EXHIBIT 4
Pooling and Servicing Agreement
EXECUTION COPY
CHASE MORTGAGE FINANCE CORPORATION,
DEPOSITOR,
CHASE MANHATTAN MORTGAGE CORPORATION,
SERVICER
AND
WACHOVIA BANK, N.A.,
TRUSTEE
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2004
$325,000,070.00
Multi-Class Mortgage Pass-Through Certificates
Series 2004-S3
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ARTICLE I DEFINITIONS................................................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; TRUST FUND..................................................33
Section 2.01. Conveyance of Mortgage Loans.....................................................33
Section 2.02. Acceptance by Trustee............................................................37
Section 2.03. Trust Fund; Authentication of Certificates.......................................38
Section 2.04. REMIC Elections..................................................................38
Section 2.05. Permitted Activities of Trust....................................................44
Section 2.06. Qualifying Special Purpose Entity................................................44
Section 2.07. Mortgage Components..............................................................44
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND THE SERVICER; REPURCHASE OF
MORTGAGE LOANS............................................................................44
Section 3.01. Representations and Warranties of the Depositor with respect to the
Mortgage Loans...................................................................44
Section 3.02. Representations and Warranties of the Servicer...................................52
Section 3.03. Option to Substitute.............................................................52
ARTICLE IV THE CERTIFICATES..........................................................................53
Section 4.01. The Certificates.................................................................53
Section 4.02. Registration of Transfer and Exchange of Certificates............................55
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates................................59
Section 4.04. Persons Deemed Owners............................................................59
Section 4.05. Appointment of Paying Agent, Certificate Registrar and Backup Advancer;
Certificate Account..............................................................59
Section 4.06. Authenticating Agents............................................................60
ARTICLE V ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............................................61
Section 5.01. Servicer to Service Mortgage Loans...............................................61
Section 5.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers; Enforcement
of Sub-Servicer's Obligations....................................................62
Section 5.03. Successor Sub-Servicers..........................................................63
Section 5.04. Liability of the Servicer........................................................63
Section 5.05. No Contractual Relationship Between Sub-Servicer and Trustee or
Certificateholders...............................................................63
Section 5.06. Termination of Sub-Servicing Agreement...........................................63
Section 5.07. Collection of Mortgage Loan Payments.............................................63
Section 5.08. Establishment of Collection Account; Deposit in Collection Account...............63
Section 5.09. Permitted Withdrawals from the Collection Account................................65
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Section 5.10. Establishment of Escrow Account; Deposits in Escrow Account......................65
Section 5.11. Permitted Withdrawals from Escrow Account........................................66
Section 5.12. Payment of Taxes, Insurance and Other Charges....................................66
Section 5.13. Transfer of Accounts.............................................................66
Section 5.14. [Reserved].......................................................................66
Section 5.15. Maintenance of the Primary Insurance Policies....................................66
Section 5.16. Maintenance of Standard Hazard Policies..........................................66
Section 5.17. [Reserved].......................................................................67
Section 5.18. [Reserved].......................................................................67
Section 5.19. Fidelity Bond and Errors and Omissions Insurance.................................67
Section 5.20. Collections under Insurance Policies; Enforcement of Due-On-Sale Clauses;
Assumption Agreements............................................................68
Section 5.21. Income and Realization from Defaulted Mortgage Loans.............................68
Section 5.22. Trustee to Cooperate; Release of Mortgage Files..................................70
Section 5.23. Servicing and Other Compensation.................................................71
Section 5.24. 1934 Act Reports.................................................................71
Section 5.25. Annual Statement as to Compliance................................................72
Section 5.26. Annual Independent Public Accountants' Servicing Report..........................72
Section 5.27. Access to Certain Documentation; Rights of the Depositor in Respect of
the Servicer.....................................................................72
Section 5.28. REMIC-Related Covenants..........................................................73
Section 5.29. Maintenance of the Rounding Account; Collections Thereunder......................74
ARTICLE VI PAYMENTS TO THE CERTIFICATEHOLDERS........................................................75
Section 6.01. Distributions....................................................................75
Section 6.02. Statements to the Certificateholders.............................................81
Section 6.03. Advances by the Servicer.........................................................82
Section 6.04. Allocation of Realized Losses....................................................83
Section 6.05. Compensating Interest; Allocation of Certain Interest Shortfalls.................84
Section 6.06. Subordination....................................................................85
Section 6.07. Principal Distributions on the Class IIA-4Certificates...........................85
ARTICLE VII REPORTS TO BE PREPARED BY THE SERVICER....................................................89
Section 7.01. Servicer Shall Provide Information as Reasonably Required........................89
Section 7.02. Federal Information Returns and Reports to Certificateholders....................89
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ARTICLE VIII THE DEPOSITOR AND THE SERVICER............................................................90
Section 8.01. Indemnification; Third Party Claims..............................................90
Section 8.02. Merger or Consolidation of the Depositor or the Servicer.........................90
Section 8.03. Limitation on Liability of the Depositor, the Servicer, the Trustee and
Others...........................................................................91
Section 8.04. Depositor and Servicer Not to Resign.............................................91
Section 8.05. Successor to the Servicer........................................................91
Section 8.06. Maintenance of Ratings...........................................................92
ARTICLE IX DEFAULT...................................................................................93
Section 9.01. Events of Default................................................................93
Section 9.02. Waiver of Defaults...............................................................94
Section 9.03. Trustee to Act; Appointment of Successor.........................................94
Section 9.04. Notification to Certificateholders and the Rating Agencies.......................94
ARTICLE X CONCERNING THE TRUSTEE....................................................................94
Section 10.01. Duties of Trustee................................................................94
Section 10.02. Certain Matters Affecting the Trustee............................................95
Section 10.03. Trustee Not Liable for Certificates or Mortgage Loans............................96
Section 10.04. Trustee May Own Certificates.....................................................96
Section 10.05. Fees and Expenses................................................................96
Section 10.06. Eligibility Requirements for Trustee.............................................96
Section 10.07. Resignation and Removal of the Trustee...........................................97
Section 10.08. Successor Trustee................................................................97
Section 10.09. Merger or Consolidation of Trustee...............................................98
Section 10.10. Appointment of Co-Trustee or Separate Trustee....................................98
Section 10.11. Appointment of Office or Agency..................................................99
ARTICLE XI TERMINATION...............................................................................99
Section 11.01. Termination......................................................................99
ARTICLE XII MISCELLANEOUS PROVISIONS.................................................................101
Section 12.01. Severability of Provisions......................................................101
Section 12.02. Limitation on Rights of Certificateholders......................................101
Section 12.03. Amendment.......................................................................101
Section 12.04. Counterparts....................................................................102
Section 12.05. Duration of Agreement...........................................................102
Section 12.06. Governing Law...................................................................102
Section 12.07. Notices.........................................................................102
Section 12.08. Further Assurances..............................................................103
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EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B CONTENTS OF MORTGAGE FILE
EXHIBIT C FORMS OF CLASS A CERTIFICATES
EXHIBIT D FORM OF CLASS M CERTIFICATE
EXHIBIT E FORMS OF CLASS B CERTIFICATES
EXHIBIT F FORM OF CLASS A-R CERTIFICATE
EXHIBIT G FORM OF TRUSTEE CERTIFICATION
EXHIBIT H FORM OF INVESTMENT LETTER
EXHIBIT I FORM OF RULE 144A INVESTMENT LETTER
EXHIBIT J FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
EXHIBIT K FORM OF CLASS A-R TRANSFEREE LETTER
EXHIBIT K-1 FORM OF CLASS A-R TRANSFEROR LETTER
EXHIBIT L REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT M FORM OF ERISA REPRESENTATION LETTER
EXHIBIT N FORM OF OFFICER'S CERTIFICATE (SERVICER)
EXHIBIT O FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
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This Pooling and Servicing Agreement, dated as of February 1, 2004, is
executed among Chase Mortgage Finance Corporation, as depositor (together with
its permitted successors and assigns, the "Depositor"), Chase Manhattan Mortgage
Corporation ("CMMC"), as servicer (together with its permitted successors and
assigns, the "Servicer") and Wachovia Bank, N.A., as trustee (together with its
permitted successors and assigns, the "Trustee").
In consideration of the premises and the mutual agreements hereinafter
set forth, the Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan, those
mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) is located, and
which are in accordance with FNMA servicing practices and procedures for MBS
pool mortgages (as defined in the FNMA Guides including future updates).
ADVANCE: The aggregate of the advances made by the Servicer with
respect to a particular Distribution Date pursuant to Section 6.03.
AFFILIATE: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "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; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AGENCY & TRUST OFFICE: The principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of execution of this instrument is located at 000 Xxxxx Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000.
AGGREGATE CLASS A INTEREST ACCRUAL AMOUNT: On any Distribution Date, an
amount equal to the sum of the Class IA-1 Interest Accrual Amount, the Class
IIA-1 Interest Accrual Amount, the Class IIA-2 Interest Accrual Amount, the
Class IIA-3 Interest Accrual Amount, Class IIA-4 Interest Accrual Amount, the
Class IIA-5 Interest Accrual Amount, the Class IIA-6 Interest Accrual Amount,
the Class IIA-7 Interest Accrual Amount, the Class IIIA-1 Interest Accrual
Amount, the Class A-X Interest Accrual Amount and the Class A-R Interest Accrual
Amount.
AGGREGATE CLASS A INTEREST SHORTFALL: On any Distribution Date, an
amount equal to the sum of the Class IA-1 Shortfall, the Class IIA-1 Shortfall,
the Class IIA-2 Shortfall, the Class IIA-3 Shortfall, the Class IIA-4 Shortfall,
the Class IIA-5 Shortfall, the Class IIA-6 Shortfall, the Class IIA-7 Shortfall,
the Class IIIA-1 Shortfall, the Class A-X Shortfall and the Class A-R Shortfall.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
APPRAISED VALUE: The value set forth in an appraisal or recertification
document made in connection with the origination of the related Mortgage Loan as
the value of the Mortgaged Property (or the related residential dwelling unit in
the Underlying Mortgaged Property, in the case of a Co-op Loan).
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer (or UCC-3 assignment (or equivalent instrument) with respect to each
Co-op Loan) or equivalent instrument, in recordable form (except in the case of
a Co-op Loan), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage
Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.
AUTHENTICATING AGENT: The meaning specified in Section 4.06.
AVAILABLE DISTRIBUTION AMOUNT: On any Distribution Date, an amount
equal to the amount on deposit in the Collection Account as of the close of
business two Business Days immediately preceding the related Distribution Date
(but prior to making any deposits into the Certificate Account on such Date)
except:
(a) amounts received on particular Mortgage Loans as late payments
or other recoveries of principal or interest (including Liquidation Proceeds,
Insurance Proceeds and condemnation awards) and respecting which the Servicer
previously made an unreimbursed Advance of such amounts;
(b) reimbursement for Nonrecoverable Advances and other amounts
permitted to be withdrawn by the Servicer pursuant to Section 5.09 from, or not
required to be deposited in, the Collection Account;
(c) amounts representing the Servicing Fee with respect to such
Distribution Date;
(d) amounts representing all or part of a Monthly Payment due (i) after
the related Due Period or (ii) on or prior to the Cut-off Date;
(e) all Repurchase Proceeds, Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and condemnation awards with respect to Mortgage
Loans received after the related Principal Prepayment Period, and all related
payments of interest representing interest for any period of time after the last
day of the related Due Period for such Mortgage Loans; and
(f) all income from Eligible Investments held in the Collection
Account for the account of the Servicer.
BACKUP ADVANCER: Initially, the Paying Agent acting with respect to the
obligation to make Advances under certain circumstances as set forth in Section
6.03.
BANKRUPTCY AMOUNT: As of any date of determination, $100,000 minus all
Bankruptcy Losses on the Mortgage Loans, if any, previously allocated to the
Certificates in accordance with Section 6.04.
BANKRUPTCY CODE: Title 11 of the United States Code, as the same may be
amended from time to time.
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BANKRUPTCY LOSS: With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate through a Participant or an Indirect Participant or a
Person holding a beneficial interest in any Definitive Certificate.
BOOK-ENTRY CERTIFICATES: The Class A Certificates (other than the Class
A-R Certificates), Class M Certificates, Class B-1 Certificates and Class B-2
Certificates, referred to collectively.
BUSINESS DAY: Any day other than (a) a Saturday or Sunday, (b) a legal
holiday in the State of New York or (c) a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to
be closed.
CARRY-OVER SUBORDINATED PRINCIPAL AMOUNT: As of any Distribution Date,
with respect to any Class of Subordinated Certificates, an amount, if any, equal
to the amount of principal distributable to such Class on any prior Distribution
Date that has not been so distributed.
CASH LIQUIDATION: Recovery of all cash proceeds by the Servicer with
respect to the liquidation of any Mortgage Loan, including Insurance Proceeds
and other payments or recoveries (whether made at one time or over a period of
time) which the Servicer deems to be finally recoverable, in connection with the
sale, assignment or satisfaction of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, but only if title to the related Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
was not acquired by foreclosure or deed in lieu of foreclosure by the Servicer
pursuant to Section 5.21.
CERTIFICATE: Any Class A, Class M or Class B Certificate.
CERTIFICATE ACCOUNT: The account created and maintained pursuant to
Section 4.05.
CERTIFICATE GROUP: Any of Certificate Group One, Certificate Group Two
or Certificate Group Three.
CERTIFICATE GROUP ONE: The Class A Group One Certificates.
CERTIFICATE GROUP THREE: The Class A Group Three Certificates.
CERTIFICATE GROUP TWO: The Class A Group Two Certificates.
CERTIFICATEHOLDER or HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Servicer, any
Sub-Servicer, or any of their respective Affiliates shall be disregarded and the
undivided Percentage Interest evidenced thereby shall not be taken into account
in determining whether the requisite amount of Percentage Interests necessary to
effect any such consent, waiver, request or demand has been obtained. The
Trustee and the Paying Agent shall be entitled to conclusively rely upon the
certificate of the Depositor or the Servicer as to the determination of which
Certificates are registered in the name of such Affiliates.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Book-Entry Certificate registered in the name of the Depository or its nominee.
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CERTIFICATE RATE: The per annum rate of interest borne by each Class of
Certificates (other than the Class A-P Certificates), which rate shall equal (i)
5.00% with respect to the Class IA-1 Certificates, (ii) 5.25% with respect to
the Class IIA-1 and Class IIA-3 Certificates, (iii) 5.50% with respect to the
Class IIA-2, Class IIA-4, Class IIA-5, Class IIA-6, and Class IIA-7 Certificates
and (iv) 6.00% with respect to the Class IIIA-1, Class A-R, and Class A-X
Certificates, in the case of each Class of Certificates (other than the Class
IIA-6, Class IIA-7 and Class A-X Certificates) on the Outstanding Certificate
Principal Balance of such Class and, in the case of the Class IIA-6, Class IIA-7
and Class A-X Certificates, on the Class IIA-6 Notional Amount, Class IIA-7
Notional Amount and Class A-X Notional Amount, respectively. With respect to any
Distribution Date after the first Distribution Date, the Certificate Rate on
each Class of Subordinated Certificates shall equal the fraction, expressed as a
percentage, the numerator of which shall equal the sum of (i) the product of (x)
5.00% and (y) the Group One Subordinated Amount, (ii) the product of (x) 5.50%
and (y) the Group Two Subordinated Amount and (iii) the product of (x) 6.00% and
(y) the Group Three Subordinated Amount and the denominator of which shall equal
the sum of the Group One Subordinated Amount, the Group Two Subordinated Amount
and the Group Three Subordinated Amount. The Certificate Rate on each Class of
Subordinated Certificates with respect to the first Distribution Date will be
5.69%. Interest with respect to each Class of Certificates (other than the Class
A-P Certificates) shall be calculated based on a 360 day year comprised of
twelve 30-day months.
CERTIFICATE REGISTER: The register maintained pursuant to Section 4.02.
CERTIFICATE REGISTRAR: The Person appointed by the Trustee as
Certificate Registrar pursuant to Section 4.05.
CHASE: JPMorgan Chase Bank, a New York State banking corporation, or
its successor in interest.
CLASS: Pertaining to the Class IA-1, Class IIA-1, Class IIA-2, Class
IIA-3, Class IIA-4, Class IIA-5, Class IIA-6, Class IIA-7, Class IIIA-1, Class
A-P, Class A-X, Class A-R, Class M, Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 Certificates, any Lower-Tier REMIC Interest or any Middle-Tier REMIC
Interest, as the case may be.
CLASS A CERTIFICATES: The Class IA-1, Class IIA-1, Class IIA-2, Class
IIA-3, Class IIA-4, Class IIA-5, Class IIA-6, Class IIA-7, Class IIIA-1, Class
A-P, Class A-X and Class A-R Certificates, referred to collectively.
CLASS A GROUP ONE CERTIFICATES: The Class IA-1 Certificates.
CLASS A GROUP THREE CERTIFICATES: The Class IIIA-1, Class A-R, and
Class A-X Certificates, referred to collectively.
CLASS A GROUP TWO CERTIFICATES: The Class IIA-1, Class IIA-2, Class
IIA-3, Class IIA-4, Class IIA-5, Class IIA-6, Class IIA-7 Certificates, referred
to collectively.
CLASS A, CLASS M OR CLASS B: Pertaining to Class A Certificates, Class
M Certificates or Class B Certificates, as the case may be.
CLASS A-P AMOUNT: With respect to any Distribution Date, (i) all
principal received on or in respect of each Component in Group A-P (exclusive of
any amounts in respect of any Monthly Payment) during the related Principal
Payment Period and (ii) all principal received as part of a Monthly Payment on
or in respect of a Component in Group A-P during the related Due Period.
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CLASS IA-1 CERTIFICATE: Any one of the Class IA-1 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS IIA-1 CERTIFICATE: Any one of the Class IIA-1 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS IIA-2 CERTIFICATE: Any one of the Class IIA-2 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS IIA-3 CERTIFICATE: Any one of the Class IIA-3 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS IIA-4 CERTIFICATE: Any one of the Class IIA-4 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS IIA-5 CERTIFICATE: Any one of the Class IIA-5 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS IIA-6 CERTIFICATE: Any one of the Class IIA-6 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS IIA-7 CERTIFICATE: Any one of the Class IIA-7 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS IIIA-1 CERTIFICATE: Any one of the Class IIIA-1 Certificates,
executed by the Depositor and authenticated by the Trustee, senior in right of
payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit C hereto.
CLASS A-P CERTIFICATE: Any one of the Class A-P Certificates executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-X CERTIFICATE: Any one of the Class A-X Certificates executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-R CERTIFICATE: The Class A-R Certificate executed by the
Depositor and authenticated by the Trustee, substantially in the form of the
Class A-R Certificate set forth in Exhibit F hereto.
CLASS IA-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class IA-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class IA-1 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class IA-1 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Servicemembers Civil Relief Act, allocated to the
Class IA-1 Certificates on such Distribution Date pursuant to Section 6.05(d).
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CLASS IIA-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class IIA-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class IIA-1 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class IIA-1
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Servicemembers Civil Relief Act,
allocated to the Class IIA-1 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS IIA-2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class IIA-2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class IIA-2 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class IIA-2
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Servicemembers Civil Relief Act,
allocated to the Class IIA-2 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS IIA-3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class IIA-3 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class IIA-3 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class IIA-3
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Servicemembers Civil Relief Act,
allocated to the Class IIA-3 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS IIA-4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class IIA-4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class IIA-4 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class IIA-4
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Servicemembers Civil Relief Act,
allocated to the Class IIA-4 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS IIA-5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class IIA-5 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class IIA-5 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class IIA-5
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Servicemembers Civil Relief Act,
allocated to the Class IIA-5 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS IIA-6 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class IIA-6 Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class
IIA-6 Certificates on such Distribution Date pursuant to Section 6.05(b), (ii)
any Realized Loss Interest Shortfall resulting from an Excess Loss allocated to
the Class IIA-6 Certificates on such Distribution Date pursuant to Section
6.05(c), and (iii) any interest shortfall resulting from the Servicemembers
Civil Relief Act, allocated to the Class IIA-6 Certificates on such Distribution
Date pursuant to Section 6.05(d).
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CLASS IIA-7 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on theClass IIA-7 Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class
IIA-7 Certificates on such Distribution Date pursuant to Section 6.05(b), (ii)
any Realized Loss Interest Shortfall resulting from an Excess Loss allocated to
the Class IIA-7 Certificates on such Distribution Date pursuant to Section
6.05(c), and (iii) any interest shortfall resulting from the Servicemembers
Civil Relief Act, allocated to the Class IIA-7 Certificates on such Distribution
Date pursuant to Section 6.05(d).
CLASS IIIA-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class IIIA-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class IIIA-1 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class IIIA-1
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Servicemembers Civil Relief Act,
allocated to the Class IIIA-1 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS A-R INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-R Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-R Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class A-R Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Servicemembers Civil Relief Act, allocated to the
Class A-R Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS A-X INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class A-X Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class A-X
Certificates on such Distribution Date pursuant to Section 6.05(b), (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class A-X Certificates on such Distribution Date pursuant to Section 6.05(c),
and (iii) any interest shortfall resulting from the Servicemembers Civil Relief
Act, allocated to the Class A-X Certificates on such Distribution Date pursuant
to Section 6.05(d).
CLASS IIA-6 NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to 4.0000000000% of the Outstanding Certificate Principal Balance
of the Class IIA-3 Certificates (prior to giving effect to the distributions
made on such Distribution Date). The Class IIA-6 Notional Amount for the first
Distribution Date will be $561,136.00.
CLASS IIA-7 NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to 4.0000000000% of the Outstanding Certificate Principal Balance
of the Class IIA-1 Certificates (prior to giving effect to the distributions
made on such Distribution Date). The Class IIA-7 Notional Amount for the first
Distribution Date will be $2,919,000.00.
CLASS A-X NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal the product of the aggregate Scheduled Principal Balance of the
Mortgage Loans having a Net Mortgage Rate greater than 6.00% and a fraction the
numerator of which is the weighted average of the Stripped Interest Rates of
such Mortgage Loans and the denominator of which is 6.00%. The Class A-X
Notional Amount for the first Distribution Date will be $1,379,238.00.
CLASS A GROUP ONE OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Class A Group One Principal Balance and
(b) the sum of:
(i) the Class A Group One Percentage of the principal portion of
all Monthly Payments, whether or not received, which were due during
the related Due Period on Mortgage Components in Group One which were
outstanding during such Due Period;
7
(ii) the Class A Group One Prepayment Percentage of all Principal
Prepayments made on Mortgage Components in Group One during the related
Principal Prepayment Period;
(iii) with respect to each Mortgage Component in Group One not
described in (iv) below, the Class A Group One Percentage of the
principal portion of all Insurance Proceeds, condemnation awards and
any other cash proceeds from a source other than the applicable
Mortgagor, to the extent required to be deposited in the Collection
Account pursuant to Section 5.08(d) and (e), which were received during
the related Principal Prepayment Period with respect to any Mortgage
Component in Group One, net of related unreimbursed Servicing Advances
and net of any portion thereof which, as to any such Mortgage
Component, constitutes Late Collections that have been the subject of
an Advance on any prior Distribution Date;
(iv) with respect to each Mortgage Component in Group One with
respect to which the related Mortgage Loan has become a Liquidated
Mortgage Loan during the related Principal Prepayment Period, the
lesser of (A) the Class A Group One Percentage of an amount equal to
the Principal Balance of such Mortgage Component as of the Due Date
immediately preceding the date on which the related Mortgage Loan
became a Liquidated Mortgage Loan and (B) the Class A Group One
Prepayment Percentage of the Net Liquidation Proceeds with respect to
such Mortgage Component (net of any unreimbursed Advances);
(v) with respect to each Mortgage Component related to a Mortgage
Loan in Group One repurchased during the related Principal Prepayment
Period pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an amount
equal to the Class A Group One Prepayment Percentage of the principal
portion of the Purchase Price (net of amounts with respect to which a
distribution of principal has previously been made to the applicable
Class A Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the excess of
the Class A Group One Principal Balance (calculated after giving effect
to reductions thereof on such Distribution Date with respect to the
amounts described in (i) - (v) above) over the outstanding principal
balance of the Mortgage Components in Group One, if any, as of the
preceding Distribution Date (giving effect to any advances but prior to
giving effect to any principal prepayments received with respect to
such Mortgage Components that have not been passed through to the
Certificateholders).
CLASS A GROUP THREE OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Class A Group Three Principal Balance
and (b) the sum of:
(i) the Class A Group Three Percentage of the principal portion of
all Monthly Payments, whether or not received, which were due during
the related Due Period on Mortgage Loans or Mortgage Components in
Group Three which were outstanding during such Due Period;
(ii) the Class A Group Three Prepayment Percentage of all
Principal Prepayments made on Mortgage Loans or Mortgage Components in
Group Three during the related Principal Prepayment Period;
8
(iii) with respect to each Mortgage Loan or Mortgage Component in
Group Three not described in (iv) below, the Class A Group Three
Percentage of the principal portion of all Insurance Proceeds,
condemnation awards and any other cash proceeds from a source other
than the applicable Mortgagor, to the extent required to be deposited
in the Collection Account pursuant to Section 5.08(d) and (e), which
were received during the related Principal Prepayment Period with
respect to any Mortgage Loan or Mortgage Component in Group Three, net
of related unreimbursed Servicing Advances and net of any portion
thereof which, as to any such Mortgage Loan or Mortgage Component,
constitutes Late Collections that have been the subject of an Advance
on any prior Distribution Date;
(iv) with respect to each Mortgage Loan or Mortgage Component in
Group Three which has become a Liquidated Mortgage Loan during the
related Principal Prepayment Period, the lesser of (A) the Class A
Group Three Percentage of an amount equal to the Principal Balance of
such Liquidated Mortgage Loan or Mortgage Component as of the Due Date
immediately preceding the date on which the related Mortgage Loan
became a Liquidated Mortgage Loan and (B) the Class A Group Three
Prepayment Percentage of the Net Liquidation Proceeds with respect to
such Mortgage Loan or Mortgage Component (net of any unreimbursed
Advances);
(v) with respect to each Mortgage Loan or Mortgage Component in
Group Three repurchased during the related Principal Prepayment Period
pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an amount equal to
the Class A Group Three Prepayment Percentage of the principal portion
of the Purchase Price (net of amounts with respect to which a
distribution of principal has previously been made to the applicable
Class A Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the excess of
the Class A Group Three Principal Balance (calculated after giving
effect to reductions thereof on such Distribution Date with respect to
the amounts described in (i) - (v) above) over the outstanding
principal balance of the Mortgage Loan or Mortgage Components in Group
Three, if any, as of the preceding Distribution Date (giving effect to
any advances but prior to giving effect to any principal prepayments
received with respect to such Mortgage Loans or Mortgage Components
that have not been passed through to the Certificateholders).
CLASS A GROUP TWO OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Class A Group Two Principal Balance and
(b) the sum of:
(i) the Class A Group Two Percentage of the principal portion of
all Monthly Payments, whether or not received, which were due during
the related Due Period on Mortgage Components in Group Two which were
outstanding during such Due Period;
(ii) the Class A Group Two Prepayment Percentage of all Principal
Prepayments made on Mortgage Components in Group Two during the related
Principal Prepayment Period;
(iii) with respect to each Mortgage Component in Group Two not
described in (iv) below, the Class A Group Two Percentage of the
principal portion of all Insurance Proceeds, condemnation awards and
any other cash proceeds from a source other than the applicable
Mortgagor, to the extent required to be deposited in the Collection
Account pursuant to Section 5.08(d) and (e), which were received during
the related Principal Prepayment Period with respect to any Mortgage
Component in Group Two, net of related unreimbursed Servicing Advances
and net of any portion thereof which, as to any such Mortgage
Component, constitutes Late Collections that have been the subject of
an Advance on any prior Distribution Date;
9
(iv) with respect to each Mortgage Component in Group Two with
respect to which the related Mortgage Loan has become a Liquidated
Mortgage Loan during the related Principal Prepayment Period, the
lesser of (A) the Class A Group Two Percentage of an amount equal to
the Principal Balance of such Mortgage Component as of the Due Date
immediately preceding the date on which the related Mortgage Loan
became a Liquidated Mortgage Loan and (B) the Class A Group Two
Prepayment Percentage of the Net Liquidation Proceeds with respect to
such Mortgage Component (net of any unreimbursed Advances);
(v) with respect to each Mortgage Component related to a Mortgage
Loan in Group Two repurchased during the related Principal Prepayment
Period pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an amount
equal to the Class A Group Two Prepayment Percentage of the principal
portion of the Purchase Price (net of amounts with respect to which a
distribution of principal has previously been made to the applicable
Class A Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the excess of
the Class A Group Two Principal Balance (calculated after giving effect
to reductions thereof on such Distribution Date with respect to the
amounts described in (i) - (v) above) over the outstanding principal
balance of the Mortgage Components in Group Two, if any, as of the
preceding Distribution Date (giving effect to any advances but prior to
giving effect to any principal prepayments received with respect to
such Mortgage Components that have not been passed through to the
Certificateholders).
CLASS A PERCENTAGE: As of any Distribution Date, the percentage
obtained by dividing the Class A Principal Balance by Mortgage Pool Principal
Balance, but not more than 100%.
CLASS A GROUP ONE PERCENTAGE: As of any Distribution Date, the
percentage obtained by dividing the Class A Group One Principal Balance by the
outstanding principal balance of the Mortgage Components in Group One, but not
more than 100%.
CLASS A GROUP THREE PERCENTAGE: As of any Distribution Date, the
percentage obtained by dividing the Class A Group Three Principal Balance by the
outstanding principal balance of the Mortgage Loans or Mortgage Components in
Group Three, but not more than 100%.
CLASS A GROUP TWO PERCENTAGE: As of any Distribution Date, the
percentage obtained by dividing the Class A Group Two Principal Balance by the
outstanding principal balance of the Mortgage Components in Group Two, but not
more than 100%.
CLASS A GROUP ONE PREPAYMENT PERCENTAGE: As of any Distribution Date up
to and including the Distribution Date in February 2009, 100%; as of any
Distribution Date in the first year thereafter, the Class A Group One Percentage
plus 70% of the Group One Subordinated Percentage for such Distribution Date; as
of any Distribution Date in the second year thereafter, the Class A Group One
Percentage plus 60% of the Group One Subordinated Percentage for such
Distribution Date; as of any Distribution Date in the third year thereafter, the
Class A Group One Percentage plus 40% of the Group One Subordinated Percentage
for such Distribution Date; as of any Distribution Date in the fourth year
thereafter, the Class A Group One Percentage plus 20% of the Group One
Subordinated Percentage for such Distribution Date; and as of any Distribution
Date after the fourth year thereafter, the Class A Group One Percentage;
provided that, if the Class A Group One Percentage as of any such Distribution
Date is greater than the Class A Group One Percentage on the first Distribution
Date or the Class A Group Two Percentage as of any such Distribution Date is
greater than the Class A Group Two Percentage on the first Distribution Date or
the Class A Group Three Percentage as of any such Distribution Date is greater
than the Class A Group Three Percentage on the first Distribution Date, the
Class A Group One Prepayment Percentage shall be 100%; and provided further,
however, that whenever the Class A Group One Percentage equals 0%, the Class A
Group One Prepayment Percentage shall equal 0%; and provided further that no
reduction of the Class A Group One Prepayment Percentage below the level in
effect for the most recent period shall occur with respect to any Distribution
Date unless, as of the last day of the month preceding such Distribution Date,
(i) the aggregate outstanding Principal Balance of Mortgage Loans or Mortgage
Components with respect to all three Groups, each taken individually, delinquent
60 days or more (including for this purpose any Mortgage Loans in foreclosure
and Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust Fund) does not exceed 50% of the Subordinated Percentage
10
of the portion of the Mortgage Pool Principal Balance with respect to the
related Group as of such date and (ii) cumulative Realized Losses with respect
to all three Groups, each taken individually, do not exceed (a) 30% of the
related Subordinated Amount as of the date of issuance of the Certificates (the
"Original Subordinated Principal Balance") if such Distribution Date occurs
between and including March 2009 and February 2010, (b) 35% of the related
Original Subordinated Principal Balance if such Distribution Date occurs between
and including March 2010 and February 2011, (c) 40% of the related Original
Subordinated Principal Balance if such Distribution Date occurs between and
including March 2011 and February 2012, (d) 45% of the related Original
Subordinated Principal Balance if such Distribution Date occurs between and
including March 2012 and February 2012, and (e) 50% of the related Original
Subordinated Principal Balance if such Distribution Date occurs during or after
March 2013.
CLASS A GROUP THREE PREPAYMENT PERCENTAGE: As of any Distribution Date
up to and including the Distribution Date in February 2009, 100%; as of any
Distribution Date in the first year thereafter, the Class A Group Three
Percentage plus 70% of the Group Three Subordinated Percentage for such
Distribution Date; as of any Distribution Date in the second year thereafter,
the Class A Group Three Percentage plus 60% of the Group Three Subordinated
Percentage for such Distribution Date; as of any Distribution Date in the third
year thereafter, the Class A Group Three Percentage plus 40% of the Group Three
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the fourth year thereafter, the Class A Group Three Percentage plus 20% of
the Group Three Subordinated Percentage for such Distribution Date; and as of
any Distribution Date after the fourth year thereafter, the Class A Group Three
Percentage; provided that, if the Class A Group Three Percentage as of any such
Distribution Date is greater than the Class A Group Three Percentage on the
first Distribution Date or the Class A Group Two Percentage as of any such
Distribution Date is greater than the Class A Group Two Percentage on the first
Distribution Date or the Class A Group One Percentage as of any such
Distribution Date is greater than the Class A Group One Percentage on the first
Distribution Date, the Class A Group Three Prepayment Percentage shall be 100%;
and provided further, however, that whenever the Class A Group Three Percentage
equals 0%, the Class A Group Three Prepayment Percentage shall equal 0%; and
provided further that no reduction of the Class A Group Three Prepayment
Percentage below the level in effect for the most recent period shall occur with
respect to any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (i) the aggregate outstanding Principal
Balance of Mortgage Loans or Mortgage Components with respect to all three
Groups, each taken individually, delinquent 60 days or more (including for this
purpose any Mortgage Loans in foreclosure and Mortgage Loans with respect to
which the related Mortgaged Property has been acquired by the Trust Fund) does
not exceed 50% of the Subordinated Percentage of the portion of the Mortgage
Pool Principal Balance with respect to the related Group as of such date and
(ii) cumulative Realized Losses with respect to all three Groups, each taken
individually, do not exceed (a) 30% of the related Subordinated Amount as of the
date of issuance of the Certificates (the "Original Subordinated Principal
Balance") if such Distribution Date occurs between and including March 2009 and
February 2010, (b) 35% of the related Original Subordinated Principal Balance if
such Distribution Date occurs between and including March 2010 and February
2011, (c) 40% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including March 2011 and February 2012, (d)
45% of the related Original Subordinated Principal Balance if such Distribution
Date occurs between and including March 2012 and February 2013, and (e) 50% of
the related Original Subordinated Principal Balance if such Distribution Date
occurs during or after March 2013.
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CLASS A GROUP TWO PREPAYMENT PERCENTAGE: As of any Distribution Date up
to and including the Distribution Date in February 2009, 100%; as of any
Distribution Date in the first year thereafter, the Class A Group Two Percentage
plus 70% of the Group Two Subordinated Percentage for such Distribution Date; as
of any Distribution Date in the second year thereafter, the Class A Group Two
Percentage plus 60% of the Group Two Subordinated Percentage for such
Distribution Date; as of any Distribution Date in the third year thereafter, the
Class A Group Two Percentage plus 40% of the Group Two Subordinated Percentage
for such Distribution Date; as of any Distribution Date in the fourth year
thereafter, the Class A Group Two Percentage plus 20% of the Group Two
Subordinated Percentage for such Distribution Date; and as of any Distribution
Date after the fourth year thereafter, the Class A Group Two Percentage;
provided that, if the Class A Group Two Percentage as of any such Distribution
Date is greater than the Class A Group Two Percentage on the first Distribution
Date or the Class A Group One Percentage as of any such Distribution Date is
greater than the Class A Group One Percentage on the first Distribution Date or
the Class A Group Three Percentage as of any such Distribution Date is greater
than the Class A Group Three Percentage on the first Distribution Date, the
Class A Group Two Prepayment Percentage shall be 100%; and provided further,
however, that whenever the Class A Group Two Percentage equals 0%, the Class A
Group Two Prepayment Percentage shall equal 0%; and provided further that no
reduction of the Class A Group Two Prepayment Percentage below the level in
effect for the most recent period shall occur with respect to any Distribution
Date unless, as of the last day of the month preceding such Distribution Date,
(i) the aggregate outstanding Principal Balance of Mortgage Loans or Mortgage
Components with respect to all three Groups, each taken individually, delinquent
60 days or more (including for this purpose any Mortgage Loans in foreclosure
and Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust Fund) does not exceed 50% of the Subordinated Percentage
of the portion of the Mortgage Pool Principal Balance with respect to the
related Group as of such date and (ii) cumulative Realized Losses with respect
to all three Groups, each taken individually, do not exceed (a) 30% of the
related Subordinated Amount as of the date of issuance of the Certificates (the
"Original Subordinated Principal Balance") if such Distribution Date occurs
between and including March 2009 and February 2010, (b) 35% of the related
Original Subordinated Principal Balance if such Distribution Date occurs between
and including March 2010 and February 2011, (c) 40% of the related Original
Subordinated Principal Balance if such Distribution Date occurs between and
including March 2011 and February 2012, (d) 45% of the related Original
Subordinated Principal Balance if such Distribution Date occurs between and
including March 2012 and February 2013, and (e) 50% of the related Original
Subordinated Principal Balance if such Distribution Date occurs during or after
March 2013.
CLASS A PRINCIPAL BALANCE: As of any Distribution Date, (a) the sum of
(i) the Class A Principal Balance for the immediately preceding Distribution
Date and (ii) the excess, immediately following such preceding Distribution Date
of (x) the aggregate amounts distributed to the Class IIA-4 Certificates from
amounts withdrawn from the Rounding Account over (y) the sum of (I) the
aggregate amounts replenished to the Rounding Account and (II) the aggregate
amounts distributed to the Class A-R Certificates pursuant to the Class A Group
Two Principal Payment Rules less (b) amounts distributed to the Class A
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.03 and Realized Losses allocated to the Class A Certificates pursuant
to Section 6.04); provided that the Class A Principal Balance on the first
Distribution Date shall be the Original Class A Principal Balance.
CLASS A GROUP ONE PRINCIPAL BALANCE: As of any Distribution Date, (a)
the Class A Group One Principal Balance for the immediately preceding
Distribution Date less (b) amounts distributed to the Class A Group One
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.03 and Realized Losses allocated to the Class A Group One Certificates
pursuant to Section 6.04); provided that the Class A Group One Principal Balance
on the first Distribution Date will be the Original Class A Group One Principal
Balance.
12
CLASS A GROUP THREE PRINCIPAL BALANCE: As of any Distribution Date, (a)
the Class A Group Three Principal Balance for the immediately preceding
Distribution Date less (b) amounts distributed to the Class A Group Three
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.03 and Realized Losses allocated to the Class A Group Three
Certificates pursuant to Section 6.04); provided that the Class A Group Three
Principal Balance on the first Distribution Date will be the Original Class A
Group Three Principal Balance.
CLASS A GROUP TWO PRINCIPAL BALANCE: As of any Distribution Date, (a)
the sum of (i) the Class A Group Two Principal Balance for the immediately
preceding Distribution Date and (ii) the excess, immediately following such
preceding Distribution Date of (x) the aggregate amounts distributed to the
Class IIA-4 Certificates from amounts withdrawn from the Rounding Account over
(y) the sum of (I) the aggregate amounts replenished to the Rounding Account and
(II) the aggregate amounts distributed to the Class A-R Certificates pursuant to
the Class A Group Two Principal Payment Rules less (b) amounts distributed to
the Class A Group Two Certificateholders on such preceding Distribution Date
allocable to principal (including the principal portion of Advances of the
Servicer made pursuant to Section 6.03 and Realized Losses allocated to the
Class A Group Two Certificates pursuant to Section 6.04); provided that the
Class A Group Two Principal Balance on the first Distribution Date will be the
Original Class A Group Two Principal Balance.
CLASS A GROUP ONE PRINCIPAL PAYMENT RULES: With respect to any
Distribution Date, distributions to the Class A Group One Certificateholders
pursuant to Section 6.01(b)(ii)(A) shall be made to the Class IA-1 Certificates
until the Outstanding Certificate Principal Balance of such Class has been
reduced to zero.
CLASS A GROUP THREE PRINCIPAL PAYMENT RULES: With respect to any
Distribution Date, distributions to the Class A Group Three Certificateholders
pursuant to Section 6.01(b)(ii)(C) shall be made sequentially to the Class A-R
and Class IIIA-1 Certificates until the Outstanding Certificate Principal
Balance of each such Class has been reduced to zero.
CLASS A GROUP TWO PRINCIPAL PAYMENT RULES:
(I) With respect to any Distribution Date up to and including the
Credit Support Depletion Date, distributions to the Class A Group Two
Certificateholders pursuant to Section 6.01(b)(ii)(B) shall be made in the
following amounts and priority:
first, on or following the earlier of (i) the Distribution Date on
which the Outstanding Certificate Principal Balance of the Class IIA-4
Certificates has been reduced to zero and (ii) the first Distribution Date on
which the aggregate unpaid principal balance of all Mortgage Loans remaining in
the Trust Fund is less than $1,000,000, to the Class A-R Certificate until the
aggregate amount distributed to the Class A-R Ceritficate under this clause
equals the excess, if any, of the aggregate amounts distributed to the Class
IIA-4 Certificates from amounts withdrawn from the Rounding Account over the
aggregate amounts replenished to the Rounding Account or distributed to the
Class A-R Certificates pursuant to the Class A Group Two Principal Payment Rules
(distributions under this clause will not reduce the Outstanding Certificate
Principal Balance of the Class A-R Certificate);
second, to the Class IIA-5 Certificates, up to the Lockout Principal
Distribution Amount; and
13
third, sequentially to the Class IIA-1, Class IIA-2, Class IIA-3, Class
IIA-4 and Class IIA-5 Certificates, until the Outstanding Certificate Principal
Balance of each such Class has been reduced to zero.
(II) With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 6.01(b)(ii)(B) shall be made
pro rata among the outstanding Classes of Class A Group Two Certificates in
relation to the respective Outstanding Certificate Principal Balances of such
outstanding Classes, and not in accordance with the priority of payments among
such Classes set forth in clause (I) above; provided that for these purposes (x)
the Outstanding Certificate Principal Balance of the Class IIA-4 Certificates
will be increased by the amount of any excess of the aggregate amounts
distributed to the Class IIA-4 Certificates from amounts withdrawn from the
Rounding Account over the sum of (i) the aggregate amounts replenished to the
Rounding Account and (ii) amounts distributed to the Class A-R Certificate under
these Class A Group Two Principal Payment Rules and (y) any increased
distributions of principal to which the Class IIA-4 Certificates are entitled as
a result of clause (x) shall be distributed to the Class A-R Certificate, but
will not reduce the Outstanding Certificate Principal Balance of the Class A-R
Certificate as they will instead reduce the Outstanding Certificate Principal
Balance of the Class IIA-4 Certificates as determined under clause (x).
CLASS IA-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class IA-1 Interest Accrual Amount over the
amount actually distributed to the Class IA-1 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(A).
CLASS IIA-1 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class IIA-1 Interest Accrual Amount
over the amount actually distributed to the Class IIA-1 Certificateholders on
such Distribution Date pursuant to Section 6.01(b)(i)(B).
CLASS IIA-2 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class IIA-2 Interest Accrual Amount
over the amount actually distributed to the Class IIA-2 Certificateholders on
such Distribution Date pursuant to Section 6.01(b)(i)(C).
CLASS IIA-3 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class IIA-3 Interest Accrual Amount
over the amount actually distributed to the Class IIA-3 Certificateholders on
such Distribution Date pursuant to Section 6.01(b)(i)(D).
CLASS IIA-4 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class IIA-4 Interest Accrual Amount
over the amount actually distributed to the Class IIA-4 Certificateholders on
such Distribution Date pursuant to Section 6.01(b)(i)(E).
CLASS IIA-5 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class IIA-5 Interest Accrual Amount
over the amount actually distributed to the Class IIA-5 Certificateholders on
such Distribution Date pursuant to Section 6.01(b)(i)(F).
CLASS IIA-6 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class IIA-6 Interest Accrual Amount
over the amount actually distributed to the Class IIA-6 Certificateholders on
such Distribution Date pursuant to Section 6.01(b)(i)(G).
CLASS IIA-7 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class IIA-7 Interest Accrual Amount
over the amount actually distributed to the Class IIA-7 Certificateholders on
such Distribution Date pursuant to Section 6.01(b)(i)(H).
14
CLASS IIIA-1 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class IIIA-1 Interest Accrual Amount
over the amount actually distributed to the Class IIIA-1 Certificateholders on
such Distribution Date pursuant to Section 6.01(b)(i)(I).
CLASS A-R SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-R Interest Accrual Amount over the
amount actually distributed to the Class A-R Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(K).
CLASS A-X SHORTFALL: With respect to any Distribution Date the amount
equal to the excess, if any, of the Class A-X Interest Accrual Amount over the
amount actually distributed to the Class A-X Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(J).
CLASS A-P SHORTFALL AMOUNT: With respect to any Distribution Date prior
to and including the Credit Support Depletion Date, to the extent of amounts
available to pay the Subordinated Optimal Principal Amount (without regard to
clause (b)(2) of the definition of such term), an amount equal to the sum of (i)
any Realized Loss with respect to a Component in Group A-P other than an Excess
Loss and (ii) the sum of amounts, if any, by which the amounts specified in
clause (i) with respect to each prior Distribution Date exceeded the amount
actually distributed in respect thereof on such prior Distribution Date and not
subsequently distributed to the Class A-P Certificateholders.
CLASS B CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates, referred to collectively.
CLASS B-1 CERTIFICATE: Any one of the Class B-1 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A and Class M Certificates, substantially in the form of
the Class B Certificate set forth in Exhibit E hereto.
CLASS B-2 CERTIFICATE: Any one of the Class B-2 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M and Class B-1 Certificates, substantially in the
form of the Class B Certificate set forth in Exhibit E hereto.
CLASS B-3 CERTIFICATE: Any one of the Class B-3 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1 and Class B-2 Certificates,
substantially in the form of the Class B Certificate set forth in Exhibit E
hereto.
CLASS B-4 CERTIFICATE: Any one of the Class B-4 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1, Class B-2 and Class B-3
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.
CLASS B-5 CERTIFICATE: Any one of the Class B-5 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.
CLASS B-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-1 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-1 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Servicemembers Civil Relief Act, allocated to the
Class B-1 Certificates on such Distribution Date pursuant to Section 6.05(d).
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CLASS B-2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-2 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-2 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Servicemembers Civil Relief Act, allocated to the
Class B-2 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS B-3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-3 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-3 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-3 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Servicemembers Civil Relief Act, allocated to the
Class B-3 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS B-4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-4 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-4 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Servicemembers Civil Relief Act, allocated to the
Class B-4 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS B-5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-5 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-5 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-5 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Servicemembers Civil Relief Act, allocated to the
Class B-5 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS B-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-1 Interest Accrual Amount over the
amount actually distributed to the Class B-1 Certificates on such Distribution
Date pursuant to Section 6.01(d)(1) (A) and (B).
CLASS B-2 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-2 Interest Accrual Amount over the
amount actually distributed to the Class B-2 Certificates on such Distribution
Date pursuant to Section 6.01(d)(2) (A) and (B).
CLASS B-3 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-3 Interest Accrual Amount over the
amount actually distributed to the Class B-3 Certificates on such Distribution
Date pursuant to Section 6.01(d)(3) (A) and (B).
CLASS B-4 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-4 Interest Accrual Amount over the
amount actually distributed to the Class B-4 Certificates on such Distribution
Date pursuant to Section 6.01(d)(4) (A) and (B).
CLASS B-5 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-5 Interest Accrual Amount over the
amount actually distributed to the Class B-5 Certificates on such Distribution
Date pursuant to Section 6.01(d)(5) (A) and (B).
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CLASS B PERCENTAGE: As of any Distribution Date, the difference between
100% and the sum of (i) the Class A Percentage and (ii) the Class M Percentage
for such Distribution Date.
CLASS B PRINCIPAL BALANCE: As of any Distribution Date, the excess of
the Mortgage Pool Principal Balance (together with the principal portion of any
Monthly Payment due but not paid with respect to which an Advance has not been
made) over the sum of (i) the Class A Principal Balance and (ii) the Class M
Principal Balance.
CLASS LT-R INTEREST: The sole residual interest in the Lower-Tier
REMIC.
CLASS M CERTIFICATE: Any one of the Class M Certificates executed by
the Depositor and authenticated by the Trustee, subordinated in right of payment
to the Class A Certificates, substantially in the form of the Class M
Certificate set forth in Exhibit D hereto.
CLASS M INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one (1) month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class M Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class M Certificates on such Distribution
Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class M Certificates on such
Distribution Date pursuant to Section 6.05(c) and (iii) any interest shortfall
resulting from the Servicemembers Civil Relief Act, allocated to the Class M
Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS M PERCENTAGE: As of any Distribution Date, the percentage
obtained by dividing the Class M Principal Balance by the Mortgage Pool
Principal Balance, but not more than 100%; provided, however, that on any
Distribution Date on which the Class B Percentage equals 0%, the Class M
Percentage shall equal 100% minus the Class A Percentage.
CLASS M PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class M
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class M Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.03 and Realized Losses
allocated to the Class M Certificates pursuant to Section 6.04); provided that
the Class M Principal Balance on the first Distribution Date shall be the
Original Class M Principal Balance, and provided further that if the aggregate
Outstanding Certificate Principal Balance of the Class B Certificates has been
reduced to zero, as of any Distribution Date, the Class M Principal Balance will
equal the excess of the Mortgage Pool Principal Balance (together with the
portion of any Monthly Payment due but not paid with respect to which an Advance
has not been made) over the Class A Principal Balance.
CLASS M SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class M Interest Accrual Amount over the
amount actually distributed to the Class M Certificateholders on such
Distribution Date pursuant to Section 6.01(c) (A) and (B).
CLASS MT-R INTEREST: The sole residual interest in the Middle-Tier
REMIC.
CLOSING DATE: February 25, 2004.
CMMC: Chase Manhattan Mortgage Corporation, a New Jersey corporation,
or its successor in interest.
CODE: The Internal Revenue Code of 1986, as amended from time to time,
and any successor statutes thereto, and applicable U.S. Department of Treasury
temporary or final regulations promulgated thereunder.
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COLLECTION ACCOUNT: The account created and maintained pursuant to
Section 5.08.
COMPENSATING INTEREST: The meaning specified in Section 6.05(a).
COMPENSATING INTEREST SHORTFALL: The meaning specified in Section
6.05(b).
CO-OP LEASE: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
CO-OP LOAN: A Mortgage Loan secured by the pledge of stock allocated to
a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
CREDIT SUPPORT: With respect to each Class of Subordinated Certificates
(other than the Class B-5 Certificates), the level of credit support supporting
such Class, expressed as a percentage of the aggregate Outstanding Certificate
Principal Balance of all Classes of Certificates (other than the Class A-P
Certificates). With respect to each Distribution Date, Credit Support for each
such Class will equal in each case the percentage, rounded to two decimal
places, obtained by dividing the aggregate Outstanding Certificate Principal
Balances immediately prior to such Distribution Date of all Classes of
Subordinated Certificates having higher numerical class designations than such
Class (for this purpose, the Class M Certificates shall be deemed to have a
lower numerical class designation than each Class of Class B Certificates) by
the aggregate Outstanding Certificate Principal Balance of all Classes of
Certificates (other than the Class A-P Certificates) immediately prior to such
Distribution Date.
CREDIT SUPPORT DEPLETION DATE: The first Distribution Date on which the
aggregate Outstanding Certificate Principal Balance of the Subordinated
Certificates has been or will be reduced to zero.
CUT-OFF DATE: February 1, 2004.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, other than such a
reduction resulting from a Deficient Valuation.
DECEASED HOLDER: A Beneficial Holder of a Class IIA-4 Certificate who
was living at the time such Class IIA-4 Certificate was acquired and whose
executor, authorized personal representative, surviving tenant by the entirety,
surviving joint tenant or surviving tenant in common or other Person endowed to
act on behalf of such Beneficial Holder causes to be furnished to the Trustee
evidence of such Beneficial Holder's death satisfactory to the Trustee and any
tax waivers requested by the Trustee.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) by a court of competent jurisdiction in an amount less
than the then outstanding Principal Balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: The Certificates referred to in Section
4.01(c).
DEPOSITOR: Chase Mortgage Finance Corporation, a Delaware corporation,
or its successor in interest or any successor under this Agreement appointed as
herein provided.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co.
DEPOSITORY AGREEMENT: The agreement referred to in Section 4.01(b).
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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.
DETERMINATION DATE: The sixteenth day of the month in which the related
Distribution Date occurs (or, if such sixteenth day is not a Business Day, the
preceding Business Day).
DISQUALIFIED ORGANIZATION: An organization referred to in Section
860E(e)(5) of the Code.
DISTRIBUTION DATE: The 25th day of any month, or if such 25th day is
not a Business Day, the first Business Day immediately following, beginning with
March 25, 2004.
DUE DATE: The first day of each month, being the day of the month on
which each Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.
DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the month preceding the month in which such Distribution Date
occurs through the first day of the month in which such Distribution Date
occurs.
ELIGIBLE ACCOUNT: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a national bank or banking corporation
which (a) has a rating of at least Baa3 or P-3 by Xxxxx'x and (b) is either
Chase or is the corporate trust department of a national bank or banking
corporation which has a rating of at least A-1 by S&P or F1 by Fitch Ratings, or
(iii) an account or accounts the deposits in which are fully insured by the
FDIC, or (iv) an account or accounts in a depository institution in which such
accounts are insured by the FDIC (to the limit established by the FDIC), the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first security interest against any
collateral (which shall be limited to Eligible Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, provided, however,
that such uninsured deposits do not result in the reduction of the ratings
assigned to the Certificates by the Rating Agencies as evidenced by a letter
from each Rating Agency or (v) otherwise acceptable to each Rating Agency
without reduction or withdrawal of the rating of any Class of Certificates, as
evidenced by a letter from each Rating Agency.
ELIGIBLE INVESTMENTS: One or more of the following:
(i) obligations of, or guaranteed as to principal and interest by, the
United States or obligations of any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
provided that any such obligation held as a "cash flow investment" within the
meaning of section 860G(a)(6) of the Code shall mature before the next
Distribution Date;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than two months from the date of acquisition thereof, provided
that the long-term unsecured obligations of the party agreeing to repurchase
such obligations are at the time rated by each Rating Agency with its highest
rating and the short-term debt obligations of the party agreeing to repurchase
are rated with one of the two highest ratings by Xxxxx'x and A-1+ by S&P;
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(iii) federal funds, certificates of deposit, time deposits and
bankers' acceptances (other than bankers' acceptances issued by Chase or any of
its Affiliates) (which shall each have an original maturity of not more than 60
days and, in the case of bankers' acceptances, shall in no event have an
original maturity of more than 365 days) of any United States depository
institution or trust company incorporated under the laws of the United States or
any state, provided that the long-term unsecured debt obligations of such
depository institution or trust company at the date of acquisition thereof have
been rated by each Rating Agency with its highest rating and the short-term
obligations of such depository institution or trust company are rated A-1+ by
S&P and P-1 by Xxxxx'x;
(iv) commercial paper (other than commercial paper issued by Chase or
any of its Affiliates) (having original maturities of not more than 365 days) of
any corporation incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been rated by each Rating Agency in
its highest short-term unsecured commercial paper rating category; provided that
such commercial paper shall have a remaining maturity of not more than 45 days;
(v) units of taxable money market funds (including those for which the
Trustee or the Servicer or any Affiliate thereof receives compensation with
respect to such investment) which may be 12b-1 funds, as contemplated under the
rules promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended, and which funds have been rated by each Rating
Agency in its highest rating category or which have been designated in writing
by each Rating Agency as Eligible Investments with respect to this definition;
or
(vi) other obligations or securities (other than investments or
obligations of Chase or any of its Affiliates) acceptable to each Rating Agency
rating the Certificates as an Eligible Investment hereunder and will not result
in a reduction or withdrawal in the then current rating of any Class of
Certificates, as evidenced by a letter to such effect from each Rating Agency;
Provided that no such instrument shall be an Eligible Investment if such
instrument evidences either (a) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (b) both principal and
interest payments derived from obligations underlying such instrument where the
interest and principal payments with respect to such instrument provide a yield
to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations; and provided further that no such instrument shall be
purchased above par; and provided further that each Eligible Investment must be
a "permitted investment" within the meaning of Section 860G(a)(5) of the Code.
ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statutes thereto, and applicable U.S.
Department of Labor temporary or final regulations promulgated thereunder.
ERISA RESTRICTED CERTIFICATE: Any Class B-3, Class B-4 or Class B-5
Certificate or any other Certificate which at the date of determination is not
rated in one of the four highest generic rating categories by any Rating Agency.
ESCROW ACCOUNT: The account or accounts created and maintained pursuant
to Section 5.10.
ESCROW PAYMENTS: The amounts constituting applicable ground rents,
taxes, assessments, water rates, Standard Hazard Policy premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
a Mortgage Loan.
EVENT OF DEFAULT: Any of the events specified in Section 9.01.
EXCEPTION REPORT: The report of the Trustee referred to in Section
2.02.
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EXCESS BANKRUPTCY LOSS: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
EXCESS FRAUD LOSS: Any Fraud Loss, or portion thereof, which exceeds
the then applicable Fraud Loss Amount.
EXCESS LOSSES: Excess Bankruptcy Losses, Excess Fraud Losses and Excess
Special Hazard Losses, referred to collectively.
EXCESS PROCEEDS: All amounts (net of the related Servicing Advances)
received on any Mortgage Loan (whether as regular principal payments, Principal
Prepayments, Repurchase Proceeds, Liquidation Proceeds, Insurance Proceeds,
condemnation awards, or with respect to a disposition of a Mortgaged Property
(or stock allocated to a dwelling unit, in the case of a Co-op Loan) which has
been acquired by foreclosure or deed in lieu of foreclosure or otherwise) in
excess of the Principal Balance at the Cut-off Date of such Mortgage Loan and
accrued interest thereon at its Mortgage Rate to the Due Date immediately
succeeding the date of prepayment, repurchase or liquidation, as the case may
be.
EXCESS SPECIAL HAZARD LOSS: Any Special Hazard Loss, or portion
thereof, that exceeds the then applicable Special Hazard Amount.
FDIC: The Federal Deposit Insurance Corporation or any successor
organization.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor
organization.
FIDELITY BOND: The fidelity bond and errors and omissions insurance to
be maintained by the Servicer pursuant to Section 5.19.
FINAL SCHEDULED DISTRIBUTION DATE. March 25, 2034.
FITCH RATINGS: Fitch, Inc. or its successor in interest.
FNMA: The Federal National Mortgage Association, or any successor
organization.
FNMA GUIDES: The FNMA Sellers' Guide and the FNMA Servicers' Guide, and
all amendments or additions thereto.
FRAUD LOSS: Any Realized Loss or portion thereof sustained by reason of
a default arising from fraud, dishonesty or misrepresentation in connection with
the related Mortgage Loan, including by reason of the denial of coverage under
any related Primary Insurance Policy.
FRAUD LOSS AMOUNT: As of any date of determination after the Cut-off
Date, an amount equal to: (X) prior to the third anniversary of the Cut-off
Date, 1.00% (initially, $3,250,001) of the aggregate outstanding Principal
Balance of all of the Mortgage Loans as of the Cut-off Date minus the aggregate
amount of Fraud Loss on the Mortgage Loans allocated to the Certificates in
accordance with Section 6.04 since the Cut-off Date up to such date of
determination and (Y) from the third to the fifth anniversary of the Cut-off
Date, (1) 0.50% of the aggregate outstanding Principal Balance of all of the
Mortgage Loans as of the most recent anniversary of the Cut-off Date minus (2)
the Fraud Losses allocated to the Certificates in accordance with Section 6.04
since the most recent anniversary of the Cut-off Date up to such date of
determination. On and after the fifth anniversary of the Cut-off Date, the Fraud
Loss Amount shall be zero.
GROUP: Any of the Group One, Group Two, Group Three or Group A-P, as
the case may be.
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GROUP A-P: For purposes of allocating principal distributions or
Realized Losses among the Class A Certificates, Group A-P will include Mortgage
Components assigned to such Group pursuant to Section 2.07.
GROUP ONE: For purposes of allocating principal distributions or
Realized Losses among the Class A Certificates, Group One will include Mortgage
Components assigned to such Group pursuant to Section 2.07.
GROUP ONE REMITTANCE RATE: 5.00% per annum.
GROUP ONE SUBORDINATED AMOUNT: For any Distribution Date, the excess of
the aggregate Scheduled Principal Balance of the Mortgage Components in Group
One over the aggregate Outstanding Certificate Principal Balance of the Class A
Group One Certificates (prior to giving effect to distributions to be made on
such Distribution Date).
GROUP ONE SUBORDINATED PERCENTAGE: As of any Distribution Date, the
difference between 100% and the Class A Group One Percentage.
GROUP ONE SUBORDINATED PREPAYMENT PERCENTAGE: As of any Distribution
Date, the difference between 100% and the Class A Group One Prepayment
Percentage.
GROUP THREE: For purposes of allocating principal distributions or
Realized Losses among the Class A Certificates, Group Three will include
Mortgage Components assigned to such Group pursuant to Section 2.07.
GROUP THREE REMITTANCE RATE: 6.00% per annum.
GROUP THREE SUBORDINATED AMOUNT: For any Distribution Date, the excess
of the aggregate Scheduled Principal Balance of the Mortgage Loans or Mortgage
Components in Group Three over the aggregate Outstanding Certificate Principal
Balance of the Class A Group Three Certificates (prior to giving effect to
distributions to be made on such Distribution Date).
GROUP THREE SUBORDINATED PERCENTAGE: As of any Distribution Date, the
difference between 100% and the Class A Group Three Percentage.
GROUP THREE SUBORDINATED PREPAYMENT PERCENTAGE: As of any Distribution
Date, the difference between 100% and the Class A Group Three Prepayment
Percentage.
GROUP TWO: For purposes of allocating principal distributions or
Realized Losses among the Class A Certificates, Group Two will include Mortgage
Components assigned to such Group pursuant to Section 2.07.
GROUP TWO REMITTANCE RATE: 5.50% per annum.
GROUP TWO SUBORDINATED AMOUNT: For any Distribution Date, the excess of
the aggregate Scheduled Principal Balance of the Mortgage Components in Group
Two over sum of (I) the aggregate Outstanding Certificate Principal Balance of
the Class A Group Two Certificates (prior to giving effect to distributions to
be made on such Distribution Date) and (II) the excess of (x) the aggregate
amounts distributed to the Class IIA-4 Certificates from amounts withdrawn from
the Rounding Account over (y) the sum of (a) the aggregate amounts replenished
to the Rounding Account and (b) amounts distributed to the Class A-R
Certificates pursuant to the Class A Group Two Principal Payment Rules.
22
GROUP TWO SUBORDINATED PERCENTAGE: As of any Distribution Date, the
difference between 100% and the Class A Group Two Percentage.
GROUP TWO SUBORDINATED PREPAYMENT PERCENTAGE: As of any Distribution
Date, the difference between 100% and the Class A Group Two Prepayment
Percentage.
INDIRECT PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant, either directly or indirectly.
INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan, net of costs of collecting such
proceeds and net of amounts released to the Mortgagor or applied to the
restoration of the Mortgaged Property (or in the underlying Mortgaged Property,
in the case of a Co-op Loan).
INSURED EXPENSES: Expenses covered by any insurance policy.
INTEREST ACCRUAL PERIOD: With respect to any Distribution Date and any
Class of Certificates (other than the Class A-P Certificates), the calendar
month immediately preceding the month in which the related Distribution Date
occurs.
LATE COLLECTIONS: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, or with
respect to a disposition of a Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) which has been acquired by
foreclosure or deed in lieu of foreclosure or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
LIQUIDATED MORTGAGE LOAN: Any Mortgage Loan (a) as to which the
Servicer has determined that all amounts which it expects to recover from or on
account of such Mortgage Loan or property acquired in respect thereof have been
recovered, (b) as to which a Cash Liquidation has taken place or (c) with
respect to which the Mortgaged Property (or stock allocated to a dwelling unit,
in the case of a Co-op Loan) has been acquired by foreclosure or deed in lieu of
foreclosure and a disposition (the term disposition shall include, for purposes
of a repurchase pursuant to Section 11.01, any repurchase of a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
pursuant to such Section) of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) has occurred.
LIQUIDATION EXPENSES: Expenses which are incurred by the Servicer or
any Sub-Servicer in connection with the liquidation of any defaulted Mortgage
Loan or property acquired in respect thereof including, without limitation,
legal fees and expenses, any unreimbursed amount expended by the Servicer
pursuant to Sections 5.16 and 5.21 respecting the related Mortgage Loan and any
related and unreimbursed expenditures for real estate property taxes or for
property restoration or preservation.
LIQUIDATION PROCEEDS: Cash (including Insurance Proceeds) received by
the Servicer in connection with the liquidation of any Mortgage Loan or
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) acquired in respect thereof, whether through the sale or assignment
of such Mortgage Loan (other than pursuant to Section 5.21), trustee's sale,
foreclosure sale or otherwise, or the sale of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) if the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
acquired in satisfaction of the Mortgage Loan other than amounts required to be
paid to the Mortgagor pursuant to law or the terms of the applicable Mortgage
Note.
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LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the principal amount of the related Mortgage Loan at the
time of origination (or, (i) for purposes of Section 5.15, at the time of
determination and (ii) for purposes of a Mortgage Loan with respect to which a
conversion from adjustable rate to fixed rate has occurred, at the time of
initial origination) and the denominator of which is the Appraised Value of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) at the time of origination or, in the case of a Mortgage Loan financing
the acquisition of the Mortgaged Property (or applicable dwelling unit, in the
case of a Co-op Loan), the sales price of the Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan), if such sales price is less than
such appraised value.
LOCKOUT PERCENTAGE: With respect to any Distribution Date through
February 2009, 0% and for any Distribution Date thereafter, the lesser of (I)
(A) the Outstanding Certificate Principal Balance of the Class IIA-5
Certificates divided by (B) the Outstanding Certificate Principal Balance of the
Mortgage Components in Group Two, in each case immediately prior to the
Distribution Date and (II) 100.00%.
LOCKOUT PREPAYMENT PERCENTAGE: The product of (a) the Lockout
Percentage and (b) the Step Down Percentage.
LOCKOUT PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the sum of (I) the Lockout Percentage of the amount equal to the sum of
(a) the amount with respect to Mortgage Components in Group Two which is
referred to in clauses (i), (iii) and (iv) of the definition of Class A Group
Two Optimal Principal Amount and (b) the portion of the amount related to
Mortgage Components in Group Two which is referred to in clauses (i), (iii) and
(iv) of the definition of Subordinated Optimal Principal Amount and (II) the
Lockout Prepayment Percentage of the amount equal to the sum of (a) the amount
with respect to Mortgage Components in Group Two which is referred to in clauses
(ii) and (v) of the definition of Class A Group Two Optimal Principal Amount and
(b) the portion of the amount related to Mortgage Components in Group Two which
is referred to in clauses (ii) and (v) of the definition of Subordinated Optimal
Principal Amount.
LOWER-TIER REMIC: The Lower-Tier REMIC as described in Section 2.04.
LOWER-TIER REMIC INTEREST: Any one of the classes of Lower-Tier REMIC
Interests described in Section 2.04.
LOWER-TIER REMIC REGULAR INTEREST: Any one of the Lower-Tier REMIC
Interests other than the Class LT-R Interest.
LOWER-TIER REMIC SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated Principal Balances of each of the Lower-Tier REMIC Regular
Interests ending with the designation "A" that is equal to the ratio among, with
respect to each such Lower-Tier REMIC Regular Interest, the excess of (x) the
aggregate Scheduled Principal Balance of the Mortgage Loans or Mortgage
Components in the related Group over (y) the aggregate class principal amounts
of the Certificate Group related to such Group; provided that, for purposes of
this clause (y), the class principal amount of the Class IIA-4 Certificates
shall be increased by the excess of (i) the aggregate amounts distributed to the
Class IIA-4 Certificates from amounts withdrawn from the Rounding Account over
(ii) the sum of (a) the aggregate amounts replenished to the Rounding Account
and (b) the aggregate amounts distributed to the Class A-R Certificates pursuant
to the Class A Group Two Principal Payment Rules.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
24
MERS MORTGAGE LOAN: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of MERS
or otherwise assigned to MERS, as agent for the holder from time to time of the
Mortgage Note.
MIDDLE-TIER REMIC: The Middle-Tier REMIC as described in Section 2.04.
MIDDLE-TIER REMIC INTEREST: Any one of the classes of Middle-Tier REMIC
Interests described in Section 2.04.
MIDDLE-TIER REMIC REGULAR INTEREST: Any one of the Middle-Tier REMIC
Interests other than the Class MT-R Interest.
MODIFIED MORTGAGE LOAN: Any Mortgage Loan which the Servicer has
modified pursuant to Section 5.01.
MONTHLY PAYMENT: The minimum required monthly payment of principal and
interest due on a Mortgage Loan as specified in the Mortgage Note for any Due
Date (before any adjustment to such scheduled amount by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace period).
Monthly Payments shall be deemed due on an Outstanding Mortgage Loan until such
time as it becomes a Liquidated Mortgage Loan.
XXXXX'X: Xxxxx'x Investors Service, Inc. or its successor in interest.
MORTGAGE: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument creating a first lien or a first
priority ownership interest in an estate in fee simple in real property securing
a Mortgage Note. With respect to a Co-op Loan, the security agreement creating a
security interest in the stock allocated to a dwelling unit in a residential
cooperative housing corporation and pledged to secure such Co-op Loan and the
related Co-op Lease.
MORTGAGE COMPONENT: Each portion of a Mortgage Loan allocated to a
Group pursuant to Section 2.07.
MORTGAGE FILE: As to each Mortgage Loan, the items referred to in
Exhibit B annexed hereto.
MORTGAGE LOAN: An individual mortgage loan and all rights with respect
thereto, evidenced by a Mortgage and a Mortgage Note, sold and assigned by the
Depositor to the Trustee and which is subject to this Agreement and included in
the Trust Fund. The Mortgage Loans originally sold and subject to this Agreement
are identified on the Mortgage Loan Schedule.
MORTGAGE LOAN SCHEDULE: The schedule of Mortgage Loans attached hereto
as Exhibit A as it may be amended in accordance with Section 3.03, setting forth
the following information as to each Mortgage Loan: (i) the Mortgage Loan
identifying number; (ii) the city, state and zip code of the Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan); (iii) an
indication of whether the Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property, in the case of a Co-op Loan)
is owner-occupied; (iv) the property type of the Mortgaged Property (or the
related residential dwelling unit in the Underlying Mortgaged Property, in the
case of a Co-op Loan); (v) the original number of months to stated maturity;
(vi) the number of months remaining to stated maturity from the Cut-off Date;
(vii) the original Loan-to-Value Ratio; (viii) the original principal balance of
the Mortgage Loan; (ix) the unpaid principal balance of the Mortgage Loan as of
the close of business on the Cut-off Date; (x) the Mortgage Rate; and (xi) the
amount of the current Monthly Payment.
25
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
MORTGAGE POOL: The pool of Mortgage Loans held in the Trust Fund.
MORTGAGE POOL PRINCIPAL BALANCE: As of any date of determination, the
aggregate of the Principal Balances of each Outstanding Mortgage Loan on such
date of determination less the principal portion of any Monthly Payment due but
not paid with respect to which an Advance has not been made, initially
$325,000,070.63.
MORTGAGED PROPERTY: The property securing a Mortgage Note.
MORTGAGE RATE: With respect to each Mortgage Loan, the per annum rate
of interest borne by the Mortgage Loan, as specified in the Mortgage Note. The
Mortgage Rate for any Mortgage Loan shall be zero with respect to the period
prior to the period during which interest accrues with respect to such Mortgage
Loan's first Monthly Payment.
MORTGAGOR: The obligor on a Mortgage Note.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
NET MORTGAGE RATE: With respect to each Mortgage Loan, a per annum rate
of interest for the applicable period equal to the Mortgage Rate less (i) the
Servicing Fee Rate and (ii) in the case of a substitute Mortgage Loan, any
excess of the Mortgage Rate on the substitute Mortgage Loan over the Mortgage
Rate on the removed Mortgage Loan.
NON-MERS MORTGAGE LOAN: Any Mortgage Loan other than a MERS Mortgage
Loan.
NONRECOVERABLE ADVANCE: Any Advance previously made or proposed to be
made in respect of a Mortgage Loan by the Servicer pursuant to Section 6.03
which, in the good faith judgment of the Servicer, will not or, in the case of a
proposed Advance, would not, ultimately be recoverable by the Servicer from Late
Collections or otherwise. The determination by the Servicer that it has made, or
would be making, a Nonrecoverable Advance shall be evidenced by a certificate of
a Servicing Officer of the Servicer delivered to the Trustee, any co-trustee and
the Depositor and detailing the reasons for such determination.
OFFICERS' CERTIFICATE: A certificate signed by two of the Chairman of
the Board, the Vice Chairman of the Board, the President or a Vice President,
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries or any other duly authorized officer of the Depositor or the
Servicer, and delivered to the Trustee.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer and who is reasonably acceptable to the
Trustee.
ORIGINAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates or Component, the amount specified for such Class or Component in
Section 4.01(d).
ORIGINAL CLASS A PRINCIPAL BALANCE: $315,898,288.00.
ORIGINAL CLASS A GROUP ONE PRINCIPAL BALANCE: $35,770,000.00.
ORIGINAL CLASS A GROUP THREE PRINCIPAL BALANCE: $156,045,100.00.
26
ORIGINAL CLASS A GROUP TWO PRINCIPAL BALANCE: $123,893,000.00.
ORIGINAL CLASS M PRINCIPAL BALANCE: $4,226,000.00.
ORIGINAL CLASS B PRINCIPAL BALANCE: $4,875,782.00.
ORIGINAL CREDIT SUPPORT: With respect to any Class of Subordinated
Certificates (other than the Class B-5 Certificates), the level of Credit
Support indicated below:
Class M: 1.50%
Class B-1: 0.90%
Class B-2: 0.55%
Class B-3: 0.35%
Class B-4: 0.20%
OUTSTANDING CERTIFICATE GROUP: With respect to any Distribution Date,
any Certificate Group whose aggregate Outstanding Certificate Principal Balance
is greater than $0 on any prior Distribution Date.
ORIGINAL SUBORDINATED PRINCIPAL BALANCE: The aggregate Original
Certificate Principal Balance of the Subordinated Certificates.
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE: With respect to any Class
(other than the Class IIA-6, Class IIA-7 and Class A-X Certificates) of
Certificates and any Distribution Date, the Original Certificate Principal
Balance of such Class minus the sum of (i) any distributions of principal made
on such Class prior to such Distribution Date and (ii) any Realized Losses
allocated to such Class prior to such Distribution Date; provided, however, that
(I) with respect to the Class of Class B Certificates then outstanding having
the highest numerical class designation, the Outstanding Certificate Principal
Balance of such Class shall equal the excess of the Mortgage Pool Principal
Balance (together with the principal portion of any Monthly Payment due but not
paid with respect to which an Advance has not been made) over the sum of the
Outstanding Certificate Principal Balances of all Classes of Certificates (other
than the Class of Class B Certificates then outstanding having the highest
numerical class designation); and (II) during such time as the Outstanding
Certificate Principal Balance of the Class B-1 Certificates equals zero, with
respect to the Class M Certificates, the Outstanding Certificate Principal
Balance of such Class shall equal the excess of the Mortgage Pool Principal
Balance (together with the principal portion of any Monthly Payment due but not
paid with respect to which an Advance has not been made) over the Class A
Principal Balance.
OUTSTANDING MORTGAGE LOAN: As to any Distribution Date, a Mortgage Loan
which was not paid in full during the related or any previous Principal
Prepayment Period, which did not become a Liquidated Mortgage Loan during the
related or any previous Principal Prepayment Period and which was not
repurchased under Section 2.02, 3.01, 5.01, 5.21 or 11.01 during the related or
any previous Principal Prepayment Period.
PASS-THRU ENTITY: A "Pass-Thru Entity" as defined in Section 860E(e)(6)
of the Code.
PAYING AGENT: The Person appointed by the Trustee as Paying Agent
pursuant to Section 4.05.
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PERCENTAGE INTEREST: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made hereunder, such
percentage interest being equal, with respect to any Class, to the percentage
obtained by dividing the Outstanding Certificate Principal Balance (or the Class
IIA-6 Notional Amount, the Class IIA-7 Notional Amount or the Class A-X Notional
Amount, in the case of the Class IIA-6 Certificates, Class IIA-7 Certificates or
Class A-X Certificates, respectively), of such Certificate by the aggregate of
the Outstanding Certificate Principal Balances (or the Class IIA-6 Notional
Amount, the Class IIA-7 Notional Amount or the Class A-X Notional Amount, in the
case of the Class IIA-6 Certificates, Class IIA-7 Certificates or Class A-X
Certificates, respectively) of all the Certificates of such Class and with
respect to all Certificates, the percentage obtained by dividing the Outstanding
Certificate Principal Balance of such Certificate by the aggregate of the
Outstanding Certificate Principal Balances of all the Certificates.
PERMITTED ACTIVITIES: The primary activities of the Trust created
pursuant to this Agreement which shall be: (i) holding Mortgage Loans
transferred from the Depositor and other assets of the Trust Fund, including any
credit enhancement and passive derivative financial instruments that pertain to
beneficial interests issued or sold to parties other than the Depositor, its
Affiliates, or its agents; (ii) issuing certificates and other interests in the
assets of the Trust Fund; (iii) receiving collections on the Mortgage Loans and
making payments on such certificates and interests in accordance with the terms
of this Agreement; and (iv) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which activities cannot be
contrary to the status of the Trust Fund as a qualified special purpose entity
under existing accounting literature.
PERSON: Any individual, corporation, partnership, limited liability
company, limited liability partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
PRIMARY INSURANCE POLICY: Each primary policy of mortgage guaranty
insurance or any replacement policy therefor referred to in Section 5.15 hereof.
PRINCIPAL BALANCE: At the time of any determination, the principal
balance of a Mortgage Loan remaining to be paid at the close of business on the
Cut-off Date (after deduction of all principal payments due on or before the
Cut-off Date whether or not paid) (or, in the case of a substitute Mortgage Loan
included in the Trust Fund pursuant to Section 3.04, the close of business as of
the date of substitution) reduced by all amounts previously distributed to
Certificateholders that are allocable to payments of principal on such Mortgage
Loan (including the principal portion of Advances of the Servicer made pursuant
to Section 6.03).
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan (other than Late Collections) which is received other than as part
of a monthly payment; provided, however, that the term Principal Prepayment does
not include Insurance Proceeds, Liquidation Proceeds, condemnation awards or
other cash proceeds from a source other than the applicable Mortgagor.
PRINCIPAL PREPAYMENT PERIOD: With respect to any Distribution Date, the
period beginning on the first day of the month preceding the month in which such
Distribution Date occurs and ending on the last day of such month.
PURCHASE PRICE: With respect to any Mortgage Loan required to be
purchased on any date pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an
amount equal to the sum of (a) 100% of the Principal Balance thereof, (b) unpaid
accrued interest at the Mortgage Rate thereon from the Due Date on which
interest was last paid by the Mortgagor or Advanced by the Servicer to the Due
Date next following the date of repurchase, (c) the aggregate of any
unreimbursed Advances and any unreimbursed Servicing Advances and (d) any
unreimbursed costs, penalties and/or damages incurred by the Trust Fund and/or
the Trustee in connection with any violation relating to such Mortgage Loan of
any predatory or abusive lending law.
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QUALIFIED INSURER: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by FNMA and
FHLMC and whose claims-paying ability is rated in the two highest rating
categories by S&P and Xxxxx'x with respect to primary mortgage insurance and in
the two highest rating categories for general policyholder rating and financial
performance index rating by A.M. Best Company or its successor in interest with
respect to hazard and flood insurance.
RATING AGENCY: Any nationally recognized statistical rating
organization, or its successor, that rated one or more Classes of Certificates
at the request of the Depositor at the time of the initial issuance of the
Certificates. If such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Servicer. References
herein to the two highest long-term debt rating categories of a Rating Agency
shall mean AA or better, in the case of S&P and Fitch Ratings and Aa or better
in the case of Moody's.
REALIZED LOSS: With respect to (i) a Liquidated Mortgage Loan, the
amount, if any, by which the unpaid Principal Balance and accrued interest
thereon at a rate equal to the Net Mortgage Rate exceeds the amount actually
recovered by the Servicer with respect thereto (net of reimbursement of Advances
and Servicing Advances) at the time such Mortgage Loan became a Liquidated
Mortgage Loan or (ii) with respect to a Mortgage Loan which is not a Liquidated
Mortgage Loan, any amount of principal that the Mortgagor is no longer legally
required to pay (except for the extinguishment of debt that results from the
exercise of remedies due to default by the Mortgagor).
REALIZED LOSS INTEREST SHORTFALL: The meaning specified in Section
6.05(c).
RECORD DATE: The close of business of the last Business Day of the
month preceding the month of the related Distribution Date.
RELEVANT MORTGAGE LOAN: The meaning specified in Section 5.01.
REMIC: A "real estate mortgage investment conduit," as such term is
defined in Section 860D of the Code. References herein to "a REMIC" or "the
REMICs" shall mean one or all, as the context requires, of the REMICs created
hereunder.
REMIC POOL: Each of the Lower-Tier REMIC, the Middle-Tier REMIC and the
Upper-Tier REMIC.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
REMICs which appear at Sections 860A through 860G of Part IV of Subchapter M of
Chapter 1 of Subtitle A of the Code, and related provisions, and U.S. Department
of the Treasury temporary, proposed or final regulations and rulings promulgated
thereunder, as the foregoing are in effect (or with respect to proposed
regulations, are proposed to be in effect) from time to time.
REMITTANCE RATE: The Group One Remittance Rate, the Group Two
Remittance Rate or the Group Three Remittance Rate, as applicable.
REPURCHASE PROCEEDS: All proceeds of any Mortgage Loan or property
acquired in respect thereof repurchased pursuant to Section 2.02, 3.01, 5.01,
5.21 or 11.01.
RESIDUAL INTEREST: The interest represented by (i) amounts, if any,
remaining in the Collection Account following termination of the Trust Fund
after payments to the Class A Certificateholders (other than the Class A-R
Certificateholders), the Class M Certificateholders and the Class B
Certificateholders and (ii) amounts paid on the Class A-R Certificates, other
than, in the case of both (i) and (ii), amounts attributable to the Class LT-R
Interest or the Class MT-R Interest.
29
RESPONSIBLE OFFICER: When used with respect to the Trustee, any senior
vice president, any vice president, any assistant vice president, any senior
trust officer, any trust officer or any other officer of the Trustee in its
Agency & Trust Office customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer in its Agency & Trust Office to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
ROUNDING ACCOUNT: The separate non-interest bearing trust account
established by deposit by Xxxxxxx, Sachs & Co., on or prior to the Closing Date
of $999.99 and maintained by the Servicer pursuant to Section 5.29, which
account shall bear a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Trustee on behalf of the
Holders of Class IIA-4 Certificates (or any other account serving a similar
function acceptable to the Rating Agencies), which account provides that the
Servicer may make, or cause to be made, withdrawals as provided in Section 5.29
hereof.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
or its successor in interest.
SALE AGREEMENT: The Mortgage Loan Sale Agreement dated as of February
25, 2004 between the Depositor and CMMC.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan as of
any Distribution Date, the unpaid principal balance of such Mortgage Loan as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such schedule by reason of bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) as of the Due Date in the month
preceding the month of such Distribution Date, or as the Cut-off Date, with
respect to the first (1st) Distribution Date, after giving effect to any
previously applied prepayments, the payment of principal due on such first day
of the month and any reduction of the principal balance of such Mortgage Loan by
a bankruptcy court, irrespective of any delinquency in payment by the related
Mortgagor.
SECTION 302 REQUIREMENTS: Any rules or regulations promulgated pursuant
to the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
SELLER: CMMC.
SERVICER: CMMC or any successor under this Agreement as herein
provided.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations and which are "unanticipated expenses" (within the meaning
of Treasury regulations section 1.860G-1(b)(3)(ii)) including, but not limited
to, the cost of (i) the preservation, restoration and protection of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) if the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
acquired in satisfaction of the Mortgage, (iv) taxes and assessments on the
Mortgaged Properties subject to the Mortgage Loans and (v) compliance with the
obligations under Section 5.21.
30
SERVICING FEE: The amount of the monthly fee paid for the servicing of
the Mortgage Loans, equal to, as of any Distribution Date, with respect to each
Mortgage Loan, one-twelfth of the Servicing Fee Rate of the Principal Balance
thereof as of the Determination Date in the preceding month, subject to
adjustment as provided in Section 6.05. The Servicing Fee shall be payable only
at the time of and with respect to those Mortgage Loans for which payment is in
fact made of the entire amount of the Monthly Payments that shall have come due
and only at the time such Monthly Payment shall be made. The right to receive
the Servicing Fee is limited to, and the Servicing Fee is payable solely from,
the interest portion of such Monthly Payments (or the interest portion of any
Principal Prepayment in full) collected by the Servicer, or as otherwise
provided under Section 5.09 or 5.23.
SERVICING FEE RATE: 0.2785% per annum.
SERVICING OFFICER: Any officer of the Servicer or any Sub-Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name appears on a written certificate listing servicing
officers furnished to the Trustee by the Servicer on or prior to the Closing
Date, and signed on behalf of the Servicer or any Sub-Servicer by its President,
any Vice President or its Treasurer, as such certificate may from time to time
be amended.
SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
SIMILAR LAW: The meaning specified in Section 4.02(d).
SINGLE CERTIFICATE: A Certificate of any Class that evidences the
smallest permissible original denomination for such Class of Certificates as
specified in Section 4.01(d).
SPECIAL HAZARD AMOUNT: Initially, $3,250,001. As of the first
anniversary of the Cut-off Date, the Special Hazard Amount shall be reduced, but
not increased, to the lesser of (i) the initial Special Hazard Amount less the
sum of all amounts allocated to the Subordinated Certificates in respect of
Special Hazard Losses on the Mortgage Loans during such year or (ii) the
Adjustment Amount for such anniversary. As of each subsequent anniversary of the
Cut-off Date, the Special Hazard Amount shall be reduced, but not increased, to
the lesser of (i) the Special Hazard Amount on the immediately preceding
anniversary of the Cut-off Date less the sum of all amounts allocated to the
Subordinated Certificates in respect of Special Hazard Losses on the Mortgage
Loans during such year and (ii) the Adjustment Amount for such anniversary. The
"Adjustment Amount" with respect to each anniversary of the Cut-off Date will be
equal to the greatest of (i) 1.00% multiplied by the aggregate outstanding
Principal Balance of the Mortgage Loans, (ii) the aggregate outstanding
Principal Balance of the Mortgage Loans secured by Mortgaged Properties located
in the California postal zip code area in which the highest percentage of
Mortgage Loans by Principal Balance are located and (iii) twice the outstanding
Principal Balance of the Mortgage Loan having the largest outstanding Principal
Balance.
SPECIAL HAZARD LOSS: With respect to any Mortgage Loan, any Realized
Loss or portion thereof resulting from direct physical loss or damage to the
related Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan), which is not insured against under the Standard Hazard Policy
required to be maintained hereunder.
STANDARD HAZARD POLICY: Each standard hazard insurance policy or
replacement therefor referred to in Section 5.16.
STARTUP DAY: The meaning specified in Section 2.04(a).
31
STEP DOWN PERCENTAGE: With respect to any Distribution Date, the
percentage indicated below:
Distribution Date Occurring in Step Down Percentage
------------------------------ --------------------
March 2004 through February 2009 0%
March 2009 through February 2010 30%
March 2010 through February 2011 40%
March 2011 through February 2012 60%
March 2012 through February 2013 80%
March 2013 and thereafter 100%
SUBORDINATED CERTIFICATES: The Class M and Class B Certificates,
referred to collectively.
SUBORDINATED OPTIMAL PRINCIPAL AMOUNT: With respect to any Distribution
Date, the lesser of (a) the aggregate Outstanding Certificate Principal Balance
of the Subordinated Certificates (before giving effect to any distributions of
principal on such Distribution Date) and (b)(1) the sum of: (i) the applicable
Subordinated Percentage of the of the principal portion of all Monthly Payments,
whether or not received, which were due during the related Due Period on
Mortgage Loans which were outstanding during such Due Period; (ii) the
Subordinated Prepayment Percentage of all Principal Prepayments made on any
Mortgage Loan during the related Principal Prepayment Period; (iii) with respect
to each Mortgage Loan not described in (iv) below, the applicable Subordinated
Percentage of the sum of the principal portion of all Insurance Proceeds,
condemnation awards and any other cash proceeds from a source other than the
applicable Mortgagor, to the extent required to be deposited in the Collection
Account pursuant to Section 5.08(d) and (e), which were received during the
related Principal Prepayment Period, net of related unreimbursed Servicing
Advances and net of any portion thereof which, as to any such Mortgage Loan,
constitutes Late Collections that have been the subject of an Advance on any
prior Distribution Date; (iv) with respect to each Mortgage Loan which has
become a Liquidated Mortgage Loan during the related Principal Prepayment
Period, an amount equal to the portion (if any) of the Net Liquidation Proceeds
with respect to such Liquidated Mortgage Loan (net of any unreimbursed Advances)
that was not included in the Class A Optimal Principal Amount with respect to
such Distribution Date; and (v) with respect to each Mortgage Loan repurchased
or purchased during the related Principal Prepayment Period pursuant to Section
2.02, 3.01, 5.01, 5.21 or 11.01, an amount equal to the applicable Subordinated
Prepayment Percentage of the principal portion of the Purchase Price (net of
amounts with respect to which a distribution of principal has previously been
made to the Subordinated Certificateholders) minus (2) the Class A-P Shortfall
Amount with respect to such Distribution Date.
SUBORDINATED PERCENTAGE: The Group One Subordinated Percentage, the
Group Two Subordinated Percentage or the Group Three Subordinated Percentage, as
the case may be.
SUBORDINATED PREPAYMENT PERCENTAGE: The Group One Subordinated
Prepayment Percentage, the Group Two Subordinated Prepayment Percentage or the
Group Three Subordinated Prepayment Percentage, as the case may be.
SUB-SERVICER: Any Person with whom the Servicer enters into a
Sub-Servicing Agreement.
SUB-SERVICING AGREEMENT: Any agreement between the Servicer and any
Sub-Servicer, relating to servicing or administration of certain Mortgage Loans
as provided in Section 5.02, in such form as has been approved by the Servicer
and the Depositor.
SUBSTITUTE EXCESS INTEREST: As defined in Section 3.03.
32
TRUST: The Trust created pursuant to this Agreement.
TRUST FUND: The corpus of the Trust consisting of (i) the Mortgage
Loans, (ii) such assets as shall from time to time be identified as deposited in
the Collection Account, the Certificate Account and the Rounding Account, (iii)
property which secured a Mortgage Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure, (iv) Standard Hazard Policies and
any other insurance policies, and the proceeds thereof and (v) any proceeds of
any of the foregoing.
TRUSTEE: Wachovia Bank, N.A., a national banking association and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party, and any successor trustee
at the time serving as successor trustee hereunder, appointed as herein
provided.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to any Lower-Tier REMIC
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 and (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such regular interest.
UPPER-TIER REMIC: The Upper-Tier REMIC as described in Section 2.04.
UPPER-TIER REMIC REGULAR INTERESTS: Each of the Classes of Certificates
(other than the Class A-R Certificates).
U.S. PERSON: A "United States Person" as defined in Section 7701(a)(30)
of the Code.
[END OF ARTICLE I]
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; TRUST FUND
Section 2.01. Conveyance of Mortgage Loans. The Depositor, concurrently
with the execution and delivery hereof, does hereby sell, transfer, assign, set
over and convey to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Mortgage Loans, including all interest
and principal received on or with respect to the Mortgage Loans on or after the
Cut-off Date (other than Monthly Payments due on the Mortgage Loans on or before
the Cut-off Date).
In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee the following documents or instruments with
respect to each Mortgage Loan so assigned:
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) Original Mortgage Note (or a lost note affidavit (including a copy
of the original Mortgage Note)) or (II) original consolidation, extension and
modification agreement (or a lost note affidavit (including a copy of the
original consolidation, extension and modification agreement)), in either case
endorsed "Pay to the order of Wachovia Bank, N.A., as trustee, without
recourse".
(B) The original Mortgage (including all riders thereto) with evidence
of recording thereon, or a copy thereof certified by the public recording office
in which such Mortgage has been recorded or, if the original Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Seller, of the original Mortgage together with a
certificate of the Seller certifying that the original Mortgage has been
delivered for recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located.
33
(ii) With respect to each Non-MERS Mortgage Loan which is not a Co-op Loan:
(A) The original Assignment of Mortgage to "Wachovia Bank, N.A., as
trustee (Chase Mortgage Finance Corporation)," which assignment shall be in form
and substance acceptable for recording, or a copy certified by the Seller as a
true and correct copy of the original Assignment of Mortgage which has been sent
for recordation. Subject to the foregoing, such assignments may, if permitted by
law, be by blanket assignments for Mortgage Loans covering Mortgaged Properties
situated within the same county. If the Assignment of Mortgage is in blanket
form, a copy of the Assignment of Mortgage shall be included in the related
individual Mortgage File.
(B) The original policy of title insurance, including riders and
endorsements thereto, or if the policy has not yet been issued, a written
commitment or interim binder or preliminary report of title issued by the title
insurance or escrow company.
(C) Originals of all recorded intervening Assignments of Mortgage, or
copies thereof, certified by the public recording office in which such
Assignments or Mortgage have been recorded showing a complete chain of title
from the originator to the Depositor, with evidence of recording, thereon, or a
copy thereof certified by the public recording office in which such Assignment
of Mortgage has been recorded or, if the original Assignment of Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage together
with a certificate of the Seller certifying that the original Assignment of
Mortgage has been delivered for recording in the appropriate public recording
office of the jurisdiction in which the Mortgaged Property is located.
(D) Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements, if
applicable, or if the original of such document has not been returned from the
applicable public recording office, a true certified copy, certified by the
Seller, of such original document together with certificate of Seller certifying
the original of such document has been delivered for recording in the
appropriate recording office of the jurisdiction in which the Mortgaged Property
is located.
(E) If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a Person on behalf
of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such Person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and complete
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original power
of attorney or other such instrument has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the Mortgaged
Property is located.
(iii) With respect to each Co-op Loan:
(A) (I) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II)
original consolidation, extension and modification agreement
(or a lost note affidavit (including a copy of the original
consolidation, extension and modification agreement)), in
either case endorsed "Pay to the order of Wachovia Bank, N.A.,
as trustee, without recourse."
34
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-Op Loan.
(C) The original Assignment of Mortgage to "Wachovia Bank, N.A. as
trustee (Chase Mortgage Finance Corporation)".
(D) Original assignments of Mortgage showing a complete chain of
assignment from the originator of the related Co-Op Loan to
the Seller.
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with
respect to such Co-Op Loan.
(F) Form UCC-3 (or copy thereof) by the applicable Mortgage Loan
Seller or its agent assigning the security interest covered by
such Form UCC-1 to "Wachovia Bank, N.A. as trustee", together
with all Forms UCC-3 (or copies thereof) showing a complete
chain of assignment from the originator of the related Co-op
Loan to the Seller, with evidence of recording thereon.
(G) Stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative
housing corporation and pledged by the related Mortgagor to
the originator of such Co-op Loan with a stock power in blank
attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee, and
all intervening assignments thereof.
(J) Original recognition agreement of the interests of the
mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was
pledged by the related Mortgagor to the originator of such
Co-op Loan.
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A)
through (F) above with respect to such Co-op Loan.
If in connection with any Mortgage Loan which is not a Co-op Loan the
Depositor cannot deliver the Mortgage, Assignments of Mortgage, or assumption,
consolidation or modification agreement, as the case may be, with evidence of
recording thereon concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage, or assumption, consolidation or modification
agreement, as the case may be, has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage, Assignments of Mortgage, or assumption, consolidation or
modification agreement, as the case may be, has been delivered to the
appropriate public recording office for recordation. Thereafter, the Depositor
shall deliver or cause to be delivered to the Trustee such Mortgage, Assignments
of Mortgage, or assumption, consolidation or modification agreement, as the case
may be, with evidence of recording indicated thereon upon receipt thereof from
the public recording office.
35
With respect to any Non-MERS Mortgage Loans which are not Co-op Loans,
and as to which the related Mortgaged Property is located in Florida, the
Servicer shall cause to be recorded in the appropriate public recording office
for real property records each Assignment of Mortgage referred to in this
Section 2.01 as soon as practicable. With respect to any Non-MERS Mortgage Loans
which are not Co-op Loans as to which the related Mortgaged Property is located
outside of Florida, the Servicer shall not be obligated to cause to be recorded
the Assignment of Mortgage referred to in this Section 2.01. With respect to
Co-op Loans as to which the related dwelling unit is located in Florida, the
Servicer shall cause to be filed in the appropriate filing office the Form UCC-3
referred to in this Section 2.01 as soon as practicable. With respect to any
Co-op Loans as to which the related dwelling unit is located outside Florida,
the Servicer shall not be obligated to cause to be filed the Form UCC-3 referred
to in this Section 2.01. While each such Assignment of Mortgage or Form UCC-3 is
being recorded or filed, as applicable, the Servicer shall deliver to the
Trustee a photocopy of such document. If any such Assignment of Mortgage or Form
UCC-3 is returned unrecorded or unfiled to the Servicer because of any defect
therein, the Servicer shall cause such defect to be cured and such document to
be recorded or filed in accordance with this paragraph. The Depositor shall
deliver or cause to be delivered each such original recorded or filed Assignment
of Mortgage and intermediate assignment or Form UCC-3 to the Trustee within 270
days of the Closing Date or shall deliver to the Trustee on or before such date
an Officer's Certificate stating that such document has been delivered to the
appropriate public recording or filing office for recording or filing, but has
not been returned solely because of a delay caused by such recording or filing
office. In any event, the Depositor shall use all reasonable efforts to cause
each such document with evidence of recording or filing thereon to be delivered
to the Trustee within 300 days of the Closing Date.
With respect to each MERS Mortgage Loan, the Trustee, at the expense of
the Depositor and at the direction and with the cooperation of the Servicer,
shall cause to be taken such actions as are necessary to cause the Trustee to be
clearly identified as the owner of each such Mortgage Loan on the records of
MERS for purposes of the system of recording transfers of beneficial ownership
of mortgages maintained by MERS.
The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee. Neither the Depositor nor
the Servicer shall take any action inconsistent with such ownership and shall
not claim any ownership interest therein. The Depositor and the Servicer shall
respond to any third party inquiries with respect to ownership of the Mortgage
Loans by stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee are and shall be held in trust by the Servicer or any
Sub-Servicer, for the benefit of the Trustee as the owner thereof, and the
Servicer's or such Sub-Servicer's possession of the contents of each Mortgage
File so retained is for the sole purpose of servicing the related Mortgage Loan,
and such retention and possession by the Servicer or such Sub-Servicer is in a
custodial capacity only. The Depositor agrees to take no action inconsistent
with the Trustee's ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no
ownership interest in the Mortgage Loans. Each Mortgage File and the mortgage
documents relating to the Mortgage Loans contain proprietary business
information of the Servicer and its customers. The Trustee and the Depositor
agree that they will not use such information for business purposes without the
express written consent of the Servicer and that all such information shall be
kept strictly confidential.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
36
In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee all of its right, title and interest in that portion of the Trust Fund
described in items (ii), (iii), (iv) and (v) of the definition thereof and
further assigns to the Trustee for the benefit of the Certificateholders those
representations and warranties of the Seller contained in the Sale Agreement and
described in Section 3.01 hereof and the benefit of the repurchase obligations
of the Seller described in Sections 2.02 and 3.01 hereof and the obligations of
the Seller contained in the Sale Agreement to take, at the request of the
Depositor or the Trustee, all action on its part which is reasonably necessary
to ensure the enforceability of a Mortgage Loan.
Section 2.02. Acceptance by Trustee. Except as set forth in the
Exception Report delivered contemporaneously herewith (the "Exception Report"),
the Trustee acknowledges receipt of the Mortgage Note for each Mortgage Loan and
delivery of a Mortgage File (but does not acknowledge receipt of all documents
required to be included in such Mortgage File) with respect to each Mortgage
Loan and declares that it holds and will hold such documents and any other
documents constituting a part of the Mortgage Files delivered to it in trust for
the use and benefit of all present and future Certificateholders. The Depositor
will cause the Seller to repurchase any Mortgage Loans to which an exception was
taken in the Exception Report unless such exception is cured to the satisfaction
of the Trustee within 45 Business Days of the Closing Date.
The Trustee agrees, for the benefit of Certificateholders, to review
each Mortgage File delivered to it within 270 days after the Closing Date to
ascertain that all documents required by Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans identified in
Exhibit A that have been conveyed to it. If the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective
(that is, mutilated, damaged, defaced or unexecuted) in any material respect,
the Trustee shall promptly (and in any event within no more than five Business
Days) after such finding so notify the Servicer, the Seller and the Depositor.
In addition, the Trustee shall also notify the Servicer, the Seller and the
Depositor, if (a) in examining the Mortgage Files, the documentation shows on
its face (i) any adverse claim, lien or encumbrance, (ii) that any Mortgage Note
was overdue or had been dishonored, (iii) any evidence on the face of any
Mortgage Note or Mortgage of any security interest or other right or interest
therein, or (iv) any defense against or claim to the Mortgage Note by any party
or (b) the original Mortgage with evidence of recording thereon with respect to
a Mortgage Loan is not received within 270 days of the Closing Date; provided,
however, that if the Depositor cannot deliver the original Mortgage with
evidence of recording thereon because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage has been delivered to the appropriate public recording
officer for recordation and thereafter the Depositor shall deliver or cause to
be delivered such Mortgage with evidence of recording thereon upon receipt
thereof from the public recording office. The Trustee shall request that the
Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 3.03, within 60
days from the date the Seller was notified of such omission or defect and, if
the Seller does not correct or cure such omission or defect within such period,
that the Seller purchase such Mortgage Loan from the Trustee within 90 days from
the date the Trustee notified the Seller of such omission, defect or other
irregularity at the Purchase Price of such Mortgage Loan. The Purchase Price for
any Mortgage Loan purchased pursuant to this Section 2.02 shall be paid to the
37
Servicer and deposited by the Servicer in the Collection Account promptly upon
receipt, and, upon receipt by the Trustee of written notification of such
deposit signed by a Servicing Officer, the Trustee shall promptly release to the
Seller the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, without recourse, as shall be necessary
to vest in the Seller or its designee, as the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility
with regard to such Mortgage Loan. It is understood and agreed that the
obligation of the Seller to purchase, cure or substitute any Mortgage Loan as to
which a material defect in or omission of a constituent document exists shall
constitute the sole remedy respecting such defect or omission available to the
Trustee on behalf of Certificateholders. The Trustee shall be under no duty or
obligation to inspect, review and examine such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable or
appropriate to the represented purpose, or that they have actually been
recorded, or that they are other than what they purport to be on their face. The
Trustee shall keep confidential the name of each Mortgagor and shall not solicit
any such Mortgagor for the purpose of refinancing the related Mortgage Loan.
Within 280 days of the Closing Date, the Trustee shall deliver to the
Depositor and the Servicer the Trustee's Certification, substantially in the
form of Exhibit G attached hereto, setting forth the status of the Mortgage
Files as of such date.
Section 2.03. Trust Fund; Authentication of Certificates. The Trustee
acknowledges and accepts the assignment to it of the Trust Fund created pursuant
to this Agreement in trust for the use and benefit of all present and future
Certificateholders. The Trustee acknowledges the assignment to it for the
benefit of the Trust Fund of the Mortgage Loans and has caused to be
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Mortgage Loans, Certificates duly authenticated by the Trustee or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent in authorized denominations evidencing ownership of the
entire Trust Fund.
Section 2.04. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to make
appropriate elections to treat the Trust Fund as comprising three REMICs (the
Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC). This
Agreement shall be construed so as to carry out the intention of the parties
that each REMIC created hereunder be treated as a REMIC at all times prior to
the date on which the Trust Fund is terminated. The Closing Date is hereby
designated as the "startup day" of each REMIC created hereunder within the
meaning of Section 860G(a)(9) of the Code. The Lower-Tier REMIC shall hold as
assets all property of the Trust Fund other than the Lower-Tier REMIC Interests,
the Middle-Tier REMIC Interests and the Rounding Account. Each of the Lower-Tier
REMIC Regular Interests is hereby designated a "regular interest" (within the
meaning of Section 860G(a)(1) of the Code) in the Lower-Tier REMIC. The
Middle-Tier REMIC shall hold as assets the several classes of uncertificated
Lower-Tier REMIC Regular Interests (other than the Class LTIIIA-X Interest).
Each of the Middle-Tier REMIC Regular Interests is hereby designated a "regular
interest" (within the meaning of Section 860G(a)(1) of the Code) in the
Middle-Tier REMIC. The Upper-Tier REMIC shall hold as assets the several classes
of uncertificated Middle-Tier REMIC Regular Interests, the Class LTIIIA-X
Interest and the Rounding Account. Each of the Upper-Tier REMIC Regular
Interests is hereby designated as a "regular interest" (within the meaning of
Section 860G(a)(1) of the Code) in the Upper-Tier REMIC. The Class LT-R Interest
is hereby designated as the sole residual interest (within the meaning of
Section 860G(a)(2) of the Code) in the Lower-Tier REMIC. The Class MT-R Interest
is hereby designated as the sole residual interest (within the meaning of
Section 860G(a)(2) of the Code) in the Middle-Tier REMIC. The Residual Interest
is hereby designated as the sole residual interest (within the meaning of
Section 860G(a)(2) of the Code) in the Upper-Tier REMIC. The Class A-R
Certificate evidences ownership of the Class LT-R Interest, the Class MT-R
Interest and the Residual Interest. All interests described in this Section
2.04(a) shall be designated as such on the Startup Day.
38
Lower-Tier REMIC
The following table specifies the class designation, interest rate and
principal amount for each class of Lower-Tier REMIC Interest.
-----------------------------------------------------------------------------------------------------------------
Lower-Tier REMIC Interest Initial Balance Pass-Through Rate Related Group
------------------------- --------------- ----------------- -------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
LTA-P $190,188.63823321 0.00% Group A-P
-----------------------------------------------------------------------------------------------------------------
LTIA $10,362.99382975 5.00% Group One
-----------------------------------------------------------------------------------------------------------------
LTIB $36,795,936.38914566 5.00% Group One
-----------------------------------------------------------------------------------------------------------------
LTIIA $35,694.47419691 5.50% Group Two
-----------------------------------------------------------------------------------------------------------------
LTIIB $127,426,752.94549407 5.50% Group Two
-----------------------------------------------------------------------------------------------------------------
LTIIIA $44,960.35229100 6.00% Group Three
-----------------------------------------------------------------------------------------------------------------
LTIIIB $160,496,174.87680939 6.00% Group Three
-----------------------------------------------------------------------------------------------------------------
LTIIIA-X (1) 6.00% Group Three
-----------------------------------------------------------------------------------------------------------------
LT-R (2) (2) N/A
-----------------------------------------------------------------------------------------------------------------
(1) The Class LTIIIA-X Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest on its
notional amount. The notional amount of the Class LTIIIA-X Interest shall equal
the Class A-X Notional Amount.
(2) The Class LT-R Interest shall represent the sole class of residual interest
in the Lower-Tier REMIC. The Class LT-R Interest will not have a principal
amount or an interest rate. The Class LT-R Interest shall be represented by the
Class A-R Certificate.
Interest shall be payable to, and shortfalls and losses are allocable to, the
Class LTIIIA-X Interest as such amounts are payable or allocable to the Class
A-X Certificates.
Principal shall be payable to, and shortfalls, losses and prepayments are
allocable to, the Class LTA-P Interest as such amounts are payable or allocable
to the Class A-P Certificates (determined as though the aggregate original
principal amount of the Class A-P Certificates was $190,188.63823321).
After the foregoing allocations and distributions are made to the Class LTIIIA-X
Interest and the Class LTA-P Interest, distributions shall be deemed to be made
to the other Lower-Tier REMIC Regular Interests first, so as to keep the
Uncertificated Principal Balance of each Lower-Tier REMIC Regular Interest
ending with the designation "A" equal to 1% of the excess of (x) the aggregate
Principal Balance of the Mortgage Components in the related Group over (y) the
aggregate class principal amounts of the Certificate Group related to such
Group; provided that, for purposes of this clause (y), the class principal
amount of the Class IIA-4 Certificates shall be increased by the excess of (i)
the aggregate amounts distributed to the Class IIA-4 Certificates from amounts
withdrawn from the Rounding Account over (ii) the sum of (a) the aggregate
amounts replenished to the Rounding Account and (b) amounts distributed to the
Class A-R Certificates pursuant to the "Class A Group Two Principal Payment
Rules" (except that if 1% of any excess of clause (x) over clause (y) described
above in this sentence is greater than the principal amount of the corresponding
Lower-Tier REMIC Regular Interest ending with the designation "A", the least
amount of principal shall be distributed to such Lower-Tier REMIC Regular
Interests such that the Lower-Tier REMIC Subordinated Balance Ratio is
maintained); and second, any remaining principal to the Lower-Tier REMIC Regular
Interests ending with the designation "B" in such a manner that the remaining
principal balance of each such Lower-Tier REMIC Regular Interest equals the
excess of the aggregate Principal Balance of the Mortgage Components in the
related Group over the sum of the Uncertificated Principal Balances of the
Lower-Tier REMIC Regular Interests ending with the designation "A" which are
related to such Group. Realized Losses not allocated to the Class LTIIIA-X
Interest and the Class LTA-P Interest shall be applied after all distributions
39
have been made on each Distribution Date first, so as to keep the Uncertificated
Principal Balance of each Lower-Tier REMIC Regular Interest ending with the
designation "A" equal to 1% of the excess of (x) the aggregate Principal Balance
of the Mortgage Components in the related Group over (y) the aggregate class
principal amounts of the Certificate Group related to such Group; provided that,
for purposes of this clause (y), the class principal amount of the Class IIA-4
Certificates shall be increased by the excess of (i) the aggregate amounts
distributed to the Class IIA-4 Certificates from amounts withdrawn from the
Rounding Account over (ii) the sum of (a) the aggregate amounts replenished to
the Rounding Account and (b) amounts distributed to the Class A-R Certificates
pursuant to the "Class A Group Two Principal Payment Rules" (except that if 1%
of any excess of clause (x) over clause (y) described above in this sentence is
greater than the principal amount of the corresponding Lower-Tier REMIC Regular
Interest ending with the designation "A", the least amount of Realized Losses
shall be allocated to such Lower-Tier REMIC Regular Interests such that the
Lower-Tier REMIC Subordinated Balance Ratio is maintained); and second, the
remaining Realized Losses shall be allocated to the Lower-Tier REMIC Regular
Interests ending with the designation "B" in such a manner that the remaining
principal balance of each such Lower-Tier REMIC Regular Interest equals the
excess of the aggregate Principal Balance of the Mortgage Components in the
related Group over the sum of the Uncertificated Principal Balances of the
Lower-Tier REMIC Regular Interests ending with the designation "A" which are
related to such Group.
All computations with respect to the Lower-Tier REMIC Interests shall be taken
out to eight decimal places.
Middle-Tier REMIC
The following table specifies the class designation, interest rate,
principal amount and Classes of corresponding certificates for each class of
Middle-Tier REMIC Interest:
Middle-Tier Pass-Through Corresponding
REMIC Interest Initial Balance Rate Certificates
-------------- --------------- ------------ -------------
MTA-P $190,188.63823321 0.00% Class A-P
MTIA-1 $35,770,000.00000000 5.00% Class XX-0
XXXXX-0 $64,218,000.00000000 5.50% Class IIA-1, Class
IIA-7
MTIIA-2 $29,521,000.00000000 5.50% Class IIA-2
MTIIA-3 $12,345,000.00000000 5.50% Class IIA-3, Class
IIA-6
MTIIA-4 $5,419,700.00000000 5.50% Class IIA-4
MTIIA-5 $12,389,300.00000000 5.50% Class IIA-5
MTIIIA-1 $156,045,000.00000000 6.00% Class IIIA-1
MTA-R $100.00000000 6.00% Class A-R
MTM $4,226,000.00000000 (1) Class M
MTB-1 $1,950,000.00000000 (1) Class B-1
MTB-2 $1,138,000.00000000 (1) Class B-2
MTB-3 $650,000.00000000 (1) Class B-3
MTB-4 $487,000.00000000 (1) Class B-4
MTB-5 $650,782.03176679 (1) Class B-5
MT-R (2) (2) N/A
--------------
(1) For any Distribution Date, the interest rate for the Class MTM
Interest, Class MTB-1 Interest, Class MTB-2 Interest, Class MTB-3
Interest, Class MTB-4 Interest and Class MTB-5 Interest shall be a per
annum rate equal to the weighted average of the interest rates on the
Class LTIA Interest, the Class LTIIA Interest and the Class LTIIIA
Interest weighted on the basis of their principal amounts immediately
prior to such Distribution Date.
(2) The Class MT-R Interest shall represent the sole class of residual
interest in the Middle-Tier REMIC. The Class MT-R Interest will not
have a principal amount or an interest rate. The Class MT-R Interest
shall be represented by the Class A-R Certificate.
40
Principal and interest shall be payable to, and shortfalls, losses and
prepayments are allocable to, the Middle-Tier REMIC Regular Interests as such
amounts are payable and allocable to the corresponding certificates under this
Agreement (excluding Section 6.01(a)(v) hereof). Notwithstanding the preceding
sentence, (i) the first $0.63 of losses on Mortgage Components in Group A-P
shall be allocated to the Class MTA-P Interest, (ii) immediately preceding any
payment to the Class A-R Certificate pursuant to Section 6.01(a)(v) attributable
to principal received with respect to any Mortgage Component in Group A-P, a
payment shall be treated as made to the Class MTA-P Interest in reduction of the
principal balance thereof, if any, to zero, (iii) the first $0.04 of losses with
respect to principal on Mortgage Components in any Group other than Group A-P
shall be allocated to the Class MTB-5 Interest and (iv) immediately preceding
any payment to the Class A-R Certificate pursuant to Section 6.01(a)(v)
attributable to principal received with respect to any Mortgage Component in any
Group other than Group A-P, a payment shall be treated as made to the Class
MTB-5 Interest in reduction of the principal balance thereof, if any, to zero.
(b) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury Regulations, the "latest possible maturity date" of each "regular
interest" in each REMIC created hereunder is the Distribution Date immediately
following the latest scheduled maturity of any Mortgage Loan.
(c) The "tax matters person" with respect to each REMIC created
hereunder for purposes of the REMIC Provisions shall be the beneficial owner of
the Class A-R Certificate having the largest Percentage Interest of such Class;
provided, however, that such largest beneficial owner and, to the extent
relevant, each other Holder of a Class A-R Certificate, by its acceptance
thereof, irrevocably appoints the Servicer as its agent and attorney-in-fact to
act as "tax matters person" with respect to each REMIC created hereunder for
purposes of the REMIC provisions.
(d) It is intended that each REMIC created hereunder shall constitute,
and that the affairs of the Trust Fund shall be conducted so as to qualify each
REMIC created hereunder as, a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Servicer covenants and agrees that it shall act as agent (and the
Servicer is hereby appointed to act as agent) on behalf of the Trust Fund, each
REMIC created hereunder and the Holder of the Class A-R Certificate and that in
such capacity it shall:
(i) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income
Tax Return (Form 1066) for each REMIC created hereunder and prepare and
file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to each REMIC
created hereunder, using the calendar year as the taxable year and the
accrual method of accounting, containing such information and at the
times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and shall furnish or cause to be
furnished to Certificateholders the schedules, statements or
information at such times and in such manner as may be required
thereby;
(ii) within thirty days of the Closing Date, shall furnish or
cause to be furnished to the Internal Revenue Service, on Form 8811 or
as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may
contact for tax information relating thereto (and the Servicer shall
act as the representative of the Trust Fund for this purpose), together
with such additional information as may be required by such Form, and
shall update such information at the time or times in the manner
required by the Code;
(iii) make or cause to be made an election, on behalf of each
REMIC created hereunder, to be treated as a REMIC, and make the
appropriate designations, if applicable, in accordance with this
Section 2.04 on the federal tax return of each REMIC hereunder for its
first taxable year (and, if necessary, under applicable state law);
(iv) prepare and forward, or cause to be prepared and forwarded,
to the Certificateholders and to the Internal Revenue Service and, if
necessary, state tax authorities, all information returns or reports,
or furnish or cause to be furnished by telephone, mail, publication or
other appropriate method such information, as and when required to be
provided to them in accordance with the REMIC Provisions, including
without limitation, the calculation of any original issue discount;
41
(v) provide information necessary for the computation of tax
imposed on the transfer of the Class A-R Certificate to a Disqualified
Organization, or an agent (including a broker, nominee or other
middleman) of a Disqualified Organization, or a pass-through entity in
which a Disqualified Organization is the record holder of an interest
(the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax);
(vi) ensure that federal, state or local income tax or information
returns shall be signed by the Trustee or such other Person as may be
required to sign such returns by the Code or state or local laws,
regulations or rules; and
(vii) maintain such records relating to each REMIC created
hereunder as may be required by the Code and as may be necessary to
prepare the foregoing returns, schedules, statements or information.
(e) Pursuant to Section 6.02(b), the Servicer, with the consent of the
Trustee, hereby appoints the Global Debt department of Chase to perform the
duties enumerated in (d) above.
Section 2.05. Permitted Activities of Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities.
Section 2.06. Qualifying Special Purpose Entity. For purposes of SFAS
140, the parties hereto intend that the Trust shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.05 of this Agreement
shall be limited in accordance with paragraph 35 thereof.
Section 2.07. Mortgage Components. For purposes of allocating principal
distributions and losses with respect to principal among the Certificates, the
Mortgage Loans will be divided into Mortgage Components. Each Mortgage Loan
having a Net Mortgage Rate of less than 5.00% will, for purposes of allocating
principal, be deemed to have been split into a Mortgage Component accruing
interest at 0.00% (which will be deemed to be part of Group A-P) and a Mortgage
Component accruing interest at 5.00% (which will be deemed to be part of Group
One). Each Mortgage Loan having a Net Mortgage Rate of greater than or equal to
5.00% and less than 5.50% will, for purposes of allocating principal, be deemed
to have been split into a Mortgage Component accruing interest at 5.00% (which
will be deemed to be part of Group One) and a Mortgage Component accruing
interest at 5.50% (which will be deemed to be part of Group Two). Each Mortgage
Loan having a Net Mortgage Rate of greater than or equal to 5.50% and less than
6.00% will, for purposes of allocating principal, be deemed to have been split
into a Mortgage Component accruing interest at 5.50% (which will be deemed to be
part of Group Two) and a Mortgage Component accruing interest at 6.00% (which
will be deemed to be part of Group Three). Group Three will also include any
Mortgage Loans with a Net Mortgage Rate greater than or equal to 6.00% for
purposes of allocating principal collections. The principal balances of the
Mortgage Components will be such that the weighted average Net Mortgage Rate of
the related Mortgage Components shall equal the Net Mortgage Rate of the related
Mortgage Loan.
[END OF ARTICLE II]
42
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND
THE SERVICER; REPURCHASE OF MORTGAGE LOANS
Section 3.01. Representations and Warranties of the Depositor with
respect to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that on the Closing Date it has entered into
the Sale Agreement with CMMC as Seller, that the Seller has made the following
representations and warranties with respect to each Mortgage Loan in such Sale
Agreement as of the Closing Date, which representations and warranties run to
and are for the benefit of the Depositor and the Trustee for the benefit of the
Certificateholders, and as to which the Depositor has assigned to the Trustee
for the benefit of the Certificateholders, pursuant to Section 2.01 hereof, the
right to cause the Seller to repurchase a Mortgage Loan as to which there has
occurred an uncured breach of representations and warranties in accordance with
the provisions of the Sale Agreement.
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct in all material respects;
(b) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a Co-op Loan, the related Mortgage is a valid, enforceable and
subsisting first security interest on the related cooperative shares securing
the related Mortgage Note, subject only to (a) liens of the related residential
cooperative housing corporation for unpaid assessments representing the
Mortgagor's pro rata share of the related residential cooperative housing
corporation's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject and (b) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the related security
agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Trustee's security interest in such cooperative shares;
(c) All payments due prior to the Cut-off Date for such Mortgage Loan
have been made as of the Closing Date, the Mortgage Loan is not delinquent in
payment more than 30 days and has not been dishonored; to the best of the
Seller's knowledge, there are no material defaults under the terms of the
Mortgage Loan; the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage (or, with respect to a Co-op Loan,
the related Mortgagor), directly or indirectly, for the payment of any amount
required by the Mortgage Loan; there has been no more than one delinquency in
excess of 30 days during the preceding twelve-month period;
(d) To the best of the Seller's knowledge, all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid,
or escrow funds have been established in an amount sufficient to pay for every
such escrowed item which remains unpaid and which has been assessed but is not
yet due and payable;
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments. No Mortgagor has been released, in whole or in part, from the terms
thereof except in connection with an assumption agreement and which assumption
agreement is part of the Mortgage File and the terms of which are reflected in
the Mortgage Loan Schedule;
43
(f) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or Mortgage, or the exercise of any right thereunder, render the Mortgage
Note or Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto, and the Mortgagor was not a debtor in any state
or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(g) With respect to a Mortgage Loan which is not a Co-op Loan, all
buildings or other customarily insured improvements upon the Mortgaged Property
are insured by an insurer acceptable under the FNMA Guides against loss by fire,
hazards of extended coverage and such other hazards as are provided for in the
FNMA Guides or by FHLMC. All such standard hazard policies are in full force and
effect and on the date of origination contained a standard mortgagee clause
naming the Seller and its successors in interest and assigns as loss payee and
such clause is still in effect and all premiums due thereon have been paid. If
required by the Flood Disaster Protection Act of 1973, as amended, the Mortgaged
Property is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration which policy conforms
to FNMA and FHLMC requirements. The Mortgage obligates the Mortgagor thereunder
to maintain all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(h) Any and all requirements of any federal, state or local laws and
all applicable predatory and abusive lending laws, including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with in all material respects;
(i) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission;
(j) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property, including, all buildings on the Mortgaged Property. The
Mortgage and the Mortgage Note do not contain any evidence of any security
interest or other interest or right thereto. Such lien is free and clear of all
adverse claims, liens and encumbrances having priority over the first lien of
the Mortgage subject only to (1) the lien of non-delinquent current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording which are acceptable to mortgage
lending institutions generally and either (A) which are referred to or otherwise
considered in the appraisal made for the originator of the Mortgage Loan, or (B)
which do not adversely affect the Appraised Value of the Mortgaged Property as
set forth in such appraisal, and (3) 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 the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, subsisting, enforceable and
perfected first lien and first priority security interest on the property
described therein, and the Depositor has the full right to sell and assign the
same to the Trustee for the benefit of the Certificateholders;
44
(k) The Mortgage Note and the related Mortgage are original and genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in all respects in accordance with its terms subject to bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors and the Depositor has taken all action necessary to transfer such
rights of enforceability to the Trustee for the benefit of the
Certificateholders. All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage have been
duly and property executed by such parties. The proceeds of the Mortgage Loan
have been fully disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow funds therefor have
been complied with;
(l) The Seller is the sole owner and holder of the Mortgage Loan and
the indebtedness evidenced by the Mortgage Note, except for the Assignments of
Mortgage which have been sent for recording, and upon recordation the Seller
will be the owner of record of the Mortgage and the indebtedness evidenced by
the Mortgage Note, and upon the sale of the Mortgage Loan to the Trust for the
benefit of the Certificateholders, the Seller will retain the Mortgage File or
any part thereof with respect thereto not delivered to the Trust for the benefit
of the Certificateholders or its designee in trust only for the purpose of
servicing and supervising the servicing of the Mortgage Loan. Immediately prior
to the transfer and assignment to the Trust for the benefit of the
Certificateholders, the Mortgage Loan, including the Mortgage Note and the
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 the Mortgage Loan to the Trustee for the benefit of the
Certificateholders free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest and has the full right and authority subject
to no interest or participation of, or agreement with, any other party, to sell
and assign the Mortgage Loan pursuant to this Agreement and following the sale
of the Mortgage Loan, the Trustee for the benefit of the Certificateholders will
own such Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest;
(m) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage Loan is covered by an ALTA lender's title insurance policy or other
generally acceptable form of policy or insurance acceptable to FNMA or FHLMC,
issued by a title insurer acceptable to FNMA or FHLMC and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
(subject to the exceptions contained in (j) (1), (2) and (3) above) the Seller,
its successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. Such lender's title insurance
policy insures ingress and egress by or upon the Mortgaged Property or any
interest therein. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. The Seller, its successors and assigns, are the sole insureds of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in full force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy;
(n) There is no default, breach, violation or event of acceleration
existent, under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;
(o) There are no mechanics', or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such liens) affecting the related Mortgaged Property (or the
related residential dwelling unit in the Underlying Mortgage Property, in the
case of a Co-op Loan) which are or may be liens prior to or equal to the lien of
the related Mortgage;
45
(p) With respect to a Mortgage Loan which is not a Co-op Loan, all
improvements subject to the Mortgage which were considered in determining the
Appraised Value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in clause (m) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances; the Mortgaged Property is lawfully occupied under
applicable law;
(q) The Mortgage Loan complies in all material respects with all the
terms, conditions and requirements of the Seller's underwriting standards in
effect at the time of origination of such Mortgage Loan. The Mortgage Notes and
Mortgages (exclusive of any riders) are on forms generally acceptable to FNMA or
FHLMC. Monthly Payments under the Mortgage Note are due and payable on the first
day of each month. The Mortgage contains the usual and enforceable provisions of
the originator at the time of origination for the acceleration of the payment of
the unpaid principal amount of the Mortgage Loan if the related Mortgaged
Property is sold without the prior consent of the mortgagee thereunder;
(r) To the best of the Seller's knowledge, the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), is not subject to
any material damage by waste, fire, earthquake, windstorm, flood or other
casualty. To the best of the Seller's knowledge, at origination of the Mortgage
Loan there was, and there currently is, no proceeding pending for the total or
partial condemnation of the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan);
(s) The related Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (l) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or similar
law;
(t) If the Mortgage constitutes a deed of trust, a trustee, authorized
and duly qualified if required under applicable law to act as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses, except as may be required by local law, are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale or attempted sale after default by the
Mortgagor;
(u) The Mortgage File contains an appraisal or a recertification
document (in the case of a Mortgage Loan originated under Seller's Streamlined
Refinance Program) of the related Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property, in the case of a Co-op
Loan), signed prior to the final approval of the mortgage loan application by an
appraiser approved by the Seller who had no interest, direct or indirect, in the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of the Mortgage Loan. The appraisal
is in a form acceptable to FNMA or FHLMC;
(v) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (A) in substantial compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property (or Underlying Mortgaged Property, in the case of
a Co-op Loan), is located, and (B) (1) organized under the laws of such state,
or (2) qualified to do business in such state, or (3) federal savings and loan
associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;
46
(w) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security interest of any applicable agreement or
chattel mortgage referred to above and such collateral does not serve as
security for any other obligation;
(x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
(y) The Mortgage Loan does not contain "graduated payment" features;
(z) The Mortgagor is not in bankruptcy and, to the best of the Seller's
knowledge, the Mortgagor is not insolvent;
(aa) The Mortgage Loans are fixed rate mortgage loans. Each Mortgage
Loan has an original term to maturity of not more than thirty (30) years with
interest payable in arrears on the first day of each month. Each Mortgage Note
is payable in equal monthly installments of principal and interest which are
sufficient to amortize the Mortgage Loan fully by the stated maturity date. No
Mortgage Loan contains terms or provisions which would result in negative
amortization;
(bb) Each Mortgage Note, each Mortgage, each Assignment of Mortgage and
any other documents required pursuant to this Agreement to be delivered to the
Trustee on behalf of the Certificateholders or its designee, or its assignee for
each Mortgage Loan, have been, on or before the Closing Date, delivered to the
Trustee on behalf of the Certificateholders or its designee, or its assignee;
(cc) All escrow payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. As to any Mortgage Loan that is the subject of an escrow, escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every escrowed item that remains unpaid and has been
assessed but is not yet due and payable. No escrow deposits or other charges or
payments due under the Mortgage Note have been capitalized under any Mortgage or
the related Mortgage Note. Any interest required to be paid pursuant to state,
federal and local law has been properly paid and credited;
(dd) [Reserved];
(ee) In the event that at origination the Mortgage Loan has a
Loan-to-Value Ratio greater than 80%, the excess of the principal balance of the
Mortgage Loan over 75% of the Appraised Value of the Mortgaged Property, with
respect to a refinanced Mortgage Loan, or the lesser of the Appraised Value or
the purchase price of the Mortgaged Property (or Underlying Mortgaged Property,
in the case of a Co-op Loan), with respect to a purchase money Mortgage Loan, is
and will be insured as to payment defaults by a Primary Insurance Policy issued
by a Qualified Insurer, except where the primary mortgage insurance was (i)
impermissible at origination at applicable law, in which case such Mortgage Loan
was originated in accordance with applicable law, (ii) cancelled at the request
of the Mortgagor pursuant to the cancellation requirements of FNMA, FHLMC, state
law or, as applicable the Home Owner and Equity Protection Act of 1994, as
amended, or (iii) automatically terminated in accordance with the termination
requirements of FNMA, FHLMC, state law or, as applicable the Home Owner and
Equity Protection Act of 1994, as amended. All provisions of such Primary
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Insurance Policy and to pay all premiums and charges in
connection therewith. The Mortgage Rate for the Mortgage Loan as set forth on
the Mortgage Loan Schedule is net of any such insurance premium;
47
(ff) The Assignment of Mortgage is in recordable form and is acceptable
for recording (or, in the case of a Co-op Loan, is in a form acceptable for
filing) under the laws of the jurisdiction in which the Mortgaged Property (or
underlying Mortgaged Property, in the case of a Co-op Loan) is located;
(gg) As to Mortgage Loans that are not secured by an interest in a
leasehold estate, the Mortgaged Property (or Underlying Mortgaged Property, in
the case of a Co-op Loan), is located in the state identified in the Mortgage
Loan Schedule and consists of a single parcel of real property with a detached
single family residence erected thereon, or a two-to four-family dwelling, or an
individual condominium unit in a condominium project, or a dwelling unit in a
residential cooperative housing corporation or an individual unit in an attached
planned unit development or a detached planned unit development, provided,
however, that no residence or dwelling is a single parcel of real property with
a mobile home thereon. As of the date of origination, no portion of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), was used for commercial purposes, and since the date of origination, to
the best of the Seller's knowledge, no portion of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), is used for
commercial purposes;
(hh) If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development), as of the date
of origination of the related Mortgage Loan, such condominium or planned unit
development project met the Seller's eligibility requirements, as set forth in
the Seller's underwriting guidelines as of such date; in the case of each Co-op
Loan, the related residential cooperative housing corporation complied in all
material respects with the Seller's requirements as set forth in the Seller's
underwriting guidelines as of such date;
(ii) To the best of the Seller's knowledge, there is no pending action
or proceeding directly involving the Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan), in which compliance with any
environmental law, rule or regulation is an issue;
(jj) As of the Cut-off Date, the Seller has not granted any interest
rate relief to the Mortgagor under the Servicemembers Civil Relief Act;
(kk) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), or facilitating the trade-in or exchange of a Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan);
(ll) No action has been taken or failed to be taken by Depositor, on or
prior to the Closing Date, which has resulted or will result in an exclusion
from, denial of, or defense to coverage under any Primary Insurance Policy
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Depositor, or
for any other reason under such coverage;
(mm) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act, as amended, a savings and loan association, a savings
bank, a commercial bank, credit union, insurance company or similar institution
which is supervised and examined by a federal or state authority;
(nn) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from commencement of
amortization;
48
(oo) As of the Closing Date, the Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (without regard
to Treasury Regulations ss.1.860G-2(f) or any similar rule that provides that a
defective obligation is a qualified mortgage for a temporary period);
(pp) With respect to a Mortgage Loan that is a Co-op Loan, the stock
that is pledged as security for the Mortgage Loan is held by a Person as a
tenant-stockholder (as defined in Section 216 of the Code) in a cooperative
housing corporation (as defined in Section 216 of the Code);
(qq) As of the Closing Date, the Mortgage Loan is not the subject of
pending or final foreclosure proceedings;
(rr) As of the Closing Date, the Mortgage Loan does not provide for
interest other than at either (i) a single fixed rate in effect throughout the
term of the Mortgage Loan or (ii) a "variable rate" (within the meaning of
Treasury Regulation Section 1.860G-1(a)(3)) in effect throughout the term of the
Mortgage Loan.
(ss) No Mortgage Loan is a "covered loan" within the meaning of the
Georgia Fair Lending Act of 2002, as amended;
(tt) None of the Mortgage Loans are classified as (a) "high cost" loans
under the Home Ownership and Equity Protection Act of 1994 or (b) a similarly
classified loan (i.e. "high cost") using different terminology under any
federal, state or local law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees such as predatory lending laws; and
(uu) As to each Mortgage Loan that is secured by an interest in a
leasehold estate, (i) the use of a leasehold estate for residential properties
is an accepted practice in the area where the related Mortgaged Property is
located, (ii) residential property consisting of leasehold estates is marketable
in the area where the related Mortgaged Property is located, (iii) the related
lease has been recorded in the applicable land records, (iv) the lease is valid
and in good standing and is not subject to any prior lien by which the lease
could be terminated or subject to any charge or penalty, and (v) the remaining
term of the lease does not terminate less than five years after the maturity
date of such Mortgage Loan.
Upon discovery by any of the Depositor, the Servicer or the Trustee of
a breach of any of the foregoing representations and warranties which materially
and adversely affects the value of a Mortgage Loan or the interest of the
Certificateholders (or which materially and adversely affects the interests of
the Certificateholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other parties
and to the Seller, which notice shall specify the date of discovery. Pursuant to
the Sale Agreement, the Seller shall within 90 days from the earlier of (i) the
date of receipt of notice of such breach or (ii) the date the Seller otherwise
discovers such breach, cure such breach, substitute a Mortgage Loan pursuant to
the provisions of Section 3.03 or, if the breach relates to a particular
Mortgage Loan, purchase such Mortgage Loan from the Trustee at the Purchase
Price. The Purchase Price for the purchased Mortgage Loan shall be paid to the
Servicer and shall be deposited by the Servicer in the Collection Account
promptly upon receipt, and, upon receipt by the Trustee of written notification
of such deposit signed by a Servicing Officer, the Trustee shall promptly
release to the Seller the related Mortgage File, and the Trustee shall execute
and deliver such instruments of transfer or assignment as may be provided to it
by the Servicer, without recourse, as shall be necessary to vest in the Seller
or its designee, as the case may be, any Mortgage Loan released pursuant hereto,
and the Trustee shall have no further responsibility with regard to such
Mortgage Loan. It is understood and agreed that the obligation of the Seller to
cure, substitute or purchase any Mortgage Loan as to which such a breach has
occurred shall constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on behalf of Certificateholder.
49
The parties hereto agree and understand that it is not intended that
any mortgage loan be included in the Trust that is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003 and in
the New Mexico Home Loan Protection Act effective January 1, 2004.
Section 3.02. Representations and Warranties of the Servicer. The
Servicer represents and warrants to, and covenants with, the Trustee for the
benefit of the Certificateholders that as of the Closing Date:
(a) The Servicer is a corporation duly chartered and validly existing
in good standing under the laws of the State of New Jersey, and the Servicer is
duly qualified or registered as a foreign corporation in good standing in each
jurisdiction in which the ownership or lease or its properties or the conduct of
its business requires such qualification;
(b) The execution and delivery of this Agreement by the Servicer and
its performance and compliance with the terms of this Agreement will not violate
the Servicer's corporate charter or by-laws or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other instrument
to which the Servicer is a party or which may be applicable to the Servicer or
any of its assets;
(c) This Agreement, assuming due authorization, execution and delivery
by the Trustee and the Depositor, constitutes a valid, legal and binding
obligation of the Servicer, enforceable against it in accordance with the terms
hereof subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(d) The Servicer is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which default might have consequences that would
materially and adversely affect the condition (financial or other) or operations
of the Servicer or its properties or might have consequences that would affect
its performance hereunder; and
(e) No litigation is pending or, to the best of the Servicer's
knowledge, threatened against the Servicer which would prohibit its entering
into this Agreement or performing its obligations under this Agreement. It is
understood and agreed that the representations and warranties set forth in this
Section 3.02 shall survive the issuance and delivery of the Certificates and
shall be continuing as long as any Certificate shall be outstanding or this
Agreement has been terminated.
Section 3.03. Option to Substitute. If the Seller is required to
repurchase any Mortgage Loan pursuant to Section 2.02 or 3.01, the Seller may,
at its option, within two years from the Closing Date, remove such defective
Mortgage Loan from the terms of this Agreement and substitute another mortgage
loan for such defective Mortgage Loan, in lieu of repurchasing such defective
Mortgage Loan. Any substitute Mortgage Loan shall (a) have a Principal Balance
at the time of substitution not in excess of the Principal Balance of the
removed Mortgage Loan (the amount of any difference, plus one month's interest
thereon at the Mortgage Rate borne by the removed Mortgage Loan, being paid by
the Seller and deemed to be a Principal Prepayment to be deposited by the
Servicer in the Collection Account), (b) have a Mortgage Rate not less than, and
not more than one percentage point greater than, the Mortgage Rate of the
removed Mortgage Loan (provided, however, that if the Mortgage Rate on the
substitute Mortgage Loan exceeds the Mortgage Rate on the removed Mortgage Loan,
the amount of that excess interest (the "Substitute Excess Interest") shall be
payable to the Class A-R Certificate), (c) have a remaining term to stated
maturity not later than, and not more than one year less than, the remaining
term to stated maturity of the removed Mortgage Loan, (d) be, in the reasonable
determination of the Servicer, of the same type, quality and character
(including location of the Mortgaged Property (or underlying Mortgaged Property,
in the case of a Co-op Loan)) as the removed Mortgage Loan as if the breach had
not occurred, (e) have a Loan-to-Value Ratio at origination no greater than that
of the removed Mortgage Loan and (f) be, in the reasonable determination of the
Seller, in material compliance with the representations and warranties contained
in the Sale Agreement and described in Section 3.01, as of the date of
substitution.
50
The Seller shall amend the Mortgage Loan Schedule to reflect the
withdrawal of the removed Mortgage Loan from this Agreement and the substitution
of such substitute Mortgage Loan therefor and shall send a copy of such amended
Mortgage Loan Schedule to the Trustee. The Sale Agreement provides that upon
such amendment the Seller shall be deemed to have made as to such substitute
Mortgage Loan the representations and warranties set forth in Section 3.01 as of
the date of such substitution, which shall be continuing as long as any
Certificate shall be outstanding or this Agreement has not been terminated, and
the remedies for breach of any such representation or warranty shall be as set
forth in Section 3.01. Upon such amendment, the Trustee shall review the
Mortgage File delivered to it relating to the substitute Mortgage Loan, within
the time and in the manner and with the remedies specified in Section 2.02,
except that for purposes of this Section 3.03 (other than the two-year period
specified in the first sentence of this Section), such time shall be measured
from the date of the applicable substitution. 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 principal payment on a substitute Mortgage Loan due on the Due
Date in the month of substitution shall be the property of the Seller, and the
principal payment on the Mortgage Loan for which the substitution is made due on
such date shall be the property of the Trust Fund.
[END OF ARTICLE III]
ARTICLE IV
THE CERTIFICATES
Section 4.01. The Certificates.
(a) The Class A, Class M and Class B Certificates shall be
substantially in the forms thereof included within Exhibits C, D, E and F and
shall, on original issue, be executed by the Depositor and authenticated by the
Trustee (or, if an Authenticating Agent has been appointed pursuant to Section
4.06, the Authenticating Agent) upon receipt by the Trustee of the documents
specified in Section 2.01, delivered to or upon the order of the Depositor.
(b) The Depository, the Paying Agent and the Trustee have entered into
a Depository Agreement dated as of February 24, 2004 (the "Depository
Agreement"). Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Book-Entry Certificates
may not be transferred as provided in Section 4.02 except to a successor to the
Depository; (ii) ownership and transfers of registration of the Book-Entry
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, Depository Participants and Indirect
Participants as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of such Holders under this
Agreement, and requests and directions for and votes of such representatives
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 and furnished by the Depository Participants with
respect to Indirect Participants and persons shown on the books of such Indirect
Participants as direct or indirect Certificate Owners. The Depository Agreement
provides that the Depository shall maintain book-entry records with respect to
the Certificate Owners and with respect to ownership and transfers of such
Certificates.
51
All transfers by Certificate Owners of Book-Entry 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.
(c) If (i)(A) the Depository advises the Depositor, the Paying Agent or
the Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository and (B) the Trustee, the
Paying Agent or the Depositor are unable after exercise of their reasonable best
efforts to locate a qualified successor or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to the
Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying
Agent, of the Book-Entry Certificates by the Depository for registration and
receipt by the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, of an adequate supply of certificates from the
Depositor, the Trustee or if the Paying Agent is appointed under Section 4.05,
the Paying Agent shall issue the Definitive Certificates based on information
received from the Depository. Neither the Depositor, the Servicer, the Paying
Agent nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions.
(d) The Certificates (other than the Class A-R Certificate) shall be
issuable in the minimum original dollar denominations (and integral multiples of
$1,000.00 in excess of such amount) and aggregate original dollar denominations
per Class (or in the case of the Class IIA-6 Certificates, in the minimum
denominations based on the Class IIA-6 Notional Amount, in the case of the Class
IIA-7 Certificates, in the minimum denominations based on the Class IIA-7
Notional Amount and in the case of the Class A-X Certificates, in the minimum
denominations based on the Class A-X Notional Amount) as set forth in the
following table (except that, if necessary, in order to aggregate the Original
Certificate Balance of a Class, one Certificate of such will be issued in a
different denomination). A single Class A-R Certificate will be issued in
definitive form in a $100 denomination.
(e)
Aggregate Original Certificate
Minimum Principal Balance of all
Original Certificates of the CUSIP
Class Denomination Indicated Class Number
---------------------- -------------- ------------------------------- -----------
Class IA-1............ $ 25,000.00 $35,770,000.00 16162W HV 4
Class IIA-1........... $ 25,000.00 $64,218,000.00 16162W HW 2
Class IIA-2........... $ 25,000.00 $29,521,000.00 16162W HX 0
Class IIA-3........... $ 25,000.00 $12,345,000.00 16162W HY 8
Class IIA-4........... $ 1,000.00 $5,419,700.00 16162W HZ 5
Class IIA-5........... $ 25,000.00 $12,389,300.00 16162W JA 8
Class IIA-6........... $ 25,000.00 (1) 16162W JB 6
Class IIA-7........... $ 25,000.00 (1) 16162W JC 4
Class IIIA-1.......... $ 25,000.00 $156,045,000.00 16162W JD 2
Class A-P(2).......... $ 25,000.00 $190,188.00 16162W JE 0
Class A-X(1).......... $ 25,000.00 (1) 16162W JF 7
Class A-R(3).......... $ 100.00 $100.00 16162W JG 5
Class M............... $ 25,000.00 $4,226,000.00 16162W JH 3
Class B-1............. $ 25,000.00 $1,950,000.00 16162W JJ 9
Class B-2............. $ 25,000.00 $1,138,000.00 16162W JK 6
Class B-3............. $ 25,000.00 $650,000.00 16162W JL 4
Class B-4............. $ 25,000.00 $487,000.00 16162W JM 2
Class B-5............. $ 25,000.00 $650,782.00 16162W JN 0
52
-------------
(1) The Class IIA-6, Class IIA-7 and Class A-X Certificates are interest-only
certificates, have no principal balance and will bear interest on their
respective notional amount. The original notional amounts of the Class
IIA-6, Class IIA-7 and Class A-X Certificates are $561,136.00, $2,919,000.00
and $1,379,238.00, respectively.
(2) The Class A-P Certificates are entitled to payments of principal only.
(3) The Class A-R Certificate represents the residual interest in each of the
REMIC Pools.
The Certificates shall be signed by manual or facsimile signature on
behalf of the Depositor by an officer of the Depositor. Certificates bearing the
manual or facsimile signatures of individuals who were at the time of signature
officers of the Depositor shall bind the Depositor, notwithstanding that such
individuals or any of them have ceased to be an officer prior to the
authentication and delivery of such Certificate or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a manual authentication by an officer of the Trustee (or if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent) and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
Section 4.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, shall cause to be kept a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Trustee or, if a
Paying Agent has been appointed under Section 4.05, the Paying Agent, shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided.
(b) Upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee, or if a Paying Agent has been appointed
hereunder pursuant to Section 4.05, the Paying Agent maintained for such
purpose, the Depositor shall execute and the Trustee or if an Authenticating
Agent is appointed under Section 4.06, the Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like Class and aggregate Percentage Interest and
dated the date of authentication by the Authenticating Agent.
53
(c) No transfer of a Class B-3, Class B-4 or Class B-5 Certificate
shall be made unless such transfer is made pursuant to an effective registration
statement or otherwise in accordance with the requirements under the Securities
Act of 1933, as amended. If such a transfer is to be made in reliance upon an
exemption from said Act, (i) the Depositor may require (except with respect to
the initial transfer of a Class B-3, Class B-4 or Class B-5 Certificate from
Xxxxxxx, Xxxxx & Co. and except if the transferee executes a certificate
substantially in the form of Exhibit H hereto) a written opinion of independent
counsel acceptable to and in form and substance satisfactory to the Depositor
that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from said Act and laws or is being
made pursuant to said Act and laws, which opinion of counsel shall not be an
expense of the Trust Fund, the Trustee, the Depositor or the Servicer, and (ii)
the Depositor shall require the transferee to execute a certification
substantially in the form of Exhibit H or Exhibit I.
(d) No transfer of an ERISA Restricted Certificate or the Class A-R
Certificate shall be made unless the Depositor or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent shall have received either (i) a
representation letter, substantially in the form of Exhibit M, from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Depositor, to the effect that (A) such transferee is not an
employee benefit plan subject to Title I of ERISA or Section 4975 of the Code or
materially similar provisions of applicable federal, state or local law
("Similar Law"), or a person acting on behalf of any such plan or using the
assets of such plan, or alternatively, (B) in the case of an ERISA Restricted
Certificate only, such transferee is an insurance company and the source of
funds for the purchase of such Certificate is an "insurance company general
account" within the meaning of Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), and the
acquisition and holding of such Certificate is covered under Sections I and III
of PTCE 95-60, which representation letter shall not be an expense of the
Trustee, the Depositor or the Servicer, or (ii) in the case of an ERISA
Restricted Certificate presented for registration in the name of an employee
benefit plan subject to Title I of ERISA or Section 4975 of the Code or Similar
Law (or comparable provisions of any subsequent enactments) or a trustee of any
such plan or any other Person who is using the assets of any such plan to effect
such acquisition, an Opinion of Counsel or such other representation as required
by and satisfactory to the Depositor to the effect that the purchase and holding
of such ERISA Restricted Certificate will not result in the assets of the Trust
Fund being deemed to be "plan assets" pursuant to the Department of Labor
Regulations set forth in 29 C.F.R. ss.2510.3-101 or to be subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of ERISA or the Code or Similar Law, will not constitute or result in
a prohibited transaction within the meaning of Section 406 or 407 of ERISA or
Section 4975 of the Code or Similar Law, and will not subject the Trustee, the
Depositor or the Servicer to any obligation in addition to those undertaken in
this Agreement, which Opinion of Counsel or other representation shall not be an
expense of the Trustee, the Depositor or the Servicer.
(e) At the option of a Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of authorized denominations of
a like Class, upon surrender of the Certificate to be exchanged at any office or
agency of the Trustee, or if a Paying Agent has been appointed under Section
4.05, the Paying Agent, maintained for such purpose. Whenever the Certificate is
so surrendered for exchange, the Depositor shall execute and the Authenticating
Agent shall authenticate and deliver, the Certificate which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Authenticating Agent duly
executed by, the Holder thereof or his attorney duly authorized in writing.
54
(f) No service charge shall be made to the Holder for any transfer or
exchange of a Certificate, but the Servicer may require payment by the
Certificateholders of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of such
Certificate.
(g) All Certificates surrendered for transfer or exchange shall be
destroyed by the Trustee or if a Paying Agent has been appointed under Section
4.05, the Paying Agent, in accordance with the Trustee's or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent's, standard procedures.
(h) [intentionally omitted].
(i) A Disqualified Organization is prohibited from acquiring beneficial
ownership of a Class A-R Certificate. Notwithstanding anything to the contrary
contained herein, (i) unless and until the Servicer shall have received an
Opinion of Counsel, satisfactory to it in form and substance, to the effect that
the absence of the conditions contained in this Section 4.02(i) would not result
in the imposition of federal tax upon any REMIC created hereunder or cause any
REMIC created hereunder to fail to qualify as a REMIC, no transfer, sale or
other disposition of the Class A-R Certificate (including for purposes of this
section any beneficial interest therein) may be made without the express written
consent of the Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee, which consent is to be granted by the Certificate
Registrar or, if no Certificate Registrar is appointed, the Trustee only upon
compliance with the requirements of this Section and (ii) no transfer, sale or
other disposition of the Class A-R Certificate (or any beneficial interest
therein) may be made to a Person who is not a U.S. Person unless such Person
furnishes the transferor and the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee, with a duly completed and effective Form
W-8ECI (or any successor thereto) or an Opinion of Counsel to the effect that
such transfer is in accordance with the requirements of the Code and that the
transfer will not be disregarded for federal income tax purposes. As a condition
to granting its consent to a transfer of a Class A-R Certificate, the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
shall require the proposed transferee of such Certificate (including, in the
case of the initial issuance of the Class A-R Certificate, the initial Holder
thereof) to execute a letter and affidavit substantially in the form attached
hereto as Exhibit K and shall require the proposed transferor (other than in the
case of the transfer to the initial holder) of such Certificate to execute a
letter substantially in the form attached hereto as Exhibit K-1. In the absence
of a contrary instruction from the transferor of such Certificate, declaration
(11) in the affidavit in Exhibit K may be left blank. If the transferor requests
by written notice to the Certificate Registrar or, if no Certificate Registrar
is appointed, the Trustee, prior to the date of the proposed transfer that one
of the two other forms of declaration (11) of such affidavit be used, then the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
shall require that such form of declaration (11) be included in such affidavit.
As a condition to the granting of the consent referred to in this
Section 4.02(i), prior to the transfer, sale, pledge, hypothecation or other
disposition of the Class A-R Certificate or any interest therein, the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
shall require that (1) the proposed transferee deliver to the Trustee or
Certificate Registrar, as applicable, its taxpayer identification number and
state, under penalties of perjury that such number is the social security or
employer identification number, as the case may be, of the transferee or provide
55
an affidavit under penalties of perjury stating that as of the date of such
transfer such transferee is not and has no intention of becoming a Disqualified
Organization; (2) the proposed transferee deliver to the Trustee or Certificate
Registrar, as applicable, an affidavit stating (i) that such transferee is not
acquiring such Class A-R Certificate as an agent, broker, nominee, or middleman
for a Disqualified Organization, (ii) if the Class A-R Certificate is a
"non-economic residual interest" within the meaning of Treas. Reg.
ss.1.860E-1(c)(2), (X) that no purpose of the acquisition of the Class A-R
Certificate is to avoid or impede the assessment or collection of tax, (Y) that
such transferee has historically paid its debts as they came due and will
continue to pay its debts as they come due, and (Z) that such transferee
represents that it understands that, as the holder of the non-economic residual
interest, the transferee may incur tax liabilities in excess of any cash flows
generated by the interest and that the transferee intends to pay taxes
associated with holding the residual interest, and (iii) unless the Certificate
Registrar or, if no Certificate Registrar is appointed, the Trustee consents to
the transfer of the Class A-R Certificate to a Person who is not a U.S. Person
and who has furnished either a duly completed and effective Form W-8ECI (or any
successor thereto) or an Opinion of Counsel to the effect that the transfer will
not be disregarded for federal income tax purposes, that it is a U.S. Person;
(3) if so requested by the transferor in written notice provided to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
prior to the date of the proposed transfer, the proposed transferee deliver to
the Trustee or Certificate Registrar, as applicable, an affidavit that includes
a declaration made in the form of declaration (11) in the affidavit set forth in
Exhibit K requested by the transferor; and (4) the transferor deliver to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
a written certification that as of the date of such transfer it has no knowledge
and no reason to know that the affirmations described in clauses (1), (2) and
(3) were false. The Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee shall not grant the consent referred to in this Section
4.02(i) if it has actual knowledge that any statement made in the affidavit
issued pursuant to the preceding sentence is not true. Notwithstanding any
purported transfer, sale or other disposition of the Class A-R Certificate to a
Disqualified Organization or in violation of the provisions of this Section
4.02(i), such transfer, sale or other disposition shall be deemed to be of no
legal force or effect whatsoever and such Disqualified Organization shall not be
deemed to be a Class A-R Certificateholder for any purpose hereunder, including,
but not limited to, the receipt of distributions on such Class A-R Certificate.
If any purported transfer shall be in violation of the provisions of this
Section 4.02(i) then the prior holder of the Class A-R Certificate shall, upon
discovery that the transfer of such Class A-R Certificate was not in fact
permitted by this Section 4.02(i), be restored to all rights and obligations as
a Holder thereof retroactive to the date of the purported transfer of such Class
A-R Certificate. The Trustee, the Servicer and the Certificate Registrar shall
be under no liability to any Person for any registration or transfer of a Class
A-R Certificate that is not permitted by this Section 4.02(i) or for making
payments due on such Class A-R 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 transfer was not registered under
the written certification of the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee as described in this Section 4.02(i). The
prior Holder shall be entitled to recover from any purported Holder of a Class
A-R Certificate that was in fact not a permitted purported transferee under this
Section 4.02(i) at the time it became a purported Holder all payments made to
such purported Holder on such Class A-R Certificate; provided that the Servicer
shall not be responsible for such recovery. Each Class A-R Certificateholder, by
the acceptance of the Class A-R Certificate, shall be deemed for all purposes to
have consented to the provisions of this Section 4.02(i) and to any amendment to
this Agreement deemed necessary by counsel of the Trustee or the Servicer to
ensure that the Class A-R Certificate is not transferred to a Disqualified
Organization and that any transfer of such Class A-R Certificate will not cause
the imposition of a tax upon any REMIC created hereunder or cause any REMIC
created hereunder to fail to qualify as a REMIC. The restrictions on transfer of
the Class A-R Certificate will cease to apply and be void upon receipt by the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
of an Opinion of Counsel to the effect that such restrictions on transfer are no
longer necessary to avoid the risk of material federal taxation to any REMIC
created hereunder or prevent any REMIC created hereunder from qualifying as a
REMIC.
56
(j) The Servicer shall make available upon written request to each
Holder and each proposed transferee of a Class B-3, Class B-4 or Class B-5
Certificate such information as may be required to permit the proposed transfer
to be effected pursuant to Rule 144A under the Securities Act of 1933.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Trustee or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent, or the Trustee or, if a
Paying Agent has been appointed under Section 4.05, the Paying Agent, receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, such security or indemnity
as may be required by it to save it harmless, then, in the absence of notice to
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, that such Certificate has been acquired by a bona fide purchaser,
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Class. Upon the issuance of any new Certificate under this Section,
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, may require of the Certificateholder 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 connected therewith. Any replacement
Certificate of any Class issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest in
the distributions to which the Certificateholders of such Class are entitled, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time, and such mutilated, destroyed, lost or
stolen Certificate shall be of no force or effect under this Agreement, to the
extent permitted by law.
Section 4.04. Persons Deemed Owners. Prior to due presentation of a
Certificate of any Class for registration of transfer, the Depositor, the
Servicer, the Paying Agent and the Trustee may treat the Person in whose name
any Certificate is registered on the Record Date as the owner of such
Certificate and the Percentage Interest in the distributions to which the
Certificateholders of such Class are entitled on the relevant date as the Holder
of such Certificate and the Percentage Interest represented by such Certificate
for the purpose of receiving remittances pursuant to Section 6.01 and for all
other purposes whatsoever, and neither the Depositor, the Servicer, the Paying
Agent nor the Trustee shall be affected by notice to the contrary.
Section 4.05. Appointment of Paying Agent, Certificate Registrar and
Backup Advancer; Certificate Account. The Trustee may appoint a Paying Agent and
a Certificate Registrar hereunder, but such Paying Agent and such Certificate
Registrar shall not be the Depositor, the Seller, or an Affiliate of the
Depositor or the Seller unless such Paying Agent or such Certificate Registrar
is the Global Debt department of Chase. In the event of an appointment of such
Paying Agent, no later than two Business Days prior to each Distribution Date,
the Servicer shall deposit or cause to be deposited with the Paying Agent from
funds on deposit in the Collection Account a sum up to the Available
Distribution Amount, such sum to be held in trust for the benefit of
Certificateholders in a segregated account (the "Certificate Account") which
shall be an Eligible Account in the name of "Wachovia Bank, N.A., as Trustee, in
trust for and for the benefit of the Certificateholders of Multi-Class Mortgage
Pass-Through Certificates, Chase Mortgage Finance Corporation, Series 2004-S3 -
Certificate Account". The Paying Agent shall establish such Certificate Account
with a commercial bank, a savings bank or a savings and loan association. The
Paying Agent may invest moneys in the Certificate Account in Eligible
Investments, which shall mature not later than a date sufficient to make payment
on the Distribute Date next following the date of such investment and shall not
be sold or disposed of prior to maturity. All income and gain realized from any
such investment shall be for the benefit of the Paying Agent as additional
compensation and shall be subject to its withdrawal or order from time to time.
The amount of any losses incurred in respect of any such investments (to the
extent not offset by income from other such investments) shall be deposited in
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the Certificate Account by the Paying Agent out of its own funds immediately as
realized. The Servicer shall cause the Paying Agent to perform each of the
obligations of the Paying Agent set forth herein and shall be liable to the
Trustee and the Certificateholders for failure of the Paying Agent to perform
such obligations. If the Paying Agent is a party other than the Trustee, the
Trustee shall have no liability in connection with the performance or failure of
performance of the Paying Agent. The Trustee designates the Global Debt
department of Chase as the initial Paying Agent and initial Certificate
Registrar. Only the Trustee may remove the Paying Agent and Certificate
Registrar and may do so at will, provided that the Trustee gives 20 days' prior
written notice of such removal to the Paying Agent and Certificate Registrar and
the Rating Agencies. The Paying Agent is designated the Backup Advancer. The
Paying Agent may not be removed as Backup Advancer nor resign as Backup Advancer
unless (a) Chase Manhattan Mortgage Corporation is removed or resigns as
Servicer or (b) it has been removed as Paying Agent. Thereafter, provided that
the Paying Agent gives written notice to the Rating Agencies and the Trustee of
its resignation as Backup Advancer, the Paying Agent will no longer be obligated
to provide Advances 20 or more days from the date of such notice.
If, on any Distribution Date, the Paying Agent fails to distribute to
Certificateholders the amounts then on deposit in the Certificate Account for
the purposes specified herein, the Trustee shall be obligated promptly upon its
knowledge thereof to distribute such amounts to Certificateholders in the manner
and in such amounts based upon information provided by the Servicer; provided
that in no event shall the Trustee be obligated for purposes of this paragraph
to distribute to Certificateholders any amounts other than those on deposit in
the Certificate Account or expend any funds not reimbursable pursuant to Section
10.05 hereof, except as otherwise provided herein. Notwithstanding anything in
this Agreement to the contrary, the Trustee shall be liable to the Servicer and
the Certificateholders only for its negligence in connection with the withdrawal
of funds from the Certificate Account by the Trustee and the distribution of
such funds by the Trustee to Certificateholders pursuant to this paragraph.
The Servicer shall cause each Paying Agent other than the Trustee to
execute and deliver to the Servicer and the Trustee on the Closing Date or, if
subsequently appointed, on the date of appointment, a written instrument
executed by an officer of the Paying Agent in which such Paying Agent shall
agree with the Servicer and the Trustee that such Paying Agent will hold all
sums held by it for the payment to Certificateholders in trust for the benefit
of the Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders.
Section 4.06. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents (each, an
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or of any state,
having a combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities. If the Authenticating Agent is a party other than
the Trustee, the Trustee shall have no liability in connection with the
performance or failure of performance of the Authenticating Agent. The Trustee
hereby appoints Chase as the initial Authenticating Agent.
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(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 4.06, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 4.06. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee. Any Authenticating Agent shall be
entitled to reasonable compensation for its services and any such compensation
shall be payable solely by the Trustee, without any right of reimbursement from
the Depositor, the Servicer or the Trust Fund.
[END OF ARTICLE IV]
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01. Servicer to Service Mortgage Loans. The Servicer shall service and
administer the Mortgage Loans and shall have full power and authority, acting
alone or through Sub-Servicers as provided in Section 5.02, to do any and all
things which it may deem necessary or desirable in connection with such
servicing and administration, all in accordance with Accepted Servicing
Practices. Without limiting the generality of the foregoing, the Servicer in its
own name or in the name of a Sub-Servicer shall, pursuant to a power of attorney
granted hereby by the Trustee for such purposes, when the Servicer or the
Sub-Servicer, as the case may be, believes it appropriate in its best judgment,
to execute and deliver, on behalf of the Certificateholders and the Trustee or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the related Mortgaged
Properties; provided, however, that subject to the provisions of this paragraph,
the Servicer may allow a modification with respect to a Mortgage Loan if the
Servicer would take such action in the ordinary course of its business if it
were the owner of the Mortgage Loan. The Servicer may agree to a modification of
any Mortgage Loan (the "Relevant Mortgage Loan") upon the request of the related
Mortgagor, provided that (i) the modification is in lieu of a refinancing and
the Mortgage Rate on the Relevant Mortgage Loan, as modified, is approximately a
prevailing market rate of newly-originated mortgage loans having similar terms,
(ii) the aggregate of the adjusted bases of all Modified Mortgage Loans
(including the Relevant Mortgage Loans) plus the aggregate adjusted bases of any
assets that are not qualified mortgages or permitted investments under Section
860G(a) of the Code that are assets of the Trust Fund established hereunder at
all times on any day is less than one percent of the aggregate of the adjusted
bases of all assets of the Trust Fund (including such Modified Mortgage Loans)
on such day, and (iii) the Servicer purchases the Relevant Mortgage Loan from
the Trust Fund as described below. Effective immediately after such
modification, and, in any event, on the same Business Day on which the
modification occurs, all right, title and interest of the Trustee in and to the
Modified Mortgage Loan shall automatically be deemed transferred and assigned to
the Servicer and all benefits and burdens of ownership thereof, including
without limitation the right to accrued interest thereon from and including the
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date of modification and the risk of default thereon, shall pass to the
Servicer. To confirm such transfer and assignment, the Servicer, as servicer
hereunder, as soon as practicable shall execute an instrument of assignment of
the Modified Mortgage Loan without recourse in customary form to the Servicer in
its individual capacity. The Servicer shall deposit the Purchase Price for any
Modified Mortgage Loan in the Collection Account pursuant to Section 5.08. Upon
receipt by the Trustee of written notification of any such deposit signed by a
Servicing Officer, the Trustee shall release to the Servicer the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary more fully to
vest in the Servicer any Modified Mortgage Loan previously transferred and
assigned pursuant thereto. The Servicer shall not make or permit any
modification of a Mortgage Loan that would cause any REMIC Pool to fail to
qualify as a REMIC for federal income tax purposes or that would result in the
imposition of any material tax under Section 860F(a) or Section 860G(d) of the
Code.
The Servicer shall furnish to the Trustee for execution and redelivery
to the Servicer or, at the request of the Servicer, a Sub-Servicer, such
documents necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans and the Trustee shall not be responsible for the
Servicer's application thereof. The Servicer agrees to remain eligible as either
a FNMA or FHLMC seller/servicer, or both, for so long as it is Servicer.
All Servicing Advances made by the Servicer in effecting the timely
payment of taxes, insurance and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loan so permit, and such
Servicing Advances shall be recoverable by the Servicer to the extent permitted
by Sections 5.09 and 5.23.
Section 5.02. Sub-Servicing Agreements Between Servicer and
Sub-Servicers; Enforcement of Sub-Servicer's Obligations.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of all or part of the
Mortgage Loans. References in this Agreement to actions taken or to be taken by
the Servicer in servicing the Mortgage Loans serviced by it include actions
taken or to be taken by a Sub-Servicer on behalf of the Servicer. Each
Sub-Servicing Agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and as the Servicer and the Sub-Servicer have
agreed. The Servicer hereby agrees to notify the Trustee in writing promptly
upon the appointment of any Sub-Servicer. For purposes of this Agreement, the
receipt by the Sub-Servicer of any amount with respect to a Mortgage Loan (other
than amounts representing servicing compensation or reimbursement for an
advance) shall be treated as the receipt by the Servicer of such amount. The
Sub-Servicer shall deposit all such funds in an Eligible Account.
(b) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements as appropriate, and the pursuit of other
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense but shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement only to the extent, if
any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loans or (ii) from a specific recovery of costs, expenses or attorneys'
fees against the party against whom such enforcement is directed.
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Section 5.03. Successor Sub-Servicers. The Servicer shall be entitled
to terminate any Sub-Servicing Agreement that may exist in accordance with the
terms and conditions of such Sub-Servicing Agreement and without any limitation
by virtue of this Agreement.
Section 5.04. Liability of the Servicer. Notwithstanding any
Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Sub-Servicer or reference
to actions taken through a Sub-Servicer or otherwise, the Servicer shall remain
obligated and liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Mortgage Loans.
The Servicer shall be entitled to enter into any agreement with a Sub-Servicer
for indemnification of the Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Section 5.05. No Contractual Relationship Between Sub-Servicer and
Trustee or Certificateholders. Any Sub-Servicing Agreement that may be entered
into and any other transactions or services relating to the Mortgage Loans
involving a Sub-Servicer in its capacity as such and not as an originator shall
be deemed to be between the Sub-Servicer and the Servicer alone, and the Trustee
and Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the
Sub-Servicer.
Section 5.06. Termination of Sub-Servicing Agreement. If the Servicer
shall for any reason no longer be the Servicer hereunder (including by reason of
any Event of Default), the Servicer shall thereupon terminate each Sub-Servicing
Agreement that may have been entered into, and the Trustee, its designee or the
successor servicer and the Trustee shall not be deemed to have assumed any of
the Servicer's interest therein or to have replaced the Servicer as a party to
any such Sub-Servicing Agreement.
Section 5.07. Collection of Mortgage Loan Payments. Continuously from
the date hereof until the principal and interest on all Mortgage Loans are paid
in full, the Servicer will proceed diligently to collect all payments due under
each of the Mortgage Loans when the same shall become due and payable; provided,
however, that the Servicer may elect, to the extent consistent with Accepted
Servicing Practices, to waive any late payment charge and shall, to the extent
such procedures shall be consistent with this Agreement, follow such collection
procedures as it follows with respect to conventional mortgage loans held in its
own portfolio. Any such arrangements shall not diminish or otherwise affect the
Servicer's obligation to make Advances pursuant to Section 6.03.
Section 5.08. Establishment of Collection Account; Deposit in
Collection Account. With respect to all of the Mortgage Loans, the Servicer
shall segregate and hold all funds collected and received pursuant to a Mortgage
Loan separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Collection Accounts for the benefit of the
Certificateholders (collectively, the "Collection Account") which are Eligible
Accounts, in the form of a trust account, in the name of "Wachovia Bank, N.A.,
as Trustee, in trust for and for the benefit of the Certificateholders of
Multi-Class Mortgage Pass-Through Certificates, Chase Manhattan Mortgage
Corporation as Servicer, Chase Mortgage Finance Corporation, Series 2004-S3 -
Collection Account." Such Collection Account shall be established with a
commercial bank, a savings bank or a savings and loan association. The Servicer
may invest, or cause the institution maintaining the Collection Account to
invest, moneys in the Collection Account in Eligible Investments, which shall
mature not later than two Business Days preceding the Distribution Date next
following the date of such investment and shall not be sold or disposed of prior
to its maturity. All income and gain realized from any such investment shall be
for the benefit of the Servicer as additional compensation and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments (to the extent not offset by income from
other such investments) shall be deposited in the Collection Account by the
Servicer out of its own funds immediately as realized; provided, however, that
if the Trustee becomes the Servicer, the Trustee shall not be required to
deposit the amount of any loss incurred prior to it becoming the Servicer.
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The Servicer shall deposit or cause to be deposited in the Collection
Account on a daily basis (and not later than the second Business Day following
receipt), and retain therein:
(a) All payments which were received after the Cut-off Date on account
of principal of the Mortgage Loans (other than the principal portion of Monthly
Payments due on or before the Cut-off Date), and all Principal Prepayments
collected on or after the Cut-off Date;
(b) All payments which were received after the Cut-off Date on account
of interest on the Mortgage Loans (net of the Servicing Fee)(other than the
interest portion of Monthly Payments due on or before the Cut-off Date);
(c) Net Liquidation Proceeds;
(d) All Insurance Proceeds received by the Servicer under any title,
hazard or other insurance policy, including amounts required to be deposited
pursuant to Sections 5.16 and 5.20, other than proceeds to be held in the Escrow
Account or applied to the restoration or repair of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) or released to the
Mortgagor in accordance with the Servicer's normal servicing procedures or
otherwise applied or held as required by applicable law;
(e) All awards or settlements in respect of condemnation proceedings
affecting any Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op Loan), which are not released to the Mortgagor in accordance with the
Servicer's normal servicing procedures;
(f) All Repurchase Proceeds;
(g) All Advances made by the Servicer pursuant to Section 6.03;
(h) All amounts representing revenues under the insurance provided
pursuant to Section 5.19 to the extent of any losses borne by any
Certificateholder;
(i) All revenues from any Mortgaged Property (or Underlying Mortgaged
Property in the case of a Co-op Loan) acquired by the Servicer by foreclosure or
deed in lieu of foreclosure net of any Servicing Advances with respect to such
Mortgaged Property (or Underlying Mortgaged Property in the case of a Co-op
Loan); and
(j) Any other amounts required to be deposited therein pursuant to this
Agreement.
The Servicer shall maintain accounting records on a Mortgage Loan by
Mortgage Loan basis with respect to the Collection Account. The Servicer shall
give notice to the Trustee, any Paying Agent, the Depositor and each Rating
Agency of any change in the location of the Collection Account, prior to the use
thereof. Notwithstanding anything to the contrary herein, no Monthly Payment or
any portion thereof shall be permitted to remain in the Collection Account for
more than 12 months. Any Monthly Payment or any portion thereof that has
remained in the Collection Account for 12 months shall be deemed a Principal
Prepayment and distributed to Certificateholders pursuant to the provisions of
this Agreement on the Distribution Date immediately following the end of such 12
month period.
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Section 5.09. Permitted Withdrawals from the Collection Account. The
Servicer may, from time to time, withdraw funds from the Collection Account for
the following purposes:
(a) to reimburse itself for Advances made pursuant to Section 6.03
(including amounts to reimburse the related Sub-Servicer for advances made
pursuant to the applicable Sub-Servicing Agreement), the Servicer's and the
related Sub-Servicer's right to receive reimbursement pursuant to this subclause
(i) being limited to amounts received on particular Mortgage Loans which
represent Late Collections (net of the Servicing Fees) with respect to those
particular Mortgage Loans;
(b) to pay itself the Servicing Fee;
(c) to reimburse itself for unreimbursed Servicing Advances, or to pay
the related Sub-Servicer any unreimbursed Servicing Advances, the Servicer's
right to receive reimbursement or make payments to the Sub-Servicer pursuant to
this subclause (iii) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Insurance Proceeds, and condemnation awards;
(d) to reimburse itself (or the related Sub-Servicer) or the Depositor
for expenses incurred by and recoverable by or reimbursable to it pursuant to
Section 5.01 or 5.16;
(e) to reimburse itself (or the related Sub-Servicer) for any
Nonrecoverable Advances;
(f) to pay to itself (or the related Sub-Servicer) income earned on the
investment of funds deposited in the Collection Account;
(g) to make deposits into the Certificate Account in the amounts and in
the manner provided for herein;
(h) to make payments to itself or others pursuant to any provision of
this Agreement, and to clear and terminate the Collection Account upon the
termination of this Agreement; and
(i) to withdraw amounts deposited in error.
Section 5.10. Establishment of Escrow Account; Deposits in Escrow
Account. With respect to those Mortgage Loans on which the Servicer or any
Sub-Servicer collects Escrow Payments, if any, the Servicer shall, and shall
cause any Sub-Servicer to, segregate and hold all funds collected and received
pursuant to each such Mortgage Loan which constitute Escrow Payments separate
and apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of trust accounts. Such Escrow
Accounts shall be established with a commercial bank, a mutual savings bank or a
savings and loan association the deposits of which are insured by the FDIC in a
manner which shall provide maximum available insurance thereunder, and which may
be drawn on by the Servicer. The Servicer shall give notice to the Trustee of
the location of any Escrow Account, and of any change thereof, prior to the use
thereof. Nothing in this paragraph shall be deemed to require the Servicer to
collect Escrow Payments in the absence of a provision in the related Mortgage
requiring such collection.
The Servicer shall deposit, or cause to be deposited, in any Escrow
Account or Accounts on a daily basis, and retain therein, (i) all Escrow
Payments collected on account of any Mortgage Loans serviced by the Servicer,
for the purpose of effecting timely payment of any such items as required under
the terms of this Agreement and (ii) all amounts representing proceeds of any
hazard insurance policy which are to be applied to the restoration or repair of
any Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan). The Servicer shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
are set forth in Section 5.11. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the related Mortgagor and, to the extent required by law, the Servicer shall pay
interest on escrowed funds to the related Mortgagor notwithstanding that the
Escrow Account is non-interest-bearing or that interest paid thereon is
insufficient for such purposes.
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Section 5.11. Permitted Withdrawals from Escrow Account. Withdrawals
from any Escrow Account or Accounts may be made by a Servicer only (i) to effect
timely payments of ground rents, taxes, assessments, water rates, Standard
Hazard Policy premiums, or other items constituting Escrow Payments for the
related Mortgage, (ii) to reimburse the Servicer for any Servicing Advance made
by the Servicer, with respect to a related Mortgage Loan but only from amounts
received on the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder, (iii) to refund to any Mortgagor any
funds found to be in excess of the amounts required under the terms of the
related Mortgage Loan or under applicable law, (iv) for application to
restoration or repair of the property subject to the related Mortgage, (v) to
pay to the Servicer, or to the Mortgagor to the extent required by law, any
interest paid on the funds deposited in the Escrow Account, (vi) to clear and
terminate the Escrow Account on the termination of this Agreement or (vii) to
withdraw amounts deposited in error.
Section 5.12. Payment of Taxes, Insurance and Other Charges. With
respect to each Mortgage Loan, the Servicer shall maintain, or cause to be
maintained, accurate records reflecting any delinquencies or nonpayments with
regard to taxes, assessments and Standard Hazard Policy premiums. The Servicer
assumes full responsibility for ensuring the payment of all such bills and shall
effect payments of all such bills irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make advances from its own funds to effect such payments.
Section 5.13. Transfer of Accounts. The Servicer may transfer the
Collection Account or Escrow Account to an Eligible Account maintained with a
different depository institution from time to time.
Section 5.14. [Reserved].
Section 5.15. Maintenance of the Primary Insurance Policies. The
Servicer shall not take, or permit any related Sub-Servicer to take, any action
which would result in non-coverage under any applicable Primary Insurance Policy
of any loss which, but for the actions of the Servicer or Sub-Servicer, would
have been covered thereunder. Except as otherwise required by applicable law, to
the extent coverage is available and until the Loan-to-Value Ratio of the
related Mortgage Loan is reduced to 80%, the Servicer shall keep or cause to be
kept in full force and effect each such Primary Insurance Policy in an amount
equal to the amount by which the unpaid principal balance of the related
Mortgage Loan exceeds 75% of the value (as described in the definition of
Loan-to-Value Ratio) of the related Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan). The Servicer shall not cancel or refuse
to renew any such Primary Insurance Policy or consent to any related
Sub-Servicer canceling or refusing to renew any such Primary Insurance Policy
applicable to a Mortgage Loan subserviced by it, that is in effect at the date
of the initial issuance of the Certificates and is required to be kept in force
hereunder unless the replacement Primary Insurance Policy for such canceled or
non-renewed policy is maintained with an insurer whose claims-paying ability is
rated at least as high as the original insurer or is acceptable to each Rating
Agency as confirmed in writing by each such Rating Agency, unless otherwise
required by law.
Section 5.16. Maintenance of Standard Hazard Policies.
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(a) The Servicer shall cause to be maintained for each Mortgage Loan
(other than a Co-op Loan) a Standard Hazard Policy with extended coverage as is
prudent in the area where the Mortgaged Property is located in an amount which
is equal to the greater of (i) the lesser of (A) 100% of the maximum insurable
value of the improvements securing such Mortgage Loan or (B) the principal
balance owing on such Mortgage Loan, or (ii) such amount required to prevent the
Mortgagor or mortgagee from becoming a co-insurer. If the Mortgaged Property is
in an area identified at the time of origination in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding Principal Balance of the Mortgage Loan, (ii) the full
insurable value or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, of any Mortgage Loan, fire and hazard insurance with extended
coverage in an amount which is not less than the lesser of (i) the outstanding
Principal Balance of the Mortgage Loan or (ii) the maximum insurable value of
the improvements which are a part of such property, liability insurance, and, to
the extent available, flood insurance in an amount as provided above. Any
amounts collected by the Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or property acquired in liquidation of the Mortgage Loan, or released
to the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited, subject to applicable law, in the Collection Account. It is
understood and agreed that no earthquake or other additional insurance need be
required by the Servicer of any Mortgagor or maintained on property acquired in
respect of a Mortgage Loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such Standard Hazard Policies and other policies shall
be endorsed with standard mortgagee clauses with loss payable to the Servicer or
its designee. Any such Standard Hazard Policies or other policies may be in the
form of blanket policies; provided, however, that in the event of any claim
arising in connection with a hazard loss the Servicer shall be obligated, in the
case of blanket insurance policies, to deposit in the Collection Account any
amount not payable under such blanket policy because of a deductible clause in
such policy and not otherwise payable under an individual policy. The Servicer
shall not interfere with the Mortgagor's freedom of choice in selecting either
his insurance carrier or agent; provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies are acceptable insurers in the discretion of the Servicer.
(b) Any cost incurred by the Servicer in maintaining any of the
foregoing insurance shall not, for the purpose of calculating monthly
distributions to Certificateholders, be added to the amount owing under the
Mortgage Loan, notwithstanding that the terms of the Mortgage Loan so permit.
Such costs (other than the costs of maintaining a blanket hazard insurance
policy not attributable to a specific Mortgaged Property) shall be recoverable
by the Servicer from the Mortgagor or out of Insurance Proceeds or Liquidation
Proceeds or to the extent permitted by Section 5.09.
Section 5.17. [Reserved].
Section 5.18. [Reserved].
Section 5.19. Fidelity Bond and Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting on behalf of the
Servicer in any capacity with regard to the Mortgage Loans to handle funds,
money, documents and papers relating to the Mortgage Loans. Any such fidelity
bond and errors and omissions insurance shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons and shall be maintained at a level
acceptable to FNMA. No provision of this Section 5.19 requiring such fidelity
bond and errors and omissions insurance shall diminish or relieve the Servicer
from its duties and obligations as set forth in this Agreement. Upon request of
the Trustee, the Servicer shall cause to be delivered to the Trustee a
certification evidencing coverage under such fidelity bond and insurance policy.
Promptly upon receipt of any notice from the surety or the insurer that such
fidelity bond or insurance policy has been terminated or modified in a
materially adverse manner, the Servicer shall notify the Trustee and each Rating
Agency of any such termination or modification.
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Section 5.20. Collections under Insurance Policies; Enforcement of
Due-On-Sale Clauses; Assumption Agreements.
(a) In connection with its activities as administrator and servicer of
the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Trustee and the Certificateholders, claims to the insurer under any Standard
Hazard Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any insurance policies. Pursuant to Section
5.08, the Servicer shall deposit Insurance Proceeds in the Collection Account.
(b) When any Mortgaged Property (or stock allocated to a dwelling unit,
in the case of a Co-op Loan) is conveyed by the Mortgagor, the Servicer shall
enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to
the extent permitted by such Mortgage Note or Mortgage, applicable law and
governmental regulations. Subject to the foregoing, the Servicer is authorized
to take or enter into an assumption or substitution agreement from or with the
Person to whom such property has been or is about to be conveyed. In connection
with such assumption or substitution, the Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
and as it applies to mortgage loans owned solely by it.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any conveyance by the
Mortgagor of the Mortgaged Property (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) or any assumption of a Mortgage Loan by operation of
law which the Servicer in good faith determines it may be restricted by law from
preventing, for any reason whatsoever.
(c) Subject to the Servicer's duty to enforce any due-on-sale clause to
the effect set forth in Section 5.20(b), in any case in which a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
to be conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage, the Servicer shall so notify the Trustee by forwarding to the
Trustee the original copy of such assumption or substitution agreement, which
copy shall be added by the Trustee to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. In connection
with any such assumption, modification agreement or substitution agreement, the
interest rate of the related Mortgage Note shall not be changed, the principal
amount of the Mortgage Note shall not be increased or decreased and the maturity
of the Mortgage Note shall not be extended, nor shall it be shortened by more
than one year. Any fee collected by the Servicer for entering into an assumption
or substitution of liability agreement with respect to such Mortgage Loan shall
be retained by the Servicer as additional servicing compensation.
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Section 5.21. Income and Realization from Defaulted Mortgage Loans. The
Servicer, on behalf of the Trustee, shall foreclose upon or otherwise comparably
convert the ownership of Mortgaged Properties (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 5.07, shall
manage, conserve, protect and operate such Mortgaged Properties (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) for the purposes of
their prompt disposition and sale, and shall dispose of such Mortgaged
Properties (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
on such terms and conditions as it deems in the best interests of the
Certificateholders. The Servicer shall sell such property prior to the close of
the third calendar year beginning after the year in which such foreclosure or
conversion occurs or such longer period as would not prevent such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
from constituting "foreclosure property" within the meaning of Section
860G(a)(8) of the Code. The Servicer will ensure that no Mortgaged Property
shall be rented or otherwise used in such a manner or pursuant to any terms that
would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or (ii) subject
any REMIC Pool to the imposition of any federal income taxes on the income
earned on such Mortgaged Property, including any taxes imposed by reason of
Section 860F or 860G(c) of the Code. In connection with such activities, the
Servicer shall follow such practices and procedures as it shall deem necessary
or advisable, as shall be normal and usual in its general mortgage servicing
activities, including its management of foreclosed properties for a temporary
period as contemplated herein. The foregoing is subject to the provisions of
Section 5.28 of this Agreement and to the proviso that the Servicer shall not be
required to expend its own funds in connection with any management, foreclosure
or towards the restoration of any property unless it shall determine that such
management, restoration or foreclosure will increase the Liquidation Proceeds of
the Mortgage Loan to Certificateholders after reimbursement to itself for such
expenses (respecting which it shall have priority for purposes of withdrawals
from the Collection Account pursuant to Section 5.09). The Servicer shall be
permitted to earn income with respect to any Mortgaged Properties (or stock
allocated to a dwelling unit, in the case of a Co-op Loan), provided such income
does not constitute "net income from foreclosure property" within the meaning of
Section 860G(c) of the Code. The income earned from the management of such
Mortgaged Properties (or stock allocated to a dwelling unit, in the case of a
Co-op Loan), net of reimbursement to the Servicer for expenses (including any
taxes) incurred in connection with such management, shall be applied to the
payment of principal of and interest on the related defaulted Mortgage Loans
(with interest accruing and principal amortizing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Collection Account. To
the extent the income received is in excess of the amount attributable to
amortizing principal and accrued interest at the Net Mortgage Rate on the
related Mortgage Loan, such excess shall be deposited in the Collection Account.
The Servicer shall take into account the existence of any hazardous
substances, hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act, as amended,
the Resources Conservation and Recovery Act of 1976, as amended, or other
federal, state or local environmental legislation, on a Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) in determining
whether to foreclose upon or otherwise comparably convert the ownership of such
property. To the extent that the Servicer has actual knowledge of any such
substance or waste, it shall consult with the Trustee regarding the appropriate
course of action. The Servicer shall not institute foreclosure actions with
respect to a property containing substance or waste as described above if it
reasonably believes that such action would not be consistent with its servicing
standards, and in no event shall the Servicer manage, operate or take any other
action with respect thereto which the Servicer in good faith believes will
result in "clean-up" or other liability under applicable law. The net income
from the rental or sale of a REO Property shall be deposited in the Collection
Account within two (2) Business Days after receipt thereof by the Servicer.
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The Servicer may enter into a special servicing agreement with an
unaffiliated holder of 100% Percentage Interest of the Class of Class B
Certificates then outstanding having the highest numerical class designation or
a holder of a class of securities representing interests in such Class B
Certificate and/or other subordinate mortgage pass-through certificates, such
agreement to be (i) substantially in the form of Exhibit J hereto or (ii)
subject to each Rating Agency's acknowledgment that the ratings of the
Certificates in effect immediately prior to the entering into of such agreement
would not be qualified, downgraded or withdrawn and the Certificates would not
be placed on credit review status (except for possible upgrading) as a result of
such agreement. Any such agreement may contain provisions whereby such holder
may instruct the Servicer to commence or delay foreclosure proceedings with
respect to delinquent Mortgage Loans and will contain provisions for the deposit
of cash by the holder that would be available for distribution to
Certificateholders if Liquidation Proceeds are less than they otherwise may have
been had the Servicer acted in accordance with its normal procedures.
Section 5.22. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
upon the receipt by the Servicer of a notification that payment in full will be
made in a manner customary for such purposes, the Servicer shall immediately
notify the Trustee (if the Trustee holds the related Mortgage File) by a
certification (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 5.08 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Mortgage File. Upon receipt of such certification and request,
within five Business Days the Trustee shall release the related Mortgage File to
the Servicer and execute and deliver to the Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such other instruments releasing the lien of the Mortgage as have been provided
by the Servicer to the Trustee, together with the Mortgage Note with written
evidence of cancellation thereon, and the Trustee shall have no further
responsibility with respect to said Mortgage File. Upon any such payment in
full, or the receipt of such notification, the Servicer is authorized to procure
from the Trustee under the deed of trust which secured the Mortgage Note, if
any, a deed of full reconveyance covering the property encumbered by such deed
of trust, which assignment of deed of trust, except as otherwise provided by any
applicable law, shall be recorded by the Servicer in the appropriate land
records in the jurisdiction in which the assignment of deed of trust is
recorded, or, as the case may be, to procure from the Trustee an instrument of
satisfaction or, if the Mortgagor so requests, an assignment without recourse,
which deed of reconveyance, instrument of satisfaction or assignment shall be
delivered by the Servicer to the Person or Persons entitled thereto. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or to the Trustee.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Servicer shall deliver to the Trustee a
certificate of a Servicing Officer requesting that possession of the Mortgage
File be released to the 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
required by this Agreement. With such certificate, the Servicer shall require
that the Trustee release the Mortgage File, and, within five Business Days, the
Trustee shall deliver the Mortgage File or any document therein to the Servicer.
The Servicer shall cause each Mortgage File so released to be returned to the
Trustee when the need therefor by the Servicer no longer exists, unless (i) the
Mortgage Loan has been liquidated and the Net Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Collection Account or (ii) the
Mortgage File 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 (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) either
judicially or non-judicially, and the Servicer has delivered to the Trustee a
certificate of a Servicing Officer in the form of Exhibit L hereto certifying as
to the name and address of the Person to which such Mortgage File was delivered
and the purpose or purposes of such delivery.
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(c) Upon written request of the Servicer, the Trustee shall execute and
deliver to the Servicer any court pleadings, requests for trustee's sale or
other documents prepared by and delivered by the Servicer to the Trustee
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) or
to any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Together with such documents or pleadings, the
Servicer shall deliver to the Trustee a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate any
insurance coverage under the insurance policies required under this Agreement or
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
Section 5.23. Servicing and Other Compensation. The Servicer, as
compensation for its activities hereunder, shall be entitled to receive, on or
prior to each Distribution Date, the amounts provided for as the Servicing Fee
and as reimbursement for Nonrecoverable Advances, Servicing Advances and
reimbursement for Advances, all as specified by Section 5.09. The amount of
compensation or reimbursement provided for shall be accounted for on a Mortgage
Loan-by-Mortgage Loan basis.
Additional servicing compensation in the form of assumption fees,
prepayment fees and late payment charges shall be retained by the Servicer, to
the extent permitted by applicable law. The Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including the fees and expenses of the Trustee and any Sub-Servicer)
and shall not be entitled to reimbursement therefor except as specifically
provided in Sections 5.09 and 5.21.
Section 5.24. 1934 Act Reports.
(a) The Servicer shall, on behalf of the Trust, make all filings
("Periodic Reports") required to be made by the Depositor or the Trust (other
than the filings relating to the closing of this transaction) with respect to
the Class A Certificates, the Class M Certificates, the Class B-1 Certificates
and the Class B-2 Certificates pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder. In no event shall the
Trustee or any agent of the Trustee including any Paying Agent be obligated or
responsible for preparing, executing, filing or delivering in respect of the
Trust Fund or on behalf of another person, either (A) any report or filing
required or permitted by the SEC to be prepared, executed, filed or delivered by
or in respect of the Trust Fund or another person, or (B) any certification in
respect of any such report or filing. The Form 10-K filing required to be made
by the Trust shall also include a certification complying with the Section 302
Requirements, which shall be signed by the senior officer of the Depositor in
charge of securitization.
(b) Within thirty (30) days after the beginning of the first fiscal
year during which the Trust's obligation to file Periodic Reports pursuant to
the Exchange Act shall have been suspended, the Depositor may prepare, or cause
to be prepared, a notice on Commission Form 15 ("Form 15") and is hereby
authorized to and shall execute such Form 15 on the Trust's behalf; provided,
however, that the Depositor shall be under no obligation to prepare such notice
if the number of Certificateholders exceeds 300. The Depositor shall file any
notice on Form 15 with the Commission in accordance with the provisions of Rule
15d-6 under the Exchange Act.
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(c) Not later than 15 calendar days before the date on which the
Trust's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, if such
day is not a Business Day, the immediately preceding Business Day), the Servicer
will deliver to the Depositor an Officer's Certificate for the prior calendar
year substantially in the form of Exhibit N hereto.
(d) Not later than 15 calendar days before the date on which the
Trust's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, if such
day is not a Business Day, the immediately preceding Business Day), the Paying
Agent will deliver to the Depositor an Officer's Certificate for the prior
calendar year substantially in the form of Exhibit O hereto.
(e) If the Commission issues additional interpretive guidance or
promulgates additional rules or regulations, or if other changes in applicable
law occur that would require the reporting arrangements or the allocation of
responsibilities with respect thereto described in this Section 5.24 to be
conducted differently than as described, the Depositor, the Servicer and the
Trustee will reasonably cooperate to amend the provisions of this Section 5.24
in order to comply with such amended reporting requirements and such amendment
of this Section 5.24. Any such amendment shall be made in accordance with
Section 12.03 without the consent of the Certificateholders, and may result in a
change in the reports filed under the Exchange Act. Notwithstanding the
foregoing, the Depositor, the Servicer and the Trustee shall not be obligated to
enter into any amendment pursuant to this Section 5.24 that adversely affects
its obligations and immunities under this Agreement.
Section 5.25. Annual Statement as to Compliance. The Servicer will
deliver to the Depositor and the Trustee on or before March 31 of each year
beginning in 2004 or such other date in order to remain in compliance with
Section 302 Requirements, an Officers' Certificate stating, as to each signer
thereof, that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement has been made
under such officer's supervision, (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and (iii) to the best of such
officer's knowledge, each Sub-Servicer has fulfilled its obligations under its
Sub-Servicing Agreement throughout such year, or if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof. Copies of such statement shall
be provided to each Rating Agency by the Servicer. Copies of such statement
shall also be provided by the Servicer to any Certificateholder upon request. If
the Servicer shall fail to provide such copies and a Responsible Officer of the
Trustee is aware that the Servicer has not so provided copies, the Trustee shall
provide such copies at the Servicer's expense if the Trustee has received such
statement.
Section 5.26. Annual Independent Public Accountants' Servicing Report.
On or before March 31 of each year beginning in 2004 or such other date in order
to remain in compliance with the Section 302 Requirements, the Servicer at its
expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Servicer or any affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Depositor and the Trustee in
compliance with the Uniform Single Attestation Program for Mortgage Bankers.
Copies of such statement shall be provided to each Rating Agency, and, upon
request, to the Certificateholders, by the Servicer, or by the Trustee at the
Servicer's expense if the Trustee has received such statement and the Servicer
shall fail to provide such copies and the Trustee is aware that the Servicer has
not so provided copies.
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Section 5.27. Access to Certain Documentation; Rights of the Depositor
in Respect of the Servicer. The Servicer shall provide access to the Trustee and
Certificateholders which are savings and loan associations, banks or insurance
companies or examiners of any federal or state banking or insurance regulatory
authority to the documentation regarding the Mortgage Loans if so required by
applicable regulations of any regulatory authority, such access to be afforded
subject to reimbursement for expenses without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer
designated by it. The Depositor may, but is not obligated to, enforce the
obligations of the Servicer under this Agreement. The Depositor shall not assume
any responsibility or liability for any action or failure to take action by the
Servicer and is not obligated to supervise the performance of the Servicer under
this Agreement or otherwise.
Section 5.28. REMIC-Related Covenants. For as long as the Trust Fund
shall exist, the Servicer and the Trustee shall act in accordance herewith to
assure continuing treatment of each REMIC created hereunder as a REMIC. In
particular:
(a) The Servicer shall not create, or permit the creation of, any
"interests" in any REMIC created hereunder within the meaning of Section 860G(a)
of the Code other than the "regular interests" in each such REMIC designated as
such in Section 2.04(a) and the "residual interest" in each such REMIC
designated as such in Section 2.04(a);
(b) As of all times as may be required by the Code, the Servicer will
ensure that substantially all of the assets of each REMIC created hereunder will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code. The
Servicer and the Trustee, upon the direction of the Servicer, also will maintain
records that are sufficient to indicate the compliance of each REMIC created
hereunder with applicable requirements of the Code (and applicable Proposed,
Temporary or final Treasury Regulations) relating to the assets held by such
REMIC. Further, the Servicer shall not permit and the Trustee shall not accept
the transfer or substitution of any Mortgage Loan other than pursuant to Section
3.04, 5.01 or 5.21 of this Agreement, and the Servicer shall, in any case, not
permit substitution later than two (2) years from the Closing Date unless the
Servicer and the Trustee have received an Opinion of Counsel, which will not be
an expense of any REMIC created hereunder, that such transfer or substitution
would not adversely affect the REMIC status of any REMIC created hereunder or
would not otherwise be prohibited by this Agreement;
(c) The Servicer shall ensure that no REMIC created hereunder receives
a fee or other compensation for services and that no REMIC created hereunder
receives any income from assets other than "qualified mortgages" within the
meaning of Section 860G(a)(3) of the Code or "permitted investments" within the
meaning of Section 860G(a)(5) of the Code, and shall take whatever action it
deems necessary to avoid any material tax imposed by the Code on any REMIC
created hereunder;
(d) The Trustee shall not sell or permit the sale of all or any portion
of the Mortgage Loans or of any Eligible Investment unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Trustee has received an Opinion of Counsel, which will not be an expense of any
REMIC created hereunder or the Trustee, to the effect that such sale (i) is
pursuant to a "qualified liquidation" as defined in Section 860F(a)(4) of the
Code and as described in Section 11.01 hereof, or (ii) would not be treated as a
"prohibited transaction" within the meaning of Section 860F(a)(2) of the Code
that results in the realization of a material amount of gain or loss for federal
income tax purposes;
(e) The Trustee shall not accept any contribution to any REMIC created
hereunder after the Startup Day without an Opinion of Counsel (which shall not
be an expense of the Trustee) that such contribution is included within the
exceptions provided in Section 860G(d)(2) of the Code and, therefore, will not
be subject to the tax imposed by Section 860G(d)(1) of the Code; and
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(f) Notwithstanding anything to the contrary in this Agreement, the
Servicer and the Trustee, at the direction of the Servicer, shall take any other
action or refuse to take any action otherwise required (including adjusting the
Purchase Price for any Mortgage Loan) where the Servicer deems such action or
inaction reasonably necessary to ensure the REMIC status of each REMIC created
hereunder under the Code and applicable regulations or to avoid the imposition
of any material tax liability on any REMIC created hereunder that will affect
amounts distributable to the Certificateholders.
(g) In the event that any applicable federal, state or local tax,
including interest, penalties or assessments, additional amounts or additions to
tax, is imposed on any REMIC created hereunder, such tax shall be treated in the
same manner as a Realized Loss and shall be charged against amounts otherwise
distributable to the Holders of the Certificates, except as provided in the last
sentence of this Section 5.28 (g). The Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent shall withdraw from the
Collection Account sufficient funds to pay or provide for the payment of, and to
actually pay, such tax as is estimated to be legally owed by (but such
authorization shall not prevent the Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent from contesting, at the expense
of the Trust Fund (other than as a consequence of a breach of its obligations
under this Agreement), any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent is hereby authorized to and shall segregate, into a
separate non-interest bearing account, the net income from any "prohibited
transaction" under Code Section 860F(a), the amount of any taxable contribution
to any REMIC created hereunder after the Startup Day that is subject to tax
under Code Section 860G(d), and 35% of any estimated "net income from
foreclosure property" under Section 860G(c) and use such income or amount, to
the extent necessary, to pay such tax. To the extent that any such tax is paid
to the Internal Revenue Service or applicable state or local tax authorities,
the Trustee or a Paying Agent has been appointed under Section 4.05, the Paying
Agent shall retain an equal amount from future amounts otherwise distributable
to the Holder of the Class A-R Certificate and shall distribute such retained
amounts to the Holders of the other Classes of Certificates, to the extent they
remain outstanding, until they are fully reimbursed for any amount of such taxes
previously charged to the then Holder of the Class A-R Certificate. Neither the
Trustee nor the Servicer shall be responsible for any taxes imposed on any REMIC
created hereunder except to the extent such taxes arise as a consequence of a
breach of their respective obligations under this Agreement.
Section 5.29. Maintenance of the Rounding Account; Collections
Thereunder.
(a) On or prior to the Closing Date, the Paying Agent shall establish
the Rounding Account, which shall be non-interest bearing, and Xxxxxxx, Xxxxx &
Co. shall deposit $999.99 therein. The Paying Agent shall maintain such account
to provide, if needed, the applicable Rounding Amount on any Distribution Date.
On the first Distribution Date with respect to which the Paying Agent determines
that amounts are available out of the Available Distribution Amount for
distributions of principal on the Class IIA-4 Certificates, and the aggregate
amount allocable to such distributions of principal is not an amount equal to an
integral multiple of $1,000.00, the Paying Agent shall withdraw from the
Rounding Account the applicable Rounding Amount. On each succeeding Distribution
Date, prior to the earlier of (i) the Credit Support Depletion Date and (ii) the
first Distribution Date on which the aggregate remaining Scheduled Principal
Balance of the Mortgage Loans is less than $1,000,000, with respect to which the
Paying Agent determines that amounts are available out of the Available
Distribution Amount for distributions of principal on the Class IIA-4
Certificates, the aggregate amount allocable to such Class IIA-4 Certificate,
respectively, will be applied first to replenish any funds withdrawn from the
Rounding Account on prior Distribution Dates which have not been repaid. If the
remainder of the aggregate amount allocable to distributions of principal on
each such Class is not an amount equal to an integral multiple of $1,000.00, the
Paying Agent shall withdraw from the Rounding Account, to the extent funds are
available therein, the applicable Rounding Amount.
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(b) Any amounts withdrawn by the Paying Agent from the Rounding Account
shall be deposited in the Certificate Account for distribution to the Holders of
Class IIA-4 Certificates as described in clause (a) above. Funds in the Rounding
Account shall remain uninvested.
(c) On or promptly after the applicable date described in clause (a)
above, the Paying Agent shall withdraw and pay to itself as additional
compensation any remaining amounts on deposit in the Rounding Account.
[END OF ARTICLE V]
ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
Section 6.01. Distributions.
(a) On each Distribution Date, the Paying Agent shall apply an amount
equal to the Available Distribution Amount in the following order of priority:
(i) to the Class A Certificateholders (other than the Class A-P
Certificates), all distributable amounts up to the sum of (A) the
Aggregate Class A Interest Accrual Amount and (B) the Aggregate Class A
Interest Shortfall;
(ii) the balance, if any, of the Available Distribution Amount
shall be distributed (A) solely from amounts received with respect to
Group One pro rata (in accordance with the maximum amounts
distributable in accordance with this clause (A)) to the Class A Group
One Certificateholders in the amounts distributable pursuant to
(b)(ii)(A) below, up to the Class A Group One Optimal Principal Amount,
(B) solely from amounts received with respect to Group Two pro rata (in
accordance with the maximum amounts distributable in accordance with
this clause (B)) to the Class A Group Two Certificateholders in the
amounts distributable pursuant to (b)(ii)(B) below, up to the Class A
Group Two Optimal Principal Amount, (C) solely from amounts received
with respect to Group Three pro rata (in accordance with the maximum
amounts distributable in accordance with this clause (C))to the Class A
Group Three Certificateholders in the amounts distributable pursuant to
(b)(ii)(C) below, up to the Class A Group Three Optimal Principal
Amount and (D) solely from amounts received with respect to Group A-P
pro rata (in accordance with the maximum amounts distributable in
accordance with this clause (D)) to the Class A-P Certificateholders in
the amounts distributable pursuant to (b)(ii)(D) below, up to the Class
A-P Amount;
(iii) subject to subsection (b) below, to the Class M
Certificateholders, the balance, if any, of the Available Distribution
Amount after making the distributions provided for in paragraphs (i)
and (ii) above, in accordance with, and up to the amount calculated
pursuant to, Section 6.01(c) below;
(iv) subject to subsection (b) below, to the Class B
Certificateholders, the balance, if any, of the Available Distribution
Amount after making the distributions provided for in paragraphs (i)
through (iii) above, in accordance with, and up to the amounts
calculated pursuant to, Section 6.01(d) below; and
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(v) to the Class A-R Certificateholders the balance, if any, of
the Available Distribution Amount remaining after the distributions
provided for in paragraphs (i) through (iv) above.
(b) Amounts payable to the Class A Certificateholders on any
Distribution Date shall be distributed as follows:
(i) to the extent the amount available for distribution pursuant
to paragraph (a)(i) above is sufficient:
(A) to the Class IA-1 Certificateholders, (1) the Class IA-1
Interest Accrual Amount plus (2) the Class IA-1 Shortfall from the
preceding Distribution Date;
(B) to the Class IIA-1 Certificateholders, (1) the Class IIA-1
Interest Accrual Amount plus (2) the Class IIA-1 Shortfall from
the preceding Distribution Date;
(C) to the Class IIA-2 Certificateholders, (1) the Class IIA-2
Interest Accrual Amount plus (2) the Class IIA-2 Shortfall from
the preceding Distribution Date;
(D) to the Class IIA-3 Certificateholders, (1) the Class IIA-3
Interest Accrual Amount plus (2) the Class IIA-3 Shortfall from
the preceding Distribution Date;
(E) to the Class IIA-4 Certificateholders, (1) the Class IIA-4
Interest Accrual Amount plus (2) the Class IIA-4 Shortfall from
the preceding Distribution Date;
(F) to the Class IIA-5 Certificateholders, (1) the Class IIA-5
Interest Accrual Amount plus (2) the Class IIA-5 Shortfall from
the preceding Distribution Date;
(G) to the Class IIA-6 Certificateholders, (1) the Class IIA-6
Interest Accrual Amount plus (2) the Class IIA-6 Shortfall from
the preceding Distribution Date;
(H) to the Class IIA-7 Certificateholders, (1) the Class IIA-7
Interest Accrual Amount plus (2) the Class IIA-7 Shortfall from
the preceding Distribution Date;
(I) to the Class IIIA-1 Certificateholders, (1) the Class
IIIA-1 Interest Accrual Amount plus (2) the Class IIIA-1 Shortfall
from the preceding Distribution Date;
(J) to the Class A-X Certificateholders, (1) the Class A-X
Interest Accrual Amount plus (2) the Class A-X Shortfall from the
preceding Distribution Date;
(K) to the Class A-R Certificateholders, (1) the Class A-R
Interest Accrual Amount plus (2) the Class A-R Shortfall from the
preceding Distribution Date;
(ii) concurrently, (A) to the Class A Group One
Certificateholders, solely from the portion of the Available
Distribution Amount related to amounts received with respect to Group
One up to the Class A Group One Optimal Principal Amount, allocated
among the Class A Group One Certificates in accordance with the Class A
Group One Principal Payment Rules, (B) to the Class A Group Two
Certificateholders (other than the Class IIA-6 and Class IIA-7
Certificateholders), solely from the portion of the Available
Distribution Amount related to amounts received with respect to Group
Two up to the Class A Group Two Optimal Principal Amount, allocated
among the Class A Group Two Certificates in accordance with the Class A
Group Two Principal Payment Rules, (C) to the Class A Group Three
Certificateholders (other than the Class A-X Certificateholders),
solely from the portion of the Available Distribution Amount related to
amounts received with respect to Group Three up to the Class A Group
Three Optimal Principal Amount, allocated among the Class A Group Three
Certificates in accordance with the Class A Group Three Principal
Payment Rules and (D) to the Class A-P Certificateholders, the portion
of the Available Distribution Amount related to amounts received with
respect to Group A-P;
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(iii) to the extent that the portion of the Available Distribution
Amount related to amounts available from Group One remaining after
giving effect to the distributions in (b)(i) above is insufficient to
distribute in full to the Class A Group One Certificateholders amounts
described in (b)(ii)(A) above (such shortfall, the "Class A Group One
Deficiency Amount") and the portion of the Available Distribution
Amount related to amounts available from Group Two remaining after
giving effect to the distributions in (b)(i) above exceeds the amount
required to distribute in full to the Class A Group Two
Certificateholders (other than the Class IIA-6 and Class IIA-7
Certificateholders) the amounts described in (b)(ii)(B) above, or the
portion of the Available Distribution Amount related to amounts
available from Group Three remaining after giving effect to the
distributions in (b)(i) above exceeds the amount required to distribute
in full to the Class A Group Three Certificateholders (other than the
Class A-X Certificates) the amounts described in (b)(ii)(C) above, such
excess shall be distributed in reduction of the Class A Group One
Deficiency Amount;
(iv) to the extent that the portion of the Available Distribution
Amount related to amounts available from Group Two remaining after
giving effect to the distributions in (b)(i) above is insufficient to
distribute in full to the Class A Group Two Certificateholders (other
than the Class IIA-6 and Class IIA-7 Certificates) amounts described in
(b)(ii)(B) above (such shortfall, the "Class A Group Two Deficiency
Amount") and the portion of the Available Distribution Amount related
to amounts available from Group One remaining after giving effect to
the distributions in (b)(i) above exceeds the amount required to
distribute in full to the Class A Group One Certificateholders the
amounts described in (b)(ii)(A) above, or the portion of the Available
Distribution Amount related to amounts available from Group Three
remaining after giving effect to the distributions in (b)(i) above
exceeds the amount required to distribute in full to the Class A Group
Three Certificateholders (other than the Class A-X Certificates) the
amounts described in (b)(ii)(C) above, such excess shall be distributed
in reduction of the Class A Group Two Deficiency Amount;
(v) to the extent that the portion of the Available Distribution
Amount related to amounts available from Group Three remaining after
giving effect to the distributions in (b)(i) above is insufficient to
distribute in full to the Class A Group Three Certificateholders (other
than the Class A-X Certificates) amounts described in (b)(ii)(C) above
(such shortfall, the "Class A Group Three Deficiency Amount") and the
portion of the Available Distribution Amount related to amounts
available from Group One remaining after giving effect to the
distributions in (b)(i) above exceeds the amount required to distribute
in full to the Class A Group One Certificateholders the amounts
described in (b)(ii)(A) above or the portion of the Available
Distribution Amount related to amounts available from Group Two
remaining after giving effect to the distributions in (b)(i) above
exceeds the amount required to distribute in full to the Class A Group
Two Certificateholders (other than the Class IIA-6 and Class IIA-7
Certificates) the amounts described in (b)(ii)(B) above, such excess
shall be distributed in reduction of the Class A Group Three Deficiency
Amount;
(vi) to the Class A-P Certificates the Class A-P Shortfall Amount;
provided, however, that any amount distributed pursuant to this Section
6.01(b)(vi) shall not cause a further reduction in the Outstanding
Certificate Principal Balance of the Class A-P Certificates;
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(vii) If the Available Distribution Amount is insufficient to make
the distributions set forth in (b)(i) above, the Paying Agent shall
distribute the Available Distribution Amount to the Class A
Certificateholders pro rata in accordance with the amounts otherwise
distributable to them pursuant to (b)(i)(A)-(K) above; and
(viii) In addition to the foregoing distributions, the Class A
Group One Certificates, Class A Group Two (other than the Class IIA-6
and Class IIA-7 Certificates) or Class A Group Three Certificates
(other than the Class A-X Certificates) will receive additional
principal distributions on any Distribution Date prior to the Credit
Support Depletion Date under the circumstances specified in (A) and (B)
below:
(A) On any Distribution Date on or after the date on which the
aggregate Outstanding Certificate Principal Balance of the Class A
Group One Certificates, the Outstanding Certificate Principal
Balance of the Class A Group Two Certificates or the Outstanding
Certificate Principal Balance of the Class A Group Three
Certificates has been reduced to zero, all principal (in excess of
that needed to reduce the aggregate Outstanding Certificate
Principal Balance of the Class A Group One Certificates, the
Outstanding Certificate Principal Balance of the Class A Group Two
Certificates or the Outstanding Certificate Principal Balance of
the Class A Group Three Certificates to zero and, where the
Outstanding Certificate Principal Balance of the Class A Group Two
Certificates has been reduced to zero, in excess of the excess of
(x) the aggregate amounts distributed to the Class IIA-4
Certificates from amounts withdrawn from the Rounding Account over
(y) the sum of (I) the aggregate amounts replenished to the
Rounding Account and (II) the aggregate amounts distributed to the
Class A-R Certificates under the Class A Group Two Principal
Payment Rules) on the Mortgage Loans or Mortgage Components in the
Group relating to such Class A Certificates that are no longer
outstanding will be distributed as principal to the remaining
Class A Certificates (pro rata) in accordance with Section
6.01(b)(ii)(A), 6.01(b)(ii)(B) or 6.01(b)(ii)(C), or as
applicable, in reduction of the Outstanding Certificate Principal
Balances thereof, provided that on such Distribution Date either
(a) the Aggregate Subordinated Percentage for such Distribution
Date is less than 200% of the initial Aggregate Subordinate
Percentage, or (b) the average outstanding Principal Balance of
the Mortgage Loans or Mortgage Components in any Group delinquent
60 days or more over the prior six months, as a percentage of the
corresponding Group One, Group Two or Group Thee Subordinated
Amount, is greater than or equal to 50%. For purposes of the
foregoing, the "Aggregate Subordinated Percentage" for any
Distribution Date is equal to the aggregate Outstanding
Certificate Principal Balance of the Subordinated Certificates
immediately prior to such Distribution Date divided by the
aggregate Scheduled Principal Balance of all of the Mortgage Loans
immediately prior to such Distribution Date.
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(B) If on any Distribution Date on which the aggregate
Outstanding Certificate Principal Balance of the Class A Group
One, Class A Group Two or Class A Group Three Certificates would
be greater than the related outstanding principal balance of the
Mortgage Loans or Mortgage Components in the related Group as of
such date (giving effect to any advances but prior to giving
effect to any principal prepayments received with respect to such
Mortgage Loans or Mortgage Component that have not been passed
through to Certificateholders) (the "Undercollateralized Group"),
after giving effect to distributions to be made on such
Distribution Date, the portion of the Available Distribution
Amount in respect of principal on the Mortgage Loans or Mortgage
Components in the other Group or Groups (each, an
"Overcollateralized Group") otherwise allocable to the
Subordinated Certificates will be distributed to the Classes of
Class A Certificates relating to the Undercollateralized Group (in
accordance with the priorities set forth herein), in reduction of
the principal balances thereof, until the aggregate principal
balance of the Certificates included in the Undercollateralized
Group is equal to the outstanding principal balance of the
Mortgage Loans and Mortgage Components in the related Group as of
such date (giving effect to any Advances but prior to giving
effect to any principal prepayments received with respect to such
Mortgage Loans that have not been passed through to the
Certificateholders). Moreover, the Available Distribution Amount
with respect to the Overcollateralized Group will be further
reduced (after distributions of interest to the Class A
Certificates included in the Overcollateralized Group) in an
amount equal to one month's interest on the amount by which the
Undercollateralized Group is undercollateralized at 5.00% per
annum (if Group One is the Undercollateralized Group), 5.50% per
annum (if Group Two is the Undercollateralized Group) or 6.00% per
annum (if Group Three is the Undercollateralized Group), plus any
shortfall of such amounts from prior Distribution Dates; provided,
however, that in no event shall the Available Distribution Amount
with respect to any Overcollateralized Group on any Distribution
Date be reduced by more than the sum of (i) the overcollateralized
amount with respect to the Overcollateralized Group and (ii)
interest thereon at the applicable Remittance Rate. Such amounts
will be distributed to the applicable Classes of Certificates in
the priority of interest payable on such Distribution Date. If two
Groups are Undercollateralized Groups then amounts will be
distributed to the Undercollateralized Groups pro rata based upon
the amounts of undercollateralization with respect to each
Undercollateralized Group. If two Groups are Overcollateralized
Groups then any amounts distributed to the Undercollateralized
Group will be allocated from each Overcollateralized Group pro
rata based upon amounts available with respect to each
Overcollateralized Group.
(c) Amounts payable on any Distribution Date to the Class M
Certificateholders shall be distributed up to an amount equal to (A) the Class M
Interest Accrual Amount plus (B) the Class M Shortfall from the preceding
Distribution Date plus (C) the portion of the Subordinated Optimal Principal
Amount allocable (pursuant to Section 6.01(e)) to the Class M Certificates plus
(D) any Carry-over Subordinated Principal Amounts with respect to the Class M
Certificates.
(d) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 6.01(a)(iv) shall be distributed in the
following priority:
(1) first, to the Class B-1 Certificateholders, up to an
amount equal to (A) the Class B-1 Interest Accrual Amount plus (B) the Class B-1
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-1
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-1 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class M Certificates in excess of the Outstanding Certificate Principal Balance
of such Class;
(2) second, to the Class B-2 Certificateholders, up to an
amount equal to (A) the Class B-2 Interest Accrual Amount plus (B) the Class B-2
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-2
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-2 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-1 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
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(3) third, to the Class B-3 Certificateholders, up to an
amount equal to (A) the Class B-3 Interest Accrual Amount plus (B) the Class B-3
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-3
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-3 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-2 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(4) fourth, to the Class B-4 Certificateholders, up to an
amount equal to (A) the Class B-4 Interest Accrual Amount plus (B) the Class B-4
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-4
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-4 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-3 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class; and
(5) fifth, to the Class B-5 Certificateholders, up to an
amount equal to (A) the Class B-5 Interest Accrual Amount plus (B) the Class B-5
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-5
Certificates in accordance with Section 6.01(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-5 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-4 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class.
(e) On each Distribution Date, the Subordinated Optimal Principal
Amount shall be allocated among the Classes of Subordinated Certificates
entitled, pursuant to the next succeeding sentence, to an allocation of
principal on such Distribution Date, pro rata based upon the Outstanding
Certificate Principal Balances of all such Classes so entitled. With respect to
the Subordinated Certificates, on each Distribution Date, principal shall be
distributable to (1) any Class of Subordinated Certificates which has current
Credit Support (before giving effect to any distribution of principal and any
Realized Losses allocable on such Distribution Date) greater than or equal to
the Original Credit Support for such Class; (2) the Class having the lowest
numerical class designation of any outstanding Class of Subordinated
Certificates which does not meet the criteria in (1) above; and (3) the Class
B-5 Certificates if all other outstanding Classes of Subordinated Certificates
meet the criteria in (1) above or if no other Class of Subordinated Certificates
is outstanding; provided, however, that no Class of Subordinated Certificates
shall receive any distributions of principal if any Class of Subordinated
Certificates having a lower numerical class designation than such Class fails to
meet the criteria in (1) above. For purposes of this paragraph, the Class M
Certificates shall be deemed to have a lower numerical class designation than
each Class of Class B Certificates.
(f) Based upon the information received from the Servicer, as provided
in Section 6.02, the Paying Agent shall make all calculations necessary to make
the distributions described in this Section 6.01. All distributions made to
Certificateholders of any Class on each Distribution Date will be made to the
Certificateholders of the respective Class of record on the next preceding
Record Date, except that the final distribution with respect to each Class shall
be made as provided in the forms of Certificates. All distributions made to
Certificateholders shall be based on the Percentage Interest of the Class
represented by their respective Certificates, and shall be made either by
transfer in immediately available funds to the account of such Holder at a bank
or other financial or depository institution having appropriate facilities
therefor, if such Holder has so notified the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, in writing at least 10
Business Days prior to the first Distribution Date for which distribution by
wire transfer is to be made and such Holder's Certificates of such Class in the
aggregate evidence an original denomination of not less than $5,000,000 or such
Holder holds a 100% Percentage Interest of such Class or, if not, by check
mailed to the address of the Person entitled thereto as it appears on the
Certificate Register, except that the final distribution in retirement of the
Certificates will be made only upon presentation and surrender of the
Certificates at the office specified in the final Distribution Notice. If on any
Determination Date, the Servicer determines that there are no Mortgage Loans
outstanding and no other funds or assets in the Trust Fund other than the funds
in the Certificate Account, the Trustee or if a Paying Agent has been appointed
under Section 4.05, the Paying Agent shall promptly send the final distribution
notice to each Certificateholder specifying the manner in which the final
distribution will be made.
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Section 6.02. Statements to the Certificateholders.
(a) Not later than the earlier of (i) three Business Days after the
Determination Date and (ii) the second Business Day prior to each Distribution
Date, the Servicer shall send to the Paying Agent and the Trustee (in such
format as may be mutually agreed) the relevant information for purposes of this
Section 6.02. Not later than each Distribution Date, the Paying Agent shall make
available on its website located at xxx.xxxxxxxx.xxx/xxx or upon request shall
send to any Certificateholder, the Depositor, the Trustee, the Servicer, any
co-trustee, and each Rating Agency a statement setting forth the following
information, after giving effect to the distributions to be made by the Paying
Agent pursuant to Section 6.01 on or as of such Distribution Date:
(i) with respect to each Class of Certificates the amount of such
distribution to Holders of such Class allocable to principal;
(ii) the aggregate amount of any Principal Prepayments and
Repurchase Proceeds included in the distributions to
Certificateholders, in each case both in the aggregate and by Mortgage
Group;
(iii) the aggregate amount of any Advances by the Servicer
pursuant to Section 6.03, both in the aggregate and by Mortgage Group;
(iv) the number of Outstanding Mortgage Loans and the Mortgage
Pool Principal Balance as of the close of business as of the end of the
related Principal Prepayment Period;
(v) the related amount of the Servicing Fees (as adjusted pursuant
to Section 6.05) retained or withdrawn from the Collection Account by
the Servicer;
(vi) the number and aggregate principal amounts of Mortgage Loans
(A) delinquent (1) one Monthly Payment, (2) two Monthly Payments and
(3) three or more Monthly Payments and (B) in foreclosure, in each
case, as of the end of the related Principal Prepayment Period;
(vii) the number and the principal balance of Mortgage Loans with
respect to any real estate acquired through foreclosure or grant of a
deed in lieu of foreclosure;
(viii) the aggregate amount of all Advances recovered during the
related Due Period;
(ix) with respect to the following Distribution Date, the Class A
Percentage, the Class M Percentage, the Class B Percentage, the Class A
Principal Balance, the Class M Principal Balance, the Class B Principal
Balance, the Class A Prepayment Percentage, the Class A Group One
Percentage, the Class A Group Two Percentage, the Class A Group Three
Percentage, the Class A Group One Prepayment Percentage, the Class A
Group Two Prepayment Percentage, Class A Group Three Prepayment
Percentage, the Class A Group One Principal Balance, the Class A Group
Two Principal Balance, the Class A Group Three Principal Balance and
the level of Credit Support, if any, with respect to each Class of
Subordinated Certificates;
(x) the aggregate amount of Realized Losses during the related Due
Period and the aggregate amount of Realized Losses since the Cut-off
Date;
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(xi) the allocation to each Class of Certificate of any Realized
Losses during the related Due Period;
(xii) the Outstanding Certificate Principal Balance of each Class
of Certificates after giving effect to the distributions to each Class
on such Distribution Date;
(xiii) with respect to each Class of Certificates, the amount of
any Compensating Interest Shortfalls on such Distribution Date; and
(xiv) the number of Mortgage Loans with respect to which a
reduction in the Mortgage Rate has occurred pursuant to the
Servicemembers Civil Relief Act, as well as the amount of interest not
required to be paid with respect to any such Mortgage Loans during the
related Due Period as a result of such reductions; both in the
aggregate and for each Class of Certificates.
The Paying Agent's responsibility for sending the above information to
the Certificateholders is limited to the availability, timeliness and accuracy
of the information derived from the Servicer which shall be provided as required
in this Section 6.02(a).
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder which is a
savings and loan association, bank or insurance company certain reports and
access during business hours to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of regulatory authorities with respect to investment in
the Certificates; provided, that the Servicer shall be entitled to be reimbursed
by each such Certificateholder for the Servicer's actual expenses incurred in
providing such reports and access.
(b) The Servicer shall cause to be prepared, and the Servicer or the
Trustee, as required by applicable law, shall file, any and all tax returns,
information statements or other filings required to be delivered to
Certificateholders and any governmental taxing authority pursuant to any
applicable law with respect to the Trust Fund and the transactions contemplated
hereby (the Servicer or the Trustee may, at its option but with the consent of
the other, which consent shall not be unreasonably withheld, appoint an
organization which regularly engages in the preparation and filing of such
documents on a continuous basis for profit and which represents itself to be
expert in such matters) and the Servicer shall maintain a record of the
information necessary for the application of Section 860E(e) of the Code and
shall make such information available as required by Section 860D(a)(6) of the
Code; provided, however, that the Servicer shall notify the Trustee of the
Trustee's obligation to make any such filings and that any fees of the
organization appointed as provided above shall be paid by the Servicer; and
provided further that if an organization is employed, as described above, to
prepare and file any such filings, neither the Trustee nor the Servicer shall be
liable for any errors by such organization.
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Section 6.03. Advances by the Servicer. If, on any Determination Date,
the Servicer determines that any Monthly Payments due on the immediately
preceding Due Date have not been received, the Servicer shall, unless it
determines in its sole discretion that such amounts will not be recoverable from
Late Collections, Liquidation Proceeds or otherwise, make an Advance on or
before two Business Days prior to the related Distribution Date in an amount
equal to the amount of such delinquent Monthly Payments, after adjustment of any
delinquent interest payment for the Servicing Fee. For purposes of this Section
6.03, the delinquent Monthly Payments referred to in the preceding sentence
shall be deemed to include an amount equal to the Monthly Payments that would
have been due on Mortgage Loans which have been foreclosed or otherwise
terminated and in connection with which the Servicer acquired and continues to
own the Mortgaged Properties on behalf of the Certificateholders. If the
Servicer makes an Advance, it shall on or prior to two Business Days prior to
such Distribution Date either (i) deposit in the Collection Account an amount
equal to such Advance, (ii) cause to be made an appropriate entry in the records
of the Collection Account that funds in such account being held for future
distribution or withdrawal have been, as permitted by this Section 6.03, used by
the Servicer to make such Advance or (iii) make Advances in the form of any
combination of clauses (i) and (ii) aggregating the amount of such Advance. Any
funds being held in the Collection Account for future distribution to
Certificateholders and so used pursuant to clause (ii) or (iii) above shall be
replaced by the Servicer from its own funds by deposit into the Collection
Account on or before any subsequent Distribution Date to the extent that funds
in the Collection Account on such Distribution Date shall be less than the
amount of payments required to be made to Certificateholders on such
Distribution Date. Any such Advance shall be included with the distribution to
the Certificateholders on the related Distribution Date. If the Servicer
determines not to make a Nonrecoverable Advance, it shall on the related
Determination Date furnish to the Trustee, any co-trustee, the Paying Agent and
each Rating Agency notice of such determination. The Servicer shall be entitled
to be reimbursed from the Collection Account for all Advances and Nonrecoverable
Advances as provided in Section 5.09. If on any Distribution Date, the Servicer
has not made any Advance due on such Distribution Date, the Backup Advancer
shall make such Advance on such Distribution Date. The Backup Advancer shall be
entitled to reimbursement for any Advances it has made in the same manner as the
Servicer is entitled to reimbursement for Advances as set forth in this
Agreement. Additionally, the Servicer shall, from its own funds, compensate the
Backup Advancer for any Advance required to be made by the Backup Advancer at
the current "prime" lending rate of Chase plus 2.00% per annum from the date
such Advance was made up to the date the Backup Advancer is reimbursed.
Section 6.04. Allocation of Realized Losses.
(a) Prior to each Determination Date, the Servicer shall determine (i)
the total amount of Realized Losses, if any, incurred during the related
Principal Prepayment Period; (ii) whether and to what extent such Realized
Losses constitute Excess Losses; and (iii) the respective portions of such
Realized Losses allocable to interest and to principal.
(b) The principal portion of any Realized Losses on Group One, Group
Two or Group Three, other than Excess Losses, shall be allocated as follows:
first, to the Class B-5 Certificates until the Outstanding Certificate Principal
Balance of the Class B-5 Certificates has been reduced to zero; second, to the
Class B-4 Certificates until the Outstanding Certificate Principal Balance of
the Class B-4 Certificates has been reduced to zero; third, to Class B-3
Certificates until the Outstanding Certificate Principal Balance of the Class
B-3 Certificates has been reduced to zero; fourth, to the Class B-2 Certificates
until the Outstanding Certificate Principal Balance of the Class B-2
Certificates has been reduced to zero; fifth, to the Class B-1 Certificates
until the Outstanding Certificate Principal Balance of the Class B-1
Certificates has been reduced to zero; sixth, to the Class M Certificates until
the Outstanding Certificate Principal Balance of the Class M Certificates has
been reduced to zero; and seventh, to the Class A Certificates; if such Realized
Losses relate to Group One, allocated first to the Class A Group One
Certificates until the aggregate Outstanding Certificate Principal Balance of
the Class A Group One Certificates has been reduced to zero and second to the
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Class A Group Two Certificates and the Class A Group Three Certificates, pro
rata based upon their respective Outstanding Certificate Principal Balances
until the aggregate Outstanding Certificate Principal Balance of the Class A
Group Two Certificates and Class A Group Three Certificates has been reduced to
zero; if such Realized Losses relate to Group Two, allocated first to the Class
A Group Two Certificates until the aggregate Outstanding Certificate Principal
Balance of the Class A Group Two Certificates has been reduced to zero and
second to the Class A Group One Certificates and the Class A Group Three
Certificates, pro rata based upon their respective Outstanding Certificate
Principal Balances until the aggregate Outstanding Certificate Principal Balance
of the Class A Group One Certificates and Class A Group Three Certificates has
been reduced to zero; if such Realized Losses relate to Group Three, allocated
first to the Class A Group Three Certificates until the aggregate Outstanding
Certificate Principal Balance of the Class A Group Three Certificates has been
reduced to zero and second to the Class A Group One Certificates and the Class A
Group Two Certificates, pro rata based upon their respective Outstanding
Certificate Principal Balances until the aggregate Outstanding Certificate
Principal Balance of the Class A Group One Certificates and Class A Group Two
Certificates has been reduced to zero. The principal portion of any Excess
Losses with respect to each Mortgage Loan or Mortgage Component shall be
allocated without priority among (i) all Classes of Subordinated Certificates
(other than with respect to Excess Losses on Mortgage Components in Group A-P)
and (ii) (a) the Classes of Class A Group One Certificates (if the Excess Loss
occurred with respect to a Mortgage Component in Group One), (b) the Classes of
Class A Group Two Certificates (if the Excess Loss occurred with respect to a
Mortgage Component in Group Two) or (c) the Classes of Class A Group Three
Certificates (if the Excess Loss occurred with respect to a Mortgage Loan or
Mortgage Component in Group Three), pro rata based upon their respective
Outstanding Certificate Principal Balances. For purposes of the foregoing
sentence, each Class of Subordinated Certificates will be deemed to have an
Outstanding Certificate Principal Balance (and to accrue interest thereon) equal
to the actual Outstanding Certificate Principal Balance thereof times a
fraction, the numerator of which is the Group One Subordinated Amount (for a
loss on Group One), the Group Two Subordinated Amount (for a loss on Group Two)
or the Group Three Subordinated Amount (for a loss on Group Three), and the
denominator of which is the aggregate of the Group One Subordinated Amount, the
Group Two Subordinated Amount and the Group Three Subordinated Amount. Realized
Losses and Excess Losses on Group A-P shall be allocated to the Class A-P
Certificates. Notwithstanding the foregoing, the first $0.04 of Realized Losses
other than Realized Losses with respect to Group A-P will not be allocated to
any Class of Certificates. (c) As used herein, an allocation of a Realized Loss
on a "pro rata basis" among two or more specified Classes of Certificates means
an allocation on a pro rata basis, among the various Classes so specified, to
each such Class of Certificates on the basis of their Outstanding Certificate
Principal Balances prior to giving effect to distributions to be made on such
Distribution Date. All Realized Losses and all other losses allocated to a Class
of Certificates hereunder will be allocated among the Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.
(d) In the event that a recovery is made with respect to any Realized
Loss, the amount of such recovery shall be treated as a Principal Prepayment and
deposited into the Collection Account and distributed on the applicable
Distribution Date.
Section 6.05. Compensating Interest; Allocation of Certain Interest
Shortfalls.
(a) Upon a Principal Prepayment of a Mortgage Loan, the Servicer shall
deposit into the Collection Account from its own funds, as a reduction of its
servicing compensation hereunder, an amount, if any, by which the amount of the
interest that would otherwise accrue with respect to such Mortgage Loan from the
date of prepayment to the Due Date in the related Due Period at the Net Mortgage
Rate exceeds the amount of the interest (adjusted to the Net Mortgage Rate)
collected from the Mortgagor with respect to such period (such amount,
"Compensating Interest"); provided, however, that with respect to any
Distribution Date, the Servicer's obligation to deposit any such amount is
limited to an amount equal to the product of (i) one-twelfth of 0.125% and (ii)
the aggregate Scheduled Principal Balance of the Mortgage Loans with respect to
such Distribution Date.
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(b) On any Distribution Date, the excess, if any, of (X) Compensating
Interest with respect to such Distribution Date over (Y) the amount deposited in
the Collection Account pursuant to (a) above for such Distribution Date shall
equal the "Compensating Interest Shortfall" with respect to such Distribution
Date. On any Distribution Date, the Compensating Interest Shortfall shall be
allocated pro rata among the outstanding Classes of Class A, Class M and Class B
Certificates based on the amount of interest to which each such Class would
otherwise be paid on such Distribution Date had there been no such Compensating
Interest Shortfall.
(c) On any Distribution Date, the interest portion of any Realized
Losses ("Realized Loss Interest Shortfall") (other than the interest portion of
Excess Losses) shall be allocated to the Class of Subordinated Certificates then
outstanding having the highest numerical class designation (for this purpose,
the Class M Certificates shall be deemed to have a lower numerical class
designation than each Class of Class B Certificates) or, if no Class of
Subordinated Certificates is then outstanding, to the Class A Certificates pro
rata among the outstanding Classes of Class A Certificates based on the amount
of interest to which each such Class would otherwise be paid on such
Distribution Date had there been no such Realized Loss Interest Shortfall. On
any Distribution Date, the interest portion of any Excess Losses shall be
allocated pro rata among the outstanding Classes of Certificates based upon the
amount of interest to which each such Class would otherwise be paid on such
Distribution Date had there been no such Excess Losses allocable to interest.
(d) Any interest shortfall resulting from the Servicemembers Civil
Relief Act shall be allocated pro rata among the outstanding Classes of
Certificates based upon the amount of interest to which each such Class would
otherwise be paid on such Distribution Date.
Section 6.06. Subordination. The rights of the Class B
Certificateholders to receive distributions in respect of the Class B
Certificates on any Distribution Date shall be subordinated to the rights of the
Class A and Class M Certificateholders to receive distributions in respect of
the Class A and Class M Certificates. The rights of the Class M
Certificateholders to receive distributions in respect of the Class M
Certificates on any Distribution Date shall be subordinated to the rights of the
Class A Certificateholders to receive distributions in respect of the Class A
Certificates. The rights of the Class B-1 Certificateholders to receive
distributions in respect of the Class B-1 Certificates on any Distribution Date
shall be subordinate to the rights of the Class A and Class M Certificateholders
to receive distributions in respect of such Class A and Class M Certificates.
Each Class of Class B Certificates (other than the Class B-1 Certificates) is
subordinated to the Class A Certificates, the Class M Certificates and each
Class of Class B Certificates having a lower numerical class designation than
such Class of Class B Certificates. The rights of the Servicer, as servicer, to
receive funds from the Collection Account, pursuant to Section 5.09, on account
of the Servicing Fee (except as provided in Section 6.05) in respect of each
Mortgage Loan, assumption fees, late payment charges and other mortgagor
charges, reimbursement of Advances and expenses or otherwise, shall not be
subordinated to the rights of the Class A, Class M or Class B
Certificateholders. Amounts held by the Servicer or the Trustee for future
distribution to the Class M or Class B Certificateholders, including, without
limitation, in the Collection Account, shall not be distributed in respect of
the Class M or Class B Certificates except in accordance with the terms of this
Agreement. The Class B Certificateholders are deemed to have granted a security
interest in such amounts to the Class A and Class M Certificateholders to secure
the rights of the Class A and Class M Certificateholders to receive
distributions in priority over the Class B Certificateholders. The Class M
Certificateholders are deemed to have granted a security interest in such
amounts to the Class A Certificateholders to secure the rights of the Class A
Certificateholders to receive distributions in priority over the Class A
Certificateholders.
Section 6.07. Principal Distributions on the Class IIA-4Certificates.
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(a) Prior to the earlier of (i) the Credit Support Depletion Date and
(ii) the first Distribution Date on which the aggregate remaining Scheduled
Principal Balance of the Mortgage Loans is less than $1,000,000, distributions
in reduction of the Outstanding Certificate Principal Balance of the Class IIA-4
Certificates will be made in integral multiples of $1,000.00 at the request of
the appropriate representatives of Deceased Holders of Certificates of such
Classes and at the request of Living Holders of Certificates of such Class or by
mandatory distributions, pursuant to Section 6.07(b) and Section 6.07(e). On and
after the earlier of (i) the Credit Support Depletion Date and (ii) the first
Distribution Date on which the aggregate remaining Scheduled Principal Balance
of the Mortgage Loans is less than $1,000,000, distributions in reduction of the
Outstanding Certificate Principal Balance of the Class IIA-4 Certificates will
each be made on a pro rata basis pursuant to Section 6.07(f).
(b) On each Distribution Date on which principal distributions to the
Class IIA-4 Certificates are made pursuant to Section 6.01(b)(ii)(B), such
distributions shall be distributed to the Beneficial Holders of each such
Certificates by the Depository pursuant to the Depository Agreement in the
following priority:
(i) first, to requesting Deceased Holders, in the order in which
such requests are received by the Depository, but not exceeding an
aggregate amount of $25,000.00 for each requesting Deceased Holder; and
(ii) second, to requesting Living Holders, in the order in which
such requests are received by the Depository, but not exceeding an
aggregate amount of $10,000.00 for each requesting Living Holder.
Thereafter, the Depository shall make distributions with respect to the Class
IIA-4 Certificates as provided in clause (i) above up to a second $25,000.00 and
as provided in clause (ii) above up to a second $10,000.00. This sequence of
priorities shall be repeated for each Class until the Depository has honored all
requests for principal distributions by Deceased Holders and Living Holders of
the applicable Class to the extent of amounts available for principal
distributions to such Class.
All requests by the Depository for principal distributions to the Class
IIA-4 Certificates will be accepted in accordance with the provisions set forth
in Section 6.07(d). Requests for principal distributions that are received by
the Paying Agent from the Depository after the related Record Date and requests
for principal distributions received in a timely manner but not accepted with
respect to any Distribution Date, will be treated as requests for principal
distributions by the Beneficial Holder(s) making such requests on the next
succeeding Distribution Date, and each succeeding Distribution Date thereafter,
until each such request is accepted or is withdrawn as provided in Section
6.07(d). Such requests as are not so withdrawn shall retain their order of
priority without the need for any further action on the part of the appropriate
Beneficial Holder of the Class IIA-4 Certificates, as applicable, all in
accordance with the procedures of the Depository and the Paying Agent.
Distributions in reduction of the Outstanding Certificate Principal
Balance of the Class IIA-4 Certificates shall be applied by the Paying Agent in
an amount equal to the portion of the Class A Group Two Optimal Principal Amount
allocable to such Class IIA-4 Certificates pursuant to Section 6.01, plus or
minus, as the case may be, any amounts available for distribution from or
required to be replenished to the Rounding Account established as provided in
Section 5.29, provided that the aggregate distribution of principal to such
Class on any Distribution Date shall be made in an integral multiple of
$1,000.00.
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To the extent that the portion of the Class A Group Two Optimal
Principal Amount allocable to the Class IIA-4 Certificates on any Distribution
Date exceeds the Outstanding Certificate Principal Balance of the Class IIA-4
Certificates, with respect to which principal distribution requests, as set
forth above, have been received, principal distributions in reduction of the
Outstanding Certificate Principal Balance of such Class will be made by
mandatory distribution pursuant to Section 6.07(e).
(c) The Class IIA-4 Certificates shall be deemed to be held by a
Deceased Holder for purposes of this Section 6.07 if the death of the Beneficial
Holder thereof is deemed to have occurred by Depository in accordance with its
rules and regulations. In the event the Depository is not the Holder of the
Class IIA-4 Certificates the following rules will govern: Class IIA-4
Certificates beneficially owned by tenants by the entirety, joint tenants or
tenants in common shall be considered to be beneficially owned by a single
owner. The death of a tenant by the entirety, joint tenant or tenant in common
shall be deemed to be the death of the Beneficial Holder, and the Class IIA-4
Certificates, as the case may be, so beneficially owned shall be eligible for
priority with respect to principal distributions, subject to the limitations
stated above. The Class IIA-4 Certificates beneficially owned by a trust shall
be considered to be beneficially owned by each beneficiary of the trust to the
extent of such beneficiary's beneficial interest therein, but in no event will a
trust's beneficiaries collectively be deemed to be Beneficial Holders of a
number of Class IIA-4 Certificates greater than the number of Class IIA-4
Certificates, of which such trust is the owner. The death of a beneficiary of a
trust shall be deemed to be the death of a Beneficial Holder of Class IIA-4
Certificates beneficially owned by the trust to the extent of such beneficiary's
beneficial interest in such trust. The death of an individual who was a tenant
by the entirety, joint tenant or tenant in common in a tenancy which is the
beneficiary of a trust shall be deemed to be the death of the beneficiary of
such trust. The death of a person who, during his or her lifetime, was entitled
to substantially all of the beneficial ownership interests in Class IIA-4
Certificates shall be deemed to be the death of the Holder of such Class IIA-4
Certificates regardless of the registration of ownership, if such beneficial
ownership interest can be established to the satisfaction of the Paying Agent.
Such beneficial interest shall be deemed to exist in typical cases of street
name or nominee ownership, ownership by a trustee, ownership under the Uniform
Gifts to Minors Act and community property or other joint ownership arrangements
between a husband and wife. Beneficial interest shall include the power to sell,
transfer or otherwise dispose of Class IIA-4 Certificates and the right to
receive the proceeds therefrom, as well as interest and principal distributions,
as applicable, payable with respect thereto. Neither the Trustee nor the Paying
Agent shall be under any duty to determine independently the occurrence of the
death of any Deceased Holder. The Paying Agent may rely entirely upon
documentation delivered to it pursuant to Section 6.07(d) in establishing the
eligibility of any Holder to receive the priority accorded Deceased Holders in
Section 6.07(b).
(d) Requests for principal distributions to Class IIA-4 Certificates
shall be made in accordance with the rules and procedures of the Depository. The
Depository may establish such procedures as it deems fair and equitable to
establish the order of receipt of requests for such distributions received by it
on the same day. None of the Depositor, the Servicer, the Paying Agent or the
Trustee shall be liable for any delay in delivery of requests for distributions
or withdrawals of such requests by the Depository, a Depository Participant or
any Indirect Participant.
The Paying Agent shall not be responsible for maintaining a list of
those Depository Participants representing the appropriate Holders of Class
IIA-4 Certificates that have submitted requests for principal distributions,
together with the order of receipt and the amounts of such requests. Requests
shall be honored by the Depository in accordance with the rules and procedures
of the Depository. The exact procedures to be followed by the Paying Agent and
the Depository for purposes of determining such priorities and limitations will
be those established from time to time by the Paying Agent or the Depository, as
the case may be. The decisions of the Paying Agent and the Depository concerning
such matters will be final and binding on all affected persons.
Class IIA-4 Certificates that have been accepted for a distribution
shall receive distributions, as applicable, on the applicable Distribution Date.
Such Class IIA-4 Certificates shall cease to bear interest on the amount of
principal to be distributed on any Distribution Date after the last calendar day
of the month preceding the month in which such Distribution Date occurs.
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Any Beneficial Holder of a Class IIA-4 Certificates that has requested
a principal distribution may withdraw its request by so notifying in writing the
Depository Participant or Indirect Participant that maintains such Beneficial
Holder's account. In the event that such account is maintained by an Indirect
Participant, such Indirect Participant must notify the related Depository
Participant which in turn must forward the withdrawal of such request, on a form
required by the Depository, to the Depository to be forwarded to the Servicer.
If such notice of withdrawal of a request for distribution has not been received
by the Depository and forwarded to the Paying Agent on or before the Record Date
for the next Distribution Date, the previously made request for a principal
distribution shall be irrevocable with respect to the making of principal
distributions on such Distribution Date.
(e) To the extent, if any, that principal distributions to be made to
the Class IIA-4 Certificates on a Distribution Date exceed the aggregate amount
of principal distribution requests for such Class IIA-4 Certificates which have
been received on or before the applicable Record Date, as provided in Section
6.07(b) above, additional Certificates of such applicable Class will be selected
to receive mandatory principal distributions in lots equal to $1,000.00 in
accordance with the then-applicable Random Lot procedures of the Depository, and
the then-applicable procedures of the Depository Participants and Indirect
Participants representing the Beneficial Holders (which procedures may or may
not be by random lot). The Paying Agent shall notify the Depository of the
aggregate amount of the mandatory principal distribution to be made on the next
Distribution Date. The Depository shall then allocate such aggregate amount
among the Depository Participants on a Random Lot basis. Each Participant and,
in turn, each Indirect Participant shall then select, in accordance with its own
procedures, the Class IIA-4 Certificates from among those held in its accounts
to receive mandatory principal distributions, such that the total amount of
principal distributed to the Class IIA-4 Certificates so selected is equal to
the aggregate amount of such mandatory distributions allocated to such
Participant by the Depository and to such Indirect Participant by its related
Participant, as the case may be. Depository Participants and Indirect
Participants that hold Class IIA-4 Certificates selected for mandatory principal
distributions are required to provide notice of such mandatory distributions to
the affected Beneficial Holders.
(f) Notwithstanding any provisions herein to the contrary, on each
Distribution Date on and after the earlier of (i) the Credit Support Depletion
Date and (ii) the first Distribution Date on which the aggregate remaining
Scheduled Principal Balance of the Mortgage Loans is less than $1,000,000,
distributions in reduction of the Outstanding Certificate Principal Balance of
Class IIA-4 Certificates will be made pro rata (based upon their respective
Outstanding Certificate Principal Balances) among the Beneficial Holders of the
Certificates of such Class IIA-4 Certificates and shall not be made in integral
multiples of $1,000.00 nor pursuant to requests for distribution as permitted by
Section 6.07(a) or by mandatory distributions as provided for by Section
6.07(e).
In the event that Definitive Certificates representing Class IIA-4
Certificates are issued pursuant to Section 4.01, an amendment to this
Agreement, which may be approved without the consent of any Certificateholder,
shall establish procedures relating to the manner in which distributions in
reduction of the Outstanding Certificate Principal Balance of Class IIA-4
Certificates are to be made.
[END OF ARTICLE VI]
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ARTICLE VII
REPORTS TO BE PREPARED BY THE SERVICER
Section 7.01. Servicer Shall Provide Information as Reasonably
Required. The Servicer shall furnish to the Trustee or, if a Paying Agent has
been appointed pursuant to Section 4.05, the Paying Agent, during the term of
this Agreement, such periodic, special, or other reports or information, whether
or not provided for herein, as shall be necessary, reasonable, or appropriate in
respect to the Trustee or, if a Paying Agent has been appointed pursuant to
Section 4.05, the Paying Agent, or otherwise in respect to the purposes of this
Agreement, all such reports or information to be as provided by and in
accordance with such applicable instructions and directions as the Trustee or,
if a Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent
may reasonably require.
Section 7.02. Federal Information Returns and Reports to
Certificateholders.
(a) For federal income tax purposes, the taxable year of each REMIC
Pool shall be a calendar year and the Servicer shall maintain or cause the
maintenance of the books of each REMIC Pool on the accrual method of accounting.
(b) The Servicer or anyone acting on its behalf pursuant to Section
2.04(e) shall prepare and file or cause to be filed with the Internal Revenue
Service federal tax or information returns with respect to the Trust Fund, each
REMIC Pool 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 Certificateholder 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. Without limitation on any
other requirement of this Section 7.02, the Servicer shall make available the
information necessary for the application of Section 860E(e) of the Code within
60 days of such request. With respect to the Class A-R Certificate, the Servicer
shall provide such information or cause such information to be provided to (i)
the Internal Revenue Service, (ii) the transferor of a Class A-R Certificate to
a Disqualified Organization and (iii) a Pass-Thru Entity that holds a Class A-R
Certificate with one or more record holders that are Disqualified Organizations.
The Servicer also shall provide or cause to be provided promptly the above
described computation and information relating to the tax on transfers to
Disqualified Organizations or holdings by Pass-Thru Entities within sixty (60)
days after becoming aware of the transfer to a Disqualified Organization or
Pass-Thru Entity with one or more Disqualified Organization owners, as the case
may be. In addition, except as may be provided in Treasury Regulations, any
Person holding an interest in a Pass-Thru Entity as a nominee for another will,
with respect to such interest, be treated as a Pass-Thru Entity. In connection
with the foregoing, the Servicer shall provide the name, address and telephone
number of the person who can be contacted to obtain information required to be
reported to the holders of regular interests in any REMIC created hereunder (the
"REMIC Reporting Agent") as required by IRS Form 8811. The Trustee hereby
designates the Servicer to serve as the REMIC Reporting Agent. The Servicer
shall indicate the elections to treat each of the Lower-Tier REMIC, the
Middle-Tier REMIC and the Upper-Tier REMIC as a REMIC (which election shall
apply to the taxable period ending December 31, 2004 and each calendar year
thereafter) in such manner as the Code or applicable Treasury regulations may
prescribe. The Trustee shall sign all tax and information returns filed pursuant
to this Section 7.02 and any other returns as may be required by the Code, and
in doing so shall rely entirely upon, and shall have no liability for
information provided by, or calculations provided by, the Servicer. The Servicer
is hereby designated as the agent of the Holder of the Class A-R Certificate who
shall be the "tax matters person" (within the meaning of Treas. Reg.
ss.1.860F-4(d)) for each REMIC Pool. Any Holder of a Class A-R Certificate will
by acceptance thereof so appoint the Servicer as agent and attorney-in-fact for
the purpose of acting as tax matters person. In the event that the Code or
applicable Treasury regulations prohibit the Trustee from signing tax or
information returns or other statements, or the Servicer from acting as tax
matters person (as an agent or otherwise), the Trustee or the Servicer, as the
case may be, 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 Class A-R
Certificate to sign such returns or act as tax matters person. Each Holder of a
Class A-R Certificate shall be bound by this Section 7.02 by virtue of its
acceptance of a Class A-R Certificate.
[END OF ARTICLE VII]
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ARTICLE VIII
THE DEPOSITOR AND THE SERVICER
Section 8.01. Indemnification; Third Party Claims. The Servicer agrees
to indemnify the Depositor and the Trustee and hold the Depositor and the
Trustee, their officers, directors, employees and agents harmless against any
and all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Depositor or
the Trustee, or their officers, directors, employees or agents may sustain in
any way related to failure of the Servicer to perform its duties and service the
Mortgage Loans in compliance with the terms of this Agreement; provided that no
such indemnification shall be required with respect to acts of a prior Servicer.
The Servicer shall immediately notify the Depositor and the Trustee if a claim
is made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the consent of the Depositor and the Trustee) the defense of any
such claim and pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it, the Depositor or the Trustee, their officers, directors,
employees or agents in respect of such claim. This right to indemnification
shall survive the termination of this Agreement.
Section 8.02. Merger or Consolidation of the Depositor or the Servicer.
The Depositor and the Servicer will each keep in full effect its existence,
rights and franchises as a corporation, 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. The Servicer will not sell all
or substantially all of its assets without the prior written consent of the
Depositor and the Trustee which shall not be unreasonably withheld or delayed.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or to whom the Depositor or the Servicer has sold substantially
all of its assets, or any corporation resulting from any merger, conversion or
consolidation to which the Depositor or the Servicer shall be a party, or any
Person succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer 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; provided, however, that the
successor or surviving Person to the Servicer shall satisfy the requirements of
Section 8.05 with respect to the qualifications of a successor to the Servicer.
Notwithstanding anything else in this Section 8.02 and Section 8.04 to
the contrary, the Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is approved in advance in writing by
the Trustee and the Depositor, is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement, in form and
substance reasonably satisfactory to the Depositor and 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 the
Servicer under this Agreement; provided further that each Rating Agency's rating
of any of the Classes of Certificates that have been rated in effect immediately
prior to such assignment and delegation will not be qualified or reduced or
withdrawn as a result of such assignment and delegation. In the case of any such
assignment and delegation, the Servicer shall be released from its obligations
as Servicer under this Agreement, except that the Servicer shall remain liable
for all liabilities and obligations incurred by it as Servicer hereunder prior
to the satisfaction of the conditions to such assignment and delegation set
forth in the next preceding sentence.
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Section 8.03. Limitation on Liability of the Depositor, the Servicer,
the Trustee and Others. Neither the Depositor, the Servicer nor any of the
directors, officers, employees or agents of the Depositor or the Servicer shall
be under any liability to the Trustee or the Certificateholders for any action
taken, or for refraining from the taking of any action, in good faith pursuant
to this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor or the Servicer against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with this Agreement, or any liability which would otherwise
be imposed by reason of any breach of the terms and conditions of this
Agreement. The Depositor, the Servicer, the Trustee, and any director, officer,
employee or agent of the Depositor, the Servicer or the Trustee 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. Neither the Depositor, the
Servicer nor the Trustee shall be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its respective duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may cause it to incur any expenses or liability; provided, however, that
the Depositor, the Servicer or the Trustee may in its discretion (and, in the
case of the Depositor or the Servicer, 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. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities payable from the Collection Account and the Depositor, the Servicer
or the Trustee shall be entitled to be reimbursed therefor out of the Collection
Account as provided by Section 4.06; provided that no such right of
reimbursement shall exist with respect to the Servicer when such claim relates
to the failure of the Servicer to service the Mortgage Loans in strict
compliance with the terms of this Agreement or to a breach of a representation
or warranty made by the Servicer hereunder.
Section 8.04. Depositor and Servicer Not to Resign. Except as described
in Section 8.02, neither the Depositor nor the Servicer shall assign this
Agreement or resign from the obligations and duties hereby imposed on it except
by mutual consent of the Depositor, the Servicer and all of the
Certificateholders unless the determination is made that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the Depositor or the Servicer. Any such determination permitting the
resignation of the Depositor or the Servicer shall be evidenced by an opinion of
independent counsel to such effect delivered to the Trustee which opinion of
counsel shall be in form and substance acceptable to the Trustee. Upon any such
assignment or resignation, the Depositor or the Servicer, as appropriate, shall
send notice to all Certificateholders of the effect of such assignment or
resignation upon the then current rating of the Class of Certificates by each
Rating Agency whose rating on such Class is then in effect. No such resignation
shall become effective until a successor shall have assumed the Depositor's or
the Servicer's responsibilities and obligations hereunder in the manner provided
in Section 8.05. Any purported assignment or resignation which does not comply
with the requirements of this Section shall be of no effect.
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Section 8.05. Successor to the Servicer. In connection with the
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Section 8.04 or 9.01, the Trustee shall succeed to and assume all of
the Servicer's responsibilities, rights, duties and obligations as Servicer (but
not in any other capacity) under this Agreement (except that the Trustee shall
not be obligated to make Advances if prohibited by applicable law nor to
effectuate repurchases or substitutions of Mortgage Loans pursuant to Section
2.02 and except that the Trustee makes no representations and warranties
pursuant to Sections 3.01 and 3.02). Prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement, the Trustee may
appoint a successor having a net worth of not less than $15,000,000 and which is
a FNMA or FHLMC approved seller/servicer in good standing and which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement, except as aforesaid, if the
Trustee receives a letter from each Rating Agency that such appointment would
not result in a reduction or withdrawal of the current rating of any Class of
Certificates that is rated by a Rating Agency. Any co-trustee appointed pursuant
to Section 10.10 for purposes of this Section 8.05 shall have an obligation to
make Advances pursuant to Section 6.03 during such time as the Trustee is the
Servicer, which obligation shall be joint and several with that of the Trustee
as Servicer. If the Trustee has become the successor to the Servicer in
accordance with this Section or Section 9.03, then notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, appoint, or petition a court of competent jurisdiction to appoint,
any established housing and home finance institution having a net worth of not
less than $15,000,000 and which is a FNMA or FHLMC approved seller/servicer in
good standing as the successor to the Servicer hereunder in the assumption of
all of the responsibilities, duties or liabilities of the Servicer hereunder. In
connection with any such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree or such court shall determine;
provided, however, that no such compensation shall be in excess of that
permitted under this Agreement without the consent of all of the
Certificateholders. If the Servicer's duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to Section 8.02, 8.04 or
9.01, the Servicer shall discharge such duties and responsibilities during the
period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which it
is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor or the Trust Fund. The resignation or removal of the Servicer
pursuant to Section 8.02, 8.04 or 9.01 shall not become effective until a
successor shall be appointed pursuant to this Section and shall in no event
relieve the Servicer of liability for breach of the representations and
warranties made pursuant to Section 3.03.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Trustee an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement
and the Certificates. Any termination or resignation of the Servicer or this
Agreement pursuant to Section 8.02, 8.04, 9.01 or 11.01 shall not affect any
claims that the Trustee may have against the Servicer for events or actions
taken or not taken by the Servicer arising prior to any such termination or
resignation.
The Servicer shall timely deliver to the successor the funds that were,
or were required to be, in the Collection Account and the Escrow Account, if
any, and all Mortgage Files and related documents, statements and recordkeeping
held by it hereunder and the Servicer shall account for all funds and shall
execute and deliver such instruments and do such other things as may reasonably
be required to more fully and definitely vest and confirm in the successor all
such rights, powers, duties, responsibilities, obligations and liabilities of
the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify, in writing, the Trustee, the Certificateholders and each Rating
Agency of such appointment.
Section 8.06. Maintenance of Ratings. The Servicer shall cooperate with
the Depositor and take any action that may be reasonably necessary to maintain
the current rating or ratings on the Certificates.
[END OF ARTICLE VIII]
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ARTICLE IX
DEFAULT
Section 9.01. Events of Default. If one or more of the following Events
of Default shall occur and be continuing, that is to say:
(a) any failure by the Servicer to remit any payment required to be
made or distributed under the terms of this Agreement which continues unremedied
for a period of three (3) Business Days after the date upon which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, the Paying Agent or the Depositor or to the Servicer,
the Trustee, the Paying Agent and the Depositor by the Holders of Certificates
of any Class evidencing, as to such Class, Percentage Interests aggregating not
less than 25%; or
(b) a breach by the Servicer in a material respect of any
representation or warranty set forth in Section 3.02, or failure on the part of
the Servicer duly to observe or perform in any material respect any other of the
covenants or agreements on the part of the Servicer set forth in this Agreement,
which continues unremedied for a period of 60 days after the date on which
written notice of such breach or failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee or the Depositor or to the
Servicer, the Trustee and the Depositor by the Holders of Certificates of any
Class evidencing, as to such Class, Percentage Interests aggregating not less
than 25%; or
(c) the Servicer shall notify the Trustee and any Paying Agent
appointed pursuant to Section 4.05 in writing that it is unable to make an
Advance required to be made in accordance with Section 6.03; or;
(d) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60 days;
or
(e) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of the Servicer's property; or
(f) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Trustee shall notify the Certificateholders and each
Rating Agency of such Event of Default. The Trustee may, and at the written
direction of the Holders of Certificates evidencing Percentage Interests
aggregating more than 50%, shall, by notice in writing to the Servicer,
terminate all the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof. On or after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 8.05. Upon written request from the Trustee, the Servicer shall prepare,
execute and deliver, any and all documents and other instruments, place in such
successor's possession all Mortgage Files, and do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
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termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise, at the Servicer's sole
expense. The Servicer agrees to cooperate with the Trustee and any co-trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited or
should have been credited by the Servicer to the Collection Account or Escrow
Account or thereafter received with respect to the Mortgage Loans. The Trustee
will have no obligation to take any action or institute, conduct or defend any
litigation under this Agreement at the request, order or direction of any of the
Holders of Certificates unless such Certificateholders have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which the Trustee may incur.
Section 9.02. Waiver of Defaults. The Trustee may waive any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except that a default in the making of any required distribution
on any of the Certificates may only be waived by the holders of a majority of
the Percentage Interests of the affected Certificateholders. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been 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.
Section 9.03. Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 9.01,
the Trustee or its appointed agent shall be the successor in all respects to the
Servicer to the extent provided in Section 8.05.
Section 9.04. Notification to Certificateholders and the Rating
Agencies.
(a) Upon any such termination pursuant to Section 9.01, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
(b) Within sixty (60) days of a Responsible Officer of the Trustee
having received written notice of the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
[END OF ARTICLE IX]
ARTICLE X
CONCERNING THE TRUSTEE
Section 10.01. Duties of Trustee. The Trustee, prior to the occurrence
of an Event of Default and after the curing of all Events of Default which may
have occurred, undertakes to, and is empowered to, perform such duties and only
such duties as are specifically set forth in this Agreement. Any permissive
right of the Trustee as enumerated in this Agreement shall not be construed as a
duty; provided that in case an Event of Default has occurred (which has not been
cured), the Trustee shall exercise such of the rights and powers vested in it by
this Agreement, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of such
man's own affairs.
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No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, and, if the Trustee is acting as the
successor Servicer pursuant to Section 8.05 or 9.03, its own willful misconduct
with respect to its servicing obligations; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement;
(ii) The Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders of any Class
holding Certificates which evidence, as to such Class, Percentage
Interests aggregating not less than 25% as to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement.
Section 10.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 10.01:
(a) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) The Trustee may consult with counsel, and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the circumstances in
the conduct of such man's own affairs;
(d) Neither the Trustee nor any of its directors, officers, employees
or agents shall be personally liable for any action taken, suffered or omitted
by it in good faith and believed by it or any of them to be authorized or within
the discretion or rights or powers conferred upon the Trustee by this Agreement;
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(e) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests aggregating not less than 25%
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request);
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or liability
as a condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer, if an Event of Default shall have
occurred and is continuing, and otherwise by the Certificateholder requesting
the investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
subcontractors or attorneys; and
(g) Nothing in this Agreement shall be construed to require the Trustee
(acting in its capacity as Trustee) to expend its own funds.
Section 10.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
authentication of the Certificates by an authorized signatory of the Trustee)
shall be taken as the statements of the Depositor or the Servicer, as the case
may be, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations or warranties as to the validity or sufficiency
of this Agreement or of the Certificates (except that (except as set forth
herein) the Certificates shall be duly and validly executed and authenticated by
it) or of any Mortgage Loan or related document. The Trustee shall not be
accountable for the use or application by the Depositor or the Servicer of any
of the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Depositor or the Servicer. The Trustee, in its capacity as trustee hereunder,
shall have no responsibility for the timeliness or the amount of payments made
by the Paying Agent to the Certificateholders.
Section 10.04. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee.
Section 10.05. Fees and Expenses. The Servicer covenants and agrees to
pay to the Trustee and its agents a monthly fee (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust) equal to the greater of (i) the product of (a) the Aggregate Principal
Balance of the Mortgage Loans as of the Determination Date in the preceding
month and (b) one-twelfth of 0.0080% and (ii) $541.67 and the Servicer will pay
or reimburse the Trustee, or its agents upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or its
agents 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, and the expenses incurred by the
Trustee in connection with the appointment of an office or agency pursuant to
Section 10.11) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. Notwithstanding anything to the contrary in
this Agreement, this Section shall survive the termination of this Agreement.
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Section 10.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be an entity having its principal office in a state
and city acceptable to the Depositor and organized and doing business under the
laws of such state or the United States of America, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. The Trustee shall not be an Affiliate of either Seller or the
Depositor. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 10.07.
Section 10.07. Resignation and Removal of the Trustee. The Trustee, and
any co-trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Servicer and each
Rating Agency. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee or co-trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee; provided that such appointment
does not result in a reduction or withdrawal of the rating of any of the Classes
of Certificates that have been rated. If no successor trustee shall have been so
appointed and have accepted appointment within thirty (30) days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
If at any time, the Trustee shall cease to be eligible in accordance
with the provisions of Section 10.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Holders of Certificates evidencing in the aggregate more than 50%
of Percentage Interest may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee or any resignation of any
co-trustee and appointment of a successor trustee or co-trustee pursuant to any
of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 10.08, or upon
acceptance of appointment by a co-trustee, as applicable, unless with respect to
a co-trustee, the Trustee receives written notice from each Rating Agency that
the failure to appoint a successor co-trustee would not result in a withdrawal
or reduction of the rating of any of the Classes of Certificates that have been
rated, in which case the resignation of any co-trustee shall be effective upon
receipt of such written notice. Any co-trustee may not be removed unless the
Depositor and the Trustee each receive written notice from each Rating Agency
that such removal would not result in a withdrawal or reduction of the rating of
any of the Classes of Certificates that have been rated, in which case the
removal of any co-trustee shall be effective upon receipt of such written
notice.
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Section 10.08. Successor Trustee. Any successor trustee appointed as
provided in Section 10.07 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective, and such successor trustee shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Depositor, the Servicer and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 10.06. Prior to the appointment of any
successor trustee becoming effective, the Depositor shall have received from
each Rating Agency written confirmation that such appointment would not result
in a reduction of the rating of the Class A or Class M Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register, to the Servicer, any Sub-Servicer and to each Rating
Agency. If the Depositor fails to mail such notice within ten (10) days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Depositor.
Section 10.09. Merger or Consolidation of Trustee. Any entity into
which the Trustee may be merged or converted or with which it may be
consolidated or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under the provisions of Section
10.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.10. Appointment of Co-Trustee or Separate Trustee. At any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing the same may at the time
be located, the Depositor and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, of any part of the Trust Fund, and to vest in such Person or Persons,
in such capacity, such title to the Trust Fund, or any part thereof, and,
subject to the other provisions of this Section 10.10, such powers, duties,
obligations, rights and trusts as the Depositor and the Trustee may consider
necessary or desirable. If the Depositor shall not have joined in such
appointment within fifteen (15) days after the receipt by it of a request so to
do, or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 10.06, hereunder, and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 10.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 10.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly and severally, 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 Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee at the direction of the
Trustee.
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Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article X. Each separate
trustee and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.
Section 10.11. Appointment of Office or Agency. The Trustee may appoint
an office or agency in The City of New York where Certificates may be
surrendered for registration of transfer or exchange. The Trustee will maintain
an office at the address stated in Section 12.07 hereof where notices and
demands to or upon the Trustee in respect of the Certificates may be served.
[END OF ARTICLE X]
ARTICLE XI
TERMINATION
Section 11.01. Termination. The respective obligations and responsibilities of
the Depositor, the Servicer (except the duty to pay the Trustee's fees and
expenses and indemnification hereunder) and the Trustee shall terminate upon (i)
the later of the final payment or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan or the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee with a copy to the Paying
Agent appointed pursuant to Section 4.05 of its intention to so deposit on or
before 20th day of such Principal Prepayment Period) an amount equal to the
Purchase Price for each Outstanding Mortgage Loan, less any unreimbursed
Advances made with respect to any Mortgage Loan (which amount shall offset
completely any unreimbursed Advances for which the Servicer is otherwise
entitled to reimbursement), and, with respect to all property acquired in
respect of any Mortgage Loan remaining in the Trust Fund, an amount equal to the
fair market value of such property, as determined by an appraisal to be
conducted by an appraiser selected by the Trustee, less unreimbursed Advances
made with respect to any Mortgage Loan with respect to which property has been
acquired; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. James's, living on the date hereof. Notwithstanding
the foregoing, a termination may be effected by the making of such optional
repurchases only if the termination of the Trust Fund satisfies the requirement
for a "qualified liquidation" of the Trust Fund within the meaning of Section
860F(a)(4) of the Code and that the purchases of the Outstanding Mortgage Loans
pursuant to this Section 11.01 will not constitute "prohibited transactions"
within the meaning of Section 860F(a)(2) of the Code.
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Notice of any termination, specifying the Distribution Date upon which
all Certificateholders may surrender their Certificates to the Trustee or, if a
Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent for
payment and cancellation, shall be given promptly by the Trustee or, if a Paying
Agent has been appointed under Section 4.05, the Paying Agent, (upon direction
by the Depositor ten (10) days prior to the date such notice is to be mailed) by
signed letter to Certificateholders and each Rating Agency mailed no later than
the 25th day of the month preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, therein designated and (ii) 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 or
agency of the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, therein specified. The Servicer shall indicate the date
of adoption of the plan of qualified liquidation in a statement attached to the
final federal income tax return of each REMIC Pool. After giving such notice,
the Trustee or if a Paying Agent has been appointed under Section 4.05, the
Paying Agent shall not register the transfer or exchange of any Certificates. If
such notice is given in connection with the Servicer's election to purchase the
Outstanding Mortgage Loans, the Servicer shall deposit in the Collection Account
after adoption of the plan during the applicable Principal Prepayment Period an
amount equal to the purchase price as determined as provided in clause (ii) of
the preceding paragraph and on the Distribution Date on which such termination
is to occur, Certificateholders will be entitled to the amount of such purchase
price but not amounts in excess thereof, all as provided herein. Upon
presentation and surrender of the Certificates, the Trustee, or if a Paying
Agent has been appointed under Section 4.05, the Paying Agent shall notify the
Servicer and the Servicer shall cause to be distributed to Certificateholders an
amount equal to (a) the amount otherwise distributable on such Distribution
Date, if not in connection with a purchase; or (b) if the Servicer elected to so
purchase, the purchase price determined as provided in clause (ii) of the
preceding paragraph. Following such final deposit the Trustee shall promptly
release to the Servicer the Mortgage Files for the remaining Mortgage Loans, and
the Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer and shall have no further responsibility
with regard to said Mortgage Files.
If all of the Certificateholders shall not surrender their Certificates
for cancellation within three (3) months after the time specified in the
above-mentioned written notice, at the close of the 90 day period beginning
after the written notice is given, each remaining Certificateholder will be
credited with an amount that would have been otherwise distributed to such
Certificateholder, and the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, shall give a second written notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within three (3)
months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent, shall appoint an agent to take
appropriate and reasonable steps to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain in the Trust Fund hereunder.
[END OF ARTICLE XI]
98
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. 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.
Section 12.02. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding-up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third Person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and the Holders of Certificates
of any Class evidencing in the aggregate not less than 25% of the Percentage
Interests of such Class shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request) and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trustee, for sixty (60) days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
99
Section 12.03. Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicer and the Trustee, without the consent of any
of the Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein, to
ensure continuing treatment of each REMIC created hereunder as a REMIC to avoid
or minimize the risk of imposition of any tax on any REMIC created hereunder
pursuant to the Code, or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be materially
inconsistent with the provisions of this Agreement, provided that such actions
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder of a Class having an
Outstanding Certificate Principal Balance of greater than zero or cause any
REMIC created hereunder to fail to qualify as a REMIC.
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interest of
each Class of Certificates having an Outstanding Certificate Principal Balance
greater than zero and affected thereby for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; 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 of any class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01, without the consent of the Holders
of all Certificates of such Class then outstanding.
Notwithstanding anything to the contrary in this Agreement, this
Agreement may be amended from time to time by the Depositor, the Servicer and
the Trustee with the consent of Certificateholders evidencing not less than
66-2/3% of the interests held by parties other than the Depositor, its
Affiliates or its agents, for the purposes of significantly changing the
Permitted Activities of the Trust.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 12.03 to approve the particular form of any proposed amendment but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 12.04. Counterparts. 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 12.05. Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.
Section 12.06. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 12.07. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by first class or registered mail, postage
prepaid, to (i) in the case of the Depositor, Chase Mortgage Finance
Corporation, 000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx, Xxxxxxxxx Lake, New Jersey
07675, Attention: Structured Finance, (ii) in the case of Chase Manhattan
Mortgage Corporation, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention:
Structured Finance, (iii) in the case of the Trustee, Wachovia Bank, N.A., 000
Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, (iv) in
the case of Fitch Ratings, Fitch Ratings, 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, (v) in the case of S&P, Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, and (vi) in the case of any of the foregoing persons, such other
addresses as may hereafter be furnished by any such persons to the other parties
to this Agreement.
100
Section 12.08. Further Assurances. The Seller and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully
to effect the purposes of this Agreement, including, without limitation, the
execution of any financing statements and the preparation for execution by the
Trustee of any continuation statements relating to the Co-op Loans for filing
under the provisions of the Uniform Commercial Code as in effect in the
jurisdiction in which the Underlying Mortgaged Property related to the affected
Co-op Loan is located. The Trustee agrees that it shall promptly execute and
redeliver to the Seller or the Servicer for filing any such continuation
statement so prepared by the Seller relating to the Co-op Loans.
[END OF ARTICLE XII]
101
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
CHASE MORTGAGE FINANCE
CORPORATION
By:
---------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
CHASE MANHATTAN MORTGAGE
CORPORATION
By:
---------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
WACHOVIA BANK, N.A.,
as Trustee
By:
---------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Assistant Vice President
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[intentionally omitted]
A-1
EXHIBIT B
CONTENTS OF MORTGAGE FILE
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) (I) Original Mortgage Note (or a lost note affidavit (including a
copy of the original Mortgage Note)) or (II) original consolidation, extension
and modification agreement (or a lost note affidavit (including a copy of the
original consolidation, extension and modification agreement), in either case
endorsed, "Pay to the order of Wachovia Bank, N.A., as trustee, without
recourse."
(B) The original Mortgage (including all riders thereto) with evidence
of recording thereon, or a copy thereof certified by the public recording office
in which such Mortgage has been recorded or, if the original Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Seller, of the original Mortgage together with a
certificate of the Seller certifying that the original Mortgage has been
delivered for recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located.
(C) With respect to each Non-MERS Mortgage Loan which is not a Co-op
Loan, the original Assignment of Mortgage to "Wachovia Bank, N.A., as trustee
(Chase Mortgage Finance Corporation)," which assignment shall be in form and
substance acceptable for recording, or a copy certified by the Seller as a true
and correct copy of the original Assignment of Mortgage which has been sent for
recordation. Subject to the foregoing, such assignments may, if permitted by
law, be by blanket assignments for Mortgage Loans covering Mortgaged Properties
situated within the same county. If the Assignment of Mortgage is in blanket
form, a copy of the Assignment of Mortgage shall be included in the related
individual Mortgage File.
(D) The original policy of title insurance, including riders and
endorsements thereto, or if the policy has not yet been issued, a written
commitment or interim binder or preliminary report of title issued by the title
insurance or escrow company.
(E) Originals of all recorded intervening Assignments of Mortgage, or
copies thereof, certified by the public recording office in which such
Assignments or Mortgage have been recorded showing a complete chain of title
from the originator to the Depositor, with evidence of recording, thereon, or a
copy thereof certified by the public recording office in which such Assignment
of Mortgage has been recorded or, if the original Assignment of Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage together
with a certificate of the Seller certifying that the original Assignment of
Mortgage has been delivered for recording in the appropriate public recording
office of the jurisdiction in which the Mortgaged Property is located.
(F) Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements, if
applicable, or if the original of such document has not been returned from the
applicable public recording office, a true certified copy, certified by the
Seller, of such original document together with certificate of Seller certifying
the original of such document has been delivered for recording in the
appropriate recording office of the jurisdiction in which the Mortgaged Property
is located.
B-1
(G) If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a Person on behalf
of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such Person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and complete
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original power
of attorney or other such instrument has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the Mortgaged
Property is located.
(ii) With respect to each Co-op Loan:
(A)(I) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension
and modification agreement)), in either case endorsed "Pay to the order
of Wachovia Bank, N.A., as trustee, without recourse."
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-op Loan.
(C) The original Assignment of Mortgage to "Wachovia Bank,
N.A. as trustee (Chase Mortgage Finance Corporation)."
(D) Original assignments of Mortgage showing a complete chain
of assignment from the originator of the related Co-op Loan to the
Seller.
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect
to such Co-op Loan.
(F) Form UCC-3 (or copy thereof) by the applicable Mortgage
Loan Seller or its agent assigning the security interest covered by
such Form UCC-1 to "Wachovia Bank, N.A. as trustee," together with all
Forms UCC-3 (or copies thereof) showing a complete chain of assignment
from the originator of the related Co-op Loan to the Seller, with
evidence of recording thereon.
(G) Stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of
such Co-op Loan with a stock power in blank attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee,
and all intervening assignments thereof.
(J) Original recognition agreement of the interests of the
mortgagee with respect to the Co-op Loan by the residential cooperative
housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan.
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F)
above with respect to such Co-op Loan.
B-2
EXHIBIT C
FORM OF CLASS A CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), CHASE MANHATTAN MORTGAGE CORPORATION (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS A-__ CERTIFICATE
Number: 04-S3-A-__-1 Original Denomination: $_________
Cut-off Date: February 1, 2004 Final Scheduled
Distribution Date: March 25, 2034
First Distribution Date: Aggregate Original Principal
March 25, 2004 Balance of all Class A-__
Certificates: $_________
Certificate Rate: ____% CUSIP: ___________
C-1
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series 2004-S3
evidencing an ownership interest in distributions allocable to the Class A-__
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Original
Denomination of all Class A-__ Certificates) in certain distributions with
respect to a pool of conventional one- to four-family first lien mortgage loans
(the "Mortgage Loans") formed and sold by Chase Mortgage Finance Corporation
(hereinafter called the "Depositor"), and certain other property held in trust
for the benefit of Certificateholders (collectively, the "Trust Fund"). The
Mortgage Loans are serviced by Chase Manhattan Mortgage Corporation (the
"Servicer") and are secured by first mortgages on Mortgaged Properties. The
Trust Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of February 1, 2004 among the Depositor, the Servicer and
Wachovia Bank, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
Class A-__ (the "Class A-__ Certificates") and is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which Agreement such Holder is bound. Also issued under the Agreement are
Certificates designated as Multi-Class Mortgage Pass-Through Certificates,
Series 2004-S3, Class M Certificates and Class B Certificates. The Class A
Certificates, the Class M Certificates and the Class B Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof on the 25th day of each month or, if such 25th
day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on March 25, 2004. Such distributions will be
made to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month preceding the month in which such
payment is made, or if such last day is not a Business Day, the Business Day
immediately preceding such last day.
C-2
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate Original Denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement the Paying Agent, for the purpose and specified in such
notice of final distribution.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like class and
dated the date of authentication by the Authenticating Agent. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, for that purpose and specified
in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-3
IN WITNESS WHEREOF, the Depositor has caused this Class A-__
Certificate to be duly executed.
Dated: ________ CHASE MORTGAGE FINANCE
CORPORATION
By:
-----------------------------
Authorized Officer
C-4
Dated: ________ CERTIFICATE OF AUTHENTICATION
This is one of the
Class A-__
Certificates
referred to in the
within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:
-----------------------------
Authorized Signatory
C-5
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-S3
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
issued in one or more Classes of Class A, Class M and Class B Certificates. The
Class A Certificates evidence in the aggregate the Class A Percentage of
distributions relating to repayments of principal and interest on the Mortgage
Loans. The Class M Certificates evidence in the aggregate the Class M Percentage
of distributions relating to repayments of principal and interest on the
Mortgage Loans. The Class B Certificates evidence in the aggregate the Class B
Percentage of distributions relating to repayments of principal and interest on
the Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders 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 Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like Class and
dated the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of the Certificate. Prior to
due presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
C-6
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC (as hereinafter defined) included in the Trust Fund as a
REMIC, or to make any other provisions with respect to matters or questions
arising under the Agreement which are not materially inconsistent with the
provisions of the Agreement, provided that such action does not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder or cause any REMIC included in the Trust Fund to fail to
qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (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 of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes four
segregated asset pools. The Depositor intends to cause elections to be made to
treat each as a "real estate mortgage investment conduit" (a "REMIC"). The Class
A Certificates (other than the Class A-R Certificate), the Class M Certificates
and the Class B Certificates will constitute "regular interests" in the
Upper-Tier REMIC. The Class A-R Certificate will represent the sole class of
"residual interest" in each of four REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate upon (i) the later of
the final payment or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the applicable Collection Account during the Principal Prepayment Period
related to such Distribution Date (and provides notice to the Trustee of its
intention to so deposit on or before the 20th day of such Principal Prepayment
Period) an amount equal to the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired; provided, however, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
C-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_______________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power
of substitution in the premises.
Dated:
(Signature guaranty)
------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code).
C-8
EXHIBIT D
FORM OF CLASS M CERTIFICATE
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), CHASE MANHATTAN MORTGAGE CORPORATION (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS M CERTIFICATE
Number: 04-S3-M-1 Original Denomination:
$____________
Cut-off Date: February 1, 2004 Final Scheduled
Distribution Date: March 25, 2034
First Distribution Date: Aggregate Original Principal
March 25, 2004 Balance of all Class M
Certificates: $____________
Certificate Rate: ________ CUSIP: __________
D-1
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series 2004-S3
evidencing an ownership interest in distributions allocable to the Class M
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Original
Denomination of all Class M Certificates) in certain distributions with respect
to a pool of conventional one- to four-family first lien mortgage loans (the
"Mortgage Loans") formed and sold by Chase Mortgage Finance Corporation
(hereinafter called the "Depositor"), and certain other property held in trust
for the benefit of Certificateholders (collectively, the "Trust Fund"). The
Mortgage Loans are serviced by Chase Manhattan Mortgage Corporation (the
"Servicer") and are secured by first mortgages on Mortgaged Properties. The
Trust Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of February 1, 2004 among the Depositor, the Servicer and
Wachovia Bank, N.A., as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
Class M (the "Class M Certificates") and is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which
Agreement such Holder is bound. Also issued under the Agreement are Certificates
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
Class A Certificates and Class B Certificates. The Class A Certificates are
senior to, and the Class B Certificates are subordinate to, the Class M
Certificates in right of payment to the extent described herein and in the
Agreement. The Class A Certificates, the Class M Certificates and the Class B
Certificates are collectively referred to herein as the "Certificates." Amounts
properly distributed to the Class M Certificateholders pursuant to the Agreement
will be deemed released from the Trust Fund, and the Class M Certificateholders
will not in any event be required to refund any such distributed amounts.
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof on the 25th day of each month or, if such 25th
day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on March 25, 2004. Such distributions will be
made to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month preceding the month in which such
payment is made, or if such last day is not a Business Day, the Business Day
immediately preceding such last day.
D-2
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate Original Denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like class and
dated the date of authentication by the Authenticating Agent. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, for that purpose and specified
in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-3
IN WITNESS WHEREOF, the Depositor has caused this Class M Certificate
to be duly executed.
Dated: ________ CHASE MORTGAGE FINANCE
CORPORATION
By:
----------------------------
Authorized Officer
D-4
Dated: ________ CERTIFICATE OF AUTHENTICATION
This is one of the
Class M
Certificates
referred to in the
within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:
-----------------------------
Authorized Signatory
D-5
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-S3
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
issued in one or more Classes of Class A, Class M and Class B Certificates. The
Class A Certificates evidence in the aggregate the Class A Percentage of
distributions relating to repayments of principal and interest on the Mortgage
Loans. The Class M Certificates evidence in the aggregate the Class M Percentage
of distributions relating to repayments of principal and interest on the
Mortgage Loans. The Class B Certificates evidence in the aggregate the Class B
Percentage of distributions relating to repayments of principal and interest on
the Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders 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 Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like Class and
dated the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of the Certificate. Prior to
due presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
D-6
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC (as hereinafter defined) included in the Trust Fund as a
REMIC, or to make any other provisions with respect to matters or questions
arising under the Agreement which are not materially inconsistent with the
provisions of the Agreement, provided that such action does not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder or cause any REMIC included in the Trust Fund to fail to
qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (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 of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes four
segregated asset pools. The Depositor intends to cause elections to be made to
treat each as a "real estate mortgage investment conduit" (a "REMIC"). The Class
A Certificates (other than the Class A-R Certificate), the Class M Certificates
and the Class B Certificates will constitute "regular interests" in the
Upper-Tier REMIC. The Class A-R Certificate will represent the sole class of
"residual interest" in each of four REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate upon (i) the later of
the final payment or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the applicable Collection Account during the Principal Prepayment Period
related to such Distribution Date (and provides notice to the Trustee of its
intention to so deposit on or before the 20th day of such Principal Prepayment
Period) an amount equal to the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired; provided, however, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
D-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_______________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power
of substitution in the premises.
Dated:
(Signature guaranty)
------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code).
D-8
EXHIBIT E
FORM OF CLASS B CERTIFICATE
THIS CLASS B-__ CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M CERTIFICATES AND THE CLASS OR CLASSES OF CLASS B
CERTIFICATES OF A LOWER NUMERICAL DESIGNATION AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE").
THIS CLASS B-__ CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), CHASE MANHATTAN MORTGAGE CORPORATION (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
[NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (i) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") (A "PLAN"),
AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS
INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A
PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE
ACCOUNTS TO EFFECT SUCH ACQUISITION OR (B) SUCH TRANSFEREE IS an insurance
company and THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES IS AN
"INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF SECTION V(E) UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925
(JULY 12, 1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATES ARE COVERED BY
SECTIONS I AND III UNDER PTCE 95-60, OR (ii) IF THIS CERTIFICATE IS PRESENTED
FOR REGISTRATION IN THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION
4975 OF THE CODE OR SIMILAR LAW (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE
ASSETS OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL
acceptable to the depositor TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE
"PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR REGULATIONS SET FORTH IN 29
C.F.R. ss.2510.3-101 or TO BE SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS
OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN
THE MEANING OF SECTION 406 OR 407 OF ERISA OR SECTION 4975 OF THE CODE OR
SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE SERVICER, THE COMPANY OR ANY
OF THEIR AFFILIATES TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW) RELATING TO
THE CERTIFICATES, WHICH OPINION OF COUNSEL OR OTHER REPRESENTATION SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE SERVICER.] [Include only if
ERISA restricted certificate.]
E-1
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS B-__ CERTIFICATE
Number: 04-S3-B-__-1 Original Denomination:
$________
Cut-off Date: February 1, 2004 Final Scheduled
Distribution Date: March 25, 2034
First Distribution Date: Aggregate Original Principal
March 25, 2004 Balance of all Class B-__
Certificates: $________
Certificate Rate: _________ CUSIP: __________
E-2
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series 2004-S3
evidencing an ownership interest in distributions allocable to the Class B-__
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
This certifies that ____________________ is the registered owner of the
ownership interest (the "Ownership Interest") evidenced by this Certificate
(obtained by dividing the Original Denomination of this Certificate by the
aggregate Original Denomination of all Class B-__ Certificates) in certain
distributions with respect to a pool of conventional one- to four-family first
lien mortgage loans (the "Mortgage Loans") formed and sold by Chase Mortgage
Finance Corporation (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation (the "Servicer") and are secured by first mortgages on Mortgaged
Properties. The Trust Fund was created pursuant to a Pooling and Servicing
Agreement (the "Agreement"), dated as of February 1, 2004 among the Depositor,
the Servicer and Wachovia Bank, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
Class B-__ (the "Class B-__ Certificates") and is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which Agreement such Holder is bound. Also issued under the Agreement are
Certificates designated as Multi-Class Mortgage Pass-Through Certificates,
Series 2004-S3, Class A Certificates and Class M Certificates. The rights of the
Class B-3 Certificateholders to receive distributions in respect of the Class B
Certificates on any Distribution Date are subordinated to the rights of the
Class A Certificateholders, Class M Certificateholders and the holders of Class
B Certificates of a lower numerical designation to receive distributions in
respect of the Class A, Class M and such classes of Class B Certificates to the
extent, and only to the extent, set forth in the Agreement. The Class A
Certificates, the Class M Certificates and the Class B Certificates are
collectively referred to herein as the "Certificates." Amounts properly
distributed to the Class B Certificateholders pursuant to the Agreement will be
deemed released from the Trust Fund, and the Class B Certificateholders will not
in any event be required to refund any such distributed amounts.
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof on the 25th day of each month or, if such 25th
day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on March 25, 2004. Such distributions will be
made to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month preceding the month in which such
payment is made, or if such last day is not a Business Day, the Business Day
immediately preceding such last day.
E-3
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate Original Denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like class and
dated the date of authentication by the Authenticating Agent. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, for that purpose and specified
in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
E-4
IN WITNESS WHEREOF, the Depositor has caused this Class B-__
Certificate to be duly executed.
Dated: _______ CHASE MORTGAGE FINANCE
CORPORATION
By:
-----------------------------
Authorized Officer
E-5
Dated: _______ CERTIFICATE OF AUTHENTICATION
This is one of the
Class B-__
Certificates
referred to in the
within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:
-----------------------------
Authorized Signatory
E-6
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-S3
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
issued in one or more Classes of Class A, Class M and Class B Certificates. The
Class A Certificates evidence in the aggregate the Class A Percentage of
distributions relating to repayments of principal and interest on the Mortgage
Loans. The Class M Certificates evidence in the aggregate the Class M Percentage
of distributions relating to repayments of principal and interest on the
Mortgage Loans. The Class B Certificates evidence in the aggregate the Class B
Percentage of distributions relating to repayments of principal and interest on
the Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders 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 Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like Class and
dated the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of the Certificate. Prior to
due presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
E-7
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC (as hereinafter defined) included in the Trust Fund as a
REMIC, or to make any other provisions with respect to matters or questions
arising under the Agreement which are not materially inconsistent with the
provisions of the Agreement, provided that such action does not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder or cause any REMIC included in the Trust Fund to fail to
qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (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 of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes four
segregated asset pools. The Depositor intends to cause elections to be made to
treat each as a "real estate mortgage investment conduit" (a "REMIC"). The Class
A Certificates (other than the Class A-R Certificate), the Class M Certificates
and the Class B Certificates will constitute "regular interests" in the
Upper-Tier REMIC. The Class A-R Certificate will represent the sole class of
"residual interest" in each of four REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate upon (i) the later of
the final payment or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the applicable Collection Account during the Principal Prepayment Period
related to such Distribution Date (and provides notice to the Trustee of its
intention to so deposit on or before the 20th day of such Principal Prepayment
Period) an amount equal to the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired; provided, however, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
E-8
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_______________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power
of substitution in the premises.
Dated:
(Signature guaranty)
------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code).
E-9
EXHIBIT F
FORM OF CLASS A-R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), CHASE MANHATTAN MORTGAGE CORPORATION (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC RESIDUAL INTEREST REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION
4975 OF THE CODE OR MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE
OR LOCAL LAW (A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY
CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF OR WITH ASSETS OF A PLAN.
TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED UNDER THE PROVISIONS OF
SECTION 4.02 OF THE AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS A-R CERTIFICATE
Number: 04-S3-A-R-1 Original Denomination:
$100.00
Cut-off Date: February 1, 2004 Final Scheduled
Distribution Date: March 25, 2034
First Distribution Date: Aggregate Original Principal
March 25, 2004 Balance of Class A-R
Certificate: $100.00
Certificate Rate: ____% CUSIP: _________
F-1
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series 2004-S3
evidencing an ownership interest in distributions allocable to the Class A-R
Certificate with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
This certifies that _____________________ is the registered owner of
the ownership interest (the "Ownership Interest") evidenced by this Certificate
in certain distributions with respect to a pool of conventional one- to
four-family first lien mortgage loans (the "Mortgage Loans") formed and sold by
Chase Mortgage Finance Corporation (hereinafter called the "Depositor"), and
certain other property held in trust for the benefit of Certificateholders
(collectively, the "Trust Fund"). The Mortgage Loans are serviced by Chase
Manhattan Mortgage Corporation (the "Servicer") and are secured by first
mortgages on Mortgaged Properties. The Trust Fund was created pursuant to a
Pooling and Servicing Agreement (the "Agreement"), dated as of February 1, 2004
among the Depositor, the Servicer and Wachovia Bank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
Class A-R (the "Class A-R Certificate") and is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which Agreement such Holder is bound. Also issued under the Agreement are
Certificates designated as Multi-Class Mortgage Pass-Through Certificates,
Series 2004-S3, Class M Certificates and Class B Certificates. The Class A
Certificates, the Class M Certificates and the Class B Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof on the 25th day of each month or, if such 25th
day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on March 25, 2004. Such distributions will be
made to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month preceding the month in which such
payment is made, or if such last day is not a Business Day, the Business Day
immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate Original Denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
F-2
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like class and
dated the date of authentication by the Authenticating Agent. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, for that purpose and specified
in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
F-3
IN WITNESS WHEREOF, the Depositor has caused this Class A-R Certificate
to be duly executed.
Dated: ________ CHASE MORTGAGE FINANCE
CORPORATION
By:
----------------------------
Authorized Officer
F-4
Dated: ________ CERTIFICATE OF AUTHENTICATION
This is the Class
A-R Certificate
referred to in the
within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By:
-----------------------------
Authorized Signatory
F-5
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-S3
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3,
issued in one or more Classes of Class A, Class M and Class B Certificates. The
Class A Certificates evidence in the aggregate the Class A Percentage of
distributions relating to repayments of principal and interest on the Mortgage
Loans. The Class M Certificates evidence in the aggregate the Class M Percentage
of distributions relating to repayments of principal and interest on the
Mortgage Loans. The Class B Certificates evidence in the aggregate the Class B
Percentage of distributions relating to repayments of principal and interest on
the Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders 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 Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) will provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, will, subject to the
limitations set forth in the Agreement, authenticate and deliver, in the name of
the designated transferee or transferees, a Certificate of a like Class and
dated the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of the Certificate. Prior to
due presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
F-6
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC (as hereinafter defined) included in the Trust Fund as a
REMIC, or to make any other provisions with respect to matters or questions
arising under the Agreement which are not materially inconsistent with the
provisions of the Agreement, provided that such action does not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder or cause any REMIC included in the Trust Fund to fail to
qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (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 of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes four
segregated asset pools. The Depositor intends to cause elections to be made to
treat each as a "real estate mortgage investment conduit" (a "REMIC"). The Class
A Certificates (other than the Class A-R Certificate), the Class M Certificates
and the Class B Certificates will constitute "regular interests" in the
Upper-Tier REMIC. The Class A-R Certificate will represent the sole class of
"residual interest" in each of four REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate upon (i) the later of
the final payment or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the applicable Collection Account during the Principal Prepayment Period
related to such Distribution Date (and provides notice to the Trustee of its
intention to so deposit on or before the 20th day of such Principal Prepayment
Period) an amount equal to the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired; provided, however, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
F-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_______________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power
of substitution in the premises.
Dated:
(Signature guaranty)
------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement or
any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code).
F-8
EXHIBIT G
FORM OF TRUSTEE CERTIFICATION
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of February 1, 2004 among
Chase Mortgage Finance Corporation, Chase Manhattan Mortgage
Corporation as servicer and Wachovia Bank, N.A., as trustee,
Multi-Class Mortgage Pass-Through Certificates, Series 2004-S3
------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to
the Trustee pursuant to Section 2.01 of the Pooling and Servicing
Agreement are in its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof
as to which documentary evidence of recording was not received on the
Closing Date, it has received evidence of such recording; and
(iii) Such documents have been reviewed by it and such documents
do not contain any material omissions or defects within the meaning of
Section 2.01 or 2.02.
The Trustee further certifies that as to each Mortgage Loan, the
Trustee holds the Mortgage Note without any Responsible Officer of the Trustee
having received written notice (a) of any adverse claims, liens or encumbrances,
(b) that any Mortgage Note was overdue or has been dishonored, (c) of evidence
on the face of any Mortgage Note or Mortgage of any security interest therein,
or (d) of any defense against or claim to the Mortgage Note by any other party.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number and the name of the Mortgagor in each Mortgage File conform to the
respective Mortgage Loan number and name listed on the Mortgage Loan Schedule
and (ii) the existence in each Mortgage File of each of the documents listed in
subparagraphs (i)(A) through (G), inclusive, of Section 2.01 in the Agreement.
The Trustee makes no representations or warranties as to the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained in
each Mortgage Loan or the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
G-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
WACHOVIA BANK, N.A., as Trustee
By: ____________________________
Name: __________________________
Title: _________________________
G-2
EXHIBIT H
FORM OF INVESTMENT LETTER
(Accredited Investor)
[DATE]
Chase Manhattan Mortgage Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
JPMorgan Chase Bank
Global Debt
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wachovia Bank, N.A., as trustee
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Chase Mortgage Finance Corporation Multi-Class Mortgage
Pass-Through Certificates, Series 2004-S3, [Class B- ]
-------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ _________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Multi-Class Mortgage Pass-Through
Certificates, Series 2004-S3, [Class B- ] (the "Certificates"), issued pursuant
to a pooling and servicing agreement, dated as of February 1, 2004 (the "Pooling
and Servicing Agreement"), among Chase Mortgage Finance Corporation (the
"Depositor"), Chase Manhattan Mortgage Corporation ("CMMC"), as servicer, and
Wachovia Bank, N.A., as trustee (the "Trustee"). [The Purchaser intends to
register the Transferred Certificate in the name of ____________________, as
nominee for __________________.] All terms used and not otherwise defined herein
shall have the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
H-1
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CLASS B CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED
IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 4.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE IS
AN ERISA RESTRICTED CERTIFICATE.] NO TRANSFER OF THIS CERTIFICATE SHALL
BE MADE UNLESS THE DEPOSITOR SHALL HAVE RECEIVED EITHER (i) A
REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE
EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE") OR MATERIALLY SIMILAR PROVISIONS OF
APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") (A "PLAN"), AND
IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF,
AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH
ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF
ANY SEPARATE ACCOUNTS TO EFFECT SUCH ACQUISITION OR (B) is an insurance
company and THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES IS
AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60
FED. REG. 35925 (JULY 12, 1995), AND THE PURCHASE AND HOLDING OF THE
CERTIFICATES IS COVERED under SECTIONS i AND III of PTCE 95-60, OR (ii)
IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN
SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE CODE OR SIMILAR LAW
(OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE
OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY
SUCH PLAN TO EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE
EFFECT THAT THE PURCHASE and HOLDING OF THIS CERTIFICATE WILL NOT
RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS"
PURSUANT TO THE DEPARTMENT OF LABOR REGULATIONS SET FORTH IN 29 C.F.R.
ss.2510.3-101 AND TO BE SUBJECT TO THE FIDUCIARY RESPONSIBILITY
PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF ERISA
OR THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A
PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT
THE TRUSTEE, THE SERVICER, THE DEPOSITOR OR ANY OF THEIR AFFILIATES TO
ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW) RELATING TO THE
CERTIFICATES, WHICH OPINION OF COUNSEL OR OTHER REPRESENTATION SHALL
NOT BE AN EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE SERVICER.
H-2
3. The Purchaser is acquiring the Transferred Certificates for its own
account [for investment only]*/ and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
4. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
5. The Purchaser will not nor has it authorized nor will it authorize
any Person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any Person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
6. [This paragraph may be deleted if the Purchaser provides the Opinion
of Counsel referred to in clause (ii) of Section 4.02(d) of the Pooling and
Servicing Agreement or if the Purchaser is purchasing an ERISA Restricted
Certificate.] The Purchaser either (A) is not an employee benefit plan within
the meaning of Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or a plan within the meaning of Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code") or any materially similar
provisions of applicable federal, state or local law (each, a "Plan"), and is
not directly or indirectly purchasing any Certificate on behalf of, as
investment manager of, as named fiduciary of, as trustee of or with assets of a
Plan or directly or indirectly purchasing any certificates with the assets of
any insurance company separate account or (B) is an insurance company and the
source of funds for the purchase of the certificates is an "insurance company
general account" within the meaning of Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), and
the purchase and holding of the Certificates is covered by Sections I and III
under PTCE 95-60.
--------
*/ Not required of a broker/dealer purchaser.
H-3
7. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit I to the Pooling and Servicing Agreement.
8. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.
Very truly yours,
[PURCHASER]
By:_________________________________
Name:_______________________________
Title:______________________________
H-4
EXHIBIT I
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
Chase Manhattan Mortgage Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
JPMorgan Chase Bank
Global Debt
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wachovia Bank, N.A., as trustee
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Chase Mortgage Finance Corporation, Multi-Class Mortgage Pass-Through
Certificates, Series 2004-S3, [Class B- ]
---------------------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Multi-Class Mortgage Pass-Through
Certificates, Series 2004-S3, [Class B-] (the "Certificates"), issued pursuant
to a pooling and servicing agreement, dated as of February 1, 2004 (the "Pooling
and Servicing Agreement"), among Chase Mortgage Finance Corporation (the
"Depositor"), Chase Manhattan Mortgage Corporation ("CMMC"), as servicer (the
"Servicer"), and Wachovia Bank, N.A., as trustee (the "Trustee"). [The Purchaser
intends to register the Transferred Certificate in the name of
____________________, as nominee for __________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
I-1
In connection with our acquisition of the above Transferred
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferred Certificates, (d)
we are not an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a plan
within the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any retirement plan or other employee benefit plan
subject to any federal, state or local law materially similar to the foregoing
provisions of ERISA or the Code (each, a "Plan"), nor are we directly or
indirectly purchasing any Certificate on behalf of, as investment manager of, as
named fiduciary of, as trustee of or with assets of a Plan or directly or
indirectly purchasing any certificates with the assets of any insurance company
separate account or alternatively, if we are an insurance company, the source of
funds for the purchase of the certificates is an "insurance company general
account" within the meaning of Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), and the
purchase and holding of the Certificates is covered by Sections I and III under
PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed one of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale of the Transferred Certificates to us is being made in
reliance on Rule 144A. We are acquiring the Transferred Certificates for our own
account or for resale pursuant to Rule 144A and further understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
I-2
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:_________________________________
Name:_______________________________
Title:______________________________
I-3
ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________*/ in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business
of which is substantially confined to banking and is
supervised by Federal, State or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which
is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
such institution or is a foreign savings and loan
association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
--------------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
I-4
____ Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934, as amended.
____ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of the State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political
subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit
of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, as amended.
____ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940, as amended.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958, as
amended.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
I-5
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:_________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
I-6
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other
than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $__________ in
securities (other than the excluded securities
referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
I-7
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:__________________________________
Name:________________________________
Title:_______________________________
IF AN ADVISER:
_____________________________________
Print Name of Buyer
Date:________________________________
I-8
EXHIBIT J
FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the "Agreement")
is made and entered into as of [DATE], between Chase Manhattan Mortgage
Corporation, (the "Company") and _____________________ (the "Purchaser").
PRELIMINARY STATEMENT
__________________ (the "Owner") is the holder of the entire interest
in Chase Mortgage Finance Corporation Multi-Class Mortgage Pass-Through
Certificates, Series 2004-S3, Class B-5 (the "Class B-5 Certificates"). The
Class B-5 Certificates were issued pursuant to a Pooling and Servicing Agreement
dated as of February 1, 2004 (the "Pooling and Servicing Agreement") among Chase
Mortgage Finance Corporation, (the "Company"), Chase Manhattan Mortgage
Corporation as servicer thereunder (the "Servicer") and Wachovia Bank, N.A., as
trustee (the "Trustee").
The Owner intends to resell all of the Class B-5 Certificates directly
to the Purchaser on or promptly after the date hereof.
In connection with such sale, the parties hereto have agreed that the
Company, as Servicer, will engage in certain special servicing procedures
relating to foreclosures for benefit of the Purchaser, and that the Purchaser
will deposit funds in a collateral fund to cover any losses attributable to such
procedures as well as all advances and costs in connection therewith, as set
forth herein.
In consideration of the mutual agreements herein contained, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Purchaser
agree to the following:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of New York are required or
authorized by law or executive order to be closed.
Collateral Fund: The fund established and maintained pursuant to
Section 3.01 hereof.
Collateral Fund Permitted Investments: Either: (i) obligations of, or
obligations fully guaranteed as to principal and interest by, the United States,
or any agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States, (ii) a money market fund
rated in the highest rating category by a nationally recognized rating agency
selected by the Company, (iii) cash, (iv) mortgage pass-through certificates
issued or guaranteed by GNMA, FNMA or FHLMC, (v) commercial paper (including
both non-interest bearing discount obligations and interest bearing obligations
payable on demand or on a specified date), the issuer of which may be an
affiliate of the Company, having at the time of such investment a rating of at
least Prime-1 by Xxxxx'x Investors Service, Inc. ("Moody's") or at least D-1 by
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P") and
(vi) demand and time deposits in, certificates of deposit of, any depository
institution or trust company (which may be an affiliate of the Company)
incorporated under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment either (x) the long-term
debt obligations of such depository institution or trust company have a rating
of at least Aa by Moody's or at least AA by S&P or (y) the certificate of
deposit or other unsecured short-term debt obligations of such depository
institution or trust company have a rating of at least A-1 by S&P or Prime-1 by
Moody's and, for each of the preceding clauses (i), (iv), (v) and (vi), the
maturity thereof shall be not later than the earlier to occur of (A) 30 days
from the date of the related investment and (B) the next succeeding Distribution
Date.
J-1
Commencement of Foreclosure: The first official action required under
local law in order to commence foreclosure proceedings or to schedule a
trustee's sale under a deed of trust, including (i) in the case of a mortgage,
any filing or service of process necessary to commence an action to foreclose,
or (ii) in the case of a deed of trust, the posting, publishing, filing or
delivery of a notice of sale, but not including in either case (x) any notice of
default, notice of intent to foreclose or sell or any other action prerequisite
to the actions specified in (i) or (ii) above and upon the consent of the
Purchaser which will be deemed given unless expressly withheld within two
Business Days of notification, (y) the acceptance of a deed-in-lieu of
foreclosure (whether in connection with a sale of the related property or
otherwise) or (z) initiation and completion of a short pay-off.
Current Appraisal: With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, an appraisal of the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), obtained by the Purchaser at its expense from an appraiser (which shall
not be an affiliate of the Purchaser) acceptable to the Company as nearly
contemporaneously as practicable to the time of the Purchaser's election,
prepared based on the Company's customary requirements for such appraisals.
Election to Delay Foreclosure: Any election by the Purchaser to delay
the Commencement of Foreclosure, made in accordance with Section 2.02(b).
Election to Foreclose: Any election by the Purchaser to proceed with
the Commencement of Foreclosure, made in accordance with Section 2.03(a).
Required Collateral Fund Balance: As of any date of determination, an
amount equal to the aggregate of all amounts previously required to be deposited
in the Collateral Fund pursuant to Section 2.02(d) (after adjustment for all
withdrawals and deposits pursuant to Section 2.02(e)) and Section 2.03(b) (after
adjustment for all withdrawals and deposits pursuant to Section 2.03(c)) and
Section 3.03 to be reduced by all withdrawals therefrom pursuant to Section
2.02(g) and Section 2.03(d).
Section 1.02. Definitions Incorporated by Reference.
All capitalized terms not otherwise defined in this Agreement shall
have the meanings assigned in the Pooling and Servicing Agreement.
J-2
ARTICLE II
SPECIAL SERVICING PROCEDURES
Section 2.01 Reports and Notices.
1. In connection with the performance of its duties under the Pooling
and Servicing Agreement relating to the realization upon defaulted Mortgage
Loans, the Company, as Servicer, shall provide to the Purchaser the following
notices and reports:
(a) Within five Business Days after each Distribution
Date (or included in or with the monthly statement to
Certificateholders pursuant to the Pooling and
Servicing Agreement), the Company shall provide to
the Purchaser a report indicating for the Trust the
number of Mortgage Loans that are (A) thirty days,
(B) sixty days, (C) ninety days or more delinquent or
(D) in foreclosure, and indicating for each such
Mortgage Loan the outstanding principal balance.
(b) Prior to the Commencement of Foreclosure in
connection with any Mortgage Loan, the Company shall
provide the Purchaser with a notice (sent by
telecopier) of such proposed and imminent
foreclosure, stating the loan number and the
aggregate amount owing under the Mortgage Loan.
2. If requested by the Purchaser, the Company shall make its servicing
personnel available (during their normal business hours) to respond to
reasonable inquiries by the Purchaser in connection with any Mortgage Loan
identified in a report under subsection (a)(i)(B), (a)(i)(C), (a)(i)(D) or
(a)(ii) which has been given to the Purchaser; provided, that (1) the Company
shall only be required to provide information that is readily accessible to its
servicing personnel and is non-confidential and (2) the Company shall not be
required to provide any written information under this subsection.
3. In addition to the foregoing, the Company shall provide to the
Purchaser such information as the Purchaser may reasonably request concerning
each Mortgage Loan that is at least sixty days delinquent and each Mortgage Loan
which has become real estate owned, through the final liquidation thereof;
provided that the Company shall only be required to provide information that is
readily accessible to its servicing personnel and is non-confidential.
(a) With respect to all Mortgage Loans which are serviced
at any time by the Company through a Subservicer, the
Company shall be entitled to rely for all purposes
hereunder, including for purposes of fulfilling its
reporting obligations under this Section 2.01 on the
accuracy and completeness of any information provided
to it by the applicable Subservicer.
Section 2.02 Purchaser's Election to Delay Foreclosure Proceedings.
1. The Purchaser directs the Company that in the event that the Company
does not receive written notice of the Purchaser's election pursuant to
subsection (b) below within 24 hours (exclusive of any intervening non-Business
Days) of transmission of the notice provided by the Company under Section
2.01(a)(ii), subject to extension as set forth in Section 2.02(b), the Company
shall proceed with the Commencement of Foreclosure in respect of such Mortgage
Loan in accordance with its normal foreclosure policies without further notice
to the Purchaser. Any foreclosure that has been initiated may be discontinued
(i) without notice to the Purchaser, if the Mortgage Loan has been brought
current or if a refinancing or prepayment occurs with respect to the Mortgage
Loan (including by means of a short payoff approved by the Company) (ii) with
notice to the Purchaser if the Company has reached the terms of a forbearance
agreement with the borrower. In such latter case the Company may complete such
forbearance agreement unless instructed otherwise by the Purchaser within one
Business Day of notification.
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2. In connection with any Mortgage Loan with respect to which a notice
under Section 2.01(a)(ii) has been given to the Purchaser, the Purchaser may
elect, for reasonable cause as determined by the Purchaser, to instruct the
Company to delay the Commencement of Foreclosure until such term as the
Purchaser determines that the Company may proceed with the Commencement of
Foreclosure. Such election must be evidenced by written notice received within
24 hours (exclusive of any intervening non-Business Days) of transmission of the
notice provided by the Company under Section 2.01(a)(ii). Such 24 hour period
shall be extended for no longer than an additional four Business Days after the
receipt of the information if the Purchaser requests additional information
related to such foreclosure; provided, however that the Purchaser will have at
least one Business Day to respond to any requested additional information. Any
such additional information shall (i) not be confidential in nature and (ii) be
obtainable by the Company from existing reports, certificates or statements or
otherwise be readily accessible to its servicing personnel. The Purchaser agrees
that it has no right to deal with the Mortgagor. If the Company's normal
foreclosure policy includes acceptance of a deed-in-lieu of foreclosure or short
payoff, the Purchaser will be notified and given one Business Day to respond.
3. With respect to any Mortgage Loan as to which the Purchaser has made
an Election to Delay Foreclosure, the Purchaser shall obtain a Current Appraisal
as soon as practicable, and shall provide the Company with a copy of such
Current Appraisal.
4. Within two Business Days of making any Election to Delay
Foreclosure, the Purchaser shall remit by wire transfer to the Company, for
deposit in the Collateral Fund, an amount, as calculated by the Company, equal
to the sum of (i) 125% of the greater of the outstanding Principal Balance of
the Mortgage Loan and the value shown in the Current Appraisal referred to in
subsection (c) above (or, if such Current Appraisal has not yet been obtained,
the Company's estimate thereof, in which case the required deposit under this
subsection shall be adjusted upon obtaining of such Current Appraisal), and (ii)
three months' interest on the Mortgage Loan at the applicable Mortgage Rate. If
any Election to Delay Foreclosure extends for a period in excess of three months
(such excess period being referred to herein as the "Excess Period"), the
Purchaser shall remit by wire transfer in advance to the Company for deposit in
the Collateral Fund the amount, as calculated by the Company, equal to interest
on the Mortgage Loan at the applicable Mortgage Rate for the Excess Period. The
terms of this Agreement shall no longer apply to the servicing of any Mortgage
Loan upon the failure of the Purchaser to deposit the above amounts relating to
the Mortgage Loan within two Business Days of the Election to Delay Foreclosure.
5. With respect to any Mortgage Loan as to which the Purchaser has made
an Election to Delay Foreclosure, the Company may withdraw from the Collateral
Fund from time to time amounts necessary to reimburse the Company for all
Advances and Liquidation Expenses thereafter made by the Company as Servicer in
accordance with the Pooling and Servicing Agreement. To the extent that the
amount of any such Liquidation Expense is determined by the Company based on
estimated costs, and the actual costs are subsequently determined to be higher,
the Company may withdraw the additional amount from the Collateral Fund. In the
event that the Mortgage Loan is brought current by the Mortgagor and the
foreclosure action is discontinued, the amounts so withdrawn from the Collateral
Fund shall be redeposited therein as and to the extent that reimbursement
therefor from amounts paid by the Mortgagor is not prohibited pursuant to the
Pooling and Servicing Agreement. Except as provided in the preceding sentence,
amounts withdrawn from the Collateral Fund to cover Advances and Liquidation
Expenses shall not be redeposited therein or otherwise reimbursed to the
Purchaser. If and when any such Mortgage Loan is brought current by the
Mortgagor, all amounts remaining in the Collateral Fund in respect of such
Mortgage Loan (after adjustment for all withdrawals and deposits pursuant to
this subsection) shall be released to the Purchaser.
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6. With respect to any Mortgage Loan as to which the Purchaser has made
an Election to Delay Foreclosure, the Company shall continue to service the
Mortgage Loan in accordance with its customary procedures (other than the delay
in Commencement of Foreclosure as provided herein). If and when the Purchaser
shall notify the Company that it believes that it is appropriate to do so, the
Company shall proceed with the Commencement of Foreclosure. In any event, if the
Mortgage Loan is not brought current by the Mortgagor by the time the loan
becomes 6 months delinquent, the Purchaser's election shall no longer be
effective and at the Purchaser's option, either (i) the Purchaser shall purchase
the Mortgage Loan from the Trust Fund at a purchase price equal to the fair
market value as shown on the Current Appraisal, to be paid by (x) applying any
balance in the Collateral Fund to such purchase price, and (y) to the extent of
any deficiency, by wire transfer of immediately available funds to the Company
or Trustee; or (ii) the Company shall proceed with the Commencement of
Foreclosure.
7. Upon the occurrence of a liquidation with respect to any Mortgage
Loan as to which the Purchaser made an Election to Delay Foreclosure and as to
which the Company proceeded with the Commencement of Foreclosure in accordance
with subsection (f) above, the Company shall calculate the amount, if any, by
which the value shown on the Current Appraisal obtained under subsection (c)
exceeds the actual sales price obtained for the related Mortgaged Property (or
stock allocated to a dwelling unit in the case of a Co-op Loan) (net of
Liquidation Expenses and accrued interest related to the extended foreclosure
period), and the Company shall withdraw the amount of such excess from the
Collateral Fund, shall remit the same to the Trust Fund and in its capacity as
Servicer shall apply such amount as additional Liquidation Proceeds pursuant to
the Pooling and Servicing Agreement. After making such withdrawal, all amounts
remaining in the Collateral Fund in respect of such Mortgage Loan (after
adjustment for all withdrawals and deposits pursuant to subsection (e)) shall be
released to the Purchaser.
Section 2.03 Purchaser's Election to Commence Foreclosure Proceedings.
1. In connection with any Mortgage Loan identified in a report under
Section 2.01(a)(i)(B), the Purchaser may elect, for reasonable cause as
determined by the Purchaser, to instruct the Company to proceed with the
Commencement of Foreclosure as soon as practicable. Such election must be
evidenced by written notice received by the Company by 5:00 p.m., New York City
time, on the third Business Day following the delivery of such report under
Section 2.01(a)(i).
2. Within two Business Days of making any Election to Foreclose, the
Purchaser shall remit to the Company, for deposit in the Collateral Fund, an
amount, as calculated by the Company, equal to 125% of the current Principal
Balance of the Mortgage Loan and three months' interest on the Mortgage Loan at
the applicable Mortgage Rate. If and when any such Mortgage Loan is brought
current by the Mortgagor, all amounts in the Collateral Fund in respect of such
Mortgage Loan shall be released to the Purchaser. The terms of this Agreement
shall no longer apply to the servicing of any Mortgage Loan upon the failure of
the Purchaser to deposit the above amounts relating to the Mortgage Loans within
two Business Days at the Election to Foreclose.
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3. With respect to any Mortgage Loan as to which the Purchaser has made
an Election to Foreclose, the Company shall continue to service the Mortgage
Loan in accordance with its customary procedures (other than to proceed with the
Commencement of Foreclosure as provided herein). In connection therewith, the
Company shall have the same rights to make withdrawals for Advances and
Liquidation Expenses from the Collateral Fund as are provided under Section
2.02(e), and the Company shall make reimbursements thereto to the limited extent
provided under such subsection. The Company shall not be required to proceed
with the Commencement of Foreclosure if (i) the same is stayed as a result of
the Mortgagor's bankruptcy or is otherwise barred by applicable law, or to the
extent that all legal conditions precedent thereto have not yet been complied
with or (ii) the Company believes there is a breach of representation or
warranties by the Company, which may result in a repurchase or substitution of
such Mortgage Loan, or (iii) the Company reasonably believes the Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan) may be
contaminated with or affected by hazardous wastes or hazardous substances (and
the Company supplies the Purchaser with information supporting such belief). The
Company will repurchase or substitute a Mortgage Loan pursuant to the preceding
clause (ii) within the time period specified in the Pooling and Servicing
Agreement. Any foreclosure that has been initiated may be discontinued (i)
without notice to the Purchaser if the Mortgage Loan has been brought current or
if a refinancing or prepayment occurs with respect to the Mortgage Loan
(including by means of a short payoff approved by the Company), or (ii) with
notice to the Purchaser if the Company has reached the terms of a forbearance
agreement unless instructed otherwise by the Purchaser within two Business Days
of notification.
4. Upon the occurrence of a liquidation with respect to any Mortgage
Loan as to which the Purchaser made an Election to Foreclose and as to which the
Company proceeded with the Commencement of Foreclosure in accordance with
subsection (c) above, the Company shall calculate the amount, if any, by which
the Principal Balance of the Mortgage Loan at the time of liquidation (plus all
unreimbursed Advances and Liquidation Expenses in connection therewith other
than those paid from the Collateral Fund) exceeds the actual sales price
obtained for the related Mortgaged Property (or stock allocated to a dwelling
unit in the case of a Co-op Loan), and the Company shall withdraw the amount of
such excess from the Collateral Fund, shall remit the same to the Trust Fund and
in its capacity as Servicer shall apply such amount as additional Liquidation
Proceeds pursuant to the Pooling and Servicing Agreement. After making such
withdrawal, all amounts remaining in the Collateral Fund (after adjustment for
all withdrawals and deposits pursuant to subsection (c)) in respect of such
Mortgage Loan shall be released to the Purchaser.
Section 2.04 Termination.
1. With respect to all Mortgage Loans included in the Trust Fund, the
Purchaser's rights to make any Election to Delay Foreclosure or any Election to
Foreclose and the Company's obligations under Section 2.01 shall terminate (i)
at such time as the Certificate Principal Balance of the Class B-5 Certificates
has been reduced to zero, (ii) if the greater of (x) ___% (or such lower or
higher percentages that represents the Company's actual historical loss
experience with respect to the Mortgage Loans in the related pool) of the
aggregate principal balance of all Mortgage Loans that are in foreclosure or are
more than 90 days delinquent on a contractual basis and REO properties or if the
aggregate amount that the Company estimates will be required to be withdrawn
from the Collateral Fund with respect to Mortgage Loans as to which the
Purchaser has made an Election to Delay Foreclosure or an Election to Foreclose
exceeds (z) the Outstanding Certificate Principal Balance of the Class B-5
Certificates, or (iii) upon any transfer by the Purchaser of any interest (other
than the minority interest therein, but only if the transferee provides written
acknowledgment to the Company of the Purchaser's right hereunder and that such
transferee will have no rights hereunder) in the Class B-5 Certificates (whether
or not such transfer is registered under the Pooling and Servicing Agreement),
including any such transfer in connection with a termination of the Trust Fund.
Except as set forth above, this Agreement and the respective rights, obligations
and responsibilities of the Purchaser and the Company hereunder shall terminate
upon the later to occur of (i) the final liquidation of the last Mortgage Loan
as to which the Purchaser made any Election to Delay Foreclosure or any Election
to Foreclose and the withdrawal of all remaining amounts in the Collateral Fund
as provided herein and (ii) ten (10) Business Day's notice.
J-6
2. Purchaser's rights pursuant to Section 2.02 or 2.03 of this
Agreement shall terminate with respect to a Mortgage loan as to which the
Purchaser has exercised its rights under Section 2.02 or 2.03 hereof, upon
Purchaser's failure to deposit any amounts required pursuant to Section 2.02(d)
or 2.03(b).
3. Neither the Servicer nor any of its directors, officers, employees
or agents shall be under any liability for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Servicer and any director, officer, employee or agent
thereof may rely in good faith on any document of any kind prima facie properly
executed and submitted by an Person respecting any matters arising hereunder.
ARTICLE III
COLLATERAL FUND; SECURITY INTEREST
Section 3.01 Collateral Fund.
1. Upon receipt from the Purchaser of the initial amount required to be
deposited in the Collateral Fund pursuant to Article 11, the Company shall
establish and maintain with itself as a segregated account on its books and
records an account (the "Collateral Fund"), entitled "Chase Manhattan Mortgage
Corporation, as Servicer, for the benefit of registered holders of Chase
Mortgage Finance Corporation Multi-Class Mortgage Pass-Through Certificates,
Series 2004-S3, Class B-5." Amounts in the Collateral Fund shall continue to be
the property of the Purchaser, subject to the first priority security interest
granted hereunder for the benefit of the Certificate holders, until withdrawn
from the Collateral Fund pursuant to Section 2.02 or 2.03 hereof.
2. Upon the termination of this Agreement and the liquidation of all
Mortgage Loans as to which the Purchaser has made any Election to Delay
Foreclosure or any Election to Foreclose pursuant to Section 2.04 hereof, the
Company shall distribute to the Purchaser all amounts remaining in the
Collateral Fund together with any investment earnings thereon.
3. The Collateral Fund shall be an "outside reserve fund" within the
meaning of the REMIC Provisions, beneficially owned by the Purchaser, who shall
report all income, gain or loss with respect thereto. Any amounts transferred
from the Trust Fund to the Collateral Fund shall be deemed to be transferred to
the Purchaser, as beneficial owner of the Collateral Fund. In no event shall the
Purchaser (i) take or cause the Trustee or the Company to take any action that
could cause any REMIC established under the Trust Agreement to fail to qualify
as a REMIC or cause the imposition on any such REMIC of any "prohibited
transaction" or "prohibited contribution" taxes or (ii) cause the Trustee or the
Company to fail to take any action necessary to maintain the status of any such
REMIC as a REMIC.
Section 3.02. Collateral Fund Permitted Investments.
1. The Company shall, at the written direction of the Purchaser invest
the funds in the Collateral Fund in Collateral Fund Permitted Investments. Such
direction shall not be changed more frequently than quarterly. In the absence of
any direction, the Company shall select such investments in accordance with the
definition of Collateral Fund Permitted Investments in its discretion.
J-7
2. All income and gain realized from any investment as well as any
interest earned on deposits in the Collateral Fund (net of any losses on such
investments) and any payments of principal made in respect of any Collateral
Fund Permitted Investment shall be deposited in the Collateral Fund upon
receipt. All costs and realized losses associated with the purchase and sale of
Collateral Fund Permitted Investments shall be borne by the Purchaser and the
amount of net realized losses shall be deposited by the Purchaser in the
Collateral Fund. The Company shall periodically (but not more frequently than
monthly) distribute to the Purchaser upon request an amount of cash, to the
extent cash is available therefor in the Collateral Fund, equal to the amount by
which the balance of the Collateral Fund, after giving effect to all other
distributions to be made from the Collateral Fund on such date, exceeds the
Required Collateral Fund Balance. Any amounts so distributed shall be released
from the lien and security interest of this Agreement.
Section 3.03 Grant of Security Interest.
1. The Purchaser grants to the Company and the Trustee for the benefit
of the Certificateholders a security interest in and lien on all of the
Purchaser's right, title and interest, whether now owned or hereafter acquired,
in and to: (1) the Collateral Fund, (2) all amounts deposited in the Collateral
Fund and Collateral Fund Permitted Investments in which such amounts are
invested (and the distributions and proceeds of such investments) and (3) all
cash and non-cash proceeds of any of the foregoing, including proceeds of the
voluntary or involuntary conversion thereof (all of the foregoing collectively,
the "Collateral").
2. The Purchaser acknowledges the lien on and security interest in the
Collateral for the benefit of the Certificateholders. The Purchaser shall take
all actions requested by the Company or the Trustee as may be reasonably
necessary to perfect the security interest created under this Agreement in the
Collateral and cause it to be prior to all other security interests and liens,
including the execution and delivery to the Company for filing of appropriate
financing statements in accordance with applicable law. The Company shall file
appropriate continuation statements, or appoint an agent on its behalf to file
such statements, in accordance with applicable law.
Section 3.04 Collateral Shortfalls.
In the event that amounts on deposit in the Collateral Fund at any time
are insufficient to cover any withdrawals therefrom that the Company or the
Trustee is then entitled to make hereunder, the Purchaser shall be obligated to
pay such amounts to the Company or the Trustee immediately upon demand. Such
obligation shall constitute a general corporate obligation of the Purchaser.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01 Amendment.
This Agreement may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.
Section 4.02 Counterparts.
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 4.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
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Section 4.04 Notices.
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
in the case of the Company,
Chase Manhattan Mortgage Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
such other address as may hereafter be furnished in writing by the Company, or
in the case of the Purchaser, with respect to notices pursuant to Section 2.01,
[PURCHASER]
_________________________________________
[ADDRESS]
Attn:____________________________________
Phone:___________________________________
Fax:_____________________________________
with respect to all other notices pursuant to this Agreement,
_________________________________________
[ADDRESS]
Attn:____________________________________
Phone:___________________________________
Fax:_____________________________________
or such other address as may hereafter be furnished in writing by the Purchaser.
Section 4.05 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever, including regulatory, 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.
Section 4.06 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, and all
such provisions shall inure to the benefit of the Certificateholders; provided,
however, that the rights under this Agreement cannot be assigned by the
Purchaser without the consent of the Company.
Section 4.07 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 4.08 Confidentiality.
The Purchaser agrees that all information supplied by or on behalf of
the Company pursuant to Sections 2.01 or 2.02, including individual account
information, is the property of the Company and the Purchaser agrees to hold
such information confidential and not to disclose such information.
J-9
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
CHASE MANHATTAN MORTGAGE CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
____________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
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EXHIBIT K
FORM OF TRANSFEREE'S LETTER
CHASE MORTGAGE FINANCE CORPORATION SERIES 2004-S3
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
JPMorgan Chase Bank
Global Debt
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wachovia Bank, N.A., as trustee
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Ladies and Gentlemen:
We propose to purchase Chase Mortgage Finance Corporation's Multi-Class
Mortgage Pass-Through Certificates, Series 2004-S3, Class A-R, described in the
Prospectus Supplement, dated February 23, 2004 and Prospectus, dated January 27,
2004.
1. We certify that (a) we are not a disqualified organization, (b) we
are not purchasing such Class A-R Certificate on behalf of a disqualified
organization and (c) we are not an entity that holds such Class A-R Certificate
as nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations; for
this purpose the term "disqualified organization" means the United States, any
state or political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of the
foregoing (except any entity treated as other than an instrumentality of the
foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code of
1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that we are not an employee benefit plan subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
or Section 4975 of the Code or materially similar provisions or applicable
federal, state or local law, nor a person acting on behalf of any such plan or
using the assets of such plan.
K-1
3. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class A-R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class A-R Certificate, (d) we intend
to pay any taxes associated with holding the Class A-R Certificate as they
become due and (e) we will not cause income from the Class A-R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.
4. We acknowledge that we will be the beneficial owner of the Class A-R
Certificate and:*/
______ The Class A-R Certificate will be registered in our
name.
______ The Class A-R Certificate will be held in the name
of our nominee, ____________________, which is not a
disqualified organization.
5. Unless Chase Mortgage Finance Corporation ("CMFC") has consented to
the transfer to us by executing the form of Consent affixed hereto as Appendix
B, we certify that we are a U.S. person; for this purpose the term "U.S. Person"
means a citizen or resident of the United States, a corporation or partnership
(unless, in the case of a partnership, Treasury regulations are adopted that
provide otherwise) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia, including an entity
treated as a corporation or partnership for federal income tax purposes, an
estate whose income is subject to Unites States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust, and one or more such
U.S. Persons have the authority to control all substantial decisions of such
trust, (or, to the extent provided in applicable Treasury regulations, certain
trusts in existence on August 20, 1996 which are eligible to elect to be treated
as U.S. Persons). We agree that any breach by us of this certification shall
render the transfer of any interest in the Class A-R Certificate to us
absolutely null and void and shall cause no rights in the Class A-R Certificate
to vest in us.
6. We agree that in the event that at some future time we wish to
transfer any interest in the Class A-R Certificate, we will transfer such
interest in the Class A-R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class A-R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person and
(iii) has delivered to CMFC a letter in the form of this letter (including the
affidavit appended hereto) and, if requested by CMFC, an opinion of counsel (in
a form acceptable to CMFC) that the proposed transfer will not cause the
interest in the Class A-R Certificate to be held by a disqualified organization
or a person who is not a U.S. person or (b) with the written consent of CMFC.
7. We hereby designate Chase Manhattan Mortgage Corporation as our
fiduciary to act as the tax matters person for the Series 2004-S3 REMICs.
Very truly yours,
[PURCHASER]
By:___________________________
Name:_________________________
Title:________________________
Accepted as of__________________ , 200_
CHASE MORTGAGE FINANCE CORPORATION
By:___________________________
Name:_________________________
Title:________________________
-------------
*/ Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
K-2
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4) of the Internal Revenue Code of
1986, as amended, and (ii) certain provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following
is true:
(1) He or she is an officer of _________________________ (the
"Transferee"),
(2) the Transferee's Employee Identification number is __________,
(3) the Transferee is not a "disqualified organization" (as
defined below), has no plan or intention of becoming a
disqualified organization, and is not acquiring any of its
interest in the Chase Mortgage Finance Corporation,
Multi-Class Mortgage Pass-Through Certificates, Series
2004-S3, Class A-R on behalf of a disqualified organization or
any other entity,
(4) unless Chase Mortgage Finance Corporation ("CMFC") has
consented to the transfer to the Transferee by executing the
form of Consent affixed as Appendix B to the Transferee's
Letter to which this Certificate is affixed as Appendix A, the
Transferee is a "U.S. Person" (as defined below),
(5) that no purpose of the transfer is to avoid or impede the
assessment or collection of tax,
(6) the Transferee has historically paid its debts as they became
due,
(7) the Transferee intends, and believes that it will be able, to
continue to pay its debts as they become due in the future,
(8) the Transferee understands that, as beneficial owner of the
Class A-R Certificate, it may incur tax liabilities in excess
of any cash flows generated by the Class A-R Certificate,
(9) the Transferee intends to pay any taxes associated with
holding the Class A-R Certificate as they become due,
(10) the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by CMFC
(upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Class A-R Certificate will not
be owned directly or indirectly by a disqualified
organization, and
(11) IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE
INAPPLICABLE[the transfer is not a direct or indirect transfer
of the Class A-R Certificate to a foreign permanent
establishment or fixed base (within the meaning of an
applicable income tax treaty) of the Transferee, and as to
each of the residual interests represented by the Class A-R
Certificate, the present value of the anticipated tax
liabilities associated with holding such residual interest
does not exceed the sum of:
the present value of any consideration given to the Transferee
to acquire such residual interest;
the present value of the expected future distributions on such
residual interest; and
the present value of the anticipated tax savings associated
with holding such residual interest as the related REMIC generates
losses.
K-3
For purposes of this declaration, (i) the Transferee is
assumed to pay tax at a rate equal to the highest rate of tax
specified in Section 11(b)(1) of the Code, but the tax rate
specified in Section 55(b)(1)(B) of the Code may be used in
lieu of the highest rate specified in Section 11(b)(1) of the
Code if the Transferee has been subject to the alternative
minimum tax under Section 55 of the Code in the preceding two
years and will compute its taxable income in the current
taxable year using the alternative minimum tax rate, and (ii)
present values are computed using a discount rate equal to the
Federal short-term rate prescribed by Section 1274(d) of the
Code for the month of the transfer and the compounding period
used by the Transferee;]
[Alternative (11) (A) at the time of the transfer, and at the close of each
of the Transferee's two fiscal years preceding the year of
transfer, the Transferee's gross assets for financial
reporting purposes exceed $100 million and its net assets for
financial reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in
Treasury regulation Section 1.860E-1(c)(6)(i) and has agreed
in writing that any subsequent transfer of the Class A-R
Certificate will be to another eligible corporation in a
transaction that satisfies Treasury regulation Sections
1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii), 1.860E-1(c)(4)(iii) and
1.860E-1(c)(5) and such transfer will not be a direct or
indirect transfer to a foreign permanent establishment (within
the meaning of an applicable income tax treaty) of a domestic
corporation.
For purposes of this declaration, (i) the gross assets and net
assets of the Transferee do not include any obligation of any
related person (as defined in Treasury regulation section
1.860E-1(c)(6)(ii)) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the
Transferee to make this declaration or to satisfy the
requirements of Treasury regulation section
1.860E-1(c)(5)(i);]
[Alternative (11) Intentionally left blank;]
(12) the Transferee represents that it will not cause income from the
Class A-R Certificate to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) of the
Transferee or another U.S. taxpayer;
For purpose of this affidavit, the term "disqualified
organization" means the United States, any state or political
subdivision thereof, any foreign government, any international
organization, any agency or instrumentality of any of the
foregoing (except any entity treated as other than an
instrumentality of the foregoing for purposes of Section
168(h)(2)(D) of the Internal Revenue Code of 1986, as amended
(the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from
taxation under the Code (unless such organization is subject
to tax on excess inclusions) and any organization that is
described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United
States, a corporation or partnership (unless, in the case of a
partnership, Treasury regulations are adopted that provide
otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia,
including an entity treated as a corporation or partnership
for federal income tax purposes, an estate whose income is
subject to Unites States federal income tax regardless of its
source, or a trust if a court within the United States is able
to exercise primary supervision over the administration of
such trust, and one or more such U.S. Persons have the
authority to control all substantial decisions of such trust,
(or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996
which are eligible to elect to be treated as U.S. Persons).
K-4
___________________________
By:________________________
___________________________
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
___________________________
___________________________, Secretary
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ 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_________ , 200__.
Notary Public
County of________________________________
State of_________________________________
My commission expires the________ day of___________________
By:______________________________
Name:____________________________
Title:___________________________
Dated:____________________
K-5
APPENDIX B
CONSENT
________________________ (Transferee)
________________________
________________________
________________________
Ladies and Gentlemen:
Chase Mortgage Finance Corporation ("CMFC") hereby consents to the
transfer to, and registration in the name of, the Transferee (or, if applicable,
registration in the name of such Transferee's nominee of the Multi-Class
Mortgage Pass-Through Certificates, Series 2004-S3, Class A-R described in the
Transferee's Letter to which this Consent is appended, notwithstanding CMFC's
knowledge that the Transferee is not a U.S. Person (as defined in such
Transferee's Letter).
CHASE MORTGAGE FINANCE CORPORATION
By:_______________________________
Dated:________________
K-6
EXHIBIT K-1
FORM OF TRANSFEROR'S LETTER
CHASE MORTGAGE FINANCE CORPORATION SERIES 2004-S3
[DATE]
JPMorgan Chase Bank
Global Debt
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wachovia Bank, N.A., as trustee
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
We propose to transfer to ___________________ (the
"Transferee") Chase Mortgage Finance Corporation's Multi-Class Mortgage
Pass-Through Certificates, Series 2004-S3, Class A-R, described in the
Prospectus Supplement, dated February 23, 2004 and Prospectus, dated January 27,
2004. We have reviewed the attached affidavit of the Transferee, and have no
actual knowledge that such affidavit is not true, and have no reason to believe
that the Transferee has the intention to impede the assessment or collection of
any federal, state or local taxes legally required to be paid with respect to
the Class A-R Certificate referred to in the attached affidavit. In addition, we
have conducted a reasonable investigation at the time of the transfer and found
that the Transferee has historically paid its debts as they came due and we
found no significant evidence to indicate that the Transferee will not continue
to pay its debts as they become due.
Very truly yours,
_______________________________
Name:
Title:
K-1-1
EXHIBIT L
REQUEST FOR RELEASE OF DOCUMENTS
To: Wachovia Bank, N.A.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement, dated as of February
1, 2004, by and among Chase Mortgage Finance
Corporation, Chase Manhattan Mortgage Corporation and
Wachovia Bank, N.A. relating to the issuance of the
Series 2004-S3 Multi-Class Mortgage Pass-Through
Certificates
-----------------------------------------------------
In connection with the administration of the Mortgage Loans held by
you, as Trustee, 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
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation
_______ 5. Nonliquidation Reason:
_______________________________________
By:____________________________________
(authorized signer)
Issuer:________________________________
Address:_______________________________
_______________________________________
Date:__________________________________
L-1
Trustee
Wachovia Bank, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
_________________________________
Signature Date
Documents returned to Trustee:
_________________________________
Trustee Date
L-2
EXHIBIT M
TRANSFEREE ERISA REPRESENTATION LETTER
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Corporation, Multi-Class
Mortgage Pass-Through Certificates, Series 2004-S3,
[Class M] [Class B- ]
---------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificate") of Multi-Class Mortgage Pass-Through
Certificates, Series 2004-S3, [Class M] [Class B-__] (the "Certificates"),
issued pursuant to a pooling and servicing agreement, dated as of February 1,
2004 (the "Pooling and Servicing Agreement"), among Chase Mortgage Finance
Corporation (the "Depositor"), Chase Manhattan Mortgage Corporation ("CMMC"), as
servicer (the "Servicer") and Wachovia Bank, N.A., as trustee (the "Trustee").
[The Purchaser intends to register the Transferred Certificate in the name of
____________________, as nominee for __________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, we hereby certify, represent and warrant to, and
covenant with, the Depositor that:
(a) we are not an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") or materially similar provisions of applicable
federal, state or local law, nor a person acting on behalf of any such
plan or using the assets of such plan, or, alternatively, in the case
of an insurance company, the assets of any separate accounts to effect
such acquisition, or alternatively, or (b) we are an insurance company
and the source of funds for the purchase of such Transferred
Certificate is an "insurance company general account" within the
meaning of Section V(e) of Prohibited Transaction Class Exemption 95-60
("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), and the acquisition
and holding of such Transferred Certificate is covered by Sections I
and III under PTCE 95-60.
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
M-1
Very truly yours,
[PURCHASER]
By:_________________________________
Name:_______________________________
Title:______________________________
M-2
EXHIBIT N
FORM OF OFFICER'S CERTIFICATE (SERVICER)
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Corporation, Multi-Class
Mortgage Pass-Through Certificates, Series 2004-S3
---------------------------------------------------
Ladies and Gentlemen:
Chase Manhattan Mortgage Corporation ("CMMC"), as servicer hereby certifies to
the Depositor that:
1. Based on our knowledge, the information prepared by CMMC and relating to
the mortgage loans serviced by CMMC and provided by CMMC to the Depositor
or the Trustee in its reports to the Depositor or the Trustee is accurate
and complete in all material respects as of the last day of the period
covered by such report;
2. Based on our knowledge, the servicing information required to be
provided to the Depositor or the Trustee by CMMC pursuant to the Agreement
has been provided to the Depositor or the Trustee;
3. Based upon the review required under the Agreement, and except as
disclosed in its reports, CMMC as of the last day of the period covered by
such reports has fulfilled its obligations under the Agreement; and
4. CMMC has disclosed to its independent auditor, who issues the
independent auditor's report on the Uniform Single Attestation Program for
Mortgage Bankers for CMMC, any significant deficiencies relating to CMMC's
compliance with minimum servicing standards.
Very truly yours,
CHASE MANHATTAN MORTGAGE CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
N-1
EXHIBIT O
FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Reference is made to each pooling and servicing agreement listed on
Exhibit A hereto (each, an "Agreement") in which JPMorgan Chase Bank has been
appointed the paying agent (the "Paying Agent"). JPMorgan Chase Bank, hereby
certifies to you that:
1. I have reviewed all reports on Form 8-K containing distribution
reports filed in respect of periods included in the year covered by the
annual report, of each of the trusts created pursuant to each
Agreement;
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit
to state a material fact required by the respective pooling and
servicing agreement to be included therein and necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by the annual reports; and
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Paying Agent by the Servicer under each
Agreement for inclusion in the reports is included in the reports.
4. In compiling the distribution information, the Paying Agent has
relied upon information furnished to it by the Servicer under each
pooling and servicing agreement. The Paying Agent shall have no
responsibility or liability for any inaccuracy in such reports
resulting from information so provided by the Servicer.
JPMORGAN CHASE BANK
By:___________________________________
Name:_________________________________
Title:
O-1
