STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
U.S. BANK NATIONAL ASSOCIATION,
TRUSTEE
XXXXX FARGO BANK, N.A.,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION
SELLER AND COMPANY
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POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2004
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Structured Asset Mortgage Investments II Inc.
Bear Xxxxxxx ARM Trust, Mortgage Pass-Through Certificates
Series 2004-9
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates
Section 2.01 CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE.......................45
Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE.......................48
Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE
LOAN PURCHASE AGREEMENT.......................................50
Section 2.04 SUBSTITUTION OF MORTGAGE LOANS................................51
Section 2.05 ISSUANCE OF CERTIFICATES......................................52
Section 2.06 REPRESENTATIONS AND WARRANTIES
CONCERNING THE DEPOSITOR......................................53
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 MASTER SERVICER...............................................55
Section 3.02 REMIC-RELATED COVENANTS.......................................56
Section 3.03 MONITORING OF SERVICERS.......................................56
Section 3.04 FIDELITY BOND.................................................57
Section 3.05 POWER TO ACT; PROCEDURES......................................57
Section 3.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS....................58
Section 3.07 RELEASE OF MORTGAGE FILES.....................................58
Section 3.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION
OF MASTER SERVICER TO BE HELD FOR TRUSTEE.....................59
Section 3.09 STANDARD HAZARD INSURANCE AND FLOOD
INSURANCE POLICIES............................................60
Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS..............60
Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE
INSURANCE POLICIES............................................61
Section 3.12 TRUSTEE TO RETAIN POSSESSION OF CERTAIN
INSURANCE POLICIES AND DOCUMENTS..............................61
Section 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS.....................62
Section 3.14 COMPENSATION FOR THE MASTER SERVICER..........................62
Section 3.15 REO PROPERTY..................................................62
Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.................63
Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S
SERVICING REPORT..............................................63
Section 3.18 REPORTS FILED WITH SECURITIES AND
EXCHANGE COMMISSION...........................................64
Section 3.19 THE COMPANY...................................................64
Section 3.20 UCC...........................................................64
Section 3.21 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.................65
Section 3.22 [RESERVED]....................................................65
ARTICLE IV
Accounts
Section 4.01 PROTECTED ACCOUNTS............................................66
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Section 4.02 MASTER SERVICER COLLECTION ACCOUNT............................67
Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM
THE MASTER SERVICER COLLECTION ACCOUNT........................68
Section 4.04 DISTRIBUTION ACCOUNT..........................................69
Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM
THE DISTRIBUTION ACCOUNT......................................70
ARTICLE V
Certificates
Section 5.01 CERTIFICATES..................................................72
Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.........81
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
ARTICLE VI
Payments to Certificateholders
Section 6.01 DISTRIBUTIONS ON THE CERTIFICATES.............................89
Section 6.02 ALLOCATION OF LOSSES..........................................93
Section 6.03 PAYMENTS......................................................96
Section 6.04 STATEMENTS TO CERTIFICATEHOLDERS .............................97
Section 6.05 MONTHLY ADVANCES..............................................99
Section 6.06 COMPENSATING INTEREST PAYMENTS...............................100
ARTICLE VII
The Master Servicer
Section 7.01 LIABILITIES OF THE MASTER SERVICER...........................101
Section 7.02 MERGER OR CONSOLIDATION OF THE MASTER SERVICER...............101
Section 7.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER
SERVICER AND THE SECURITIES ADMINISTRATOR....................101
Section 7.04 LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS...102
Section 7.05 MASTER SERVICER NOT TO RESIGN................................103
Section 7.06 SUCCESSOR MASTER SERVICER....................................103
Section 7.07 SALE AND ASSIGNMENT OF MASTER SERVICING......................103
ARTICLE VIII
Default
Section 8.01 EVENTS OF DEFAULT............................................105
Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.....................107
Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS...........................108
Section 8.04 WAIVER OF DEFAULTS...........................................108
Section 8.05 LIST OF CERTIFICATEHOLDERS...................................108
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ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 DUTIES OF TRUSTEE............................................109
Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND
THE SECURITIES ADMINISTRATOR.................................111
Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT
LIABLE FOR CERTIFICATES OR MORTGAGE LOANS....................113
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 AND
SECURITIES ADMINISTRATOR.....................................114
Section 9.07 INSURANCE....................................................114
Section 9.08 RESIGNATION AND REMOVAL OF THE TRUSTEE
AND SECURITIES ADMINISTRATOR.................................114
Section 9.09 SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES
ADMINISTRATOR................................................115
Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR................................................116
Section 9.11 PPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.................116
Section 9.12 FEDERAL INFORMATION RETURNS AND REPORTS
TO CERTIFICATEHOLDERS; REMIC ADMINISTRATION..................117
ARTICLE X
Termination
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..........................123
ARTICLE XI
Miscellaneous Provisions
Section 11.01 INTENT OF PARTIES............................................124
Section 11.02 AMENDMENT....................................................124
Section 11.03 RECORDATION OF AGREEMENT.....................................125
Section 11.04 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...................125
Section 11.05 ACTS OF CERTIFICATEHOLDERS...................................126
Section 11.06 GOVERNING LAW................................................127
Section 11.07 NOTICES......................................................127
Section 11.08 SEVERABILITY OF PROVISIONS...................................128
Section 11.09 SUCCESSORS AND ASSIGNS.......................................128
Section 11.10 ARTICLE AND SECTION HEADINGS.................................128
Section 11.11 COUNTERPARTS.................................................128
Section 11.12 NOTICE TO RATING AGENCIES....................................128
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EXHIBITS
Exhibit A-1 - Form of Class A and Class X Certificates
Exhibit A-2 - Form of Class B Certificates
Exhibit A-3 - 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 to H-3 - Servicing Agreements
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
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POOLING AND SERVICING AGREEMENT
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Pooling and Servicing Agreement dated as of October 1, 2004, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), U.S. Bank National Association, a national banking
association, not in its individual capacity but solely as trustee (the
"Trustee"), Xxxxx Fargo Bank, N.A., as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator"), and EMC Mortgage Corporation, as seller (in such
capacity, the "Seller") and as company (in such capacity, the "Company").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from the Seller. On the Closing Date, the Depositor will sell the Mortgage
Loans and certain other property to the Trust Fund and receive in consideration
therefor Certificates evidencing the entire beneficial ownership interest in the
Trust Fund.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I-A to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC I-A Regular Interests will be designated
"regular interests" in such REMIC and the Class R-I-A Certificate will be
designated the "residual interest" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I-B to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC I-B Regular Interests will be designated
"regular interests" in such REMIC and the Class R-I-B Interest will be
designated the "residual interest" in such REMIC.
The Class R-I Certificates will represent beneficial ownership of the
Class R-I-A Interest and the Class R-I-B Interest.
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 Interests will be designated
"regular interests" in such REMIC and the Class R-II Certificate will be
designated the "residual interest" 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 interest" in such REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $612,736,230.82. The initial principal amount of the
Certificates (excluding the Residual Certificates) will not exceed such
Outstanding Principal Balance. The Group I Mortgage Loans will have an
Outstanding Principal Balance as of the Cut-off Date, after deducting all
Scheduled Principal due on or before the Cut-off Date, of $269,887,574.67. The
Group II Mortgage Loans will have an Outstanding Principal Balance
as of the Cut-off Date, after deducting all Scheduled Principal due on or before
the Cut-off Date, of $342,848,656.15.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator, the Seller, the
Company and the Trustee agree as follows:
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ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage Loan,
as applicable, those customary mortgage servicing practices of prudent mortgage
servicing institutions that master service mortgage loans of the same type and
quality as such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located, to the extent applicable to the Trustee or the Master
Servicer (except in its capacity as successor to a Servicer).
ACCOUNT: The Master Servicer Collection Account and the Protected
Account as the context may require.
ACCRUED CERTIFICATE INTEREST: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount, or Notional Amount
in the case of any Interest Only Certificate, of such Certificate immediately
prior to such Distribution Date, on the basis of a 360-day year consisting of
twelve 30-day months, less (i) in the case of a Senior Certificate, such
Certificate's share of any Net Interest Shortfall from the related Mortgage
Loans and, after the Cross-Over Date, the interest portion of any Realized
Losses on the related Mortgage Loans allocated thereto in accordance with
Section 6.02(i) and (ii) in the case of a Subordinate Certificate, such
Certificate's share of any Net Interest Shortfall from the related Mortgage
Loans and the interest portion of any Realized Losses on the related Mortgage
Loans allocated thereto in accordance with Section 6.02(i).
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.
AGGREGATE EXPENSE RATE: With respect to any Mortgage Loan, the sum of
the Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
ALLOCABLE SHARE: With respect to any Class of Group I Subordinate
Certificates:
(a) as to any Distribution Date and amounts distributable pursuant
to clauses (i) and (iv) of the definition of Group I Subordinate Optimal
Principal Amount, the fraction, expressed as a percentage, the numerator of
which is the Current Principal Amount of such Class and the denominator of which
is the aggregate Current Principal Amount of all Classes of the Group I
Subordinate Certificates; and
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(b) as to any Distribution Date and amounts distributable pursuant
to clauses (ii), (iii) and (v) of the definition of Group I Subordinate Optimal
Principal Amount, and as to each Class of Group I Subordinate Certificates
(other than the Class of Group I Subordinate Certificates having the lowest
numerical designation as to which the Class Prepayment Distribution Trigger
shall not be applicable) 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 and the denominator of which is the aggregate Current Principal Amount of
all such Classes of Group I Subordinate Certificates and (y) the related Class
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 Group I 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), to the
extent of such Class's remaining Allocable Share, shall be distributed to the
remaining Class or Classes of Group I Subordinate Certificates which satisfy the
related Class Prepayment Distribution Trigger and to the Class of Group I
Subordinate Certificates having the lowest numerical Class designation in
reduction of their respective Current Principal Amounts in the order of their
numerical Class designations.
With respect to any Class of Group II Subordinate Certificates:
(a) as to any Distribution Date and amounts distributable pursuant
to clauses (i) and (iv) of the definition of Group II Subordinate Optimal
Principal Amount, the fraction, expressed as a percentage, the numerator of
which is the Current Principal Amount of such Class and the denominator of which
is the aggregate Current Principal Amount of all Classes of the Group II
Subordinate Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant
to clauses (ii), (iii) and (v) of the definition of Group II Subordinate Optimal
Principal Amount, and as to each Class of Group II Subordinate Certificates
(other than the Class of Group II Subordinate Certificates having the lowest
numerical designation as to which the Class Prepayment Distribution Trigger
shall not be applicable) 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 and the denominator of which is the aggregate Current Principal Amount of
all such Classes of Group II Subordinate Certificates and (y) the related Class
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 Group II 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), to the
extent of such Class's remaining Allocable Share, shall be distributed to the
remaining Class or Classes of Group II Subordinate Certificates which satisfy
the related Class Prepayment Distribution Trigger and to the Class of Group II
Subordinate Certificates having the lowest numerical Class designation in
reduction of their respective Current Principal Amounts in the order of their
numerical Class designations.
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APPLICABLE CREDIT RATING: For any long-term deposit or security, a
credit rating of AAA in the case of S&P or Aaa in the case of Xxxxx'x. For any
short-term deposit or security, or a rating of A-l+ in the case of S&P or P-1 in
the case of Xxxxx'x.
APPLICABLE STATE LAW: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other state
law whose applicability shall have been brought to the attention of the
Securities Administrator and the Trustee by either (i) an Opinion of Counsel
reasonably acceptable to the Securities Administrator and the Trustee delivered
to it by the Master Servicer or the Depositor, or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.
APPRAISED VALUE: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
ASSIGNMENT AGREEMENTS: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit of
the Certificateholders.
ASSUMED FINAL DISTRIBUTION DATE: November 25, 2034, or if such day is
not a Business Day, the next succeeding Business Day.
AVAILABLE FUNDS: With respect to any Distribution Date, the sum of the
Group I-1, Group I-2, Group I-3, Group II-1, Group II-2, Group I-3 and Group
II-4 Available Funds for such Distribution Date.
AVERAGE LOSS SEVERITY PERCENTAGE: With respect to any Distribution Date
and each Loan Group, the percentage equivalent of a fraction, the numerator of
which is the sum of the Loss Severity Percentages for each Mortgage Loan in such
Loan Group which had a Realized Loss and the denominator of which is the number
of Mortgage Loans in the related Loan Group which had Realized Losses.
BANKRUPTCY CODE: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. xx.xx. 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 Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator is located are authorized
or obligated by law or executive order to be closed.
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CALENDAR QUARTER: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.
CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits X-0, X-0 and A-3
with the blanks therein appropriately completed.
CERTIFICATE GROUP: The Group I-1 Senior Certificates, Group I-2 Senior
Certificates, Group I-3 Senior Certificates, Group I Certificates, Group II-1
Senior Certificates, Group II-2 Senior Certificates, Group II-3 Senior
Certificates, Group II-4 Senior Certificates and Group II Certificates, as
applicable.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.
CERTIFICATEHOLDER: A Holder of a Certificate.
CHEVY CHASE: Chevy Chase Bank F.S.B., or its successor in interest.
CHEVY CHASE SERVICING AGREEMENT: The Purchase, Warranties and Servicing
Agreement, dated as of July 1, 2001, between the Seller and Chevy Chase Bank,
F.S.B., as amended by Amendment No. 1, dated as of January 13, 2003, attached
hereto as Exhibit H-1, as modified by the related Assignment Agreement.
CLASS: With respect to the Certificates, X-0-X-0, X-0-X-0, X-0-X-0,
X-0-X-0, X-0-X-0, I-2-X-1, X-0-X-0, XX-0-X-0, XX-0-X-0, XX-0-X-0, XX-0-X-0, R-I,
R-II, R-III, X-X-0, X-X-0, X-X-0, X-X-0, X-X-0, X-X-0, XX-X-0, XX-X-0, XX-X-0,
XX-X-0, XX-X-0 and II-B-6.
CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Group I
Subordinate Certificates or Group II Subordinate Certificates for any
Distribution Date, the Class Prepayment Distribution Trigger is satisfied if the
fraction (expressed as a percentage), the numerator of which is the aggregate
Current Principal Amount of such Class and each Class of Group I Subordinate
Certificates or Group II Subordinate Certificates, respectively, subordinate
thereto, if any, and the denominator of which is the Scheduled Principal Balance
of all of the Group I Mortgage Loans or Group II Mortgage Loans, respectively,
as of the beginning of the related Due Period, equals or exceeds such percentage
calculated as of the Closing Date.
CLASS R CERTIFICATES: The Class R-I (evidencing beneficial ownership of
the Class R-I-A Interest and Class R-I-B Interest), Class R-II and Class R-III
Certificates.
CLOSING DATE: October 29, 2004.
CODE: The Internal Revenue Code of 1986, as amended.
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COMPENSATING INTEREST PAYMENT: As defined in Section 6.06.
CORRESPONDING CLASS: With respect to each REMIC II Regular Interest,
the Class of Certificates with the corresponding designation.
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 U.S. Bank Corporate
Trust Services, Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Corporate Trust Services/BART Series 2004-9. For purposes of
registration and transfer and exchange only, the Corporate Trust Office shall be
located at U.S. Bank National Association, 00 Xxxxxxxxxx Xxxxxx, Xxxx Drop
Window, Xx. Xxxx, Xxxxxxxxx 00000.
COUNTRYWIDE: Countrywide Home Loans, Inc., or its successor in
interest.
COUNTRYWIDE SERVICING AGREEMENT: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2002, as amended on January 1, 2003, between
the Seller and Countrywide, attached hereto as Exhibit H-2, as modified by the
related Assignment Agreement.
CROSS-OVER DATE: The Group I Cross-Over Date or Group II Cross-Over
Date, as applicable.
CURRENT PRINCIPAL AMOUNT: With respect to any Certificate (other than
an Interest Only Certificate) as of any Distribution Date, the initial principal
amount of such Certificate, and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate, taking account of the Loss Allocation
Limitation and (iii) in the case of a Subordinate Certificate, such
Certificate's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount for previous Distribution Dates. With respect to any Class of
Certificates (other than an Interest Only Certificate), 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, N.A., or any successor custodian appointed
pursuant to the provisions hereof and of the Custodial Agreement.
CUT-OFF DATE: October 1, 2004.
CUT-OFF DATE BALANCE: $612,736,230.82.
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DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
DEPOSITOR: Structured Asset Mortgage Investments II Inc., a Delaware
corporation, or its successors in interest.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
DEPOSITORY AGREEMENT: The meaning specified in 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 each Mortgage Loan, the
Determination Date as defined in the related Servicing Agreement.
DISQUALIFIED ORGANIZATION: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the Xxxxxxx Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an ownership interest in a Residual Certificate by such Person
may cause any 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.
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DISTRIBUTION ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "U.S. Bank
National Association, as Trustee f/b/o holders of Structured Asset Mortgage
Investments II Inc., Bear Xxxxxxx ARM Trust, Mortgage Pass-Through Certificates,
Series 2004-9 - Distribution Account." The Distribution Account shall be an
Eligible Account.
DISTRIBUTION ACCOUNT DEPOSIT DATE: The Business Day prior to each
Distribution Date.
DISTRIBUTION DATE: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
DIVERTED AMOUNT: On any Distribution Date, an amount equal to any
Special Hazard Loss allocated to the Group I Senior Certificates or Group II
Senior Certificates, as applicable, for such date pursuant to Section 6.02(e).
DTC CUSTODIAN: U.S. Bank National Association, or its successors in
interest as custodian for the Depository.
DUE DATE: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.
DUE PERIOD: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-2 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 secured such
that, as evidenced by an Opinion of Counsel (obtained by the Person requesting
that the account be held pursuant to this clause (i)) delivered to the Trustee
prior to the establishment of such account, the Certificateholders will have a
claim with respect to the funds in such account and a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Investment is an obligation of the institution that maintains the Distribution
Account) securing such funds that is superior to claims of any other depositors
or general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies that use of any such account as the
Distribution Account will not have an adverse effect on the then-current ratings
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assigned to the Classes of Certificates then rated by the Rating Agencies).
Eligible Accounts may bear 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 Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
XXXXXX XXX: Federal National Mortgage Association 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.
FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount, or Notional
Amount in the case of the Interest Only Certificates, of such Certificate and
the denominator of which is the Current Principal Amount, or Notional Amount in
the case of the Interest Only Certificates, of such Class. 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 Interest Only 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 its respective
Class and (iii) a Certificate of any other Class will be deemed to equal 97.25%
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 1.0% upon the retirement of each Class
of Interest Only Certificates.
XXXXXXX MAC: Xxxxxxx Mac, formerly the 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).
GMAC: GMAC Mortgage Corporation, or its successor in interest.
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GMAC SERVICING AGREEMENT: The Servicing Agreement, dated as of May 1,
2001, as between the Seller and GMAC, as amended, attached hereto as Exhibit
H-6, as modified by the Assignment Agreement.
GROSS MARGIN: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
GROUP I AVAILABLE FUNDS: An amount equal to the sum of (a) Group I-1
Available Funds, (b) Group I-2 Available Funds, (c) Group I-3 Available Funds
and (d) Group I-4 Available Funds.
GROUP I CERTIFICATE GROUP: The Group I-1 Senior Certificates, Group I-2
Senior Certificates, and Group I-3 Senior Certificates, as applicable.
GROUP I CERTIFICATES: The Class I-1-A-1, Class I-1-X-1, Class I-2-A-1,
Class I-2-A-2, Class I-2-A-3, Class I-2-X-1, Class I-3-A-1, Class I-B-I, Class
I-B-2, Class I-B-3, Class I-B-4, Class I-B-5, Class I-B-6, Class R-I, Class R-II
and Class R-III Certificates.
GROUP I CROSS-OVER DATE: The first Distribution Date on which the
aggregate Current Principal Amount of the Group I Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).
GROUP I CUT-OFF DATE BALANCE: $269,887,574.67.
GROUP I LOSS ALLOCATION LIMITATION: The meaning specified in Section
6.02(d) hereof.
GROUP I MORTGAGE LOANS: The Group I-1 Mortgage Loans, Group I-2
Mortgage Loans and Group I-3 Mortgage Loans.
GROUP I NON-OFFERED SUBORDINATE CERTIFICATES: The Class I-B-4, Class
I-B-5 and Class I-B-6 Certificates.
GROUP I OFFERED SUBORDINATE CERTIFICATES: The Class I-B-1, Class I-B-2
and Class I-B-3 Certificates.
GROUP I OPTIONAL TERMINATION DATE: The Distribution Date on which the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans is less than
10% of the Group I Cut-off Date Balance.
GROUP I SENIOR CERTIFICATES: The Class I-1-A-1, Class I-1-X-1, Class
I-2-A-1, Class I-2-A-2, Class I-2-A-3, Class I-2-X-1, Class I-3-A-1, Class R-I,
Class R-II and Class R-III Certificates.
GROUP I SENIOR PERCENTAGE: The Group I-1 Senior Percentage, Group I-2
Senior Percentage or Group I-3 Senior Percentage, as applicable.
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GROUP I SENIOR PREPAYMENT PERCENTAGE: The Group I-1 Senior Prepayment
Percentage, Group I-2 Senior Prepayment Percentage or Group I-3 Senior
Prepayment Percentage, as applicable.
GROUP I SUBORDINATE CERTIFICATES: The Class I-B-1, Class I-B-2, Class
I-B-3, Class I-B-4, Class I-B-5 and Class I-B-6 Certificates.
GROUP I SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution
Date and the Group I Subordinate Certificates, an amount equal to the sum,
without duplication, of the following for the Loan Group I-1, Loan Group I-2 and
Loan Group I-3 Mortgage Loans (but in no event greater than the aggregate
Current Principal Amount of the Group I Subordinate Certificates immediately
prior to such Distribution Date):
(i) the applicable Group I Subordinate Percentage of the
principal portion of all Scheduled Payments due on each
Outstanding Mortgage Loan in the related Loan Group on the
related Due Date as specified in the amortization schedule at
the time applicable thereto (after adjustment for previous
Principal Prepayments but before any adjustment to such
amortization schedule by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Group I Subordinate Prepayment
Percentage of the Scheduled Principal Balance of each Mortgage
Loan in the related Loan Group that was the subject of a
Principal Prepayment in full received by the Master Servicer
during the related Prepayment Period;
(iii) the applicable Group I Subordinate Prepayment
Percentage of each Principal Prepayment in part received
during the related Prepayment Period with respect to each
Mortgage Loan in the related Loan Group;
(iv) the excess, if any, of (a) all Net Liquidation
Proceeds allocable to principal received during the related
Prepayment Period in respect of each Liquidated Mortgage Loan
in the related Loan Group over (b) the sum of the amounts
distributable to the related Senior Certificateholders
pursuant to clause (iv) of the related definition of Senior
Optimal Principal Amount on such Distribution Date;
(v) the applicable Group I Subordinate Prepayment
Percentage of the sum of (a) the Scheduled Principal Balance
of each Mortgage Loan in the related Loan Group which was
repurchased by the Seller in connection with such Distribution
Date and (b) the difference, if any, between the Scheduled
Principal Balance of a Mortgage Loan in the related Loan Group
that has been replaced by the Seller with a Substitute
Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement
in connection with such Distribution Date over the Scheduled
Principal Balance of such Substitute Mortgage Loan; and
(vi) on the Distribution Date on which the Current
Principal Amounts of the Group I-1 Senior Certificates (other
than the Class I-1-X-1 Certificates), Group I-2 Senior
Certificates (other than the Class I-2-X-1 Certificates) or
Group I-3 Senior
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Certificates have all been reduced to zero, 100% of the
related Senior Optimal Principal Amount. After the aggregate
Current Principal Amount of the Group I Subordinate
Certificates has been reduced to zero, the Group I Subordinate
Optimal Principal Amount shall be zero.
GROUP I SUBORDINATE PERCENTAGE: The Group I-1 Subordinate Percentage,
Group I-2 Subordinate Percentage or Group I-3 Subordinate Percentage, as
applicable.
GROUP I SUBORDINATE PREPAYMENT PERCENTAGE: The Group I-1 Subordinate
Prepayment Percentage, Group I-2 Subordinate Prepayment Percentage or Group I-3
Subordinate Prepayment Percentage, as applicable.
GROUP I-1 AVAILABLE FUNDS, GROUP I-2 AVAILABLE FUNDS AND GROUP I-3
AVAILABLE FUNDS: With respect to any Distribution Date, an amount equal to the
aggregate of the following amounts with respect to the Mortgage Loans in the
related Loan Group: (a) all previously undistributed payments on account of
principal (including the principal portion of Scheduled Payments, Principal
Prepayments and the principal portion of Net Liquidation Proceeds) and all
previously undistributed payments on account of interest received after the
Cut-off Date and on or prior to the related Determination Date, (b) any Monthly
Advances and Compensating Interest Payments by the Servicers or the Master
Servicer with respect to such Distribution Date and (c) any reimbursed amount in
connection with losses on investments of deposits in an account, except:
(i) all payments that were due on or before the Cut-off
Date;
(ii) all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or
dates subsequent to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to
the extent that, there are any unreimbursed Monthly Advances;
(v) amounts representing Monthly Advances determined to
be Nonrecoverable Advances;
(vi) any investment earnings on amounts on deposit in the
Master Servicer Collection Account and the Distribution
Account and amounts permitted to be withdrawn from the Master
Servicer Collection Account and the Distribution Account
pursuant to this Agreement;
(vii) amounts needed to pay the Servicing Fees or to
reimburse any Servicer or the Master Servicer for amounts due
under the applicable Servicing Agreement and the Agreement to
the extent such amounts have not been retained by, or paid
previously to, such Servicer or the Master Servicer;
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(viii) to pay any fees with respect to any lender-paid
primary mortgage insurance policy; and
(ix) any expenses or other amounts reimbursable to the
Trustee, the Securities Administrator and the Custodian
pursuant to Section 7.04(c) or Section 9.05.
In addition, on each Distribution Date, the Group I-1 Available Funds,
Group I-2 Available Funds or Group I-3 Available Funds shall be increased or
decreased, as applicable, by any Diverted Amount allocated thereto pursuant to
Section 6.02(e).
GROUP I-1 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP I-1 SENIOR CERTIFICATES: The Class I-1-A-1, Class I-1-X-1, Class
R-I, Class R-II and Class R-III Certificates.
GROUP I-1 SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP I-2 SENIOR OPTIMAL
PRINCIPAL AMOUNT AND GROUP I-3 SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to
the Group I-1, Group I-2 and Group I-3 Senior Certificates (other than any
Interest Only Certificates) each Distribution Date, an amount equal to the sum,
without duplication, of the following (but in no event greater than the
aggregate Current Principal Amounts of the Group I-1, Group I-2 and Group I-3
Senior Certificates, as applicable, immediately prior to such Distribution
Date):
(i) the applicable Group I Senior Percentage of the
principal portion of all Scheduled Payments due on each Outstanding
Mortgage Loan in the related Loan Group on the related Due Date as
specified in the amortization schedule at the time applicable thereto
(after adjustments for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Group I Senior Prepayment Percentage
of the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group which was the subject of a Principal Prepayment in full
received by the Master Servicer during the related Prepayment Period;
(iii) the applicable Group I 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
in the related Loan Group;
(iv) the lesser of (a) the applicable Group I Senior
Prepayment Percentage of the sum of (A) all Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage Loan in the
related Loan Group which became a Liquidated Mortgage Loan during the
related Prepayment Period (other than Mortgage Loans described in the
immediately following clause (B)) and (B) the Scheduled Principal
Balance of each such Mortgage Loan in the related Loan Group purchased
by an insurer from the Trustee during the related
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Prepayment Period pursuant to the related Primary Mortgage Insurance
Policy, if any, or otherwise; and (b) the applicable Group I Senior
Percentage of the sum of (A) the Scheduled Principal Balance of each
Mortgage Loan in the related Loan Group which became a Liquidated
Mortgage Loan during the related Prepayment Period (other than the
Mortgage Loans described in the immediately following clause (B)) and
(B) the Scheduled Principal Balance of each such Mortgage Loan in the
related Loan Group that was purchased by an insurer from the Trust
during the related Prepayment Period pursuant to the related Primary
Mortgage Insurance Policy, if any or otherwise;
(v) the applicable Group I Senior Prepayment Percentage
of the sum of (a) the Scheduled Principal Balance of each Mortgage Loan
in the related Loan Group 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 in the related Loan
Group that has been replaced by the Seller with a substitute Mortgage
Loan pursuant to the Mortgage Loan Purchase Agreement in connection
with such Distribution Date over the Scheduled Principal Balance of
such substitute Mortgage Loan; and
(vi) any Diverted Amount allocated to the Group I-1 Senior
Optimal Principal Amount, Group I-2 Senior Optimal Principal Amount or
Group I-3 Senior Optimal Principal Amount, as applicable for such
Distribution Date;
minus
(vii) any Diverted Amount from the Group I-1 Senior Optimal
Principal Amount, Group I-2 Senior Optimal Principal Amount or Group
I-3 Senior Optimal Principal Amount, as applicable, for such
Distribution Date.
GROUP I-1 SENIOR PERCENTAGE: Initially, 94.75%. 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
Group I-1 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group I-1 Mortgage Loans as of
the beginning of the related Due Period.
GROUP I-1 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I-1 Senior Prepayment Percentage
--------------------------------------------------------------------------------
November 25, 2004 - October 25, 2011 100%
November 25, 2011 - October 25, 2012 Group I-1 Senior Percentage plus 70% of
the Group I-1 Subordinate Percentage
November 25, 2012 - October 25, 2013 Group I-1 Senior Percentage plus 60% of
the Group I-1 Subordinate Percentage
November 25, 2013 - October 25, 2014 Group I-1 Senior Percentage plus 40% of
the Group I-1 Subordinate Percentage
-15-
November 25, 2014 - October 25, 2015 Group I-1 Senior Percentage plus 20% of
the Group I-1 Subordinate Percentage
November 25, 2015 and thereafter Group I-1 Senior Percentage
In addition, no reduction of the Group I-1 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 Group I Mortgage Loans delinquent 60 days or more (including for this
purpose any such Group I Mortgage Loans in foreclosure and Group I 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 Group I Subordinate Certificates does
not exceed 50%; and (B) cumulative Realized Losses on the Group I Mortgage Loans
do not exceed (a) 30% of the Original Group I Subordinate Principal Balance if
such Distribution Date occurs between and including November 2011 and October
2012, (b) 35% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2012 and October 2013,
(c) 40% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2013 and October 2014,
(d) 45% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2014 and October 2015,
and (e) 50% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs during or after November 2015.
In addition, if on any Distribution Date the current weighted average
of the Group I Subordinate Percentages is equal to or greater than two times the
initial weighted average of the Group I Subordinate Percentages, and (a) the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans delinquent
60 days or more (including for this purpose any such Group I Mortgage Loans in
foreclosure and such Group I 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 Group I
Subordinate Certificates does not exceed 50% and (b)(i) on or prior to the
Distribution Date in October 2007 cumulative Realized Losses on the Group I
Mortgage Loans as of the end of the related Prepayment Period do not exceed 20%
of the Original Group I Subordinate Principal Balance and (ii) after the
Distribution Date in October 2007 cumulative Realized Losses on the Group I
Mortgage Loans as of the end of the related Prepayment Period do not exceed 30%
of the Original Group I Subordinate Principal Balance, then, the Group I-1
Senior Prepayment Percentage for such Distribution Date will equal the Group I-1
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Group I Subordinate Percentages is equal to or greater
than two times the initial weighted average of the Group I Subordinate
Percentages on or prior to the Distribution Date occurring in October 2007 and
the above delinquency and loss tests are met, then the Group I-1 Senior
Prepayment Percentage for such Distribution Date will equal the Group I-1 Senior
Percentage plus 50% of the Group I-1 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
I-1 Senior Percentage exceeds the Group I-1 Senior Percentage as of the Cut-Off
Date, the Group I-1 Senior Prepayment Percentage for such Distribution Date will
equal 100%. On the Distribution Date on which the Current Principal Amounts of
the Group I-1 Senior Certificates are reduced to zero, the Group I-1
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Senior Prepayment Percentage shall be the minimum percentage sufficient to
effect such reduction and thereafter shall be zero.
GROUP I-1 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group I-1 Senior Percentage.
GROUP I-1 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
I-1 Mortgage Loans, on any Distribution Date, 100% minus the Group I-1 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group I-1 Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Group I Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Group I Subordinate Percentages and (b) the aggregate Scheduled Principal
Balance of the Group I Mortgage Loans delinquent 60 days or more (including for
this purpose any such Group I Mortgage Loans in foreclosure and Group I 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 Group I Subordinate Certificates does
not exceed 100%, the Group I-1 Subordinate Prepayment Percentage will equal
100%. If the test set forth in the preceding sentence is not satisfied on any
Distribution Date after the Current Principal Amount of the Group I-1 Senior
Certificates have each been reduced to zero, then the Group I-1 Subordinate
Prepayment Percentage will equal zero for such Distribution Date.
GROUP I-2 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP I-2 SENIOR CERTIFICATES: The Class I-2-A-1, Class I-2-A-2, Class
I-2-A-3 and Class I-2-X-1 Certificates.
GROUP I-2 SENIOR PERCENTAGE: Initially, 94.75%. 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
Group I-2 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group I-2 Mortgage Loans as of
the beginning of the related Due Period.
GROUP I-2 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I-2 Senior Prepayment Percentage
--------------------------------------------------------------------------------
November 25, 2004 - October 25, 2011 100%
November 25, 2011 - October 25, 2012 Group I-2 Senior Percentage plus 70% of
the Group I-2 Subordinate Percentage
November 25, 2012 - October 25, 2013 Group I-2 Senior Percentage plus 60% of
the Group I-2 Subordinate Percentage
November 25, 2013 - October 25, 2014 Group I-2 Senior Percentage plus 40% of
the Group I-2 Subordinate Percentage
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November 25, 2014 - October 25, 2015 Group I-2 Senior Percentage plus 20% of
the Group I-2 Subordinate Percentage
November 25, 2015 and thereafter Group I-2 Senior Percentage
In addition, no reduction of the Group I-2 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 Group I Mortgage Loans delinquent 60 days or more (including for this
purpose any such Group I Mortgage Loans in foreclosure and Group I 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 Group I Subordinate Certificates does
not exceed 50%; and (B) cumulative Realized Losses on the Group I Mortgage Loans
do not exceed (a) 30% of the Original Group I Subordinate Principal Balance if
such Distribution Date occurs between and including November 2011 and October
2012, (b) 35% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2012 and October 2013,
(c) 40% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2013 and October 2014,
(d) 45% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2014 and October 2015,
and (e) 50% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs during or after November 2015.
In addition, if on any Distribution Date the current weighted average
of the Group I Subordinate Percentages is equal to or greater than two times the
initial weighted average of the Group I Subordinate Percentages, and (a) the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans delinquent
60 days or more (including for this purpose any such Group I Mortgage Loans in
foreclosure and such Group I 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 Group I
Subordinate Certificates does not exceed 50% and (b)(i) on or prior to the
Distribution Date in October 2007 cumulative Realized Losses on the Group I
Mortgage Loans as of the end of the related Prepayment Period do not exceed 20%
of the Original Group I Subordinate Principal Balance and (ii) after the
Distribution Date in October 2007 cumulative Realized Losses on the Group I
Mortgage Loans as of the end of the related Prepayment Period do not exceed 30%
of the Original Group I Subordinate Principal Balance, then, the Group I-2
Senior Prepayment Percentage for such Distribution Date will equal the Group I-2
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Group I Subordinate Percentages is equal to or greater
than two times the initial weighted average of the Group I Subordinate
Percentages on or prior to the Distribution Date occurring in October 2007 and
the above delinquency and loss tests are met, then the Group I-2 Senior
Prepayment Percentage for such Distribution Date will equal the Group I-2 Senior
Percentage plus 50% of the Group I-2 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
I-2 Senior Percentage exceeds the Group I-2 Senior Percentage as of the Cut-Off
Date, the Group I-2 Senior Prepayment Percentage for such Distribution Date will
equal 100%. On the Distribution Date on which the Current Principal Amounts of
the Group I-2 Senior Certificates are reduced to zero, the Group I-2
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Senior Prepayment Percentage shall be the minimum percentage sufficient to
effect such reduction and thereafter shall be zero.
GROUP I-2 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group I-2 Senior Percentage.
GROUP I-2 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
I-2 Mortgage Loans, on any Distribution Date, 100% minus the Group I-2 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group I-2 Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Group I Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Group I Subordinate Percentages and (b) the aggregate Scheduled Principal
Balance of the Group I Mortgage Loans delinquent 60 days or more (including for
this purpose any such Group I Mortgage Loans in foreclosure and Group I 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 Group I Subordinate Certificates does
not exceed 100%, the Group I-2 Subordinate Prepayment Percentage will equal
100%. If the test set forth in the preceding sentence is not satisfied on any
Distribution Date after the Current Principal Amount of the Group I-2 Senior
Certificates have each been reduced to zero, then the Group I-2 Subordinate
Prepayment Percentage will equal zero for such Distribution Date.
GROUP I-3 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP I-3 SENIOR CERTIFICATES: The Class I-3-A-1 Certificates.
GROUP I-3 SENIOR PERCENTAGE: Initially, 94.75%. 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
Group I-3 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group I-3 Mortgage Loans as of
the beginning of the related Due Period.
GROUP I-3 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I-3 Senior Prepayment Percentage
--------------------------------------------------------------------------------
November 25, 2004 - October 25, 2011 100%
November 25, 2011 - October 25, 2012 Group I-3 Senior Percentage plus 70% of
the Group I-3 Subordinate Percentage
November 25, 2012 - October 25, 2013 Group I-3 Senior Percentage plus 60% of
the Group I-3 Subordinate Percentage
November 25, 2013 - October 25, 2014 Group I-3 Senior Percentage plus 40% of
the Group I-3 Subordinate Percentage
November 25, 2014 - October 25, 2015 Group I-3 Senior Percentage plus 20% of
the Group I-3 Subordinate Percentage
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November 25, 2015 and thereafter Group I-3 Senior Percentage
In addition, no reduction of the Group I-3 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 Group I Mortgage Loans delinquent 60 days or more (including for this
purpose any such Group I Mortgage Loans in foreclosure and Group I 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 Group I Subordinate Certificates does
not exceed 50%; and (B) cumulative Realized Losses on the Group I Mortgage Loans
do not exceed (a) 30% of the Original Group I Subordinate Principal Balance if
such Distribution Date occurs between and including November 2011 and October
2012, (b) 35% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2012 and October 2013,
(c) 40% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2013 and October 2014,
(d) 45% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs between and including November 2014 and October 2015,
and (e) 50% of the Original Group I Subordinate Principal Balance if such
Distribution Date occurs during or after November 2015.
In addition, if on any Distribution Date the current weighted average
of the Group I Subordinate Percentages is equal to or greater than two times the
initial weighted average of the Group I Subordinate Percentages, and (a) the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans delinquent
60 days or more (including for this purpose any such Group I Mortgage Loans in
foreclosure and such Group I 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 Group I
Subordinate Certificates does not exceed 50% and (b)(i) on or prior to the
Distribution Date in October 2007 cumulative Realized Losses on the Group I
Mortgage Loans as of the end of the related Prepayment Period do not exceed 20%
of the Original Group I Subordinate Principal Balance and (ii) after the
Distribution Date in October 2007 cumulative Realized Losses on the Group I
Mortgage Loans as of the end of the related Prepayment Period do not exceed 30%
of the Original Group I Subordinate Principal Balance, then, the Group I-3
Senior Prepayment Percentage for such Distribution Date will equal the Group I-3
Senior Percentage; provided, however, if on such Distribution Date the current
weighted average of the Group I Subordinate Percentages is equal to or greater
than two times the initial weighted average of the Group I Subordinate
Percentages on or prior to the Distribution Date occurring in October 2007 and
the above delinquency and loss tests are met, then the Group I-3 Senior
Prepayment Percentage for such Distribution Date will equal the Group I-3 Senior
Percentage plus 50% of the Group I-3 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date the Group
I-3 Senior Percentage exceeds the Group I-3 Senior Percentage as of the Cut-Off
Date, the Group I-3 Senior Prepayment Percentage for such Distribution Date will
equal 100%. On the Distribution Date on which the Current Principal Amounts of
the Group I-3 Senior Certificates are reduced to zero, the Group I-3 Senior
Prepayment Percentage shall be the minimum percentage sufficient to effect such
reduction and thereafter shall be zero.
-20-
GROUP I-3 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group I-3 Senior Percentage.
GROUP I-3 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
I-3 Mortgage Loans, on any Distribution Date, 100% minus the Group I-3 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group I-3 Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Group I Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Group I Subordinate Percentages and (b) the aggregate Scheduled Principal
Balance of the Group I Mortgage Loans delinquent 60 days or more (including for
this purpose any such Group I Mortgage Loans in foreclosure and Group I 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 Group I Subordinate Certificates does
not exceed 100%, the Group I-3 Subordinate Prepayment Percentage will equal
100%. If the test set forth in the preceding sentence is not satisfied on any
Distribution Date after the Current Principal Amount of the Group I-3 Senior
Certificates have each been reduced to zero, then the Group I-3 Subordinate
Prepayment Percentage will equal zero for such Distribution Date.
GROUP II AVAILABLE FUNDS: An amount equal to the sum of (a) the Group
II-1 Available Funds, (b) the Group II-2 Available Funds, (c) the Group II-3
Available Funds and (d) the Group II-4 Available Funds.
GROUP II CERTIFICATE GROUP: The Group II-1 Senior Certificates, Group
II-2 Senior Certificates, Group II-3 Senior Certificates and Group II-4 Senior
Certificates, as applicable.
GROUP II CERTIFICATES: The Class II-1-A-1, Class II-2-A-1, Class
II-3-A-1, Class II-4-A-1, Class II-B-1, Class II-B-2, Class II-B-3, Class
II-B-4, Class II-B-5 and Class II-B-6 Certificates.
GROUP II CROSS-OVER DATE: The first Distribution Date on which the
aggregate Current Principal Amount of the Group II Subordinate Certificates has
been reduced to zero (giving effect to all distributions on such Distribution
Date).
GROUP II CUT-OFF DATE BALANCE: $342,848,656.15.
GROUP II LOSS ALLOCATION LIMITATION: The meaning specified in Section
6.02(d) hereof.
GROUP II MORTGAGE LOANS: The Group II-1, Group II-2, Group II-3 and
Group II-4 Mortgage Loans, as identified as such on the Mortgage Loan Schedule.
GROUP II NON-OFFERED SUBORDINATE CERTIFICATES: The Class II-B-4, Class
II-B-5 and Class II-B-6 Certificates.
GROUP II OFFERED SUBORDINATE CERTIFICATES: The Class II-B-1, Class
II-B-2 and Class II-B-3 Certificates.
-21-
GROUP II OPTIONAL TERMINATION DATE: The Distribution Date on which the
aggregate Scheduled Principal Balance of the Group II Mortgage Loans is less
than 10% of the Group II Cut-off Date Balance.
GROUP II SENIOR CERTIFICATES: The Class II-1-A-1, Class II-2-A-1, Class
II-3-A-1 and Class II-4-A-1 Certificates.
GROUP II SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to each
Distribution Date, an amount equal to the sum, without duplication, of the
following (but in no event greater than the aggregate Current Principal Amounts
of the Group II Senior Certificates immediately prior to such Distribution
Date):
(i) the Group II Senior Percentage of the principal
portion of all Scheduled Payments due on each Outstanding Mortgage Loan
in Loan Group II 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);
(ii) the Group II Senior Prepayment Percentage of the
Scheduled Principal Balance of each Group II Mortgage Loan which was
the subject of a Principal Prepayment in full received by the Master
Servicer during the related Prepayment Period;
(iii) the Group II Senior Prepayment Percentage of all
Principal Prepayments in part received by the Master Servicer during
the related Prepayment Period with respect to each Group II Mortgage
Loan;
(iv) the lesser of (a) the Group II Senior Prepayment
Percentage of the sum of (A) all Net Liquidation Proceeds allocable to
principal received in respect of each Group II Mortgage Loan which
became a Liquidated Mortgage Loan during the related Prepayment Period
(other than Mortgage Loans described in the immediately following
clause (B)) and (B) the Scheduled Principal Balance of each such Group
II Mortgage Loan purchased by an insurer from the Trust during the
related Prepayment Period pursuant to the related Primary Mortgage
Insurance Policy, if any, or otherwise; and (b) the Group II Senior
Percentage of the sum of (A) the Scheduled Principal Balance of each
Group II Mortgage Loan which became a Liquidated Mortgage Loan during
the related Prepayment Period (other than the Mortgage Loans described
in the immediately following clause (B)) and (B) the Scheduled
Principal Balance of each such Group II Mortgage Loan that was
purchased by an insurer from the Trust during the related Prepayment
Period pursuant to the related Primary Mortgage Insurance Policy, if
any or otherwise;
(v) the Group II Senior Prepayment Percentage of the sum
of (a) the Scheduled Principal Balance of each Group II 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 Group II Mortgage Loan that has been replaced by
the Seller with a Substitute Mortgage Loan pursuant to the Mortgage
Loan Purchase Agreement in connection with such
-22-
Distribution Date over the Scheduled Principal Balance of such
Substitute Mortgage Loan; and
(vi) any Diverted Amount allocated to the Group II Senior
Optimal Principal Amount for such Distribution Date;
minus
(vii) any Diverted Amount from the Group II Senior Optimal
Principal Amount for such Distribution Date.
GROUP II SENIOR PERCENTAGE: The Group II-1 Senior Percentage, Group
II-2 Senior Percentage, Group II-3 Senior Percentage or Group II-4 Senior
Percentage, as applicable.
GROUP II SENIOR PREPAYMENT PERCENTAGE: The Group II-1 Senior Prepayment
Percentage, Group II-2 Senior Prepayment Percentage, Group II-3 Senior
Prepayment Percentage or Group II-4 Senior Prepayment Percentage, as applicable.
GROUP II SUBORDINATE CERTIFICATES: The Class II-B-1, Class II-B-2,
Class II-B-3, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates.
GROUP II SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution
Date and the Group II Subordinate Certificates, an amount equal to the sum,
without duplication, of the following for Loan Group II-1, Loan Group II-2, Loan
Group II-3 and Loan Group II-4 (but in no event greater than the aggregate
Current Principal Amount of the Group II Subordinate Certificates immediately
prior to such Distribution Date):
(i) the applicable Group II Subordinate Percentage of the
principal portion of all Scheduled Payments due on each
Outstanding Mortgage Loan in the related Loan Group on the
related Due Date as specified in the amortization schedule at
the time applicable thereto (after adjustment for previous
Principal Prepayments but before any adjustment to such
amortization schedule by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable Group II Subordinate Prepayment
Percentage of the Scheduled Principal Balance of each Mortgage
Loan in the related Loan Group that was the subject of a
Principal Prepayment in full received by the Master Servicer
during the related Prepayment Period;
(iii) the applicable Group II Subordinate Prepayment
Percentage of each Principal Prepayment in part received
during the related Prepayment Period with respect to each
Mortgage Loan in the related Loan Group;
(iv) the excess, if any, of (a) all Net Liquidation
Proceeds allocable to principal received during the related
Prepayment Period in respect of each Liquidated Mortgage Loan
in the related Loan Group and all Subsequent Recoveries
received
-23-
in respect of each Liquidated Mortgage Loan in the related
Loan Group during the related Due Period over (b) the sum of
the amounts distributable to the Holders of the related Senior
Certificates pursuant to clause (iv) of the definition of
Group II Senior Optimal Principal Amount on such Distribution
Date;
(v) the applicable Group II Subordinate Prepayment
Percentage of the sum of (a) the Scheduled Principal Balance
of each Mortgage Loan in the related Loan Group which was
repurchased by the Seller in connection with respect to such
Distribution Date and (b) the difference, if any, between the
Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group that has been replaced by the Seller with a
Substitute Mortgage Loan pursuant to the Mortgage Loan
Purchase Agreement in connection with such Distribution Date
over the Scheduled Principal Balance of each such Substitute
Mortgage Loan; and
(vi) on the Distribution Date on which the Current
Principal Amounts of the Group II-1 Senior Certificates, Group
II-2 Senior Certificates, Group II-3 Senior Certificates or
Group II-4 Senior Certificates have all been reduced to zero,
100% of the related Senior Optimal Principal Amount. After the
aggregate Current Principal Amount of the Group II Subordinate
Certificates has been reduced to zero, the Group II
Subordinate Optimal Principal Amount shall be zero.
GROUP II SUBORDINATE PERCENTAGE: The Group II-1 Subordinate Percentage,
Group II-2 Subordinate Percentage, Group II-3 Subordinate Percentage or Group
II-4 Subordinate Percentage, as applicable.
GROUP II SUBORDINATE PREPAYMENT PERCENTAGE: The Group II-1 Subordinate
Prepayment Percentage, Group II-2 Subordinate Prepayment Percentage, Group II-3
Subordinate Prepayment Percentage or Group II-4 Subordinate Prepayment
Percentage, as applicable.
GROUP II-1 AVAILABLE FUNDS, GROUP II-2 AVAILABLE FUNDS, GROUP II-3
AVAILABLE FUNDS AND GROUP II-4 AVAILABLE FUNDS: With respect to any Distribution
Date, an amount equal to the aggregate of the following amounts with respect to
the Mortgage Loans in the related Loan Group: (a) all previously undistributed
payments on account of principal (including the principal portion of Scheduled
Payments, Principal Prepayments and the principal portion of Net Liquidation
Proceeds) and all previously undistributed payments on account of interest
received after the Cut-off Date and on or prior to the related Determination
Date, (b) any Monthly Advances and Compensating Interest Payments by the
Servicers or the Master Servicer with respect to such Distribution Date and (c)
any reimbursed amount in connection with losses on investments of deposits in an
account, except:
(viii) all payments that were due on or before the Cut-off
Date;
(ix) all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period;
(x) 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;
-24-
(xi) 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;
(xii) amounts representing Monthly Advances determined to
be Nonrecoverable Advances;
(xiii) any investment earnings on amounts on deposit in the
Master Servicer Collection Account and the Distribution Account and
amounts permitted to be withdrawn from the Master Servicer Collection
Account and the Distribution Account pursuant to this Agreement;
(xiv) amounts needed to pay the Servicing Fees or to
reimburse any Servicer or the Master Servicer for amounts due under the
applicable Servicing Agreement and the Agreement to the extent such
amounts have not been retained by, or paid previously to, such Servicer
or the Master Servicer;
(xv) to pay any fees with respect to any lender-paid
primary mortgage insurance policy; and
(xvi) any expenses or other amounts reimbursable to the
Trustee, the Securities Administrator and the Custodian pursuant to
Section 7.04(c) or Section 9.05.
In addition, on each Distribution Date, the Group II-1 Available Funds,
Group II-2 Available Funds, Group II-3 Available Funds or Group II-4 Available
Funds shall be increased or decreased, as applicable, by any Diverted Amount
allocated thereto pursuant to Section 6.02(e).
GROUP II-1 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP II-1 SENIOR CERTIFICATES: The Class II-1-A-1 Certificates.
GROUP II-1 SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP II-2 SENIOR OPTIMAL
PRINCIPAL AMOUNT, GROUP II-3 SENIOR OPTIMAL PRINCIPAL AMOUNT AND GROUP II-4
SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to the Group II-1, Group II-2,
Group II-3 and Group II-4 Senior Certificates and each Distribution Date, an
amount equal to the sum, without duplication, of the following (but in no event
greater than the aggregate Current Principal Amounts of the Group II-1, Group
II-2, Group II-3 and Group II-4 Senior Certificates, as applicable, immediately
prior to such Distribution Date):
(i) the applicable Group II Senior Percentage of the
principal portion of all Scheduled Payments due on each Outstanding
Mortgage Loan in the related Loan Group on the related Due Date as
specified in the amortization schedule at the time applicable thereto
(after adjustments for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
-25-
(ii) the applicable Group II Senior Prepayment Percentage
of the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group which was the subject of a Principal Prepayment in full
received by the Master Servicer during the related Prepayment Period;
(iii) the applicable Group II 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
in the related Loan Group;
(iv) the lesser of (a) the applicable Group II Senior
Prepayment Percentage of the sum of (A) all Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage Loan in the
related Loan Group which became a Liquidated Mortgage Loan during the
related Prepayment Period (other than Mortgage Loans described in the
immediately following clause (B)) and all Subsequent Recoveries
received in respect of each Liquidated Mortgage Loan in the related
Loan Group during the related Due Period and (B) the Scheduled
Principal Balance of each such Mortgage Loan in the related Loan Group
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 applicable Group II Senior Percentage of
the sum of (A) the Scheduled Principal Balance of each Mortgage Loan in
the related Loan Group which became a Liquidated Mortgage Loan during
the related Prepayment Period (other than the Mortgage Loans described
in the immediately following clause (B)) and all Subsequent Recoveries
received in respect of each Liquidated Mortgage Loan in the related
Loan Group during the related Due Period and (B) the Scheduled
Principal Balance of each such Mortgage Loan in the related Loan Group
that was purchased by an insurer from the Trust during the related
Prepayment Period pursuant to the related Primary Mortgage Insurance
Policy, if any or otherwise;
(v) the applicable Group II Senior Prepayment Percentage
of the sum of (a) the Scheduled Principal Balance of each Mortgage Loan
in the related Loan Group which was repurchased by the Seller in
connection with such Distribution Date and (b) the excess, if any, of
the Scheduled Principal Balance of each Mortgage Loan in the related
Loan Group that has been replaced by the Seller with a Substitute
Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement in
connection with such Distribution Date over the Scheduled Principal
Balance of each such Substitute Mortgage Loan; and
(vi) any Diverted Amount allocated to the Group II-1
Senior Optimal Principal Amount, Group II-2 Senior Optimal Principal
Amount, Group II-3 Senior Optimal Principal Amount or Group II-4 Senior
Optimal Principal Amount, as applicable for such Distribution Date;
minus
(vii) any Diverted Amount from the Group II-1 Senior
Optimal Principal Amount, Group II-2 Senior Optimal Principal Amount,
Group II-3 Senior Optimal Principal Amount or Group II-4 Senior Optimal
Principal Amount, as applicable, for such Distribution Date.
-26-
GROUP II-1 SENIOR PERCENTAGE: Initially, 96.50%. 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
Group II-1 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group II-1 Mortgage Loans as of
the beginning of the related Due Period.
GROUP II-1 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group II-1 Senior Prepayment Percentage
--------------------------------------------------------------------------------
November 25, 2004 - October 25, 2011 100%
November 25, 2011 - October 25, 2012 Group II-1 Senior Percentage plus 70% of
the Group II-1 Subordinate Percentage
November 25, 2012 - October 25, 2013 Group II-1 Senior Percentage plus 60% of
the Group II-1 Subordinate Percentage
November 25, 2013 - October 25, 2014 Group II-1 Senior Percentage plus 40% of
the Group II-1 Subordinate Percentage
November 25, 2014 - October 25, 2015 Group II-1 Senior Percentage plus 20% of
the Group II-1 Subordinate Percentage
November 25, 2015 and thereafter Group II-1 Senior Percentage
In addition, no reduction of the Group II-1 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 Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
Group II 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 Group II Subordinate
Certificates does not exceed 50%; and (B) cumulative Realized Losses on the
Group II Mortgage Loans do not exceed (a) 30% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2011 and October 2012, (b) 35% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2012 and October 2013, (c) 40% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2013 and October 2014, (d) 45% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2014 and October 2015, and (e) 50% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs during or after
November 2015.
In addition, if on any Distribution Date the current weighted average
of the Group II Subordinate Percentages is equal to or greater than two times
the initial weighted average of the Group II Subordinate Percentages, and (a)
the aggregate Scheduled Principal Balance of the Group II Mortgage Loans
delinquent 60 days or more (including for this purpose any such Group II
Mortgage Loans in foreclosure and such Group II 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 Group II Subordinate
Certificates does not exceed 50% and (b)(i) on or prior to the Distribution Date
in October 2007 cumulative Realized Losses on the Group II Mortgage Loans as of
the end of the related Prepayment Period do not exceed 20% of the Original Group
II Subordinate Principal Balance and (ii) after the Distribution Date in October
2007 cumulative Realized Losses on the Group II Mortgage Loans as of the end of
the related Prepayment Period do not exceed 30% of the Original Group II
Subordinate Principal Balance, then, the Group II-1 Senior Prepayment Percentage
for such Distribution Date will equal the Group II-1 Senior Percentage;
provided, however, if on such Distribution Date the current weighted average of
the Group II Subordinate Percentages is equal to or greater than two times the
initial weighted average of the Group II Subordinate Percentages on or prior to
the Distribution Date occurring in October 2007 and the above delinquency and
loss tests are met, then the Group II-1 Senior Prepayment Percentage for such
Distribution Date will equal the Group II-1 Senior Percentage plus 50% of the
Group II-1 Subordinate Percentage.
-27-
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Group II Senior Certificates (other than the Interest Only Certificates)
immediately preceding such Distribution Date, and the denominator of which is
the Scheduled Principal Balance of the Group II 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 with respect to the Group II-1
Senior Certificates for such distribution date will equal 100%. On the
Distribution Date on which the Current Principal Amounts of the Group II-1
Senior Certificates are reduced to zero, the Group II-1 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
GROUP II-1 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group II-1 Senior Percentage.
GROUP II-1 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
II-1 Mortgage Loans, on any Distribution Date, 100% minus the Group II-1 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group II-1 Senior Certificates have each been reduced
to zero, if (a) the weighted average of the Group II Subordinate Percentages on
such Distribution Date equals or exceeds two times the initial weighted average
of the Group II Subordinate Percentages and (b) the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
Group II 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 Group II Subordinate
Certificates does not exceed 100%, the Group II-1 Subordinate Prepayment
Percentage will equal 100%. If the test set forth in the preceding sentence is
not satisfied on any Distribution Date after the Current Principal Amount of the
Group II-1 Senior Certificates have each been reduced to zero, then the Group
II-1 Subordinate Prepayment Percentage will equal zero for such Distribution
Date.
GROUP II-2 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP II-2 SENIOR CERTIFICATES: The Class II-2-A-1 Certificates.
-28-
GROUP II-2 SENIOR PERCENTAGE: Initially, 96.50%. 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
Group II-2 Senior Certificates (other than the Interest Only Certificates)
immediately preceding such Distribution Date by the aggregate Scheduled
Principal Balance of the Group II-2 Mortgage Loans as of the beginning of the
related Due Period.
GROUP II-2 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group II-2 Senior Prepayment Percentage
--------------------------------------------------------------------------------
November 25, 2004 - October 25, 2011 100%
November 25, 2011 - October 25, 2012 Group II-2 Senior Percentage plus 70% of
the Group II-2 Subordinate Percentage
November 25, 2012 - October 25, 2013 Group II-2 Senior Percentage plus 60% of
the Group II-2 Subordinate Percentage
November 25, 2013 - October 25, 2014 Group II-2 Senior Percentage plus 40% of
the Group II-2 Subordinate Percentage
November 25, 2014 - October 25, 2015 Group II-2 Senior Percentage plus 20% of
the Group II-2 Subordinate Percentage
November 25, 2015 and thereafter Group II-2 Senior Percentage
In addition, no reduction of the Group II-2 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 Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
Group II 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 Group II Subordinate
Certificates does not exceed 50%; and (B) cumulative Realized Losses on the
Group II Mortgage Loans do not exceed (a) 30% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2011 and October 2012, (b) 35% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2012 and October 2013, (c) 40% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2013 and October 2014, (d) 45% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2014 and October 2015, and (e) 50% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs during or after
November 2015.
In addition, if on any Distribution Date the current weighted average
of the Group II Subordinate Percentages is equal to or greater than two times
the initial weighted average of the Group II Subordinate Percentages, and (a)
the aggregate Scheduled Principal Balance of the Group II Mortgage Loans
delinquent 60 days or more (including for this purpose any such Group II
Mortgage Loans in foreclosure and such Group II 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 Group II Subordinate Certificates does
-29-
not exceed 50% and (b)(i) on or prior to the Distribution Date in October 2007
cumulative Realized Losses on the Group II Mortgage Loans as of the end of the
related Prepayment Period do not exceed 20% of the Original Group II Subordinate
Principal Balance and (ii) after the Distribution Date in October 2007
cumulative Realized Losses on the Group II Mortgage Loans as of the end of the
related Prepayment Period do not exceed 30% of the Original Group II Subordinate
Principal Balance, then, the Group II-2 Senior Prepayment Percentage for such
Distribution Date will equal the Group II-2 Senior Percentage; provided,
however, if on such Distribution Date the current weighted average of the Group
II Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Group II Subordinate Percentages on or prior to the
Distribution Date occurring in October 2007 and the above delinquency and loss
tests are met, then the Group II-2 Senior Prepayment Percentage for such
Distribution Date will equal the Group II-2 Senior Percentage plus 50% of the
Group II-2 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Group II Senior Certificates (other than the Interest Only Certificates)
immediately preceding such Distribution Date, and the denominator of which is
the Scheduled Principal Balance of the Group II 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 with respect to the Group II-2
Senior Certificates for such distribution date will equal 100%. On the
Distribution Date on which the Current Principal Amounts of the Group II-2
Senior Certificates are reduced to zero, the Group II-2 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
GROUP II-2 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group II-2 Senior Percentage.
GROUP II-2 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
II-2 Mortgage Loans, on any Distribution Date, 100% minus the Group II-2 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group II-2 Senior Certificates have each been reduced
to zero, if (a) the weighted average of the Group II Subordinate Percentages on
such Distribution Date equals or exceeds two times the initial weighted average
of the Group II Subordinate Percentages and (b) the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
Group II 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 Group II Subordinate
Certificates does not exceed 100%, the Group II-2 Subordinate Prepayment
Percentage will equal 100%. If the test set forth in the preceding sentence is
not satisfied on any Distribution Date after the Current Principal Amount of the
Group II-2 Senior Certificates have each been reduced to zero, then the Group
II-2 Subordinate Prepayment Percentage will equal zero for such Distribution
Date.
GROUP II-3 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP II-3 SENIOR CERTIFICATES: The Class II-3-A-1 Certificates.
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GROUP II-3 SENIOR PERCENTAGE: Initially, 96.50%. 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
Group II-3 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group II-3 Mortgage Loans as of
the beginning of the related Due Period.
GROUP II-3 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group II-3 Senior Prepayment Percentage
--------------------------------------------------------------------------------
November 25, 2004 - October 25, 2011 100%
November 25, 2011 - October 25, 2012 Group II-3 Senior Percentage plus 70% of
the Group II-3 Subordinate Percentage
November 25, 2012 - October 25, 2013 Group II-3 Senior Percentage plus 60% of
the Group II-3 Subordinate Percentage
November 25, 2013 - October 25, 2014 Group II-3 Senior Percentage plus 40% of
the Group II-3 Subordinate Percentage
November 25, 2014 - October 25, 2015 Group II-3 Senior Percentage plus 20% of
the Group II-3 Subordinate Percentage
November 25, 2015 and thereafter Group II-3 Senior Percentage
In addition, no reduction of the Group II-3 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 Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
Group II 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 Group II Subordinate
Certificates does not exceed 50%; and (B) cumulative Realized Losses on the
Group II Mortgage Loans do not exceed (a) 30% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2011 and October 2012, (b) 35% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2012 and October 2013, (c) 40% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2013 and October 2014, (d) 45% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2014 and October 2015, and (e) 50% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs during or after
November 2015.
In addition, if on any Distribution Date the current weighted average
of the Group II Subordinate Percentages is equal to or greater than two times
the initial weighted average of the Group II Subordinate Percentages, and (a)
the aggregate Scheduled Principal Balance of the Group II Mortgage Loans
delinquent 60 days or more (including for this purpose any such Group II
Mortgage Loans in foreclosure and such Group II 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 Group II Subordinate Certificates does
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not exceed 50% and (b)(i) on or prior to the Distribution Date in October 2007
cumulative Realized Losses on the Group II Mortgage Loans as of the end of the
related Prepayment Period do not exceed 20% of the Original Group II Subordinate
Principal Balance and (ii) after the Distribution Date in October 2007
cumulative Realized Losses on the Group II Mortgage Loans as of the end of the
related Prepayment Period do not exceed 30% of the Original Group II Subordinate
Principal Balance, then, the Group II-3 Senior Prepayment Percentage for such
Distribution Date will equal the Group II-3 Senior Percentage; provided,
however, if on such Distribution Date the current weighted average of the Group
II Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Group II Subordinate Percentages on or prior to the
Distribution Date occurring in October 2007 and the above delinquency and loss
tests are met, then the Group II-3 Senior Prepayment Percentage for such
Distribution Date will equal the Group II-3 Senior Percentage plus 50% of the
Group II-3 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Group II Senior Certificates (other than the Interest Only Certificates)
immediately preceding such Distribution Date, and the denominator of which is
the Scheduled Principal Balance of the Group II 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 with respect to the Group II-3
Senior Certificates for such distribution date will equal 100%. On the
Distribution Date on which the Current Principal Amounts of the Group II-3
Senior Certificates are reduced to zero, the Group II-3 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
GROUP II-3 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group II-3 Senior Percentage.
GROUP II-3 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
II-3 Mortgage Loans, on any Distribution Date, 100% minus the Group II-3 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group II-3 Senior Certificates have each been reduced
to zero, if (a) the weighted average of the Group II Subordinate Percentages on
such Distribution Date equals or exceeds two times the initial weighted average
of the Group II Subordinate Percentages and (b) the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
Group II 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 Group II Subordinate
Certificates does not exceed 100%, the Group II-3 Subordinate Prepayment
Percentage will equal 100%. If the test set forth in the preceding sentence is
not satisfied on any Distribution Date after the Current Principal Amount of the
Group II-3 Senior Certificates have each been reduced to zero, then the Group
II-3 Subordinate Prepayment Percentage will equal zero for such Distribution
Date.
GROUP II-4 MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
GROUP II-4 SENIOR CERTIFICATES: The Class II-4-A-1 Certificates.
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GROUP II-4 SENIOR PERCENTAGE: Initially, 96.50%. 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
Group II-4 Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group II-4 Mortgage Loans as of
the beginning of the related Due Period.
GROUP II-4 SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group II-4 Senior Prepayment Percentage
--------------------------------------------------------------------------------
November 25, 2004 - October 25, 2011 100%
November 25, 2011 - October 25, 2012 Group II-4 Senior Percentage plus 70% of
the Group II-4 Subordinate Percentage
November 25, 2012 - October 25, 2013 Group II-4 Senior Percentage plus 60% of
the Group II-4 Subordinate Percentage
November 25, 2013 - October 25, 2014 Group II-4 Senior Percentage plus 40% of
the Group II-4 Subordinate Percentage
November 25, 2014 - October 25, 2015 Group II-4 Senior Percentage plus 20% of
the Group II-4 Subordinate Percentage
November 25, 2015 and thereafter Group II-4 Senior Percentage
In addition, no reduction of the Group II-4 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 Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
Group II 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 Group II Subordinate
Certificates does not exceed 50%; and (B) cumulative Realized Losses on the
Group II Mortgage Loans do not exceed (a) 30% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2011 and October 2012, (b) 35% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2012 and October 2013, (c) 40% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2013 and October 2014, (d) 45% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs between and
including November 2014 and October 2015, and (e) 50% of the Original Group II
Subordinate Principal Balance if such Distribution Date occurs during or after
November 2015.
In addition, if on any Distribution Date the current weighted average
of the Group II Subordinate Percentages is equal to or greater than two times
the initial weighted average of the Group II Subordinate Percentages, and (a)
the aggregate Scheduled Principal Balance of the Group II Mortgage Loans
delinquent 60 days or more (including for this purpose any such Group II
Mortgage Loans in foreclosure and such Group II 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 Group II Subordinate Certificates does
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not exceed 50% and (b)(i) on or prior to the Distribution Date in October 2007
cumulative Realized Losses on the Group II Mortgage Loans as of the end of the
related Prepayment Period do not exceed 20% of the Original Group II Subordinate
Principal Balance and (ii) after the Distribution Date in October 2007
cumulative Realized Losses on the Group II Mortgage Loans as of the end of the
related Prepayment Period do not exceed 30% of the Original Group II Subordinate
Principal Balance, then, the Group II-4 Senior Prepayment Percentage for such
Distribution Date will equal the Group II-4 Senior Percentage; provided,
however, if on such Distribution Date the current weighted average of the Group
II Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Group II Subordinate Percentages on or prior to the
Distribution Date occurring in October 2007 and the above delinquency and loss
tests are met, then the Group II-4 Senior Prepayment Percentage for such
Distribution Date will equal the Group II-4 Senior Percentage plus 50% of the
Group II-4 Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Group II Senior Certificates (other than the Interest Only Certificates)
immediately preceding such Distribution Date, and the denominator of which is
the Scheduled Principal Balance of the Group II 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 with respect to the Group II-4
Senior Certificates for such distribution date will equal 100%. On the
Distribution Date on which the Current Principal Amounts of the Group II-4
Senior Certificates are reduced to zero, the Group II-4 Senior Prepayment
Percentage shall be the minimum percentage sufficient to effect such reduction
and thereafter shall be zero.
GROUP II-4 SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group II-4 Senior Percentage.
GROUP II-4 SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
II-4 Mortgage Loans, on any Distribution Date, 100% minus the Group II-4 Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group II-4 Senior Certificates have each been reduced
to zero, if (a) the weighted average of the Group II Subordinate Percentages on
such Distribution Date equals or exceeds two times the initial weighted average
of the Group II Subordinate Percentages and (b) the aggregate Scheduled
Principal Balance of the Group II Mortgage Loans delinquent 60 days or more
(including for this purpose any such Group II Mortgage Loans in foreclosure and
Group II 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 Group II Subordinate
Certificates does not exceed 100%, the Group II-4 Subordinate Prepayment
Percentage will equal 100%. If the test set forth in the preceding sentence is
not satisfied on any Distribution Date after the Current Principal Amount of the
Group II-4 Senior Certificates have each been reduced to zero, then the Group
II-4 Subordinate Prepayment Percentage will equal zero for such Distribution
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
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whether the requisite percentage of Fractional Undivided Interests necessary to
effect any such consent has been obtained.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material indirect financial
interest in the Depositor or the Master Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is not connected with the Depositor or
the Master Servicer or any Affiliate as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
INDEX: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
INITIAL CERTIFICATION: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
INSURANCE POLICY: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.
INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses.
INTEREST ACCRUAL PERIOD: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.
INTEREST ADJUSTMENT DATE: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
INTEREST ONLY CERTIFICATES: The Class I-1-X-1 Certificates and Class
I-2-X-1 Certificates.
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INTEREST SHORTFALL: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) Partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the amount of such prepayment and (ii) the amount of
interest for the calendar month of such prepayment (adjusted to the applicable
Net Rate) received at the time of such prepayment;
(b) Principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the Scheduled Principal Balance of such Mortgage Loan
immediately prior to such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan,
the excess of (i) 30 days' interest (or, in the case of a principal prepayment
in full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a principal prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a principal prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the Mortgagor
as limited by application of the Relief Act.ed to be paid by the Mortgagor as
limited by application of the Relief Act.
INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
LENDER-PAID PMI RATE: With respect to each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the related
insurer, as stated in the Mortgage Loan Schedule.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
related Servicer or the Master Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer or the related Servicer has certified that
such Mortgage Loan has become a Liquidated Mortgage Loan.
LIQUIDATION EXPENSES: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the related Servicers in connection with the liquidation of such
Mortgage Loan and the related Mortgage Property, such expenses including (a)
property protection expenses, (b) property sales expenses, (c) foreclosure and
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sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with liquidation.
LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.
LOAN GROUP: Loan Group I-1, Loan Group I-2, Loan Group I-3, Loan Group
I, Loan Group II-1, Loan Group II-2, Loan Group II-3, Loan Group II-4 or Loan
Group II, as applicable.
LOAN GROUP I: Loan Group I-1, Loan Group I-2 and Loan Group I-3,
collectively.
LOAN GROUP I-1: The group of Mortgage Loans designated as belonging to
Loan Group I-1 on the Mortgage Loan Schedule.
LOAN GROUP I-2: The group of Mortgage Loans designated as belonging to
Loan Group I-2 on the Mortgage Loan Schedule.
LOAN GROUP I-3: The group of Mortgage Loans designated as belonging to
Loan Group I-3 on the Mortgage Loan Schedule.
LOAN GROUP II: Loan Group II-1, Loan Group II-2, Loan Group II-3 and
Loan Group II-4, collectively.
LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
LOSS ALLOCATION LIMITATION: The Group I Loss Allocation Limitation or
Group II Loss Allocation Limitation, as applicable.
LOSS SEVERITY PERCENTAGE: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
Scheduled Principal Balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
LOST NOTES: The original Mortgage Notes that have been lost, as
indicated on the Mortgage Loan Schedule.
MASTER SERVICER: As of the Closing Date, Xxxxx Fargo Bank, N.A. and,
thereafter, its respective successors in interest who meet the qualifications of
the Servicing Agreements and this Agreement.
MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by all Servicers and signed by an officer of the
Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement
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by the Staff of the Division of Corporation Finance of the Securities and
Exchange Commission Regarding Compliance by Asset-Backed Issuers with Exchange
Act Rules 13a-14 and 15d-14, as in effect from time to time; provided that if,
after the Closing Date (a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the
Statement referred to in clause (ii) is modified or superceded by any subsequent
statement, rule or regulation of the Securities and Exchange Commission or any
statement of a division thereof, or (c) any future releases, rules and
regulations are published by the Securities and Exchange Commission from time to
time pursuant to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Depositor following a negotiation in good faith to
determine how to comply with any such new requirements.
MASTER SERVICER COLLECTION ACCOUNT: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"U.S. Bank National Association, as Trustee f/b/o holders of Structured Asset
Mortgage Investments II Inc., Bear Xxxxxxx ARM Trust, Mortgage Pass-Through
Certificates, Series 2004-9 - Master Servicer Collection Account." The Master
Servicer Collection Account shall be an Eligible Account.
MASTER SERVICING COMPENSATION: The meaning specified in Section 3.14.
MATERIAL DEFECT: The meaning specified in Section 2.02(a).
MAXIMUM LIFETIME MORTGAGE RATE: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(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: 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: An advance of principal or interest required to be
made by the applicable Servicer pursuant to the related Servicing Agreement or
the Master Servicer pursuant to Section 6.05.
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MOODY'S: Xxxxx'x Investors Service, Inc. or 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.
MORTGAGE INTEREST RATE: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is initially equal to the "Mortgage Interest Rate" set forth with respect
thereto on the Mortgage Loan Schedule.
MORTGAGE LOAN: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule (which shall include, without
limitation, each related Mortgage Note, Mortgage and Mortgage File and all
rights appertaining thereto), including a mortgage loan the property securing
which has become an REO Property.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of October 29, 2004, between EMC Mortgage Corporation, as seller, and
Structured Asset Mortgage Investments II Inc., as purchaser, and all amendments
thereof and supplements thereto, attached as Exhibit J.
MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
MORTGAGE NOTE: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
MORTGAGOR: The obligor on a Mortgage Note.
NET INTEREST SHORTFALL: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the related Servicer or the Master Servicer in accordance with the related
Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
related Servicer or the Master Servicer and Monthly Advances.
NET RATE: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Aggregate Expense Rate (expressed as a
per annum rate).
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NON-OFFERED SUBORDINATE CERTIFICATES: The Class I-B-4, Class I-B-5,
Class I-B-6, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates.
NONRECOVERABLE ADVANCE: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the applicable Servicer and (ii) which, in the
good faith judgment of the Master Servicer, the Trustee or the applicable
Servicer, will not or, in the case of a proposed advance or Monthly Advance,
would not, be ultimately recoverable by the Master Servicer, the Trustee (as
successor Master Servicer) or the applicable Servicer from Liquidation Proceeds,
Insurance Proceeds or future payments on the Mortgage Loan for which such
advance or Monthly Advance was made or is proposed to be made.
NOTIONAL AMOUNT: The Notional Amount of the Class I-1-X-1 Certificates,
as of any date of determination, is equal to the Current Principal Amount of the
Class I-1-A-1 Certificates. For federal income tax purposes, however, the
Notional Amount of the Class I-1-X-1 Certificates is equal to the Uncertificated
Principal Balance of REMIC II Regular Interest I-1-A-1. The Notional Amount of
the Class I-2-X-1 Certificates, as of any date of determination, is equal to the
aggregate Current Principal Amount of the Class I-2-A-1 Certificates and Class
I-2-A-2 Certificates. For federal income tax purposes, however, the Notional
Amount of the Class I-2-X-1 Certificates is equal to the aggregate
Uncertificated Principal Balance of REMIC II Regular Interests I-2-A-1 and
I-2-A-2. Reference to the Notional Amount of the Interest Only Certificates is
solely for convenience in calculations and does not represent the right to
receive any distributions allocable to principal.
OFFERED CERTIFICATES: The Class I-1-A-1, Class I-2-A-1, Class I-2-A-2,
Class I-2-A-3, Class I-1-X-1, Class I-2-X-1, Class I-3-A-1, Class II-1-A-1,
Class II-2-A-1, Class II-3-A-1, Class II-4-A-1, Class R-I, Class R-II, Class
R-III, Class I-B-1, Class I-B-2, Class I-B-3, Class II-B-1, Class II-B-2 and
Class II-B-3 Certificates.
OFFERED SUBORDINATE CERTIFICATES: The Class I-B-l, Class I-B-2, Class
I-B-3, Class II-X-x, Class II-B-2 and Class II-B-3 Certificates.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer or
the Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.
OPINION OF COUNSEL: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Company, the
Master Servicer or the Depositor.
ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The Original Group I
Subordinate Principal Balance or Original Group II Subordinate Principal
Balance.
ORIGINAL GROUP I SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate Current Principal Amounts of each Class of Group I Subordinate
Certificates as of the Closing Date.
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ORIGINAL GROUP II SUBORDINATE PRINCIPAL BALANCE: The sum of the
aggregate Current Principal Amounts of each Class of Group II Subordinate
Certificates as of the Closing Date.
ORIGINAL VALUE: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Depositor.
OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.
OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
PASS-THROUGH RATE: As to each Class of Certificates and the REMIC I-A
Regular Interests, REMIC I-B Regular Interests, REMIC II Regular Interests and
REMIC III Regular Interests, the rate of interest determined as provided with
respect thereto, in Section 5.01(c). Any monthly calculation of interest at a
stated rate shall be based upon annual interest at such rate divided by twelve.
PERIODIC RATE CAP: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely
payment of which are fully guaranteed by the United States of America
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(ii) (a) demand or time deposits, federal funds or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States of America or
any state thereof (including the Trustee or the Master Servicer or its
Affiliates acting in its commercial banking capacity) and subject to
supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term
debt rating and/or the long-term unsecured debt obligations of such
depository institution or trust company at the time of such investment
or contractual commitment providing for such investment have the
Applicable Credit Rating or better from each Rating Agency and (b) any
other demand or time deposit or certificate of deposit that is fully
insured by the Federal Deposit Insurance Corporation;
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(iii) repurchase obligations with respect to (a) any
security described in clause (i) above or (b) any other security issued
or guaranteed by an agency or instrumentality of the United States of
America, the obligations of which are backed by the full faith and
credit of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (ii)(a) above where the Trustee holds the security
therefor;
(iv) securities bearing interest or sold at a discount
issued by any corporation (including the Trustee or the Master Servicer
or its Affiliates) incorporated under the laws of the United States of
America or any state thereof that have the Applicable Credit Rating or
better from each Rating Agency at the time of such investment or
contractual commitment providing for such investment; provided,
however, that securities issued by any particular corporation will not
be Permitted Investments to the extent that investments therein will
cause the then outstanding principal amount of securities issued by
such corporation and held as part of the Trust to exceed 10% of the
aggregate Outstanding Principal Balances of all the Mortgage Loans and
Permitted Investments held as part of the Trust;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than one year after the date of
issuance thereof) having the Applicable Credit Rating or better from
each Rating Agency at the time of such investment;
(vi) a Reinvestment Agreement issued by any bank,
insurance company or other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating
Agency as evidenced in writing by each Rating Agency to the Trustee;
and
(viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including
any such fund for which the Trustee or Master Servicer or any affiliate
of the Trustee or Master Servicer acts as a manager or an advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive
only interest payments with respect to the obligations underlying such
instrument or if such security provides for payment of both principal
and interest with a yield to maturity in excess of 120% of the yield to
maturity at par or if such instrument or security is purchased at a
price greater than par.
PERMITTED TRANSFEREE: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).
PERSON: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
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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 thereof.
PREPAYMENT PERIOD: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, if any or any
replacement policy therefor through the related Interest Accrual Period for such
Class relating to a Distribution Date.
PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and Repurchase Proceeds, but excluding the principal portion of Net Liquidation
Proceeds.
PRIVATE CERTIFICATES: The Class I-B-4, Class I-B-5, Class I-B-6, Class
II-B-4, Class II-B-5 or Class II-B-6 Certificate.
PROTECTED ACCOUNT: An account established and maintained for the
benefit of Certificateholders by each Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the respective
Servicing Agreements. Each Protected Account shall be 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 which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
RATING AGENCIES: Moody's and S&P.
REALIZED LOSS: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan and the related Mortgage
Property.
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RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
RELIEF ACT: The Servicemembers Civil Relief Act or similar state law.
RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I-A: That group of assets contained in the Trust Fund designated
as a REMIC consisting of (i) the Group I Mortgage Loans, (ii) the portion of the
Master Servicer Collection Account relating to the Group I Mortgage Loans, (iii)
any REO Property relating to the Group I Mortgage Loans, (iv) the rights with
respect to any related Servicing Agreement, (v) the rights with respect to any
related Assignment Agreement and (vi) any proceeds of the foregoing.
REMIC I-A INTERESTS: The REMIC I-A Regular Interests and the Class
R-I-A Interest.
REMIC I-A REGULAR INTERESTS: The REMIC I-A Regular Interests,
designated in, and with such terms as described in, Section 5.01(c)(i).
REMIC I-A SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated Principal Balances of each of the REMIC I-A Regular Interests
ending with the designation "A," equal to the ratio among, with respect to each
such REMIC I-A Regular Interest, the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan Group over (y) the
Current Principal Amount of the Senior Certificates in the related Group.
REMIC I-B: That group of assets contained in the Trust Fund designated
as a REMIC consisting of (i) the Group II Mortgage Loans, (ii) the portion of
the Master Servicer Collection Account relating to the Group II Mortgage Loans,
(iii) any REO Property relating to the Group II Mortgage Loans, (iv) the rights
with respect to any related Servicing Agreement, (v) the rights with respect to
any related Assignment Agreement and (vi) any proceeds of the foregoing.
REMIC I-B INTERESTS: The REMIC I-B Regular Interests and the Class
R-I-B Interest.
REMIC I-B REGULAR INTERESTS: The REMIC I-B Regular Interests designated
in, and with such terms as described in, Section 5.01(c)(ii).
REMIC I-B SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated Principal Balances of each of the REMIC I-B Regular Interests
ending with the designation "A," equal to the ratio among, with respect to each
such REMIC I-B Regular Interest, the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan Group over (y) the
Current Principal Amount of the Senior Certificates in the related Certificate
Group.
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REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I-A Regular Interests and the REMIC I-B
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 designated
in, and with such terms as described in, Section 5.01(c)(iii).
REMIC III : That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC II Regular Interests. REMIC III CERTIFICATES
: The REMIC III Regular Certificates and the Class R-III Certificates.
REMIC III REGULAR CERTIFICATES : The Certificates other than the Class
R Certificates, with such terms as described in Section 5.01(c)(iv).
REMIC OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause any REMIC to fail to qualify as a REMIC while any regular interest in such
REMIC is 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 the REMIC, 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 to be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement or Article II of this Agreement, an
amount equal to the sum of (i)(a) 100% of the Outstanding Principal Balance of
such Mortgage Loan as of the date of repurchase (or if the related Mortgaged
Property was acquired with respect thereto, 100% of the Outstanding Principal
Balance at the date of the acquisition), plus (b) accrued but unpaid interest on
the Outstanding Principal Balance at the related Mortgage Interest Rate, through
and including the last day of the month of repurchase, plus (c) any unreimbursed
Monthly Advances and servicing advances payable to the Servicer of the Mortgage
Loan or to the Master Servicer and (ii) any costs and damages (if any) incurred
by the Trust in connection with any violation of such Mortgage Loan of any
anti-predatory lending laws.
REPURCHASE PROCEEDS: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller and any cash deposit in connection
with the substitution of a Mortgage Loan.
REQUEST FOR RELEASE: A request for release in the form attached hereto
as Exhibit D.
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REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
RESIDUAL CERTIFICATES: 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 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 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 REO Property, would otherwise have
been payable under the related Mortgage Note.
SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) and less (ii) any Principal Prepayments (including the principal portion
of Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: Xxxxx Fargo Bank, N.A., or its successor in
interest, or any successor securities administrator appointed as herein
provided.
SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
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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 ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
ANY OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY
OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT 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:] UNLESS THE PROPOSED
TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO THE
DEPOSITOR, TRUSTEE, MASTER SERVICER AND 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
MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE [in the case of the
Class I-B-4, Class I-B-5, Class I-B-6, Class II-B-4, Class II-B-5 and Class
II-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 OBLIGATIONS ON THE PART OF THE DEPOSITOR,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A
GLOBAL CERTIFICATE OR UNLESS AN OPINION OF COUNSEL SPECIFIED IN SECTION 5.07 OF
THE AGREEMENT IS PROVIDED."
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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 mortgage loan seller under the
Mortgage Loan Purchase Agreement.
SENIOR CERTIFICATES: The Class I-1-A-1, Class I-1-X-1, Class R-I, Class
R-II, Class R-III, Class I-2-A-1, Class I-2-A-2, Class I-2-X-1, Class I-2-A-3,
Class I-3-A-1, Class II-1-A-1, Class II-2-A-1, Class II-3-A-1 and Class II-4-A-1
Certificates
SENIOR OPTIMAL PRINCIPAL AMOUNT: The Group I-1 Senior Optimal Principal
Amount, Group I-2 Senior Optimal Principal Amount, Group I-3 Senior Optimal
Principal Amount, Group II-1 Senior Optimal Principal Amount, Group II-2 Senior
Optimal Principal Amount, Group II-3 Senior Optimal Principal Amount or Group
II-4 Senior Optimal Principal Amount, as applicable.
SENIOR PERCENTAGE: The Group I-1 Senior Percentage, Group I-2 Senior
Percentage, Group I-3 Senior Percentage, Group II-1 Senior Percentage, Group
II-2 Senior Percentage, Group II-3 Senior Percentage or Group II-4 Senior
Percentage, as applicable.
SENIOR PREPAYMENT PERCENTAGE: The Group I-1 Senior Prepayment
Percentage, Group I-2 Senior Prepayment Percentage, Group I-3 Senior Prepayment
Percentage, Group II-1 Senior Prepayment Percentage, Group II-2 Senior
Prepayment Percentage, Group II-3 Senior Prepayment Percentage or Group II-4
Senior Prepayment Percentage, as applicable.
SERVICER: With respect to each Mortgage Loan, Chevy Chase, Countrywide
or GMACM.
SERVICER REMITTANCE DATE: With respect to each Mortgage Loan, the date
set forth in the related Servicing Agreement.
SERVICING AGREEMENTS: The Chevy Chase Servicing Agreement, Countrywide
Servicing Agreement and GMACM Servicing Agreement.
SERVICING FEE: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Scheduled Principal Balance of such Mortgage
Loan as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate.
SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.
SERVICING OFFICER: Any officer of the related Servicer or Master
Servicer involved in or responsible for the administration and servicing or
master servicing, as applicable, of the Mortgage Loans as to which officer
evidence, reasonably acceptable to the Trustee, of due authorization of such
officer by such Servicer or Master Servicer, has been furnished from time to
time to the Trustee.
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SPECIAL HAZARD LOSS: A Realized Loss attributable to damage or a direct
physical loss suffered by a Mortgaged Property (including any Realized Loss due
to the presence or suspected presence of hazardous wastes or substances on a
Mortgaged Property) other than any such damage or loss covered by a hazard
policy or a flood insurance policy required to be maintained in respect of such
Mortgaged Property under this Agreement or any loss due to normal wear and tear
or certain other causes, as reported by the applicable Servicer to the Master
Servicer.
STARTUP DAY: October 29, 2004.
SUBORDINATE CERTIFICATES: The Class I-B-1, Class I-B-2, Class I-B-3,
Class I-B-4, Class I-B-5, Class I-B-6, Class II-B-1, Class II-B-2, Class II-B-3,
Class II-B-4, Class II-B-5 and Class II-B-6 Certificates.
SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: With respect to (i) the Group
I Subordinate Certificates, and as to any Distribution Date, the amount by which
(x) the sum of the Current Principal Amounts of the Group I Certificates (after
giving effect to the distribution of principal and the allocation of applicable
Realized Losses in reduction of the Current Principal Amounts of the Group I
Certificates on such Distribution Date) exceeds (y) the aggregate Scheduled
Principal Balances of the Group I Mortgage Loans on the Due Date related to such
Distribution Date and (ii) the Group II Subordinate Certificates, and as to any
Distribution Date, the amount by which (x) the sum of the Current Principal
Amounts of the Group II Certificates (after giving effect to the distribution of
principal and the allocation of applicable Realized Losses in reduction of the
Current Principal Amounts of the Group II Certificates on such Distribution
Date) exceeds (y) the aggregate Scheduled Principal Balances of the Group II
Mortgage Loans on the Due Date related to such Distribution Date.
SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: The Group I Subordinate Optimal
Principal Amount or the Group II Subordinate Optimal Principal Amount, as
applicable.
SUBORDINATE PERCENTAGE: The Group I-1 Subordinate Percentage, Group I-2
Subordinate Percentage, Group I-3 Subordinate Percentage, Group II-1 Subordinate
Percentage, Group II-2 Subordinate Percentage, Group II-3 Subordinate Percentage
or Group II-4 Subordinate Percentage, with respect to the Group I-1 Mortgage
Loans, Group I-2 Mortgage Loans, Group I-3 Mortgage Loans, Group II-1 Mortgage
Loans, Group II-2 Mortgage Loans, Group II-3 Mortgage Loans and Group II-4
Mortgage Loans, respectively.
SUBORDINATE PREPAYMENT PERCENTAGE: The Group I-1 Subordinate Prepayment
Percentage, Group I-2 Subordinate Prepayment Percentage, Group I-3 Subordinate
Prepayment Percentage, Group II-1 Subordinate Prepayment Percentage, Group II-2
Subordinate Prepayment Percentage, Group II-3 Subordinate Prepayment Percentage
or Group II-4 Subordinate Prepayment Percentage, with respect to the Group I-1
Mortgage Loans, Group I-2 Mortgage Loans, Group I-3 Mortgage Loans, Group II-1
Mortgage Loans, Group II-2 Mortgage Loans, Group II-3 Mortgage Loans and Group
II-4 Mortgage Loans, respectively.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to the related Servicing Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement,
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as applicable, in each case, (i) which has an Outstanding Principal Balance not
greater nor materially less than the Mortgage Loan for which it is to be
substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less than,
and not materially greater than, such Mortgage Loan; (iii) which has a maturity
date not materially earlier or later than such Mortgage Loan and not later than
the latest maturity date of any Mortgage Loan; (iv) which is of the same
property type and occupancy type as such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which is current in payment of principal and interest as of the date
of substitution; (vii) as to which the payment terms do not vary in any material
respect from the payment terms of the Mortgage Loan for which it is to be
substituted and (viii) which has a Gross Margin, Periodic Rate Cap and Maximum
Lifetime Mortgage Rate no less than those of such Mortgage Loan, has the same
Index and interval between Interest Adjustment Dates as such Mortgage Loan, and
a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan.
TAX ADMINISTRATION AND TAX MATTERS PERSON: 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 Person for the related REMIC, as
more particularly set forth in Section 9.12 hereof.
TERMINATION PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.
TRUST FUND OR TRUST: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).
TRUSTEE: U.S. Bank National Association, or its successor in interest,
or any successor trustee appointed as herein provided.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to any REMIC I-A Regular
Interest, REMIC I-B Regular Interests or REMIC II Regular Interest or REMIC III
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 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
Class is a Subordinate Certificate, such Regular Interest's pro rata share, if
any, of the applicable Subordinate Certificate Writedown Amount allocated to
such Corresponding Class for previous Distribution Dates.
UNDERLYING SELLER: With respect to each Mortgage Loan, Chevy Chase,
Countrywide, or GMACM, as indicated on the Mortgage Loan Schedule.
UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or related
REO Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
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UNITED STATES PERSON: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
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ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee.(a) The Depositor
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Master Servicer Collection Account, (iii) such assets relating to the Mortgage
Loans as from time to time may be held by the Servicers in Protected Accounts,
the Master Servicer in the Master Servicer Collection Account and the Trustee in
the Distribution Account, (iv) any REO Property, (v) the Required Insurance
Policies and any amounts paid or payable by the insurer under any Insurance
Policy (to the extent the mortgagee has a claim thereto), (vi) the Mortgage Loan
Purchase Agreement to the extent provided in Subsection 2.03(a), (vii) the
rights with respect to the Servicing Agreements as assigned to the Trustee on
behalf of the Certificateholders by the Assignment Agreements and (viii) any
proceeds of the foregoing. Although it is the intent of the parties to this
Agreement that the conveyance of the Depositor's right, title and interest in
and to the Mortgage Loans and other assets in the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan, in the event that
such conveyance is deemed to be a loan, it is the intent of the parties to this
Agreement that the Depositor shall be deemed to have granted to the Trustee a
first priority perfected security interest in all of the Depositor's right,
title and interest in, to and under the Mortgage Loans and other assets in the
Trust Fund, and that this Agreement shall constitute a security agreement under
applicable law.
(b) In connection with the above transfer and assignment, the
Depositor hereby delivers to the Custodian, as agent for the Trustee, with
respect to each Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse
to the order of the Trustee and showing an unbroken chain of endorsements from
the originator thereof to the Person endorsing it to the Trustee, or lost note
affidavit together with a copy of the related Mortgage Note,
(ii) the original Mortgage and, if the related Mortgage
Loan is a MOM Loan, noting the presence of the MIN and language indicating that
such Mortgage Loan is a MOM Loan, which shall have been recorded (or if the
original is not available, a copy), with evidence of such recording indicated
thereon (or if clause (w) in the proviso below applies, shall be in recordable
form),
(iii) unless the Mortgage Loan is a MOM Loan, a certified
copy of the assignment (which may be in the form of a
blanket assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) to "U.S. Bank National Association, as Trustee", with
evidence of recording with respect to each Mortgage Loan in the name of the
Trustee thereon (or if clause (w) in the proviso below applies or for Mortgage
Loans with respect to which the related Mortgaged Property is located in a state
other than Maryland or an Opinion of Counsel has been provided as set forth in
this Section 2.01(b), shall be in recordable form),
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(iv) all intervening assignments of the Security
Instrument, if applicable and only to the extent available to the Depositor with
evidence of recording thereon,
(v) the original or a copy of the policy or certificate
of primary mortgage guaranty insurance, to the extent available, if any,
(vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance, and
(vii) originals of all modification agreements, if
applicable and available;
PROVIDED, HOWEVER, that in lieu of the foregoing, the Depositor may deliver to
the Custodian, as agent of the Trustee, the following documents, under the
circumstances set forth below: (w) in lieu of the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to the
Depositor in time to permit their delivery as specified above, the Depositor may
deliver a true copy thereof with a certification by the Depositor, on the face
of such copy, substantially as follows: "Certified to be a true and correct copy
of the original, which has been transmitted for recording"; (x) in lieu of the
Security Instrument, assignment to the Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such documents
(as evidenced by a certification from the Depositor to such effect) the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans identified on Exhibit 5 to the Mortgage
Loan Purchase Agreement, the Depositor may deliver lost note affidavits from the
Seller; and (z) the Depositor shall not be required to deliver intervening
assignments or Mortgage Note endorsements between the related Underlying Seller
and the Seller, between the Seller and the Depositor, and between the Depositor
and the Trustee; and provided, further, however, that in the case of Mortgage
Loans which have been prepaid in full after the Cut-off Date and prior to the
Closing Date, the Depositor, in lieu of delivering the above documents, may
deliver to the Trustee or the Custodian, as its agent, a certification to such
effect and shall deposit all amounts paid in respect of such Mortgage Loans in
the Master Servicer Collection Account on the Closing Date. The Depositor shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) to the Trustee or the Custodian,
as its agent, promptly after they are received. The Depositor shall cause the
Seller, at its expense, to cause each assignment of the Security Instrument to
the Trustee to be recorded not later than 180 days after the Closing Date,
unless (a) such recordation is not required by the Rating Agencies or an Opinion
of Counsel addressed to the Trustee has been provided to the Trustee (with a
copy to the Custodian) which states that recordation of such Security Instrument
is not required to protect the interests of the Certificateholders in the
related Mortgage Loans or (b) MERS is identified on the Mortgage or on a
properly recorded assignment of the Mortgage as the mortgagee of record solely
as nominee for the Seller and its successor and assigns; provided, however,
notwithstanding the foregoing, each assignment shall be submitted for recording
by the Seller in the manner described above, at no expense to the Trust or the
Trustee or the Custodian, as its agent, upon the earliest to occur of: (i)
reasonable direction by the Holders of Certificates evidencing Fractional
Undivided Interests
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aggregating not less than 25% of the Trust, (ii) the occurrence of an Event of
Default, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Seller and (iv) the occurrence of a servicing transfer as
described in Section 8.02 hereof. Notwithstanding the foregoing, if the Seller
fails to pay the cost of recording the assignments, such expense will be paid by
the Trustee and the Trustee shall be reimbursed for such expenses by the Trust
in accordance with Section 9.05.
Section 2.02 Acceptance of Mortgage Loans by Trustee. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Depositor and receipt of, subject to further review and the exceptions which may
be noted pursuant to the procedures described below, and declares that it holds,
the documents (or certified copies thereof) delivered to the Custodian, as its
agent, pursuant to Section 2.01, and declares that it will continue to hold
those documents and any amendments, replacements or supplements thereto and all
other assets of the Trust Fund delivered to it as Trustee in trust for the use
and benefit of all present and future Holders of the Certificates. On the
Closing Date, the Custodian, with respect to the Mortgage Loans, shall
acknowledge with respect to each Mortgage Loan by delivery to the Depositor and
the Trustee of an Initial Certification receipt of the Mortgage File, but
without review of such Mortgage File, except to the extent necessary to confirm
that such Mortgage File contains the related Mortgage Note or lost note
affidavit. No later than 90 days after the Closing Date (or, with respect to any
Substitute Mortgage Loan, within five Business Days after the receipt by the
Trustee or Custodian thereof), the Trustee agrees, for the benefit of the
Certificateholders, to review or cause to be reviewed by the Custodian on its
behalf (under the Custodial Agreement), each Mortgage File delivered to it and
to execute and deliver, or cause to be executed and delivered, to the Depositor
and the Trustee an Interim Certification. In conducting such review, the Trustee
or Custodian will ascertain whether all required documents have been executed
and received, and based on the Mortgage Loan Schedule, whether those documents
relate, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans it has received, as identified in
the Mortgage Loan Schedule. In performing any such review, the Trustee or the
Custodian, as its agent, may conclusively rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If the Trustee or the Custodian, as its agent, finds any
document constituting part of the Mortgage File has not been executed or
received, or to be unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified in
Exhibit B or to appear defective on its face (a "Material Defect"), the Trustee
or the Custodian, as its agent, shall promptly notify the Seller. In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any
such defect within ninety (90) days from the date of notice from the Trustee or
the Custodian, as its agent, of the defect and if the Seller fails to correct or
cure the defect within such period, and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Trustee or the Custodian, as its agent, shall enforce the Seller's
obligation under 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) of
the Code, any such cure or repurchase must occur within 90 days from the date
such breach was discovered; provided, however, that if such defect relates
solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy have not been returned by the
applicable jurisdiction, the Seller shall not be required
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to purchase such Mortgage Loan if the Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver such original or copy of any document
submitted for recording to the appropriate recording office in the applicable
jurisdiction because such document has not been returned by such office;
provided that the Seller shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate confirming
that such documents have been accepted for recording, and delivery to the
Trustee or the Custodian, as its agent, shall be effected by the Seller within
thirty days of its receipt of the original recorded document.
(b) No later than 180 days after the Closing Date, the Trustee or
the Custodian, as its agent, will review, for the benefit of the
Certificateholders, the Mortgage Files delivered to it and will execute and
deliver or cause to be executed and delivered to the Depositor and the Trustee a
Final Certification. In conducting such review, the Trustee or the Custodian, as
its agent, will ascertain whether an original of each document required to be
recorded has been returned from the recording office with evidence of recording
thereon or a certified copy has been obtained from the recording office. If the
Trustee or the Custodian, as its agent, finds a Material Defect, the Trustee or
the Custodian, as its agent, shall promptly notify the Seller (provided,
however, that with respect to those documents described in subsections (b)(iv),
(v) and (vii) of Section 2.01, the Trustee's and Custodian's obligations shall
extend only to the documents actually delivered to the Custodian pursuant to
such subsections). In accordance with the Mortgage Loan Purchase Agreement, the
Seller shall correct or cure any such defect within 90 days from the date of
notice from the Trustee or the Custodian, as its agent, of the Material Defect
and if the Seller is unable to cure such defect within such period, and if such
defect materially and adversely affects the interests of the Certificateholders
in the related Mortgage Loan, the Trustee shall enforce the Seller's obligation
under the Mortgage Loan Purchase Agreement to, 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) of the Code, any
such cure, repurchase or substitution must occur within 90 days from the date
such breach was discovered, provided, however, that if such defect relates
solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy, because the
originals of such documents or a certified copy, have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan, if the Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver such original or copy of any document submitted for
recording to the appropriate recording office in the applicable jurisdiction
because such document has not been returned by such office; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate confirming that such documents have
been accepted for recording, and delivery to the Trustee or the Custodian, as
its agent, shall be effected by the Seller within thirty days of its receipt of
the original recorded document.
(c) In the event that a Mortgage Loan is purchased by the Seller
in accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to
the Master Servicer the Repurchase Price for deposit in the Master Servicer
Collection Account and the Seller shall provide to the Securities
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Administrator and the Trustee written notification detailing the components of
the Repurchase Price. Upon deposit of the Repurchase Price in the Master
Servicer Collection Account, the Depositor shall notify the Trustee and the
Custodian, as agent of the Trustee (upon receipt of a Request for Release in the
form of Exhibit D attached hereto with respect to such Mortgage Loan), shall
release to the Seller the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment, without recourse,
representation or warranty, furnished to it by the Seller, as are necessary to
vest in the Seller title to and rights under the Mortgage Loan. Such purchase
shall be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Trustee shall amend the Mortgage
Loan Schedule, which was previously delivered to it by the Depositor in a form
agreed to between the Depositor and the Trustee, to reflect such repurchase and
shall promptly notify the Rating Agencies and the Master Servicer of such
amendment. The obligation of the Seller to repurchase or substitute any Mortgage
Loan as to which such a defect in a constituent document exists shall be the
sole remedy respecting such defect available to the Certificateholders or to the
Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement. (a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to the Depositor's rights and
obligations pursuant to the Servicing Agreements (noting that the Seller has
retained the right in the event of breach of the representations, warranties and
covenants, if any, with respect to the related Mortgage Loans of the related
Servicer under the related Servicing Agreement to enforce the provisions thereof
and to seek all or any available remedies). The obligations of the Seller to
substitute or repurchase, as applicable, a Mortgage Loan shall be the Trustee's
and the Certificateholders' sole remedy for any breach thereof. At the request
of the Trustee, the Depositor shall take such actions as may be necessary to
enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
(b) If the Depositor, the 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 borrower.) Any such purchase by the Seller
shall be made by providing an amount equal to the Repurchase Price to the Master
Servicer for deposit in the Master Servicer Collection Account and written
notification detailing the components of such Repurchase Price. The Depositor
shall notify the Trustee and submit to the Custodian, as agent for the Trustee,
a Request for Release, and the Custodian shall release, or the
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Trustee shall cause the Custodian to release, to the Seller the related Mortgage
File and the Trustee shall execute and deliver all instruments of transfer or
assignment furnished to it by the Seller, without recourse, representation or
warranty as are necessary to vest in the Seller title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Master Servicer shall amend the
Mortgage Loan Schedule to reflect such repurchase and shall promptly notify the
Trustee and the Rating Agencies of such amendment. Enforcement of the obligation
of the Seller to purchase (or substitute a Substitute Mortgage Loan for) any
Mortgage Loan or any property acquired with respect thereto (or pay the
Repurchase Price as set forth in the above proviso) as to which a breach has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Seller may, no later than the date by which such purchase by
the Seller would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of the
Seller that such Substitute Mortgage Loan conforms to the requirements set forth
in the definition of "Substitute Mortgage Loan" in the Mortgage Loan Purchase
Agreement or this Agreement, as applicable; provided, however, that substitution
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, in lieu of purchase shall not be permitted after the
termination of the two-year period beginning on the Startup Day; provided,
further, that if the breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such cure
or substitution must occur within 90 days from the date the breach was
discovered. The Custodian, as agent for the Trustee, 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 Trustee for deposit in the
Distribution Account the amount, if any, by which the Outstanding Principal
Balance as of the next preceding Due Date of the Mortgage Loan for which
substitution is being made, after giving effect to the Scheduled Principal due
on such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by the Seller of the Repurchase Price for the purchase of a
Mortgage Loan by the Seller. After such notification to the Seller and, if any
such excess exists, upon receipt of such deposit, the Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage Loan
hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Fund and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property of
the Trust Fund. Upon acceptance
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of the Substitute Mortgage Loan (and delivery to the Custodian of a Request for
Release for such Mortgage Loan), the Custodian, as agent for the Trustee, shall
release to the Seller the related Mortgage File related to any Mortgage Loan
released pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, and shall execute and deliver all instruments of
transfer or assignment, without recourse, representation or warranty in form as
provided to it as are necessary to vest in the Seller title to and rights under
any Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable. The Seller shall deliver to the
Custodian 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. The Master
Servicer shall amend the Mortgage Loan Schedule to reflect such substitution and
shall provide a copy of such amended Mortgage Loan Schedule to the Trustee and
the Rating Agencies.
Section 2.05 Issuance of Certificates.
(a) The Trustee acknowledges the assignment to it of the Mortgage
Loans and the other assets comprising the Trust Fund and, concurrently
therewith, has signed, and countersigned and delivered to the Depositor, in
exchange therefor, Certificates in such authorized denominations representing
such Fractional Undivided Interests as the Depositor has requested. The Trustee
agrees that it will hold the Mortgage Loans and such other assets as may from
time to time be delivered to it segregated on the books of the Trustee in trust
for the benefit of the Certificateholders.
(b) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC I-A Regular Interests and REMIC I-B 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-A Regular Interests
and REMIC I-B 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.
(c) 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.
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Section 2.06 Representations and Warranties Concerning the Depositor.
The Depositor hereby represents and warrants to the Trustee, the Master Servicer
and the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and (b) is qualified and in good standing as a foreign
corporation to do business in each jurisdiction where such
qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse effect on
the Depositor's business as presently conducted or on the Depositor's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(ii) the Depositor has full corporate power to own its
property, to carry on its business as presently conducted and to enter
into and perform its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Depositor; and neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Depositor or its properties or the
articles of incorporation or by-laws of the Depositor, except those
conflicts, breaches or defaults which would not reasonably be expected
to have a material adverse effect on the Depositor's ability to enter
into this Agreement and to consummate the transactions contemplated
hereby;
(iv) the execution, delivery and performance by the
Depositor of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices,
registrations or other actions as have already been obtained, given or
made;
(v) this Agreement has been duly executed and delivered
by the Depositor and, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid and binding
obligation of the Depositor enforceable against it in accordance with
its terms (subject to applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of the rights of creditors
generally);
(vi) there are no actions, suits or proceedings pending
or, to the knowledge of the Depositor, threatened against the
Depositor, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions
contemplated by this Agreement or (ii) with respect to any other matter
which in the judgment of the Depositor will be determined adversely to
the Depositor and will if determined adversely to the Depositor
materially and adversely affect the Depositor's ability to enter into
this Agreement or perform its obligations under this Agreement; and the
Depositor is not in
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default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely
affect the transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to
the Trustee, each Mortgage Note and each Mortgage were not subject to
an assignment or pledge, and the Depositor had good and marketable
title to and was the sole owner thereof and had full right to transfer
and sell such Mortgage Loan to the Trustee free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest.
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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
Servicers to service and administer their respective Mortgage Loans in
accordance with the terms of the applicable Servicing Agreements and shall have
full power and authority to do any and all things which it may deem necessary or
desirable in connection with such master servicing and administration. In
performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices. Furthermore, the Master
Servicer shall oversee and consult with each Servicer as necessary from
time-to-time to carry out the Master Servicer's obligations hereunder, shall
receive, review and evaluate all reports, information and other data provided to
the Master Servicer by each Servicer and shall cause each Servicer to perform
and observe the covenants, obligations and conditions to be performed or
observed by such Servicer under its applicable Servicing Agreement. The Master
Servicer shall independently and separately monitor each Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the Servicers' and Master
Servicer's records, and based on such reconciled and corrected information, the
Master Servicer shall provide such information to the Securities Administrator
as shall be necessary in order for it to prepare the statements specified in
Section 6.04, and prepare any other information and statements required to be
forwarded by the Master Servicer hereunder. The Master Servicer shall reconcile
the results of its Mortgage Loan monitoring with the actual remittances of the
Servicers to the Master Servicer Collection Account pursuant to the applicable
Servicing Agreements.
The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicers and the Master Servicer to service and
administer the related Mortgage Loans and REO Property.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.
The Trustee shall execute and deliver to the related Servicer and the
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
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Section 3.02 REMIC-Related Covenants. 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 related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion addressed
to the Trustee prepared at the expense of the Trust Fund; and (b) other than
with respect to a substitution pursuant to the Mortgage Loan Purchase Agreement
or Section 2.04 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a REMIC Opinion addressed to the
Trustee .
Section 3.03 Monitoring of Servicer. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Depositor the compliance by
each Servicer with its duties under the related Servicing Agreement. In the
review of each Servicer's activities, the Master Servicer may rely upon an
officer's certificate of the Servicer (or similar document signed by an officer
of the Servicer) with regard to such Servicer's compliance with the terms of its
Servicing Agreement. In the event that the Master Servicer, in its judgment,
determines that a Servicer should be terminated in accordance with its Servicing
Agreement, or that a notice should be sent pursuant to such Servicing Agreement
with respect to the occurrence of an event that, unless cured, would constitute
grounds for such termination, the Master Servicer shall notify the Depositor and
the Trustee thereof and the Master Servicer shall issue such notice or take such
other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To the extent that the costs and expenses of the Master
Servicer related to any termination of a Servicer, appointment of a successor
Servicer or the transfer and assumption of servicing by the Master Servicer with
respect to any Servicing Agreement (including, without limitation, (i) all legal
costs and expenses and all due diligence costs and expenses associated with an
evaluation of the potential termination of the Servicer as a result of an event
of default by such Servicer and (ii) all costs and expenses associated with the
complete transfer of servicing, including
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all servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the successor service to service the Mortgage Loans in accordance with
the related Servicing Agreement) are not fully and timely reimbursed by the
terminated Servicer, the Master Servicer shall be entitled to reimbursement of
such costs and expenses from the Master Servicer Collection Account.
(d) The Master Servicer shall require each Servicer to comply with
the remittance requirements and other obligations set forth in the related
Servicing Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall
master service the Mortgage Loans and shall have full power and authority,
subject to the REMIC Provisions and the provisions of Article X hereof, to do
any and all things that it may deem necessary or desirable in connection with
the master servicing and administration of the Mortgage Loans, including but not
limited to the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC to fail to qualify as a REMIC
or result in the imposition of a tax upon the Trust Fund (including but not
limited to the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code and the tax on contributions to a REMIC set forth in Section 860G(d)
of the Code) unless the Master Servicer has received an Opinion of Counsel (but
not at the expense of the Master Servicer) to the effect that the contemplated
action would not cause any REMIC to fail to qualify as a REMIC or result in the
imposition of a tax upon any REMIC. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or any Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with the applicable Servicing
Agreement and this Agreement, and the Trustee shall execute and deliver such
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other documents, as the Master Servicer may request, to enable the Master
Servicer to master service and administer the Mortgage Loans and carry out its
duties hereunder, in each case in accordance with Accepted Master Servicing
Practices (and the Trustee shall have no liability for misuse of any such powers
of attorney by the Master Servicer or any Servicer). If the Master Servicer or
the Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties hereunder, the
Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files.(a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Servicer will, if required under the applicable Servicing Agreement (or if
the Servicer does not, the Master Servicer may), promptly furnish to the
Custodian, on behalf of the Trustee, two copies of a certification substantially
in the form of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained by
the applicable Servicer pursuant to Section 4.01 or by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the applicable Servicer and the Trustee and Custodian
shall have no further responsibility with regard to such Mortgage File. Upon any
such payment in full, each Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in
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form reasonably acceptable to the Trustee) and as are necessary to the
prosecution of any such proceedings. The Custodian, on behalf of the Trustee,
shall, upon the request of a Servicer or the Master Servicer, and delivery to
the Custodian, on behalf of the Trustee, of two copies of a request for release
signed by a Servicing Officer substantially in the form of Exhibit D (or in a
mutually agreeable electronic format which will, in lieu of a signature on its
face, originate from a Servicing Officer), release the related Mortgage File
held in its possession or control to the Servicer or the Master Servicer, as
applicable. Such trust receipt shall obligate the Servicer or the Master
Servicer to return the Mortgage File to the Custodian on behalf of the Trustee,
when the need therefor by the Servicer or the Master Servicer no longer exists
unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
Mortgage File shall be released by the Custodian, on behalf of the Trustee, to
the Servicer or the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee .
(a) The Master Servicer shall transmit and each Servicer (to the
extent required by the related Servicing Agreement) shall transmit to the
Trustee or Custodian such documents and instruments coming into the possession
of the Master Servicer or such Servicer from time to time as are required by the
terms hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to be delivered to the Trustee or Custodian. Any funds received by
the Master Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer or by a Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall be held for
the benefit of the Trustee and the Certificateholders subject to the Master
Servicer's right to retain or withdraw from the Master Servicer Collection
Account the Master Servicing Compensation and other amounts provided in this
Agreement, and to the right of each Servicer to retain its Servicing Fee and
other amounts as provided in the applicable Servicing Agreement. The Master
Servicer shall, and (to the extent provided in the applicable Servicing
Agreement) shall cause each Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or other
regulatory authority, such access to be afforded without charge but only upon
reasonable request in writing and during normal business hours at the offices of
the Master Servicer designated by it. In fulfilling such a request the Master
Servicer shall not be responsible for determining the sufficiency of such
information.
(b) All Mortgage Files and funds collected or held by, or under
the control of, the Master Servicer, in respect of any Mortgage Loans, whether
from the collection of principal and interest payments or from Liquidation
Proceeds or Insurance Proceeds, shall be held by the Master Servicer for and on
behalf of the Trustee and the Certificateholders and shall be and remain the
sole and exclusive property of the Trustee; provided, however, that the Master
Servicer and each Servicer shall be entitled to setoff against, and deduct from,
any such funds any amounts that are properly due
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and payable to the Master Servicer or such Servicer under this Agreement or the
applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01 and 4.02, any amounts collected by
the Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.02 and 4.03. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance if the Mortgagor defaults in its obligation to do
so shall be added to the amount owing under the Mortgage Loan where the terms of
the Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to
the extent such action is prohibited under the applicable Servicing Agreement)
to take, any action that would result in noncoverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of the
Master Servicer or such Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each Servicer (to the
extent required under the related Servicing Agreement) to keep in force and
effect (to the extent that the Mortgage Loan
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requires the Mortgagor to maintain such insurance), primary mortgage insurance
applicable to each Mortgage Loan in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit any Servicer (to the extent required
under the related Servicing Agreement) to, cancel or refuse to renew any such
Primary Mortgage Insurance Policy that is in effect at the date of the initial
issuance of the Mortgage Note and is required to be kept in force hereunder
except in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each
Servicer (to the extent required under the related Servicing Agreement) to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01 and 4.02, any amounts collected by the Master Servicer
or any Servicer under any Primary Mortgage Insurance Policies shall be deposited
in the Master Servicer Collection Account, subject to withdrawal pursuant to
Sections 4.02 and 4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of any
Primary Mortgage Insurance Policies, or certificate of insurance if applicable,
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts distributable in
respect of the Certificates have been distributed in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee (or the Custodian, as directed
by the Trustee), upon the execution or receipt thereof the originals of any
Primary Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its activities
hereunder and shall not be
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entitled to reimbursement therefor except as provided in this Agreement.
Section 3.15 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the
related Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the
final disposition of any REO Property, shall be entitled to reimbursement for
any related unreimbursed Monthly Advances and other unreimbursed advances as
well as any unpaid Servicing Fees from Liquidation Proceeds received in
connection with the final disposition of such REO Property; provided, that any
such unreimbursed Monthly Advances as well as any unpaid Servicing Fees may be
reimbursed or paid, as the case may be, prior to final disposition, out of any
net rental income or other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Servicer Remittance
Date.
Section 3.16 Annual Officers Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the
Rating Agencies on or before March 1 of each year, commencing on March 1, 2005,
an Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been
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a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that any Servicer
has failed to perform any of its duties, responsibilities and obligations under
its Servicing Agreement in all material respects throughout such year, or, if
there has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 3.17 Annual Independent Accountants Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Depositor on or
before March 1 of each year, commencing on March 1, 2005 to the effect that,
with respect to the most recently ended fiscal year, such firm has examined
certain records and documents relating to the Master Servicer's performance of
its servicing obligations under this Agreement and pooling and servicing and
trust agreements in material respects similar to this Agreement and to each
other and that, on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for Xxxxxxx Mac or the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in compliance
with this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies. If
such report discloses exceptions that are material, the Master Servicer shall
advise the Trustee whether such exceptions have been or are susceptible of cure,
and will take prompt action to do so.
Section 3.18 Reports Filed with Securities and Exchange Commission.
Within 15 days after each Distribution Date, the Securities Administrator shall,
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("XXXXX"), a Form 8-K 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, 2005 and (ii) unless and until a Form 15
Suspension Notice shall have been filed, prior to March 15 of each year
thereafter, the Master Servicer shall provide the Securities Administrator with
a Master Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance of each
Servicer, in each case, required to be delivered pursuant to the related
Servicing
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Agreement, and, if applicable, the annual independent accountant's servicing
report and annual statement of compliance to be delivered by the Master Servicer
pursuant to Sections 3.16 and 3.17. Prior to (i) March 31, 2005, or such earlier
filing date as may be required by the Commission, and (ii) unless and until a
Form 15 Suspension Notice shall have been filed, March 31 of each year
thereafter, or such earlier filing date as may be required by the Commission,
the Securities Administrator shall file a Form 10-K, in substance conforming to
industry standards, with respect to the Trust. Such Form 10-K shall include the
Master Servicer Certification and other documentation provided by the Master
Servicer pursuant to the second preceding sentence. The Depositor hereby grants
to the Securities Administrator a limited power of attorney to execute and file
each such document on behalf of the Depositor. Such power of attorney shall
continue until either the earlier of (i) receipt by the Securities Administrator
from the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to the
Securities Administrator, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement and the Mortgage Loans as the Securities Administrator reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Securities Administrator shall have no responsibility to file any items
other than those specified in this Section 3.18; provided, however, the
Securities Administrator will cooperate with the Depositor in connection with
any additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Fees and expenses incurred by the Securities Administrator in connection
with this Section 3.18 shall not be reimbursable from the Trust Fund.
Section 3.19 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 3.20 Optional Purchase of Defaulted Mortgage Loans.
(a) With respect to any Mortgage Loan which as of the first day of
a Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, the Company shall have the right to purchase such Mortgage Loan from
the Trust at a price equal to the Repurchase Price; provided however (i) that
such Mortgage Loan is still 90 days or more delinquent or is an REO Property as
of the date of such purchase and (ii) this purchase option, if not theretofore
exercised, shall terminate on the date prior to the last day of the related
Calendar Quarter. This purchase option, if not exercised, shall not be
thereafter reinstated unless the delinquency is cured and the Mortgage Loan
thereafter again becomes 90 days or more delinquent or becomes an REO Property,
in which case the option shall again become exercisable as of the first day of
the related Calendar Quarter.
(b) If at any time the Company remits to the Master Servicer a
payment for deposit in the Master Servicer Collection Account covering the
amount of the Repurchase Price for such a
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Mortgage Loan, and the Company provides to the Trustee a certification signed by
a Servicing Officer stating that the amount of such payment has been deposited
in the Master Servicer Collection Account, then the Trustee shall execute the
assignment of such Mortgage Loan to the Company at the request of the Company
without recourse, representation or warranty and the Company shall succeed to
all of the Trustee's right, title and interest in and to such Mortgage Loan, and
all security and documents relative thereto. Such assignment shall be an
assignment outright and not for security. The Company will thereupon own such
Mortgage, and all such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
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ARTICLE IV
Accounts
Section 4.01 Protected Accounts.(a) The Master Servicer shall enforce
the obligation of each Servicer to establish and maintain a Protected Account in
accordance with the applicable Servicing Agreement, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 48 hours (or as of such other time specified in the
related Servicing Agreement) of receipt, all collections of principal and
interest on any Mortgage Loan and any REO Property received by a Servicer,
including Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and
advances made from the Servicer's own funds (less servicing compensation as
permitted by the applicable Servicing Agreement in the case of any Servicer) and
all other amounts to be deposited in the Protected Account. The Servicer is
hereby authorized to make withdrawals from and deposits to the related Protected
Account for purposes required or permitted by this Agreement. To the extent
provided in the related Servicing Agreement, the Protected Account shall be held
by a Designated Depository Institution and segregated on the books of such
institution in the name of the Trustee for the benefit of Certificateholders.
(b) To the extent provided in the related Servicing Agreement,
amounts on deposit in a Protected Account may be invested in Permitted
Investments in the name of the Trustee for the benefit of Certificateholders
and, except as provided in the preceding paragraph, not commingled with any
other funds. Such Permitted Investments shall mature, or shall be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Master Servicer Collection Account,
and shall be held until required for such deposit. The income earned from
Permitted Investments made pursuant to this Section 4.01 shall be paid to the
related Servicer under the applicable Servicing Agreement, and the risk of loss
of moneys required to be distributed to the Certificateholders resulting from
such investments shall be borne by and be the risk of the related Servicer. The
related Servicer (to the extent provided in the Servicing Agreement) shall
deposit the amount of any such loss in the Protected Account within two Business
Days of receipt of notification of such loss but not later than the second
Business Day prior to the Distribution Date on which the moneys so invested are
required to be distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from its
Protected Accounts and shall immediately deposit or cause to be deposited in the
Master Servicer Collection Account amounts representing the following
collections and payments (other than with respect to principal of or interest on
the Mortgage Loans due on or before the Cut-off Date) with respect to each Loan
Group:
(i) Scheduled Payments on the Mortgage Loans received or
any related portion thereof advanced by such Servicer pursuant to its
Servicing Agreement which were due on or before the related Due Date,
net of the amount thereof comprising its Servicing Fee or any fees with
respect to any lender-paid primary mortgage insurance policy;
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(ii) Full Principal Prepayments and any Liquidation
Proceeds received by such Servicer with respect to the Mortgage Loans
in the related Prepayment Period, with interest to the date of
prepayment or liquidation, net of the amount thereof comprising its
Servicing Fee;
(iii) Partial Principal Prepayments received by such
Servicer for the Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from an Account only to make
remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the
Master Servicer or a Servicer for Monthly Advances which have been recovered by
subsequent collections from the related Mortgagor; to remove amounts deposited
in error; to remove fees, charges or other such amounts deposited on a temporary
basis; or to clear and terminate the account at the termination of this
Agreement in accordance with Section 10.01. As provided in Sections 4.01(a) and
4.02(b) certain amounts otherwise due to the Servicers may be retained by them
and need not be deposited in the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account.(a) The Master
Servicer shall establish and maintain in the name of the Trustee, for the
benefit of the Certificateholders, the Master Servicer Collection Account as a
segregated trust account or accounts. The Master Servicer Collection Account
shall be an Eligible Account. The Master Servicer will deposit in the Master
Servicer Collection Account as identified by the Master Servicer and as received
by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds
received by or on behalf of the Master Servicer or which were not
deposited in a Protected Account;
(iv) The Repurchase Price with respect to any Mortgage
Loans purchased by the Seller pursuant to the Mortgage Loan Purchase
Agreement or Sections 2.02 or 2.03 hereof, any amounts which are to be
treated pursuant to Section 2.04 of this Agreement as the payment of a
Repurchase Price in connection with the tender of a Substitute Mortgage
Loan by the Seller, the Repurchase Price with respect to any Mortgage
Loans purchased by the Company pursuant to Section 3.21, and all
proceeds of any Mortgage Loans or property acquired with respect
thereto repurchased by the Depositor or its designee pursuant to
Section 10.01;
(v) Any amounts required to be deposited with respect to
losses on investments of deposits in an Account; and
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(vi) Any other amounts received by or on behalf of the
Master Servicer and required to be deposited in the Master Servicer
Collection Account pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection
Account shall be held by the Master Servicer in the name of the Trustee in trust
for the benefit of the Certificateholders in accordance with the terms and
provisions of this Agreement. The requirements for crediting the Master Servicer
Collection Account or the Distribution Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the foregoing,
payments in the nature of (i) prepayment or late payment charges or assumption,
tax service, statement account or payoff, substitution, satisfaction, release
and other like fees and charges and (ii) the items enumerated in Subsections
4.05(a)(i), (ii), (iii), (iv), (vi), (vii), (viii), (ix) and (x) need not be
credited by the Master Servicer or the related Servicer to the Distribution
Account or the Master Servicer Collection Account, as applicable. In the event
that the Master Servicer shall deposit or cause to be deposited to the
Distribution Account any amount not required to be credited thereto, the
Trustee, upon receipt of a written request therefor signed by a Servicing
Officer of the Master Servicer, shall promptly transfer such amount to the
Master Servicer, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer
Collection Account may be invested, in the name of the Trustee, or its nominee,
for the benefit of the Certificateholders, in Permitted Investments as directed
by Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Account. The risk of loss of moneys
required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the Master Servicer. The Master
Servicer shall deposit the amount of any such loss in the Master Servicer
Collection Account within two Business Days of receipt of notification of such
loss but not later than the second Business Day prior to the Distribution Date
on which the moneys so invested are required to be distributed to the
Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account. (a) The Master Servicer will, from time to time on
demand of a Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 10.01 and
remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from
the Master Servicer Collection Account (i) any expenses, costs and liabilities
recoverable by the Trustee, the Master Servicer or the Securities Administrator
or the Custodian pursuant to Sections 3.03, 7.04 and 9.05 and (ii) any amounts
payable to the Master Servicer as set forth in Section 3.14; provided however,
that the Master Servicer shall be obligated to pay from its own funds any
amounts which it is required to pay under Section 7.03(a).
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(c) In addition, on or before each Distribution Account Deposit
Date, the Master Servicer shall deposit in the Distribution Account (or remit to
the Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution
Account Deposit Date, the Master Servicer will transfer all Available Funds on
deposit in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
Section 4.04 Distribution Account.(a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Distribution Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be
held by the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of
the Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) held in cash and fully insured by the FDIC to
the maximum coverage provided thereby or (ii) invested in the name of the
Trustee, in such Permitted Investments as may be selected by the Master Servicer
or deposited in demand deposits with such depository institutions as may be
selected by the Master Servicer, provided that time deposits of such depository
institutions would be a Permitted Investment. All Permitted Investments shall
mature or be subject to redemption or withdrawal on or before, and shall be held
until, the next succeeding Distribution Date if the obligor for such Permitted
Investment is the Trustee or, if such obligor is any other Person, the Business
Day preceding such Distribution Date. All investment earnings on amounts on
deposit in the Distribution Account or benefit from funds uninvested therein
from time to time shall be for the account of the Master Servicer. The Master
Servicer shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Distribution Account on each Distribution Date. If
there is any loss on a Permitted Investment or demand deposit, the Master
Servicer shall remit the amount of the loss to the Trustee who shall deposit
such amount in the Distribution Account. With respect to the Distribution
Account and the funds deposited therein, the Master Servicer shall take such
action as may be necessary to ensure that the Certificateholders shall be
entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e),
and applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
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Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account. (a) The Trustee will, from time to time on demand of the
Master Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement and
the Servicing Agreements or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account in accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for
any Monthly Advance of its own funds, the right of the Master Servicer
or a Servicer to reimbursement pursuant to this subclause (i) being
limited to amounts received on a particular Mortgage Loan (including,
for this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late payments or recoveries of
the principal of or interest on such Mortgage Loan respecting which
such Monthly Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or such
Servicer in good faith in connection with the restoration of the
related Mortgaged Property which was damaged by an Uninsured Cause or
in connection with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured
expenses incurred with respect to such Mortgage Loan and to reimburse
the Master Servicer or such Servicer from Liquidation Proceeds from a
particular Mortgage Loan for Liquidation Expenses incurred with respect
to such Mortgage Loan; provided that the Master Servicer shall not be
entitled to reimbursement for Liquidation Expenses with respect to a
Mortgage Loan to the extent that (i) any amounts with respect to such
Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
clause (viii) of this Subsection 4.05 (a) to the Master Servicer; and
(ii) such Liquidation Expenses were not included in the computation of
such Excess Liquidation Proceeds;
(iv) to reimburse the Master Servicer or any Servicer for
advances of funds (other than Monthly Advances) made with respect to
the Mortgage Loans, and the right to reimbursement pursuant to this
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;
(v) to reimburse the Master Servicer or any Servicer for
any Monthly Advance or advance, after a Realized Loss has been
allocated with respect to the related Mortgage Loan if the Monthly
Advance or advance has not been reimbursed pursuant to clauses (i) and
(iv);
(vi) to pay the Master Servicer as set forth in Section
3.14;
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(vii) to reimburse the Master Servicer for expenses, costs
and liabilities incurred by and reimbursable to it pursuant to Sections
3.03 and 7.04(c) and (d);
(viii) to pay to the Master Servicer, as additional
servicing compensation, any Excess Liquidation Proceeds to the extent
not retained by the related Servicer;
(ix) to reimburse or pay any Servicer any such amounts as
are due thereto under the applicable Servicing Agreement and have not
been retained by or paid to the Servicer, to the extent provided in the
related Servicing Agreement;
(x) to reimburse the Trustee, the Securities
Administrator or the Custodian for expenses, costs and liabilities
incurred by or reimbursable to it pursuant to this Agreement;
(xi) to remove amounts deposited in error; and
(xii) to clear and terminate the Distribution Account
pursuant to Section 10.01.
(b) The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
accounting for any reimbursement from the Distribution Account pursuant to
subclauses (i) through (iv) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b).
(c) On each Distribution Date, the Trustee shall distribute the
Available Funds to the extent on deposit in the Distribution Account for each
Loan Group to the Holders of the Certificates in accordance with distribution
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Distribution Date and determined by the Securities
Administrator in accordance with Section 6.01.
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ARTICLE V
Certificates
Section 5.01 Certificates. (a) The Depository, the Depositor and the
Trustee have entered into a Depository Agreement dated as of the Closing Date
(the "Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in 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 Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates on
the books of the Depository shall be governed by applicable rules established by
the Depository; (iii) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (iv) the Trustee shall
deal with the Depository as representative of such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Depositor will take such action as may
be reasonably required to cause the Depository to accept such Class or Classes
for trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor within 30 days or (ii) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of such instructions
required under this section and may conclusively rely on, and shall be protected
in relying on, such instructions.
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 Fractional
Undivided 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
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Depository, provide the Depository or the related Depository Participant with
directions for the Trustee to exchange or cause the exchange of the Certificate
Owner's interest in such Class of Certificates for an equivalent Fractional
Undivided Interest in fully registered definitive form. Upon receipt by the
Trustee of instructions from the Depository directing the Trustee to effect such
exchange (such instructions to contain information regarding the Class of
Certificates and the Current Principal Amount being exchanged, the Depository
Participant account to be debited with the decrease, the registered holder of
and delivery instructions for the definitive Certificate, and any other
information reasonably required by the Trustee), (i) the Trustee shall instruct
the Depository to reduce the related Depository Participant's account by the
aggregate Current Principal Amount of the definitive Certificate, (ii) the
Trustee shall execute, authenticate and deliver, in accordance with the
registration and delivery instructions provided by the Depository, a definitive
Certificate evidencing such Certificate Owner's Fractional Undivided Interest in
such Class of Certificates and (iii) the Trustee shall execute and authenticate
a new Book-Entry Certificate reflecting the reduction in the Current Principal
Amount of such Class of Certificates by the amount of the definitive
Certificates.
(c) (i) REMIC I-A will be evidenced by (x) the REMIC I-A Regular
Interests (designated below), which will be uncertificated and non-transferable
and are hereby designated as the "regular interests" in REMIC I-A 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-A Interest, which is
hereby designated as the single "residual interest" in REMIC I-A.
The REMIC I-A Regular Interests and the Class R-I-A Interest will have
the following designations, initial balances and pass-through rates:
REMIC I-A
Interest Initial Balance Pass-Through Rate Related Group
----------- ----------------- ----------------- ---------------------------
1A $ 322.71 (1) Group I-1
1B $ 6,146.56 (2) Group I-1
2A $ 866.17 (1) Group I-2
2B $ 16,496.87 (3) Group I-2
3A $ 228.23 (1) Group I-3
3B $ 4,345.33 (4) Group I-3
ZZZ $ 269,859,118.81 (1) Group I-1 through Group I-3
Class R-I-A $ 50.00 (2) Group I-1
Interest
----------------------------
(1) The weighted average of the Net Rates of the Group I Mortgage Loans,
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.
(2) The weighted average of the Net Rates of the Group I-1 Mortgage Loans,
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.
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(3) The weighted average of the Net Rates of the Group I-2 Mortgage Loans,
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.
(4) The weighted average of the Net Rates of the Group I-3 Mortgage Loans,
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.
Distributions shall be deemed to be made from amounts received on the
Group I Mortgage Loans to the REMIC I-A Regular Interests, first, to each REMIC
I-A Regular Interest ending with the designation "B," so as to keep the
Uncertificated Principal Balance of each such REMIC I-A Regular Interest equal
to 0.01% of the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Loan Group; second, to each REMIC I-A Regular Interest ending with
the designation "A," so as to keep the Uncertificated Principal Balance of each
such REMIC I-A Regular Interest equal to 0.01% of the excess of (x) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the Current Principal Amount of the Senior Certificates (other
than any Interest Only Certificate) in the related Certificate Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of principal shall be distributed to such REMIC I-A
Regular Interests such that the REMIC I-A Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC I-A Regular Interest
ZZZ. Realized Losses on the Group I Mortgage Loans shall be applied after all
distributions have been made on each Distribution Date first, to each REMIC I-A
Regular Interest ending with the designation "B," so as to keep the
Uncertificated Principal Balance of each such REMIC I-A Regular Interest equal
to 0.01% of the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Loan Group; second, to each REMIC I-A Regular Interest ending with
the designation "A," so as to keep the Uncertificated Principal Balance of each
such REMIC I-A Regular Interest equal to 0.01% of the excess of (x) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the Current Principal Amount of the Senior Certificates (other
than any Interest Only Certificate) in the related Certificate Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of Realized Losses shall be applied to such REMIC I-A
Regular Interests such that the REMIC I-A Subordinated Balance Ratio is
maintained); and third, any remaining Realized Losses on the Group I Mortgage
Loans shall be allocated to REMIC I-A Regular Interest ZZZ.
(ii) REMIC I-B will be evidenced by (x) the REMIC I-B
Regular Interests (designated below), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests"
in REMIC I-B 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-I-B Interest, which is hereby designated as the
single "residual interest" in REMIC I-B.
The REMIC I-B Regular Interests and the Class R-I-B Certificate will have the
following designations, initial balances and pass-through rates:
REMIC I-B
Interest Initial Balance Pass-Through Rate Related Group
----------- --------------- ----------------- -----------------------------
1A $50.73 (1) Group II-1
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1B $1,448.03 (2) Group II-1
2A $713.03 (1) Group II-2
2B $20,371.13 (3) Group II-2
3A $92.27 (1) Group II-3
3B $2,635.07 (4) Group II-3
4A $344.14 (1) Group II-4
4B $9,830.64 (5) Group II-4
ZZZ $342,813,121.12 (1) Group II-1 through Group II-4
Class R-I-B $0.00 (6) N/A
Interest
----------------------------
(1) The weighted average of the Net Rates of the Group II Mortgage Loans,
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.
(2) The weighted average of the Net Rates of the Group II-1 Mortgage Loans,
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.
(3) The weighted average of the Net Rates of the Group II-2 Mortgage Loans,
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.
(4) The weighted average of the Net Rates of the Group II-3 Mortgage Loans,
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.
(5) The weighted average of the Net Rates of the Group II-4 Mortgage Loans,
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.
(6) The Class R-I-B Certificates will not be entitled to distributions of
interest.
Distributions shall be deemed to be made from amounts received on the
Group II Mortgage Loans to the REMIC I-B Regular Interests, first, to each REMIC
I-B Regular Interest ending with the designation "B," so as to keep the
Uncertificated Principal Balance of each such REMIC I-B Regular Interest equal
to 0.01% of the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Loan Group; second, to each REMIC I-B Regular Interest ending with
the designation "A," so as to keep the Uncertificated Principal Balance of each
such REMIC I-B Regular Interest equal to 0.01% of the excess of (x) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the
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related Loan Group over (y) the Current Principal Amount of the Senior
Certificates (other than any Interest Only Certificate) in the related
Certificate Group (except that if any such excess is a larger number than in the
preceding distribution period, the least amount of principal shall be
distributed to such REMIC I-B Regular Interests such that the REMIC I-B
Subordinated Balance Ratio is maintained); and third, any remaining principal to
REMIC I-B Regular Interest ZZZ. Realized Losses on the Group I Mortgage Loans
shall be applied after all distributions have been made on each Distribution
Date first, to each REMIC I-B Regular Interest ending with the designation "B,"
so as to keep the Uncertificated Principal Balance of each such REMIC I-B
Regular Interest equal to 0.01% of the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group; second, to each REMIC I-B Regular
Interest ending with the designation "A," so as to keep the Uncertificated
Principal Balance of each such REMIC I-B Regular Interest equal to 0.01% of the
excess of (x) the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Loan Group over (y) the Current Principal Amount of the Senior
Certificates (other than any Interest Only Certificate) in the related
Certificate Group (except that if any such excess is a larger number than in the
preceding distribution period, the least amount of Realized Losses shall be
applied to such REMIC I-B Regular Interests such that the REMIC I-B Subordinated
Balance Ratio is maintained); and third, any remaining Realized Losses on the
Group I Mortgage Loans shall be allocated to REMIC I-B Regular Interest ZZZ.
(iii) REMIC II will be evidenced by (x) the REMIC II
Regular Interests (designated below), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests"
in REMIC II and have the principal balances and accrue interest at the
Pass-Through Rates equal to those set forth in this Section
5.01(c)(iii) and (y) 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 Related Group
----------- ----------------- ----------------- -----------------------------
I-1-A-1 $ 58,238,500.00 (1) Group I-1
I-2-A-1 $ 100,000,000.00 (2) Group I-2
I-2-A-2 $ 3,000,000.00 (2) Group I-2
I-2-A-3 $ 53,307,000.00 (2) Group I-2
I-3-A-1 $ 41,171,000.00 (3) Group I-3
II-1-A-1 $ 13,973,000.00 (4) Group II-1
II-2-A-1 $ 196,581,000.00 (5) Group II-2
II-3-A-1 $ 25,428,000.00 (6) Group II-3
II-4-A-1 $ 94,865,000.00 (7) Group II-4
R-III $ 50.00 (1) Group I-1
I-B-1 $ 4,723,000.00 (8) Group I-1 through Group I-4
I-B-2 $ 3,643,000.00 (8) Group I-1 through Group I-4
I-B-3 $ 2,564,000.00 (8) Group I-1 through Group I-4
I-B-4 $ 1,754,000.00 (8) Group I-1 through Group I-4
I-B-5 $ 945,000.00 (8) Group I-1 through Group I-4
I-B-6 $ 541,925.00 (8) Group I-1 through Group I-4
II-B-1 $ 5,485,000.00 (9) Group II-1 through Group II-4
II-B-2 $ 2,400,000.00 (9) Group II-1 through Group II-4
II-B-3 $ 1,371,000.00 (9) Group II-1 through Group II-4
II-B-4 $ 1,029,000.00 (9) Group II-1 through Group II-4
II-B-5 $ 1,029,000.00 (9) Group II-1 through Group II-4
II-B-6 $ 687,655.82 (9) Group II-1 through Group II-4
Class R-II $ 50.00 (1) Group I-1
Certificate
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------------------------------
(1) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I-A Regular Interest 1B, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I-A Regular
Interest immediately preceding the related Distribution Date.
(2) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I-A Regular Interest 2B, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I-A Regular
Interest immediately preceding the related Distribution Date.
(3) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I-A Regular Interest 3B, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I-A Regular
Interest immediately preceding the related Distribution Date.
(4) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I-B Regular Interest 1B, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I-B Regular
Interest immediately preceding the related Distribution Date.
(5) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I-B Regular Interest 2B, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I-B Regular
Interest immediately preceding the related Distribution Date.
(6) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I-B Regular Interest 3B, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I-B Regular
Interest immediately preceding the related Distribution Date.
(7) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rate on REMIC I-B Regular Interest 4B, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I-B Regular
Interest immediately preceding the related Distribution Date.
(8) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I-A Regular Interests 1A, 2A and 3A
weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I-A Regular Interest immediately preceding the related
Distribution Date, provided that for purposes of such weighted average,
the Pass-Through Rate of each such REMIC I-A Regular Interest shall be
subject to a cap and a floor equal to the Pass-Through Rate of the
REMIC I-A Regular Interest from the related Group ending with the
designation "B".
(9) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I-B Regular Interests 1A, 2A, 3A and 4A
weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I-B Regular Interest immediately preceding the related
Distribution Date, provided that for purposes of such weighted average,
the Pass-Through Rate of each such REMIC I-B Regular Interest shall be
subject to a cap and a floor equal to the Pass-Through Rate of the
REMIC I-B Regular Interest from the related Group ending with the
designation "B".
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 Class of Certificates. Interest shall be payable
to the REMIC II Regular Interests at the Pass-Through Rate for each such REMIC
II Regular Interest on each such REMIC II Regular Interest's Uncertificated
Principal Balance.
(iv) REMIC III will be evidenced by (x) the REMIC III Regular
Certificates (designated below), which are hereby designated as the "regular
interests" in REMIC III and (y) the Class R-III Certificate, which is hereby
designated as the single "residual interest" in REMIC III. The Classes
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of the Certificates shall have the following designations, initial principal
amounts and Pass-Through Rates:
DESIGNATION INITIAL PRINCIPAL AMOUNT PASS-THROUGH RATE
----------- ------------------------ -----------------
I-1-A-1 (1)
$ 58,238,500.00
I-1-X-1 (2) (3)
I-2-A-1 (4)
$ 100,000,000.00
I-2-A-2 (5)
$ 3,000,000.00
I-2-X-1 (2) (6)
I-2-A-3 (7)
$ 53,307,000.00
I-3-A-1 (8)
$ 41,171,000.00
II-1-A-1 (9)
$ 13,973,000.00
II-2-A-1 (10)
$ 196,581,000.00
II-3-A-1 (11)
$ 25,428,000.00
II-4-A-1 (12)
$ 94,865,000.00
I-B-1 (13)
$ 4,723,000.00
I-B-2 (13)
$ 3,643,000.00
I-B-3 (13)
$ 2,564,000.00
I-B-4 (13)
$ 1,754,000.00
I-B-5 $ 945,000.00 (13)
I-B-6 $ 541,924.67 (13)
II-B-1 (14)
$ 5,485,000.00
II-B-2 (14)
$ 2,400,000.00
II-B-3 (14)
$ 1,371,000.00
II-B-4 (14)
$ 1,029,000.00
II-B-5 (14)
$ 1,029,000.00
II-B-6 $ 687,656.15 (14)
R-I $ 50.00 (15)
R-II $ 50.00 (15)
R-III $ 50.00 (15)
-------------------------------------
(1) On or prior to the Distribution Date in October 2007, the
Class I-1-A-1 Certificates will bear interest at a variable pass-through rate
equal to the weighted average of the Net Rates of the Group I-1 Mortgage Loans,
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, minus 1.113% per annum; provided that, on such
Distribution Dates, for federal income tax purposes the Class I-1-A-1
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
I-1-A-1 weighted on the basis of the Uncertificated Principal balance of such
REMIC II Regular Interest immediately preceding the related Distribution Date,
minus 1.113% per annum. After the Distribution Date in October 2007, the Class
I-1-A-1 Certificates will bear interest at a variable pass-through rate equal to
the weighted average of the Net Rates of the Group I-1 Mortgage Loans, 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 the Class I-1-A-1 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest I-1-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 with
respect to the first Interest Accrual Period is 3.581% per annum.
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(2) As described in the definition of Notional Amount herein.
(3) On or prior to the Distribution Date in October 2007, the
Class I-1-X-1 Certificates will bear interest at a fixed Pass-Through Rate equal
to 1.113% per annum. After the Distribution Date in October 2007, the Class
I-1-X-1 Certificates will not bear any interest.
(4) On or prior to the Distribution Date in September 2009, the
Class I-2-A-1 Certificates will bear interest at a variable pass-through rate
equal to the weighted average of the Net Rates of the Group I-2 Mortgage Loans,
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, minus 0.905% per annum; provided that, on such
Distribution Dates, for federal income tax purposes the Class I-2-A-1
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
I-2-A-1, weighted on the basis of the Uncertificated Principal balance of such
REMIC II Regular Interest immediately preceding the related Distribution Date,
minus 0.905% per annum. After the Distribution Date in September 2009, the Class
I-2-A-1 Certificates will bear interest at a variable pass-through rate equal to
the weighted average of the Net Rates of the Group I-2 Mortgage Loans, 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 the Class I-2-A-1 Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest I-2-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 with
respect to the first Interest Accrual Period is 4.175% per annum.
(5) On or prior to the Distribution Date in September 2009, the
Class I-2-A-2 Certificates will bear interest at a variable pass-through rate
equal to the weighted average of the Net Rates of the Group I-2 Mortgage Loans,
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, minus 0.905% per annum; provided that, on such
Distribution Dates, for federal income tax purposes the Class I-2-A-2
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rate on REMIC II Regular Interest
I-2-A-2, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II Regular Interest immediately preceding the related Distribution Date
minus 0.905% per annum. After the Distribution Date in September 2009, the Class
I-2-A-2 Certificates will bear interest at a variable pass-through rate equal to
the weighted average of the Net Rates of the Group I-2 Mortgage Loans, 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 the Class I-2-A-2 Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest I-2-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 with
respect to the first Interest Accrual Period is 4.175% per annum.
(6) On or prior to the Distribution Date in September 2009, the
Class I-2-X-1 Certificates will bear interest at a fixed Pass-Through Rate equal
to 0.905% per annum. After the Distribution Date in September 2009, the Class
I-2-X-1 Certificates will not bear any interest.
(7) The Class I-2-A-3 Certificates will bear interest at a
variable pass-through rate equal to the weighted average of the Net Rates of the
Group I-2 Mortgage Loans, 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, for
federal income tax purposes the Class I-2-A-3 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest I-2-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 with
respect to the first Interest Accrual Period is 5.080% per annum.
(8) The Class I-3-A-1 Certificates will bear interest at a
variable pass-through rate equal to the weighted average of the Net Rates of the
Group I-3 Mortgage Loans, weighted on the basis of the respective Scheduled
Principal
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Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, for federal
income tax purposes the Class I-3-A-1 Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest I-3-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 with
respect to the first Interest Accrual Period is 5.534% per annum.
(9) The Class II-1-A-1 Certificates will bear interest at a
variable pass-through rate equal to the weighted average of the Net Rates of the
Group II-1 Mortgage Loans, 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, for
federal income tax purposes the Class II-1-A Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest II-1-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 with
respect to the first Interest Accrual Period is 4.319% per annum.
(10) The Class II-2-A-1 Certificates will bear interest at a
variable pass-through rate equal to the weighted average of the Net Rates of the
Group II-2 Mortgage Loans, 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, for
federal income tax purposes the Class II-2-A-1 Certificates will bear interest
at a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest II-2-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 with
respect to the first Interest Accrual Period is 4.878% per annum.
(11) The Class II-3-A-1 Certificates will bear interest at a
variable pass-through rate equal to the weighted average of the Net Rates of the
Group II-3 Mortgage Loans, 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, for
federal income tax purposes the Class II-3-A-1 Certificates will bear interest
at a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest II-3-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 with
respect to the first Interest Accrual Period is 4.938% per annum.
(12) The Class II-4-A-1 Certificates will bear interest at a
variable pass-through rate equal to the weighted average of the Net Rates of the
Group II-4 Mortgage Loans, 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, for
federal income tax purposes the Class II-4-A-1 Certificates will bear interest
at a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest II-4-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 with
respect to the first Interest Accrual Period is 5.523% per annum.
(13) The Class I-B-1, Class I-B-2, Class I-B-3, Class I-B-4, Class
I-B-5 and Class I-B-6 Certificates will each bear interest at a variable
pass-through rate equal to the weighted average of the Net Rates of the Mortgage
Loans in Loan Group I-1, Loan Group I-2 and Loan Group I-3, weighted in
proportion to the results of subtracting from the aggregate Scheduled Principal
Balance of each such Loan Group, the Current Principal Amount of the related
Class or Classes of Senior Certificates; 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-X-0, X-X-0, X-X-0, X-X-0, X-X-0 and I-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 5.065% per annum.
(14) The Class II-B-1, Class II-B-2, Class II-B-3, Class II-B-4,
Class II-B-5 and Class II-B-6 Certificates will each bear interest at a variable
pass-through rate equal to the weighted average of the Net Rates of the Mortgage
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Loans in Loan Group II-1, Loan Group II-2, Loan Group II-3 and Loan Group II-4,
weighted in proportion to the results of subtracting from the aggregate
Scheduled Principal Balance of each such Loan Group, the Current Principal
Amount of the related Class or Classes of Senior Certificates; 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 XX-X-0, XX-X-0, XX-X-0, XX-X-0,
XX-X-0 and II-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 5.044% per annum.
(15) The Class R-I, Class R-II and Class R-III Certificates will
bear interest at a variable pass-through rate equal to the weighted average of
the Net Rates of the Group I-1 Mortgage Loans, 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.
The pass-through rate with respect to the first Interest Accrual Period is
3.581% per annum.
(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-A Regular
Interests, REMIC I-B Regular Interest, REMIC II Regular Interests and the
Certificates.
(e) With respect to each Distribution Date, each Class of
Certificates (other than the Residuals Certificates) shall accrue interest
during the related Interest Accrual Period. With respect to each Distribution
Date and each such Class of Certificates, interest shall be calculated, on the
basis of a 360-day year comprised of twelve 30-day months, based upon the
respective Pass-Through Rate set forth, or determined as provided, above and the
Current Principal Amount (or Notional Amount in the case of the Interest Only
Certificates) of such Class applicable to such Distribution Date.
(f) The Certificates shall be substantially in the forms set forth
in Exhibits X-0, X-0 and A-3. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Depositor. Pending
the preparation of definitive Certificates of any Class, the Trustee may sign
and countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each
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case increments of $1.00 in excess thereof, and (ii) in the case of the Offered
Subordinate Certificates, $25,000 and increments of $1.00 in excess thereof,
except that one Certificate of each such Class may be issued in a different
amount so that the sum of the denominations of all outstanding Certificates of
such Class shall equal the Current Principal Amount of such Class on the Closing
Date. On the Closing Date, the Trustee shall execute and countersign Physical
Certificates all in an aggregate principal amount that shall equal the Current
Principal Amount or Notional Amount of such Class on the Closing Date. The
Private Certificates shall be issued in certificated fully-registered form in
minimum dollar denominations of $25,000 and integral multiples of $1.00 in
excess thereof, except that one Private Certificate of each Class may be issued
in a different amount so that the sum of the denominations of all outstanding
Private Certificates of such Class shall equal the Current Principal Amount of
such Class on the Closing Date. The Residual Certificates shall each be issued
in certificated fully-registered form, each, in the denomination of $50. Each
Class of Global Certificates, if any, shall be issued in fully registered form
in minimum dollar denominations of $50,000 and integral multiples of $1.00 in
excess thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign (i) in the case of each Class of Offered Certificates, the
Certificate in the entire Current Principal Amount of the respective Class and
(ii) in the case of each Class of Private Certificates, Individual Certificates
all in an aggregate principal amount that shall equal the Current Principal
Amount of each such respective Class on the Closing Date. The Certificates
referred to in clause (i) and if at any time there are to be Global
Certificates, the Global Certificates shall be delivered by the Depositor to the
Depository or pursuant to the Depository's instructions, shall be delivered by
the Depositor on behalf of the Depository to and deposited with the DTC
Custodian. The Trustee shall sign the Certificates by facsimile or manual
signature and countersign them by manual signature on behalf of the Trustee by
one or more authorized signatories, each of whom shall be Responsible Officers
of the Trustee or its agent. A Certificate bearing the manual and facsimile
signatures of individuals who were the authorized signatories of the Trustee or
its agent at the time of issuance shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(i) The Closing Date is hereby designated as the "startup" day of
each 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
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Agreement or in the administration of any Trust established hereby shall be
resolved in a manner that preserves the validity of such elections.
(l) The following legend shall be placed on the Residual
Certificates, whether upon original issuance or upon issuance
of any other Certificate of any such Class in exchange therefor or upon transfer
thereof:
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 DEPOSITOR, TRUSTEE,
MASTER SERVICER AND 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 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 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 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.
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Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall maintain at its Corporate Trust Office a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided.
(b) Subject to 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 Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of 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 Trustee shall register the transfer of an
Individual Certificate if the requested transfer is being made to a
transferee who has provided the Trustee with a Rule 144A Certificate or
comparable evidence as to its QIB status.
(ii) The Trustee shall register the transfer of any
Individual Certificate if (x) the transferor has advised the Trustee in
writing that the Certificate is being transferred to an Institutional
Accredited Investor; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall be
fully protected in so doing), provided that, if based upon an Opinion
of Counsel addressed to the Trustee to the effect that the delivery of
(x) and (y) above are not sufficient to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and other applicable laws, the Trustee shall as a
condition of the registration of any such transfer require the
transferor to furnish such other certifications, legal opinions or
other information prior to registering the transfer of an Individual
Certificate as shall be set forth in such Opinion of Counsel.
(d) 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 Trustee 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 Trustee 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 Trustee
shall register such transfer if the transferee has provided the Trustee
with a Rule 144A Certificate or comparable evidence as to its QIB
status.
(iv) No restrictions shall apply with respect to the
transfer or registration of transfer of a beneficial interest in the
Global Certificate of a Class to a transferee that takes delivery in
the form of a beneficial interest in the Global Certificate of such
Class; provided that each such transferee shall be deemed to have made
such representations and warranties contained in the Rule 144A
Certificate as are sufficient to establish that it is a QIB.
(e) Subject to 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 Trustee a Rule 144A Certificate or comparable
evidence as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Trustee shall cancel such Individual Certificate
and shall (or shall request the Depository to) endorse on the schedule affixed
to the applicable Global Certificate (or on a continuation of such schedule
affixed to the Global Certificate and made a part thereof) or otherwise make in
its books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate
exchanged or transferred therefor.
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(ii) Upon acceptance for exchange or transfer of a
beneficial interest in a Global Certificate of a Class for an
Individual Certificate of such Class as provided herein, the Trustee
shall (or shall request the Depository to) endorse on the schedule
affixed to such Global Certificate (or on a continuation of such
schedule affixed to such Global Certificate and made a part thereof) or
otherwise make in its books and records an appropriate notation
evidencing the date of such exchange or transfer and a decrease in the
certificate balance of such Global Certificate equal to the certificate
balance of such Individual Certificate issued in exchange therefor or
upon transfer thereof.
(g) The Securities Legend shall be placed on any Individual
Certificate issued in exchange for or upon transfer of another Individual
Certificate or of a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth
in this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(g) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Corporate Trust Office, or at the office of any transfer agent, together
with an executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
the Corporate Trust Office, sign, countersign and deliver at the Corporate Trust
Office, to the transferee (in the case of transfer) or holder (in the case of
exchange) or send by first class mail at the risk of the transferee (in the case
of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office by the
registered holder in person, or by a duly authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at the Corporate Trust Office; provided, however, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the
Depositor as indicated to the Trustee in writing. Whenever any Certificates are
so surrendered for exchange, the Trustee shall sign and countersign and the
Trustee shall deliver the Certificates which the Certificateholder making the
exchange is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a
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signature guarantee, in form satisfactory to the Trustee, duly executed by the
holder thereof or his or her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for
transfer or exchange but shall retain such Certificates in accordance with its
standard retention policy or for such further time as is required by the record
retention requirements of the Securities Exchange Act of 1934, as amended, and
thereafter may destroy such Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. (a)
If (i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.
(b) Upon the issuance of any new Certificate under this Section
5.03, the Trustee may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith. Any duplicate Certificate issued pursuant to this Section 5.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 6.01 and for all other purposes
whatsoever. Neither the Depositor, the Trustee nor any agent of the Depositor or
the Trustee shall be affected by notice to the contrary. No Certificate shall be
deemed duly presented for a transfer effective on any Record Date unless the
Certificate to be transferred is presented no later than the close of business
on the third Business Day preceding such Record Date.
Section 5.05 Transfer Restrictions on Residual Certificates. (a)
Residual Certificates, or interests therein, may not be transferred without the
prior express written consent of the Tax Matters Person and the Depositor. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Depositor and the Trustee with an affidavit that the
proposed transferee is a Permitted Transferee (and 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
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Certificate, the proposed transferee (including the initial purchasers thereof)
delivers to the Tax Matters Person, the Trustee and the Depositor an affidavit
in the form attached hereto as Exhibit E stating, among other things, that as of
the date of such transfer (i) such transferee is a Permitted Transferee and that
(ii) such transferee is not acquiring such Residual Certificate for the account
of any person who is not a Permitted Transferee. The Tax Matters Person shall
not consent to a transfer of a Residual Certificate if it has actual knowledge
that any statement made in the affidavit issued pursuant to the preceding
sentence is not true. Notwithstanding any transfer, sale or other disposition of
a Residual Certificate to any Person who is not a Permitted Transferee, such
transfer, sale or other disposition shall be deemed to be of no legal force or
effect whatsoever and such Person shall not be deemed to be a Holder of a
Residual Certificate for any purpose hereunder, including, but not limited to,
the receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this 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 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.
(c) 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 Trustee an Investment Letter, if the transferee is an Institutional
Accredited Investor, in the form set forth as Exhibit F-l hereto, or a Rule 144A
Certificate, if the transferee is a QIB, in the form set forth as Exhibit F-2
hereto. Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest
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in any Certificate that is a Global Certificate of a Class to a transferee that
takes delivery in the form of a beneficial interest in the Global Certificate of
such Class provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate as are
sufficient to establish that it is a QIB. In the case of a proposed transfer of
any Certificate to a transferee other than a QIB, the Trustee may require an
Opinion of Counsel addressed to the Trustee that such transaction is exempt from
the registration requirements of the Securities Act. The cost of such opinion
shall not be an expense of the Trustee or the Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions. (a) Subject to the provisions of
subsection (b), no Residual Certificates may be acquired directly or indirectly
by, or on behalf of, or with the assets of an employee benefit plan or other
retirement arrangement which is subject to Title I of ERISA or Section 4975 of
the Code ("Plan"), unless the proposed transferee provides either (i) the
Trustee, with an Opinion of Counsel for the benefit of the Depositor, the
Trustee, the Master Servicer and the Securities Administrator (upon which they
may rely) which is satisfactory to the Trustee, which opinion will not be at the
expense of the Depositor, 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 result in a nonexempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Depositor, Seller, the Master Servicer, the Securities
Administrator, any servicers or the Trustee to any obligation in addition to
those undertaken in the Agreement or (ii) in the case of the Class I-B-4, Class
I-B-5, Class I-B-6, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates, a
representation or certification to the Trustee (upon which the Trustee is
authorized to rely) to the effect that the proposed transfer and holding of such
a Certificate and the servicing, management and operation of the Trust and its
assets: (I) will not result in a 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 Exemption ("PTE") 84-14 (Class Exemption for
Plan Asset Transactions Determined by Independent Qualified Professional Asset
Managers); PTE 91-38 (Class Exemption for Certain Transactions Involving Bank
Collective Investment Funds); PTE 90-1 (Class Exemption for Certain Transactions
Involving Insurance Company Pooled Separate Accounts), PTE 95-60 (Class
Exemption for Certain Transactions Involving Insurance Company General
Accounts), and PTE 96-23 (Class Exemption for Plan Asset Transactions Determined
by In-House Asset Managers and (II) will not subject the Depositor, the
Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.
(b) 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 I-B-4, Class
I-B-5, Class I-B-6, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates,
either: (i) it is not acquiring an interest in such Certificate directly or
indirectly by, or on behalf of a Plan, or (ii) the transfer and holding of an
interest in such Certificate to that Person and the subsequent 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, XXX 00-00, XXX
00-00, XXX 00-0, XXX 95-60 or PTE 96-23 and (II) will not subject the Depositor,
the Securities Administrator, the Master Servicer or the Trustee to any
obligation in addition to those undertaken in the Agreement.
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(c) Each beneficial owner of a Class I-B-1, Class I-B-2, Class
I-B-3, Class II-B-1, Class II-B-2 or Class II-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 90-30, as amended
from time to time (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 conditions in Sections I
and III of PTCE 95-60 have been satisfied.
(d) Neither the Trustee, the Master Servicer nor the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of 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 Securities
Administrator and the Master Servicer from and against any and all liabilities,
claims, costs or expenses incurred by the Trustee, the Securities Administrator
or the Master Servicer as a result of such attempted or purported transfer. The
Trustee shall have no liability for transfer of any such Global Certificates in
or through book-entry facilities of any Depository or between or among
Depository Participants or Certificate Owners made in violation of the transfer
restrictions set forth herein.
Section 5.08 Rule 144A Information. For so long as any 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.
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ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates. (a) Interest and
principal (as applicable) on the Certificates (other than the Class Residual
Certificates) will be distributed monthly on each Distribution Date, commencing
in November 2004, in an amount equal to the Available Funds on deposit in the
Distribution Account for such Distribution Date. In addition, on the
Distribution Date occurring in November 2004, the Class R-I Deposit will be
distributed to the Holder of the Class R-I Certificate. On each Distribution
Date, the Available Funds on deposit in the Distribution Account shall be
distributed as follows:
(i) With respect to the Group I Certificates:
(A) on each Distribution Date, the Group I-1 Available
Funds will be distributed to the Group I-1 Senior Certificates
as follows:
first, to the Class I-1-A-1, Class I-1-X-1, Class
R-I, Class R-II and Class R-III Certificates, on a
pro rata basis, the Accrued Certificate Interest on
such Classes for such Distribution Date. As described
below, Accrued Certificate Interest on the Class
I-1-A-1, Class I-1-X-1, Class R-I, Class R-II and
Class R-III Certificates is subject to reduction in
the event of certain Net Interest Shortfalls
allocable thereto;
second, to the Class I-1-A-1, Class I-1-X-1, Class
R-I, Class R-II and Class R-III Certificates, on a
pro rata basis, any Accrued Certificate Interest
thereon remaining undistributed from previous
Distribution Dates, to the extent of remaining Group
I-1 Available Funds;
third, to the Class R-I, Class R-II and Class R-III
Certificates, on a pro rata basis, in reduction of
the Current Principal Amounts thereof, the Group I-1
Senior Optimal Principal Amount for such Distribution
Date to the extent of Group I-1 Available Funds until
the Current Principal Amount of each such class is
reduced to zero; and
fourth, to the Class I-1-A-1 Certificates, in
reduction of the Current Principal Amount thereof,
the Group I-1 Senior Optimal Principal Amount for
such Distribution Date to the extent of remaining
Group I-1 Available Funds, until the Current
Principal Amount of such class has been reduced to
zero.
(B) on each Distribution Date, the Group I-2 Available
Funds will be distributed to the Group I-2 Senior Certificates
as follows:
first, to the Class I-2-A-1, Class I-2-A-2, Class
I-2-A-3 and Class I-2-X-1 Certificates, on a pro rata
basis, the Accrued Certificate Interest on such
classes for such Distribution Date. As described
below, Accrued Certificate Interest on the Class
I-2-A-1, Class I-2-A-2, Class I-2-A-3 and Class
I-2-X-1
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Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Class I-2-A-1, Class I-2-A-2, Class
I-2-A-3 and Class I-2-X-1 Certificates, on a pro rata
basis, any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution
Dates, to the extent of remaining Group I-2 Available
Funds; and
third, to the Class I-2-A-1, Class I-2-A-2 and Class
I-2-A-3 Certificates, on a pro rata basis, in
reduction of the Current Principal Amounts thereof,
the Group I-2 Senior Optimal Principal Amount for
such Distribution Date to the extent of remaining
Group I-2 Available Funds, until the Current
Principal Amounts of such Classes has been reduced to
zero.
(C) on each Distribution Date, the Group I-3 Available
Funds will be distributed to the Group I-3 Senior Certificates
as follows:
first, to the Class I-3-A-1 Certificates, the Accrued
Certificate Interest on such Class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class I-3-A-1
Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Class I-3-A-1 Certificates, any
Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to
the extent of remaining Group I-3 Available Funds;
and
third, to the Class I-3-A-1 Certificates, in
reduction of the Current Principal Amount thereof,
the Group I-3 Senior Optimal Principal Amount for
such Distribution Date to the extent of remaining
Group I-3 Available Funds, until the Current
Principal Amount of such Class has been reduced to
zero.
(D) Except as provided in clauses (E) and (F) below, on
each Distribution Date on or prior to the Group I Cross-Over
Date, an amount equal to the sum of any remaining Group I-1,
Group I-2 and Group I-3 Available Funds after the
distributions in clauses (A), (B) and (C) above will be
distributed sequentially, in the following order, to the Class
I-B-1, Class I-B-2, Class I-B-3, Class I-B-4, Class I-B-5 and
Class I-B-6 Certificates, in each case up to an amount equal
to and in the following order: (a) the Accrued Certificate
Interest thereon for such Distribution Date, (b) any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates and (c) such Class's Allocable
Share for such Distribution Date, in each case, to the extent
of remaining Group I-1, Group I-2 and Group I-3 Available
Funds.
(E) On each Distribution Date prior to the Group I
Cross-Over Date, but after the reduction of the Current
Principal Amount of the Group I-1, Group I-2 or Group I-3
Senior Certificates to zero, the remaining Class or Classes of
Group I Senior
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Certificates (other than the Interest Only Certificates) will
be entitled to receive in reduction of their Current Principal
Amounts, pro rata based upon their Current Principal Amounts
immediately prior to such Distribution Date, in addition to
any Principal Prepayments related to such remaining Group I
Senior Certificates' respective Loan Group allocated to such
Group I Senior Certificates, 100% of the Principal Prepayments
on any Mortgage Loan in the Loan Group relating to the fully
repaid Class or Classes of Group I Senior Certificates;
provided, however, that if (a) the weighted average of the
Group I Subordinate Percentages on such Distribution Date
equals or exceeds two times the initial weighted average of
the Group I Subordinate Percentages and (b) the aggregate
Scheduled Principal Balance of the Group I Mortgage Loans
delinquent 60 days or more (including for this purpose any
such Group I Mortgage Loans in foreclosure and Group I
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 Group I Subordinate Certificates does
not exceed 100%, then the additional allocation of Principal
Prepayments to the Group I Senior Certificates in accordance
with this clause (E) will not be made and 100% of the
Principal Prepayments on any Mortgage Loan in the Loan Group
relating to the fully repaid Class or Classes of Group I
Senior Certificates will be allocated to the Group I
Subordinate Certificates.
(F) If on any Distribution Date on which the aggregate
Current Principal Amount of any Class or Classes of Group I
Senior Certificates (other than the Interest Only
Certificates) would be greater than the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan
Group and any Group I Subordinate Certificates are still
outstanding, in each case after giving effect to distributions
to be made on such Distribution Date, (a) 100% of amounts
otherwise allocable to the Group I Subordinate Certificates in
respect of principal will be distributed to such Class or
Classes of Group I Senior Certificates in reduction of the
Current Principal Amounts thereof, until the aggregate Current
Principal Amount of such Class or Classes of Group I Senior
Certificates is an amount equal to the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan
Group, and (b) the Accrued Certificate Interest otherwise
allocable to the Group I Subordinate Certificates on such
Distribution Date will be reduced, if necessary, and
distributed to such Class or Classes of Senior Certificates in
an amount equal to the Accrued Certificate Interest for such
Distribution Date on the excess of (x) the aggregate Current
Principal Amount of such Class or Classes of Group I Senior
Certificates over (y) the aggregate Scheduled Principal
Balance of the Mortgage Loans in the related Loan Group. Any
such reduction in the Accrued Certificate Interest on the
Group I Subordinate Certificates will be allocated in reverse
order of the Group I Subordinate Certificates numerical
designations, commencing with the Class I-B-6 Certificates.
(G) If, after distributions have been made pursuant to
priorities first and second of clauses (a)(i)(A), (B) and (C)
above on any Distribution Date, the remaining Group I-1, Group
I-2 or Group I-3 Available Funds are less than the Group I-1,
Group I-2 and Group I-3 Senior Optimal Principal Amounts,
respectively, such
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amount shall be reduced, and such remaining funds will be
distributed on the related Senior Certificates on the basis of
such reduced amount. On each Distribution Date, any Group I-1,
Group I-2, Group I-3 or Group I-4 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-II Certificates; provided that if
on any Distribution Date there are any Group I-1, Group I-2,
Group I-3 or Group I-4 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 Group I Senior
Certificates, pro rata, based upon their Current Principal
Amounts, until all amounts due to all Classes of Group I
Senior Certificates have been paid in full, before any amounts
are distributed to the Class R-II Certificates.
(ii) With respect to the Group II Certificates:
(A) on each Distribution Date, the Group II Available
Funds will be distributed to the Group II Senior Certificates
as follows:
first, to the Class II-1-A-1 Certificates, the
Accrued Certificate Interest on such Class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class II-1-A-1
Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Class II-1-A-1 Certificates, any
Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to
the extent of remaining Group II-1 Available Funds;
and
third, to the Class II-1-A-1 Certificates in
reduction of the Current Principal Amount thereof,
the Group II Senior Optimal Principal Amount for such
Distribution Date to the extent of remaining Group
II-1 Available Funds until the Current Principal
Amount of such class has been reduced to zero.
(B) on each Distribution Date, the Group II-2 Available
Funds will be distributed to the Group II-2 Senior
Certificates as follows:
first, to the Class II-2-A-1 Certificates, the
Accrued Certificate Interest on such Class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class II-2-A-1
Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Class II-2-A-1 Certificates, any
Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to
the extent of remaining Group II-2 Available Funds;
and
third, to the Class II-2-A-1 Certificates, in
reduction of the Current Principal Amount thereof,
the Group II-2 Senior Optimal Principal Amount for
such
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Distribution Date to the extent of remaining Group
II-2 Available Funds until the Current Principal
Amount of such class has been reduced to zero.
(C) on each Distribution Date, the Group II-3 Available
Funds will be distributed to the Group II-3 Senior
Certificates as follows:
first, to the Class II-3-A-1 Certificates, the
Accrued Certificate Interest on such class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class II-3-A-1
Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Class II-3-A-1 Certificates, any
Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to
the extent of remaining Group II-3 Available Funds;
and
third, to the Class II-3-A-1 Certificates, in
reduction of the Current Principal Amount thereof,
the Group II-3 Senior Optimal Principal Amount for
such Distribution Date to the extent of remaining
Group II-3 Available Funds until the Current
Principal Amount of such class has been reduced to
zero.
(D) on each Distribution Date, the Group II-4 Available
Funds will be distributed to the Group II-4 Senior
Certificates as follows:
first, to the Class II-4-A-1 Certificates, the
Accrued Certificate Interest on such class for such
Distribution Date. As described below, Accrued
Certificate Interest on the Class II-4-A-1
Certificates is subject to reduction in the event of
certain Net Interest Shortfalls allocable thereto;
second, to the Class II-4-A-1 Certificates, any
Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to
the extent of remaining Group II-4 Available Funds;
and
third, to the Class II-4-A-1 Certificates, in
reduction of the Current Principal Amount thereof,
the Group II-4 Senior Optimal Principal Amount for
such Distribution Date to the extent of remaining
Group II-4 Available Funds until the Current
Principal Amount of such class has been reduced to
zero.
(E) Except as provided in clauses (F) and (G) below, on
each Distribution Date on or prior to the Distribution Date on
which the Current Principal Amounts of the Group II
Subordinate Certificates are reduced to zero, such date being
referred to herein as the Group II Cross-Over Date, an amount
equal to the remaining Group II-I, Group II-2, Group II-3 and
Group II-4 Available Funds after the distributions in (A)
above will be distributed sequentially in the following order,
to the Class II-B-1, Class II-B-2, Class II-B-3, Class II-B-4,
Class II-B-5 and Class II-B-6 Certificates, in each case up to
an amount equal to and in the following order: (a) the Accrued
Certificate Interest thereon for such Distribution Date, (b)
any Accrued Certificate
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Interest thereon remaining undistributed from previous
Distribution Dates and (c) such class's Allocable Share for
such Distribution Date, in each case, to the extent of the
remaining Group II-1, Group II-2, Group II-3 and Group II-4
Available Funds.
(F) On each Distribution Date prior to the Group II
Cross-Over Date but after the reduction of the Current
Principal Amount of all of the Senior Certificates of a Group
II Certificate Group or Groups to zero, the class or classes
of Senior Certificates in the remaining Group II Certificate
Groups will be entitled to receive in reduction of their
Current Principal Amounts, pro rata based upon their Current
Principal Amounts immediately prior to such Distribution Date,
in addition to any Principal Prepayments related to such
remaining Senior Certificates' respective Loan Group allocated
to such Senior Certificates, 100% of the Principal Prepayments
on any mortgage loan in the Loan Group or Groups relating to
the class or classes of Senior Certificates of the fully
repaid Group II Certificate Group or Groups; provided,
however, that if (A) the weighted average of the Subordinate
Percentages of the Group II Subordinate Certificates on such
Distribution Date equals or exceeds two times the initial
weighted average of the Subordinate Percentages of the Group
II Subordinate Certificates and (B) the aggregate Scheduled
Principal Balance of the Group I mortgage loans delinquent 60
days or more (including for this purpose any such Group II
mortgage loans in foreclosure and Group II 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 Group II Subordinate Certificates does not
exceed 100%, then the additional allocation of Principal
Prepayments to the Group II-1, Group II-2, Group II-3 and
Group II-4 Senior Certificates in accordance with this clause
(F) will not be made and 100% of the Principal Prepayments on
any mortgage loan in the Loan Group relating to the class or
classes of Senior Certificates of the fully repaid Group II
Certificate Group or Groups will be allocated to the Group II
Subordinate Certificates.
(G) If on any Distribution Date on which the aggregate
Current Principal Amount of the Group II-1, Group II-2, Group
II-3 and Group II-4 Senior Certificates would be greater than
the aggregate Scheduled Principal Balance of the mortgage
loans in its related Loan Group and any Group II Subordinate
Certificates are still outstanding, in each case, after giving
effect to distributions to be made on such Distribution Date,
(i) 100% of amounts otherwise allocable to the Group II
Subordinate Certificates in respect of principal will be
distributed to the Group II-1, Group II-2, Group II-3 or Group
II-4 Senior Certificates, as applicable, pro rata based upon
their Current Principal Amounts immediately prior to such
Distribution Date, in reduction of the Current Principal
Amounts thereof, until the aggregate Current Principal Amount
of the Group II-1, Group II-2, Group II-3 or Group II-4 Senior
Certificates, as applicable, is equal to the aggregate
Scheduled Principal Balance of the mortgage loans in its
related Loan Group, and (ii) the Accrued Certificate Interest
otherwise allocable to the Group II Subordinate Certificates
on such Distribution Date will be reduced, if necessary, and
distributed to the Group II-1, Group II-2, Group II-3 or Group
II-4 Senior Certificates, as applicable, in an amount equal to
the
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Accrued Certificate Interest for such Distribution Date on the
excess of (x) the aggregate Current Principal Amount of the
Group II-1, Group II-2, Group II-3 or Group II-4 Senior
Certificates, as applicable, over (y) the aggregate Scheduled
Principal Balance of the mortgage loans in the related Loan
Group. Any such reduction in the Accrued Certificate Interest
on the Group II Subordinate Certificates will be allocated in
reverse order of the Group II Subordinate Certificates'
numerical designations, commencing with the Class II-B-6
Certificates.
(H) If, after distributions have been made pursuant to
priorities first and second of paragraph (A), (B), (C) and (D)
above on any Distribution Date, the remaining Group II-1,
Group II-2, Group II-3 and Group II-4 Available Funds are less
than the Group II-1, Group II-2, Group II-3 or Group II-4
Senior Optimal Principal Amount, respectively, the Senior
Optimal Principal Amount for such Loan Group shall be reduced,
and such remaining Available Funds will be distributed among
the related Senior Certificates, on a pro rata basis, on the
basis of such reduced amount.
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 Group II-1, Group II-2,
Group II-3 or Group II-4 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 Group II Senior
Certificates, pro rata, based upon their Current Principal
Amounts, until all amounts due to all classes of Group II
Senior Certificates have been paid in full, before any amounts
are distributed to the Class R-III Certificates. It is not
anticipated that there will be any significant amounts
remaining for such distribution.
(b) "Pro rata" distributions among Classes of Certificates will be
made in proportion to the then Current Principal Amount of such Classes.
(c) No Accrued Certificate Interest will be payable with respect
to any Class of Certificates after the Distribution Date on which the Current
Principal Amount of such Certificate has been reduced to zero.
(d) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfalls and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfalls and/or Realized Losses for such
Distribution Date. In addition, the amount of any interest shortfalls will
constitute unpaid Accrued Certificate Interest and will be distributable to
holders of the Certificates of the related Classes entitled to such amounts on
subsequent Distribution Dates, to the extent of the applicable Available Funds
after current interest distributions as required herein. Any such amounts so
carried forward will not bear interest. Shortfalls in interest payments will not
be offset by a
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reduction in the servicing compensation of the Master Servicer or otherwise,
except to the extent of applicable Compensating Interest Payments.
(e) 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.(a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any
Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month, based on information provided by the
related Servicer.
(b) With respect to any Group I Certificates (other than the
Interest Only Certificates) on any Distribution Date, the principal portion of
each Realized Loss on a Group I Mortgage Loan shall be allocated as follows:
first, to the Class I-B-6 Certificates until the Current
Principal Amount thereof has been reduced to zero;
second, to the Class I-B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
third, to the Class I-B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fourth, to the Class I-B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fifth, to the Class I-B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
sixth, to the Class I-B-1 Certificates until the Current
Principal Amount thereof has been reduced to zero;
seventh, if such loss is on a (w) Group I-1 Mortgage Loan, to
the Class I-1-A-1, Class R-I, Class R-II and Class R-III Certificates,
on a pro rata basis, until the Current Principal Amounts thereof have
been reduced to zero, (x) Group I-2 Mortgage Loans, to the Class
I-2-A-1, Class I-2-A-2 and Class I-2-A-3 Certificates, until the
Current Principal Amounts thereof have been reduced to zero; provided
that any such loss allocable to the Class I-2-A-1 will be allocated
first to the Class I-2-A-2 Certificates, until the Current Principal
Amount thereof has been reduced to zero, and then to the Class I-2-A-1
Certificates, until the Current Principal Amount thereof has been
reduced to zero, and (y) Group I-3 Mortgage Loan, to the Class I-3-A-1
Certificates, until the Current Principal Amount thereof has been
reduced to zero; and
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eighth, to the Group I Senior Certificates (other than the
Interest Only Certificates), on a pro rata basis.
(c) With respect to any Group II Certificates on any Distribution
Date, the principal portion of each Realized Loss on a Group II Mortgage Loan
shall be allocated as follows:
first, to the Class II-B-6 Certificates until the Current
Principal Amount thereof has been reduced to zero;
second, to the Class II-B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
third, to the Class II-B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fourth, to the Class II-B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fifth, to the Class II-B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
sixth, to the Class II-B-1 Certificates until the Current
Principal Amount thereof has been reduced to zero; and
seventh, if such loss is on a (w) Group II-1 Mortgage Loan, to
the Class II-1-A-1 Certificates, until the Current Principal Amount
thereof has been reduced to zero, (x) Group II-2 Mortgage Loan, to the
Class II-2-A-1 Certificates until the Current Principal Amount thereof
has been reduced to zero, (y) Group II-3 Mortgage Loan, to the Class
II-3-A-1 Certificates until the Current Principal Amount thereof has
been reduced to zero and (z) Group II-4 Mortgage Loan, to the Class
II-4-A-1 Certificates until the Current Principal Amount thereof has
been reduced to zero; and
eighth, to the Group II Senior Certificates on a pro rata
basis.
(d) Notwithstanding (x) the foregoing clause (b), no such
allocation of any Realized Loss shall be made on a Distribution Date to any
Class of Group I Certificates to the extent that such allocation would result in
the reduction of the aggregate Current Principal Amounts of all the Group I
Certificates as of such Distribution Date, after giving effect to all
distributions and prior allocations of Realized Losses on the Group I Mortgage
Loans on such date, to an amount less than the aggregate Scheduled Principal
Balance of all of the Group I Mortgage Loans as of the first day of the month of
such Distribution Date (such limitation, the "Group I Loss Allocation
Limitation") and (y) the foregoing clause (c), no such allocation of any
Realized Loss shall be made on a Distribution Date to any Class of Group II
Certificates to the extent that such allocation would result in the reduction of
the aggregate Current Principal Amounts of all the Group II Certificates as of
such Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Group II Mortgage Loans on such date, to
an amount less than the aggregate Scheduled Principal
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Balance of all of the Group II Mortgage Loans as of the first day of the month
of such Distribution Date (such limitation, the "Group II Loss Allocation
Limitation").
(e) Notwithstanding the foregoing clauses (b) and (c), any Special
Hazard Loss allocable to the Group I Senior Certificates or Group II Senior
Certificates pursuant to clauses (b) or (c) above after the Group I Cross-Over
Date or Group II Cross-Over Date, respectively, shall be allocated to such
Senior Certificates and the most subordinate Class or Classes of Group II
Subordinate Certificates and Group I Subordinate Certificates, respectively, on
a pro rata basis, based on the Current Principal Amounts of such Certificates,
in reduction of the Current Principal Amounts thereof until reduced to zero,
with any such loss allocable to the related Subordinate Certificates allocated
in the order described in clause (b) or (c) above, as applicable.
(f) Any Realized Losses allocated to a Class of Certificates shall
be allocated among the Certificates of such Class (other than the Interest Only
Certificates) in proportion to their respective Current Principal Amounts. Any
allocation of Realized Losses shall be accomplished by reducing the Current
Principal Amount of the related Certificates on the related Distribution Date.
(g) Realized Losses shall be allocated on the Distribution Date in
the month following the month in which such loss was incurred and, in the case
of the principal portion thereof, after giving effect to distributions made on
such Distribution Date.
(h) On each Distribution Date, the Securities Administrator shall
determine and notify the Trustee of the Group I Subordinate Certificate
Writedown Amount and the Group II Subordinate Certificate Writedown Amount. Any
Group I Subordinate Certificate Writedown Amount shall effect a corresponding
reduction in the Current Principal Amount of (i) if prior to the Group I
Cross-Over Date, the Current Principal Amounts of the Group I Subordinate
Certificates, in the reverse order of their numerical Class designations and
(ii) from and after the Group I Cross-Over Date, the Group I Senior Certificates
(other than the Interest Only Certificates) and the Class R-I, Class R-II and
Class R-III in accordance with priorities set forth in clause (b) above, which
reduction shall occur on such Distribution Date after giving effect to
distributions made on such Distribution Date. Any Group II Subordinate
Certificate Writedown Amount shall effect a corresponding reduction in the
Current Principal Amount of (i) if prior to the Group II Cross-Over Date, the
Current Principal Amounts of the Group II Subordinate Certificates, in the
reverse order of their numerical Class designations and (ii) from and after the
Group II Cross-Over Date, the Group II Senior Certificates, which reduction
shall occur on such Distribution Date after giving effect to distributions made
on such Distribution Date.
(i) Any Net Interest Shortfall will be allocated among the Classes
of Certificates (other than the Residual Certificates) in proportion to the
respective amounts of Accrued Certificate Interest that would have been
allocated thereto in the absence of such Net Interest Shortfall for such
Distribution Date. The interest portion of any Realized Losses with respect to
the Group I Mortgage Loans or Group II Mortgage Loans occurring on or prior to
the Group I Cross-Over Date or Group II Cross-Over Date, respectively, will not
be allocated among any Certificates, but will reduce the amount of Group I
Available Funds or Group II Available Funds, respectively, on the related
Distribution Date. As a result of the subordination of the Group I Subordinate
Certificates and Group II Subordinate Certificates in right of distribution,
such Realized Losses on the Group I Mortgage
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Loans and Group II Mortgage Loans will be borne by the Group I Subordinate
Certificates and Group II Subordinate Certificates, respectively, in inverse
order of their numerical Class designations. Following the Group I Cross- Over
Date, the interest portion of Realized Losses on the Group I Mortgage Loans will
be allocated to the Group I Senior Certificates. Following the Group II
Cross-Over Date, the interest portion of Realized Losses on the Group II
Mortgage Loans will be allocated to the Group II Senior Certificates in the
manner described in the first sentence of this clause (i).
(j) In addition, in the event that the Master Servicer receives
any Subsequent Recoveries from a Servicer, the Master Servicer shall deposit
such funds into the Master Servicer Collection Account pursuant to Section 4.02.
If, after taking into account such Subsequent Recoveries, the amount of a
Realized Loss is reduced, the amount of such Subsequent Recoveries will be
applied to increase the Current Principal Amount of the Class of Subordinate
Certificates in the related Certificate Group with the highest payment priority
to which Realized Losses have been allocated, but not by more than the amount of
Realized Losses previously allocated to that Class of Subordinate Certificates
pursuant to this Section 6.02. The amount of any remaining Subsequent Recoveries
will be applied to sequentially increase the Current Principal Amount of the
Subordinate Certificates of the related Certificate Group, beginning with the
Class of Subordinate Certificates in the related Certificate Group with the next
highest payment priority, up to the amount of such Realized Losses previously
allocated to such Class of Certificates pursuant to this Section 6.02. Holders
of such Certificates will not be entitled to any payment in respect of current
interest on the amount of such increases for any Interest Accrual Period
preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied to the Current Principal Amount of each Subordinate
Certificate of such Class in accordance with its respective Fractional Undivided
Interest.
Section 6.03 PAYMENTS. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each Certificateholder
of record as of the immediately preceding Record Date the Certificateholder's
pro rata share of its Class (based on the aggregate Fractional Undivided
Interest represented by such Holder's Certificates) of all amounts required to
be distributed on such Distribution Date to such Class, based on information
provided to the Trustee by the Securities Administrator. The Securities
Administrator shall calculate the amount to be distributed to each Class and,
based on such amounts, the Securities Administrator shall determine the amount
to be distributed to each Certificateholder. All of the Securities
Administrator's calculations of payments shall be based solely on information
provided to the Securities Administrator by the Master Servicer. Neither the
Securities Administrator nor the Trustee shall be required to confirm, verify or
recompute any such information but shall be entitled to rely conclusively on
such information.
(b) Payment of the above amounts to each Certificateholder shall
be made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder by wire transfer to a United States dollar
account maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; provided, however,
that the final payment in respect of each Class of Certificates will be made
only upon presentation and surrender of such respective Certificates at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final payment.
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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, or in the case of the Residual Certificates, an initial Current
Principal Amount of $50:
(i) the Current Principal Amount or Notional Amount of
each Class of Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal
on each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the
related Pass-Through Rate with respect to each Class during the related
Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments
to interest at the related Pass-Through Rate necessary to account for
any difference between interest accrued and aggregate interest
distributed with respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest
on each Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;
(vii) the Current Principal Amount 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 Servicer included in such distribution separately
stated for each Loan Group;
(ix) the aggregate amount of any Realized Losses (listed
separately for each category of Realized Loss and for each Loan Group)
during the related Prepayment Period and cumulatively since the Cut-off
Date and the amount and source (separately identified) of any
distribution in respect thereof included in such distribution;
(x) with respect to each Mortgage Loan which incurred a
Realized Loss during the related Prepayment Period, (i) the loan
number, (ii) the Scheduled Principal Balance of such Mortgage Loan as
of the Cut-off Date, (ii) the Scheduled Principal Balance of such
Mortgage Loan as of the beginning of the related Due Period, (iii) the
Net Liquidation Proceeds with respect to such Mortgage Loan and (iv)
the amount of the Realized Loss with respect to such Mortgage Loan;
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(xi) with respect to each Loan Group, the amount of
Scheduled Principal and Principal Prepayments, (including but
separately identifying the principal amount of Principal Prepayments,
Insurance Proceeds, the purchase price in connection with the purchase
of Mortgage Loans, cash deposits in connection with substitutions of
Mortgage Loans and Net Liquidation Proceeds) and the number and
principal balance of Mortgage Loans purchased or substituted for during
the relevant period and cumulatively since the Cut-off Date;
(xii) the number of Mortgage Loans (excluding REO Property)
in each Loan Group remaining in the Trust Fund as of the end of the
related Prepayment Period;
(xiii) information for each Loan Group and in the aggregate
regarding any Mortgage Loan delinquencies as of the end of the related
Prepayment Period, including the aggregate number and aggregate
Outstanding Principal Balance of Mortgage Loans (a) delinquent 30 to 59
days on a contractual basis, (b) delinquent 60 to 89 days on a
contractual basis, and (c) delinquent 90 or more days on a contractual
basis, in each case as of the close of business on the last Business
Day of the immediately preceding month;
(xiv) for each Loan Group, the number of Mortgage Loans in
the foreclosure process as of the end of the related Due Period and the
aggregate Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group, the number and aggregate
Outstanding Principal Balance of all Mortgage Loans as to which the
Mortgaged Property was REO Property as of the end of the related Due
Period;
(xvi) the book value (the sum of (A) the Outstanding
Principal Balance of the Mortgage Loan, (B) accrued interest through
the date of foreclosure and (C) foreclosure expenses) of any REO
Property in each Loan Group; provided that, in the event that such
information is not available to the Securities Administrator on the
Distribution Date, such information shall be furnished promptly after
it becomes available;
(xvii) the amount of Realized Losses allocated to each Class
of Certificates since the prior Distribution Date and in the aggregate
for all prior Distribution Dates; and
(xviii) the Average Loss Severity Percentage for each Loan
Group;
(xix) any Diverted Amount for such Distribution Date; and
(xx) the then applicable Group I-1, Group I-2,
Group I-3, Group II-1, Group II-2, Group II-3 and Group II-4 Senior
Percentage, Senior Prepayment Percentage, Subordinate Percentage and
Subordinate Prepayment Percentage.
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
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Administrator by the Master Servicer. The Securities Administrator may
conclusively rely on such information and shall not be required to confirm,
verify or recalculate any such information.
The Securities Administrator may make available each month, to any
interested party , the monthly statement to Certificateholders via the
Securities Administrator's website initially located at "xxx.xxxxxxx.xxx."
Assistance in using the website can be obtained by calling the Securities
Administrator's customer service desk at (000) 000-0000. Parties that are unable
to use the above distribution option are entitled to have a paper copy mailed to
them via first class mail by calling the Securities Administrator's customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such reports are distributed in order to make such
distribution more convenient and/or more accessible to the parties, and the
Securities Administrator shall provide timely and adequate notification to all
parties regarding any such change.
To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at
"xxxxx://xxxxxxxxxxxxxxxxxxxxxx.xxxxxx.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 April 30 of each year beginning in 2005, the Trustee will
furnish such report to each Holder of the Certificates of record at any time
during the prior calendar year as to the aggregate of amounts reported pursuant
to subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advises
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator or the
Trustee pursuant to the requirements of the Code.
Section 6.05 Monthly Advances. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date is delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account which will be used for an
advance with respect to such Mortgage Loan, the Master Servicer will deposit in
the Master Servicer Collection Account not later than the Distribution Account
Deposit Date immediately preceding the related Distribution Date an amount equal
to such deficiency, net of the Servicing Fee for such Mortgage Loan except to
the extent the Master Servicer determines any such advance to be a
Nonrecoverable Advance. Subject to the foregoing, the Master Servicer shall
continue to make such advances through the date that the related Servicer is
required to do so under its Servicing Agreement. If the Master Servicer deems an
advance to be a Nonrecoverable Advance, on the Distribution Account Deposit
Date, the Master Servicer shall present an Officer's Certificate to the Trustee
(i) stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be a
Nonrecoverable Advance.
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Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the sum
of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition of
Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicers and (ii) the Master
Servicer Compensation for such Distribution Date (such amount, the "Compensating
Interest Payment"). The Master Servicer shall not be entitled to any
reimbursement of any Compensating Interest Payment.
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ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02 Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03 Indemnification of the Trustee, the Master Servicer and
the Securities Administrator. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, the Servicing Agreements, the
Assignment Agreements or the Certificates or the powers of attorney delivered by
the Trustee hereunder (i) related to the Master Servicer's failure to perform
its duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or (ii)
incurred by reason of the Master Servicer's willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or by reason of
reckless disregard of its obligations and duties hereunder, provided, in each
case, that with respect to any such claim or legal action (or pending or
threatened claim or legal action), the Trustee shall have given the Master
Servicer and the Depositor written notice thereof promptly after the Trustee
shall have with respect to such claim or legal action knowledge thereof. The
Master Servicer's failure to receive any such notice shall not affect the
Trustee's right to indemnification hereunder, except to the extent the Master
Servicer is materially prejudiced by such failure to give notice. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(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.
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Section 7.04 Limitations on Liability of the Master Servicer and
Others. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors,
officers, employees or agents of the Master Servicer shall be under any
liability to the Indemnified Persons, the Depositor, the Trust Fund or the
Certificateholders for taking any action or for refraining from taking any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Master Servicer or
any such Person against any breach of warranties or representations made herein
or any liability which would otherwise be imposed by reason of such Person's
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or
agent of the Master Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of reckless disregard of obligations and duties hereunder or under
the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
duties under this Agreement and that in its opinion may involve it in any
expense or liability; provided, however, the Master Servicer may in its
discretion, with the consent of the Trustee (which consent shall not be
unreasonably withheld), undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Master Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Collection Account as provided by Section 4.03. Nothing in this
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 Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to
this Agreement, unless specifically required to do so pursuant to this
Agreement, the Master Servicer shall not be required
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to investigate or make recommendations concerning potential liabilities which
the Trust might incur as a result of such course of action by reason of the
condition of the Mortgaged Properties but shall give notice to the Trustee if it
has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or
omissions of any Servicer, except as otherwise expressly provided herein.
Section 7.05 Master Servicer Not to Resign. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel addressed to the Trustee to such effect delivered to the
Trustee. No such resignation by the Master Servicer shall become effective until
the Company or the Trustee or a successor to the Master Servicer reasonably
satisfactory to the Trustee shall have assumed the responsibilities and
obligations of the Master Servicer in accordance with Section 8.02 hereof. The
Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer.
Section 7.06 Successor Master Servicer. In connection with the
appointment of any successor master servicer or the assumption of the duties of
the Master Servicer, the Company or the Trustee may make such arrangements for
the compensation of such successor master servicer out of payments on the
Mortgage Loans as the Company or the Trustee and such successor master servicer
shall agree. If the successor master servicer does not agree that such market
value is a fair price, such successor master servicer shall obtain two
quotations of market value from third parties actively engaged in the servicing
of single-family mortgage loans. Notwithstanding the foregoing, the compensation
payable to a successor master servicer may not exceed the compensation which the
Master Servicer would have been entitled to retain if the Master Servicer had
continued to act as Master Servicer hereunder.
Section 7.07 Sale and Assignment of Master Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and the Company may
terminate the Master Servicer without cause and select a new Master Servicer;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net worth
of not less than $10,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the
Trustee (as evidenced in a writing signed by the Trustee); and (d) shall execute
and deliver to the Trustee an agreement, in form and substance reasonably
satisfactory to the Trustee, which contains an assumption by such Person of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by it as master servicer under this Agreement, any
custodial agreement from and after the effective date of such agreement; (ii)
each Rating Agency shall be given prior written notice of the identity of the
proposed successor to the Master Servicer and each Rating Agency's rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded, qualified or withdrawn as a result of such assignment,
sale and delegation, as evidenced by a letter to such effect delivered to the
Master Servicer and the Trustee; (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the
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Trustee an Officer's Certificate and an Opinion of Independent Counsel addressed
to the Trustee, each stating that all conditions precedent to such action under
this Agreement have been completed and such action is permitted by and complies
with the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by the Company, the Company shall pay the terminated
Master Servicer a termination fee equal to 0.25% of the aggregate Scheduled
Principal Balance of the Mortgage Loans at the time the master servicing of the
Mortgage Loans is transferred to the successor Master Servicer. No such
assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.
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ARTICLE VIII
Default
Section 8.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in
the Distribution Account any amount so required to be deposited
pursuant to this Agreement (other than a Monthly Advance), and such
failure continues unremedied for a period of three Business Days after
the date upon which written notice of such failure, requiring the same
to be remedied, shall have been given to the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in
any material respect any other material covenants and agreements set
forth in this Agreement to be performed by it, which covenants and
agreements materially affect the rights of Certificateholders, and such
failure continues unremedied for a period of 60 days after the date on
which written notice of such failure, properly requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee
or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree
or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any
such decree or order is unstayed and in effect for a period of 60
consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization
statute and the petition is not dismissed within 60 days after the
commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to pay
its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute, makes
an assignment for the benefit of its creditors, or voluntarily suspends
payment of its obligations;
(v) The Master Servicer assigns or delegates its duties
or rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Sections 7.05 or 7.07;
or
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(vi) The Master Servicer fails to deposit, or cause to be
deposited, in the Distribution Account any Monthly Advance (other than
a Nonrecoverable Advance) by 5:00 p.m. New York City time on the
Distribution Account Deposit Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of the Company, may
terminate all of the rights and obligations (but not the liabilities) of the
Master Servicer under this Agreement and in and to the Mortgage Loans and/or the
REO Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
prior to the distribution on the relevant Distribution Date.
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Section 8.02 Trustee to Act; Appointment of Successor. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; provided, however, that the Company shall have the
right to either (a) immediately assume the duties of the Master Servicer or (b)
select a successor Master Servicer; provided further, however, that the Trustee
shall have no obligation whatsoever with respect to any liability (other than
advances deemed recoverable and not previously made) incurred by the Master
Servicer at or prior to the time of termination. As compensation therefor, but
subject to Section 7.06, the Trustee shall be entitled to compensation which the
Master Servicer would have been entitled to retain if the Master Servicer had
continued to act hereunder, except for those amounts due the Master Servicer as
reimbursement permitted under this Agreement for advances previously made or
expenses previously incurred. Notwithstanding the above, the Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution which is a Xxxxxx Mae- or
Xxxxxxx Mac-approved servicer, and with respect to a successor to the Master
Servicer only, having a net worth of not less than $10,000,000, as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the Trustee shall obtain a letter from each Rating Agency that
the ratings, if any, on each of the Certificates will not be lowered as a result
of the selection of the successor to the Master Servicer. Pending appointment of
a successor to the Master Servicer hereunder, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on the Mortgage Loans as it and such successor shall
agree; provided, however, that the provisions of Section 7.06 shall apply, the
compensation shall not be in excess of that which the Master Servicer would have
been entitled to if the Master Servicer had continued to act hereunder, and that
such successor shall undertake and assume the obligations of the Trustee to pay
compensation to any third Person acting as an agent or independent contractor in
the performance of master servicing responsibilities hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
(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); the provisions of Article VII, however, shall apply to it in its
capacity as successor master servicer.
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Section 8.03 Notification to Certificateholders. Upon any termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail
to all Certificateholders, within 60 days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Trustee, unless such
Event of Default shall have been cured, notice of each such Event of Default.
The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may, on behalf of all
Certificateholders, waive any default by the Master Servicer in the performance
of its obligations hereunder and the consequences thereof, except a default in
the making of or the causing to be made any required distribution on the
Certificates, which default may only be waived by Holders of Certificates
evidencing Fractional Undivided Interests aggregating 100% of the Trust Fund.
Upon any such waiver of a past default, such default shall be deemed to cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
timely remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived. The Trustee shall give notice of any such
waiver to the Rating Agencies.
Section 8.05 List of Certificateholders. Upon written request of three
or more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
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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 hereunder; provided, further, that neither
the Trustee nor the Securities Administrator shall be responsible for the
accuracy or verification of any calculation provided to it pursuant to this
Agreement.
(c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.01 and 10.01 herein based
solely on the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve
the Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and
after the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee and the Securities
Administrator shall be determined solely by the express provisions of
this Agreement, neither the Trustee nor the Securities Administrator
shall be liable except for the performance of their respective duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee or the Securities Administrator and, in the absence
of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the
requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee or an officer of the Securities Administrator,
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respectively, unless it shall be proved that the Trustee or the
Securities Administrator, respectively, was negligent in ascertaining
the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the directions of
the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Trust Fund, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power
conferred upon the Trustee or the Securities Administrator,
respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or
be deemed to have notice or knowledge of any default or Event of
Default unless a Responsible Officer of the Trustee's Corporate Trust
Office shall have actual knowledge thereof. In the absence of such
notice, the Trustee may conclusively assume there is no such default or
Event of Default;
(v) The Trustee shall not in any way be liable by reason
of any insufficiency in any Account held by or in the name of Trustee
unless it is determined by a court of competent jurisdiction that the
Trustee's gross negligence or willful misconduct was the primary cause
of such insufficiency (except to the extent that the Trustee is obligor
and has defaulted thereon);
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities
Administrator be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost
profits), even if the Trustee or the Securities Administrator,
respectively, has been advised of the likelihood of such loss or damage
and regardless of the form of action;
(vii) None of the Securities Administrator, the Depositor,
the Company or the Trustee shall be responsible for the acts or
omissions of the other, it being understood that this Agreement shall
not be construed to render them partners, joint venturers or agents of
one another and
(viii) Neither the Trustee nor the Securities Administrator
shall be required to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of
the obligations of the Master Servicer under the Servicing Agreements,
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.
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(e) All funds received by the Master Servicer and the Trustee and
required to be deposited in the Master Servicer Collection Account or
Distribution Account pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor
the Securities Administrator shall have any obligation or liability
to take any action or to refrain from taking any action hereunder in
the absence of written direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(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 the Depositor, the Master Servicer or
a Servicer, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(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 has actual knowledge (which has not
been cured or waived), to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care and skill
in their exercise, as a prudent person would exercise under the
circumstances in the conduct of his own affairs;
(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
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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. 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;
(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 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, as applicable, or the eligibility of any Mortgage
Loan for purposes of this Agreement.
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Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Depositor, and neither
the Trustee, or the Custodian on its behalf, nor the Securities Administrator
shall have any responsibility for their correctness. Neither the Trustee nor the
Securities Administrator makes any representation as to the validity or
sufficiency of the Certificates (other than the signature and countersignature
of the Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee, or the Custodian on its behalf, of the obligation
to review the Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's
signature and countersignature (or countersignature of its agent) on the
Certificates shall be solely in its capacity as Trustee and shall not constitute
the Certificates an obligation of the Trustee in any other capacity. Neither the
Trustee 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.
Section 9.04 Trustee and Securities Administrator May Own
Certificates. The Trustee and the Securities Administrator in its individual
capacity or in any capacity other than as Trustee hereunder may become the owner
or pledgee of any Certificates with the same rights it would have if it were not
Trustee or the Securities Administrator, as applicable, and may otherwise deal
with the parties hereto.
Section 9.05 Trustees and Securities Administrators Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid in accordance with a side letter agreement between the Trustee and the
Master Servicer. In addition, the Trustee and the Securities Administrator will
be entitled to recover from the Master Servicer Collection Account pursuant to
Section 4.03(b) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee and the Securities Administrator,
respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or intentional misconduct or which is the responsibility of the
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Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor and the Depositor hereby agrees to pay
such expenses, disbursements or advances upon demand. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by S&P with respect to their long-term rating
and rated "BBB" or higher by S&P and "Baa2" or higher by Moody's with respect to
any outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee or successor Securities Administrator other than pursuant to
Section 9.10, rated in one of the two highest long-term debt categories of, or
otherwise acceptable to, each of the Rating Agencies. If the Trustee publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee or the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Trustee or the
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07 Insurance. The Trustee and the Securities Administrator,
at their own expense, shall at all times maintain and keep in full force and
effect: (i) fidelity insurance, (ii) theft of documents insurance and (iii)
forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance shall be
in amounts, with standard coverage and subject to deductibles, as are customary
for insurance typically maintained by banks or their affiliates which act as
custodians for investor-owned mortgage pools. A certificate of an officer of the
Trustee or the Securities Administrator as to the Trustee's or the Securities
Administrator's, respectively, compliance with this Section 9.07 shall be
furnished to any Certificateholder upon reasonable written request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator. (a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Depositor and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the
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Depositor shall promptly appoint a successor Trustee or successor Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the resigning Trustee or
Securities Administrator, as applicable, the successor Trustee or Securities
Administrator, as applicable. If no successor Trustee or Securities
Administrator shall have been so appointed and have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Trustee or
Securities Administrator may petition any court of competent jurisdiction for
the appointment of a successor Trustee or Securities Administrator.
(b) If at any time the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of Section 9.06 and
shall fail to resign after written request therefor by the Depositor or if at
any time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or the Securities Administrator, as applicable, or of its property shall
be appointed, or any public officer shall take charge or control of the Trustee
or the Securities Administrator, as applicable, or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, then the
Depositor shall promptly remove the Trustee, or shall be entitled to remove the
Securities Administrator, as applicable, and appoint a successor Trustee or
Securities Administrator, as applicable, by written instrument, in triplicate,
one copy of which instrument shall be delivered to each of the Trustee or
Securities Administrator, as applicable, so removed, the successor Trustee or
Securities Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Depositor, the Master
Servicer, the Securities Administrator (if the Trustee is removed), the Trustee
(if the Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed. In the event that the
Trustee or Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee or
successor Securities Administrator, in excess of the amount paid to the
predecessor Trustee or predecessor Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
(a) Any successor Trustee or Securities Administrator appointed as provided in
Section 9.08 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Trustee or Securities Administrator an instrument accepting such
appointment hereunder. The resignation or removal of the predecessor Trustee or
Securities Administrator shall then become effective and such successor Trustee
or Securities Administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee or
Securities Administrator herein. The predecessor Trustee or Securities
Administrator shall after payment of its outstanding fees and expenses promptly
deliver to the successor Trustee or Securities Administrator, as applicable, all
assets and records of the Trust held by it hereunder, and the Depositor and the
predecessor Trustee or Securities Administrator, as applicable, shall execute
and deliver such instruments and do such other things as may reasonably
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be required for more fully and certainly vesting and confirming in the successor
Trustee or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or
Securities Administrator as provided in this Section 9.09, the successor Trustee
or Securities Administrator shall mail notice of the succession of such Trustee
or Securities Administrator hereunder to all Certificateholders at their
addresses as shown in the Certificate Register and to the Rating Agencies. The
Company shall pay the cost of any mailing by the successor Trustee or Securities
Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 9.11, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment
within 15 days after the receipt by it of a written request so to do, the
Trustee shall have the power to make such appointment without the Depositor.
(c) No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.11, all rights, powers, duties and
obligations conferred or imposed upon the Trustee and
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required to be conferred on such co-trustee shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
(e) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Depositor and the Trustee acting jointly may at any time accept the resignation
of or remove any separate trustee or co-trustee.
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration. (a) For federal income tax purposes,
the taxable year of each REMIC 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) 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, 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 will apply for an Employee Identification Number from the IRS
under Form SS-4 or any other acceptable method for all tax entities. In
connection with the foregoing, the Securities Administrator shall timely prepare
and file,
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and the Trustee shall sign, IRS Form 8811, which shall provide the name and
address of the person who can be contacted to obtain information required to be
reported to the holders of regular interests in each REMIC (the "REMIC Reporting
Agent"). The Trustee shall make elections to treat each REMIC as a REMIC (which
elections shall apply to the taxable period ending December 31, 2003 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe, and as described by the Securities Administrator. The
Trustee shall sign all tax information returns filed pursuant to this Section
and any other returns as may be required by the Code. The Holder of the Class
R-I Certificate is hereby designated as the "Tax Matters Person" (within the
meaning of Treas. Reg. ss.ss.1.860F-4(d)) for REMIC I-A and REMIC I-B, the
Holder of the Class R-II Certificate is hereby designated as the "Tax Matters
Person" for REMIC II and the Holder of the Class R-III Certificate is hereby
designated as the "Tax Matters Person" 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, the Trustee and
the Securities Administrator shall take whatever action that in its sole good
faith judgment is necessary for the proper filing of such information returns or
for the provision of a tax matters person, including designation of the Holder
of a Residual Certificate to sign such returns or act as tax matters person.
Each Holder of a Residual Certificate shall be bound by this Section.
(c) The Securities Administrator shall provide upon request and
receipt of reasonable compensation, such information as required in Section
860D(a)(6)(B) of the Code to the Internal Revenue Service, to any Person
purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee holding
an interest in a pass-through entity described in Section 860E(e)(6) of the
Code, any record holder of which is not a transferee permitted by Section
5.05(b) (or which is deemed by statute to be an entity with a disqualified
member).
(d) The Securities Administrator shall prepare and file or cause
to be filed, and the Trustee shall sign, any state income tax returns required
under Applicable State Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the
Trustee and the Securities Administrator shall comply with all federal
withholding requirements respecting payments to Certificateholders of interest
or original issue discount on the Mortgage Loans, that the Trustee or the
Securities Administrator reasonably believes are applicable under the Code. The
consent of Certificateholders shall not be required for such withholding. In the
event the Trustee or the Securities Administrator withholds any amount from
interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Trustee or
the Securities Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
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(f) The Trustee and the Securities Administrator agree to
indemnify the Trust Fund and the Depositor for any taxes and costs including,
without limitation, any reasonable attorneys fees imposed on or incurred by the
Trust Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants and the Securities Administrator's covenants, respectively,
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall 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
Section 10.01 Termination Upon Repurchase by the Depositor or its
Designee or Liquidation of the Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities of the Depositor, the Trustee, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate with respect to Loan Group I and Loan Group II, as applicable, upon:
(i) the repurchase by or at the direction of the
Depositor or its designee of all of the Mortgage Loans in such Loan
Group and all related REO Property remaining in the Trust relating to
such Loan Group at a price (in each case, the "Termination Purchase
Price") equal to the sum of (a) 100% of the Outstanding Principal
Balance of each Mortgage Loan in such Loan Group (other than a Mortgage
Loan related to REO Property) as of the date of repurchase, net of the
principal portion of any unreimbursed Monthly Advances on the Mortgage
Loans in such Loan Group 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 in such Loan Group, less the good
faith estimate of the Depositor of liquidation expenses to be incurred
in connection with its disposal thereof (but not more than the
Outstanding Principal Balance of the related Mortgage Loan, together
with interest at the applicable Mortgage Interest Rate accrued on that
balance but unpaid to, but not including, the first day of the month of
repurchase), such appraisal to be calculated by an appraiser mutually
agreed upon by the Depositor and the Trustee at the expense of the
Depositor, (c) unreimbursed out-of pocket costs of the Master Servicer,
including unreimbursed servicing advances and the principal portion of
any unreimbursed Monthly Advances, made on the Mortgage Loans in such
Loan Group prior to the exercise of such repurchase right and (d) any
unreimbursed costs and expenses of the Trustee and the Securities
Administrator payable pursuant to Section 9.05; or
(ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage
Loan in such Loan Group, remaining in the Trust Fund or the disposition
of all property acquired with respect to any Mortgage Loan in such Loan
Group; provided, however, that in the event that an advance has been
made, but not yet recovered, at the time of such termination, the
Person having made such advance shall be entitled to receive,
notwithstanding such termination, any payments received subsequent
thereto with respect to which such advance was made; or
(iii) the payment to the Certificateholders of the related
Certificate Group 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.
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(c) (i) The right of the Depositor or its designee to repurchase
all the assets of the Trust Fund relating to the Group I Mortgage Loans, as
described in Subsection 10.01(a)(i) above is conditioned upon the date of such
purchase occurring after the Group I Optional Termination Date. The Depositor or
its designee may repurchase all the assets of the Trust Fund relating to the
Group I Mortgage Loans if 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 REMIC I-A has been lost or that a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year. (ii) The right of the Depositor or its designee to repurchase all
the assets of the Trust Fund relating to the Group II Mortgage Loans described
in Subsection 10.01(a)(i) above is conditioned upon the date of such purchase
occurring on or after the Group II Optional Termination Date. The Depositor or
its designee may repurchase all the assets of the Trust Fund relating to the
Group II Mortgage Loans if 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 REMIC I-B has been lost or that a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year. (iii) At any time thereafter, in the case of a repurchase as
described in this Subsection 10.01(c), the Depositor may elect to terminate
REMIC I-A, REMIC I-B, REMIC II and REMIC III at any time, and upon such
election, the Depositor or its designee, shall repurchase all the assets of the
Trust Fund described in Subsection 10.01(a)(i) above.
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the l5th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Trustee therein specified.
(e) If the option of the Depositor to repurchase or cause the
repurchase of all the assets in the Trust Fund relating to either Loan Group I
or Loan Group II, as described in Subsection 10.01(a)(i) above, is exercised,
the Depositor and/or its designee shall deliver to the Trustee for deposit in
the Distribution Account, by the Business Day prior to the applicable
Distribution Date, an amount equal to the Termination Purchase Price for the
Mortgage Loans being purchased by it and all property acquired with respect to
such Mortgage Loans being purchased by it and all property acquired with respect
to such Mortgage Loans remaining in REMIC I-A or REMIC I-B, as applicable. Upon
presentation and surrender of the Certificates in the related Certificate Group
by the Certificateholders, the Trustee shall distribute to such
Certificateholders as directed by the Securities Administrator in writing an
amount determined as follows: with respect to each Certificate (other than the
Interest Only Certificates and 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
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the Certificates in such Certificate Group (other than the Class R
Certificates). If the proceeds with respect to the Group I-1 Mortgage Loans are
not sufficient to pay all of the Group I-1 Senior Certificates in full, any such
deficiency will be allocated first, to the Group I Subordinate Certificates, in
inverse order of their numerical designation and then to the Group I-1 Senior
Certificates. If the proceeds with respect to the Group I-2 Mortgage Loans are
not sufficient to pay all of the Group I-2 Senior Certificates in full, any such
deficiency will be allocated first, to the Group I Subordinate Certificates, in
inverse order of their numerical designation and then to the Group I-2 Senior
Certificates on a pro rata basis. If the proceeds with respect to the Group I-3
Mortgage Loans are not sufficient to pay all of the Group I-3 Senior
Certificates in full, any such deficiency will be allocated first, to the Group
I Subordinate Certificates, in inverse order of their numerical designation and
then to the Group I-3 Senior Certificates. If the proceeds with respect to the
Group II-1 Mortgage Loans are not sufficient to pay all of the Group II-1 Senior
Certificates in full, any such deficiency will be allocated first, to the Group
II Subordinate Certificates, in inverse order of their numerical designation and
then to the Group II-1 Senior Certificates on a pro rata basis. If the proceeds
with respect to the Group II-2 Mortgage Loans are not sufficient to pay all of
the Group II-2 Senior Certificates in full, any such deficiency will be
allocated first, to the Group II Subordinate Certificates, in inverse order of
their numerical designation and then to the Group II-2 Senior Certificates on a
pro rata basis. If the proceeds with respect to the Group II-3 Mortgage Loans
are not sufficient to pay all of the Group II-3 Senior Certificates in full, any
such deficiency will be allocated first, to the Group II Subordinate
Certificates, in inverse order of their numerical designation and then to the
Group II-3 Senior Certificates. If the proceeds with respect to the Group II-4
Mortgage Loans are not sufficient to pay all of the Group II-4 Senior
Certificates in full, any such deficiency will be allocated first, to the Group
II Subordinate Certificates, in inverse order of their numerical designation and
then to the Group II-4 Senior Certificates. Upon deposit of the Termination
Purchase Price and following such final Distribution Date, the Trustee shall
release promptly to the Depositor and/or its designee the Mortgage Files for the
remaining Mortgage Loans of the related Loan Group, and the Accounts as they
relate to such Loan Group shall terminate, subject to the Trustee's obligation
to hold any amounts payable to the Certificateholders in trust without interest
pending final distributions pursuant to Subsection 10.01(g). Any other amounts
remaining in the Accounts will belong to the Depositor.
(f) In the event that this Agreement is terminated by reason of
the payment or liquidation of all Mortgage Loans or the disposition of all
property acquired with respect to all Mortgage Loans under Subsection
10.01(a)(ii) above, the Master Servicer shall deliver to the Trustee for deposit
in the Distribution Account all distributable amounts remaining in the Master
Servicer Collection Account. Upon the presentation and surrender of the
Certificates, the Trustee shall distribute to the remaining Certificateholders,
pursuant to the written direction of the Securities Administrator and in
accordance with their respective interests, all distributable amounts remaining
in the Distribution Account. Upon deposit by the Master Servicer of such
distributable amounts, and following such final Distribution Date, the Trustee
shall release promptly to the Depositor or its designee the Mortgage Files for
the remaining Mortgage Loans, and the Master Servicer Collection Account and the
Distribution Account shall terminate, subject to the Trustee's obligation to
hold any amounts payable to the Certificateholders in trust without interest
pending final distributions pursuant to this Subsection 10.01(f).
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(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02 Additional Termination Requirements. (a) If the option
of the Depositor to repurchase (i) all the Group I Mortgage Loans and REMIC I-A,
(ii) all of the Group II Mortgage Loans and REMIC I-A or (iii) all of the
Mortgage Loans under Subsection 10.01(a)(i) above is exercised, (i) REMIC I-A,
(ii) REMIC I-B, or (iii) the Trust Fund and each of REMIC I-A, REMIC I-B , 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
addressed to the Trustee to the effect that the failure of the Trust to comply
with the requirements of this Section 10.02 will not (i) result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code on REMIC I-A, REMIC I-B , REMIC II or REMIC III or (ii) cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any Regular
Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date,
at the written direction of the Depositor, the Trustee, as agent for
the respective Tax Matters Persons, shall adopt a plan of complete
liquidation of each REMIC in the case of a termination of Loan Group I
and Loan Group II under Subsection 10.01(a)(i), or a plan of complete
liquidation of REMIC I-A in the case of a termination of Loan Group I
under Subsection 10.01(a)(i), or a plan of complete liquidation of
REMIC I-B in the case of a termination of Loan Group II under
Subsection 10.01(a)(ii), provided to it by the Depositor, which meets
the requirements of a "qualified liquidation" under Section 860F of the
Code and any regulations thereunder;
(ii) the Depositor shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the
time of making of the final payment on the Certificates, the Trustee
shall sell or otherwise dispose of all of the remaining assets of the
Trust Fund in accordance with the terms hereof; and
(iii) at or after the time of adoption of such a plan of
complete liquidation of each REMIC, of REMIC I-A or REMIC I-B, as
applicable, and at or prior to the final Distribution Date relating
thereto, the Trustee shall sell for cash all of the assets of the Trust
or REMIC I-A or REMIC I-B, as applicable, to or at the direction of the
Depositor, and each of REMIC I-A, REMIC I-B, 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
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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 REMIC shall terminate.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties. The parties intend that each of REMIC
I-A, REMIC I-B, 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.
Section 11.02 Amendment. (a) This Agreement may be amended from time
to time by the Company, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee, without notice to or the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein or therein that may be defective or inconsistent with any
other provisions herein or therein, to comply with any changes in the Code or to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Independent Counsel, addressed to the Trustee, adversely affect in
any material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the
Company, the Master Servicer, the Depositor, the Securities Administrator and
the Trustee, with the consent of the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund
or of the applicable Class or Classes, if such amendment affects only such Class
or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding, or (iii) cause any REMIC to fail to qualify as a
REMIC for federal income tax purposes, as evidenced by an Opinion of Independent
Counsel addressed to the Trustee which shall be provided to the Trustee other
than at the Trustee's expense. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.02(b), Certificates registered in the name of or held for the
benefit of the Depositor, the Securities Administrator, the Master Servicer, or
the Trustee or any Affiliate thereof shall be entitled to vote their Fractional
Undivided Interests with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the
Trustee shall furnish a copy of such amendment or written notification of the
substance of such amendment to each Certificateholder, with a copy to the Rating
Agencies.
(d) In the case of an amendment under 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.
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(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
addressed to the Trustee stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee and the Securities
Administrator may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's or the Securities Administrator's own respective
rights, duties or immunities under this Agreement.
Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation, at the expense of the Trust upon the request in
writing of a Certificateholder, but only if such direction is accompanied by an
Opinion of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.
Section 11.04 Limitation on Rights of Certificateholders. (a) The
death or incapacity of any Certificateholder shall not terminate this Agreement
or the Trust, nor entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Depositor, the Securities Administrator, the Master Servicer or any successor to
any such parties unless (i) such Certificateholder previously shall have given
to the Trustee a written notice of a continuing default, as herein provided,
(ii) the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs and expenses and liabilities to be
incurred therein or thereby, and (iii) the Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by
virtue of any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04,
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each and every Certificateholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
Section 11.05 Acts of Certificateholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Depositor. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the
Depositor, if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Securities Administrator, the Depositor, the Master Servicer nor
any successor to any such parties shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action of the holder of any Certificate shall bind
every future holder of the same Certificate and the holder of every Certificate
issued upon the registration of transfer or exchange thereof, if applicable, or
in lieu thereof with respect to anything done, omitted or suffered to be done by
the Trustee, the Securities Administrator, the Depositor, the Master Servicer or
any successor to any such party in reliance thereon, whether or not notation of
such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage
of Certificates evidencing Fractional Undivided Interests have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 11.02(b) and except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Certificates which have been pledged in good faith to the Trustee,
the Securities Administrator, the Depositor, the Master Servicer or any
Affiliate thereof may be regarded as outstanding if the pledgor establishes to
the satisfaction of the Trustee the pledgor's right to act with
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respect to such Certificates and that the pledgor is not an Affiliate of the
Trustee, the Securities Administrator, the Depositor, or the Master Servicer, as
the case may be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the Company, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Vice President-Servicing, telecopier number: (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 or Securities Administrator, Xxxxx Fargo
Bank, N.A., X.X. Xxx 00, Xxxxxxxx Xxxxxxxx 00000 (or, in the case of overnight
deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 21045) (Attention:
Corporate Trust Services - BART 2004-9), facsimile no.: (000) 000-0000, or such
other address as may hereafter be furnished to the other parties hereto in
writing; or (v) in the case of the Rating Agencies, Xxxxx'x Investors Service,
Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. Any notice delivered to the Depositor, the Master Servicer, the
Securities Administrator or the Trustee under this Agreement shall be effective
only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
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Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section
headings herein are for convenience of reference only, and shall not limited or
otherwise affect the meaning hereof. The Trustee shall promptly provide notice
to each Rating Agency with respect to each of the following of which a
Responsible Officer of the Trustee has actual knowledge:
1. Any material change or amendment to this Agreement or the
Servicing Agreements;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of the Master Servicer, the
Trustee or the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection
Account or the Distribution Account.
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and
the Securities Administrator have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Depositor
By:/s/ Xxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A., as Master
Servicer
By:/s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:/s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By:/s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)
in its capacity as Seller
EMC MORTGAGE CORPORATION
By: /s/ Xxx Xxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxx
Title: Executive Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 29th day of October, 2004 before me, a notary public in and for
said State, personally appeared ________________, known to me to be a(n) Vice
President of Structured Asset Mortgage Investments II Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 29th day of October, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx X. Xxxxxxx, known to me to be a Vice
President of U.S. Bank National Association, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 29th day of October, 2004 before me, a notary public in and for
said State, personally appeared Xxxxx X. Xxxxxxxxx, known to me to be a Vice
President of Xxxxx Fargo Bank, N.A., the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 29th day of October, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx, known to me to be an Assistant
Vice President of Xxxxx Fargo Bank, N.A., the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 29th day of October 2004 before me, a notary public in and for
said State, personally appeared _________________________, known to me to be
_________________________________ of EMC Mortgage Corporation, the corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 29th day of October, 2004 before me, a notary public in and for
said State, personally appeared Xxx Xxxxxxxx, known to me to be Executive Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS [_-[A][X]-_] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
[THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED
BY THE PRINCIPAL PAYMENTS HEREON AND 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 THE TRUSTEE NAMED HEREIN.]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL BE 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 WILL BE 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.
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Certificate No. 1 [Variable] Pass-Through Rate
Class [_-[A][X]-_] Senior
Date of Pooling and Servicing Aggregate Initial [Current
Agreement and Cut-off Date: Principal][Notional] Amount of this
October 1, 2004 Senior Certificate as of the Cut-off
Date:
$[_____________]
First Distribution Date: Initial [Current Principal][Notional]
November 26, 2004 Amount of this Senior Certificate as
of the Cut-off Date: $[_____________]
Master Servicer: CUSIP: [____________]
Xxxxx Fargo Bank, N.A.
Assumed Final Distribution Date:
November 25, 2034
BEAR XXXXXXX ARM TRUST 2004-9
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-9
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 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
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. 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") primarily 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
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Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to XXXX
XX. Xxxxx Fargo Bank, N.A. ("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 EMC Mortgage Corporation, as seller and
company (the "Seller"), XXXX XX, as depositor (the "Depositor"), Xxxxx Fargo
Bank, N.A. as master servicer and securities administrator (in such capacity,
the "Securities Administrator") and U.S. Bank National Association, 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][Notional] Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above and as further described in the Agreement. The
Trustee 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 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
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.
Distributions on this Certificate will be made by the Trustee 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 Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial [Current Principal][Notional] 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-six 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 the
Trustee is not liable to the
A-1-3
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 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 parties thereto
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
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates 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 Trustee 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 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 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 the earlier of
(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 upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) the optional
A-1-4
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 on or after the Distribution Date on
which the aggregate unpaid principal balance of the Mortgage Loans is less than
the percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. 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 Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: __________, 20__ U.S. BANK NATIONAL ASSOCIATION
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.
U.S. BANK NATIONAL ASSOCIATION
Authorized signatory of U.S. Bank
National Association, not in its
individual capacity but solely as
Trustee
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
FORM OF CLASS [_-B-_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE GROUP __
SENIOR CERTIFICATES, [AND THE CLASS [_-B-_] CERTIFICATES], AS DESCRIBED IN THE
AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
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 THE TRUSTEE NAMED HEREIN.
[FOR CLASS I-B-1, CLASS I-B-2, CLASS I-B-3, CLASS II-B-1, CLASS
II-B-2 AND CLASS II-B-3] [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, ANY CERTIFICATE ISSUED WILL BE
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 WILL
BE 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 I-B-1, CLASS I-B-2, CLASS I-B-3, CLASS II-B-1, CLASS
II-B-2 AND CLASS II-B-3][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 THE CERTIFICATE MUST BE RATED, AT THE TIME OF
A-2-1
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 I-B-4, CLASS I-B-5, CLASS I-B-6, CLASS II-B-4, CLASS
II-B-5, CLASS II-B-6][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 ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.]
[FOR CLASS I-B-4, CLASS I-B-5, CLASS I-B-6, CLASS II-B-4, CLASS
II-B-5, CLASS II-B-6] [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 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,
A-2-2
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 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.]
Certificate No. 1 Variable Pass-Through Rate
Class [_-B-_] Subordinate
Date of Pooling and Servicing Aggregate Initial Current Principal
Agreement and Cut-off Date: Amount of this Subordinate
October 1, 2004 Certificate as of the Cut-off Date:
$[_________]
First Distribution Date: Initial Current Principal Amount of
November 26, 2004 this Subordinate Certificate as of
the Cut-off Date: $[_________]
Master Servicer: CUSIP: [____________]
Xxxxx Fargo Bank, N.A.
Assumed Final Distribution Date:
November 25, 2034
BEAR XXXXXXX ARM TRUST 2004-9
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-9
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 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
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 [_______] 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") primarily 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 Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to XXXX
XX. Xxxxx Fargo
A-2-4
Bank, N.A. ("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 EMC as seller and company (the "Seller"), XXXX XX, as
depositor (the "Depositor"), Xxxxx Fargo Bank, N.A. as master servicer and
securities administrator (in such capacity, the "Securities Administrator") and
U.S. Bank National Association, 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 rate equal to the Pass-Through
Rate set forth above and as further described in the Agreement. The Trustee 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 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 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 Trustee 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 Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee 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 I-B-4, Class I-B-5, Class I-B-6, Class II-B-4, Class
II-B-5 and Class II-B-6][No transfer of this Class [_-B-_] Certificate will be
made unless such transfer is (i) exempt from the registration requirements of
the Securities act of 1933, as amended, and any applicable state securities laws
or is made in accordance with said Act and laws and (ii) made in accordance with
Section 5.02 of the Agreement. In the event that such transfer is to be made the
Trustee shall register such transfer if, (i) made to a transferee who has
provided the Trustee with evidence as to its QIB status; or (ii) (A) the
transferor has advised the Trustee 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 an Investment Letter; provided
that if based upon an Opinion of Counsel to the effect that (A) and (B) above
are not sufficient to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the
A-2-5
registration requirements of the Securities Act and other applicable laws, the
Trustee shall as a condition of the registration of any such transfer require
the transferor to furnish such other certifications, legal opinions or other
information prior to registering the transfer of this Certificate as shall be
set forth in such Opinion of Counsel.]
[For Class I-B-1, Class I-B-2, Class I-B-3, Class II-B-1, Class
II-B-2 and Class II-B-3] [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 a 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 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 I-B-4, Class I-B-5, Class I-B-6, Class II-B-4, Class
II-B-5 and Class II-B-6] [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 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 00-00 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.]
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
twenty-six 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 the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
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
A-2-6
and the Trustee and the rights of the Certificateholders under the Agreement
from time to time by the parties thereto 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
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates 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 Trustee 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 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 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 the earlier of
(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 upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) 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 on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. 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.
A-2-7
Unless this Certificate has been countersigned by an authorized
signatory of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-2-8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: _________, 20__ U.S. BANK NATIONAL ASSOCIATION
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.
U.S. BANK NATIONAL ASSOCIATION
Authorized signatory of U.S. Bank
National Association, not in its
individual capacity but solely as
Trustee
By:
-------------------------------
Authorized Signatory
A-2-9
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
FORM OF 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 (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, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL
FOR THE BENEFIT OF THE DEPOSITOR, MASTER SERVICER AND THE SECURITIES
ADMINISTRATOR AND ON WHICH THEY MAY RELY (WHICH SHALL NOT BE AT THE EXPENSE OF
THE TRUSTEE) WHICH IS ACCEPTABLE TO 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
OBLIGATIONS ON THE PART OF THE SELLER, THE MASTER SERVICER, ANY SERVICER, THE
SECURITIES ADMINISTRATOR OR THE TRUSTEE.
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 STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC., THE SECURITIES ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS
NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX
IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE, (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B) OR (C) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR
(D) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3)
A-3-1
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-3-2
Certificate No. 1
Class R-[_]
Date of Pooling and Servicing Aggregate Initial Current Principal
Agreement and Cut-off Date: Amount of this Certificate as of the
October 1, 2004 Cut-off Date:
$[_____________]
First Distribution Date: Initial Current Principal Amount of
November 26, 2004 this Certificate as of the Cut-off
Date: $[_____________]
Master Servicer: CUSIP: [_____________]
Xxxxx Fargo Bank, N.A.
Assumed Final Distribution Date:
November 25, 2034
BEAR XXXXXXX ARM TRUST 2004-9
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-9
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 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
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") primarily consisting of adjustable rate mortgages 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 Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to XXXX XX. Xxxxx Fargo Bank, N.A. ("Xxxxx Fargo") will act
as master servicer of the Mortgage
A-3-3
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 EMC Mortgage Corporation as seller and company (the
"Seller"), XXXX XX, as depositor(the "Depositor"), Xxxxx Fargo Bank, N.A. as
master servicer and securities administrator (in such capacity, the "Securities
Administrator") and U.S. Bank National Association, 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.
The Trustee 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 of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount (of
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
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 Trustee 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 Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee 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.
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 Trustee and the Securities Administrator 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 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, which purchaser may be the Depositor, or any affiliate of the
Depositor, on such terms and conditions as the Depositor may choose.
A-3-4
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
for the benefit of the Depositor, Master Servicer and the Securities
Administrator and on which they may rely (which shall not be at the expense of
the Trustee) which is acceptable to 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
obligations on the part of the Seller, the Master Servicer, any Servicer, the
Securities Administrator 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-six 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 the
Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
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 parties thereto
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
Trustee upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee for such purposes, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates 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-3-5
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 Trustee 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 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 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 the earlier of
(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 upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due under the
Agreement, or (ii) 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 on or
after the Distribution Date on which the aggregate unpaid principal balance of
the Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. 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 Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-3-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: _________, 20__ U.S. BANK NATIONAL ASSOCIATION
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.
U.S. BANK NATIONAL ASSOCIATION
Authorized signatory of U.S. Bank
National Association, not in its
individual capacity but solely as
Trustee
By:
-------------------------------
Authorized Signatory
A-3-7
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-3-8
EXHIBIT B
MORTGAGE LOAN SCHEDULE
The Preliminary and Final Mortgage Loan Schedules shall set forth
the following information with respect to each Mortgage Loan:
(a) the loan number;
(b) [reserved];
(c) the city, state and zip code of the Mortgaged Property;
(d) the property type;
(e) the Mortgage Rate;
(f) the Servicer;
(g) the Servicing Rate;
(h) the Net Rate;
(i) the original term;
(j) the maturity date;
(k) the stated remaining term to maturity;
(l) the original principal balance;
(m) the first payment date;
(n) the principal and interest payment in effect as of the Cut-off Date;
(o) the unpaid principal balance as of the Cut-off Date;
(p) the Loan-to-Value Ratio at origination;
(q) paid-through date;
(r) the insurer of any Primary Mortgage Insurance Policy;
(s) the Gross Margin, if applicable;
(t) the Maximum Lifetime Mortgage Rate, if applicable;
(u) the Minimum Lifetime Mortgage Rate, if applicable;
(v) the Periodic Rate Cap, if applicable;
B-1
(w) the number of days delinquent, if any;
(x) which Mortgage Loans adjust after an initial fixed-rate period of three,
five, seven or ten years;
(y) The Loan Group; and
(z) The Prepayment Charge Loans.
Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
B-2
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000-0000
Attn: Inventory Control
RE: Pooling and Servicing Agreement, dated as of
October 1, 2004, among XXXX XX,
Xxxxx Fargo Bank, N.A., as Master Servicer
and Securities Administrator,
EMC Mortgage Corporation, as Seller
and company and U.S. Bank National Association, as Trustee
In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.
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:_______________________________
D-1
EXHIBIT E
FORM OF AFFIDAVIT
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 Inc., Bear Xxxxxxx ARM Trust, Mortgage Pass-Through Certificates, Series
2004-9 Class R-I, Class R-II and Class R-II 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
________________________.
E-1
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.
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]
[SELLER]
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments II Inc., Bear Xxxxxxx ARM
Trust,
Series 2004-9 Mortgage Pass-Through Certificates (the
"Certificates"),
including the Class I-B-4, Class I-B-5, Class I-B-6, Class
II-B-4, Class II-B-5 and
Class II-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
F-1-1
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 to the Pooling and Servicing Agreement (as
defined below) (or such other documentation as may be
acceptable to the Trustee) 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
U.S. Bank National Association(the "Trustee") so requests, a
satisfactory Opinion of Counsel 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, 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, or section 4975 of the Internal
Revenue Code of 1986, as amended, or (ii) are providing a
representation to the effect that the proposed transfer and
holding of a Privately Offered 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
obligations on the part of the Depositor, the
F-1-2
Master Servicer, the Securities Administrator or the Trustee
or (iii) have attached hereto the opinion specified in
Section 5.07 of the Agreement.
(ix) We understand that each of the Privately Offered Certificates
bears, and will continue to bear, a legend to substantiate 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 ACT OR
ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A
LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED
DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE
BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT 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 TRANSFER AND HOLDING
OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION
OF THE TRUST AND ITS ASSETS: (1) 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
F-1-3
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 OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE
MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY
CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS THE OPINION
PROVIDED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED."
"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 October 1, 2004, among
Structured Asset Mortgage Investments II Inc., Xxxxx Fargo Bank, N.A. as master
servicer and securities administrator, EMC Mortgage Corporation, as seller and
company and U.S. Bank National Association, 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):_______________________
F-1-4
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-1-5
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-1-6
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER] [Date]
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments II Inc., Bear Xxxxxxx ARM
Trust,
Series 2004-9 Mortgage Pass-Through Certificates, Class I-B-4,
Class I-B-5, I-Class B-6, Class II-B-4, Class II-B-5 and Class
II-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:
(x) |_| an insurance company as defined in Section 2(13) of
the Act/1; or
(y) |_| an investment company registered under the Investment
Company Act or any business development company as
defined in Section 2(a)(48) of the Investment Company
Act of 1940; or
-------------------------------
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, 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-2-1
(z) |_| 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
(aa) |_| 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
(bb) |_| a business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
(cc) |_| 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; or
(dd) |_| 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
(ee) |_| 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 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.
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
F-2-2
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 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 to the Pooling and
Servicing Agreement, dated as of October 1, 2004, among Structured Asset
Mortgage Investments II Inc., Xxxxx Fargo Bank, N.A., EMC Mortgage Corporation
and U.S. Bank National Association, 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, 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 holding of a Privately Offered 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 a prohibited transaction exemption,
including, but not limited to, Prohibited Transaction Exemption ("PTE") 84-14,
XXX 00-00, XXX 00-0, XXX 00-00, XXX 00-00 and (II) will not give rise to any
additional obligations on the part of the Depositor, the Master Servicer, the
Securities Administrator or the Trustee or (iii) has attached hereto the opinion
specified in Section 5.07 of the 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.
F-2-3
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-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 October 29, 2004, by and among U.S. BANK
NATIONAL ASSOCIATION, not individually but solely as trustee under the Pooling
and Servicing Agreement defined below (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, N.A., 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, N.A., 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 October 1, 2004, relating to the issuance of Bear Xxxxxxx
ARM Trust 2004-9, Mortgage Pass-Through Certificates, Series 2004-9 (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 the Depositor or the Master Servicer under the Pooling
and Servicing Agreement and the Servicers 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 custodial agent of the Trustee for
these purposes, acknowledges (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 the schedule attached hereto
G-1
(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, in accordance with Section 2.02
of the Pooling and Servicing Agreement, the Custodian shall deliver to 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 the Schedule attached hereto (the
"Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date, 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 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, the Custodian
shall review the Mortgage Files as provided in Section 2.02 of the Pooling and
Servicing Agreement and deliver to the Depositor and the Trustee a Final
Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files.
(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 missing from the Mortgage Files.
G-2
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 Depositor, the related
Servicer and the Trustee.
Section 2.5. CUSTODIAN TO COOPERATE: RELEASE OF MORTGAGE FILES. Upon
receipt of written notice from the Trustee that the Seller has repurchased a
Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement, and
that the purchase price therefore has been deposited in the Master Servicer
Collection Account or the Distribution Account, then the Custodian agrees to
promptly release to the 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 promptly to release to the related 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.
From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any Primary
Insurance Policy, the related Servicer (or if the Servicer does not, the Master
Servicer) shall deliver to the Custodian a Request for Release signed by a
Servicing Officer requesting that possession of all of the Mortgage File be
released to the related 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 Mortgage Loan under any of the Insurance Policies.
Upon receipt of the foregoing, the Custodian shall deliver the 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
therefore by the related Servicer no longer exists, unless (i) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Master Servicer Collection Account or the
Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the 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 is required to deliver to the Custodian
a Request for Release, the Servicer shall deliver two copies of the Request for
Release if delivered in hard copy or the 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 the Request for Release. In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, such Request for Release shall be followed by an
assignment of mortgage, without recourse, representation or warranty from the
Trustee to the Seller and the
G-3
related Mortgage Note shall be endorsed without recourse by the Trustee and be
returned to the Seller. In connection with any Request for Release of a Mortgage
File because of the payment in full of a Mortgage Loan, 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.
G-4
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 or
substitution agreement has been completed by forwarding to the Custodian the
original of such assumption or substitution 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 as Bailee and Agent of the Trustee. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and custodial agent of the Trustee and has no instructions to hold
any Mortgage Note or Mortgage 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 and in the
Pooling and Servicing Agreement. Except upon compliance with the provisions of
Section 2.5 of this Agreement, no Mortgage Note, Mortgage or Mortgage File shall
be delivered by the Custodian to the Depositor, the Servicers 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 or 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 written notice of resignation, the Trustee shall
either take custody of the Mortgage Files itself and give prompt written notice
thereof to the Depositor, the Master Servicer and the Custodian, or
G-5
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 written 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 the
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 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, 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 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
G-6
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.
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, 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.
G-7
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: U.S. BANK NATIONAL ASSOCIATION, not
individually but solely as Trustee
Xxx Xxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx By:_______________________________
02110 Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Attention:
Telecopy:
Confirmation:
Address: STRUCTURED ASSET MORTGAGE INVESTMENTS
II INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By:_______________________________
Name:
Title:
Address: XXXXX FARGO BANK,
N.A., as Master Servicer
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
By:_______________________________
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
Address: XXXXX FARGO BANK,
N.A., as Custodian
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 By:_______________________________
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
X-0
XXXXX XX XXXXXXXXXXXXX )
)ss.:
COUNTY OF SUFFOLK )
On the 29th day of October 2004 before me, a notary public in and
for said State, personally appeared Xxxxxx X. Xxxxxxx, known to me to be a Vice
President of U.S. 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 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-0
XXXXX XX XXXXXXXX )
) ss.:
COUNTY OF XXXXXX )
On the 29th day of October 2004 before me, a notary public in and
for said State, personally appeared Xxxxxx Xxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank, N.A., 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 29th day of October 2004 before me, a notary public in and
for said State, personally appeared __________________ known to me to be a
____________________ of Structured Asset Mortgage Investments II Inc., one of
the corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_______________________________
Notary Public
[Notarial Seal]
X-00
XXXXX XX XXXXXXXX )
)ss.:
COUNTY OF XXXXXX )
On the 29th day of October 2004 before me, a notary public in and
for said State, personally appeared Xxxxxx Xxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank, N.A., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_______________________________
Notary Public
[Notarial Seal]
G-12
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
September __, 2004
U.S. Bank National Association Structured Asset Mortgage Investments II Inc.
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx 000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc.
Bear Xxxxxxx ARM Trust 2004-9, Mortgage Pass-Through Certificates, Series
2004-9
Re: Custodial Agreement, dated as of October 29, 2004,
by and among U.S. Bank National Association,
Structured Asset Mortgage Investments II Inc. and
Xxxxx Fargo Bank, N.A. relating to Bear Xxxxxxx
ARM Trust 2004-9, Mortgage Pass-Through
Certificates, Series 2004-9
----------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3(a) of the above-captioned Custodial
Agreement and, subject to Section 2.02(a) 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, N.A.
By:_______________________________
Name:
Title:
G-13
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
___________, 20__
U.S. Bank National Association Structured Asset Mortgage Investments II Inc.
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx 000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc.
Bear Xxxxxxx ARM Trust 2004-9, Mortgage Pass-Through Certificates, Series
2004-9
Re: Custodial Agreement, dated as of October 29,
2004, by and among U.S. Bank National
Association, Structured Asset Mortgage
Investments II Inc. and Xxxxx Fargo Bank, N.A.
relating to Bear Xxxxxxx ARM Trust 2004-9,
Mortgage Pass-Through Certificates, Series 2004-9
--------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3(b) of the above-captioned Custodial
Agreement and, subject to Section 2.02(a) of the Pooling and Servicing
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 relate 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, N.A.
By:_________________________________
Name:_______________________________
Title:______________________________
G-14
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
_______, 20__
U.S. Bank National Association Structured Asset Mortgage Investments One Federal
Street, 3rd Floor II Inc. Xxxxxx, Xxxxxxxxxxxxx 00000 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc.
Bear Xxxxxxx ARM Trust 2004-9, Mortgage Pass-Through Certificates, Series
2004-9
Re: Custodial Agreement, dated as of October 29,
2004, by and among U.S. Bank National
Association, Structured Asset Mortgage
Investments II Inc. and Xxxxx Fargo Bank , N.A.
relating to Bear Xxxxxxx ARM Trust 2004-9,
Mortgage Pass-Through Certificates, Series 2004-9
--------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3(c) of the above-captioned Custodial
Agreement and, subject to Section 2.02(b) of the Pooling and Servicing
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 relate 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 or in the
Pooling and Servicing Agreement, as applicable.
XXXXX FARGO BANK, N.A.
By:_________________________________
Name:_______________________________
Title:______________________________
G-15
EXHIBIT H-1
SERVICING AGREEMENT
COUNTRYWIDE
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENT
GMAC Mortgage company
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENTS
chevy chase bank, f.s.b.
[provided upon request]
X-0-0
XXXXXXX X-0
SERVICING AGREEMENT
EMC Mortgage CORPORATION
[provided upon request]
H-4-1
EXHIBIT I
ASSIGNMENT AGREEMENTS
[provided upon request]
I-1
EXHIBIT J
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of October 29,
2004, as amended and supplemented by any and all amendments hereto
(collectively, the "AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a
Delaware corporation (the "MORTGAGE LOAN SELLER") and STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., a Delaware corporation (the "PURCHASER").
Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties and individual condominium units
(collectively, the "MORTGAGE Loans") as described herein. The Purchaser intends
to deposit the Mortgage Loans into a trust fund (the "TRUST FUND") and create
Bear Xxxxxxx ARM Trust 2004-9, Mortgage Pass-Through Certificates, Series 2004-9
(the "CERTIFICATES"), under a pooling and servicing agreement, to be dated as of
October 1, 2004 (the "POOLING AND SERVICING AGREEMENT"), among the Purchaser, as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator, U.S. Bank National Association, as trustee (the "TRUSTEE") and
EMC Mortgage Corporation, as seller and company.
The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-115122) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "SECURITIES ACT"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "PUBLIC OFFERING"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"PROSPECTUS," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated October [__], 2004, to the Prospectus, dated May 14, 2004,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, the Purchaser and Bear, Xxxxxxx
& Co. Inc. ("BEAR XXXXXXX") have entered into a terms agreement dated as of
October [__], 2004 to an underwriting agreement dated July 29, 2003, between the
Purchaser and Bear Xxxxxxx (collectively, the "UNDERWRITING AGREEMENT").
Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:
Section 1. DEFINITIONS. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:
ACQUISITION PRICE: Cash in an amount equal to $______ (plus
$______ in accrued interest)./2
BEAR XXXXXXX: Bear, Xxxxxxx & Co. Inc.
CLOSING DATE: October 29, 2004.
CUT-OFF DATE: October 1, 2004.
CUT-OFF DATE BALANCE: $[__________].
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Substitute Mortgage Loan.
DUE DATE: With respect to each Mortgage Loan, the date in each
month on which its scheduled payment is due if such due date is the first day of
a month and otherwise is deemed to be the first day of the following month or
such other date specified in the related Servicing Agreement.
MASTER SERVICER: Xxxxx Fargo Bank, N.A..
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MOODY'S: Xxxxx'x Investors Service, Inc., or its successors in
interest.
MORTGAGE: The mortgage or deed of trust creating a first lien
on an interest in real property securing a Mortgage Note.
MORTGAGE FILE: The items referred to in EXHIBIT 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.
MORTGAGE INTEREST RATE: The annual rate of interest borne by a
Mortgage Note as stated therein.
MORTGAGOR: The obligor(s) on a Mortgage Note.
NET RATE: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate and the Lender-Paid PMI Rate
(if applicable).
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.
-----------------------------
2 Please contact Bear, Xxxxxxx & Co. Inc. for Purchase Price.
J-2
PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
PURCHASE PRICE: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement or Article II of the Pooling and
Servicing Agreement, an amount equal to the sum of (i)(a) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of repurchase
(or if the related Mortgaged Property was acquired with respect thereto, 100% of
the Outstanding Principal Balance at the date of the acquisition), plus (b)
accrued but unpaid interest on the Outstanding Principal Balance at the related
Mortgage Interest Rate, through and including the last day of the month of
repurchase, plus (c) any unreimbursed Monthly Advances and servicing advances
payable to the Servicer of the Mortgage Loan and (ii) any costs and damages (if
any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any predatory lending laws.
RATING AGENCIES: Standard & Poor's and Moody's, each a "RATING
AGENCY."
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITY INSTRUMENT: A written instrument creating a valid
first lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
SERVICING AGREEMENTS: Shall have the meaning assigned to such
term in the Pooling and Servicing Agreement.
STANDARD & POOR'S: Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc. or its successors in interest.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.
VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.
Section 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.
(b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.
J-3
(c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.
(d) In addition to the foregoing, on the Closing Date the
Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the Servicing Agreements (other than its right to enforce the
representations and warranties set forth therein).
Section 3. MORTGAGE LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "PRELIMINARY MORTGAGE LOAN SCHEDULE") setting forth
the information listed on EXHIBIT 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "FINAL
MORTGAGE LOAN Schedule") setting forth the information listed on Exhibit 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "AMENDMENT"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.
Section 4. MORTGAGE LOAN TRANSFER.
(a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest due on or before the Cut-off Date but received
after the Cut-off Date. The Mortgage Loan Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereon, other than scheduled principal and interest due after
the Cut-off Date but received on or before the Cut-off Date. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.
(b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee by the Closing Date or such later date as is
agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing
Date and such later date is referred to as a "MORTGAGE FILE DELIVERY DATE"), the
items of each Mortgage File, PROVIDED, HOWEVER, that in lieu of the foregoing,
the Mortgage Loan Seller may deliver the following documents, under the
circumstances set forth below: (w) in lieu of the original Security Instrument,
assignments to the
J-4
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 Mortgage Loan Seller in
time to permit their delivery as specified above, the Mortgage Loan Seller may
deliver a true copy thereof with a certification by the Mortgage Loan Seller, on
the face of such copy, substantially as follows: "Certified to be a true and
correct copy of the original, which has been transmitted for recording"; (x) in
lieu of the Security Instrument, assignments to the Trustee or intervening
assignments thereof, if the applicable jurisdiction retains the originals of
such documents (as evidenced by a certification from the Mortgage Loan Seller to
such effect) the Mortgage Loan Seller may deliver photocopies of such documents
containing an original certification by the judicial or other governmental
authority of the jurisdiction where such documents were recorded; (y) in lieu of
the Mortgage Notes relating to the Mortgage Loans, each identified in the list
delivered by the Purchaser to the Trustee on the Closing Date and attached
hereto as Exhibit 5, the Mortgage Loan Seller may deliver lost note affidavits
and indemnities of the Mortgage Loan Seller; and (z) the Mortgage Loan Seller
shall not be required to deliver intervening assignments or Mortgage Note
endorsements between the related Underlying Seller and the Mortgage Loan Seller,
between the Mortgage Loan Seller and the Depositor, 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 Mortgage Loan Seller, in lieu of delivering the above
documents, may deliver to the Trustee a certification by the Mortgage Loan
Seller or the Master Servicer to such effect and shall deposit all amounts paid
in respect of such Mortgage Loans in the Master Servicer Collection Account on
the Closing Date. The Mortgage Loan Seller shall deliver such original documents
(including any original documents as to which certified copies had previously
been delivered) or such certified copies to the Trustee promptly after they are
received. The Mortgage Loan Seller shall cause the Mortgage and intervening
assignments, if any, and the assignment of the Security Instrument to be
recorded not later than 180 days after the Closing Date, unless such assignment
is not required to be recorded under the terms set forth in Section 6(a) hereof.
(c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser and by the Purchaser
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Mortgage Loan Seller further agrees
that it will not, and will not permit any Servicer or the Master Servicer to,
and the Master Servicer agrees that it will not, alter the codes referenced in
this paragraph with respect to any Mortgage Loan during the term of the Pooling
and Servicing Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of the Pooling and Servicing Agreement.
(d) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans and the related servicing will
ultimately be assigned to U.S. Bank National Association, as Trustee for the
Certificateholders, on the date hereof.
J-5
Section 5. EXAMINATION OF MORTGAGE FILES.
(a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Pooling and Servicing Agreement. In addition, upon request of the Purchaser,
the Mortgage Loan Seller agrees to provide to the Purchaser, Bear Xxxxxxx and to
any investors or prospective investors in the Certificates information regarding
the Mortgage Loans and their servicing, to make the Mortgage Files available to
the Purchaser, Bear Xxxxxxx and to such investors or prospective investors
(which may be at the offices of the Mortgage Loan Seller and/or the Mortgage
Loan Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Xxxxxxx and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Xxxxxxx and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.
(b) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Custodian, on behalf of the Trustee, for the benefit of the
Certificateholders, will acknowledge receipt of each Mortgage Loan, by delivery
to the Mortgage Loan Seller, the Purchaser and the Trustee of an initial
certification in the form attached as Exhibit One to the Custodial Agreement.
(c) Pursuant to the Pooling and Servicing Agreement, within 90
days of 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 will review or shall cause the Custodian to review items
of the Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage
Loan Seller, the Purchaser and the Trustee an interim certification
substantially in the form of Exhibit Two to the Custodial Agreement. If the
Trustee or Custodian, as its agent, finds any document listed on EXHIBIT 1 not
to have been executed or received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in the Final Mortgage Loan Schedule or to appear
defective on its face (a "MATERIAL DEFECT"), the Trustee or the Custodian, as
its agent, shall promptly notify the Mortgage Loan Seller of such Material
Defect. The Mortgage Loan Seller shall correct or cure any such Material Defect
within 90 days from the date of notice from the Trustee or the Custodian, as its
agent, of the Material Defect and if the Mortgage Loan Seller fails to correct
or cure such Material Defect within such period and such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, the Mortgage Loan Seller will, in accordance with the terms of
the Pooling and Servicing Agreement, within 90 days of the date of notice,
provide the Trustee with a Substitute Mortgage Loan (if within two years of the
Closing Date) or purchase the related Mortgage Loan at the applicable Purchase
Price; PROVIDED THAT, if such defect would cause the Mortgage Loan to be other
than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code, any
such cure, repurchase or substitution must occur within 90
J-6
days from the date such breach was discovered; PROVIDED, HOWEVER, that if such
defect relates solely to the inability of the Mortgage Loan Seller to deliver
the original Security Instrument or intervening assignments thereof, or a
certified copy because the originals of such documents, or a certified copy,
have not been returned by the applicable jurisdiction, the Mortgage Loan Seller
shall not be required to purchase such Mortgage Loan if the Mortgage Loan Seller
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Mortgage Loan Seller cannot
deliver such original or copy of any document submitted for recording to the
appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Mortgage Loan
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate confirming that such documents have
been accepted for recording, and delivery to the Trustee or the Custodian, as
its agent, shall be effected by the Mortgage Loan Seller within thirty days of
its receipt of the original recorded document.
(d) Pursuant to the Pooling and Servicing Agreement, within
180 days of 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 will review or cause the Custodian to review items of the Mortgage
Files as set forth on EXHIBIT 1 and will deliver to the Mortgage Loan Seller,
the Purchaser and the Trustee a final certification substantially in the form of
Exhibit Three to the Custodial Agreement. If the Trustee or Custodian, as its
agent, finds a Material Defect, the Trustee or the Custodian, as its agent,
shall promptly notify the Mortgage Loan Seller of such Material Defect. The
Mortgage Loan Seller shall correct or cure any such Material Defect within 90
days from the date of notice from the Trustee or the Custodian, as its agent, of
the Material Defect and if the Mortgage Loan Seller fails to correct or cure
such Material Defect within such period and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Mortgage Loan Seller will, in accordance with the terms of the Pooling and
Servicing Agreement, within 90 days of the date of notice, provide the Trustee
with a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase the related Mortgage Loan at the applicable Purchase Price; PROVIDED
THAT, if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure,
repurchase or substitution must occur within 90 days from the date such breach
was discovered; PROVIDED, HOWEVER, that if such defect relates solely to the
inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if the Mortgage Loan Seller delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that the Mortgage Loan Seller cannot deliver such original or
copy of any document submitted for recording to the appropriate recording office
in the applicable jurisdiction because such document has not been returned by
such office; provided that the Mortgage Loan Seller shall instead deliver a
recording receipt of such recording office or, if such receipt is not available,
a certificate confirming that such documents have been accepted for recording,
and delivery to the Trustee or the Custodian, as its agent, shall be effected by
the Mortgage Loan Seller within thirty days of its receipt of the original
recorded document.
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(e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Pooling and Servicing Agreement.
At the time of any purchase or substitution, the Trustee in accordance with the
terms of the Pooling and Servicing Agreement shall (i) assign to the Mortgage
Loan Seller and cause the Custodian to release the documents (including, but not
limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File)
in the possession of the Custodian relating to the Deleted Mortgage Loan and
(ii) execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Mortgage Loan Seller
title to such Deleted Mortgage Loan.
Section 6. RECORDATION OF ASSIGNMENTS OF MORTGAGE.
(a) The Mortgage Loan Seller shall cause each assignment of
the Security Instrument from the Mortgage Loan Seller to the Trustee to be
recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agencies or an Opinion of Counsel has
been provided to the Trustee (with a copy to the Custodian) which states that
the recordation of such assignments is not necessary to protect the interests of
the Certificateholders in the related Mortgage Loans or (b) MERS is identified
on the Mortgage or a properly recorded assignment of the Mortgage, as the
Mortgagee of record solely as nominee for the Mortgage Loan Seller and its
successors and assigns; PROVIDED, HOWEVER, notwithstanding the foregoing, each
assignment shall be submitted for recording by the Mortgage Loan Seller in the
manner described above, at no expense to the Trust or Trustee, upon the earliest
to occur of (i) reasonable direction by the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust, (ii)
the occurrence of a Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller and (iv) the
occurrence of a servicing transfer as described in Section 8.02 of the Pooling
and Servicing Agreement.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee a certified copy of such Mortgage or assignment. All customary recording
fees and reasonable expenses relating to the recordation of the assignments of
mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be
borne by the Mortgage Loan Seller.
(b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held by a
court to continue to be property of the Mortgage Loan Seller, then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Mortgage Loan Seller to the Purchaser of a security interest in all of the
Mortgage Loan Seller's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the
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conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, to the extent the Purchaser would otherwise be
entitled to own such Mortgage Loans and proceeds pursuant to Section 4 hereof,
including all amounts, other than investment earnings, from time to time held or
invested in any accounts created pursuant to the Pooling and Servicing
Agreement, whether in the form of cash, instruments, securities or other
property; (c) the possession by the Purchaser or the Trustee of Mortgage Notes
and such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-313 (or comparable provision) of the applicable Uniform Commercial Code; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to any provision hereof or
pursuant to the Pooling and Servicing Agreement shall also be deemed to be an
assignment of any security interest created hereby. The Mortgage Loan Seller and
the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be reasonably necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Pooling and Servicing Agreement.
Section 7. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it:
(i) the information set forth in the Mortgage Loan Schedule
hereto is true and correct in all material respects and the information
provided to the Rating Agencies, including the Mortgage Loan level
detail, is true and correct according to the Rating Agency
requirements;
(ii) immediately prior to the transfer to the Purchaser, the
Mortgage Loan Seller was the sole owner of beneficial title and holder
of each Mortgage and Mortgage Note relating to the Mortgage Loans and
is conveying the same free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature and the Mortgage Loan Seller has full
right and authority to sell or assign the same pursuant to this
Agreement;
(iii) Each Mortgage Loan at the time it was made complied in
all material respects with all applicable laws and regulations,
including, without limitation, usury, equal credit opportunity,
disclosure and recording laws and all predatory lending laws; and each
Mortgage Loan has been serviced in all material respects in accordance
with all applicable laws and regulations, including, without
limitation, usury, equal credit opportunity, disclosure and recording
laws and all predatory lending laws and the terms of the related
Mortgage Note, the Mortgage and other loan documents;
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(iv) there is no monetary default existing under any Mortgage
or the related Mortgage Note and there is no material event which, with
the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach or event of
acceleration; and neither the Mortgage Loan Seller, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any
action to waive any default, breach or event of acceleration; no
foreclosure action is threatened or has been commenced with respect to
the Mortgage Loan;
(v) the terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by
written instruments, (i) if required by law in the jurisdiction where
the Mortgaged Property is located, or (ii) to protect the interests of
the Trustee on behalf of the Certificateholders;
(vi) no selection procedure reasonably believed by the
Mortgage Loan Seller to be adverse to the interests of the
Certificateholders was utilized in selecting the Mortgage Loans;
(vii) each Mortgage is a valid and enforceable first lien on
the property securing the related Mortgage Note and each Mortgaged
Property is owned by the Mortgagor in fee simple (except with respect
to common areas in the case of condominiums, PUDs and DE MINIMIS PUDs)
or by leasehold for a term longer than the term of the related
Mortgage, subject only to (i) the lien of current real property taxes
and assessments, (ii) covenants, conditions and restrictions, rights of
way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender's title insurance
policy delivered to the originator of the related Mortgage Loan and
(iii) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by such Mortgage;
(viii) there is no mechanics' lien or claim for work, labor or
material affecting the premises subject to any Mortgage which is or may
be a lien prior to, or equal with, the lien of such Mortgage except
those which are insured against by the title insurance policy referred
to in (xiiii) below;
(ix) as of the Cut-off Date, to the best of the Mortgage Loan
Seller's knowledge, there was no delinquent tax or assessment lien
against the property subject to any Mortgage, except where such lien
was being contested in good faith and a stay had been granted against
levying on the property;
(x) there is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal and interest on such Mortgage Note;
(xi) to the best of the Mortgage Loan Seller's knowledge,
except to the extent insurance is in place which will cover such
damage, the physical property subject to any
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Mortgage is free of material damage and is in good repair and there is
no proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property;
(xii) to the best of the Mortgage Loan Seller's knowledge, the
Mortgaged Property and all improvements thereon comply with all
requirements of any applicable zoning and subdivision laws and
ordinances;
(xiii) a lender's title insurance policy (on an ALTA or CLTA
form) or binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to Xxxxxx Xxx or Xxxxxxx
Mac, was issued on the date that each Mortgage Loan was created by a
title insurance company which, to the best of the Mortgage Loan
Seller's knowledge, was qualified to do business in the jurisdiction
where the related Mortgaged Property is located, insuring the Mortgage
Loan Seller and its successors and assigns that the Mortgage is a first
priority lien on the related Mortgaged Property in the original
principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
sole insured under such lender's title insurance policy, and such
policy, binder or assurance is valid and remains in full force and
effect, and each such policy, binder or assurance shall contain all
applicable endorsements including a negative amortization endorsement,
if applicable;
(xiv) at the time of origination, each Mortgaged Property was
the subject of an appraisal which conformed to the underwriting
requirements of the originator of the Mortgage Loan and, the appraisal
is in a form acceptable to Xxxxxx Mae or FHLMC;
(xv) as of the Closing Date, the improvements on each
Mortgaged Property securing a Mortgage Loan is insured (by an insurer
which is acceptable to the Mortgage Loan Seller) against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement in the locale in which the Mortgaged Property is located,
in an amount which is not less than the lesser of the maximum insurable
value of the improvements securing such Mortgage Loan or the
outstanding principal balance of the Mortgage Loan, but in no event in
an amount less than an amount that is required to prevent the Mortgagor
from being deemed to be a co-insurer thereunder; if the improvement on
the Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium project; if
upon origination of the related Mortgage Loan, the improvements on the
Mortgaged Property were in an area identified as a federally designated
flood area, a flood insurance policy is in effect in an amount
representing coverage not less than the least of (i) the outstanding
principal balance of the Mortgage Loan, (ii) the restorable cost of
improvements located on such Mortgaged Property or (iii) the maximum
coverage available under federal law; and each Mortgage obligates the
Mortgagor thereunder to maintain the insurance referred to above at the
Mortgagor's cost and expense;
(xvi) each Mortgage Loan constitutes a "qualified mortgage"
under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(xvii) each Mortgage Loan was originated or funded by (a) a
savings and loan association, savings bank, commercial bank, credit
union, insurance company or similar
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institution which is supervised and examined by a federal or state
authority (or originated by (i) a subsidiary of any of the foregoing
institutions which subsidiary is actually supervised and examined by
applicable regulatory authorities or (ii) a mortgage loan correspondent
of any of the foregoing and that was originated pursuant to the
criteria established by any of the foregoing) or (b) a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to
sections 203 and 211 of the National Housing Act, as amended;
(xviii) none of the Mortgage Loans are (a) loans subject to 12
CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation
Z, the regulation implementing TILA, which implements the Home
Ownership and Equity Protection Act of 1994, as amended or (b)
classified and/or defined as a "high cost home loan" under any federal,
state or local law, including, but not limited to, the States of
Georgia or North Carolina;
(xix) the information set forth in Schedule A of the
Prospectus Supplement with respect to the Mortgage Loans is true and
correct in all material respects; and
(xx) no Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in Standard & Poor's LEVELS(R)
Glossary, Version 5.6 Revised, Appendix E, attached hereto as Exhibit
6) and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the "Georgia Fair Lending Act."
(xxi) each Mortgage Loan was originated in accordance with the
underwriting guidelines of the related originator;
(xxii) each original Mortgage has been recorded or is in the
process of being recorded in accordance with the requirements of
Section 2.01 of the Pooling and Servicing Agreement in the appropriate
jurisdictions wherein such recordation is required to perfect the lien
thereof for the benefit of the Trust Fund;
(xxiii) the related Mortgage File contains each of the
documents and instruments listed in Section 2.01 of the Pooling and
Servicing Agreement, subject to any exceptions, substitutions and
qualifications as are set forth in such Section;
(xxiv) the Mortgage Loans are currently being serviced in
accordance with accepted servicing practices;
(xxv) at the time of origination, each Mortgaged Property was
the subject of an appraisal which conformed to the underwriting
requirements of the originator of the Mortgage Loan, and the appraisal
is in a form which was acceptable to Xxxxxx Xxx or FHLMC at the time of
origination; and
(xxvi) none of the Mortgage Loans violate the Illinois
Interest Act.
It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
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representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of
substitution.
Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser or the Trustee of a breach of any representation or
warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the Certificateholders or the Trustee in any of the Mortgage Loans delivered to
the Purchaser pursuant to this Agreement, the party discovering or receiving
notice of such breach shall give prompt written notice to the others. In the
case of any such breach of a representation or warranty set forth in this
Section 7, within 90 days from the date of discovery by the Mortgage Loan
Seller, or the date the Mortgage Loan Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Mortgage Loan Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute
Mortgage Loan in exchange for such Mortgage Loan. The obligations of the
Mortgage Loan Seller to cure, purchase or substitute a qualifying Substitute
Mortgage Loan shall constitute the Purchaser's, the Trustee's and the
Certificateholder's sole and exclusive remedy under this Agreement or otherwise
respecting a breach of representations or warranties hereunder with respect to
the Mortgage Loans, except for the obligation of the Mortgage Loan Seller to
indemnify the Purchaser for such breach as set forth in and limited by Section
13 hereof.
Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.
Section 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:
(a) the Mortgage Loan Seller (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) is qualified and in good standing to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Mortgage Loan Seller's business as presently conducted or on the Mortgage
Loan Sellers ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(b) the Mortgage Loan Seller has full power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(c) the execution and delivery by the Mortgage Loan Seller of
this Agreement have been duly authorized by all necessary action on the part of
the Mortgage Loan Seller; and neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
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breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Mortgage
Loan Seller or its properties or the charter or by-laws of the Mortgage Loan
Seller, except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Mortgage Loan Seller's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(d) the execution, delivery and performance by the Mortgage
Loan Seller of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have already
been obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
(e) this Agreement has been duly executed and delivered by the
Mortgage Loan Seller and, assuming due authorization, execution and delivery by
the Purchaser, constitutes a valid and binding obligation of the Mortgage Loan
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to
the knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan
Seller, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions contemplated by
this Agreement or (ii) with respect to any other matter which in the judgment of
the Mortgage Loan Seller will be determined adversely to the Mortgage Loan
Seller and will if determined adversely to the Mortgage Loan Seller materially
and adversely affect the Mortgage Loan Seller's ability to perform its
obligations under this Agreement; and the Mortgage Loan Seller is not in default
with respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the Mortgage Loan Seller's Information (as defined in
Section 13(a) hereof) does not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
Section 9. REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (ii)
is qualified and in good standing as a foreign corporation to do business in
each jurisdiction where such qualification is necessary, except where the
failure so to qualify would not reasonably be expected to have a material
adverse effect on the Purchaser's business as presently conducted or on the
Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
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(b) the Purchaser has full corporate power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Purchaser; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Purchaser or its properties
or the articles of incorporation or by-laws of the Purchaser, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Purchaser's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(d) the execution, delivery and performance by the Purchaser
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the
Mortgage Loan Seller, constitutes a valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally); (f) there are no actions,
suits or proceedings pending or, to the knowledge of the Purchaser, threatened
against the Purchaser, before or by any court, administrative agency, arbitrator
or governmental body (i) with respect to any of the transactions contemplated by
this Agreement or (ii) with respect to any other matter which in the judgment of
the Purchaser will be determined adversely to the Purchaser and will if
determined adversely to the Purchaser materially and adversely affect the
Purchaser's ability to perform its obligations under this Agreement; and the
Purchaser is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to materially and
adversely affect the transactions contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b)
hereof) does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 10. CONDITIONS TO CLOSING.
(a) The obligations of the Purchaser under this Agreement will
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
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(i) Each of the obligations of the Mortgage Loan Seller
required to be performed at or prior to the Closing Date pursuant to
the terms of this Agreement shall have been duly performed and complied
with in all material respects; all of the representations and
warranties of the Mortgage Loan Seller under this Agreement shall be
true and correct as of the date or dates specified in all material
respects; and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this Agreement, or
the Pooling and Servicing Agreement; and the Purchaser shall have
received certificates to that effect signed by authorized officers of
the Mortgage Loan Seller.
(ii) The Purchaser shall have received all of the following
closing documents, in such forms as are agreed upon and reasonably
acceptable to the Purchaser, duly executed by all signatories (other
than the Purchaser) as required pursuant to the respective terms
thereof:
(1) If required pursuant to Section 3 hereof, the
Amendment dated as of the Closing Date and any documents
referred to therein;
(2) If required pursuant to Section 3 hereof, the
Final Mortgage Loan Schedule containing the information set
forth on Exhibit 2 hereto, one copy to be attached to each
counterpart of the Amendment;
(3) The Pooling and Servicing Agreement, in form and
substance reasonably satisfactory to the Trustee and the
Purchaser, and all documents required thereby duly executed by
all signatories;
(4) A certificate of an officer of the Mortgage Loan
Seller dated as of the Closing Date, in a form reasonably
acceptable to the Purchaser, and attached thereto the
resolutions of the Mortgage Loan Seller authorizing the
transactions contemplated by this Agreement, together with
copies of the charter and by-laws of the Mortgage Loan Seller;
(5) One or more opinions of counsel from the Mortgage
Loan Seller's counsel otherwise in form and substance
reasonably satisfactory to the Purchaser, the Trustee and each
Rating Agency;
(6) A letter from each of the Rating Agencies giving
each Class of Certificates set forth on Schedule A the rating
set forth on Schedule A; and
(7) Such other documents, certificates (including
additional representations and warranties) and opinions as may
be reasonably necessary to secure the intended ratings from
each Rating Agency for the Certificates.
(iii) The Certificates to be sold to Bear Xxxxxxx pursuant to
the Underwriting Agreement and the Purchase Agreement shall have been
issued and sold to Bear Xxxxxxx.
(iv) The Mortgage Loan Seller shall have furnished to the
Purchaser such other certificates of its officers or others and such
other documents and opinions of counsel to
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evidence fulfillment of the conditions set forth in this Agreement and
the transactions contemplated hereby as the Purchaser and its counsel
may reasonably request.
(b) The obligations of the Mortgage Loan Seller under this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:
(i) The obligations of the Purchaser required to be performed
by it on or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with in all
material respects, and all of the representations and warranties of the
Purchaser under this Agreement shall be true and correct in all
material respects as of the date hereof and as of the Closing Date, and
no event shall have occurred which would constitute a breach by it of
the terms of this Agreement, and the Mortgage Loan Seller shall have
received a certificate to that effect signed by an authorized officer
of the Purchaser.
(ii) The Mortgage Loan Seller shall have received copies of
all of the following closing documents, in such forms as are agreed
upon and reasonably acceptable to the Mortgage Loan Seller, duly
executed by all signatories other than the Mortgage Loan Seller as
required pursuant to the respective terms thereof:
(1) If required pursuant to Section 3 hereof, the
Amendment dated as of the Closing Date and any documents
referred to therein;
(2) The Pooling and Servicing Agreement, in form and
substance reasonably satisfactory to the Mortgage Loan Seller,
and all documents required thereby duly executed by all
signatories;
(3) A certificate of an officer of the Purchaser
dated as of the Closing Date, in a form reasonably acceptable
to the Mortgage Loan Seller, and attached thereto the
resolutions of the Purchaser authorizing the transactions
contemplated by this Agreement and the Pooling and Servicing
Agreement, together with copies of the Purchaser's articles of
incorporation, and evidence as to the good standing of the
Purchaser dated as of a recent date;
(4) One or more opinions of counsel from the
Purchaser's counsel in form and substance reasonably
satisfactory to the Mortgage Loan Seller;
(5) Such other documents, certificates (including
additional representations and warranties) and opinions as may
be reasonably necessary to secure the intended rating from
each Rating Agency for the Certificates;
Section 11. FEES AND EXPENSES. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Certificates and the filing fee of the
Commission as in effect on the date on which the Registration Statement was
declared effective, (iv) the fees and expenses including
J-17
counsel's fees and expenses in connection with any "blue sky" and legal
investment matters, (v) the fees and expenses of the Trustee which shall include
without limitation the fees and expenses of the Trustee (and the fees and
disbursements of its counsel) with respect to (A) legal and document review of
this Agreement, the Pooling and Servicing Agreement, the Certificates and
related agreements, (B) attendance at the Closing and (C) review of the Mortgage
Loans to be performed by the Custodian, (vi) the expenses for printing or
otherwise reproducing the Certificates, the Prospectus and the Prospectus
Supplement, (vii) the fees and expenses of each Rating Agency (both initial and
ongoing), (viii) the fees and expenses relating to the preparation and
recordation of mortgage assignments (including intervening assignments, if any
and if available, to evidence a complete chain of title from the originator to
the Trustee) from the Mortgage Loan Seller to the Trustee or the expenses
relating to the Opinion of Counsel referred to in Section 6(a) hereof, as the
case may be, and (ix) Mortgage File due diligence expenses and other
out-of-pocket expenses incurred by the Purchaser in connection with the purchase
of the Mortgage Loans and by Bear Xxxxxxx in connection with the sale of the
Certificates. The Mortgage Loan Seller additionally agrees to pay directly to
any third party on a timely basis the fees provided for above which are charged
by such third party and which are billed periodically.
Section 12. ACCOUNTANTS' LETTERS.
(a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and
will compare those characteristics to the description of the Mortgage Loans
contained in the Prospectus Supplement under the captions "Summary of Prospectus
Supplement--The Mortgage Loans" and "The Mortgage Pool" and in Schedule A
thereto. The Mortgage Loan Seller will cooperate with the Purchaser in making
available all information and taking all steps reasonably necessary to permit
such accountants to complete the review and to deliver the letters required of
them under the Underwriting Agreement. Deloitte & Touche LLP will also confirm
certain calculations as set forth under the caption "Yield On The Certificates"
in the Prospectus Supplement.
(b) To the extent statistical information with respect to the
Master Servicer's or a Servicer's servicing portfolio is included in the
Prospectus Supplement under the caption "The Master Servicer and the Servicers,"
a letter from the certified public accountant for the Master Servicer and such
Servicer or Servicers will be delivered to the Purchaser dated the date of the
Prospectus Supplement, in the form previously agreed to by the Mortgage Loan
Seller and the Purchaser, with respect to such statistical information.
Section 13. INDEMNIFICATION.
(a) The Mortgage Loan Seller shall indemnify and hold harmless
the Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the MORTGAGE LOAN SELLER'S INFORMATION
as identified in EXHIBIT 3, the omission to state in the Prospectus Supplement
or Prospectus (or any amendment thereof or supplement thereto approved by the
Mortgage Loan Seller and in which additional Mortgage Loan Seller's Information
is identified), in reliance upon and in conformity with
J-18
Mortgage Loan Seller's Information a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances in
which they were made, not misleading, (ii) any representation or warranty
assigned or made by the Mortgage Loan Seller in Section 7 or Section 8 hereof
being, or alleged to be, untrue or incorrect, or (iii) any failure by the
Mortgage Loan Seller to perform its obligations under this Agreement; and the
Mortgage Loan Seller shall reimburse the Purchaser and each other indemnified
party for any legal and other expenses reasonably incurred by them in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action.
The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.
(b) The Purchaser shall indemnify and hold harmless the
Mortgage Loan Seller and its respective directors, officers and controlling
persons (as defined in Section 15 of the Securities Act) from and against any
loss, claim, damage or liability or action in respect thereof, to which they or
any of them may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement of a material fact contained in the PURCHASER'S
INFORMATION as identified in EXHIBIT 4, the omission to state in the Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Purchaser and in which additional Purchaser's Information is
identified), in reliance upon and in conformity with the Purchaser's
Information, a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty made by the Purchaser in
Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any
failure by the Purchaser to perform its obligations under this Agreement; and
the Purchaser shall reimburse the Mortgage Loan Seller, and each other
indemnified party for any legal and other expenses reasonably incurred by them
in connection with investigating or defending or preparing to defend any such
loss, claim, damage, liability or action. The foregoing indemnity agreement is
in addition to any liability which the Purchaser otherwise may have to the
Mortgage Loan Seller, or any other such indemnified party,
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 13 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the
indemnified party promptly (but, in any event, within 30 days) after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of
J-19
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there is a conflict of interest between itself or
themselves and the indemnifying party in the conduct of the defense of any claim
or that the interests of the indemnified party or parties are not substantially
co-extensive with those of the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties (PROVIDED,
HOWEVER, that the indemnifying party shall be liable only for the fees and
expenses of one counsel in addition to one local counsel in the jurisdiction
involved. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement or any claim or action
effected without its written consent; PROVIDED, HOWEVER, that such consent was
not unreasonably withheld.
(d) If the indemnification provided for in paragraphs (a) and
(b) of this Section 13 shall for any reason be unavailable to an indemnified
party in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to in Section 13, then the indemnifying party shall in
lieu of indemnifying the indemnified party contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, in such proportion as shall be
appropriate to reflect the relative benefits received by the Mortgage Loan
Seller on the one hand and the Purchaser on the other from the purchase and sale
of the Mortgage Loans, the offering of the Certificates and the other
transactions contemplated hereunder. No person found liable for a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not also found liable
for such fraudulent misrepresentation.
(e) The parties hereto agree that reliance by an indemnified
party on any publicly available information or any information or directions
furnished by an indemnifying party shall not constitute negligence, bad faith or
willful misconduct by such indemnified party.
Section 14. NOTICES. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, Mac Xxxxxx Xxxxx XX, 000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (Telecopy: (972-444-2880)), and notices to
the Purchaser shall be directed to Structured Asset Mortgage Investments II
Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Telecopy: (212-272-7206)),
Attention: Xxxxx Xxxxxxxxxxx; or to any other address as may hereafter be
furnished by one party to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided
that it is received on a business day during normal business hours and, if
received after normal business hours, then it shall be deemed to be received on
the next business day.
Section 15. TRANSFER OF MORTGAGE LOANS. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; PROVIDED, HOWEVER,
J-20
the Purchaser shall remain entitled to the benefits set forth in Sections 11, 13
and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing,
the sole and exclusive right and remedy of the Trustee with respect to a breach
of representation or warranty of the Mortgage Loan Seller shall be the purchase
or substitution obligations of the Mortgage Loan Seller contained in Sections 5
and 7 hereof.
Section 16. TERMINATION. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of-pocket expenses incurred by the other in connection with the transactions
contemplated by this Agreement. In the event of a termination pursuant to clause
(a), each party shall be responsible for its own expenses.
Section 17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, the Mortgage Loan Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the Final
Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.
Section 18. SEVERABILITY. If any provision of this Agreement
shall be prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
Section 19. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.
Section 20. AMENDMENT. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.
Section 21. GOVERNING LAW. THIS AGREEMENT SHALL BE 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
INCLUDING SECTIONS 5-1401 AND 5-1402 OF NEW YORK GENERAL OBLIGATIONS LAW BUT
OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPALS.
Section 22. FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably
J-21
request in order to effectuate the purpose and to carry out the terms of this
Agreement including any amendments hereto which may be required by either Rating
Agency.
Section 23. SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Xxxxxxx, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to the Trustee. Any person into
which the Mortgage Loan Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Mortgage Loan Seller),
any person resulting from a change in form of the Mortgage Loan Seller or any
person succeeding to the business of the Mortgage Loan Seller, shall be
considered the "successor" of the Mortgage Loan Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any
further act or consent on the part of any party hereto. Except as provided in
the two preceding sentences, this Agreement cannot be assigned, pledged or
hypothecated by either party hereto without the written consent of the other
parties to this Agreement and any such assignment or purported assignment shall
be deemed null and void.
Section 24. THE MORTGAGE LOAN SELLER. The Mortgage Loan Seller
will keep in full effect all rights as are necessary to perform their respective
obligations under this Agreement.
Section 25. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding between the parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever
with respect to the subject matter hereof.
Section 26. NO PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
EMC MORTGAGE CORPORATION
By:
-----------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
By:
-----------------------------------------
Name:
Title:
EXHIBIT 1
---------
CONTENTS OF MORTGAGE FILE
-------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of the Agreement.
(a) with respect to each Mortgage Loan:
(i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements
from the originator thereof to the Person endorsing it to the Trustee,
or a lost note affidavit together with a copy of the related Mortgage
Note;
(ii) The original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been recorded
(or if the original is not available, a copy), with evidence of such
recording indicated thereon (or if the original is not available, a
copy), with evidence of such recording indicated thereon (or if 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 Seller in time
to permit their recording as specified in Section 2.01(b) of the
Pooling and Servicing Agreement, shall be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) to "U.S. Bank National Association, as Trustee", with evidence
of recording with respect to each Mortgage Loan in the name of the
Trustee thereon (or if (A) 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 Seller in time to permit their
delivery as specified in Section 2.01(b) of the Pooling and Servicing
Agreement, the Seller may deliver a true copy thereof with a
certification by the Seller, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original,
which has been transmitted for recording" or (B) the related Mortgaged
Property is located in a state other than Maryland and an Opinion of
Counsel has been provided as set forth in Section 2.01(b) of the
Pooling and Servicing Agreement, shall be in recordable form);
(iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Mortgage Loan
Seller with evidence of recording thereon;
X-X-1-1
(v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
(vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title
insurance; and
(vii) originals of all modification agreements, if applicable
and available.
X-X-1-2
EXHIBIT 2
---------
MORTGAGE LOAN SCHEDULE INFORMATION
----------------------------------
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(a) the loan number;
(b) [Reserved];
(c) the city, state and zip code of the Mortgaged Property;
(d) the property type;
(e) the Mortgage Interest Rate;
(f) the Servicing Rate;
(g) the Net Rate;
(h) the original term;
(i) the maturity date;
(j) the stated remaining term to maturity;
(k) the original principal balance;
(1) the first payment date;
(m) the principal and interest payment in effect as of the Cut-off Date;
(n) the unpaid principal balance as of the Cut-off Date;
(o) the Loan-to-Value Ratio at origination;
(p) paid-through date;
(q) the insurer of any Primary Mortgage Insurance Policy;
(r) the Gross Margin, if applicable;
(s) the Maximum Lifetime Mortgage Rate, if applicable;
(t) the Minimum Lifetime Mortgage Rate, if applicable;
(u) the Periodic Rate Cap, if applicable;
(v) the number of days delinquent, if any;
X-X-2-1
(w) which Mortgage Loans adjust after an initial fixed-rate period of
three, five, seven or ten years;
(x) the Loan Group;
(y) the Prepayment Charge Loans; and
(z) the Servicer.
Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.
X-X-2-2
EXHIBIT 3
MORTGAGE LOAN SELLER'S INFORMATION
----------------------------------
All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loans,"
"THE MORTGAGE POOL" and "SCHEDULE A -- CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."
X-X-3-1
EXHIBIT 4
PURCHASER'S INFORMATION
-----------------------
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
X-X-4-1
EXHIBIT 5
SCHEDULE OF LOST NOTES
----------------------
Available Upon Request
X-X-5-1
EXHIBIT 6
APPENDIX E: Standard & Poor's Predatory Lending Categorization
Standard & Poor's has categorized loans governed by anti-predatory
lending laws in the Jurisdictions listed below into three categories based upon
a combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High Cost
by the industry.
STANDARD & POOR'S
HIGH COST LOAN CATEGORIZATION
State/Jurisdiction Name of Anti-Predatory Category under
Lending Law/Effective Date Applicable Anti-
Predatory Lending Law
-----------------------------------------------------------------------------------------------------
Arkansas Arkansas Home Loan Protection Act, High Cost Home Loan
Ark. Code Xxx. xx.xx. 00-00-000 et seq.
Effective July 16, 2003
-----------------------------------------------------------------------------------------------------
Cleveland Heights, OH OH Ordinance No. 72-2003 (PSH), Covered Loan
Mun. Code xx.xx. 757.01 et seq.
Effective June 2, 2003
-----------------------------------------------------------------------------------------------------
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx. xx.xx. 5-3.5-101 et seq.
Effective for covered loans
offered or entered into on or
after January 1, 2003. Other
provisions of the Act took effect
on June 7, 2002
-----------------------------------------------------------------------------------------------------
Connecticut Connecticut Abusive Home Loan High Cost Home Loan
Lending Practices Act, Conn. Gen.
Stat. xx.xx. 36a-746 et seq.
Effective October 1, 2001
X-X-6-1
-----------------------------------------------------------------------------------------------------
District of Columbia Home Loan Protection Act, D.C. Covered Loan
Code xx.xx. 26-1151.01 et seq.
Effective for loans closed on or
after January 28, 2003
-----------------------------------------------------------------------------------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. High Cost Home Loan
xx.xx. 494.0078 et seq.
Effective October 2, 2002
-----------------------------------------------------------------------------------------------------
Georgia Georgia Fair Lending Act, Ga. Code High Cost Home Loan
(Oct 1, 2002 - Mar 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 -
March 6, 2003
-----------------------------------------------------------------------------------------------------
Georgia as amended Georgia Fair Lending Act, Ga. Code High Cost Home Loan
(Mar 7, 2003 - current) Xxx. xx.xx. 7-6A-1 et seq.
Effective for loans closed on or
after March 7, 2003
-----------------------------------------------------------------------------------------------------
HOEPA Section 32 Home Ownership and Equity High Cost Loan
Protection Act of 1994, 15 U.S.C.
ss. 1639, 12 C.F.R. xx.xx. 226.32 and
226.34 Effective October 1, 1995,
amendments October 1, 2002
-----------------------------------------------------------------------------------------------------
Illinois High Risk Home Loan Act, Ill. High Risk Home Loan
Comp. Stat. tit. 815, xx.xx. 137/5
et seq. Effective January 1, 2004
(prior to this date, regulations
under Residential Mortgage License
Act effective from May 14, 2001)
X-X-6-2
-----------------------------------------------------------------------------------------------------
Kansas Consumer Credit Code, Kan. Stat. High Loan to Value
Xxx. xx.xx. 16a-1-101 et seq. Consumer Loan and;
Sections 16a-1-301 and 16a-3-207 High APR Consumer
became effective April 14, 1999; Loan
Section 16a-3-308a became
effective July 1, 1999
-----------------------------------------------------------------------------------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home High Cost Home Loan
Loan Act, Ky. Rev. Stat. xx.xx.
360.100 et seq. Effective June 24,
2003
-----------------------------------------------------------------------------------------------------
Maine Truth in Lending, Me. Rev. Stat. High Rate High Fee
tit. 9-A, xx.xx. 8-101 et Mortgage
seq. Effective September 29,
1995 and as amended from time
to time
-----------------------------------------------------------------------------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. xx.xx. High Cost Home Loan
32.00 et seq. and 209 C.M.R. xx.xx.
40.01 et seq. Effective March 22,
2001 and amended from time to time
-----------------------------------------------------------------------------------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Home Loan
Stat. xx.xx. 598D.010 et seq.
Effective October 1, 2003
-----------------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security High Cost Home Loan
Act of 2002, N.J. Rev. Stat. xx.xx.
46:10B-22 et seq.
Effective for loans closed on or
after November 27, 2003
-----------------------------------------------------------------------------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on
or after April 1, 2003
X-X-6-3
-----------------------------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. High Cost Home Loan
Rev. Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
-----------------------------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on High Cost Home Loan
High Cost Home Loans, N.C. Gen.
Stat. xx.xx. 24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
-----------------------------------------------------------------------------------------------------
Ohio H.B. 386 (codified in various Covered Loan
sections of the Ohio Code), Ohio
Rev. Code Xxx. xx.xx. 1349.25 et seq.
Effective May 24, 2002
-----------------------------------------------------------------------------------------------------
Oklahoma Consumer Credit Code (codified in Subsection 10 Mortgage
various sections of Title 14A)
Effective July 1, 2000; amended
effective January 1, 2004
-----------------------------------------------------------------------------------------------------
South Carolina South Carolina High Cost and High Cost Home Loan
Consumer Home Loans Act, S.C. Code
Xxx. xx.xx. 37-23-10 et seq.
Effective for loans taken on or
after January 1, 2004
-----------------------------------------------------------------------------------------------------
West Virginia West Virginia Residential Mortgage West Virginia Mortgage
Lender, Broker and Servicer Act, Loan Act Loan
W. Va. Code Xxx. xx.xx. 31-17-1 et seq.
Effective June 5, 2002
-----------------------------------------------------------------------------------------------------
X-X-6-4
STANDARD & POOR'S
COVERED LOAN CATEGORIZATION
State/Jurisdiction Name of Anti-Predatory Category under
Lending Law/Effective Date Applicable Anti-
Predatory Lending Law
------------------------------------------------------------------------------------------------------
Georgia Georgia Fair Lending Act, Ga. Code Covered Loan
(Oct 1, 2002 - Mar 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 -
March 6, 2003
------------------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Covered Home Loan
Act of 2002, N.J. Rev. Stat. xx.xx.
46:10B-22 et seq.
Effective November 27, 2003 -
July 5, 2004
------------------------------------------------------------------------------------------------------
STANDARD & POOR'S
HOME LOAN CATEGORIZATION
State/Jurisdiction Name of Anti-Predatory Category under
Lending Law/Effective Date Applicable Anti-
Predatory Lending Law
------------------------------------------------------------------------------------------------------
Georgia Georgia Fair Lending Act, Ga. Code Home Loan
(Oct 1, 2002 - Mar 6, 2003) Xxx. xx.xx. 7-6A-1 et seq. Effective
October 1, 2002 - March 6, 2003
------------------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Home Loan
Act of 2002, N.J. Rev. Stat. xx.xx.
46:10B-22 et seq.
Effective for loans closed on or
after November 27, 2003
------------------------------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. Home Loan
Rev. Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
X-X-6-5
------------------------------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on Consumer Home Loan
High Cost Home Loans, N.C. Gen.
Stat. xx.xx. 24-1.1E et seq. Effective
July 1, 2000; amended October 1,
2003 (adding open-end lines of
credit)
------------------------------------------------------------------------------------------------------
South Carolina South Carolina High Cost and Consumer Home Loan
Consumer Home Loans Act, S.C. Code
Xxx. xx.xx. 37-23-10 et seq. Effective
for loans taken on or after
January 1, 2004
------------------------------------------------------------------------------------------------------
SCHEDULE A
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
-----------------------------------------------
Public Certificates
-------------------
Class S&P Xxxxx'x
------------------------------------- ----------------- -----------------
Class I-1-A-1........................ AAA Aaa
Class I-2-A-1........................ AAA Aaa
Class I-3-A-1........................ AAA Aaa
Class I-B-1.......................... AA Aa2
Class I-B-2.......................... A A2
Class I-B-3.......................... BBB Baa2
Class R-I............................ AAA Aaa
Class R-II........................... AAA Aaa
Class R-III.......................... AAA Aaa
Class II-1-A-1....................... AAA Aaa
Class II-2-A-1....................... AAA Aaa
Class II-3-A-1....................... AAA Aaa
Class II-4-A-1....................... AAA Aaa
Class II-B-1......................... AA --
Class II-B-2......................... AA --
Class II-B-3......................... BBB --
None of the above ratings has been lowered since the respective dates of such
letters.
X-X-1
Private Certificates
--------------------
Class S&P Xxxxx'x
------------------------------------- ----------------- -----------------
Class B-4............................ BB NR
Class B-5............................ B NR
Class B-6............................ NR NR
None of the above ratings has been lowered since the respective dates of such
letters.
X-X-2
SCHEDULE B
----------
MORTGAGE LOAN SCHEDULE
----------------------
[Provided upon request]
X-X-1
