
Section 5.02 of the Agreement. In the event that such transfer is to be made the
Certificate Registrar shall register such transfer if: (i) made to a transferee
who has provided the Certificate Registrar and the Trustee with evidence as to
its QIB status; or (ii) (A) the transferor has advised the Trustee and the
Certificate Registrar in writing that the Certificate is being transferred to an
Institutional Accredited Investor and (B) prior to such transfer the transferee
furnishes to the Trustee and the Certificate Registrar an Investment Letter; or
(iii) based upon an Opinion of Counsel to the effect that (A) and (B) above are
met sufficient to confirm that such 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.]
Neither the Depositor nor the Certificate Registrar nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Certificate Registrar, the Securities Administrator, the Depositor,
EMC and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
[For Class B-4, Class B-5 and Class B-6 Certificates] [This Certificate
may not be acquired directly or indirectly by, or on behalf of, an employee
benefit plan or other retirement arrangement which is subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended, unless the transferee certifies
or represents that the proposed transfer and holding of this Certificate and the
servicing, management and operation of the Trust and its assets: (i) will not
result in any prohibited transaction under Section 406 of ERISA or Section 4975
of the Code which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 84-14 (Class Exemption for Plan
Asset Transactions Determined by Independent Qualified Professional Asset
Managers); PTCE 91-38 (Class Exemption for Certain Transactions Involving Bank
Collective Investment Funds); PTCE 90-1 (Class Exemption for Certain
Transactions Involving Insurance Company Pooled Separate Accounts); PTCE 95-60
(Class Exemption for Certain Transactions Involving Insurance Company General
Accounts); and PTCE 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers), or Section 401(c) of ERISA and
A-3-6
the regulations promulgated thereunder; (ii) will not constitute or result in
the assets of the Trust being deemed to be "plan assets" subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code; and
(iii) will not give rise to any additional obligations on the part of the
Depositor, the Securities Administrator, any Servicer, the Master Servicer, the
Certificate Registrar or the Trustee in addition to those undertaken in the
Agreement, which will be deemed represented by an owner of a Book-Entry
Certificate or a Global Certificate, or unless the opinion specified in Section
5.07 of the Agreement is provided.]
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-one Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee nor the Certificate Registrar is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor 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 in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof, whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more
A-3-7
new Certificates evidencing the same Class and in the same aggregate Fractional
Undivided Interest, as requested by the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Certificate
Registrar, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Certificate Registrar, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon (i) the later
of the (A) final payment or other liquidation (or Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and (B) disposition of all
property acquired with respect to any Mortgage Loan, (ii) the payment to
Certificateholders of all amounts required to be paid to them under the
Agreement, or (iii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only (A) if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than or equal to 10% of the sum of (x) the Cut-off
Date Balance, (y) the Group I Pre-Funded Amount and (z) the Group II Pre-Funded
Amount, or (ii) the Depositor, based upon an Opinion of Counsel, has determined
that the REMIC status of any REMIC under the Agreement has been lost or a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year, and (B) following the satisfaction of certain additional
termination requirements specified in the Agreement. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
[Signature page follows]
A-3-8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 30, 2005
JPMORGAN CHASE BANK, N.A., not in
its individual capacity but solely
as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-__ Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:_______________________________
Authorized Signatory
A-3-9
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: ________________
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to ___________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-00
XXXXXXX X-0
CLASS R-__ CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON, A PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED ORGANIZATION (AS
DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH 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,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE CERTIFICATE REGISTRAR AND THE
TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO THE TRUSTEE, THE DEPOSITOR, THE
MASTER SERVICER, THE CERTIFICATE REGISTRAR AND THE SECURITIES ADMINISTRATOR, AND
ON WHICH THEY MAY RELY, IN A FORM SATISFACTORY TO THE TRUSTEE AND THE
CERTIFICATE REGISTRAR, THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE
AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I)
WILL NOT CONSTITUTE OR RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE
"PLAN ASSETS" SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR
SECTION 4975 OF THE CODE; (II) WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE; (III) IS
PERMISSIBLE UNDER APPLICABLE LAW; AND (IV) WILL NOT SUBJECT THE DEPOSITOR, THE
SECURITIES ADMINISTRATOR, THE MASTER SERVICER, THE CERTIFICATE REGISTRAR, ANY
SERVICER OR THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT (AS DEFINED HEREIN).
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE OBTAINS THE PRIOR WRITTEN CONSENT OF
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC. AND THE SECURITIES ADMINISTRATOR
AND PROVIDES A TRANSFER AFFIDAVIT TO THE TAX MATTERS PERSON, THE SELLER, THE
CERTIFICATE REGISTRAR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE
UNITED STATES (AS DEFINED IN SECTION 7701 OF THE CODE), ANY STATE (AS DEFINED IN
SECTION 7701 OF THE CODE) 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
A-4-1
FOR XXXXXXX MAC OR ANY SUCCESSOR THERETO, A MAJORITY OF ITS BOARD OF DIRECTORS
IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT), (B) ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION (AS DEFINED IN SECTION 7701 OF THE CODE), OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (C) ANY ORGANIZATION (OTHER
THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH
IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE (INCLUDING THE TAX
IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D)
ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C) OR (D) BEING HEREIN REFERRED TO
AS A "DISQUALIFIED ORGANIZATION") OR (E) 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.
A-4-2
Certificate No. 1 Pass-Through Rate: N/A
Class R-__Senior
Date of Pooling and Servicing Agreement Aggregate Initial [Current Principal]
and Cut-off Date: [Notional] Amount of this Class of
May 1, 2005 Certificates as of the Cut-off Date:
$50.00
First Distribution Date: Initial [Current Principal] [Notional
July 25, 0000 Xxxxxx] of this Certificate as of the
Cut-off Date: $____________
[Initial Principal Balance of the
Principal Component of this Certifi-
cate as of the Cut-off Date: $0]
Master Servicer: CUSIP: 86359L____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 29, 2045
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2005-AR3
evidencing a fractional undivided interest in the
distributions allocable to the Class R-__ Certificates with
respect to a Trust Fund consisting primarily of a pool of
adjustable rate mortgage loans secured by first liens on one-
to four-family residential properties sold by STRUCTURED ASSET
MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the registered
owner of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of adjustable rate mortgage loans
secured by first liens on one- to four-family residential properties
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments II Inc. ("XXXX XX"). The
A-4-3
Initial Mortgage Loans were sold on the Closing Date, and the Subsequent
Mortgage Loans will be sold on the related Subsequent Transfer Date, by EMC
Mortgage Corporation ("EMC") to XXXX XX. Xxxxx Fargo Bank, National Association
("Xxxxx Fargo") will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among XXXX XX, as depositor (the "Depositor"), EMC Mortgage
Corporation, Xxxxx Fargo, as Master Servicer and securities administrator and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
No Interest will accrue or be payable on this Certificate. On the First
Distribution Date specified above, the Paying Agent will distribute to the Class
R-____ Certificates $50 from the Deposit Amount deposited by the Depositor on
the Closing Date in the Distribution Account, thereby reducing the Current
Principal Amount of this Class of Certificates to zero.
Distributions on this Certificate will be made by the Paying Agent by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests,
by notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any ownership interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
ownership interest in this Certificate will be conditioned upon the delivery to
XXXX XX, the Securities Administrator, the Trustee and the Certificate Registrar
of, among other things, an affidavit to the effect that it is a United States
Person and Permitted Transferee, (iii) any attempted or purported transfer of
any ownership interest in this Certificate in violation of such restrictions
will be absolutely null and void and will vest no rights in the purported
transferee, and (iv) if any person other than a person that is a United States
Person and a Permitted Transferee acquires any ownership interest in this
Certificate in violation of such restrictions, then the Depositor will have the
right, in its sole discretion and without notice to the Holder of this
Certificate, to sell this Certificate to a purchaser selected by the Depositor,
or any affiliate of the Depositor, on such terms and conditions as the Depositor
may impose.
This Certificate may not be acquired directly or indirectly by, or on
behalf of, an employee benefit plan or other retirement arrangement which 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,
unless the proposed transferee provides the Certificate Registrar and the
Trustee with an opinion of counsel addressed to the Trustee, the Certificate
Registrar, the Master Servicer and the Securities Administrator and on which
they may rely
A-4-4
(which shall not be at the expense of the Trustee, the Certificate Registrar,
the Master Servicer or the Securities Administrator) which is acceptable to the
Certificate Registrar and the Trustee, that the purchase of this Certificate
will not result in or constitute a nonexempt prohibited transaction, is
permissible under applicable law and will not give rise to any additional
fiduciary obligations on the part of the Depositor, the Master Servicer, the
Securities Administrator, the Certificate Registrar or the Trustee.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-one Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee nor the Certificate Registrar is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor 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 in certain cases, Holders of Certificates of affected Classes evidencing
such percentage of the Fractional Undivided Interests thereof). Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
By accepting this Certificate, the purchaser hereof agrees to be a Tax
Matters Person and appoints the Securities Administrator to act as its agent
with respect to all matters concerning the tax obligations of the Trust.
A-4-5
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Certificate
Registrar, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Certificate Registrar, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon (i) the later
of the (A) final payment or other liquidation (or Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and (B) disposition of all
property acquired with respect to any Mortgage Loan, (ii) the payment to
Certificateholders of all amounts required to be paid to them under the
Agreement, or (iii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only (A) if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than or equal to 10% of the sum of (x) the Cut-off
Date Balance, (y) the Group I Pre-Funded Amount and (z) the Group II Pre-Funded
Amount, or (ii) the Depositor, based upon an Opinion of Counsel, has determined
that the REMIC status of any REMIC under the Agreement has been lost or a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year, and (B) following the satisfaction of certain additional
termination requirements specified in the Agreement. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
[Signature page follows]
A-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: June 30, 2005 JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Trustee
By: _________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-__ Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By: _________________________________
Authorized Signatory
A-4-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: _______________
______________________________________
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to __________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
A-4-8
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[PROVIDED UPON REQUEST]
EXHIBIT C
[RESERVED]
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
as Custodian
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: XXXX XX 2005-AR3
RE: Pooling and Servicing Agreement dated as of
June 1, 2005, among Structured Asset Mortgage Investments II Inc.,
EMC Mortgage Corporation, Xxxxx Fargo
Bank, National Association and
JPMorgan Chase Bank, N.A.
as Trustee
In connection with the administration of the Mortgage Loans (as defined
in the Agreement) held by you pursuant to the above-captioned Pooling and
Servicing Agreement (the "Agreement"), we request the release, and hereby
acknowledge receipt, of the Mortgage File (as defined in the Agreement) for the
Mortgage Loan described below, for the reason indicated. The release of such
Mortgage File will not invalidate any insurance coverage provided in respect of
such Mortgage Loan under any of the Insurance Policies (as defined in the
Agreement).
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage paid in full and proceeds have been deposited into the
Custodial Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason:__________________________________
_____ 6. California Mortgage Loan paid in full
By: _____________________________________
(authorized signer)
Issuer:__________________________________
Address:_________________________________
Date:____________________________________
EXHIBIT E
FORM OF AFFIDAVIT PURSUANT TO SECTION 860E(E)(4)
Affidavit pursuant to Section
860E(e)(4) of the Internal Revenue
Code of 1986, as amended, and for
other purposes
STATE OF )
: ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ______] [the United States], on behalf of which
he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investments II Trust 2005-AR3, Mortgage Pass-Through Certificates, Series
2005-AR3, Class R-I, Class R-II and Class R-III Certificates (the "Residual
Certificates") for the account of a disqualified organization; (iii) it consents
to any amendment of the Pooling and Servicing Agreement that shall be deemed
necessary by Structured Asset Mortgage Investments II Inc. (upon advice of
counsel) to constitute a reasonable arrangement to ensure that the Residual
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificates unless
(a) it has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same four representations and (b) as of
the time of the transfer, it does not have actual knowledge that such affidavit
is false.
3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) 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 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, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.
4. That the Investor's taxpayer identification number is
______________________.
5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
8. The Investor is not an employee benefit plan or other plan subject
to the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or an investment manager, named
fiduciary or a trustee of any such plan, or any other Person acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
such plan.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.
[NAME OF INVESTOR]
By:______________________________________
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt of
distributions]
Address of Investor for receipt of
tax information:
E-2
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _________, 20___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of ___________________, 20___.
E-3
EXHIBIT F-1
FORM OF INVESTMENT LETTER
___________________[Date]
[DEPOSITOR]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments II Trust 2005-AR3, Mortgage
Pass-Through Certificates Series 2005-AR3 (the "Certificates"),
including the [Class B-4, Class B-5, Class B-6] Certificates (the
"Privately Offered Certificates")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
applicable state securities or "Blue Sky" laws, and are being sold to us in a
transaction that is exempt from the registration requirements of such laws;
(ii) any information we desired concerning the Certificates, including
the Privately Offered Certificates, the trust in which the Certificates
represent the entire beneficial ownership interest (the "Trust") or any other
matter we deemed relevant to our decision to purchase Privately Offered
Certificates has been made available to us;
(iii) we are able to bear the economic risk of investment in Privately
Offered Certificates; we are an institutional "accredited investor" as defined
in Section 501(a) of Regulation D promulgated under the Act and a sophisticated
institutional investor;
(iv) we are acquiring Privately Offered Certificates for our own
account, not as nominee for any other person, and not with a present view to any
distribution or other disposition of the Privately Offered Certificates;
(v) we agree the Privately Offered Certificates must be held
indefinitely by us (and may not be sold, pledged, hypothecated or in any way
disposed of) unless subsequently registered under the Act and any applicable
state securities or "Blue Sky" laws or an exemption from the registration
requirements of the Act and any applicable state securities or "Blue Sky" laws
is available;
(vi) we agree that in the event that at some future time we wish to
dispose of or exchange any of the Privately Offered Certificates (such
disposition or exchange not being currently foreseen or contemplated), we will
not transfer or exchange any of the Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser (as defined below), (2) if
required by the Pooling and Servicing Agreement (as defined below), a letter to
substantially the same effect as either this letter or, if the Eligible
Purchaser is a Qualified Institutional Buyer as defined under Rule 144A of the
Act, the Rule 144A and Related Matters Certificate in the form attached as
Exhibit F-2 to the Pooling and Servicing Agreement (as defined below) (or such
other documentation as may be acceptable to the Trustee and the Certificate
Registrar (each such term as defined below)) is executed promptly by the
purchaser and delivered to the addressees hereof and (3) all offers or
solicitations in connection with the sale, whether directly or through any agent
acting on our behalf, are limited only to Eligible Purchasers and are not made
by means of any form of general solicitation or general advertising whatsoever;
and
(B) if the Privately Offered Certificate is not registered under the
Act (as to which we acknowledge you have no obligation), the Privately Offered
Certificate is sold in a transaction that does not require registration under
the Act and any applicable state securities or "blue sky" laws and, if JPMorgan
Chase Bank, N.A. (the "Trustee") or Xxxxx Fargo Bank, National Association (the
"Certificate Registrar") so requests, a satisfactory Opinion of Counsel (as
defined in the Pooling and Servicing Agreement) is furnished to such effect,
which Opinion of Counsel shall be an expense of the transferor or the
transferee;
(vii) we agree to be bound by all of the terms (including those
relating to restrictions on transfer) of the Pooling and Servicing Agreement,
pursuant to which the Trust was formed; we have reviewed carefully and
understand the terms of the Pooling and Servicing Agreement;
(viii) we either: (i) are not acquiring the Privately Offered
Certificate directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which 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, or (ii) are providing a
representation or an Opinion of Counsel to the effect that the proposed transfer
and/or holding of a Privately Offered Certificate and the servicing, management
and/or operation of the Trust and its assets: (I) will not result in any
prohibited transaction unless it is covered under an individual or prohibited
transaction class exemption, including, but not limited to, Class Prohibited
Transaction Exemption ("PTCE") 84-14, XXXX 00-00, XXXX 00-0, XXXX 95-60, PTCE
96-23 or Section 401(c) of ERISA and the regulations promulgated thereunder;
(II) will not constitute or result in the assets of the Trust being deemed to be
"plan assets" subject to the prohibited transaction provisions of ERISA or
Section 4975 of the Code; and (III) will not give rise to any
F-1-2
additional fiduciary duties on the part of the Seller, the Master Servicer, the
Certificate Registrar, the Securities Administrator, any Servicer or the
Trustee.
(ix) We understand that each of the [Class B-4, Class B-5 and Class
B-6] Certificates bears, and will continue to bear, a legend to substantially
the following effect: "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, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) 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 SECURITIES 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 AND THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY
IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE AND THE
CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE AND THE
CERTIFICATE REGISTRAR 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. NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 5.07 OF THE AGREEMENT OR ANY OPINION OR COUNSEL SATISFACTORY TO THE
MASTER SERVICER, THE TRUSTEE, THE CERTIFICATE REGISTRAR AND THE SECURITIES
ADMINISTRATOR THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, WILL NOT RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE, THE CERTIFICATE
REGISTRAR, THE SELLER, ANY SERVICER OR THE SECURITIES ADMINISTRATOR TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT."
F-1-3
"Eligible Purchaser" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of June 1, 2005, among
Structured Asset Mortgage Investments II Inc., EMC Mortgage Corporation, Xxxxx
Fargo Bank, National Association and JPMorgan Chase Bank, N.A., as Trustee (the
"Pooling and Servicing Agreement").
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any): _________________________
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.
Very truly yours,
[PURCHASER]
By:______________________________________
(Authorized Officer)
[By:_____________________________________
Attorney-in-fact]
F-1-4
NOMINEE ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:______________________________________
(Authorized Officer)
[By:_____________________________________
Attorney-in-fact]
F-1-5
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
______________________[Date]
[DEPOSITOR]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments II Trust 2005-AR3,
Mortgage Pass-Through Certificates, Series 2005-AR3
Class B-4, Class B-5 and Class B-6 Certificates
(the "Privately Offered Certificates")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible
securities (excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to a
repurchase agreement and swaps), as described below:
Date: ______________, 20__ (must be on or after the close of its most
recent fiscal year)
Amount: $ _____________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the
following entities:
F-2-1
(i) an insurance company as defined in Section 2(a)(13) of the
Act(1); or
(ii) an investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), or any
"business development company" as defined in Section 2(a)(48) of the
Investment Company Act; or
(iii) a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; or
(iv) a plan (i) established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or
its political subdivisions, the laws of which permit the purchase of
securities of this type, for the benefit of its employees and (ii) the
governing investment guidelines of which permit the purchase of
securities of this type; or
(v) a "business development company" as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
(vi) a corporation (other than a U.S. bank, savings and loan
association or equivalent foreign institution), partnership,
Massachusetts or similar business trust, or an organization described
in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;
or
(vii) a U.S. bank, savings and loan association or equivalent
foreign institution, which has an audited net worth of at least $25
million as demonstrated in its latest annual financial statements; or
(viii) an investment adviser registered under the Investment
Advisers Act; or
b. greater than $10 million, and the undersigned is a broker-dealer
registered with the Securities and Exchange Commission ("SEC"); or
c. less than $10 million, and the undersigned is a broker-dealer
registered with the SEC and will only purchase Rule 144A securities in
transactions in which it acts as a riskless principal (as defined in Rule 144A);
or
d. less than $100 million, and the undersigned is an investment company
registered under the Investment Company Act of 1940, which, together with one or
more registered investment companies having the same or an affiliated investment
adviser, owns at least $100 million of eligible securities; or
e. less than $100 million, and the undersigned is an entity, all the
equity owners of which are "qualified institutional buyers."
--------
(1) A purchase by an insurance company for one or more of its "separate
accounts", as defined by Section 2(a)(37) of the Investment Company Act of 1940,
as amended, which are neither registered nor required to be registered
thereunder, shall be deemed to be a purchase for the account of such insurance
company.
F-2-2
The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) a person
reasonably believed to be a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501(a) of the Act, in a transaction that otherwise does not
constitute a public offering.
The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached as Exhibit F-1 to
the Pooling and Servicing Agreement, dated as of June 1, 2005, among Structured
Asset Mortgage Investments II Inc., EMC Mortgage Corporation, Xxxxx Fargo Bank,
National Association and JPMorgan Chase Bank, N.A., as Trustee, pursuant to
Certificates were issued.
The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which 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, or (ii) is
providing a representation or an opinion of counsel to the effect that the
proposed transfer and/or holding of a Privately Offered Certificate and the
servicing, management and/or operation of the Trust and its assets: (I) will not
result in any prohibited transaction unless it is covered under an individual or
class prohibited transaction exemption, including, but not limited to, Class
Prohibited Transaction Exemption ("PTCE") 84-14, XXXX 00-00, XXXX 00-0, XXXX
95-60, PTCE 96-23 or Section 401(c) of ERISA and the regulations to be
promulgated thereunder; (II) will not constitute or result in the assets of the
Trust being deemed to be "plan assets" subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code; and (III) will not give rise to
any additional fiduciary duties on the part of the Depositor, the Master
Servicer, the Certificate Registrar, the Securities Administrator, any Servicer
or the Trustee.
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned purchaser (the
"Purchaser") on the ____ day of ___________, 20___.
F-2-3
Very truly yours,
[PURCHASER]
By:__________________________________
(Authorized Officer)
[By:_________________________________
Attorney-in-fact]
F-2-4
NOMINEE ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:__________________________________
(Authorized Officer)
[By:_________________________________
Attorney-in-fact]
F-2-5
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement"), dated as of June 30, 2005, by and among JPMORGAN CHASE
BANK, N.A., as trustee (including its successors under the Pooling and Servicing
Agreement defined below, the "Trustee"), STRUCTURED ASSET MORTGAGE INVESTMENTS
II INC., as depositor (together with any successor in interest, the
"Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, as master servicer and
securities administrator (together with any successor in interest or successor
under the Pooling and Servicing Agreement referred to below, the "Master
Servicer") and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as custodian (together
with any successor in interest or any successor appointed hereunder, the
"Custodian").
WITNESSETH THAT:
WHEREAS, the Depositor, the Master Servicer, the Trustee and EMC
Mortgage Corporation (the "Seller") have entered into a Pooling and Servicing
Agreement, dated as of June 1, 2005, relating to the issuance of Structured
Asset Mortgage Investments II Trust 2005-AR3, Mortgage Pass-Through
Certificates, Series 2005-AR3 (as in effect on the date of this agreement, the
"Original Pooling and Servicing Agreement," and as amended and supplemented from
time to time, the "Pooling and Servicing Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for
the purposes of receiving and holding certain documents and other instruments
delivered by (i) the Depositor or the Master Servicer under the Pooling and
Servicing Agreement and (ii) the related Servicer under their respective
Servicing Agreements, all upon the terms and conditions and subject to the
limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Depositor, the
Master Servicer and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned in the Original Pooling and Servicing Agreement,
unless otherwise required by the context herein.
ARTICLE II
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1 Custodian to Act as Agent: Acceptance of Mortgage Files.
The Custodian, as the duly appointed agent of the Trustee for these purposes,
acknowledges, and on each Subsequent Transfer Date, the Custodian, as the duly
appointed agent of the Trustee, will acknowledge (subject to any exceptions
noted in the Initial Certification referred to in Section 2.3(a)) receipt of the
Mortgage Files relating to the Mortgage Loans identified on Schedule 1
attached hereto (as such Schedule shall be updated from time to time) (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.
Section 2.2 Recordation of Assignments. If any Mortgage File includes
one or more assignments of Mortgage to the Trustee in a state which is
specifically excluded from the Opinion of Counsel delivered by the Seller to the
Trustee and the Custodian pursuant to the provisions of Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Depositor for the purpose of recording it in the appropriate
public office for real property records, and the Depositor, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.
Section 2.3 Review of Mortgage Files.
(a) On or prior to the Closing Date, with respect to the
Initial Mortgage Loans, and on or prior to each Subsequent Transfer Date, with
respect to the related Subsequent Mortgage Loans, in accordance with Section
2.02 of the Pooling and Servicing Agreement, in accordance with Section 2.02 of
the Pooling and Servicing Agreement, the Custodian shall deliver to the
Depositor and the Trustee an Initial Certification in the form annexed hereto as
Exhibit One evidencing receipt (subject to any exceptions noted therein) of a
Mortgage File for each of the Mortgage Loans listed on Schedule 1 attached
hereto (the "Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date (or, within 90 days of
a Subsequent Transfer Date, with respect to the related Subsequent Mortgage
Loans, or, with respect to any Substitute Mortgage Loans, within 5 Business Days
after the receipt by the Custodian thereof), the Custodian agrees, for the
benefit of Certificateholders, to review, in accordance with the provisions of
Section 2.02 of the Pooling and Servicing Agreement, each such document, and
shall execute and deliver to the Depositor and the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all
such documents have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. The
Custodian shall be under no duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face.
(c) Not later than 180 days after the Closing Date (or not
later than 180 days after a Subsequent Transfer Date, with respect to the
related Subsequent Mortgage Loans, or, with respect to any Substitute Mortgage
Loans, within 5 Business Days after the receipt by the Custodian thereof), the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and execute and deliver to the Depositor and the
Trustee (and if the Custodian is not also the Master Servicer, then to the
Master Servicer) a Final Certification in the form annexed hereto as Exhibit
Three evidencing the completeness of the Mortgage Files.
G-2
(d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans then contained in the Mortgage Files.
Section 2.4 Notification of Breaches of Representations and Warranties.
Upon discovery by the Custodian of a breach of any representation or warranty
made by the Depositor as set forth in the Pooling and Servicing Agreement with
respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall give
prompt written notice to the Company, the applicable Servicer and the Trustee.
Section 2.5 Custodian to Cooperate: Release of Mortgage Files. Upon
receipt of written notice from the Trustee that the Mortgage Loan Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and that the Repurchase Price therefor has been deposited in the
Distribution Account, and a Request for Release (as defined below), the
Custodian agrees to promptly release to the Mortgage Loan Seller the related
Mortgage File.
Upon the Custodian's receipt of a request for release (a "Request for
Release") substantially in the form of Exhibit D to the Pooling and Servicing
Agreement signed by a Servicing Officer of the related Servicer stating that it
has received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees to
promptly release to such Servicer the related Mortgage File. The Depositor shall
deliver to the Custodian, and the Custodian agrees to accept, the Mortgage Note
and other documents constituting the Mortgage File with respect to any
Substitute Mortgage Loan, which documents the Custodian will review to the
extent provided in Article II of the Pooling and Servicing Agreement.
From time to time as is appropriate for the servicing or foreclosure of
any Mortgage Loan, including, for this purpose, collection under any Primary
Mortgage Insurance Policy, the related Servicer shall (or, if the related
Servicer does not, then the Master Servicer may) deliver to the Custodian a
Request for Release signed by a Servicing Officer requesting that possession of
all of the related Mortgage File be released to such Servicer and certifying as
to the reason for such release and that such release will not invalidate any
insurance coverage provided in respect of the related Mortgage Loan under any of
the Insurance Policies. Upon receipt of the foregoing, the Custodian shall
deliver such Mortgage File to the related Servicer. The related Servicer shall
cause each Mortgage File or any document therein so released to be returned to
the Custodian when the need therefor by such Servicer no longer exists, unless
(i) such Mortgage Loan has been liquidated and the Liquidation Proceeds relating
to the related Mortgage Loan have been deposited in the Distribution Account or
(ii) such Mortgage File or such document has been delivered to an attorney, or
to a public trustee or other public official as required by law, for
G-3
purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the related Mortgaged Property either judicially or
non-judicially, and the related Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.
At any time that a Servicer or the Master Servicer is required to
deliver to the Custodian a Request for Release, such Servicer or the Master
Servicer shall deliver two copies of the Request for Release if delivered in
hard copy or such Servicer or the Master Servicer may furnish such Request for
Release electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed such Request for Release.
In connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, the assignment of mortgage and the related
Mortgage Note shall be returned to the related Servicer or the Master Servicer,
as applicable, for execution and endorsement, respectively, pursuant to a power
of attorney from the Trustee and for delivery to the Seller. If the related
Servicer or the Master Servicer does not have a power of attorney from the
Trustee to execute the applicable assignment and to endorse the related Mortgage
Note, such Request for Release shall be accompanied by an assignment of
mortgage, without recourse, executed by the Trustee to the Seller and the
related Mortgage Note shall be endorsed without recourse by the Trustee (if not
in blank) and be returned to the related Servicer or the Master Servicer, as
applicable, for delivery to the Seller; provided, however, that in the case of a
Mortgage Loan that is registered on the MERS(R) System, no assignment of
mortgage or endorsement of the Mortgage Note by the Trustee, or by the related
Servicer or the Master Servicer pursuant to a power of attorney from the
Trustee, shall be required. In connection with any Request for Release of a
Mortgage File because of the payment in full of a Mortgage Loan and if the
related Servicer or the Master Servicer does not have a power of attorney from
the Trustee to execute the applicable certificate of satisfaction or similar
instrument, such Request for Release shall be accompanied by a certificate of
satisfaction or other similar instrument to be executed by or on behalf of the
Trustee and returned to the related Servicer or the Master Servicer, as
applicable.
Section 2.6 Assumption Agreements. In the event that any assumption
agreement, substitution of liability agreement or sale of servicing agreement is
entered into with respect to any Mortgage Loan subject to this Agreement in
accordance with the terms and provisions of the Pooling and Servicing Agreement,
the Master Servicer, to the extent provided in the related Servicing Agreement,
shall cause the related Servicer to notify the Custodian that such assumption
agreement, substitution of liability agreement or sale of servicing agreement
has been completed by forwarding to the Custodian the original of such
assumption agreement, substitution of liability agreement or sale of servicing
agreement, which shall be added to the related Mortgage File and, for all
purposes, shall be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting parts thereof.
ARTICLE III
CONCERNING THE CUSTODIAN
Section 3.1 Custodian a Bailee and Agent of the Trustee. With respect
to each Mortgage Note and other documents constituting each Mortgage File which
are delivered to the Custodian, the Custodian is exclusively the bailee and
agent of the Trustee and has no
G-4
instructions to hold any Mortgage Note or Mortgage File for the benefit of any
person other than the Trustee and the Certificateholders and undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. Except upon compliance with the provisions of Section 2.5 of this
Agreement, no Mortgage Note or Mortgage File shall be delivered by the Custodian
to the Depositor, the Seller, any Servicer or the Master Servicer or otherwise
released from the possession of the Custodian.
Section 3.2 Reserved.
Section 3.3 Custodian May Own Certificates. The Custodian in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Custodian.
Section 3.4 Master Servicer to Pay Custodian's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith, to the extent that such cost or expense is
indemnified by the Depositor pursuant to the Pooling and Servicing Agreement.
Section 3.5 Custodian May Resign; Trustee May Remove Custodian. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Mortgage Files itself and give prompt notice thereof to the
Depositor, the Master Servicer, the Servicers and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time with the consent of
the Master Servicer. In such event, the Trustee shall appoint, or petition a
court of competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority, shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with any
Servicer or the Depositor.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Depositor and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian
G-5
shall be appointed by the Trustee without the prior approval of the Depositor
and the Master Servicer.
Section 3.6 Merger or Consolidation of Custodian. Any Person into which
the Custodian may be merged or converted or with which it may be consolidated,
or any Person resulting from any merger, conversion or consolidation to which
the Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the Custodian hereunder (provided such
Person shall satisfy the requirements set forth in Section 3.7), 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 3.7 Representations of the Custodian. The Custodian hereby
represents, and any successor Custodian hereunder shall represent, that it is a
depository institution subject to supervision or examination by a federal or
state authority, has a combined capital and surplus of at least $15,000,000 and
is qualified to do business in the jurisdictions in which it will hold any
Mortgage File.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.1 Notices. All notices, requests, consents and demands and
other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 4.2 Amendments. No modification or amendment of or supplement
to this Agreement shall be valid or effective unless the same is in writing and
signed by all parties hereto, and neither the Depositor, the Master Servicer nor
the Trustee shall enter into any amendment hereof except as permitted by the
Pooling and Servicing Agreement. The Trustee shall give prompt notice to the
Custodian of any amendment or supplement to the Pooling and Servicing Agreement
and furnish the Custodian with written copies thereof.
Section 4.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, WHICH SHALL APPLY HERETO).
Section 4.4 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 properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Depositor and at the Trust's expense on
direction by the
G-6
Trustee, but only upon direction accompanied by an Opinion of Counsel reasonably
satisfactory to the Depositor to the effect that the failure to effect such
recordation is likely to materially and adversely affect the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 4.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
[Signature page follows]
G-7
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: JPMORGAN CHASE BANK, N.A., as Trustee
By:
0 Xxx Xxxx Xxxxx, 0xx Xxxxx Name:
Xxx Xxxx, Xxx Xxxx 00000 Title:
Attention: Worldwide Securities
Services-Global Debt
XXXX XX Series 2005-AR3
Telecopy: (000) 000-0000
Address: STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By:
Name:
Title:
Address: XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Master Servicer
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
By:
Name:
Title:
Address: XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Custodian
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 By:
Name:
Title:
X-0
XXXXX XX XXX XXXX )
: ss:
COUNTY OF NEW YORK )
On the 30th day of June 2005 before me, a notary public in and for said
State, personally appeared _______________, known to me to be a
_________________of JPMorgan Chase Bank, N.A., a banking association organized
under the laws of the United States of America that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said banking association and acknowledged to me that such banking association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
__________________________________
Notary Public
[SEAL]
X-0
XXXXX XX XXXXXXXX )
: ss:
COUNTY OF BALTIMORE )
On the 30th day of June 2005 before me, a notary public in and for said
State, personally appeared _________________, known to me to be an _______ of
Xxxxx Fargo Bank, National Association, a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national banking association, and acknowledged to
me that such national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
__________________________________
Notary Public
[SEAL]
X-00
XXXXX XX XXX XXXX )
: ss:
COUNTY OF NEW YORK )
On the 30th day of June 2005 before me, a notary public in and for said
State, personally appeared _________________, known to me to be a
_________________ of Structured Asset Mortgage Investments II Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
__________________________________
Notary Public
[SEAL]
X-00
XXXXX XX XXXXXXXX )
: ss:
COUNTY OF BALTIMORE )
On the 30th day of June 2005 before me, a notary public in and for said
State, personally appeared ____________, known to me to be a ______________ of
Xxxxx Fargo Bank, National Association, one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
__________________________________
Notary Public
[SEAL]
G-12
SCHEDULE 1
MORTGAGE LOANS
G-13
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
June 30, 2005
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Trust 2005-AR3, Mortgage
Pass-Through Certificates Series 2005-AR3
Re: Custodial Agreement, dated as of June 30, 2005, by and among
JPMorgan Chase Bank, N.A., Structured Asset Mortgage Investments
II Inc. and Xxxxx Fargo Bank, National Association relating to
Structured Asset Mortgage Investments II Trust 2005-AR3, Mortgage
Pass-Through Certificates, Series 2005-AR3
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, and subject to Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File (which contains an original Mortgage Note or lost note affidavit) to the
extent required in Section 2.01 of the Pooling and Servicing Agreement with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule, with any
exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:_________________________________
Name: _________________
Title: _________________
G-14
Schedule A to Exhibit One
Exceptions
G-15
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
_______ __, 20__
JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Trust 2005-AR3, Mortgage
Pass-Through Certificates, Series 2005-AR3
Re: Custodial Agreement, dated as of June 30, 2005, by and among
JPMorgan Chase Bank, N.A., Structured Asset Mortgage Investments
II Inc. and Xxxxx Fargo Bank, National Association relating to
Structured Asset Mortgage Investments II Trust 2005-AR3, Mortgage
Pass-Through Certificates, Series 2005-AR3
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
G-16
Schedule A to Exhibit Two
Exceptions
G-17
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
_______ __, 20__
JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Trust 2005-AR3, Mortgage
Pass-Through Certificates, Series 2005-AR3
Re: Custodial Agreement, dated as of June 30, 2005, by and among
JPMorgan Chase Bank, N.A., Structured Asset Mortgage Investments
II Inc. and Xxxxx Fargo Bank, National Association relating to
Structured Asset Mortgage Investments II Trust 2005-AR3, Mortgage
Pass-Through Certificates, Series 2005-AR3
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, and it has reviewed the Mortgage File and the Mortgage Loan Schedule
and has determined that an original of each document related thereto required to
be recorded has been returned from the related recording office with evidence of
recording thereon, or a certified copy has been obtained from the related
recording office, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
G-18
EXHIBIT H-1
EMC MORTGAGE CORPORATION
AND
EVERHOME MORTGAGE COMPANY
SUBSERVICING AGREEMENT
DATED AS OF AUGUST 1, 2002
EXHIBIT H-2
HOMEBANC MORTGAGE CORPORATION
AND
EMC MORTGAGE CORPORATION
PURCHASE, WARRANTIES AND SERVICING AGREEMENT,
DATED JANUARY 1, 2004 AS AMENDED
EXHIBIT H-3
WACHOVIA MORTGAGE CORPORATION
AND
EMC MORTGAGE CORPORATION
PURCHASE, WARRANTIES AND SERVICING AGREEMENT
DATED AS OF NOVEMBER 1, 2002
EXHIBIT H-4
EMC MORTGAGE CORPORATION
AND
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
SERVICING AGREEMENT
DATED AS OF JUNE 30, 2005
EXHIBIT I
ASSIGNMENT AGREEMENTS
(Available upon request)
EXHIBIT J
MORTGAGE LOAN PURCHASE AGREEMENT
(Available upon request)
EXHIBIT K
FORM OF TRUSTEE LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, N.A., a banking
association organized under the laws of the United States of America,
having a place of business at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
X.X. 00000, as Trustee (and in no personal or other representative
capacity) under the Pooling and Servicing Agreement, dated as of June
1, 2005, by and among Structured Asset Mortgage Investments II Inc.,
the Trustee, Xxxxx Fargo Bank, National Association and EMC Mortgage
Corporation (as amended, restated, supplemented or otherwise modified
from time to time, the "Agreement"; capitalized terms not defined
herein have the definitions assigned to such terms in the Agreement),
relating to the Structured Asset Mortgage Investments II Trust
2005-AR3, Mortgage Pass-Through Certificates, Series 2005-AR3, hereby
appoints _______________, in its capacity as a Servicer under the
Agreement, as the Trustee's true and lawful Special Attorney-in-Fact,
in the Trustee's name, place and stead and for the Trustee's benefit,
but only in its capacity as Trustee aforesaid, to perform all acts and
execute all documents as may be customary, necessary and appropriate to
effectuate the following enumerated transactions in respect of any
mortgage, deed of trust, promissory note or real estate owned from time
to time owned (beneficially or in title, whether the Trustee is named
therein as mortgagee or beneficiary or has become mortgagee or
beneficiary by virtue of endorsement, assignment or other conveyance)
or held by or registered to the Trustee (directly or through custodians
or nominees), or in respect of which the Trustee has a security
interest or other lien, all as provided under the applicable Agreement
and only to the extent the respective Trustee has an interest therein
under the Agreement, and in respect of which the Servicer is acting as
servicer pursuant to the Agreement (the "Mortgage Documents").
This appointment shall apply to the following enumerated transactions under the
Agreement only:
1. The modification or re-recording of any Mortgage Document for the purpose of
correcting it to conform to the original intent of the parties thereto or to
correct title errors discovered after title insurance was issued and where such
modification or re-recording does not adversely affect the lien under the
Mortgage Document as insured.
2. The subordination of the lien under a Mortgage Document to an easement in
favor of a public utility company or a state or federal agency or unit with
powers of eminent domain including, without limitation, the execution of partial
satisfactions/releases, partial reconveyances and the execution of requests to
trustees to accomplish same.
3. The conveyance of the properties subject to a Mortgage Document to the
applicable mortgage insurer, or the closing of the title to the property to be
acquired as real estate so owned, or conveyance of title to real estate so
owned.
4. The completion of loan assumption and modification agreements in respect of
Mortgage Documents.
5. The full or partial satisfaction/release of a Mortgage Document or full
conveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related note.
6. The assignment of any Mortgage Document, in connection with the repurchase of
the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage Document upon payment and discharge of all
sums secured thereby in conjunction with the refinancing thereof, including,
without limitation, the assignment of the related note.
8. With respect to a Mortgage Document, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial foreclosure
or termination, cancellation or rescission of any such foreclosure, including,
without limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a deed of trust,
in accordance with state law and the deed of trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage Document or state law to
expeditiously complete said transactions in paragraphs 8(a)
through 8(e), above.
9. Demand, xxx for, recover, collection and receive each and every sum of money,
debt, account and interest (which now is, or hereafter shall become due and
payable) belonging to or claimed by the Trustee under the Mortgage Documents,
and to use or take any lawful means for recovery thereof by legal process or
otherwise.
10. Endorse on behalf of the Trustee all checks, drafts and/or negotiable
instruments made payable to the Trustee in respect of the Mortgage Documents.
The Trustee gives the Special Attorney-in-Fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by this
Limited Power of Attorney, subject to the terms and conditions set forth in the
Agreement including the standard of care applicable to servicers in the
Agreement, and hereby does ratify and confirm what such Special Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
K-2
IN WITNESS WHEREOF, the Trustee has caused its corporate name and seal to be
hereto signed and affixed and these presents to be acknowledged by its duly
elected and authorized officer this ___ day of ___ , 2005.
JPMORGAN CHASE BANK, N.A., AS TRUSTEE
By:______________________________________
Name:
Title:
WITNESS: WITNESS:
______________________________ _________________________________________
Name: Name:
Title: Title:
XXXXX XX XXX XXXX
XX
XXXXXX XX XXX XXXX
Xx ______________, 2005, before me, the undersigned, a Notary Public in
and for said state, personally appeared __________________, personally known to
me to be the person whose name is subscribed to the within instrument and to be
a duly authorized and acting Senior Vice President of JPMorgan Chase Bank, N.A.,
and such person acknowledged to me that such person executed the within
instrument in such person's authorized capacity as a Senior Vice President of
JPMorgan Chase Bank, N.A., and that by such signature on the within instrument
the entity upon behalf of which such person acted executed the instrument.
WITNESS my hand and official seal.
__________________________________
Notary Public
K-3
SCHEDULE A
SCHEDULE OF STRIKE PRICES AND PROJECTED PRINCIPAL BALANCES
(GROUP I SENIOR CERTIFICATES YIELD MAINTENANCE AGREEMENT)
----------------------------------------------------------------------------------------------------------------
DISTRIBUTION DATE STRIKE PRICE PROJECTED DISTRIBUTION DATE STRIKE PRICE PROJECTED PRINCIPAL
PRINCIPAL BALANCE BALANCE
----------------------------------------------------------------------------------------------------------------
07/22/2005 10.50% 46,058,992.00 09/24/2009 9.85% 31,422,144.00
08/24/2005 7.15% 45,998,654.00 10/23/2009 10.18% 30,663,495.00
09/23/2005 8.21% 45,986,137.00 11/24/2009 9.85% 29,923,044.00
10/24/2005 8.66% 45,984,123.00 12/24/2009 10.18% 29,200,354.00
11/23/2005 8.47% 45,983,423.00 01/22/2010 9.85% 28,495,003.00
12/23/2005 8.81% 45,982,816.00 02/24/2010 9.85% 27,806,577.00
01/24/2006 8.58% 45,982,254.00 03/24/2010 10.50% 27,134,670.00
02/24/2006 8.60% 45,981,714.00 04/23/2010 9.85% 26,478,799.00
03/24/2006 9.55% 45,981,179.00 05/24/2010 10.18% 25,838,755.00
04/24/2006 8.68% 45,980,641.00 06/24/2010 9.85% 25,214,076.00
05/24/2006 9.06% 45,980,107.00 07/23/2010 10.18% 24,603,985.00
06/23/2006 8.82% 45,979,587.00 08/24/2010 9.85% 24,008,549.00
07/24/2006 9.14% 45,979,106.00 09/24/2010 9.85% 23,427,419.00
08/24/2006 8.86% 45,978,644.00 10/22/2010 10.18% 22,860,252.00
09/22/2006 8.88% 45,978,185.00 11/24/2010 9.85% 22,306,715.00
10/24/2006 9.23% 45,977,724.00 12/24/2010 10.18% 21,766,481.00
11/24/2006 9.02% 45,977,266.00 01/24/2011 9.85% 21,239,234.00
12/22/2006 9.37% 45,976,820.00 02/24/2011 9.85% 20,724,661.00
01/24/2007 9.09% 45,976,370.00 03/24/2011 10.50% 20,222,462.00
02/23/2007 9.11% 45,974,621.00 04/22/2011 9.85% 19,732,216.00
03/23/2007 10.11% 45,969,513.00 05/24/2011 10.18% 19,253,878.00
04/24/2007 9.17% 45,963,910.00 06/24/2011 9.85% 18,787,046.00
05/24/2007 9.56% 45,958,280.00 07/22/2011 10.18% 18,331,445.00
06/22/2007 9.30% 45,951,100.00 08/24/2011 9.85% 17,886,806.00
07/24/2007 9.64% 45,943,852.00 09/23/2011 9.85% 17,452,868.00
08/24/2007 9.34% 45,936,578.00 10/24/2011 10.18% 17,029,373.00
09/24/2007 9.35% 45,929,265.00 11/23/2011 9.85% 16,616,072.00
10/24/2007 9.72% 45,921,824.00 12/23/2011 10.18% 16,212,722.00
11/23/2007 9.48% 45,914,344.00 01/24/2012 9.85% 15,819,084.00
12/24/2007 9.85% 45,897,865.00 02/24/2012 9.85% 15,434,926.00
01/24/2008 9.55% 45,881,147.00 03/23/2012 10.50% 15,060,021.00
02/22/2008 9.57% 45,864,306.00 04/24/2012 9.85% 14,694,000.00
03/24/2008 10.24% 45,846,556.00 05/24/2012 10.18% 14,336,940.00
04/24/2008 9.63% 45,828,657.00 06/22/2012 9.85% 13,988,484.00
05/23/2008 10.03% 45,271,881.00 07/24/2012 10.18% 13,648,426.00
06/24/2008 9.75% 44,721,648.00 08/24/2012 9.85% 13,316,565.00
07/24/2008 10.10% 44,176,384.00 09/24/2012 9.85% 12,992,706.00
08/22/2008 9.79% 43,117,056.00 10/24/2012 10.18% 12,676,655.00
09/24/2008 9.79% 42,083,022.00 11/23/2012 9.85% 12,368,227.00
10/24/2008 10.14% 41,073,679.00 12/24/2012 10.18% 12,067,239.00
11/24/2008 9.82% 40,088,439.00 01/24/2013 9.85% 11,773,512.00
12/24/2008 10.16% 39,126,731.00 02/22/2013 9.85% 11,486,872.00
01/23/2009 9.84% 38,187,995.00 03/22/2013 10.50% 11,207,151.00
02/24/2009 9.84% 37,271,684.00 04/24/2013 9.85% 10,934,018.00
03/24/2009 10.50% 36,377,262.00 05/24/2013 10.18% 10,667,637.00
04/24/2009 9.84% 35,504,164.00 06/24/2013 9.85% 10,407,689.00
05/22/2009 10.17% 34,647,704.00 07/24/2013 10.18% 10,154,018.00
06/24/2009 9.84% 33,811,774.00 08/23/2013 9.85% 9,906,475.00
07/24/2009 10.18% 32,995,822.00 09/24/2013 9.85% 9,664,912.00
08/24/2009 9.85% 32,199,434.00 10/24/2013 9.85% 9,429,187.00
K-3
SCHEDULE B
SCHEDULE OF STRIKE PRICES AND PROJECTED PRINCIPAL BALANCES (CLASS M
AND CLASS B CERTIFICATES YIELD MAINTENANCE AGREEMENT)
---------------------------------------------------------------------------------------------------------------------
DISTRIBUTION DATE STRIKE PRICE PROJECTED PRINCIPAL DISTRIBUTION DATE STRIKE PRICE PROJECTED PRINCIPAL
BALANCE BALANCE
---------------------------------------------------------------------------------------------------------------------
07/22/2005 10.50% 404,275,000.00 09/24/2009 9.70% 123,353,013.00
08/24/2005 8.29% 393,210,508.00 10/23/2009 10.03% 120,356,763.00
09/23/2005 9.46% 384,719,038.00 11/24/2009 9.70% 117,432,624.00
10/24/2005 9.92% 376,778,028.00 12/24/2009 10.03% 114,578,870.00
11/23/2005 9.61% 369,042,305.00 01/22/2010 9.70% 111,793,818.00
12/23/2005 9.93% 361,461,840.00 02/24/2010 9.70% 109,075,823.00
01/24/2006 9.65% 354,030,709.00 03/24/2010 10.50% 106,423,280.00
02/24/2006 9.65% 346,745,836.00 04/23/2010 9.71% 103,834,622.00
03/24/2006 10.50% 339,604,211.00 05/24/2010 10.03% 101,308,320.00
04/24/2006 9.65% 332,602,888.00 06/24/2010 9.71% 98,842,881.00
05/24/2006 9.97% 325,738,984.00 07/23/2010 10.03% 96,434,707.00
06/23/2006 9.65% 319,000,042.00 08/24/2010 9.71% 94,084,600.00
07/24/2006 9.98% 312,338,008.00 09/24/2010 9.71% 91,791,169.00
08/24/2006 9.66% 305,793,328.00 10/22/2010 10.03% 89,553,056.00
09/22/2006 9.66% 299,378,140.00 11/24/2010 9.71% 87,368,935.00
10/24/2006 9.98% 293,089,767.00 12/24/2010 10.03% 85,237,513.00
11/24/2006 9.66% 286,925,589.00 01/24/2011 9.71% 83,157,526.00
12/22/2006 9.98% 280,883,041.00 02/24/2011 9.71% 81,127,741.00
01/24/2007 9.67% 274,953,359.00 03/24/2011 10.50% 79,146,956.00
02/23/2007 9.67% 268,960,121.00 04/22/2011 9.71% 77,213,995.00
03/23/2007 10.50% 262,770,509.00 05/24/2011 10.03% 75,327,712.00
04/24/2007 9.67% 256,663,207.00 06/24/2011 9.71% 73,486,987.00
05/24/2007 9.99% 250,686,379.00 07/22/2011 10.03% 71,690,727.00
06/22/2007 9.67% 244,711,686.00 08/24/2011 9.71% 69,937,867.00
07/24/2007 10.00% 238,830,149.00 09/23/2011 9.71% 68,227,365.00
08/24/2007 9.67% 233,072,978.00 10/24/2011 10.03% 66,558,205.00
09/24/2007 9.67% 227,441,423.00 11/23/2011 9.71% 64,929,395.00
10/24/2007 10.00% 221,923,235.00 12/23/2011 10.03% 63,339,966.00
11/23/2007 9.67% 216,525,478.00 01/24/2012 9.71% 61,788,975.00
12/24/2007 10.00% 210,588,471.00 02/24/2012 9.71% 60,275,497.00
01/24/2008 9.68% 204,782,564.00 03/23/2012 10.38% 58,798,633.00
02/22/2008 9.68% 199,114,923.00 04/24/2012 9.71% 57,357,504.00
03/24/2008 10.35% 193,534,495.00 05/24/2012 10.03% 55,951,252.00
04/24/2008 9.68% 188,087,780.00 06/22/2012 9.71% 54,579,038.00
05/23/2008 10.00% 183,175,717.00 07/24/2012 10.03% 53,240,047.00
06/24/2008 9.68% 178,384,624.00 08/24/2012 9.71% 51,933,479.00
07/24/2008 10.01% 173,696,192.00 09/24/2012 9.71% 50,658,557.00
08/22/2008 9.69% 169,515,590.00 10/24/2012 10.03% 49,414,519.00
09/24/2008 9.69% 165,435,021.00 11/23/2012 9.71% 48,200,624.00
10/24/2008 10.01% 161,452,102.00 12/24/2012 10.03% 47,016,147.00
11/24/2008 9.69% 157,564,503.00 01/24/2013 9.71% 45,860,381.00
12/24/2008 10.01% 153,769,952.00 02/22/2013 9.71% 44,732,636.00
01/23/2009 9.70% 150,066,230.00 03/22/2013 10.50% 43,632,239.00
02/24/2009 9.70% 146,451,172.00 04/24/2013 9.71% 42,558,533.00
03/24/2009 10.50% 142,922,662.00 05/24/2013 10.03% 41,510,874.00
04/24/2009 9.70% 139,478,637.00 06/24/2013 9.71% 40,488,637.00
05/22/2009 10.02% 136,094,792.00 07/24/2013 10.03% 39,491,211.00
06/24/2009 9.70% 132,792,326.00 08/23/2013 9.71% 38,517,998.00
07/24/2009 10.03% 129,568,962.00 09/24/2013 9.71% 37,568,416.00
08/24/2009 9.70% 126,423,143.00 10/24/2013 9.71% 36,641,896.00
