EXHIBIT 4.1
EXECUTION COPY
STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,
AURORA LOAN SERVICES INC., as Master Servicer,
and
JPMORGAN CHASE BANK, as Trustee
---------------------------
TRUST AGREEMENT
Dated as of July 1, 2003
---------------------------
STRUCTURED ASSET SECURITIES CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2003-24A
TABLE OF CONTENTS
(continued)
Page
Article I DEFINITIONS..............................................................................11
Section 1.01. Definitions......................................................................11
Section 1.02. Calculations Respecting Mortgage Loans...........................................44
Article II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES...........................................44
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans.............44
Section 2.02. Acceptance of Trust Fund by Trustee: Review of Documentation for Trust
Fund.............................................................................48
Section 2.03. Representations and Warranties of the Depositor..................................50
Section 2.04. Discovery of Breach..............................................................51
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans...........................52
Section 2.06. Grant Clause.....................................................................53
Article III THE CERTIFICATES................................. .......................................53
Section 3.01. The Certificates.................................................................53
Section 3.02. Registration.....................................................................55
Section 3.03. Transfer and Exchange of Certificates............................................55
Section 3.04. Cancellation of Certificates.....................................................61
Section 3.05. Replacement of Certificates......................................................61
Section 3.06. Persons Deemed Owners............................................................61
Section 3.07. Temporary Certificates...........................................................61
Section 3.08. Appointment of Paying Agent......................................................62
Section 3.09. Book-Entry Certificates..........................................................62
Article IV ADMINISTRATION OF THE TRUST FUND............................ ............................64
Section 4.01. Collection Account...............................................................64
Section 4.02. Application of Funds in the Collection Account...................................65
Section 4.03. Reports to Certificateholders....................................................68
Section 4.04. Certificate Account..............................................................70
Section 4.05. [Reserved].......................................................................71
Section 4.06. Certain Provisions with Respect to the Participations............................71
Article V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES.................................................72
Section 5.01. Distributions Generally..........................................................72
i
TABLE OF CONTENTS
(continued)
Page
Section 5.02. Distributions from the Certificate Account.......................................72
Section 5.03. Allocation of Realized Losses....................................................78
Section 5.04. Advances by the Master Servicer and the Trustee..................................80
Section 5.05. Compensating Interest Payments...................................................81
Article VI CONCERNING THE TRUSTEE; EVENTS OF DEFAULT................................................81
Section 6.01. Duties of Trustee................................................................81
Section 6.02. Certain Matters Affecting the Trustee............................................83
Section 6.03. Trustee Not Liable for Certificates..............................................84
Section 6.04. Trustee May Own Certificates.....................................................85
Section 6.05. Eligibility Requirements for Trustee.............................................85
Section 6.06. Resignation and Removal of Trustee...............................................85
Section 6.07. Successor Trustee................................................................86
Section 6.08. Merger or Consolidation of Trustee...............................................87
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.........................87
Section 6.10. Authenticating Agents............................................................88
Section 6.11. Indemnification of Trustee.......................................................89
Section 6.12. Fees and Expenses of Trustee and Custodian.......................................90
Section 6.13. Collection of Monies.............................................................90
Section 6.14. Events of Default; Trustee To Act; Appointment of Successor......................90
Section 6.15. Additional Remedies of Trustee Upon Event of Default.............................94
Section 6.16. Waiver of Defaults...............................................................95
Section 6.17. Notification to Holders..........................................................95
Section 6.18. Directions by Certificateholders and Duties of Trustee During Event of
Default..........................................................................95
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon Event of
Default..........................................................................96
Section 6.20. Preparation of Tax Returns and Other Reports.....................................96
Article VII PURCHASE AND TERMINATION OF THE TRUST FUND....... .......................................97
Section 7.01. Termination of Trust Fund Upon Repurchase or Liquidation of All Mortgage
Loans............................................................................97
Section 7.02. Procedure Upon Termination of Trust Fund.........................................98
ii
TABLE OF CONTENTS
(continued)
Page
Section 7.03. Additional Requirements under the REMIC Provisions...............................99
Article VIII RIGHTS OF CERTIFICATEHOLDERS........... ................................................100
Section 8.01. Limitation on Rights of Holders.................................................100
Section 8.02. Access to List of Holders.......................................................100
Section 8.03. Acts of Holders of Certificates.................................................101
Article IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER... ...............102
Section 9.01. Duties of the Master Servicer...................................................102
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors and Omissions
Insurance Policy................................................................102
Section 9.03. Master Servicer's Financial Statements and Related Information..................103
Section 9.04. Power to Act; Procedures........................................................103
Section 9.05. Servicing Agreements Between the Master Servicer and Servicers;
Enforcement of Servicers' Obligations...........................................105
Section 9.06. Collection of Taxes, Assessments and Similar Items..............................106
Section 9.07. Termination of Servicing Agreements; Successor Servicers........................106
Section 9.08. Master Servicer Liable for Enforcement..........................................107
Section 9.09. No Contractual Relationship Between Servicers and Trustee or Depositor..........107
Section 9.10. Assumption of Servicing Agreement by Trustee....................................107
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements....................................108
Section 9.12. Release of Mortgage Files.......................................................108
Section 9.13. Documents, Records and Funds in Possession of Master Servicer To Be Held
for Trustee.....................................................................109
Section 9.14. Representations and Warranties of the Master Servicer...........................111
Section 9.15. Closing Certificate and Opinion.................................................113
Section 9.16. Standard Hazard and Flood Insurance Policies....................................113
Section 9.17. Presentment of Claims and Collection of Proceeds................................113
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies..........................114
Section 9.19. Trustee To Retain Possession of Certain Insurance Policies and Documents........114
iii
TABLE OF CONTENTS
(continued)
Page
Section 9.20. Realization Upon Defaulted Mortgage Loans.......................................115
Section 9.21. Compensation to the Master Servicer.............................................115
Section 9.22. REO Property....................................................................116
Section 9.23. [Reserved]......................................................................116
Section 9.24. Reports to the Trustee..........................................................116
Section 9.25. Annual Officer's Certificate as to Compliance...................................117
Section 9.26. Annual Independent Accountants' Servicing Report................................118
Section 9.27. Merger or Consolidation.........................................................118
Section 9.28. Resignation of Master Servicer..................................................118
Section 9.29. Assignment or Delegation of Duties by the Master Servicer.......................119
Section 9.30. Limitation on Liability of the Master Servicer and Others.......................119
Section 9.31. Indemnification; Third-Party Claims.............................................120
Article X REMIC ADMINISTRATION........................... ........................................121
Section 10.01. REMIC and Grantor Trust Administration..........................................121
Section 10.02. Prohibited Transactions and Activities..........................................124
Section 10.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status..........124
Section 10.04. REO Property....................................................................125
Article XI MISCELLANEOUS PROVISIONS................................................................126
Section 11.01. Binding Nature of Agreement; Assignment.........................................126
Section 11.02. Entire Agreement................................................................126
Section 11.03. Amendment.......................................................................126
Section 11.04. Voting Rights...................................................................127
Section 11.05. Provision of Information........................................................127
Section 11.06. Governing Law...................................................................128
Section 11.07. Notices.........................................................................128
Section 11.08. Severability of Provisions......................................................128
Section 11.09. Indulgences; No Waivers.........................................................129
Section 11.10. Headings Not To Affect Interpretation...........................................129
Section 11.11. Benefits of Agreement...........................................................129
iv
TABLE OF CONTENTS
(continued)
Page
Section 11.12. Special Notices to the Rating Agencies..........................................129
Section 11.13. Counterparts....................................................................130
Section 11.14. Transfer of Servicing...........................................................130
v
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 Form of Initial Certification
Exhibit B-2 Form of Interim Certification
Exhibit B-3 Form of Final Certification
Exhibit B-4 Form of Endorsement
Exhibit C Request for Release of Documents and Receipt
Exhibit D-l Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit E Servicing Agreements
Exhibit F Form of Rule 144A Transfer Certificate
Exhibit G Form of Purchaser's Letter for Institutional Accredited
Investors
Exhibit H Form of ERISA Transfer Affidavit
Exhibit I Monthly Remittance Advice
Exhibit J Monthly Electronic Data Transmission
Exhibit K Custodial Agreements
Exhibit L-1 Form of Transfer Certificate for Transfer from Restricted
Global Security to Regulation S Global Security
Exhibit L-2 Form of Transfer Certificate for Transfer from Regulation S
Global Security to Restricted Global Security
Exhibit M Form of Certification to be Provided to the Depositor and the
Master Servicer by the Trustee
Schedule A Mortgage Loan Schedule
Schedule B Employee Mortgage Loan Schedule
Schedule C Pool 4 AX Mortgage Loans
Schedule D Pool 4 PAX Mortgage Loans
This TRUST AGREEMENT, dated as of July 1, 2003 (the "Agreement"), is by
and among STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), AURORA LOAN SERVICES INC., as master servicer (the
"Master Servicer"), and JPMORGAN CHASE BANK, a New York banking corporation, as
trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from Xxxxxx Brothers
Holdings (the "Seller"), and at the Closing Date is the owner of the Mortgage
Loans and the other property being conveyed by it to the Trustee for inclusion
in the Trust Fund. On the Closing Date, the Depositor will acquire the
Certificates from the Trust Fund as consideration for its transfer to the Trust
Fund of the Mortgage Loans and the other property constituting the Trust Fund.
The Depositor has duly authorized the execution and delivery of this Agreement
to provide for the conveyance to the Trustee of the Mortgage Loans and the other
property constituting the Trust Fund. All covenants and agreements made by the
Depositor, the Master Servicer and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust Fund are for the
benefit of the Holders from time to time of the Certificates. The Depositor and
the Master Servicer are entering into this Agreement, and the Trustee is
accepting the Trust Fund created hereby, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged.
As provided herein, the Trustee shall elect that the Trust Fund (other
than the rights to Prepayment Penalty Amounts) be treated for federal income tax
purposes as comprising five real estate mortgage investment conduits (each a
"REMIC" or, in the alternative, REMIC 1, REMIC 2, REMIC 3, REMIC 4 and REMIC 5,
(REMIC 5 also being referred to herein as the "Upper Tier REMIC")). As is
described in Section 10.01 hereof, the Trust Fund will also be treated for
federal income tax purposes as including five grantor trusts. Each Certificate,
other than the Class P-I, Class P-II and Class P-III Certificates and the Class
R Certificate, represents ownership of a regular interest in the Upper Tier
REMIC for purposes of the REMIC Provisions. The Class R Certificate represents
ownership of the sole class of residual interest in each of REMIC 1, REMIC 2,
REMIC 3, REMIC 4, and REMIC 5 for purposes of the REMIC Provisions. The Upper
Tier REMIC shall hold as assets the several classes of uncertificated REMIC 4
Regular Interests, the Class LT2-4AXIO Interest and the Class LT2-4PAXIO
Interest. Each REMIC 4 Regular Interest is hereby designated as a regular
interest in REMIC 4. REMIC 4 shall hold as assets the several classes of
uncertificated REMIC 3 Regular Interests. Each REMIC 3 Regular Interest is
hereby designated as a regular interest in REMIC 3. REMIC 3 shall hold as assets
the several classes of uncertificated REMIC 2 Regular Interests, other than the
Class LT2-4AXIO Interest and the Class LT2-4PAXIO Interest. Each REMIC 2 Regular
Interest is hereby designated as a regular interest in REMIC 2. REMIC 2 shall
hold as assets the several classes of uncertificated REMIC 1 Regular Interests.
Each REMIC 1 Regular Interest is hereby designated as a regular interest in
REMIC 1. REMIC 1 shall hold as assets all property of the Trust Fund other than
the REMIC 2 Regular Interests, the REMIC 3 Regular Interests, the REMIC 4
Regular Interests, the REMIC 5 Regular Interests and the rights to Prepayment
Penalty Amounts.
REMIC 1
The following table specifies the class designation, interest rate,
principal amount and related Mortgage Pool for each class of REMIC 1 Interests.
REMIC 1 Class Initial Class or Principal Related Pool or
Designation Interest Rate Amount Pools
--------------- ------------- -------------------------- ---------------
Class LT1-1 (1) $ 156,374,012.07 Pool 1
Class LT1-2 (2) $ 152,495,067.49 Pool 2
Class LT1-3 (3) $ 204,342,427.97 Pool 3
Class LT1-4AX (4) $ 34,788,975.37 Pool 4
Class LT1-4PAX (5) $ 44,736,282.09 Pool 4
Class LT1-5 (6) $ 27,543,334.43 Pool 5
Class LT1-R (7) (7) N/A
----------
(1) For any Distribution Date, the interest rate for the Class LT1-1
Interest shall be a per annum rate equal to the weighted average of the
Net Mortgage Rates of the Pool 1 Mortgage Loans at the beginning of the
related Due Period, weighted on the basis of their respective Scheduled
Principal Balances.
(2) For any Distribution Date, the interest rate for the Class LT1-2
Interest shall be a per annum rate equal to the weighted average of the
Net Mortgage Rates of the Pool 2 Mortgage Loans at the beginning of the
related Due Period, weighted on the basis of their respective Scheduled
Principal Balances.
(3) For any Distribution Date, the interest rate for the Class LT1-3
Interest shall be a per annum rate equal to the weighted average of the
Net Mortgage Rates of the Pool 3 Mortgage Loans at the beginning of the
related Due Period, weighted on the basis of their respective Scheduled
Principal Balances.
(4) For any Distribution Date prior to the Distribution Date in May of
2010, the interest rate for the Class LT1-4AX Interest shall be a per
annum rate equal to the weighted average of the Net Mortgage Rates of
the AX Mortgage Loans in Mortgage Loan Pool 4 at the beginning of the
related Due Period, weighted on the basis of their respective Scheduled
Principal Balances. For each Distribution Date starting with the
Distribution Date in May of 2010, the interest rate for the Class
LT1-4AX Interest shall be a per annum rate equal to the weighted
average of the Net Mortgage Rates of the Pool 4 Mortgage Loans at the
beginning of the related Due Period, weighted on the basis of their
respective Scheduled Principal Balances.
(5) For any Distribution Date prior to the Distribution Date in May of
2010, the interest rate for the Class LT1-4PAX Interest shall be a per
annum rate equal to the weighted average of the Net Mortgage Rates of
the PAX Mortgage Loans in Mortgage Loan Pool 4 at the beginning of the
related Due Period, weighted on the basis of their respective Scheduled
Principal Balances. For each Distribution Date starting with the
Distribution Date in May of 2010, the interest rate for the Class
LT1-4PAX Interest shall be a per annum rate equal to the weighted
average of the Net Mortgage Rates of the Pool 4 Mortgage Loans at the
beginning of the related Due Period, weighted on the basis of their
respective Scheduled Principal Balances.
(6) For any Distribution Date, the interest rate for the Class LT1-5
Interest shall be a per annum rate equal to the weighted average of the
Net Mortgage Rates of the Pool 5 Mortgage Loans at the beginning of the
related Due Period, weighted on the basis of their respective Scheduled
Principal Balances.
2
(7) The Class LT1-R Interest shall represent the sole class of residual
interest in REMIC 1. The Class LT1-R Interest will not have a principal
amount or an interest rate. The Class LT1-R Interest shall be
represented by the Class R Certificate.
All Realized Losses and shortfalls from the Pool 1 Mortgage Loans shall
be allocated to the Class LT1-1 Interest and all payments of principal and
interest received with respect to the Pool 1 Mortgage Loans shall be paid on the
Class LT1-1 Interest in payment of accrued interest and principal until the
principal balance of such Class is reduced to zero and any losses allocated to
such Class have been reimbursed.
All Realized Losses and shortfalls from the Pool 2 Mortgage Loans shall
be allocated to the Class LT1-2 Interest and all payments of principal and
interest received with respect to the Pool 2 Mortgage Loans shall be paid on the
Class LT1-2 Interest in payment of accrued interest and principal until the
principal balance of such Class is reduced to zero and any losses allocated to
such Class have been reimbursed.
All Realized Losses and shortfalls from the Pool 3 Mortgage Loans shall
be allocated to the Class LT1-3 Interest and all payments of principal and
interest received with respect to the Pool 3 Mortgage Loans shall be paid on the
Class LT1-3 Interest in payment of accrued interest and principal until the
principal balance of such Class is reduced to zero and any losses allocated to
such Class have been reimbursed.
All Realized Losses and shortfalls from the Pool 4 AX Mortgage Loans
shall be allocated to the Class LT1-4AX Interest and all payments of principal
and, for Distribution Dates prior to the Distribution Date in May of 2010,
interest received with respect to the Pool 4 AX Mortgage Loans shall be paid on
the Class LT1-4AX Interest in payment of accrued interest and principal until
the principal balance of such Class is reduced to zero and any losses allocated
to such Class have been reimbursed.
All Realized Losses and shortfalls from the Pool 4 PAX Mortgage Loans
shall be allocated to the Class LT1-4PAX Interest and all payments of principal
and, for Distribution Dates prior to the Distribution Date in May of 2010,
interest received with respect to the Pool 4 PAX Mortgage Loans shall be paid on
the Class LT1-4PAX Interest in payment of accrued interest and principal until
the principal balance of such Class is reduced to zero and any losses allocated
to such Class have been reimbursed.
For each Distribution Date starting with the Distribution Date in May
of 2010, interest received on the Pool 4 Mortgage Loans will be distributed in
respect of the Class LT1-4AX Interest and the Class LT1-4PAX Interest in
proportion to the relative outstanding unpaid interest amounts for those
Interests.
All Realized Losses and shortfalls from the Pool 5 Mortgage Loans shall
be allocated to the Class LT1-5 Interest and all payments of principal and
interest received with respect to the Pool 5 Mortgage Loans shall be paid on the
Class LT1-5 Interest in payment of accrued interest and principal until the
principal balance of such Class is reduced to zero and any losses allocated to
such Class have been reimbursed.
3
REMIC 2
The following table specifies the class designation, interest rate,
principal amount and related Mortgage Pool for each class of REMIC 2 Interests.
REMIC 2 Class Initial Class or Principal Related Pool or
Designation Interest Rate Amount Pools
--------------- ------------- -------------------------- ---------------
Class LT2-1 (1) $ 156,374,012.07 Pool 1
Class LT2-2 (2) $ 152,495,067.49 Pool 2
Class LT2-3 (3) $ 204,342,427.97 Pool 3
Class LT2-4AX (4) $ 34,788,975.37 Pool 4
Class LT2-4AXIO (5) (10) Pool 4
Class LT2-4PAX (6) $ 44,736,282.09 Pool 4
Class LT2-4PAXIO (7) (11) Pool 4
Class LT2-5 (8) $ 27,543,334.43 Pool 5
Class LT2-R (9) (9) N/A
----------
(1) For any Distribution Date, the interest rate for the Class LT2-1
Interest shall be the interest rate on the Class LT1-1 Interest.
(2) For any Distribution Date, the interest rate for the Class LT2-2
Interest shall be the interest rate on the Class LT1-2 Interest.
(3) For any Distribution Date, the interest rate for the Class LT2-3
Interest shall be the interest rate on the Class LT1-3 Interest.
(4) For any Distribution Date prior to the Distribution Date in May of
2010, the interest rate for the Class LT2-4AX Interest shall be the
lesser of (i) 4.31% or (ii) the interest rate on the Class LT1-4AX
Interest. For each Distribution Date starting with the Distribution
Date in May of 2010, the interest rate for the Class LT2-4AX Interest
shall be the interest rate on the Class LT1-4AX Interest.
(5) For any Distribution Date prior to the Distribution Date in May of
2010, the interest rate for the Class LT2-4AXIO Interest shall be equal
to the excess, if any, of (i) the interest rate on the Class LT1-4AX
Interest over (ii) 4.31%. The Class LT2-4AXIO Interest shall not be
entitled to any distributions in respect of Accrual Periods after the
Accrual Period in March of 2010.
(6) For any Distribution Date prior to the Distribution Date in May of
2010, the interest rate for the Class LT2-4PAX Interest shall be the
lesser of (i) 4.31% or (ii) the interest rate on the Class LT1-4PAX
Interest. For each Distribution Date starting with the Distribution
Date in May of 2010, the interest rate for the Class LT2-4PAX Interest
shall be the interest rate on the Class LT1-4PAX Interest.
(7) For any Distribution Date prior to the Distribution Date in May of
2010, the interest rate for the Class LT2-4PAXIO Interest shall be
equal to the excess, if any, of (i) the interest rate on the Class
LT1-4PAX Interest over (ii) 4.31%. The Class LT2-4PAXIO Interest shall
not be entitled to any distributions in respect of Accrual Periods
after the Accrual Period in March of 2010.
(8) For any Distribution Date, the interest rate for the Class LT2-5
Interest shall be the interest rate on the Class LT1-5 Interest.
4
(9) The Class LT2-R Interest shall represent the sole class of residual
interest in REMIC 2. The Class LT2-R Interest will not have a principal
amount or an interest rate. The Class LT2-R Interest shall be
represented by the Class R Certificate.
(10) For any Distribution Date prior to the Distribution Date in May of
2010, the Class LT2-4AXIO Interest shall bear interest on a notional
amount equal to the aggregate Scheduled Principal Balance of the AX
Mortgage Loans in Mortgage Loan Pool 4.
(11) For any Distribution Date prior to the Distribution Date in May of
2010, the Class LT2-4PAXIO Interest shall bear interest on a notional
amount equal to the aggregate Scheduled Principal Balance of the PAX
Mortgage Loans in Mortgage Loan Pool 4.
All Realized Losses and shortfalls allocated to the Class LT1-1
Interest shall be allocated to the Class LT2-1 Interest. All distributions in
respect of principal, interest and reimbursements of previously allocated
Realized Losses on the Class LT1-1 Interest shall be made to the Class LT2-1
Interest.
All Realized Losses and shortfalls allocated to the Class LT1-2
Interest shall be allocated to the Class LT2-2 Interest. All distributions in
respect of principal, interest and reimbursements of previously allocated
Realized Losses on the Class LT1-2 Interest shall be made to the Class LT2-2
Interest.
All Realized Losses and shortfalls allocated to the Class LT1-3
Interest shall be allocated to the Class LT2-3 Interest. All distributions in
respect of principal, interest and reimbursements of previously allocated
Realized Losses on the Class LT1-3 Interest shall be made to the Class LT2-3
Interest.
An amount of Realized Losses and shortfalls equal to the amount of
Realized Losses and shortfalls allocated to the Class 4-AX Certificates shall be
allocated to the Class LT2-4AXIO Interest. An amount equal to the amount of all
distributions made, or deemed made under Section 5.02(g) hereof, to the Class
4-AX Certificates shall be distributed to the Class LT2-4AXIO Interest.
All Realized Losses and shortfalls on the AX Mortgage Loans in Mortgage
Pool 4 not allocated to the Class 4-AX Certificates will be allocated to the
Class LT2-4AX Interest. All distributions in respect of principal, interest and
reimbursements of previously allocated Realized Losses on the Class LT1-4AX
Interest in excess of such amounts distributed or treated as distributed to the
Class LT2-4AXIO Interest shall be treated as made in respect of the Class
LT2-4AX Interest.
An amount of Realized Losses and shortfalls equal to the amount of
Realized Losses and shortfalls allocated to the Class 4-PAX Certificates shall
be allocated to the Class LT2-4PAXIO Interest. An amount equal to the amount of
all distributions made, or deemed made under Section 5.02(g) hereof, to the
Class 4-PAX Certificates shall be distributed to the Class LT2-4PAXIO Interest.
All Realized Losses and shortfalls on the PAX Mortgage Loans in
Mortgage Pool 4 not allocated to the Class 4-PAX Certificates will be allocated
to the Class LT2-4PAX Interest. All distributions in respect of principal,
interest and reimbursements of previously allocated Realized Losses on the Class
LT1-4PAX Interest in excess of such amounts distributed or treated as
5
distributed to the Class LT2-4PAXIO Interest shall be treated as made in respect
of the Class LT2-4PAX Interest.
All Realized Losses and shortfalls allocated to the Class LT1-5
Interest shall be allocated to the Class LT2-5 Interest. All distributions in
respect of principal, interest and reimbursements of previously allocated
Realized Losses on the Class LT1-5 Interest shall be made to the Class LT2-5
Interest.
REMIC 3
The following table specifies the class designation, interest rate,
principal amount and related Mortgage Pool for each class of REMIC 3 Interests.
REMIC 3 Class Initial Class or Principal Related Pool or
Designation Interest Rate Amount Pools
--------------- ------------- -------------------------- ---------------
Class LT3-1A (1) $ 83,659.1207 Pool 1
Class LT3-1B (2) $ 1,563,740.1207 Pool 1
Class LT3-2A (1) $ 81,590.6749 Pool 2
Class LT3-2B (3) $ 1,524,950.6749 Pool 2
Class LT3-3A (1) $ 109,324.2797 Pool 3
Class LT3-3B (4) $ 2,043,424.2797 Pool 3
Class LT3-4A (1) $ 42,552.5746 Pool 4
Class LT3-4B (5) $ 795,252.5746 Pool 4
Class LT3-5A (1) $ 14,743.3443 Pool 5
Class LT3-5B (6) $ 275,433.3443 Pool 5
Class LT3-Z (1) $ 613,745,428.4316 N/A
Class LT3-R (7) (7) N/A
----------
(1) For any Distribution Date, the interest rate for the Class LT3-1A,
Class LT3-2A, Class LT3-3A, Class LT3-4A, Class LT3-5A and Class LT3-Z
Interest shall be the weighted average of the interest rates on the
Class LT2-1, Class LT2-2, Class LT2-3, Class LT2-4AX, Class LT2-4PAX
and LT2-5 Interests.
(2) For any Distribution Date, the interest rate for the Class LT3-1B
Interest shall be the interest rate on the Class LT2-1 Interest for
such Distribution Date.
(3) For any Distribution Date, the interest rate for the Class LT3-2B
Interest shall be a per annum rate equal to the interest rate on the
Class LT2-2 Interest for such Distribution Date.
(4) For any Distribution Date, the interest rate for the Class LT3-3B
Interest shall be a per annum rate equal to the interest rate on the
Class LT2-3 Interest for such Distribution Date.
(5) For any Distribution Date, the interest rate for the Class LT3-4B
Interest shall be a per annum rate equal to the weighted average of the
interest rates on the Class LT2-4AX and LT2-4PAX Interests for such
Distribution Date.
(6) For any Distribution Date, the interest rate for the Class LT3-5B
Interest shall be a per annum rate equal to the interest rate on the
Class LT2-5 Interest for such Distribution Date.
6
(7) The Class LT3-R Interest shall represent the sole class of residual
interest in REMIC 3. The Class LT3-R Interest will not have a principal
amount or an interest rate. The Class LT3-R Interest shall be
represented by the Class R Certificate.
Distributions shall be deemed to be made to the REMIC 3 Regular
Interests first, so as to keep the Uncertificated Principal Balance of each
REMIC 3 Regular Interest ending with the designation "B" equal to 1% of the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Mortgage Pool; second, to each REMIC 3 Regular Interest ending with the
designation "A" so that the Uncertificated Principal Balance of each such REMIC
3 Regular Interest is equal to 1% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Mortgage Pool over (y)
the aggregate Class Principal Amounts of the Certificate Group related to such
Mortgage Pool (except that if 1% of any such excess is greater than the
principal amount of the corresponding REMIC 3 Regular Interest ending with the
designation "A", the least amount of principal shall be distributed to such
REMIC 3 Regular Interests such that the REMIC 3 Subordinated Balance Ratio is
maintained); and finally, any remaining principal to the Class LT3-Z Interest.
Realized Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Principal Balance of
each REMIC 3 Regular Interest ending with the designation "B" equal to 1% of the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Mortgage Pool; second, to each REMIC 3 Regular Interest ending with the
designation "A" so that the Uncertificated Principal Balance of each such REMIC
3 Regular Interest is equal to 1% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Mortgage Pool over (y)
the aggregate Class Principal Amounts of the Certificate Group related to such
Mortgage Pool (except that if 1% of any such excess is greater than the
principal amount of the corresponding REMIC 3 Regular Interest ending with the
designation "A", the least amount of Realized Losses shall be allocated to such
REMIC 3 Regular Interests such that the REMIC 3 Subordinated Balance Ratio is
maintained); and third, the remaining Realized Losses shall be allocated to the
Class LT3-Z Interest. All computations with respect to any REMIC 3 Interest
shall be taken out to eight decimal places.
REMIC 4
The following table specifies the class designation, interest rate,
principal amount and Classes of Corresponding Certificates for each class of
REMIC 4 Interests:
7
REMIC 4 Pass-Through Corresponding
REMIC Interest Initial Balance Rate Certificates
-------------- ------------------- ------------ -------------
LT4-1A1 $ 15,000,000.00 (1) 1-A1, 1-PAX
LT4-1A2 $ 30,000,000.00 (1) 1-A2, 1-PAX
LT4-1A3 $ 103,008,000.00 (1) 1-A3, 1-PAX
LT4-1R $ 100.00 (1) R
LT4-2A $ 144,336,000.00 (2) 2-A, 2-AX
LT4-3A1 $ 96,705,000.00 (3) 3-A1, 3-AX
LT4-3A2 $ 96,705,000.00 (3) 3-A2, 3-AX
LT4-4A $ 75,270,000.00 (4) 4-A
LT4-5A $ 26,069,000.00 (5) 5-A
LT4-B1 $ 19,536,000.00 (6) X0
XX0-X0 $ 4,959,000.00 (6) X0
XX0-X0 $ 3,720,000.00 (6) X0
XX0-X0 $ 1,859,000.00 (6) X0
XX0-X0 $ 1,547,000.00 (6) X0
XX0-X0 $ 1,565,999.42 (6) X0
XX0-X (7) (7) R
----------
(1) For any Distribution Date, the interest rate for each of the Class
LT4-1A1 Interest, Class LT4-1A2 Interest, Class LT4-1A3 Interest and
the Class LT4-1R Interest shall be a per annum rate equal to the Net
WAC for Pool 1 for such Distribution Date.
(2) For any Distribution Date, the interest rate for the Class LT4-2A
Interest shall be a per annum rate equal to the Net WAC for Pool 2 for
such Distribution Date.
(3) For any Distribution Date, the interest rate for each of the Class
LT4-3A1 Interest and the Class LT4-3A2 Interest shall be a per annum
rate equal to the Net WAC for Pool 3 for such Distribution Date.
(4) For any Distribution Date, the interest rate for the Class LT4-4A
Interest shall be a per annum rate equal to the interest rate on the
Class LT3-4B Interest for such Distribution Date.
(5) For any Distribution Date, the interest rate for the Class LT4-5A
Interest shall be a per annum rate equal to the Net WAC for Pool 5 for
such Distribution Date.
(6) For any Distribution Date, the Class LT4-B1 Interest, Class LT4-B2
Interest, Class LT4-B3 Interest, Class LT4-B4 Interest, Class LT4-B5
Interest and Class LT4-B6 Interest will bear interest at a per annum
rate equal to the weighted average of the pass-through rates on the
REMIC 3 Regular Interests ending with the designation "A", weighted on
the basis of the Uncertificated Principal Balance of each such REMIC 3
Regular Interest immediately preceding the Distribution Date; provided
that for purposes of such weighted average, the pass-through rate of
each such REMIC 3 Regular Interest shall be subject to a cap and floor
equal to the pass-through rate of the REMIC 3 Regular Interest that
ends with the designation "B" and is related to the same Mortgage Pool.
(7) The Class LT4-R Interest shall represent the sole class of residual
interest in REMIC 4. The Class LT4-R Interest will not have a principal
amount or an interest rate. The Class LT4-R Interest shall be
represented by the Class R Certificate.
Principal and interest shall be payable to, and shortfalls, losses and
prepayments are allocable to, the REMIC 4 Regular Interests as such amounts are
payable and allocable to the
8
Corresponding Certificates. Notwithstanding the preceding sentence, (i) the
first $0.42 of losses with respect to principal on the Mortgage Loans shall be
allocated to the Class LT4-B6 Interest and (ii) immediately preceding any
payment to the Class R Certificate pursuant to Section 5.02(e) attributable to
principal received with respect to any Mortgage Loan, a payment shall be treated
as made to the Class LT4-B6 Interest in reduction of the principal balance
thereof, if any, to zero.
Upper Tier REMIC
The following table specifies the Class designation, Certificate Interest Rate,
initial Class Principal Amount or Class Notional Amount, and minimum
denomination (by dollar amount or Percentage Interest) for each Class of
Certificates representing the interests in the Trust Fund created hereunder.
Each Certificate, other than the Class P-I, Class P-II, Class P-III and Class R
Certificates, represents ownership of a regular interest in the Upper Tier REMIC
for purposes of the REMIC provisions.
Initial Class
Principal Amount
Certificate or Class Minimum
Class Designation Interest Rate Notional Amount Denomination
----------------- -------------- ------------------ ------------------
Class 1-A1 4.60%(1) $ 15,000,000 $ 25,000
Class 1-A2 3.87%(2) $ 30,000,000 $ 25,000
Class 1-A3 5.00%(3) $ 103,008,000 $ 25,000
Class 1-PAX 4.50%(4) $ 13,643,509(4) $ 1,000,000
Class 2-A 3.97%(5) $ 144,336,000 $ 25,000
Class 2-AX 3.97%(6) $ 41,981,446(6) $ 1,000,000
Class 3-A1 4.06%(7) $ 96,705,000 $ 25,000
Class 3-A2 3.815%(8) $ 96,705,000 $ 25,000
Class 3-AX 4.00%(9) $ 56,711,796(9) $ 1,000,000
Class 4-A 4.31%(10) $ 75,270,000 $ 25,000
Class 4-AX 4.31%(11) $ 7,262,746(11) $ 1,000,000
Class 4-PAX 4.31%%(12) $ 11,383,183(12) $ 1,000,000
Class 5-A (13) $ 26,069,000 $ 25,000
Class B1 (14) $ 19,536,000 $ 100,000
Class B2 (14) $ 4,959,000 $ 100,000
Class B3 (14) $ 3,720,000 $ 100,000
Class B4 (14) $ 1,859,000 $ 250,000
Class B5 (14) $ 1,547,000 $ 250,000
Class B6 (14) $ 1,565,999 $ 250,000
Class R (15) $ 100 $ 100
Class P-I (16) (16) 25%
Class P-II (16) (16) 25%
Class P-III (16) (16) 25%
----------
(1) For any Distribution Date on or before the Distribution Date in May
2008, the Certificate Interest Rate for the Class 1-A1 Certificates
shall be a per annum rate equal to 4.60%, subject to a maximum rate
equal to the Net WAC for Pool 1 for such Distribution Date. For any
Distribution Date after the Distribution Date in May 2008,
9
the Certificate Interest Rate for the Class 1-A1 Certificates shall be
a per annum rate equal to the Net WAC for Pool 1 for such Distribution
Date.
(2) For any Distribution Date on or before the Distribution Date in May
2008, the Certificate Interest Rate for the Class 1-A2 Certificates
shall be a per annum rate equal to 3.87%, subject to a maximum rate
equal to the Net WAC for Pool 1 for such Distribution Date. For any
Distribution Date after the Distribution Date in May 2008, the
Certificate Interest Rate for the Class 1-A2 Certificates shall be a
per annum rate equal to the Net WAC for Pool 1 for such Distribution
Date.
(3) For any Distribution Date on or before the Distribution Date in May
2008, the Certificate Interest Rate for the Class 1-A3 Certificates
shall be a per annum rate equal to 5.00%, subject to a maximum rate
equal to the Net WAC for Pool 1 for such Distribution Date. For any
Distribution Date after the Distribution Date in May 2008, the
Certificate Interest Rate for the Class 1-A3 Certificates shall be a
per annum rate equal to the Net WAC for Pool 1 for such Distribution
Date.
(4) The Class 1-PAX Certificates are Notional Certificates. For any
Distribution Date on or before the Distribution Date in May 2008, the
Class Notional Amount of the Class 1-PAX Certificates will be equal to
the sum of (A) the product of (i) a fraction, the numerator of which is
the excess, if any, of (1) the Net WAC for Pool 1 for the related
Distribution Date over (2) 4.60% and the denominator of which is 4.50%
and (ii) the Class Principal Amount fo the Class 1-A1 Certificates
immediately prior to such Distribution Date, (B) the product of (i) a
fraction, the numerator of which is the excess, if any, of (1) the Net
WAC for Pool 1 for the related Distribution Date over (2) 3.87% and the
denominator of which is 4.50% and (ii) the Class Principal Amount of
the Class 1-A2 Certificates immediately prior to such Distribution Date
and (C) the product of (i) a fraction, the numerator of which is the
excess, if any, of (1) the Net WAC for Pool 1 for the related
Distribution Date over (2) 5.00% and the denominator of which is 4.50%
and (ii) the Class Principal Amount of the Class 1-A3 Certificates
immediately prior to such Distribution Date. For any Distribution Date
after the Distribution Date in May 2008, the Class 1-PAX Certificates
shall have a Class Notional Amount of zero.
(5) For any Distribution Date on or before the Distribution Date in May
2008, the Certificate Interest Rate for the Class 2-A Certificates
shall be a per annum rate equal to 3.97%, subject to a maximum rate
equal to the Net WAC for Pool 2 for such Distribution Date. For any
Distribution Date after the Distribution Date in May 2008, the
Certificate Interest Rate for the Class 2-A Certificates shall be a per
annum rate equal to the Net WAC for Pool 2 for such Distribution Date.
(6) The Class 2-AX Certificates are Notional Certificates. For any
Distribution Date on or before the Distribution Date in May 2008, the
Class Notional Amount of the Class 2-AX Certificates will be equal to
the product of (i) a fraction, the numerator of which is the excess, if
any, of (1) the Net WAC for Pool 2 for the related Distribution Date
over (2) 3.97% and the denominator of which is 3.97% and (ii) the Class
Principal Amount of the Class 2-A Certificates immediately prior to
such Distribution Date. For any Distribution Date after the
Distribution Date in May 2008, the Class 2-AX Certificates shall have a
Class Notional Amount of zero.
(7) For any Distribution Date on or before the Distribution Date in May
2008, the Certificate Interest Rate for the Class 3-A1 Certificates
shall be a per annum rate equal to 4.06%, subject to a maximum rate
equal to the Net WAC for Pool 3 for such Distribution Date. For any
Distribution Date after the Distribution Date in May 2008, the
Certificate Interest Rate for the Class 3-A1 Certificates shall be a
per annum rate equal to the Net WAC for Pool 3 for such Distribution
Date.
(8) For any Distribution Date on or before the Distribution Date in May
2008, the Certificate Interest Rate for the Class 3-A2 Certificates
shall be a per annum rate equal to 3.815%, subject to a maximum rate
equal to the Net WAC for Pool 3 for such Distribution Date. For any
Distribution Date after the Distribution Date in May 2008, the
Certificate Interest Rate for the Class 3-A2 Certificates shall be a
per annum rate equal to the Net WAC for Pool 3 for such Distribution
Date.
(9) The Class 3-AX Certificates are Notional Certificates. For any
Distribution Date on or before the Distribution Date in May 2008, the
Class Notional Amount of the Class 3-AX Certificates will be equal to
the sum of (A) the product of (i) a fraction, the numerator of which is
the excess, if any, of (1) the Net WAC for Pool 3 for the related
Distribution Date over (2) 4.06% and the denominator of which is 4.00%
and (ii) the Class Principal Amount of the Class 3-A1 Certificates
immediately prior to such Distribution Date and (B) the product of (i)
a fraction, the numerator of which is the excess, if any, of (1) the
Net WAC for Pool 3 for the related Distribution Date over (2) 3.815%
and the denominator of which is 4.00% and (ii) the Class Principal
Amount of the Class
10
3-A2 Certificates immediately prior to such Distribution Date. For any
Distribution Date after the Distribution Date in May 2008, the Class
3-AX Certificates shall have a Class Notional Amount of zero.
(10) For any Distribution Date on or before the Distribution Date in April
2010, the Certificate Interest Rate for the Class 4-A Certificates
shall be a per annum rate equal to 4.31%, subject to a maximum rate
equal to the Adjusted Net WAC for Pool 4 for such Distribution Date.
For any Distribution Date after the Distribution Date in April 2010,
the Certificate Interest Rate for the Class 4-A Certificates shall be a
per annum rate equal to the Net WAC for Pool 4 for such Distribution
Date.
(11) The Class 4-AX Certificates are Notional Certificates. For any
Distribution Date on or before the Distribution Date in April 2010, the
Certificate Interest Rate on the Class 4-AX Certificates shall be a per
annum rate equal to 4.31%. For any Distribution Date prior to the
Distribution Date in May 2010, the Class Notional Amount of the Class
4-AX Certificates will be equal to the product of (i) a fraction, the
numerator of which is the excess, if any, of (1) the weighted average
of the Net Mortgage Rates of the Pool 4-AX Mortgage Loans over (2)
4.31% and the denominator of which is 4.31% and (ii) the aggregate
Scheduled Principal Balance of the Pool 4-AX Mortgage Loans as of the
first day of the related Accrual Period. For any Distribution Date
after the Distribution Date in April 2010, the Class 4-AX Certificates
shall have a Class Notional Amount of zero.
(12) The Class 4-PAX Certificates are Notional Certificates. For any
Distribution Date on or before the Distribution Date in April 2010, the
Certificate Interest Rate on the Class 4-PAX Certificates shall be a
per annum rate equal to 4.31%. For any Distribution Date prior to the
Distribution Date in May 2010, the Class Notional Amount of the Class
4-PAX Certificates will be equal to the product of (i) a fraction, the
numerator of which is the excess, if any, of (1) the weighted average
of the Net Mortgage Rates of the Pool 4 PAX Mortgage Loans over (2)
4.31% and the denominator of which is 4.31% and (ii) the aggregate
Scheduled Principal Balance of the Pool 4 PAX Mortgage Loans as of the
first day of the related Accrual Period. For any Distribution Date
after the Distribution Date in April 2010, the Class 4-PAX Certificates
shall have a Class Notional Amount of zero.
(13) The Certificate Interest Rate for the Class 5-A Certificates shall be
the per annum rate equal to the Net WAC for Pool 5 for such
Distribution Date.
(14) For any Distribution Date, the Class B1, Class B2, Class B3, Class B4,
Class B5 and Class B6 Certificates shall bear interest at a per annum
rate equal to the weighted average of the Underlying Subordinate Rates
applicable to each of the Mortgage Pools, weighted on the basis of the
Group Subordinate Amount for each Mortgage Pool.
(15) For any Distribution Date, the Certificate Interest Rate on the Class R
Certificates shall be a per annum rate equal to the Net WAC for Pool 1
for such Distribution Date.
(16) The Class P-I Certificates will be entitled to receive Prepayment
Penalty Amounts paid by borrowers upon voluntary full or partial
prepayment of the Mortgage Loans in Pool 1. The Class P-II Certificates
will be entitled to receive Prepayment Penalty Amounts paid by
borrowers upon voluntary full or partial prepayment of the Mortgage
Loans in Pool 2 and Pool 5. The Class P-III Certificates will be
entitled to receive Prepayment Penalty Amounts paid by borrowers upon
voluntary full or partial prepayment of the Mortgage Loans in Pool 4.
Class P-I, Class P-II and Class P-III Certificates will be issued in
definitive, fully registered form.
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $620,280,099.42.
For purposes hereof, each pool of Mortgage Loans constitutes a fully
separate and distinct sub-trust.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
11
Section 1.01. Definitions.
The following words and phrases, unless the context otherwise requires,
shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage servicing practices of prudent
mortgage servicing institutions that service or master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer or (y) as provided in the applicable Servicing Agreement,
to the extent applicable to the related Servicer.
Accountant: A person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Accretion Directed Certificate: Not applicable.
Accretion Termination Date: Not applicable.
Accrual Amount: As to any Class of Accrual Certificates and each
Distribution Date through the Credit Support Depletion Date, the sum of (x) any
amount of Accrued Certificate Interest allocable to such Class pursuant to
Section 5.02(a)(ii) on such Distribution Date and (y) any Interest Shortfall
allocable to such Class pursuant to Section 5.02(a)(iii) on such Distribution
Date. As to any Class of Accrual Certificates and each Distribution Date after
the Credit Support Depletion Date, zero.
Accrual Certificate: Not applicable.
Accrual Component: Not applicable.
Accrual Period: With respect to any Distribution Date and any Class of
Certificates, REMIC 1 Interests, REMIC 2 Interests, REMIC 3 Interests, REMIC 4
Interests or REMIC 5 Interests, the one-month period beginning immediately
following the end of the preceding Accrual Period (or from the Cut-off Date, in
the case of the first Accrual Period) and ending on the last day of the month
immediately preceding the month in which such Distribution Date occurs.
Accrued Certificate Interest: As to any Class of Certificates and any
Distribution Date, the product of the Certificate Interest Rate for such Class
of Certificates and the Class Principal Amount (or Class Notional Amount) of
such Class of Certificates immediately preceding such Distribution Date, as
reduced by such Class's share of the interest portion of (i) any Excess Losses
for the related Mortgage Pool or Mortgage Pools for such Distribution Date and
(ii) any Relief Act Reduction for the related Mortgage Pool or Mortgage Pools
for such Distribution Date, in each case allocable among the Senior Certificates
of the related Certificate Group pro rata based on the Accrued Certificate
Interest otherwise distributable thereto, and allocable to the Subordinate
Certificates pro rata based on interest accrued at the related Net WAC on their
12
respective Apportioned Principal Balances. Interest shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months.
Act: As defined in Section 3.03(c).
Additional Collateral: Not applicable.
Additional Collateral Servicing Agreement: Not applicable.
Adjustable Rate Mortgage Loan: Any Mortgage Loan as to which the
related Mortgage Note provides for the adjustment of the Mortgage Rate.
Adjusted Net WAC: For Pool 4 for each Distribution Date will be the
weighted average, based on their respective principal balances, of the interest
rates on (i) an obligation having a principal balance equal to the aggregate
principal balance of the Pool 4 PAX Mortgage Loans as of the beginning of the
related Due Period and bearing interest at a rate equal to the lesser of (x)
4.31% or (y) the weighted average of the Net Mortgage Rates of the Pool 4 PAX
Mortgage Loans at the beginning of the related Due Period and (ii) an obligation
having a principal balance equal to the aggregate principal balance of Pool 4 AX
Mortgage Loans as of the beginning of the related Due Period and bearing
interest at a rate equal to the lesser of (x) 4.31% or (y) the weighted average
of the Net Mortgage Rates of the Pool 4 AX Mortgage Loans at the beginning of
the related Due Period.
Advance: An advance of the aggregate of payments of principal and
interest (net of the Master Servicing Fee and the applicable Servicing Fee) on
one or more Mortgage Loans that were due on the Due Date in the related Due
Period and not received as of the close of business on the related Determination
Date, required to be made by or on behalf of the Master Servicer and the related
Servicer (or by the Trustee solely in its capacity as successor master servicer
in accordance with Section 6.14) pursuant to Section 5.04.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Master Servicing Compensation: As to any Distribution Date,
all income and gain realized from the investment of funds in the Collection
Account during the period from and including the Deposit Date in the calendar
month immediately preceding the month in which such Distribution Date occurs, to
but excluding the Deposit Date relating to such Distribution Date.
Aggregate Principal Balance: The aggregate of the Scheduled Principal
Balances for all Mortgage Loans at any date of determination.
Aggregate Subordinate Percentage: With respect to any Distribution
Date, the sum of the Class Principal Amounts of the Subordinate Certificates
immediately prior to such date divided
13
by the sum of the Pool Balances for all of the Mortgage Pools for the
immediately preceding Distribution Date.
Aggregate Voting Interests: The aggregate of the Voting Interests of
all the Certificates under this Agreement.
Agreement: This Trust Agreement and all amendments and supplements
hereto.
AP Percentage: Not applicable.
AP Principal Distribution Amount: Not applicable.
Apportioned Principal Balance: As to any Class of Subordinate
Certificates and any Distribution Date, the Class Principal Amount of such Class
immediately prior to such Distribution Date multiplied by a fraction, the
numerator of which is the applicable Group Subordinate Amount for such date and
the denominator of which is the sum of the Group Subordinate Amounts for all
Mortgage Pools for such date.
Appraised Value: With respect to any Mortgage Loan, the amount set
forth in an appraisal made in connection with the origination of such Mortgage
Loan as the value of the related Mortgaged Property.
Associated Mortgage Loan: Not applicable.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that the Trustee shall not
be responsible for determining whether any such assignment is in recordable
form.
Aurora: Aurora Loan Services Inc. or its successor in interest, in its
capacity as a Servicer.
Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 6.10.
Authorized Officer: Any Person who may execute an Officer's Certificate
on behalf of the Depositor.
Available Distribution Amount: As to each Mortgage Pool and on any
Distribution Date, the sum of the following amounts:
(i) the total amount of all cash received by the Master
Servicer through the Remittance Date applicable to each Servicer and
deposited by the Master Servicer by the Deposit Date for such
Distribution Date on the Mortgage Loans of such Mortgage Pool
(including proceeds of any Insurance Policy and any other credit
support relating to such
14
Mortgage Loans), plus all Advances made by the Master Servicer or any
Servicer (or the Trustee, in its capacity as successor Master Servicer)
for such Distribution Date, any Compensating Interest Payment for such
date and Mortgage Pool, any amounts received with respect to any
Additional Collateral or any Surety Bond related thereto and any
amounts paid by any Servicer in respect of Prepayment Interest
Shortfalls in respect of the related Mortgage Loans for such date, but
not including:
(A) all amounts distributed pursuant to Section
5.02 on prior Distribution Dates;
(B) all Scheduled Payments of principal and
interest collected but due on a date subsequent to the related
Due Period;
(C) all Principal Prepayments received or
identified by the applicable Servicer after the applicable
Prepayment Period (together with any interest payments
received with such prepayments to the extent that they
represent the payment of interest accrued on the related
Mortgage Loans for the period subsequent to the applicable
Prepayment Period);
(D) any other unscheduled collection, including
Net Liquidation Proceeds and Insurance Proceeds, received by
the Master Servicer after the applicable Prepayment Period;
(E) all fees and amounts due or reimbursable to
the Master Servicer, the Trustee (other than the Trustee Fee),
the Custodian or a Servicer pursuant to the terms of this
Agreement, the applicable Custodial Agreement or the
applicable Servicing Agreement;
(F) any Retained Interest; and
(G) Prepayment Interest Excess, to the extent
not offset by Prepayment Interest Shortfalls; and
(ii) any other payment made by the Master Servicer, any
Servicer, the Seller, the Depositor, or any other Person with respect
to such Distribution Date (including the Purchase Price with respect to
any Mortgage Loan purchased by the Seller, the Depositor or any other
Person).
Balloon Mortgage Loan: Not applicable.
Balloon Payment: Not applicable.
Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief, or
seeking, consenting to or acquiescing in the appointment of a trustee, receiver
or liquidator, dissolution,
15
or termination, as the case may be, of such Person pursuant to the provisions of
either the United States Bankruptcy Code of 1986, as amended, or any other
similar state laws.
Bankruptcy Coverage Termination Date: As to any Mortgage Pool, the
Distribution Date on which the Bankruptcy Loss Limit has been reduced to zero
(or less than zero).
Bankruptcy Loss Limit: As of the Cut-off Date, $138,224.00, which
amount shall be reduced from time to time by the amount of Bankruptcy Losses
that are allocated to the Certificates.
Bankruptcy Losses: With respect to the Mortgage Loans in the related
Mortgage Pool, losses that are incurred as a result of Deficient Valuations and
any reduction, in a bankruptcy proceeding, of the amount of the Scheduled
Payment on a Mortgage Loan other than as a result of a Deficient Valuation.
Basis Risk Shortfall: For any Distribution Date on or prior to the
Distribution Date in April 2010, (i) in the case of the Class 4-A Certificates,
the excess of what the Accrued Certificate Interest on such Class would have
been if the Interest Rate on such Class had not been limited by reference to the
Adjusted Net WAC of Pool 4 and (ii) in the case of any Class of Subordinate
Certificates, the excess of what the Accrued Certificate Interest on such Class
would have been had the Underlying Subordinate Rate for Pool 4 been 4.31% over
what the Accrued Certificate Interest was on such Class for such Distribution
Date.
Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.
Book-Entry Certificates: Beneficial interests in Certificates
designated as "Book-Entry Certificates" in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by a Clearing
Agency as described in Section 3.09; provided, that after the occurrence of a
condition whereupon book-entry registration and transfer are no longer permitted
and Definitive Certificates are to be issued to Certificate Owners, such
Book-Entry Certificates shall no longer be "Book-Entry Certificates." As of the
Closing Date, all of the Classes of Certificates listed in the second table of
the Preliminary Statement, other than the Class R Certificates, will constitute
Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in New York, New York or, if other than New York,
the city in which the Corporate Trust Office of the Trustee is located, or (iii)
with respect to any Remittance Date or any Servicer reporting date, the States
specified in the definition of "Business Day" in the applicable Servicing
Agreement, are authorized or obligated by law or executive order to be closed.
Certificate: Any one of the certificates signed and countersigned by
the Trustee in substantially the forms attached hereto as Exhibit A.
Certificate Account: The account maintained by the Trustee in
accordance with the provisions of Section 4.04.
16
Certificate Group: The Group 1 Certificates, the Group 2 Certificates,
the Group 3 Certificates, the Group 4 Certificates or the Group 5 Certificates,
as applicable.
Certificate Interest Rate: With respect to each Class of Certificates,
the applicable per annum rate specified or determined as provided in the
Preliminary Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate other
than a Notional Certificate, at the time of determination, the maximum specified
dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the initial principal amount set forth on
the face of such Certificate (plus, in the case of any Negative Amortization
Certificate, any Deferred Interest allocated thereto on previous Distribution
Dates, and plus, in the case of any Accrual Certificate, its Percentage Interest
of any related Accrual Amount for each previous Distribution Date), less the
amount of all principal distributions previously made with respect to such
Certificate, and all Realized Losses allocated to such Certificate and, in the
case of a Subordinate Certificate, any Subordinate Certificate Writedown Amount
allocated to such Certificates. For purposes of Article V hereof, unless
specifically provided to the contrary, Certificate Principal Amounts shall be
determined as of the close of business of the immediately preceding Distribution
Date, after giving effect to all distributions made on such date. Notional
Certificates are issued without Certificate Principal Amounts.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02.
Class: All Certificates bearing the same class designation, and, in the
case of REMIC 1, REMIC 2, REMIC 3, REMIC 4 or REMIC 5, all Interests bearing the
same designation.
Class AP Certificate: None.
Class P Certificates: The Class P-I, Class P-II and Class P-III
Certificates, referred to collectively.
Class AP Deferred Amount: Not applicable.
Class B Certificate: Any Class B1, Class B2, Class B3, Class B4, Class
B5 or Class B6 Certificate.
Class LT1-R Interest: The sole residual interest in REMIC 1.
Class LT2-R Interest: The sole residual interest in REMIC 2.
Class LT3-R Interest: The sole residual interest in REMIC 3.
Class LT4-R Interest: The sole residual interest in REMIC 4.
17
Class Notional Amount: With respect to each Class of Notional
Certificates the applicable class notional amount calculated as provided in the
Preliminary Statement hereto.
Class Percentage: With respect to each Class of Subordinate
Certificates, for each Distribution Date, the percentage obtained by dividing
the Class Principal Amount of such Class immediately prior to such Distribution
Date by the sum of the Class Principal Amounts of all Certificates immediately
prior to such date.
Class Principal Amount: With respect to each Class of Certificates
other than any Class of Notional Certificates, the aggregate of the Certificate
Principal Amounts of all Certificates of such Class at the date of
determination. With respect to each Class of Notional Certificates, zero.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
Clearstream: Clearstream Banking, societe anonyme, and any successor
thereto.
Closing Date: July 30, 2003.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collection Account: A separate account established and maintained by
the Master Servicer pursuant to Section 4.01.
Compensating Interest Payment: With respect to each Mortgage Pool and
any Distribution Date, an amount equal to the excess of (x) the aggregate of any
Prepayment Interest Shortfalls with respect to such Mortgage Pool and such
Distribution Date over (y) the aggregate of any amounts required to be paid by
the applicable Servicer in respect of such shortfalls but not paid.
Component: Not applicable.
Component Certificate: Not applicable.
Component Interest Rate: Not applicable.
Component Notional Amount: Not applicable.
Component Principal Amount: Not applicable.
18
Component Writedown Amount: Not applicable.
Conventional Loan: A Mortgage Loan that is not insured by the United
States Federal Housing Administration or guaranteed by the United States
Veterans Administration.
Converted Mortgage Loan: Not applicable.
Convertible Mortgage Loan: Not applicable.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.
Cooperative Loan Documents: As to any Cooperative Loan, (i) the
Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon, which
has been filed in all places required to perfect the security interest in the
Cooperative Shares and the Proprietary Lease; and (vi) executed UCC-3 financing
statements (or copies thereof) or other appropriate UCC financing statements
required by state law, evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single-family dwelling located in a Cooperative
Property.
Corporate Trust Office: The principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at JPMorgan Chase Bank,
4 New York Plaza, 6th Floor, New York, New York 10004, Attention: Institutional
Trust Services (SASCO 2003-24A).
Corresponding Certificates: With respect to any class of REMIC 4
Interests, the Class of Certificates so designated in the Preliminary Statement
hereto.
Corresponding Class: With respect to any Class of Certificates, the
class or classes of REMIC 4 Interests so designated in the Preliminary Statement
hereto.
19
Corresponding Component: None.
Credit Score: With respect to any Mortgage Loan, a numerical assessment
of default risk with respect to the Mortgagor under such Mortgage Loan,
determined on the basis of a methodology developed by Fair, Xxxxx & Co., Inc.
Credit Support Depletion Date: The Distribution Date on which, after
giving effect to all distributions on such date, the aggregate Certificate
Principal Amount of the Subordinate Certificates is reduced to zero.
Credit Support Percentage: As to any Class of Subordinate Certificates
and any Distribution Date, the sum of the Class Percentages of all Classes of
Certificates that rank lower in priority than such Class.
Custodial Agreement: Each custodial agreement attached as Exhibit K
hereto, and any custodial agreement subsequently executed by the Trustee
substantially in the form thereof.
Custodian: Each custodian appointed by the Trustee pursuant to a
Custodial Agreement, and any successor thereto. The initial Custodians are
LaSalle Bank National Association and U.S. Bank, National Association.
Cut-off Date: July 1, 2003.
Cut-off Date Aggregate Principal Balance: With respect to the Mortgage
Loans in the Trust Fund on the Closing Date, the Aggregate Principal Balance for
all such Mortgage Loans as of the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
of the Scheduled Payment that the related Mortgagor is obligated to pay on any
Due Date as a result of any proceeding under Bankruptcy law or any similar
proceeding.
Deferred Interest: With respect to any Class of Negative Amortization
Certificates and any Distribution Date, the lesser of (x) the applicable
Interest Distribution Amount for such date (without giving effect to any
Deferred Interest) and (y) the aggregate Mortgage Loan Negative Amortization, if
any, for the related Due Period.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, which valuation
results from a proceeding under Bankruptcy law or any similar proceeding.
Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the
Trust Fund pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.
20
Deposit Date: With respect to each Distribution Date, the Business Day
immediately preceding such Distribution Date.
Depositor: Structured Asset Securities Corporation, a Delaware
corporation having its principal place of business in New York, or its
successors in interest.
Designated Rate: Not applicable.
Determination Date: With respect to each Distribution Date, the
Remittance Date immediately preceding such Distribution Date.
Discount Mortgage Loan: Not applicable.
Disqualified Organization: Either (i) the United States, (ii) any state
or political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt organization (other than a cooperative described
in section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by section 511
of the Code, (vii) any organization described in section 1381(a)(2)(C) of the
Code, (viii) any "electing large partnership" described in section 775 of the
Code, or (ix) any other entity designated as a Disqualified Organization by
relevant legislation amending the REMIC Provisions and in effect at or proposed
to be effective as of the time of the determination. In addition, a corporation
will not be treated as an instrumentality of the United States or of any state
or political subdivision thereof if all of its activities are subject to tax
and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such governmental unit.
Distribution Date: The 25th day of each month, or, if such 25th day is
not a Business Day, the next succeeding Business Day commencing in August 2003.
Due Date: With respect to any Mortgage Loan, the date on which a
Scheduled Payment is due under the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable to
the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided that
any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt or deposit obligations of such holding company or
depository institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category, or (iii) a segregated trust
account or accounts (which shall be a "special deposit account") maintained with
the Trustee or any other federal or state chartered depository institution or
trust company, acting in
21
its fiduciary capacity, in a manner acceptable to the Trustee and the Rating
Agencies. Eligible Accounts may bear interest.
Eligible Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully
guaranteed as to timely payment of principal and interest by, the
United States of America or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith
and credit of the United States of America ("Direct Obligations");
(ii) federal funds, or demand and time deposits in,
certificates of deposits of, or bankers' acceptances issued by, any
depository institution or trust company (including U.S. subsidiaries of
foreign depositories and the Trustee or any agent of the Trustee,
acting in its respective commercial capacity) incorporated or organized
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal or state banking
authorities, so long as at the time of investment or the contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt or deposit obligations of such holding
company or deposit institution, as the case may be) have been rated by
each Rating Agency in one of its two highest short-term rating
categories or one of its three highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by GNMA, FNMA or FHLMC with any
registered broker/dealer subject to Securities Investors' Protection
Corporation jurisdiction or any commercial bank insured by the FDIC, if
such broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any state thereof which have a credit rating from
each Rating Agency, at the time of investment or the contractual
commitment providing for such investment, at least equal to one of the
two highest short-term credit ratings of each Rating Agency; provided,
however, that securities issued by any particular corporation will not
be Eligible Investments to the extent that investment therein will
cause the then outstanding principal amount of securities issued by
such corporation and held as part of the Trust Fund to exceed 20% of
the sum of the Aggregate Principal Balance and the aggregate principal
amount of all Eligible Investments in the Certificate Account;
provided, further, that such securities will not be Eligible
Investments if they are published as being under review with negative
implications from either Rating Agency;
(v) commercial paper (including both non interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 180 days after the date of
issuance thereof) rated by each Rating Agency in its highest short-term
ratings;
22
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct
ownership interests in future interest or principal payments on
obligations of the United States of America or its agencies or
instrumentalities (which obligations are backed by the full faith and
credit of the United States of America) held by a custodian in
safekeeping on behalf of the holders of such receipts; and
(viii) any other demand, money market fund, common trust
fund or time deposit or obligation, or interest-bearing or other
security or investment, (A) rated in the highest rating category by
each Rating Agency (if rated by such Rating Agency) or (B) that would
not adversely affect the then current rating by either Rating Agency of
any of the Certificates. Such investments in this subsection (viii) may
include money market mutual funds or common trust funds, including,
without limitation, the X.X. Xxxxxx Prime Money Market Fund or any
other fund for which JPMorgan Chase Bank ("JPMorgan Chase"), the
Trustee or an affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent, and/or custodian or
subcustodian, notwithstanding that (i) Xxxxxx Brothers Holdings or an
affiliate thereof charges and collects fees and expenses from such
funds for services rendered, (ii) JPMorgan Chase or an affiliate
thereof charges and collects fees and expenses for services rendered
pursuant to this Agreement, and (iii) services performed for such funds
and pursuant to this Agreement may converge at any time. The Trustee
specifically authorizes JPMorgan Chase or an affiliate thereof to
charge and collect from the Trustee such fees as are collected from all
investors in such funds for services rendered to such funds (but not to
exceed investment earnings thereon);
provided, however, that (x) no such instrument shall be an Eligible Investment
if such instrument evidences either (i) a right to receive only interest
payments with respect to the obligations underlying such instrument, or (ii)
both principal and interest payments derived from obligations underlying such
instrument and the principal and interest 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 (y) each such investment must
be a "permitted investment" within the meaning of Section 860G(a)(5) of the
Code.
Employee Mortgage Loan: Each Mortgage Loan listed on Schedule B hereto.
ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Labor regulations issued pursuant
thereto in temporary or final form.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA-Restricted Certificate: Any Class R, Class B4, Class B5 or Class
B6 Certificate or any Certificate with a rating below the lowest applicable
rating permitted under the Underwriter's Exemption.
23
Escrow Account: Any account established and maintained by a Servicer
pursuant to the applicable Servicing Agreement.
Euroclear: JPMorgan Chase Bank, Brussels office, as operator of the
Euroclear System.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 6.14(a).
Excess Loss: Any Bankruptcy Loss, or portion thereof, in excess of the
then-applicable Bankruptcy Loss Limit, any Fraud Loss, or portion thereof, in
excess of the then-applicable Fraud Loss Limit, and any Special Hazard Loss, or
portion thereof, in excess of the then-applicable Special Hazard Loss Limit.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Scheduled Distribution Date: For the certificates (other than the
Class 1-PAX, Class 2-AX, Class 3-AX, Class 4-AX and Class 4-PAX) is the
Distribution Date in July 2033; for the Class 1-PAX Certificates is the
Distribution Date in May 2008; for the Class 2-AX Certificates is the
Distribution Date in May 2008; for the Class 3-AX Certificates is the
Distribution Date in May 2008 and for the Class 4-AX and Class 4-PAX
Certificates is the Distribution Date in April 2010.
Financial Intermediary: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant.
Fitch: Not applicable.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
Fraud Loss: Any Realized Loss on a Liquidated Mortgage Loan sustained
by reason of a default arising from fraud, dishonesty or misrepresentation in
connection with the related Mortgage Loan, as reported by the applicable
Servicer to the Master Servicer.
Fraud Loss Limit: With respect to any Distribution Date (x) prior to
the first anniversary of the Cut-off Date, $12,617,274.00 less the aggregate of
Fraud Losses since the Cut-off Date, from the first to the fifth anniversary of
the Cut-off Date, an amount equal to (1) the lesser of (a) the Fraud Loss Limit
as of the most recent anniversary of the Cut-off Date and (b) 1% of the
aggregate principal balance of all the Mortgage Loans as of the most recent
anniversary of the Cut-off Date less (2) the aggregate of Fraud Losses since the
most recent anniversary of the Cut-off Date. On or after the fifth anniversary
of the Cut-off Date, the Fraud Loss Limit shall be zero.
24
Global Securities: The global certificates representing the Book-Entry
Certificates.
GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.
Grantor Trust: Any of Grantor Trust I, Grantor Trust II, Grantor Trust
III or any grantor trust described in Section 10.01(l) hereof.
Grantor Trust I: That certain "grantor trust" (within the meaning of
the Grantor Trust Provisions) consisting of the Grantor Trust I Assets.
Grantor Trust I Assets: Any Prepayment Penalty Amounts collected with
respect to Pool 1.
Grantor Trust II: That certain "grantor trust" (within the meaning of
the Grantor Trust Provisions) consisting of the Grantor Trust II Assets.
Grantor Trust II Assets: Any Prepayment Penalty Amounts collected with
respect to Pool 2 and Pool 5.
Grantor Trust III: That certain "grantor trust" (within the meaning of
the Grantor Trust Provisions) consisting of the Grantor Trust III Assets.
Grantor Trust III Assets: Any Prepayment Penalty Amounts collected with
respect to Pool 4.
Grantor Trust Provisions: Subpart E of Subchapter J of the Code,
including Treasury regulation section 301.7701-4(c)(2).
Group 1: All of the Group 1 Certificates.
Group 1 Certificate: Any Class 1-A1, Class 1-A2, Class 1-A3, Class 1-AX
or Class R Certificate.
Group 2: All of the Group 2 Certificates.
Group 2 Certificate: Any Class 2-A or Class 2-AX Certificate.
Group 3: All of the Group 3 Certificates.
Group 3 Certificate: Any Class 3-A1, Class 3-A2 or Class 3-AX
Certificate.
Group 4: All of the Group 4 Certificates.
Group 4 Certificate: Any Class 4-A, Class 4-AX or Class 4-PAX
Certificate.
Group 5: All of the Group 5 Certificates.
Group 5 Certificate: Any Class 5-A Certificate.
25
Group Subordinate Amount: With respect to any Mortgage Pool and any
Distribution Date, the excess, if any, of the Pool Balance of such Mortgage Pool
for the immediately preceding Distribution Date over the sum of the aggregate of
the Certificate Principal Amounts of the Senior Certificates of the related
Certificate Group immediately prior to the related Distribution Date.
Holder or Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor, the Trustee, the Master
Servicer, any Servicer or any Affiliate thereof shall be deemed not to be
outstanding in determining whether the requisite percentage necessary to effect
any such consent has been obtained, except that, in determining whether the
Trustee shall be protected in relying upon any such consent, only Certificates
which a Responsible Officer of the Trustee knows to be so owned shall be
disregarded. The Trustee may request and conclusively rely on certifications by
the Depositor, the Master Servicer and any Servicer in determining whether any
Certificates are registered to an Affiliate of the Depositor, the Master
Servicer or such Servicer.
HUD: The United States Department of Housing and Urban Development, or
any successor thereto.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
Initial LIBOR Rate: Not applicable.
Initial Net Mortgage Rate: Not applicable.
Initial Senior Enhancement Percentage: 5.35%.
Insurance Policy: Any Primary Mortgage Insurance Policy and any
standard hazard insurance policy, flood insurance policy, earthquake insurance
policy or title insurance policy relating to the Mortgage Loans or the Mortgaged
Properties, to be in effect as of the Closing Date or thereafter during the term
of this Agreement.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy, other than amounts (i) to cover expenses incurred by or on behalf of the
applicable Servicer in connection with procuring such proceeds, (ii) to be
applied to restoration or repair of the related Mortgaged Property, or (iii)
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note.
Interest Distribution Amount: Not applicable.
26
Interest Shortfall: With respect to any Class of Certificates and any
Distribution Date, any Accrued Certificate Interest not distributed (or added to
principal) with respect to any previous Distribution Date, other than any Net
Prepayment Interest Shortfalls.
Intervening Assignments: The original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument.
Latest Possible Maturity Date: The Distribution Date in July 2033.
Xxxxxx Brothers Holdings: Xxxxxx Brothers Holdings Inc., or any
successor in interest.
LIBOR: Not applicable.
LIBOR Certificate: Not applicable.
LIBOR Component: Not applicable.
LIBOR Determination Date: Not applicable.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer or the applicable Servicer has determined that all amounts that
it expects to recover on behalf of the Trust Fund from or on account of such
Mortgage Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Master Servicer
or any Servicer in connection with the liquidation of any defaulted Mortgage
Loan and are not recoverable under the applicable Primary Mortgage Insurance
Policy, including, without limitation, foreclosure and rehabilitation expenses,
legal expenses and unreimbursed amounts expended pursuant to Sections 9.06, 9.16
or 9.22.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property (including any Additional Collateral) if the
Mortgaged Property (including such Additional Collateral) is acquired in
satisfaction of the Mortgage Loan, including any amounts remaining in the
related Escrow Account.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of
the principal balance of such Mortgage Loan at origination, or such other date
as is specified, to the Original Value thereof.
London Business Day: Not applicable.
Maintenance: With respect to any Cooperative Unit, the rent or fee paid
by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
Master Servicer: Aurora Loan Services Inc., or any successor in
interest, or if any successor master servicer shall be appointed as herein
provided, then such successor master servicer.
27
Master Servicing Fee: As to any Distribution Date and each Mortgage
Loan, an amount equal to the product of the Master Servicing Fee Rate and the
Scheduled Principal Balance of such Mortgage Loan as of the first day of the
related Due Period. The Master Servicing Fee for any Mortgage Loan shall be
payable in respect of any Distribution Date solely from the interest portion of
the Scheduled Payment or other payment or recovery with respect to such Mortgage
Loan.
Master Servicing Fee Rate: With respect to each Mortgage Loan (other
than any Participation), 0.000% per annum.
Material Defect: As defined in Section 2.02(c) hereof.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
Corporation, or any successor in interest thereto.
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,
as agent for the holder from time to time of the Mortgage Note.
Moody's: Xxxxx'x Investors Service, Inc, or any successor in interest.
Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage 100(SM) Loan: Not applicable.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan required to be delivered to the Trustee
or a Custodian pursuant to this Agreement.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold, assigned
to or deposited with the Trustee pursuant to Section 2.01 or Section 2.05,
including without limitation, each Mortgage Loan listed on the Mortgage Loan
Schedule, as amended from time to time. In addition, as used herein the term
"Mortgage Loan" includes the Participations, except where otherwise specified or
where the context requires otherwise.
Mortgage Loan Sale Agreement: The agreement, dated as of July 1, 2003,
for the sale of certain Mortgage Loans by Xxxxxx Brothers Holdings to the
Depositor.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended from
time to time to reflect the addition of Mortgage Loans to, or the deletion of
Mortgage Loans from, the Trust Fund. The Depositor shall be responsible for
providing the Trustee and the Master Servicer with all amendments to the
Mortgage Loan Schedule.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.
28
Mortgage Pool: Either Pool 1, Pool 2, Pool 3, Pool 4 or Pool 5.
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan.
Mortgaged Property: Either of (x) the fee simple interest in real
property, together with improvements thereto including any exterior improvements
to be completed within 120 days of disbursement of the related Mortgage Loan
proceeds, or (y) in the case of a Cooperative Loan, the related Cooperative
Shares and Proprietary Lease, securing the indebtedness of the Mortgagor under
the related Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization Certificate: None.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
the related Liquidation Proceeds net of unreimbursed expenses incurred in
connection with liquidation or foreclosure and unreimbursed Advances, Servicing
Advances and Servicing Fees received and retained in connection with the
liquidation of such Mortgage Loan.
Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage Rate
thereof reduced by the sum of the Trustee Fee Rate, the Master Servicing Fee
Rate, the applicable Servicing Fee Rate and the Retained Interest Rate (if
applicable).
Net Prepayment Interest Shortfall: With respect to each Mortgage Pool
and any Distribution Date, the excess, if any, of any Prepayment Interest
Shortfalls with respect to the Mortgage Loans in such Mortgage Pool for such
date over the sum of any amounts paid by the applicable Servicer with respect to
such shortfalls and any amount that is required to be paid by the Master
Servicer in respect of such shortfalls pursuant to this Agreement.
Net WAC: With respect to each Mortgage Pool and any Distribution Date,
the weighted average of Net Mortgage Rates of the Mortgage Loans in the related
Mortgage Pool at the beginning of the related Due Period, weighted on the basis
of their Scheduled Principal Balances.
Non-AP Percentage: Not applicable.
Non-AP Senior Certificate: Not applicable.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Discount Mortgage Loan: Not applicable.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-U.S. Person: Any person other than (i) a citizen or resident of the
United States; (ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the
29
United States or under the laws of the United States or of any state thereof,
including, for this purpose, the District of Columbia; (iii) a partnership (or
entity treated as a partnership for tax purposes) organized in the United States
or under the laws of the United States or of any state thereof, including, for
this purpose, the District of Columbia (unless provided otherwise by future
Treasury regulations); (iv) an estate whose income is includible in gross income
for United States income tax purposes regardless of its source; or (v) a trust,
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more U.S. Persons have authority to
control all substantial decisions of the trust. Notwithstanding the last clause
of the preceding sentence, to the extent provided in Treasury regulations,
certain trusts in existence on August 20, 1996, and treated as U.S. Persons
prior to such date, may elect to continue to be U.S. Persons.
Notional Amount: With respect to any Notional Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Class Notional
Amount of such Class of Certificates for such Distribution Date.
Notional Certificate: Any Class 1-PAX, Class 2-AX, Class 3-AX, Class
4-AX or Class 4-PAX Certificate.
Notional Component: None.
Offering Document: Either of the private placement memorandum dated
July 28, 2003 relating to the Class B4, Class B5 and Class B6 Certificates, or
the Prospectus.
Officer's Certificate: A certificate signed by the Chairman of the
Board, any Vice Chairman, the President, any Vice President or any Assistant
Vice President of a Person, and in each case delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee, and who may be in-house or outside counsel
to the Depositor, the Master Servicer or the applicable Servicer but which must
be Independent outside counsel with respect to any such opinion of counsel
concerning the transfer of any Residual Certificate or concerning certain
matters with respect to ERISA, or the taxation, or the federal income tax
status, of each REMIC. For purpose of Section 2.01(c)(i), the Opinion of Counsel
referred to therein may take the form of a memorandum of law or other acceptable
assurance.
Original Credit Support Percentage: With respect to each Class of
Subordinate Certificates, the Credit Support Percentage for such Class of
Certificates on the Closing Date.
Original Group Subordinate Amount: As to any Mortgage Pool, the Group
Subordinate Amount for such Mortgage Pool on the Closing Date.
Original Value: The lesser of (a) the Appraised Value of a Mortgaged
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor at
the time the related Mortgage Loan was originated.
Parent Power(SM) Loan: Not applicable.
30
Participation Agreement: Not applicable.
Participation: Not applicable.
Participation Schedule: Not applicable.
Participation Master Servicer: Not applicable.
Paying Agent: Any paying agent appointed pursuant to Section 3.08.
Percentage Interest: With respect to any Certificate and the related
Class, such Certificate's percentage interest in the undivided beneficial
ownership interest in the Trust Fund evidenced by all Certificates of the same
Class as such Certificate. With respect to any Certificate other than a Notional
Certificate, the Percentage Interest evidenced thereby shall equal the initial
Certificate Principal Amount thereof divided by the initial Class Principal
Amount of all Certificates of the same Class. With respect to any Notional
Certificate, the Percentage Interest evidenced thereby shall be as specified on
the face thereof.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Placement Agent: Xxxxxx Brothers Inc.
Plan Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. 2510.3-101.
Pool 1: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 1.
Pool 2: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 2.
Pool 3: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 3.
Pool 4: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 4.
Pool 4 AX Mortgage Loans: The Pool 4 Mortgage Loans other than the Pool
4 PAX Mortgage Loans and are listed on Schedule C hereto.
Pool 4 PAX Mortgage Loans: The Pool 4 Mortgage Loans that have
Prepayment Penalty Amounts for which the Seller owns the servicing rights and
are listed on Schedule D hereto.
Pool 5: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 5.
31
Pool Balance: As to each Mortgage Pool and any Distribution Date, the
sum of the Scheduled Principal Balance of each Mortgage Loan included in such
Mortgage Pool.
Pledged Asset Loan-to-Value Ratio: Not applicable.
Pledged Asset Mortgage Loan: Not applicable.
Prepayment Interest Excess: With respect to any Distribution Date and
any Principal Prepayment in full received on the Mortgage Loans serviced by
Aurora from the first day through the sixteenth day of the month during which
such Distribution Date occurs, all amounts paid in respect of interest at the
applicable Net Mortgage Rate on such Principal Prepayment in full.
Prepayment Interest Shortfall: With respect to any Distribution Date
and (x) any Principal Prepayment in part and, with respect to those Mortgage
Loans serviced by Servicers other than Aurora, any Principal Prepayment in full
and (y) any Principal Prepayment in full with respect to those Mortgage Loans
serviced by Aurora if received on or after the seventeenth day of the month
immediately preceding the month of such Distribution Date but on or before the
last day of the month immediately preceding the month of such Distribution Date,
the difference between (i) one full month's interest at the applicable Mortgage
Rate (after giving effect to any applicable Relief Act Reduction), as reduced by
the applicable Servicing Fee Rate, the Master Servicing Fee Rate and the
applicable Retained Interest Rate, if any, on the outstanding principal balance
of such Mortgage Loan immediately prior to such prepayment and (ii) the amount
of interest actually received with respect to such Mortgage Loan in connection
with such Principal Prepayment.
Prepayment Penalty Amounts: With respect to any Distribution Date, all
premiums or charges paid by the obligors under the related Mortgage Notes due to
Principal Prepayments collected by the applicable Servicer during the
immediately preceding Prepayment Period, if any.
Prepayment Period: With respect to those Mortgage Loans serviced by
Servicers other than Aurora, any Distribution Date and any Principal Prepayment,
whether in part or in full (including any liquidation), the calendar month
immediately preceding the month in which such Distribution Date occurs. With
respect to any Distribution Date and a Principal Prepayment in full (including
any liquidation) with respect to those Mortgage Loans serviced by Aurora, the
period from the seventeenth day of the month immediately preceding the month of
such Distribution Date to the sixteenth day of the month of such Distribution
Date. With respect to those Mortgage Loans serviced by Aurora, any Distribution
Date and any Principal Prepayment in part, the calendar month immediately
preceding the month in which such Distribution Date occurs.
Primary Mortgage Insurance Policy: Mortgage guaranty insurance, if any,
on an individual Mortgage Loan, as evidenced by a policy or certificate.
Principal Amount Schedules: Not applicable.
Principal Only Certificate: Not applicable.
32
Principal Prepayment: Any Mortgagor payment of principal (other than a
Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled Due
Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note or the applicable Servicing
Agreement.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated July 28, 2003, together
with the accompanying prospectus dated March 20, 2003.
Purchase Price: With respect to the repurchase of a Mortgage Loan
pursuant to this Agreement, an amount equal to the sum of (a) 100% of the unpaid
principal balance of such Mortgage Loan, (b) accrued interest thereon at the
Mortgage Rate, from the date as to which interest was last paid to (but not
including) the Due Date immediately preceding the related Distribution Date, (c)
any unreimbursed Servicing Advances with respect to such Mortgage Loan and (d)
any costs and damages incurred by the Trust Fund in connection with any
violation by such Mortgage Loan of any predatory- or abusive-lending law. The
Master Servicer or the applicable Servicer (or the Trustee, if applicable) shall
be reimbursed from the Purchase Price for any Mortgage Loan or related REO
Property for any Advances made with respect to such Mortgage Loan that are
reimbursable to the Master Servicer or such Servicer under this Agreement or the
applicable Servicing Agreement, as well as any unreimbursed Servicing Advances
and accrued and unpaid Master Servicing Fees or Servicing Fees, as applicable.
QIB: As defined in Section 3.03(c).
Qualified GIC: A guaranteed investment contract or surety bond
providing for the investment of funds in the Collection Account or the
Certificate Account and insuring a minimum, fixed or floating rate of return on
investments of such funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other corporation whose
long-term debt is rated by each Rating Agency in one of its two highest rating
categories or, if such insurance company has no long-term debt, whose claims
paying ability is rated by each Rating Agency in one of its two highest rating
categories, and whose short-term debt is rated by each Rating Agency in its
highest rating category;
(b) provide that the Trustee may exercise all of the rights under such
contract or surety bond without the necessity of taking any action by any other
Person;
(c) provide that if at any time the then current credit standing of the
obligor under such guaranteed investment contract is such that continued
investment pursuant to such contract of funds would result in a downgrading of
any rating of the Certificates, the Trustee shall terminate such contract
without penalty and be entitled to the return of all funds previously invested
33
thereunder, together with accrued interest thereon at the interest rate provided
under such contract to the date of delivery of such funds to the Trustee;
(d) provide that the Trustee's interest therein shall be transferable
to any successor trustee hereunder; and
(e) provide that the funds reinvested thereunder and accrued interest
thereon be returnable to the Collection Account or the Certificate Account, as
the case may be, not later than the Business Day prior to any Distribution Date.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the related Mortgaged Properties are located,
duly authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability is
rated by each Rating Agency in its highest rating category or whose selection as
an insurer will not adversely affect the rating of the Certificates.
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan, a Mortgage Loan that, on the date of
substitution, (i) has a Scheduled Principal Balance (together with that of any
other mortgage loan substituted for the same Deleted Mortgage Loan) as of the
Due Date in the month in which such substitution occurs not in excess of the
Scheduled Principal Balance of the related Deleted Mortgage Loan, provided,
however, that, to the extent that the Scheduled Principal Balance of such
Mortgage Loan is less than the Scheduled Principal Balance of the related
Deleted Mortgage Loan, then such differential in principal amount, together with
interest thereon at the applicable Mortgage Rate net of the applicable Master
Servicing Fee and the applicable Servicing Fee from the date as to which
interest was last paid through the end of the Due Period in which such
substitution occurs, shall be paid by the party effecting such substitution to
the Master Servicer for deposit into the Collection Account, and shall be
treated as a Principal Prepayment hereunder; (ii) has a Net Mortgage Rate not
lower than the Net Mortgage Rate of the related Deleted Mortgage Loan and will
be a Discount Mortgage Loan if the Deleted Mortgage Loan was a Discount Mortgage
Loan or a Non-Discount Mortgage Loan if the Deleted Mortgage Loan was a
Non-Discount Mortgage Loan; (iii) has a remaining stated term to maturity not
longer than, and not more than one year shorter than, the remaining term to
stated maturity of the related Deleted Mortgage Loan; (iv) (A) has a
Loan-to-Value Ratio as of the date of such substitution of not greater than 80%,
provided, however, that if the related Deleted Mortgage Loan has a Loan-to-Value
Ratio of greater than 80%, then the Loan-to-Value Ratio of such substitute
Mortgage Loan may be greater than 80% but shall not be greater than the
Loan-to-Value Ratio of the related Deleted Mortgage Loan and (B) the addition of
such substitute Mortgage Loan does not increase the weighted average
Loan-to-Value Ratio of the related Mortgage Pool by more than 5%; (v) will
comply with all of the representations and warranties relating to Mortgage Loans
set forth herein, as of the date as of which such substitution occurs; (vi) is
not a Cooperative Loan unless the related Deleted Mortgage Loan was a
Cooperative Loan; (vii) if applicable, has the same index as and a margin not
less than that of the related Deleted Mortgage Loan; (viii) has not been
delinquent for a period of more than 30 days more than once in the twelve months
immediately preceding such date of substitution; (ix) is covered by a Primary
Mortgage Insurance Policy if the related Deleted Mortgage Loan is so covered,
and the Loan-to-Value Ratio of such Mortgage Loan is greater than 80%; (x) has a
Credit Score not greater than 20 points lower than the Credit Score of
34
the related Deleted Mortgage Loan, provided, however, that if the Deleted
Mortgage Loan does not have a Credit Score, then such substitute Mortgage Loan
shall have a Credit Score equal to or greater than 700; (xi) has its initial
adjustment date after the related Reset Date; and (xii) has a gross margin no
less than the related Deleted Mortgage Loan. In the event that either one
mortgage loan is substituted for more than one Deleted Mortgage Loan or more
than one mortgage loan is substituted for one or more Deleted Mortgage Loans,
then (a) the Scheduled Principal Balance referred to in clause (i) above shall
be determined such that the aggregate Scheduled Principal Balance of all such
substitute Mortgage Loans shall not exceed the aggregate Scheduled Principal
Balance of all Deleted Mortgage Loans and (b) each of (1) the rate referred to
in clause (ii) above, (2) the remaining term to stated maturity referred to in
clause (iii) above, (3) the Loan-to-Value Ratio referred to in clause (iv) above
and (4) the Credit Score referred to in clause (x) above shall be determined on
a weighted average basis, provided that the final scheduled maturity date of any
Qualifying Substitute Mortgage Loan shall not exceed the Final Scheduled
Distribution Date of any Class of Certificates. Whenever a Qualifying Substitute
Mortgage Loan is substituted for a Deleted Mortgage Loan pursuant to this
Agreement, the party effecting such substitution shall certify such
qualification in writing to the Trustee and the Master Servicer.
Rating Agency: Each of S&P or Xxxxx'x.
Realized Loss: (a) with respect to each Liquidated Mortgage Loan, an
amount equal to (i) the unpaid principal balance of such Mortgage Loan as of the
date of liquidation, plus (ii) interest at the applicable Net Mortgage Rate from
the date as to which interest was last paid up to the last day of the month of
such liquidation, minus (iii) Liquidation Proceeds received, net of amounts that
are reimbursable to the Master Servicer or the applicable Servicer with respect
to such Mortgage Loan (other than Advances of principal and interest) including
expenses of liquidation and (b) with respect to each Mortgage Loan that has
become the subject of a Deficient Valuation, the difference between the unpaid
principal balance of such Mortgage Loan immediately prior to such Deficient
Valuation and the unpaid principal balance of such Mortgage Loan as reduced by
the Deficient Valuation. In determining whether a Realized Loss on a Liquidated
Mortgage Loan is a Realized Loss of interest or principal, Liquidation Proceeds
shall be allocated, first, to payment of expenses related to such Liquidated
Mortgage Loan (including payment of any Retained Interest), then to accrued
unpaid interest and finally to reduce the principal balance of the Mortgage
Loan.
Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the related Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.
Record Date: With respect to any Distribution Date and each Class of
Certificates, the close of business on the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.
Redemption Certificate: None.
Reference Banks: Not applicable.
35
Regulation S: Regulation S promulgated under the Act or any successor
provision thereto, in each case as the same may be amended from time to time;
and all references to any rule, section or subsection of, or definition or term
contained in, Regulation S means such rule, section, subsection, definition or
term, as the case may be, or any successor thereto, in each case as the same may
be amended from time to time.
Regulation S Global Security: The meaning specified in Section 3.01(c).
Relief Act Reduction: With respect to any Mortgage Loan as to which
there has been a reduction in the amount of interest collectible thereon as a
result of application of the Solders' and Sailors' Civil Relief Act of 1940, as
amended or any similar state law, any amount by which interest collectible on
such Mortgage Loan for the Due Date in the related Due Period is less than
interest accrued thereon for the applicable one-month period at the Mortgage
Rate without giving effect to such reduction.
REMIC: Each of REMIC 1, REMIC 2, REMIC 3, REMIC 4 and the Upper Tier
REMIC, as described in the Preliminary Statement hereto.
REMIC Provisions: The provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 86OG of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
REMIC 1: REMIC 1 as described in the Preliminary Statement hereto.
REMIC 1 Interest: Any one of the classes of REMIC 1 Interests described
in the Preliminary Statement hereto.
REMIC 1 Regular Interest: Any of the Class LT1-1 Interest, Class LT1-2
Interest, Class LT1-3 Interest, Class LT1-4AX Interest, Class LT1-4PAX Interest
and Class LT1-5 Interest.
REMIC 2: REMIC 2 as described in the Preliminary Statement hereto.
REMIC 2 Interest: Any one of the classes of REMIC 2 Interests described
in the Preliminary Statement hereto.
REMIC 2 Regular Interest: Any of the Class LT2-1 Interest, Class LT2-2
Interest, Class LT2-3 Interest, Class LT2-4AX Interest, Class LT2-4AXIO
Interest, Class LT2-4PAX Interest, Class LT2-4PAXIO Interest and Class LT2-5
Interest.
REMIC 3: REMIC 3 as described in the Preliminary Statement hereto.
REMIC 3 Interest: Any one of the classes of REMIC 3 Interests described
in the Preliminary Statement hereto.
REMIC 3 Regular Interest: Any of the Class LT3-1A Interest, Class
LT3-1B Interest, the Class LT3-2A Interest, Class LT3-2B Interest, Class LT3-3A
Interest, Class LT3-3B Interest,
36
Class LT3-4A Interest, Class LT3-4B Interest, Class LT3-5A Interest, Class
LT3-5B Interest and Class LT3-Z Interest.
REMIC 3 Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each of the REMIC 3 Regular Interests ending with the
designation "A" that is equal to the ratio among, with respect to each such
REMIC 3 Regular Interest, the excess of (x) the aggregate Scheduled Principal
Balance of the Mortgage Loans in the related Mortgage Pool over (y) the
aggregate Class Principal Amounts of the Senior Certificates of the Certificate
Group related to such Mortgage Pool.
REMIC 4: REMIC 4 as described in the Preliminary Statement hereto.
REMIC 4 Interest: Any one of the classes of REMIC 4 Interests described
in the Preliminary Statement hereto.
REMIC 4 Regular Interest: Any of the Class LT4-1A1 Interest, Class
LT4-1A2 Interest, Class LT4-1A3 Interest, Class LT4-1R Interest, Class LT4-2A
Interest, Class LT4-3A1 Interest, Class LT4-3A2 Interest, Class LT4-4A Interest,
Class LT4-5A Interest, Class LT4-B1 Interest, Class LT4-B2 Interest, Class
LT4-B3 Interest, Class LT4-B4 Interest Class LT4-B5 Interest and Class LT4-B6
Interest.
REMIC 5: REMIC 5 as described in the Preliminary Statement hereto.
REMIC 5 Regular Interests: Any of (i) the Class 1-A1, the Class 1-A2,
the Class 1-A3, the Class 1-PAX, the Class 2-A, the Class 2-AX, the Class 3-A1,
the Class 3-A2, the Class 3-AX and the Class 5-A Certificates and (ii) the
uncertificated REMIC regular interests represented by (x) the rights associated
with the Class 4-A, Class B1, Class B2, Class B3, Class B4, Class B5 and Class
B6 Certificates other than the rights to receive payments in respect of Basis
Risk Shortfalls and (y) the rights associated with the Class 4-AX and Class
4-PAX Certificates as determined without regard to the obligation to make
payments in respect of Basis Risk Shortfalls.
REMIC 5 Residual Interest: The sole class of residual interest in the
Upper-Tier REMIC, representing the rights to receive all distributions on the
Class R Certificates other than distributions in respect of the Class LT1-R,
Class LT2-R, Class LT3-R and Class LT4-R Interests.
Remittance Date: The day in each month on which each Servicer is
required to remit payments to the account maintained by the Master Servicer, as
specified in the applicable Servicing Agreement, which is the 18th day of each
month (or if such 18th day is not a Business Day, the next succeeding Business
Day).
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC
Provisions.
Repurchase Price: As defined in Section 7.01 hereof.
37
Reserve Interest Rate: Not applicable.
Reset Date: With respect to Pool 1, May 2008, with respect to Pool 2,
May 2008, with respect to Pool 3 and May 2008 with respect to Pool 4.
Residual Certificate: Any Class R Certificate.
Responsible Officer: When used with respect to the Trustee, any Vice
President, Assistant Vice President, the Secretary, any assistant secretary, any
Trust Officer, the Treasurer, or any assistant treasurer, working in its
corporate trust department and having direct responsibility for the
administration of this Agreement.
Restricted Certificate: Any Class B4, Class B5 or Class B6 Certificate
but excluding any Regulation S Global Security.
Restricted Global Security: The meaning specified in Section 3.01(c).
Retained Interest: Interest in respect of each Employee Mortgage Loan,
retained in each case by the Retained Interest Holder at the Retained Interest
Rate.
Retained Interest Holder: Xxxxxx Brothers Holdings or any successor in
interest by assignment or otherwise.
Retained Interest Rate: For each Due Period, 0.00% per annum; provided,
however, if the Mortgagor of the Employee Mortgage Loan ceases to be an employee
of Xxxxxx Brothers Inc. or its Affiliates, 0.25% per annum.
Rounding Account: Not applicable.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
or any successor in interest.
Scheduled Payment: Each scheduled payment of principal and interest (or
of interest only, if applicable) to be paid by the Mortgagor on a Mortgage Loan,
as reduced (except where otherwise specified herein) by the amount of any
related Debt Service Reduction (excluding all amounts of principal and interest
that were due on or before the Cut-off Date whenever received) and, in the case
of an REO Property, an amount equivalent to the Scheduled Payment that would
have been due on the related Mortgage Loan if such Mortgage Loan had remained in
existence. In the case of any bi-weekly payment Mortgage Loan, all payments due
on such Mortgage Loan during any Due Period shall be deemed collectively to
constitute the Scheduled Payment due on such Mortgage Loan in such Due Period.
Scheduled Principal Amount: As to any Distribution Date, an amount
equal to the amount described in clause (i)(b) of the definition of Senior
Principal Distribution Amount.
Scheduled Principal Balance: With respect to (i) any Mortgage Loan as
of any Distribution Date, the principal balance of such Mortgage Loan at the
close of business on the Cut-off Date, after giving effect to principal payments
due on or before the Cut-off Date,
38
whether or not received, less an amount equal to principal payments due after
the Cut-off Date and on or before the Due Date in the related Due Period,
whether or not received from the Mortgagor or advanced by the applicable
Servicer or the Master Servicer, and all amounts allocable to unscheduled
principal payments (including Principal Prepayments, Net Liquidation Proceeds,
Insurance Proceeds and condemnation proceeds, in each case to the extent
identified and applied prior to or during the applicable Prepayment Period) and
(ii) any REO Property as of any Distribution Date, the Scheduled Principal
Balance of the related Mortgage Loan on the Due Date immediately preceding the
date of acquisition of such REO Property by or on behalf of the Trustee (reduced
by any amount applied as a reduction of principal on the Mortgage Loan). With
respect to any Mortgage Loan as of the Cut-off Date, as specified in the
Mortgage Loan Schedule or the Participation Schedule, as the case may be.
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).
Security Agreement: With respect to any Cooperative Loan, the agreement
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note that defines the terms of the security interest in such
Cooperative Shares and the related Proprietary Lease.
Seller: Xxxxxx Brothers Holdings or any successor in interest.
Senior Certificate: Any Class 1-A1, Class 1-A2, Class 1-A3, Class
1-PAX, Class 2-A, Class 2-AX, Class 3-A1, Class 3-A2, Class 3-AX, Class 4-A,
Class 4-AX, Class 4-PAX, Class 5-A or Class R Certificate.
Senior Enhancement Percentage: For each Mortgage Pool for any
Distribution Date the percentage equivalent of a fraction, the numerator of
which is the sum of the Class Principal Amounts of the Subordinate Certificates
and the denominator of which is the sum of the Pool Balances for each Mortgage
Pool for the immediately preceding Distribution Date.
Senior Percentage: With respect to each Mortgage Pool and any
Distribution Date, the percentage equivalent of the fraction, the numerator of
which is the aggregate of the Certificate Principal Amounts of the Class 1-A1,
Class 1-A2, Class 1-A3 and Class R Certificates, in the case of Pool 1, the
Class 2-A Certificates, in the case of Pool 2, the Class 3-A1 and Class 3-A2
Certificates, in the case of Pool 3, the Class 4-A Certificates, in the case of
Pool 4 and the Class 5-A Certificates, in the case of Pool 5, in each case
immediately prior to such Distribution Date and the denominator of which is the
related Pool Balance for the immediately preceding Distribution Date.
Senior Prepayment Percentage: With respect to each Mortgage Pool and
any Distribution Date occurring during the seven years beginning on the first
Distribution Date, 100%, except as described herein below. With respect to each
Mortgage Pool and for any Distribution Date occurring on or after the seventh
anniversary of the first Distribution Date, the related Senior Percentage plus
the following percentage of the related Subordinate Percentage for such
Distribution Date: for any Distribution Date in the first year thereafter, 70%;
for any Distribution Date in the second year thereafter, 60%; for any
Distribution Date in the third year thereafter,
39
40%; for any Distribution Date in the fourth year thereafter, 20%; and for any
subsequent Distribution Date, 0%; provided, however, (i) if on any of the
foregoing Distribution Dates the Senior Enhancement Percentage is less than the
Initial Senior Enhancement Percentage, the Senior Prepayment Percentage for each
Mortgage Pool on such Distribution Date shall once again equal 100%, (ii) unless
the condition described in (i) has occurred, if on any Distribution Date before
the Distribution Date in August 2006, prior to giving effect to any
distributions on such Distribution Date, the Senior Enhancement Percentage for
such Distribution Date is greater than or equal to twice the Initial Senior
Enhancement Percentage, then the Senior Prepayment Percentage for each Mortgage
Pool for such Distribution Date will equal the related Senior Percentage plus
50% of the related Subordinate Percentage for such Mortgage Pool and (iii)
unless the condition described in (i) has occurred, if on any Distribution Date
on or after the Distribution Date in August 2006, prior to giving effect to any
distributions on such Distribution Date, the Senior Enhancement Percentage for
such Distribution Date is greater than or equal to twice the Initial Senior
Enhancement Percentage, then the Senior Prepayment Percentage for each Mortgage
Pool on such Distribution Date will equal the related Senior Percentage.
Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage for any Mortgage Pool below the respective levels in effect for the
most recent prior period set forth in the paragraph above shall be effective on
any Distribution Date if, as of the first Distribution Date as to which any such
decrease applies, (i) the average outstanding principal balance on such
Distribution Date and for the preceding five Distribution Dates of all Mortgage
Loans in the related Mortgage Pool that were delinquent 60 days or more
(including for this purpose any Mortgage Loans in foreclosure and the Scheduled
Payments that would have been due on Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust Fund if the related
Mortgage Loan had remained in existence) is greater than or equal to 50% of the
applicable Group Subordinate Amount immediately prior to such Distribution Date
or (ii) cumulative Realized Losses with respect to the Mortgage Loans in the
related Mortgage Pool exceed (a) with respect to the Distribution Date prior to
the third anniversary of the first Distribution Date, 20% of the related
Original Group Subordinate Amount, (b) with respect to the Distribution Date on
or after the third anniversary and prior to the sixth anniversary of the first
Distribution Date, 30% of the related Original Group Subordinate Amount, (c)
with respect to the Distribution Date on or after the sixth anniversary and
prior to the seventh anniversary of the first Distribution Date, 35% of the
related Original Group Subordinate Amount, (d) with respect to the Distribution
Date on or after the seventh anniversary and prior to the eighth anniversary of
the first Distribution Date, 40% of the related Original Group Subordinate
Amount, (e) with respect to the Distribution Date on or after the eighth
anniversary and prior to the ninth anniversary of the first Distribution Date,
45% of the related Original Group Subordinate Amount, and (f) with respect to
the Distribution Date on or after the ninth anniversary of the first
Distribution Date or thereafter, 50% of the related Original Group Subordinate
Amount. After the Class Principal Amount of each Class of Senior Certificates in
any Certificate Group has been reduced to zero, the Senior Prepayment Percentage
for the related Mortgage Pool shall be 0%.
Senior Principal Distribution Amount: For each Certificate Group and
any Distribution Date, the sum of the following amounts:
40
(i) the product of (a) the related Senior Percentage for
such date and (b) the principal portion of each Scheduled Payment
(without giving effect to any Debt Service Reduction occurring prior to
the Bankruptcy Coverage Termination Date), on each Mortgage Loan in the
related Mortgage Pool due during the related Due Period;
(ii) the product of (a) the related Senior Prepayment
Percentage for such date and (b) each of the following amounts: (1)
each Principal Prepayment on the Mortgage Loans in the related Mortgage
Pool collected during the related Prepayment Period, (2) each other
unscheduled collection, including Insurance Proceeds and Net
Liquidation Proceeds (other than with respect to any Mortgage Loan in
the related Mortgage Pool that was finally liquidated during the
related Prepayment Period) representing or allocable to recoveries of
principal received during the related Prepayment Period, and (3) the
principal portion of all proceeds of the purchase of any Mortgage Loan
in the related Mortgage Pool (or, in the case of a permitted
substitution, amounts representing a principal adjustment) actually
received by the Trustee during the related Prepayment Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment Period, the lesser of
(a) the related net Liquidation Proceeds allocable to principal and (b)
the product of the related Senior Prepayment Percentage for such date
and the Scheduled Principal Balance of such related Mortgage Loan at
the time of liquidation; and
(iv) any amounts described in clauses (i) through (iii)
for any previous Distribution Date that remain unpaid.
If on any Distribution Date the Class Principal Amount of each Class of Senior
Certificates in any Certificate Group has been reduced to zero, the Senior
Principal Distribution Amount for such Certificate Group for such date
(following such reduction) and each subsequent Distribution Date shall be zero.
Servicer: Any Servicer that has entered into any of the Servicing
Agreements attached as Exhibit E hereto, or any successor in interest.
Initially, the Servicers are Aurora, Cendant Mortgage Corporation, Colonial
Savings, F.A., and Xxxxx Fargo Home Mortgage, Inc.
Servicing Advances: Expenditures incurred by a Servicer in connection
with the liquidation or foreclosure of a Mortgage Loan which are eligible for
reimbursement under the applicable Servicing Agreement.
Servicing Agreement: Each Servicing Agreement between a Servicer and
the Seller, dated as of July 1, 2003, attached hereto in Exhibit E, and any
other servicing agreement entered into between a successor servicer and the
Seller or the Trustee pursuant to the terms hereof.
Servicing Fee: The Servicing Fee specified in the applicable Servicing
Agreement.
Servicing Fee Rate: With respect to a Servicer, the rate specified in
the applicable Servicing Agreement.
41
Servicing Officer: Any officer of the Master Servicer involved in or
responsible for the administration and servicing or master servicing of the
Mortgage Loans whose name appears on a list of servicing officers furnished by
the Master Servicer to the Trustee, as such list may from time to time be
amended.
Special Hazard Loss: With respect to the Mortgage Loans, (x) any
Realized Loss arising out of any direct physical loss or damage to a Mortgaged
Property which is caused by or results from any cause, exclusive of any loss
covered by a hazard policy or a flood insurance policy required to be maintained
in respect of such Mortgaged Property and any loss caused by or resulting from
(i) normal wear and tear, (ii) conversion or other dishonest act on the part of
the Trustee, the Master Servicer, any Servicer or any of their agents or
employees, or (iii) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues, or (y) any
Realized Loss arising from or related to the presence or suspected presence of
hazardous wastes, or hazardous substances on a Mortgaged Property unless such
loss is covered by a hazard policy or flood insurance policy required to be
maintained in respect of such Mortgaged Property, in any case, as reported by
any Servicer to the Master Servicer.
Special Hazard Loss Limit: As of the Cut-off Date, $7,523,300.00. which
amount shall be reduced from time to time to an amount equal on any Distribution
Date to the lesser of (a) the greatest of (i) 1% of the aggregate of the
Scheduled Principal Balances of the Mortgage Loans; (ii) twice the Scheduled
Principal Balance of the Mortgage Loan having the highest Scheduled Principal
Balance, and (iii) the aggregate Scheduled Principal Balances of the Mortgage
Loans secured by Mortgaged Properties located in the single California postal
zip code area having the highest aggregate Scheduled Principal Balance of
Mortgage Loans of any such postal zip code area and (b) the Special Hazard Loss
Limit as of the Closing Date less the amount, if any, of Special Hazard Losses
incurred with respect to Mortgage Loans since the Closing Date.
Specified Rating: Not applicable.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Subordinate Certificate: Any Class B Certificate.
Subordinate Certificate Writedown Amount: As to any Distribution Date,
the amount by which (i) the sum of the Class Principal Amounts of all the
Certificates (after giving effect to the distribution of principal and the
allocation of Realized Losses in reduction of the Certificate Principal Amounts
of the Certificates on such Distribution Date) exceeds (ii) the aggregate
Scheduled Principal Balance of the Mortgage Loans for such Distribution Date.
Subordinate Class Percentage: With respect to any Distribution Date and
any Class of Subordinate Certificates, the percentage obtained by dividing the
Class Principal Amount of such Class immediately prior to such Distribution Date
by the aggregate Certificate Principal Amount of all Subordinate Certificates
immediately prior to such Distribution Date.
Subordinate Component Percentage: Not applicable.
Subordinate Percentage: With respect to each Mortgage Pool and any
Distribution Date, the difference between 100% and the related Senior Percentage
for such Distribution Date.
42
Subordinate Prepayment Percentage: With respect to each Mortgage Pool
and any Distribution Date, the difference between 100% and the related Senior
Prepayment Percentage for such Distribution Date.
Subordinate Principal Distribution Amount: For each Mortgage Pool and
any Distribution Date, the sum of the following:
(i) the product of (a) the related Subordinate Percentage
for such date and (b) the principal portion of each Scheduled Payment
(without giving effect to any Debt Service Reduction occurring prior to
the applicable Bankruptcy Coverage Termination Date) on each Mortgage
Loan in the related Mortgage Pool due during the related Due Period;
(ii) the product of (a) the related Subordinate Prepayment
Percentage for such date and (b) each of the following amounts: (1)
each Principal Prepayment on the Mortgage Loans in the related Mortgage
Pool collected during the related Prepayment Period, (2) each other
unscheduled collection, including Insurance Proceeds and Net
Liquidation Proceeds (other than with respect to any Mortgage Loan in
the related Mortgage Pool that was finally liquidated during the
related Prepayment Period) representing or allocable to recoveries of
principal received during the related Prepayment Period, and (3) the
principal portion of all proceeds of the purchase of any Mortgage Loan
in the related Mortgage Pool (or, in the case of a permitted
substitution, amounts representing a principal adjustment) actually
received by the Trustee during the related Prepayment Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment Period, the related
net Liquidation Proceeds allocable to principal less any related amount
paid pursuant to subsection (iii) of the definition of Senior Principal
Distribution Amount for the related Certificate Group; and
(iv) any amounts described in clauses (i) through (iii)
for any previous Distribution Date that remain unpaid;
Surety: Not applicable.
Surety Bond: Not applicable.
Tax Matters Person: The "tax matters person" as specified in the REMIC
Provisions.
Title Insurance Policy: A title insurance policy maintained with
respect to a Mortgage Loan.
Transfer Agreement: As defined in the Mortgage Loan Sale Agreement.
Transferor: Each seller of Mortgage Loans to Xxxxxx Brothers Holdings
pursuant to a Transfer Agreement.
43
Trust Fund: The corpus of the trust created pursuant to this Agreement,
consisting of the Mortgage Loans (other than any Retained Interest), the
assignment of the Depositor's rights under the Mortgage Loan Sale Agreement and
the Participation Agreement, the Participations, the Additional Collateral, such
amounts as shall from time to time be held in the Collection Account, the
Certificate Account, any Escrow Account, the Insurance Policies, any REO
Property and the other items referred to in, and conveyed to the Trustee under,
Section 2.01(a).
Trust Rate: Not applicable.
Trust REMIC: Any of REMIC 1, REMIC 2, REMIC 3, REMIC 4 or REMIC 5.
Trustee: JPMorgan Chase Bank, not in its individual capacity but solely
as Trustee, or any successor in interest, or if any successor trustee or any
co-trustee shall be appointed as herein provided, then such successor trustee
and such co-trustee, as the case may be.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of the Trustee Fee Rate and the aggregate Scheduled Principal Balance of
the related Mortgage Loans as of the first day of the related Due Period in the
aggregate. For purposes of payment of the Trustee Fee pursuant to Section
5.02(a)(i), the Trustee Fee shall be calculated separately, by Mortgage Pool.
Trustee Fee Rate: 0.0075% per annum.
Undercollateralization Distribution: As defined in Section 5.02(f)(ii).
Undercollateralized Group: With respect to any Distribution Date, the
Senior Certificates of any Certificate Group as to which the aggregate
Certificate Principal Amount thereof, after giving effect to distributions
pursuant to Sections 5.02(a) and (b) on such date, is greater than the Pool
Balance of the related Mortgage Pool for such Distribution Date.
Underlying Subordinate Rate: For Mortgage Pool 1 for each Distribution
Date, will be the Pool 1 Net WAC; for Mortgage Pool 2 for each Distribution
Date, will be the Pool 2 Net WAC; for Mortgage Pool 3 for each Distribution
Date, will be the Pool 3 Net WAC; for Mortgage Pool 4 (A) for each Distribution
Date on or prior to the Distribution Date in April 2010, will be the lesser of
(x) 4.31% and (y) the Adjusted Net WAC for Pool 4 and (B) for each Distribution
Date after the Distribution Date in April 2010, will be the Pool 4 Net WAC; and
for Mortgage Pool 5 for each Distribution Date, will be the Pool 5 Net WAC.
Underwriter's Exemption: Prohibited Transaction Exemption 91-14, 56
Fed. Reg. 7413 (1991), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
Unpaid Basis Risk Shortfall: For any Distribution Date and any of the
Class 4-A Certificates or any Class of Subordinate Certificates, the sum of all
Basis Risk Shortfalls for such Class for prior Distribution Dates in respect of
which no payment of amounts that would otherwise have been distributed to the
Class 4-AX or Class 4-PAX Certificates has been made.
Upper Tier REMIC: One of the separate REMICs as described in the
Preliminary Statement hereto.
44
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement
until the Class Notional Amount of each Class of Notional Certificates has been
reduced to zero, 93% of all Voting Interests shall be allocated to the
Certificates other than the Notional Certificates and the Class P Certificates,
and 5% of all Voting Interests shall be allocated to the Notional Certificates,
1% shall be allocated to the Class P-I Certificates and 1% shall be allocated to
the Class P-II Certificates. After the Class Notional Amount of each Class of
Notional Certificates has been reduced to zero, 98% of all Voting Interests
shall be allocated to the remaining Classes of Certificates other than the Class
P Certificates. Voting Interests allocated to the Notional Certificates shall be
allocated among the Classes of such Certificates (and among the Certificates of
each such Class) in proportion to their Class Notional Amounts (or Notional
Amounts). Voting Interests shall be allocated among the other Classes of
Certificates (and among the Certificates of each such Class) in proportion to
their Class Principal Amounts (or Certificate Principal Amounts).
Section 1.02. Calculations Respecting Mortgage Loans.
Calculations required to be made pursuant to this Agreement with
respect to any Mortgage Loan in the Trust Fund shall be made based upon current
information as to the terms of the Mortgage Loans and reports of payments
received from the Mortgagor on such Mortgage Loans and payments to be made to
the Trustee by the Master Servicer as supplied to the Trustee by the Master
Servicer. The Trustee shall not be required to recompute, verify or recalculate
the information supplied to it by the Master Servicer.
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Concurrently with the execution and delivery of this
Agreement, the Depositor does hereby transfer, assign, set over, deposit with
and otherwise convey to the Trustee, without recourse, subject to Sections 2.02,
2.04, 2.05 and 2.06, in trust, all the right, title and interest of the
Depositor in and to the Mortgage Loans (including the Participations). Such
conveyance includes, without limitation, the right to all distributions of
principal and interest received on or with respect to the Mortgage Loans on and
after the Cut-off Date (other than payments of principal and interest due on or
before such date), and all such payments due after such date but received prior
to such date and intended by the related Mortgagors to be applied after such
date, together with all of the Depositor's right, title and interest in and to
the Collection Account and all amounts from time to time credited to and the
proceeds of the Collection Account, the Certificate Account and all amounts from
time to time credited to and the proceeds of the Certificate Account, any Escrow
Account established pursuant to Section 9.06 hereof and all amounts from time to
time credited to and the proceeds of any such Escrow Account, any REO Property
and the proceeds thereof, the Depositor's rights under any Insurance Policies
related to the Mortgage Loans, and the Depositor's security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties and any Additional Collateral, and any
45
proceeds of the foregoing, to have and to hold, in trust; and the Trustee
declares that, subject to the review provided for in Section 2.02, it has
received and shall hold the Trust Fund, as trustee, in trust, for the benefit
and use of the Holders of the Certificates and for the purposes and subject to
the terms and conditions set forth in this Agreement, and, concurrently with
such receipt, has caused to be executed, authenticated and delivered to or upon
the order of the Depositor, in exchange for the Trust Fund, Certificates in the
authorized denominations evidencing the entire ownership of the Trust Fund.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest under
the Mortgage Loan Sale Agreement; including all rights of the Seller under the
applicable Servicing Agreement to the extent assigned under the Mortgage Loan
Sale Agreement. The Trustee hereby accepts such assignment, and shall be
entitled to exercise all rights of the Depositor under the Mortgage Loan Sale
Agreement as if, for such purpose, it were the Depositor. The foregoing sale,
transfer, assignment, set-over, deposit and conveyance does not and is not
intended to result in creation or assumption by the Trustee of any obligation of
the Depositor, the Seller, or any other Person in connection with the Mortgage
Loans or any other agreement or instrument relating thereto except as
specifically set forth herein.
In addition, with respect to any Pledged Asset Mortgage Loan, the
Depositor does hereby transfer, assign, set-over and otherwise convey to the
Trustee without recourse (except as provided herein) (i) its rights as assignee
under any security agreements, pledge agreements or guarantees relating to the
Additional Collateral supporting any Pledged Asset Mortgage Loan, (ii) its
security interest in and to any Additional Collateral, (iii) its right to
receive payments in respect of any Pledged Asset Mortgage Loan pursuant to the
Additional Collateral Servicing Agreement, and (iv) its rights as beneficiary
under the Surety Bond in respect of any Pledged Asset Mortgage Loan.
Notwithstanding anything to the contrary in this Agreement, the Trust Fund shall
not obtain title to or beneficial ownership of any Additional Collateral as a
result of or in lieu of the disposition thereof or otherwise.
(b) In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, or cause to be delivered to and
deposited with, the Trustee, and/or any custodian acting on the Trustee's
behalf, if applicable, the following documents or instruments with respect to
each Mortgage Loan (each a "Mortgage File") so transferred and assigned (other
than the Participations):
(i) with respect to each Mortgage Loan, the original
Mortgage Note endorsed without recourse in proper form to the order of
the Trustee, or in blank (in each case, with all necessary intervening
endorsements as applicable);
(ii) the original of any guarantee, security agreement or
pledge agreement relating to any Additional Collateral and executed in
connection with the Mortgage Note, assigned to the Trustee;
(iii) with respect to each Mortgage Loan other than a
Cooperative Loan, the original recorded Mortgage with evidence of
recording indicated thereon and the original recorded power of
attorney, if the Mortgage was executed pursuant to a power of
46
attorney, with evidence of recording thereon or, if such Mortgage or
power of attorney has been submitted for recording but has not been
returned from the applicable public recording office, has been lost or
is not otherwise available, a copy of such Mortgage or power of
attorney, as the case may be, certified to be a true and complete copy
of the original submitted for recording. If, in connection with any
Mortgage Loan, the Depositor cannot deliver the Mortgage with evidence
of recording thereon on or prior to the Closing Date because of a delay
caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost, the
Depositor shall deliver or cause to be delivered to the Trustee (or its
custodian), in the case of a delay due to recording, a true copy of
such Mortgage, pending delivery of the original thereof, together with
an Officer's Certificate of the Depositor certifying that the copy of
such Mortgage delivered to the Trustee (or its custodian) is a true
copy and that the original of such Mortgage has been forwarded to the
public recording office, or, in the case of a Mortgage that has been
lost, a copy thereof (certified as provided for under the laws of the
appropriate jurisdiction) and a written Opinion of Counsel acceptable
to the Trustee and the Depositor that an original recorded Mortgage is
not required to enforce the Trustee's interest in the Mortgage Loan;
(iv) the original of each assumption, modification or
substitution agreement, if any, relating to the Mortgage Loans, or, as
to any assumption, modification or substitution agreement which cannot
be delivered on or prior to the Closing Date because of a delay caused
by the public recording office where such assumption, modification or
substitution agreement has been delivered for recordation, a photocopy
of such assumption, modification or substitution agreement, pending
delivery of the original thereof, together with an Officer's
Certificate of the Depositor certifying that the copy of such
assumption, modification or substitution agreement delivered to the
Trustee (or its custodian) is a true copy and that the original of such
agreement has been forwarded to the public recording office;
(v) with respect to each Non-MERS Mortgage Loan other
than a Cooperative Loan, the original Assignment of Mortgage for each
Mortgage Loan;
(vi) if applicable, such original intervening assignments
of the Mortgage, notice of transfer or equivalent instrument (each, an
"Intervening Assignment"), as may be necessary to show a complete chain
of assignment from the originator, or, in the case of an Intervening
Assignment that has been lost, a written Opinion of Counsel acceptable
to the Trustee that such original Intervening Assignment is not
required to enforce the Trustee's interest in the Mortgage Loans;
(vii) the original Primary Mortgage Insurance Policy or
certificate, if private mortgage guaranty insurance is required;
(viii) with respect to each Mortgage Loan other than a
Cooperative Loan, the original mortgagee title insurance policy or
attorney's opinion of title and abstract of title;
(ix) the original of any security agreement, chattel
mortgage or equivalent executed in connection with the Mortgage or as
to any security agreement, chattel
47
mortgage or their equivalent that cannot be delivered on or prior to
the Closing Date because of a delay caused by the public recording
office where such document has been delivered for recordation, a
photocopy of such document, pending delivery of the original thereof,
together with an Officer's Certificate of the Depositor certifying that
the copy of such security agreement, chattel mortgage or their
equivalent delivered to the Trustee (or its custodian) is a true copy
and that the original of such document has been forwarded to the public
recording office; and
(x) with respect to any Cooperative Loan, the Cooperative
Loan Documents.
The parties hereto acknowledge and agree that the form of endorsement
attached hereto as Exhibit B-4 is intended to effect the transfer to the
Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and
the Mortgages.
With respect to each Participation, the Depositor does hereby deliver
to, and deposit with, or cause to be delivered to and deposited with, the
Trustee, and/or any custodian acting on the Trustee's behalf, a copy of the
Participation Agreement and the original Participation issued to the Trustee.
(c) (i) Assignments of Mortgage with respect to each Non-MERS
Mortgage Loan other than a Cooperative Loan shall be recorded;
provided, however, that such Assignments need not be recorded if, in
the Opinion of Counsel (which must be from Independent counsel)
acceptable to the Trustee and the Rating Agencies, recording in such
states is not required to protect the Trustee's interest in the related
Non-MERS Mortgage Loans. Subject to the preceding sentence, as soon as
practicable after the Closing Date (but in no event more than 3 months
thereafter except to the extent delays are caused by the applicable
recording office), the Trustee (or its Custodian), at the expense of
the Depositor and with the cooperation of the applicable Servicer,
shall cause to be properly recorded by such Servicer in each public
recording office where the related Mortgages are recorded each
Assignment of Mortgage referred to in subsection (b)(v) above with
respect to a Non-MERS Mortgage Loan. With respect to each Cooperative
Loan, the Trustee (or its Custodian), at the expense of the Depositor
and with the cooperation of the applicable Servicer, shall cause such
Servicer to take such actions as are necessary under applicable law in
order to perfect the interest of the Trustee in the related Mortgaged
Property.
(ii) With respect to each MERS Mortgage Loan, the Trustee
(or its applicable Custodian), at the expense of the Depositor and with
the cooperation of the applicable Servicer, shall cause to be taken
such actions by such Servicer 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.
(d) In instances where a Title Insurance Policy is required to be
delivered to the Trustee, or to the applicable Custodian on behalf of the
Trustee, under clause (b)(viii) above and is not so delivered, the Depositor
will provide a copy of such Title Insurance Policy to the
48
Trustee, or to the applicable Custodian on behalf of the Trustee, as promptly as
practicable after the execution and delivery hereof, but in any case within 180
days of the Closing Date.
(e) For Mortgage Loans (if any) that have been prepaid in full
after the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers to the Trustee, or to the
applicable Custodian on behalf of the Trustee, an Officer's Certificate which
shall include a statement to the effect that all amounts received in connection
with such prepayment that are required to be deposited in the applicable
Collection Account pursuant to Section 4.01 have been so deposited. All original
documents that are not delivered to the Trustee or the applicable Custodian on
behalf of the Trustee shall be held by the Master Servicer or the applicable
Servicer in trust for the benefit of the Trustee and the Certificateholders.
Section 2.02. Acceptance of Trust Fund by Trustee: Review of
Documentation for Trust Fund.
(a) The Trustee or the applicable Custodian on behalf of the
Trustee, by execution and delivery hereof, acknowledges receipt of the
Participations and the Mortgage Files pertaining to the Mortgage Loans listed on
the Mortgage Loan Schedule, subject to review thereof by the Trustee, or by the
applicable Custodian on behalf of the Trustee, under this Section 2.02. The
Trustee, or the applicable Custodian on behalf of the Trustee, will execute and
deliver to the Trustee, the Depositor and the Master Servicer on the Closing
Date an Initial Certification in the form annexed hereto as Exhibit B-1 (or in
the form annexed to the applicable Custodial Agreement as Exhibit B-1, as
applicable).
(b) Within 45 days after the Closing Date, the applicable
Custodian will, on behalf of the Trustee and for the benefit of Holders of the
Certificates, review each Mortgage File to ascertain that all required documents
set forth in Section 2.01 have been received and appear on their face to contain
the requisite signatures by or on behalf of the respective parties thereto, and
shall deliver to the Trustee, the Depositor and the Master Servicer an Interim
Certification in the form annexed hereto as Exhibit B-2 (or in the form annexed
to the applicable Custodial Agreement as Exhibit B-2, as applicable) to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan prepaid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (i) all
of the applicable documents specified in Section 2.01(b) are in its possession
and (ii) such documents have been reviewed by it and appear to relate to such
Mortgage Loan. The Trustee, or the applicable Custodian on behalf of the
Trustee, shall make sure that the documents are executed and endorsed, but shall
be under no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that the same are valid,
binding, legally effective, properly endorsed, genuine, enforceable or
appropriate for the represented purpose or that they have actually been recorded
or are in recordable form or that they are other than what they purport to be on
their face. Neither the Trustee nor any Custodian shall have any responsibility
for verifying the genuineness or the legal effectiveness of or authority for any
signatures of or on behalf of any party or endorser.
(c) If in the course of the review described in paragraph (b)
above the Trustee or the applicable Custodian discovers any document or
documents constituting a part of a Mortgage
49
File that is missing, does not appear regular on its face (i.e., is mutilated,
damaged, defaced, torn or otherwise physically altered) or appears to be
unrelated to the Mortgage Loans identified in the Mortgage Loan Schedule (each,
a "Material Defect"), the Trustee, or the applicable Custodian on behalf of the
Trustee, shall promptly identify the Mortgage Loan to which such Material Defect
relates in the Interim Certificate delivered to the Depositor or the Master
Servicer (and to the Trustee). Within 90 days of its receipt of such notice, the
Depositor shall be required to cure such Material Defect (and, in such event,
the Depositor shall provide the Trustee with an Officer's Certificate confirming
that such cure has been effected). If the Depositor does not so cure such
Material Defect, it shall, if a loss has been incurred with respect to such
Mortgage Loan that would, if such Mortgage Loan were not purchased from the
Trust Fund, constitute a Realized Loss, and such loss is attributable to the
failure of the Depositor to cure such Material Defect, repurchase the related
Mortgage Loan from the Trust Fund at the Purchase Price. A loss shall be deemed
to be attributable to the failure of the Depositor to cure a Material Defect if,
as determined by the Depositor, upon mutual agreement with the Servicer acting
in good faith, absent such Material Defect, such loss would not have been
incurred. Within the two-year period following the Closing Date, the Depositor
may, in lieu of repurchasing a Mortgage Loan pursuant to this Section 2.02,
substitute for such Mortgage Loan a Qualifying Substitute Mortgage Loan subject
to the provisions of Section 2.05. The failure of the Trustee or the applicable
Custodian to give the notice contemplated herein within 45 days after the
Closing Date shall not affect or relieve the Depositor of its obligation to
repurchase any Mortgage Loan pursuant to this Section 2.02 or any other Section
of this Agreement requiring the repurchase of Mortgage Loans from the Trust
Fund.
(d) Within 180 days following the Closing Date, the Trustee, or
the applicable Custodian, shall deliver to the Trustee, the Depositor and the
Master Servicer a Final Certification substantially in the form annexed hereto
as Exhibit B-3 (or in the form annexed to the applicable Custodial Agreement as
Exhibit B-3, as applicable) evidencing the completeness of the Mortgage Files in
its possession or control, with any exceptions noted thereto.
(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.
(f) Each of the parties hereto acknowledges that the applicable
Custodian shall perform the applicable review of the Mortgage Loans and deliver
the respective certifications thereof as provided in this Section 2.02.
Section 2.03. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the Trustee,
for the benefit of Certificateholders, and to the Master Servicer, as of the
Closing Date or such other date as is specified, that:
(i) the Depositor is a corporation duly organized,
validly existing and in good standing under the laws governing its
creation and existence and has full corporate power and authority to
own its property, to carry on its business as presently conducted, to
enter
50
into and perform its obligations under this Agreement, and to create
the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Depositor; neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Depositor or its properties or the
certificate of incorporation or bylaws of the Depositor;
(iii) the execution, delivery and performance by the
Depositor of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental
authority or agency, except such as has been obtained, given, effected
or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered
by the Depositor and, assuming due authorization, execution and
delivery by the Trustee and the Master Servicer, constitutes a valid
and binding obligation of the Depositor enforceable against it in
accordance with its terms except as such enforceability may be subject
to (A) applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally and (B)
general principles of equity regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending
or, to the knowledge of the Depositor, threatened or likely to be
asserted against or affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Agreement or (B) with
respect to any other matter which in the judgment of the Depositor will
be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect it or its
business, assets, operations or condition, financial or otherwise, or
adversely affect its ability to perform its obligations under this
Agreement; and
(vi) immediately prior to the transfer and assignment of
the Mortgage Loans to the Trustee, the Depositor was the sole owner of
record and holder of each Mortgage Loan, and the Depositor had good and
marketable title thereto, and had full right to transfer and sell each
Mortgage Loan to the Trustee free and clear, subject only to (1) liens
of current real property taxes and assessments not yet due and payable
and, if the related Mortgaged Property is a condominium unit, any lien
for common charges permitted by statute, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage acceptable to
mortgage lending institutions in the area in which the related
Mortgaged Property is located and specifically referred to in the
lender's Title Insurance Policy or attorney's opinion of title and
abstract of title delivered to the originator of such Mortgage Loan,
and (3) such other matters to which like properties are commonly
subject
51
which do not, individually or in the aggregate, materially interfere
with the benefits of the security intended to be provided by the
Mortgage, of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest, and had full right and
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement.
(b) The representations and warranties of each Transferor with
respect to the related Mortgage Loans in the applicable Transfer Agreement,
which have been assigned to the Trustee hereunder, were made as of the date
specified in the applicable Transfer Agreement (or underlying agreement, if such
Transfer Agreement is in the form of an assignment of a prior agreement). To the
extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of both (i) a representation or warranty of the applicable
Transferor under the applicable Transfer Agreement and (ii) a representation or
warranty of Xxxxxx Brothers Holdings under the Mortgage Loan Sale Agreement, the
only right or remedy of the Trustee or of any Certificateholder shall be the
Trustee's right to enforce the obligations of the applicable Transferor under
any applicable representation or warranty made by it. The Trustee acknowledges
that Xxxxxx Brothers Holdings shall have no obligation or liability with respect
to any breach of a representation or warranty made by it with respect to the
Mortgage Loans if the fact, condition or event constituting such breach also
constitutes a breach of a representation or warranty made by the applicable
Transferor in the applicable Transfer Agreement, without regard to whether such
Transferor fulfills its contractual obligations in respect of such
representation or warranty. The Trustee further acknowledges that the Depositor
shall have no obligation or liability with respect to any breach of any
representation or warranty with respect to the Mortgage Loans (except as set
forth in Section 2.03(a)(vi)) under any circumstances.
Section 2.04. Discovery of Breach.
It is understood and agreed that the representations and warranties (i)
set forth in Section 2.03, (ii) of Xxxxxx Brothers Holdings set forth in the
Mortgage Loan Sale Agreement and assigned to the Trustee by the Depositor
hereunder and (iii) of each Transferor, assigned by Xxxxxx Brothers Holdings to
the Depositor pursuant to the Mortgage Loan Sale Agreement and assigned to the
Trustee by the Depositor hereunder shall each survive delivery of the Mortgage
Files and the Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue throughout the term of this Agreement. Upon discovery by either
the Depositor, the Master Servicer or the Trustee of a breach of any of such
representations and warranties that adversely and materially affects the value
of the related Mortgage Loan, the party discovering such breach shall give
prompt written notice to the other parties. Within 90 days of the discovery of a
breach of any representation or warranty given to the Trustee by the Depositor,
any Transferor, or Xxxxxx Brothers Holdings and assigned to the Trustee, the
Depositor, such Transferor, or Xxxxxx Brothers Holdings, as applicable, shall
either (a) cure such breach in all material respects, (b) repurchase such
Mortgage Loan or any property acquired in respect thereof from the Trustee at
the Purchase Price or (c) within the two year period following the Closing Date,
substitute a Qualifying Substitute Mortgage Loan for the affected Mortgage Loan.
In the event of discovery of a breach of any representation and warranty of any
Transferor assigned to the Trustee, the Trustee shall enforce its rights under
the applicable Transfer Agreement and the Mortgage Loan Sale Agreement for the
benefit of Certificateholders. As provided in the Mortgage Loan Sale Agreement,
if any Transferor substitutes for a Mortgage Loan for which
52
there is a breach of any representations and warranties in the related Transfer
Agreement which adversely and materially affects the value of such Mortgage Loan
and such substitute mortgage loan is not a Qualifying Substitute Mortgage Loan,
under the terms of the Mortgage Loan Sale Agreement, Xxxxxx Brothers Holdings
will, in exchange for such substitute Mortgage Loan, (i) provide the applicable
Purchase Price for the affected Mortgage Loan or (ii) within two years of the
Closing Date, substitute such affected Mortgage Loan with a Qualifying
Substitute Mortgage Loan.
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans.
(a) With respect to any Mortgage Loan repurchased by the Depositor
pursuant to this Agreement, by Xxxxxx Brothers Holdings pursuant to the
applicable Mortgage Loan Sale Agreement or by any Transferor pursuant to the
applicable Transfer Agreement, the principal portion of the funds received by
the Master Servicer in respect of such repurchase of a Mortgage Loan will be
considered a Principal Prepayment and shall be deposited in the Collection
Account pursuant to Section 4.01. The Trustee, upon receipt of the full amount
of the Purchase Price for a Deleted Mortgage Loan, or upon receipt of the
Mortgage File for a Qualifying Substitute Mortgage Loan substituted for a
Deleted Mortgage Loan (and any applicable Substitution Amount), shall release or
cause to be released to the Depositor, Xxxxxx Brothers Holdings or the
applicable Transferor, as applicable, the related Mortgage File for the Deleted
Mortgage Loan and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as shall
be necessary to vest in such party or its designee or assignee title to any
Deleted Mortgage Loan released pursuant hereto, free and clear of all security
interests, liens and other encumbrances created by this Agreement, which
instruments shall be prepared by the Trustee (or its custodian), and the Trustee
shall have no further responsibility with respect to the Mortgage File relating
to such Deleted Mortgage Loan.
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Trustee (or its applicable Custodian) pursuant to the terms of
this Article II in exchange for a Deleted Mortgage Loan: (i) the Depositor, the
applicable Transferor, or Xxxxxx Brothers Holdings, as applicable, must deliver
to the Trustee (or its custodian) the Mortgage File for the Qualifying
Substitute Mortgage Loan containing the documents set forth in Section 2.01(b)
along with a written certification certifying as to the delivery of such
Mortgage File and containing the granting language set forth in Section 2.01(a);
and (ii) the Depositor will be deemed to have made, with respect to such
Qualified Substitute Mortgage Loan, each of the representations and warranties
made by it with respect to the related Deleted Mortgage Loan. As soon as
practicable after the delivery of any Qualifying Substitute Mortgage Loan
hereunder, (i) the Master Servicer, at the expense of the Depositor and at the
direction and with the cooperation of the applicable Servicer, shall (i) with
respect to a Qualifying Substitute Mortgage Loan that is a Non-MERS Mortgage
Loan, cause the Assignment of Mortgage to be recorded by such Servicer if
required pursuant to Section 2.01(c)(i), or (ii) with respect to a Qualifying
Substitute Mortgage Loan that is a MERS Mortgage Loan, cause to be taken such
actions by such Servicer as are necessary to cause the Trustee to be clearly
identified as the owner of each such Mortgage Loan on the records of MERS if
required pursuant to Section 2.01(c)(ii).
(c) Notwithstanding any other provision of this Agreement, the
right to substitute Mortgage Loans pursuant to this Article II shall be subject
to the additional limitations that no
53
substitution of a Qualifying Substitute Mortgage Loan for a Deleted Mortgage
Loan shall be made unless the Trustee has received an Opinion of Counsel (at the
expense of the party seeking to make the substitution) that, under current law,
such substitution will not (A) affect adversely the status of any REMIC
established hereunder as a REMIC, or of the related "regular interests" as
"regular interests" in any such REMIC, or (B) cause any such REMIC to engage in
a "prohibited transaction" or prohibited contribution pursuant to the REMIC
Provisions. The Depositor shall cause the Mortgage Loan Schedule to be amended
in accordance with the terms of this Agreement.
Section 2.06. Grant Clause.
It is intended that the conveyance of the Depositor's right, title and
interest in and to property constituting the Trust Fund pursuant to this
Agreement shall constitute, and shall be construed as, a sale of such property
and not a grant of a security interest to secure a loan. However, if such
conveyance is deemed to be in respect of a loan, it is intended that: (i) the
rights and obligations of the parties shall be established pursuant to the terms
of this Agreement; (ii) the Depositor hereby grants to the Trustee for the
benefit of the Holders of the Certificates a first priority security interest in
all of the Depositor's right, title and interest in, to and under, whether now
owned or hereafter acquired, the Trust Fund and all proceeds of any and all
property constituting the Trust Fund to secure payment of the Certificates; and
(iii) this Agreement shall constitute a security agreement under applicable law.
If such conveyance is deemed to be in respect of a loan and the Trust created by
this Agreement terminates prior to the satisfaction of the claims of any Person
holding any Certificate, 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, and all proceeds shall be distributed as herein
provided.
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates.
(a) The Certificates shall be issuable in registered form only and
shall be securities governed by Article 8 of the New York Uniform Commercial
Code. The Book-Entry Certificates will be evidenced by one or more certificates,
beneficial ownership of which will be held in the dollar denominations in
Certificate Principal Amount or Notional Principal Amount, as applicable, or in
the Percentage Interests, specified herein. Each Class of Book-Entry
Certificates shall be issued in the minimum denominations in Certificate
Principal Amount (or Notional Amount) or Percentage Interest specified in the
Preliminary Statement hereto and in integral multiples of $1 or 5% (in the case
of Certificates issued in Percentage Interests) in excess thereof. Each Class of
Non-Book Entry Certificates other than the Residual Certificate shall be issued
in definitive, fully registered form in the minimum denominations in Certificate
Principal Amount (or Notional Amount) specified in the Preliminary Statement
hereto and in integral multiples of $1 in excess thereof. The Residual
Certificate shall be issued as a single Certificate and maintained in
definitive, fully registered form in a minimum denomination equal to 25% of the
Percentage Interest of such Class. The Certificates may be issued in the form of
typewritten certificates. One Certificate of each Class of Certificates other
than any Class of
54
Residual Certificates may be issued in any denomination in excess of the minimum
denomination.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Each Certificate
shall, on original issue, be authenticated by the Trustee upon the order of the
Depositor upon receipt by the Trustee of the Mortgage Files described in Section
2.01. No Certificate shall be entitled to any benefit under this Agreement, or
be valid for any purpose, unless there appears on such Certificate a certificate
of authentication substantially in the form provided for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by manual
signature, and such certification 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. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates executed
by the Depositor to the Trustee or the Authenticating Agent for authentication
and the Trustee or the Authenticating Agent shall authenticate and deliver such
Certificates as in this Agreement provided and not otherwise.
(c) The Class B4, Class B5 or Class B6 Certificates offered and
sold in reliance on the exemption from registration under Rule 144A shall be
issued initially in the form of one or more permanent global Certificates in
definitive, fully registered form without interest coupons with the applicable
legends set forth in Exhibit A added to the forms of such Certificates (each, a
"Restricted Global Security"), which shall be deposited on behalf of the
subscribers for such Certificates represented thereby with the Trustee, as
custodian for DTC and registered in the name of a nominee of DTC, duly executed
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amounts of the Restricted Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee or DTC
or its nominee, as the case may be, as hereinafter provided.
The Class B4, Class B5 or Class B6 Certificates sold in offshore
transactions in reliance on Regulation S shall be issued initially in the form
of one or more permanent global Certificates in definitive, fully registered
form without interest coupons with the applicable legends set forth in Exhibit A
hereto added to the forms of such Certificates (each, a "Regulation S Global
Security"), which shall be deposited on behalf of the subscribers for such
Certificates represented thereby with the Trustee, as custodian for DTC and
registered in the name of a nominee of DTC, duly executed and authenticated by
the Trustee as hereinafter provided. The aggregate principal amounts of the
Regulation S Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee or DTC or its nominee, as the
case may be, as hereinafter provided.
(d) The Class B4, Class B5, or Class B6 Certificates sold to an
"accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the Act shall
be issued initially in the form of one or more Definitive Certificates.
Section 3.02. Registration.
55
The Trustee is hereby appointed, and hereby accepts its appointment as,
Certificate Registrar in respect of the Certificates and shall maintain books
for the registration and for the transfer of Certificates (the "Certificate
Register"). The Trustee may appoint a bank or trust company to act as
Certificate Registrar. A registration book shall be maintained for the
Certificates collectively. The Certificate Registrar may resign or be discharged
or removed and a new successor may be appointed in accordance with the
procedures and requirements set forth in Sections 6.06 and 6.07 hereof with
respect to the resignation, discharge or removal of the Trustee and the
appointment of a successor trustee. The Certificate Registrar may appoint, by a
written instrument delivered to the Holders and the Master Servicer, any bank or
trust company to act as co-registrar under such conditions as the Certificate
Registrar may prescribe; provided, however, that the Certificate Registrar shall
not be relieved of any of its duties or responsibilities hereunder by reason of
such appointment.
Section 3.03. Transfer and Exchange of Certificates.
(a) A Certificate (other than Book-Entry Certificates which shall
be subject to Section 3.09 hereof) may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall be
satisfactory to the Certificate Registrar. Upon the transfer of any Certificate
in accordance with the preceding sentence, the Trustee shall execute, and the
Trustee or any Authenticating Agent shall authenticate and deliver to the
transferee, one or more new Certificates of the same Class and evidencing, in
the aggregate, the same aggregate Certificate Principal Amount as the
Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any registration
of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any
number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Principal Amount as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the office of the Certificate Registrar duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or his duly
authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any exchange of Certificates. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute, and the
Trustee or the Authenticating Agent shall authenticate, date and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(c) By acceptance of a Restricted Certificate or a Regulation S
Global Security, whether upon original issuance or subsequent transfer, each
Holder of such a Certificate acknowledges the restrictions on the transfer of
such Certificate set forth thereon and agrees that it will transfer such a
Certificate only as provided herein. In addition, each Holder of a
56
Regulation S Global Security shall be deemed to have represented and warranted
to the Trustee, the Certificate Registrar and any of their respective successors
that: (i) such Person is not a U.S. person within the meaning of Regulation S
and was, at the time the buy order was originated, outside the United States and
(ii) such Person understands that such Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and that (x) until the
expiration of the 40-day distribution compliance period (within the meaning of
Regulation S), no offer, sale, pledge or other transfer of such Certificates or
any interest therein shall be made in the United States or to or for the account
or benefit of a U.S. person (each as defined in Regulation S), (y) if in the
future it decides to offer, resell, pledge or otherwise transfer such
Certificates, such Certificates may be offered, resold, pledged or otherwise
transferred only (A) to a person which the seller reasonably believes is a
"qualified institutional buyer" (a "QIB") as defined in Rule 144A under the Act,
that is purchasing such Certificates for its own account or for the account of a
qualified institutional buyer to which notice is given that the transfer is
being made in reliance on Rule 144A or (B) in an offshore transaction (as
defined in Regulation S) in compliance with the provisions of Regulation S, in
each case in compliance with the requirements of this Agreement; and it will
notify such transferee of the transfer restrictions specified in this Section.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer
of a Restricted Certificate if the requested transfer is (x) to the
Depositor or the Placement Agent, an affiliate (as defined in Rule 405
under the Act) of the Depositor or the Placement Agent or (y) being
made to a QIB by a transferor that has provided the Trustee with a
certificate in the form of Exhibit F hereto; and
(ii) The Certificate Registrar shall register the transfer
of a Restricted Certificate if the requested transfer is being made to
an "accredited investor" under Rule 501(a)(1), (2), (3) or (7) under
the Act by a transferor who furnishes to the Trustee a letter of the
transferee substantially in the form of Exhibit G hereto.
(d) No transfer of an ERISA-Restricted Certificate in the form of
a Definitive Certificate shall be made to any Person unless the Trustee has
received (A) a certificate substantially in the form of Exhibit H (or Exhibit
D-1 in the case of the Class R Certificate) hereto from such transferee, or (B)
an Opinion of Counsel satisfactory to the Trustee and the Depositor to the
effect that the purchase and holding of such a Certificate will not constitute
or result in the assets of the Trust Fund being deemed to be "plan assets"
subject to the prohibited transaction provisions of ERISA, Section 4975 of the
Code or substantially similar rules under state, local or other federal law
("Similar Law") and will not subject the Trustee, the Master Servicer, any
Servicer or the Depositor to any obligation in addition to those undertaken in
the Agreement; provided, however, that the Trustee will not require such
certificate or opinion in the event that, as a result of a change of law or
otherwise, counsel satisfactory to the Trustee has rendered an Opinion of
Counsel to the effect that the purchase and holding of an ERISA-Restricted
Certificate (other than the Class R Certificate) by a Plan or a Person that is
purchasing or holding such a Certificate with the assets of a Plan will not
constitute or result in a prohibited
57
transaction under ERISA, Section 4975 of the Code or Similar Law. Each
transferee of an ERISA-Restricted Certificate that is a Book Entry Certificate
shall be deemed to have made the representations set forth in Exhibit H. The
preparation and delivery of the certificate and opinions referred to above shall
not be an expense of the Trust Fund, the Trustee or the Depositor.
Notwithstanding the foregoing, no opinion or certificate shall be required for
the initial issuance of the ERISA-Restricted Certificates.
The Trustee shall have no obligations to monitor transfers of
Book-Entry Certificates that are ERISA-Restricted Certificates or Restricted
Global Securities and shall have no liability for transfers of such Certificates
in violation of the transfer restrictions.
Notwithstanding anything to the contrary herein, any purported transfer
of an ERISA-Restricted Certificate in the form of a Definitive Certificate to or
on behalf of an employee benefit plan subject to Title I of ERISA, a plan
subject to Section 4975 of the Code or a plan subject to Similar Law without the
delivery to the Trustee of a certificate substantially in the form of Exhibit H
(or Exhibit D-1 in the case of the Class R Certificate) or an Opinion of Counsel
satisfactory to the Trustee as described above shall be void and of no effect.
The Trustee shall be under no liability to any Person for any registration of
transfer of any ERISA-Restricted Certificate that is in fact not permitted by
this Section 3.03(d) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the transfer was registered in
accordance with the foregoing requirements. The Trustee shall be entitled, but
not obligated, to recover from any Holder of any ERISA-Restricted Certificate
that was in fact an employee benefit plan subject to Title I of ERISA, a plan
subject to Section 4975 of the Code or a plan subject to Similar Law, or a
Person acting on behalf of any such plan at the time it became a Holder or, at
such subsequent time as it became such a plan or Person acting on behalf of such
a plan, all payments made on such ERISA-Restricted Certificate at and after
either such time. Any such payments so recovered by the Trustee shall be paid
and delivered by the Trustee to the last preceding Holder of such Certificate
that is not such a plan or Person acting on behalf of a plan.
(e) As a condition of the registration of transfer or exchange of
any Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless, in the case of clause (ii),
such person is (A) not a Non-U.S. Person or (B) is a Non-U.S. Person that holds
a Residual Certificate in connection with the conduct of a trade or business
within the United States and has furnished the transferor and the Trustee with
an effective Internal Revenue Service Form W-8ECI or successor form at the time
and in the manner required by the Code (any such person who is not covered by
clause (A) or (B) above is referred to herein as a "Non-permitted Foreign
Holder").
58
Prior to and as a condition of the registration of any transfer, sale
or other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Trustee an affidavit in substantially the form attached hereto as
Exhibit D-1 representing and warranting, among other things, that such
transferee is neither a Disqualified Organization, an agent or nominee acting on
behalf of a Disqualified Organization, nor a Non-permitted Foreign Holder (any
such transferee, a "Permitted Transferee"), and the proposed transferor shall
deliver to the Trustee an affidavit in substantially the form attached hereto as
Exhibit D-2. In addition, the Trustee may (but shall have no obligation to)
require, prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, addressed to the Depositor and the
Trustee satisfactory in form and substance to the Depositor, that such proposed
transferee or, if the proposed transferee is an agent or nominee, the proposed
beneficial owner, is not a Disqualified Organization, agent or nominee thereof,
or Non-permitted Foreign Holder. Notwithstanding the registration in the
Certificate Register of any transfer, sale, or other disposition of a Residual
Certificate to a Disqualified Organization, an agent or nominee thereof, or
Non-permitted Foreign Holder, such registration shall be deemed to be of no
legal force or effect whatsoever and such Disqualified Organization, agent or
nominee thereof, or Non-permitted Foreign Holder shall not be deemed to be a
Certificateholder for any purpose hereunder, including, but not limited to, the
receipt of distributions on such Residual Certificate. The Trustee shall not be
under any liability to any person for any registration or transfer of a Residual
Certificate to a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder or for the maturity of any payments due on such
Residual Certificate to the Holder thereof or for taking any other action with
respect to such Holder under the provisions of the Agreement, so long as the
transfer was effected in accordance with this Section 3.03(f), unless the
Trustee shall have actual knowledge at the time of such transfer or the time of
such payment or other action that the transferee is a Disqualified Organization,
agent or nominee thereof, or Non-permitted Foreign Holder. The Trustee shall be
entitled to recover from any Holder of a Residual Certificate that was a
Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign
Holder at the time it became a Holder or any subsequent time it became a
Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign
Holder, all payments made on such Residual Certificate at and after either such
times (and all costs and expenses, including but not limited to attorneys' fees,
incurred in connection therewith). Any payment (not including any such costs and
expenses) so recovered by the Trustee shall be paid and delivered to the last
preceding Holder of such Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee that the registration of
transfer of such Residual Certificate was not in fact permitted by this Section
3.03(f), the last preceding Permitted Transferee shall be restored to all rights
as Holder thereof retroactive to the date of such registration of transfer of
such Residual Certificate. The Trustee shall be under no liability to any Person
for any registration of transfer of a Residual Certificate that is in fact not
permitted by this Section 3.03(f), for making any payment due on such
Certificate to the registered Holder thereof or for taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered upon receipt of the affidavit described in the preceding
paragraph of this Section 3.03(f).
(g) Each Holder of a Residual Certificate, by such Holder's
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this section.
59
(h) Notwithstanding any provision to the contrary herein, so long
as a Global Security representing any of the Class B4, Class B5 or Class B6
Certificates remains outstanding and is held by or on behalf of DTC, transfers
of a Global Security representing any such Certificates, in whole or in part,
shall only be made in accordance with Section 3.01 and this Section 3.03(h).
(A) Subject to clauses (B) and (C) of this
Section 3.03(h), transfers of a Global Security representing
any of the Class B4, Class B5 or Class B6 Certificates shall
be limited to transfers of such Global Security, in whole or
in part, to nominees of DTC or to a successor of DTC or such
successor's nominee.
(B) Restricted Global Security to Regulation S
Global Security. If a holder of a beneficial interest in a
Restricted Global Security deposited with or on behalf of DTC
wishes at any time to exchange its interest in such Restricted
Global Security for an interest in a Regulation S Global
Security, or to transfer its interest in such Restricted
Global Security to a Person who wishes to take delivery
thereof in the form of an interest in a Regulation S Global
Security, such holder, provided such holder is not a U.S.
person, may, subject to the rules and procedures of DTC,
exchange or cause the exchange of such interest for an
equivalent beneficial interest in the Regulation S Global
Security. Upon receipt by the Trustee, as Certificate
Registrar, of (I) instructions from DTC directing the Trustee,
as Certificate Registrar, to be credited a beneficial interest
in a Regulation S Global Security in an amount equal to the
beneficial interest in such Restricted Global Security to be
exchanged but not less than the minimum denomination
applicable to such holder's Certificates held through a
Regulation S Global Security, (II) a written order given in
accordance with DTC's procedures containing information
regarding the participant account of DTC and, in the case of a
transfer pursuant to and in accordance with Regulation S, the
Euroclear or Clearstream account to be credited with such
increase and (III) a certificate in the form of Exhibit A
hereto given by the holder of such beneficial interest stating
that the exchange or transfer of such interest has been made
in compliance with the transfer restrictions applicable to the
Global Securities, including that the holder is not a U.S.
person, and pursuant to and in accordance with Regulation S,
the Trustee, as Certificate Registrar, shall reduce the
principal amount of the Restricted Global Security and
increase the principal amount of the Regulation S Global
Security by the aggregate principal amount of the beneficial
interest in the Restricted Global Security to be exchanged,
and shall instruct Euroclear or Clearstream, as applicable,
concurrently with such reduction, to credit or cause to be
credited to the account of the Person specified in such
instructions a beneficial interest in the Regulation S Global
Security equal to the reduction in the principal amount of the
Restricted Global Security.
(C) Regulation S Global Security to Restricted
Global Security. If a holder of a beneficial interest in a
Regulation S Global Security
60
deposited with or on behalf of DTC wishes at any time to
transfer its interest in such Regulation S Global Security to
a Person who wishes to take delivery thereof in the form of an
interest in a Restricted Global Security, such holder may,
subject to the rules and procedures DTC, exchange or cause the
exchange of such interest for an equivalent beneficial
interest in a Restricted Global Security. Upon receipt by the
Trustee, as Certificate Registrar, of (I) instructions from
DTC directing the Trustee, as Certificate Registrar, to cause
to be credited a beneficial interest in a Restricted Global
Security in an amount equal to the beneficial interest in such
Regulation S Global Security to be exchanged but not less than
the minimum denomination applicable to such holder's
Certificates held through a Restricted Global Security, to be
exchanged, such instructions to contain information regarding
the participant account with DTC to be credited with such
increase, and (II) a certificate in the form of Exhibit L-2
hereto given by the holder of such beneficial interest and
stating, among other things, that the Person transferring such
interest in such Regulation S Global Security reasonably
believes that the Person acquiring such interest in a
Restricted Global Security is a QIB, is obtaining such
beneficial interest in a transaction meeting the requirements
of Rule 144A and in accordance with any applicable securities
laws of any State of the United States or any other
jurisdiction, then the Trustee, as Certificate Registrar, will
reduce the principal amount of the Regulation S Global
Security and increase the principal amount of the Restricted
Global Security by the aggregate principal amount of the
beneficial interest in the Regulation S Global Security to be
transferred and the Trustee, as Certificate Registrar, shall
instruct DTC, concurrently with such reduction, to credit or
cause to be credited to the account of the Person specified in
such instructions a beneficial interest in the Restricted
Global Security equal to the reduction in the principal amount
of the Regulation S Global Security.
(D) Other Exchanges. In the event that a Global
Security is exchanged for Certificates in definitive
registered form without interest coupons, pursuant to Section
3.09(c) hereof, such Certificates may be exchanged for one
another only in accordance with such procedures as are
substantially consistent with the provisions above (including
certification requirements intended to insure that such
transfers comply with Rule 144A, comply with Rule 501(a)(1),
(2), (3) or (7) or are to non-U.S. persons in compliance with
Regulation S under the Act, as the case may be), and as may be
from time to time adopted by the Trustee.
(E) Restrictions on U.S. Transfers. Transfers of
interests in the Regulation S Global Security to U.S. persons
(as defined in Regulation S) shall be limited to transfers
made pursuant to the provisions of Section 3.03(h)(C).
Section 3.04. Cancellation of Certificates.
61
Any Certificate surrendered for registration of transfer or exchange
shall be cancelled and retained in accordance with normal retention policies
with respect to cancelled certificates maintained by the Trustee or the
Certificate Registrar.
Section 3.05. Replacement of Certificates.
If (i) any Certificate is mutilated and is surrendered to the Trustee
or any Authenticating Agent or (ii) the Trustee or any Authenticating Agent
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee or the Authenticating Agent
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Depositor and any Authenticating
Agent that such destroyed, lost or stolen Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute and the Trustee or any
Authenticating 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 Certificate Principal Amount. Upon the issuance of any new
Certificate under this Section 3.05, the Trustee and Authenticating Agent may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee or the Authenticating Agent) connected
therewith. Any replacement Certificate issued pursuant to this Section 3.05
shall constitute complete and indefeasible evidence of ownership in the
applicable Trust Fund, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 3.06. Persons Deemed Owners.
Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Master Servicer, the Trustee, the Certificate
Registrar and any agent of any of them may treat the Person in whose name any
Certificate is registered upon the books of the Certificate Registrar as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Sections 5.01 and 5.02 and for all other purposes whatsoever, and neither the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
agent of any of them shall be affected by notice to the contrary.
Section 3.07. Temporary Certificates.
(a) Pending the preparation of definitive Certificates, upon the
order of the Depositor, the Trustee shall execute and shall authenticate and
deliver temporary Certificates that are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such variations as the authorized officers executing such
Certificates may determine, as evidenced by their execution of such
Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the
62
Trustee shall execute and authenticate and deliver in exchange therefor a like
aggregate Certificate Principal Amount of definitive Certificates of the same
Class in the authorized denominations. Until so exchanged, the temporary
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Certificates of the same Class.
Section 3.08. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent (which may be the Trustee) for
the purpose of making distributions to Certificateholders hereunder. The Trustee
shall cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in an Eligible Account in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to the Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee. If the Paying Agent is not the Trustee, the Trustee shall cause to be
remitted to the Paying Agent on or before the Business Day prior to each
Distribution Date, by wire transfer in immediately available funds, the funds to
be distributed on such Distribution Date. Any Paying Agent shall be either a
bank or trust company or otherwise authorized under law to exercise corporate
trust powers.
Section 3.09. Book-Entry Certificates.
(a) Each Class of Book-Entry Certificates, upon original issuance,
shall be issued in the form of one or more typewritten Certificates representing
the Book-Entry Certificates, to be delivered to The Depository Trust Company,
the initial Clearing Agency, by, or on behalf of, the Depositor. The Book-Entry
Certificates shall initially be registered on the Certificate Register in the
name of the nominee of the Clearing Agency, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Book-Entry Certificates, except as provided in Section 3.09(c). Unless
Definitive Certificates have been issued to Certificate Owners of Book-Entry
Certificates pursuant to Section 3.09(c):
(i) the provisions of this Section 3.09 shall be in full
force and effect;
(ii) the Depositor, the Master Servicer, the Paying Agent,
the Certificate Registrar and the Trustee may deal with the Clearing
Agency for all purposes (including the making of distributions on the
Book-Entry Certificates) as the authorized representatives of the
Certificate Owners and the Clearing Agency shall be responsible for
crediting the amount of such distributions to the accounts of such
Persons entitled thereto, in accordance with the Clearing Agency's
normal procedures;
(iii) to the extent that the provisions of this Section
3.09 conflict with any other provisions of this Agreement, the
provisions of this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and the Clearing Agency Participants
and shall be limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency and/or the Clearing
Agency Participants. Unless and until Definitive Certificates
63
are issued pursuant to Section 3.09(c), the initial Clearing Agency
will make book-entry transfers among the Clearing Agency Participants
and receive and transmit distributions of principal of and interest on
the Book-Entry Certificates to such Clearing Agency Participants.
(b) Whenever notice or other communication to the
Certificateholders is required under this Agreement, unless and until Definitive
Certificates shall have been issued to Certificate Owners pursuant to Section
3.09(c), the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Book-Entry Certificates to the Clearing
Agency.
(c) If (i) (A) the Depositor advises the Trustee in writing that
the Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Book-Entry Certificates, and (B) the
Trustee or the Depositor is unable to locate a qualified successor, (ii) the
Depositor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 50% of the Class Principal Amount of a Class
of Book-Entry Certificates identified as such to the Trustee by an Officer's
Certificate from the Clearing Agency advise the Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Certificate Owners of a Class of Book-Entry Certificates, the Trustee
shall notify or cause the Certificate Registrar to notify the Clearing Agency to
effect notification to all Certificate Owners, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Trustee of the Book-Entry Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration, the Trustee
shall issue the Definitive Certificates. Neither the Transferor 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.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Trustee, to the extent
applicable, with respect to such Definitive Certificates and the Trustee shall
recognize the holders of the Definitive Certificates as Certificateholders
hereunder.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account.
(a) On the Closing Date, the Master Servicer shall open and shall
thereafter maintain a segregated account held in trust (the "Collection
Account"), entitled "Aurora Loan Services Inc., as Master Servicer, in trust for
the benefit of the Holders of Structured Asset Securities Corporation Mortgage
Pass-Through Certificates, Series 2003-24A." The Collection Account shall relate
solely to the Certificates issued by the Trust Fund hereunder, and funds in such
Collection Account shall not be commingled with any other monies.
64
(b) The Collection Account shall be an Eligible Account. If an
existing Collection Account ceases to be an Eligible Account, the Master
Servicer shall establish a new Collection Account that is an Eligible Account
within 30 days and transfer all funds on deposit in such existing Collection
Account into such new Collection Account.
(c) The Master Servicer shall give to the Trustee prior written
notice of the name and address of the depository institution at which the
Collection Account is maintained and the account number of such Collection
Account. No later than 2:00 p.m. New York City time on each Deposit Date, the
entire amount on deposit in the Collection Account (subject to permitted
withdrawals set forth in Section 4.02), not including any amounts which are to
be excluded from the Available Distribution Amount for such Distribution Date
pursuant to clauses (A) through (G) of paragraph (i) of the definition thereof
(other than any amounts due or reimbursable to the Trustee pursuant to this
Agreement), shall be remitted to the Trustee for deposit into the Certificate
Account by wire transfer in immediately available funds. The Master Servicer, at
its option, may choose to make daily remittances from the Collection Account to
the Trustee for deposit into the Certificate Account.
(d) The Master Servicer shall deposit or cause to be deposited
into the Collection Account, no later than the Business Day following the
Closing Date, any amounts representing Scheduled Payments on the Mortgage Loans
due after the Cut-off Date and received by the Master Servicer on or before the
Closing Date. Thereafter, the Master Servicer shall deposit or cause to be
deposited in the Collection Account on the applicable Remittance Date the
following amounts received or payments made by it (other than in respect of
principal of and interest on the Mortgage Loans due on or before the Cut-Off
Date):
(i) all payments on account of principal, including
Principal Prepayments and late collections, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans (other than payments due prior to the Cut-off Date), net of the
applicable Servicing Fee and Master Servicing Fee with respect to each
such Mortgage Loan, but only to the extent of the amount permitted to
be withdrawn or withheld from the Collection Account in accordance with
Sections 5.04 and 9.21;
(iii) any unscheduled payment or other recovery with
respect to a Mortgage Loan not otherwise specified in this paragraph
(d), including all Net Liquidation Proceeds with respect to the
Mortgage Loans and REO Property, and all amounts received in connection
with the operation of any REO Property, net of any unpaid Servicing
Fees and Master Servicing Fees with respect to such Mortgage Loans, but
only to the extent of the amount permitted to be withdrawn or withheld
from the Collection Account in accordance with Sections 5.04 and 9.21;
provided that if the applicable Servicer is also the Retained Interest
Holder with respect to any Mortgage Loan, payments on account of
interest on the Mortgage Loans as to which such Servicer is the
Retained Interest Holder may also be made net of the related Retained
Interest with respect to each such Mortgage Loan.
(iv) all Insurance Proceeds;
65
(v) all Advances made by the Master Servicer or the
applicable Servicer pursuant to Section 5.04 or the applicable
Servicing Agreement; and
(vi) all proceeds of any Mortgage Loan purchased by any
Person.
(e) Funds in the Collection Account may be invested in Eligible
Investments (selected by and at the written direction of the Master Servicer)
which shall mature not later than the earlier of (a) the Deposit Date (except
that if such Eligible Investment is an obligation of the Trustee or the Paying
Agent, if other than the Trustee, and such Collection Account is maintained with
the Trustee or the Paying Agent, if other than the Trustee, then such Eligible
Investment shall mature not later than such applicable Distribution Date) or (b)
the day on which the funds in such Collection Account are required to be
remitted to the Trustee for deposit into the Certificate Account, and any such
Eligible Investment shall not be sold or disposed of prior to its maturity. All
such Eligible Investments shall be made in the name of the Master Servicer in
trust for the benefit of the Trustee and Holders of Structured Asset Securities
Corporation, Mortgage Pass-Through Certificates, Series 2003-24A. All income and
gain realized from any such investment shall be for the benefit of the Master
Servicer, while such Collection Account is maintained by the Master Servicer,
and shall be subject to its withdrawal or order from time to time and shall not
be part of the Trust Fund. The amount of any losses incurred in respect of any
such investments shall be deposited in such Collection Account by the Master
Servicer out of its own funds, without any right of reimbursement therefor,
immediately as realized. The foregoing requirements for deposit in the
Collection Account are exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments of interest on funds in the
Collection Account and payments in the nature of late payment charges or
assumption fees need not be deposited by the Master Servicer in the Collection
Account and may be retained by the Master Servicer or the applicable Servicer as
additional servicing compensation. If the Master Servicer deposits in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from such Collection Account.
Section 4.02. Application of Funds in the Collection Account.
The Master Servicer may, from time to time, make, or cause to be made,
withdrawals from the Collection Account for the following purposes:
(i) to reimburse itself or any Servicer for Advances made
by it or by such Servicer pursuant to Section 5.04 or the applicable
Servicing Agreement; the Master Servicer's right to reimburse itself
pursuant to this subclause (i) is limited to amounts received on or in
respect of particular Mortgage Loans (including, for this purpose,
Liquidation Proceeds and amounts representing Insurance Proceeds with
respect to the property subject to the related Mortgage) which
represent late recoveries (net of the applicable Servicing Fee and the
Master Servicing Fee) of payments of principal or interest respecting
which any such Advance was made, it being understood, in the case of
any such reimbursement, that the Master Servicer's or Servicer's right
thereto shall be prior to the rights of the Certificateholders;
(ii) to reimburse itself or any Servicer for any Servicing
Advances made by it or by such Servicer that it or such Servicer
determines in good faith will not be
66
recoverable from amounts representing late recoveries of payments of
principal or interest respecting the particular Mortgage Loan as to
which such Servicing Advance was made or from Liquidation Proceeds or
Insurance Proceeds with respect to such Mortgage Loan, it being
understood, in the case of any such reimbursement, that such Master
Servicer's or Servicer's right thereto shall be prior to the rights of
the Certificateholders;
(iii) to reimburse itself or any Servicer from Liquidation
Proceeds for Liquidation Expenses and for amounts expended by it
pursuant to Sections 9.20 and 9.22(a) or the applicable Servicing
Agreement in good faith in connection with the restoration of damaged
property and, to the extent that Liquidation Proceeds after such
reimbursement exceed the unpaid principal balance of the related
Mortgage Loan, together with accrued and unpaid interest thereon at the
applicable Mortgage Rate less the applicable Servicing Fee and the
Master Servicing Fee for such Mortgage Loan to the Due Date next
succeeding the date of its receipt of such Liquidation Proceeds, to pay
to itself out of such excess the amount of any unpaid assumption fees,
late payment charges or other Mortgagor charges on the related Mortgage
Loan and to retain any excess remaining thereafter as additional
servicing compensation, it being understood, in the case of any such
reimbursement or payment, that such Master Servicer's or Servicer's
right thereto shall be prior to the rights of the Certificateholders;
(iv) in the event it has elected not to pay itself the
Master Servicing Fee out of any Mortgagor payment on account of
interest or other recovery with respect to a particular Mortgage Loan
prior to the deposit of such Mortgagor payment or recovery in the
Collection Account, to pay to itself the Master Servicing Fee for each
Distribution Date and any unpaid Master Servicing Fees for prior
Distribution Dates, as reduced pursuant to Section 5.05, from any
Mortgagor payment as to interest or such other recovery with respect to
that Mortgage Loan, as is permitted by this Agreement;
(v) to reimburse itself or any Servicer for expenses
incurred by and recoverable by or reimbursable to it or such Servicer
pursuant to Section 9.04, 9.06, 9.16 or 9.22(a) or pursuant to the
applicable Servicing Agreement, and to reimburse itself for any
expenses reimbursable to it pursuant to Section 10.01(c);
(vi) to pay to the applicable Person, with respect to each
Mortgage Loan or REO Property acquired in respect thereof that has been
repurchased by such Person pursuant to this Agreement, all amounts
received thereon and not distributed on the date on which the related
repurchase was effected;
(vii) subject to Section 5.04, to pay to itself income
earned on the investment of funds deposited in the Collection Account;
(viii) to make payments to the Trustee for deposit into the
Certificate Account in the amounts and in the manner provided for in
Section 4.04;
(ix) to make distributions of the Retained Interest to the
Retained Interest Holder on each Distribution Date (other than any
Retained Interest not deposited into the Collection Account in
accordance with Section 4.01(d)(iii));
67
(x) to make payment to itself, the Trustee and others
pursuant to any provision of this Agreement;
(xi) to withdraw funds deposited in error in the
Collection Account;
(xii) to clear and terminate any Collection Account
pursuant to Section 7.02;
(xiii) to reimburse a successor Master Servicer (solely in
its capacity as successor Master Servicer), for any fee or advance
occasioned by a termination of the Master Servicer, and the assumption
of such duties by the Trustee or a successor Master Servicer appointed
by the Trustee pursuant to Section 6.14, in each case to the extent not
reimbursed by the terminated Master Servicer, it being understood, in
the case of any such reimbursement or payment, that the right of the
Master Servicer or the Trustee thereto shall be prior to the rights of
the Certificateholders; and
(xiv) to reimburse any Servicer for such amounts as are due
thereto under the applicable Servicing Agreement and have not been
retained by or paid to such Servicer to the extent provided in such
Servicing Agreement.
If provided in the related Servicing Agreement, each Servicer shall be
entitled to retain as additional servicing compensation any Prepayment Interest
Excess (to the extent not offset by Prepayment Interest Shortfalls). The
Servicers of the Participations shall be entitled to retain as additional
servicing compensation any Prepayment Penalty Amounts received with respect to
the Participations.
In connection with withdrawals pursuant to subclauses (i), (iii), (iv)
and (vi) above, the Master Servicer's or Servicer's entitlement thereto is
limited to collections or other recoveries on the related Mortgage Loan. The
Master Servicer shall therefore keep and maintain a separate accounting for each
Mortgage Loan it master services for the purpose of justifying any withdrawal
from the Collection Account it maintains pursuant to such subclause (i), (iii),
(iv) and (vi).
Section 4.03. Reports to Certificateholders.
(a) On each Distribution Date, the Trustee shall have prepared
(based solely on information provided by the Master Servicer) and shall make
available to each Certificateholder a written report setting forth the following
information, by Mortgage Pool and Certificate Group (on the basis of Mortgage
Loan level information obtained from the applicable Servicer and the Master
Servicer):
(i) the aggregate amount of the distribution to be made
on such Distribution Date to the Holders of each Class of Certificates,
other than any Class of Notional Certificates, to the extent
applicable, allocable to principal on the Mortgage Loans, including
Liquidation Proceeds and Insurance Proceeds, stating separately the
amount attributable to scheduled principal payments and unscheduled
payments in the nature of principal in each Mortgage Pool;
68
(ii) the aggregate amount of the distribution to be made
on such Distribution Date to the Holders of each Class of Certificates
allocable to interest, including any Accrual Amount added to the Class
Principal Amount of any Class of Accrual Certificates;
(iii) the amount, if any, of any distribution to the
Holders of a Residual Certificate;
(iv) (A) the aggregate amount of any Advances required to
be made by or on behalf of the Master Servicer or any Servicer (or, if
applicable, the Trustee) with respect to such Distribution Date, (B)
the aggregate amount of such Advances actually made, and (C) the
amount, if any, by which (A) above exceeds (B) above;
(v) the Aggregate Principal Balance of the Mortgage Loans
and the Pool Balance of each Mortgage Pool for such Distribution Date,
after giving effect to payments allocated to principal reported under
clause (i) above;
(vi) the Class Principal Amount (or Class Notional Amount)
of each Class of Certificates, to the extent applicable, as of such
Distribution Date after giving effect to payments allocated to
principal reported under clause (i) above (and to the addition of any
Accrual Amount in the case of any Class of Accrual Certificates),
separately identifying any reduction of any of the foregoing
Certificate Principal Amounts due to Realized Losses:
(vii) any Realized Losses realized with respect to the
Mortgage Loans (x) in the applicable Prepayment Period and (y) in the
aggregate since the Cut-off Date, stating separately the amount of
Special Hazard Losses, Fraud Losses and Bankruptcy Losses and the
aggregate amount of such Realized Losses, and the remaining Special
Hazard Loss Amount, Fraud Loss Amount and Bankruptcy Loss Amount;
(viii) the amount of the Master Servicing Fees, Servicing
Fees and Trustee Fee paid during the Due Period to which such
distribution relates;
(ix) the number and aggregate Scheduled Principal Balance
of Mortgage Loans, as reported to the Trustee by the Master Servicer,
(a) remaining outstanding (b) delinquent one month, (c) delinquent two
months, (d) delinquent three or more months, and (e) as to which
foreclosure proceedings have been commenced as of the close of business
on the last Business Day of the calendar month immediately preceding
the month in which such Distribution Date occurs;
(x) the deemed aggregate principal balance of all REO
Properties as of the close of business on the last Business Day of the
calendar month immediately preceding the month in which such
Distribution Date occurs;
(xi) with respect to substitution of Mortgage Loans in the
preceding calendar month, the aggregate Scheduled Principal Balance of
all such Deleted Mortgage Loans, and of all Qualifying Substitute
Mortgage Loans;
69
(xii) the aggregate outstanding Interest Shortfalls and Net
Prepayment Interest Shortfalls, if any, for each Class of Certificates,
after giving effect to the distribution made on such Distribution Date;
(xiii) the Certificate Interest Rate applicable to such
Distribution Date with respect to each Class of Certificates;
(xiv) if applicable, the amount of any shortfall (i.e., the
difference between the aggregate amounts of principal and interest
which Certificateholders would have received if there were sufficient
available amounts in the Certificate Account and the amounts actually
distributed);
(xv) the amount of any payments made to each Class of
Certificates under Section 5.02(g) hereof that would otherwise have
been made to the Class 4-AX Certificates; and
(xvi) the amount of any payments made to each Class of
Certificates under Section 5.02(g) hereof that would otherwise have
been made to the Class 4-PAX Certificates.
In the case of information furnished pursuant to subclauses (i), (ii)
and (viii) above, the amounts shall be expressed as a dollar amount per $1,000
of original principal amount of Certificates.
The Trustee will make such report and additional loan level information
(and, at its option, any additional files provided by the Master Servicer
containing the same information in an alternative format) available each month
to the Certificateholders and the Rating Agencies via the Trustee's internet
website. The Trustee's internet website shall initially be located at
xxx.xxxxxxxx.xxx/xxx. Assistance in using the website can be obtained by calling
the Trustee's customer service desk at 0-000-000-0000. Such parties that are
unable to use the website are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Trustee shall have the right to change the way such statements are distributed
in order to make such distribution more convenient and/or more accessible to the
above parties and the Trustee shall provide timely and adequate notification to
all above parties regarding any such changes.
The foregoing information and reports shall be prepared and determined
by the Trustee based solely on Mortgage Loan data provided to the Trustee by the
Master Servicer no later than three Business Days prior to the Distribution
Date. In preparing or furnishing the Mortgage Loan data to the Trustee, the
Master Servicer shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO Property
that has been provided to the Master Servicer by each Servicer, and the Master
Servicer shall not be obligated to verify, recompute, reconcile or recalculate
any such information or data. The Trustee shall be entitled to conclusively rely
on the Mortgage Loan data provided by the Master Servicer and shall have no
liability for any errors in such Mortgage Loan data.
(b) Upon the reasonable advance written request of any
Certificateholder that is a savings and loan, bank or insurance company, which
request, if received by the Trustee, will be
70
promptly forwarded to the Master Servicer, the Master Servicer shall provide, or
cause to be provided, (or, to the extent that such information or documentation
is not required to be provided by a Servicer under the applicable Servicing
Agreement, shall use reasonable efforts to obtain such information and
documentation from such Servicer, and provide) to such Certificateholder such
reports and access to information and documentation regarding the Mortgage Loans
as such Certificateholder may reasonably deem necessary to comply with
applicable regulations of the Office of Thrift Supervision or its successor or
other regulatory authorities with respect to investment in the Certificates;
provided, however, that the Master Servicer shall be entitled to be reimbursed
by such Certificateholder for such Master Servicer's actual expenses incurred in
providing such reports and access.
(c) Within 90 days, or such shorter period as may be required by
statute or regulation, after the end of each calendar year, the Trustee shall,
upon written request, send to each Person who at any time during the calendar
year was a Certificateholder of record, and make available to Certificate Owners
(identified as such by the Clearing Agency) in accordance with applicable
regulations, a report summarizing the items provided to Certificateholders
pursuant to Section 4.03(a) on an annual basis as may be required to enable such
Holders to prepare their federal income tax returns. Such information shall
include the amount of original issue discount accrued on each Class of
Certificates and information regarding the expenses of the Trust Fund. The
Master Servicer shall provide the Trustee with Mortgage Loan level information
as is necessary for the Trustee to prepare such reports.
Section 4.04. Certificate Account.
(a) The Trustee shall establish and maintain in its name, as
trustee, a trust account (the "Certificate Account"), to be held in trust for
the benefit of the Certificateholders until disbursed pursuant to the terms of
this Agreement. The Certificate Account shall be an Eligible Account. If the
existing Certificate Account ceases to be an Eligible Account, the Trustee shall
establish a new Certificate Account that is an Eligible Account within 20
Business Days and transfer all funds on deposit in such existing Certificate
Account into such new Certificate Account. The Certificate Account shall relate
solely to the Certificates issued hereunder and funds in the Certificate Account
shall be held separate and apart from and shall not be commingled with any other
monies including, without limitation, other monies of the Trustee held under
this Agreement.
(b) The Trustee shall cause to be deposited into the Certificate
Account on the day on which, or, if such day is not a Business Day, the Business
Day immediately following the day on which, any monies are remitted by the
Master Servicer to the Trustee all such amounts. The Trustee shall make
withdrawals from the Certificate Account only for the following purposes:
(i) to withdraw amounts deposited in the Certificate
Account in error;
(ii) to pay itself any investment income earned with
respect to funds in the Certificate Account invested in Eligible
Investments as set forth in subsection (c) below, and to make payments
to itself prior to making distributions pursuant to Section 5.02 for
any expenses or other indemnification owing to the Trustee and others
pursuant to any provision of this Agreement;
71
(iii) to make payments of the Master Servicing Fee (to the
extent not already withheld or withdrawn from the Collection Account by
the Master Servicer) to the Master Servicer;
(iv) to make distributions to the Certificateholders
pursuant to Article V; and
(v) to clear and terminate the Certificate Account
pursuant to Section 7.02.
(c) The Trustee may invest, or cause to be invested, funds held in
the Certificate Account, which funds, if invested, shall be invested in Eligible
Investments (which may be obligations of the Trustee). All such investments must
mature no later than the next Distribution Date, and shall not be sold or
disposed of prior to their maturity. All such Eligible Investments will be made
in the name of the Trustee (in its capacity as such) or its nominee. All income
and gain realized from any such investment shall be paid to the Trustee and
shall be subject to its withdrawal on order from time to time. The amount of any
losses incurred in respect of any such investments shall be paid by the Trustee
for deposit in the Certificate Account out of its own funds, without any right
of reimbursement therefor, immediately as realized. Funds held in the
Certificate Account that are not invested shall be held in cash.
Section 4.05. [Reserved].
Section 4.06. Certain Provisions with Respect to the Participations.
If the Trustee shall not have received a payment with respect to any
Participation by the date on which such payment was due and payable pursuant to
the terms thereof, the Trustee shall make demand upon the Participation Master
Servicer for immediate payment, and may, and at the direction of a majority (by
Voting Interests) of the Certificateholders shall, take any available legal
action, including the prosecution of any claims in connection therewith. The
Depositor shall cooperate with the Trustee in connection with any such demand or
action to the extent reasonably requested by the Trustee. The reasonable legal
fees and expenses incurred by the Trustee in connection with the prosecution of
any such legal action shall be reimbursable to the Trustee from the Trust Fund.
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally.
(a) Subject to Section 7.01 with respect to the final distribution
on the Certificates, on each Distribution Date the Trustee or the Paying Agent
shall make distributions in accordance with this Article V. Such distributions
shall be made by check mailed to each Certificateholder's address as it appears
on the Certificate Register of the Certificate Registrar (which shall initially
be the Trustee) or, upon written request made to the Trustee at least three
Business Days prior to the related Distribution Date to any Certificateholder
owning an aggregate initial Certificate Principal Amount of at least $2,500,000,
or, in the case of the Notional Certificates, a Percentage Interest of 25%, by
wire transfer in immediately available funds to an account specified in the
request and at the expense of such Certificateholder; provided, however, that
the final distribution in respect of any Certificate shall be made only upon
presentation and surrender of such Certificate at the Corporate Trust Office.
Wire transfers may be made at the expense of the
72
Holder requesting such wire transfer by deducting a wire transfer fee from the
related distribution. Notwithstanding such final payment of principal of any of
the Certificates, each Residual Certificate will remain outstanding until the
termination of each REMIC and the payment in full of all other amounts due with
respect to the Residual Certificate and at such time such final payment in
retirement of the Residual Certificate will be made only upon presentation and
surrender of such Certificate at the Corporate Trust Office of the Trustee or at
the office of its designated presenting agent in New York City. If any payment
required to be made on the Certificates is to be made on a day that is not a
Business Day, then such payment will be made on the next succeeding Business
Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in proportion
to their respective initial Certificate Principal Amounts (or initial Notional
Amounts).
Section 5.02. Distributions from the Certificate Account.
(a) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall withdraw from the Certificate Account the Available
Distribution Amount with respect to each Mortgage Pool, and shall distribute
such amount to the Holders of record of each Class of Certificates, in the
following order of priority:
(i) to payment of the Trustee Fee for such Distribution
Date;
(ii) from the remaining Available Distribution Amount for
each Mortgage Pool, to each Class of Senior Certificates in the related
Certificate Group, the Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's allocable share of any
Net Prepayment Interest Shortfalls for the related Mortgage Pool for
such Distribution Date; provided, however, that any shortfall in
available amounts for a Mortgage Pool shall be allocated among the
Classes of the related Certificate Group in proportion to the amount of
Accrued Certificate Interest (as so reduced) that would otherwise be
distributable thereon; provided, further, however, that payments that
would otherwise be made to the Class 4-AX or Class 4-PAX Certificates
hereunder shall be made to the Class 4-A Certificates or Subordinate
Certificates to the extent required by Section 5.02(g);
(iii) from the remaining Available Distribution Amount for
each Mortgage Pool, to each Class of Senior Certificates in the related
Certificate Group, any related Interest Shortfall for such Distribution
Date; provided, however, that any shortfall in available amounts for
each Mortgage Pool shall be allocated among the Classes of the related
Certificate Group in proportion to the Interest Shortfall for each such
Class on such Distribution Date;
(iv) from the remaining Available Distribution Amount for
each Mortgage Pool, to the Senior Certificates of the related
Certificate Group (other than any Class of Notional Certificates) in
reduction of the Class Principal Amounts thereof, as follows:
73
(A) sequentially, to the Class R, Class 1-A1,
Class 1-A2 and Class 1-A3 Certificates from the Available
Distribution Amount for Pool 1, the Senior Principal
Distribution Amount for such Mortgage Pool, in reduction of
their Class Principal Amounts (i) to the Class R Certificate,
until its Class Principal Amount has been reduced to zero and
(ii) to the Class 1-A1, Class 1-A2 and Class 1-A3
Certificates, pro rata, until their Class Principal Amounts
have been reduced to zero;
(B) to the Class 2-A Certificates from the
Available Distribution Amount for Pool 2 for such Distribution
Date, the Senior Principal Distribution Amount for such
Mortgage Pool for such Distribution Date, in reduction of
their Class Principal Amounts until the Class Principal Amount
thereof has been reduced to zero;
(C) pro rata, to the Class 3-A1 and Class 3-A2
Certificates from the Available Distribution Amount for Pool 3
for such Distribution Date in an amount up to the Senior
Principal Distribution Amount for such Mortgage Pool for such
Distribution Date, in reduction of their Class Principal
Amounts until their Class Principal Amounts have been reduced
to zero;
(D) to the Class 4-A Certificates from the
Available Distribution Amount for Pool 4 for such Distribution
Date in an amount up to the Senior Principal Distribution
Amount for such Mortgage Pool for such Distribution Date, in
reduction of their Class Principal Amount until the Class
Principal Amount thereof has been reduced to zero;
(E) to the Class 5-A Certificates from the
Available Distribution Amount for Pool 5 for such Distribution
Date in an amount up to the Senior Principal Distribution
Amount for such Mortgage Pool for such Distribution Date, in
reduction of their Class Principal Amount until the Class
Principal Amount thereof has been reduced to zero; and
(v) from the remaining Available Distribution Amount for
each Mortgage Pool, subject to the prior distribution of amounts
pursuant to Section 5.02(f) in the case of clauses (C), (F), (I), (L),
(O) and (R) below, to the Subordinated Certificates, in the following
order of priority:
(A) to the Class B1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(B) to the Class B1 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(C) to the Class B1 Certificates, in reduction
of the Class Principal Amount thereof, such Class's
Subordinate Class Percentage of
74
each Subordinate Principal Distribution Amount for such
Distribution Date, except as provided in Section 5.02(c),
until the Certificate Principal Balance thereof has been
reduced to zero;
(D) to the Class B2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(E) to the Class B2 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(F) to the Class B2 Certificates, in reduction
of the Certificate Principal Amount thereof, such Class's
Subordinate Class Percentage of each Subordinate Principal
Distribution Amount for such Distribution Date, except as
provided in Section 5.02(c), until the Class Principal Amount
thereof has been reduced to zero;
(G) to the Class B3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(H) to the Class B3 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(I) to the Class B3 Certificates, in reduction
of the Certificate Principal Amount thereof, such Class's
Subordinate Class Percentage of each Subordinate Principal
Distribution Amount for such Distribution Date, except as
provided in Section 5.02(c), until the Class Principal Amount
thereof has been reduced to zero;
(J) to the Class B4 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(K) to the Class B4 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(L) to the Class B4 Certificates, in reduction
of the Certificate Principal Amount thereof, such Class's
Subordinate Class Percentage of each Subordinate Principal
Distribution Amount for such Distribution Date, except as
provided in Section 5.02(c), until the Certificate Principal
Balance thereof has been reduced to zero;
(M) to the Class B5 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's
75
allocable share of any Net Prepayment Interest Shortfalls for
such Distribution Date;
(N) to the Class B5 Certificates, any Interest
Shortfall for such Class on such Distribution Date;
(O) to the Class B5 Certificates, in reduction
of the Certificate Principal Amount thereof, such Class's
Subordinate Class Percentage of each Subordinate Principal
Distribution Amount for such Distribution Date, except as
provided in Section 5.02(c), until the Class Principal Balance
thereof has been reduced to zero;
(P) to the Class B6 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, as
reduced by such Class's allocable share of any Net Prepayment
Interest Shortfalls for such Distribution Date;
(Q) to the Class B6 Certificates, any Interest
Shortfall for such Class on such Distribution Date; and
(R) to the Class B6 Certificates, in reduction
of the Certificate Principal Amount thereof, such Class's
Subordinate Class Percentage of each Subordinate Principal
Distribution Amount for such Distribution Date, except as
provided in Section 5.02(c), until the Certificate Principal
Balance thereof has been reduced to zero.
(b) Net Prepayment Interest Shortfalls for each Mortgage Pool
shall be allocated among the Certificates of the related Certificate Group pro
rata based on (i) in the case of the related Senior Certificates, the Accrued
Certificate Interest otherwise distributable thereon, and (ii) in the case of
the Subordinate Certificates, interest accrued on the related Apportioned
Principal Balances.
(c) (i) If on any Distribution Date the Credit Support Percentage
for the Class B1 Certificates is less than the Original Credit Support
Percentage for such Class, then, notwithstanding anything to the contrary in
Section 5.02(a), no distribution of amounts described in clauses (ii) and (iii)
of the definition of Subordinate Principal Distribution Amount will be made in
respect of the Class B2, Class B3, Class B4, Class B5 or Class B6 Certificates
on such Distribution Date; (ii) If on any Distribution Date the Credit Support
Percentage for the Class B2 Certificates is less than the Original Credit
Support Percentage for such Class, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described in clauses
(ii) and (iii) of the definition of Subordinate Principal Distribution Amount
will be made in respect of the Class B3, Class B4, Class B5 or Class B6
Certificates on such Distribution Date; (iii) If on any Distribution Date the
Credit Support Percentage for the Class B3 Certificates is less than the
Original Credit Support Percentage for such Class, then, notwithstanding
anything to the contrary in Section 5.02(a), no distribution of amounts
described in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B4, Class B5 or Class
B6 Certificates on such Distribution Date;
76
(iv) If on any Distribution Date the Credit Support Percentage for the Class B4
Certificates is less than the Original Credit Support Percentage for such Class,
then, notwithstanding anything to the contrary in Section 5.02(a), no
distribution of amounts described in clauses (ii) and (iii) of the definition of
Subordinate Principal Distribution Amount will be made in respect of the Class
B5 or Class B6 Certificates on such Distribution Date; and (v) If on any
Distribution Date the Credit Support Percentage for the Class B5 Certificates is
less than the Original Credit Support Percentage for such Class, then,
notwithstanding anything to the contrary in Section 5.02(a), no distribution of
amounts described in clauses (ii) and (iii) of the definition of Subordinate
Principal Distribution Amount will be made in respect of the Class B6
Certificates on such Distribution Date.
Any amount not distributed in respect of any Class on any Distribution
Date pursuant to the immediately preceding paragraph will be allocated among the
remaining Subordinate Classes in proportion to their respective Certificate
Principal Amounts.
(d) On each Distribution Date, the Trustee shall distribute to
Holders of the Class P-I Certificates any Prepayment Penalty Amounts related to
Pool 1, to Holders of the Class P-II Certificates any Prepayment Penalty Amounts
related to Pool 2 and Pool 5 and to Holders of the Class P-III any Prepayment
Penalty Amounts related to Pool 4, for such Distribution Date.
(e) On each Distribution Date, the Trustee shall distribute to the
Holder of the Class R Certificate any Available Distribution Amount for each of
the Mortgage Pools remaining for such Distribution Date after application of all
amounts described in paragraph (a) and (d) of this Section 5.02. Any
distributions pursuant to this paragraph (e) shall not reduce the Class
Principal Amount of the Class R Certificate.
(f) (i) (A) On each Distribution Date prior to the
Credit Support Depletion Date but on or after the date on which the aggregate
Certificate Principal Amount of the Senior Certificates of any Certificate Group
has been reduced to zero, amounts otherwise distributable as principal on each
Class of Subordinate Certificates in accordance with the priorities set forth in
Section 5.02(a)(v), in reverse order of priority, in respect of such Class's
Subordinate Class Percentage of the Subordinate Principal Distribution Amount
for the Mortgage Pool relating to such retired Senior Certificates, shall be
distributed as principal to the Senior Certificates (other than any Notional
Certificates) remaining outstanding in accordance with the priorities set forth
in Section 5.02(a)(iv), until the Class Principal Amounts thereof have been
reduced to zero, provided that on such Distribution Date (a) the Aggregate
Subordinate Percentage for such Distribution Date is less than 200% of the
Aggregate Subordinate Percentage as of the Cut-off Date or (b) the average
outstanding principal balance of the Mortgage Loans in Pool 1 (if the aggregate
Certificate Principal Amount of the Senior Certificates of Group 2, Group 3,
Group 4 or Group 5 has been reduced to zero), Pool 2 (if the aggregate
Certificate Principal Amount of the Senior Certificates of Group 1, Group 3,
Group 4 or Group 5 has been reduced to zero), Pool 3 (if the aggregate
Certificate Principal Amount of the Senior Certificates of Group 1, Group 2,
Group 4 or Group 5 has been reduced to zero), Pool 4 (if the aggregate
Certificate Principal Amount of the Senior Certificates of Group 1, Group 2,
Group 3 or Group 5 has been reduced to zero) or Pool 5 (if the aggregate
Certificate Principal Amount of the Senior Certificates of Group 1, Group 2,
Group 3 or Group 4 has been reduced to zero) that are delinquent 60 days or more
77
for the last six months as a percentage of the related Group Subordinate Amount
is greater than or equal to 50%.
(B) On each Distribution Date on which the
Senior Certificates of two or more Certificate Groups remain
outstanding, any amounts distributable pursuant to this Section
5.02(f)(i) will be distributed in proportion to the aggregate
Certificate Principal Amounts of such Certificates of each such
Certificate Group.
(ii) (A) On any Distribution Date on which any
Certificate Group constitutes an Undercollateralized Group, all amounts
otherwise distributable as principal on the Subordinate Certificates,
in reverse order of priority (other than amounts necessary to pay
unpaid Interest Shortfalls) (or, following the Credit Support Depletion
Date, such other amounts described in the immediately following
sentence), will be distributed as principal to the Senior Certificates
(other than any Notional Certificates) of such Undercollateralized
Group in accordance with the priorities set forth in Section
5.02(a)(iv), until the aggregate Certificate Principal Amount of such
Senior Certificates equals the Pool Balance of the related Mortgage
Pool (such distribution, an "Undercollateralization Distribution"). In
the event that any Certificate Group constitutes an Undercollateralized
Group on any Distribution Date following the Credit Support Depletion
Date, Undercollateralization Distributions will be made from the excess
of the Available Distribution Amount for the other such Mortgage Pools
not related to an Undercollateralized Group remaining after all
required amounts have been distributed to the Senior Certificates of
the other Certificate Groups. In addition, the amount of any unpaid
Interest Shortfalls with respect to an Undercollateralized Group on any
Distribution Date (including any Interest Shortfalls for such
Distribution Date) will be distributed to the Senior Certificates of
such Undercollateralized Group prior to the payment of any
Undercollateralization Distributions from amounts otherwise
distributable as principal on the Subordinate Certificates, in reverse
order of priority (or, following the Credit Support Depletion Date, as
provided in the preceding sentence).
(B) If on any Distribution Date two or more
Certificate Groups are Undercollateralized Groups and one or
more Certificate Group is not an Undercollateralized Group,
the distributions described in paragraph (ii)(A) above will be
made in proportion to the amount by which the aggregate
Certificate Principal Amount of the Senior Certificates, after
giving effect to distributions pursuant to Sections 5.02(a)
and (b) on such Distribution Date, of each Undercollateralized
Group exceeds the Pool Balance of the related Mortgage Pool
for such Distribution Date.
(g) On each Distribution Date on or prior to April 2010, amounts
otherwise payable to the Class 4-AX or Class 4-PAX Certificates pursuant to
Section 5.02(a)(ii), if any, will be distributed to the Class 4-A Certificates
and Subordinate Certificates in respect of any unpaid Basis Risk Shortfalls for
such Distribution Date or any prior Distribution Date. Such amounts will be
distributed (i) first, pro rata, to the Class 4-A Certificates and (ii) second,
sequentially, to the Class B1, Class B2, Class B3, Class B4, Class B5 and Class
B6 Certificates. The Class 4-AX and Class 4-PAX Certificates will contribute
amounts hereunder pro rata based on the amount of interest each such Class would
otherwise be entitled to receive on such Distribution
78
Date. The amounts distributed hereunder to the Class 4-A Certificates and
Subordinate Certificates with respect to any Basis Risk Shortfalls shall be
deemed for federal income tax purposes as having been distributed to the Class
4-AX and Class 4-PAX Certificates, as applicable. The Class 4-AX and Class 4-PAX
Certificates shall have no right to reimbursement for such amounts distributed
pursuant to this section.
Section 5.03. Allocation of Realized Losses.
(a) On any Distribution Date, the principal portion of each
Realized Loss (other than any Excess Loss) in respect of a Mortgage Loan shall
be allocated in the following order of priority:
first, to the Class B6 Certificates, until the Class Principal
Amount thereof has been reduced to zero;
second, to the Class B5 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
third, to the Class B4 Certificates, until the Class Principal
Amount thereof has been reduced to zero;
fourth, to the Class B3 Certificates, until the Class
Principal Amount thereof has been reduced to zero;
fifth, to the Class B2 Certificates, until the Class Principal
Amount thereof has been reduced to zero;
sixth, to the Class B1 Certificates, until the Class Principal
Amount thereof has been reduced to zero; and
seventh, to the Classes of Senior Certificates of the related
Certificated Group, pro rata, in accordance with their Class Principal
Amounts; provided, that any such loss allocated to any Class of Accrual
Certificates shall be allocated (subject to Section 5.03(c)) on the
basis of the lesser of (x) the Class Principal Amount thereof
immediately prior to the applicable Distribution Date and (y) the Class
Principal Amount thereof on the Closing Date (as reduced by any
Realized Losses previously allocated thereto).
Notwithstanding the foregoing, the first $0.42 of principal portion of Realized
Losses shall not be allocated to any Class of Certificates.
79
(b) With respect to any Distribution Date, the principal portion
of any Excess Loss in respect of a Mortgage Loan shall be allocated, pro rata,
to the Subordinate Certificates (without regard to which Mortgage Pool
experienced the loss) and the Senior Certificates of the related Certificate
Group and on the basis of the Apportioned Principal Balances of the Classes of
Subordinate Certificates and Class Principal Amounts of the Senior Certificates;
provided, that any such loss allocated to any Class of Accrual Certificates (and
any Accrual Component) shall be allocated (subject to Section 5.03(c)) on the
basis of the lesser of (x) the Class Principal Amount thereof immediately prior
to the applicable Distribution Date and (y) the Class Principal Amount thereof
on the Closing Date (as reduced by any Realized Losses previously allocated
thereto).
(c) Any Realized Losses allocated to a Class of Certificates
pursuant to Section 5.03(a) or (b) shall be allocated among the Certificates of
such Class in proportion to their respective Certificate Principal Amounts. Any
allocation of Realized Losses pursuant to this paragraph (c) shall be
accomplished by reducing the Certificate Principal Amount of the related
Certificates on the related Distribution Date in accordance with Section
5.03(d).
(d) Realized Losses allocated in accordance with this Section 5.03
shall be allocated on the Distribution Date in the month following the month in
which such loss was incurred and, in the case of the principal portion thereof,
after giving effect to distributions made on such Distribution Date.
(e) On each Distribution Date, the Subordinate Certificate
Writedown Amount for such date shall effect a corresponding reduction in the
Certificate Principal Amount of the lowest ranking Class of outstanding
Subordinate Certificates, which reduction shall occur on such Distribution Date
after giving effect to distributions made on such Distribution Date.
(f) In the event that there is a recovery of an amount in respect
of principal of a Mortgage Loan, which amount had previously been allocated as a
Realized Loss to one or more Classes of Certificates, each outstanding Class to
which any portion of such Realized Loss had previously been allocated shall be
entitled to receive, on the Distribution Date in the month following the month
in which such recovery is received, its pro rata share (based on the Class
Principal Amount thereof) of such recovery, up to the amount of the portion of
such Realized Loss previously allocated to such Class. In the event that the
total amount of such recovery exceeds the amount of Realized Loss allocated to
the outstanding Classes in accordance with the preceding provisions, each
outstanding Class of Certificates shall be entitled to receive its pro rata
share of the amount of such excess, up to the amount of any unrecovered Realized
Loss previously allocated to such Class. Any such recovery allocated to a Class
of Certificates shall not further reduce the Certificate Principal Amount of
such Certificate. Any such amounts not otherwise allocated to any Class of
Certificates, pursuant to this subsection shall be treated as Principal
Prepayments for purposes of this Agreement.
Section 5.04. Advances by the Master Servicer and the Trustee.
(a) Advances shall be made in respect of each Deposit Date as
provided herein. If, on any Determination Date, the Master Servicer determines
that any Scheduled Payments due during the related Due Period (other than
Balloon Payments) have not been received, the Master
80
Servicer shall, or shall cause the applicable Servicer to, advance such amount,
less an amount, if any, to be set forth in an Officer's Certificate to be
delivered to the Trustee on such Determination Date, which if advanced the
Master Servicer or such Servicer has determined would not be recoverable from
amounts received with respect to such Mortgage Loan, including late payments,
Liquidation Proceeds, Insurance Proceeds or otherwise. If the Master Servicer
determines that an Advance is required, it shall on the Deposit Date immediately
following such Determination Date either (i) remit to the Trustee from its own
funds (or funds advanced by the applicable Servicer) for deposit in the
Certificate Account immediately available funds in 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 5.04, used by the Master
Servicer to make such Advance, and remit such immediately available funds to the
Trustee for deposit in the Certificate Account 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 shall be replaced by the Master Servicer from
its own funds by remittance to the Trustee for deposit in the Certificate
Account on or before any future Deposit Date to the extent that funds in the
Certificate Account on such Deposit Date shall be less than payments to
Certificateholders required to be made on the related Distribution Date. The
Master Servicer and each Servicer shall be entitled to be reimbursed from the
Collection Account for all Advances made by it as provided in Section 4.02.
(b) In the event that the Master Servicer fails for any reason to
make an Advance required to be made pursuant to Section 5.04(a) on or before the
Deposit Date, the Trustee, solely in its capacity as successor Master Servicer
pursuant to Section 6.14, shall, on or before the related Distribution Date,
deposit in the Certificate Account an amount equal to the excess of (a) Advances
required to be made by the Master Servicer or any Servicer that would have been
deposited in such Certificate Account over (b) the amount of any Advance made by
the Master Servicer or such Servicer with respect to such Distribution Date;
provided, however, that the Trustee shall be required to make such Advance only
if it is not prohibited by law from doing so and it has determined that such
Advance would be recoverable from amounts to be received with respect to such
Mortgage Loan, including late payments, Liquidation Proceeds, Insurance
Proceeds, or otherwise. The Trustee shall be entitled to be reimbursed from the
Certificate Account for Advances made by it pursuant to this Section 5.04 as if
it were the Master Servicer.
Section 5.05. Compensating Interest Payments.
The amount of the Aggregate Master Servicing Compensation payable to
the Master Servicer in respect of any Distribution Date shall be reduced by the
amount of any Compensating Interest Payment for such Distribution Date, but only
to the extent such Compensating Interest Payment is not actually made by the
applicable Servicer on the applicable Remittance Date. Such amount shall not be
treated as an Advance and shall not be reimbursable to the Master Servicer.
ARTICLE VI CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee.
81
(a) The Trustee, except during the continuance of an Event of
Default (of which a Responsible Officer of the Trustee shall have actual
knowledge), undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. Any permissive right of the Trustee
provided for in this Agreement shall not be construed as a duty of the Trustee.
If an Event of Default (of which a Responsible Officer of the Trustee shall have
actual knowledge) has occurred and has not otherwise been cured or waived, 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 Person would exercise or use under the circumstances in the conduct of
such Person's own affairs unless the Trustee is acting as Master Servicer, in
which case it shall use the same degree of care and skill as the Master Servicer
hereunder.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer, to the Trustee pursuant to this Agreement, and
the Trustee shall not be required to recalculate or verify any numerical
information furnished to the Trustee pursuant to this Agreement.
(c) The Trustee shall not have any liability arising out of or in
connection with this Agreement, except for its negligence or willful misconduct.
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; provided, however, that:
(i) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the consent or direction of Holders of
Certificates as provided in Section 6.19 hereof;
(ii) For all purposes under this Agreement, the Trustee
shall not be deemed to have notice of any Event of Default (other than
resulting from a failure by the Master Servicer (i) to remit funds (or
to make Advances) or (ii) to furnish information to the Trustee when
required to do so) unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is
in fact such a default is received by the Trustee at the Corporate
Trust Office, and such notice references the Holders of the
Certificates and this Agreement;
(iii) For all purposes under this Agreement, the Trustee
shall not be deemed to have notice of any Event of Default (other than
resulting from a failure by the Master Servicer to furnish information
to the Trustee when required to do so) unless a Responsible Officer of
the Trustee has actual knowledge thereof or unless written notice of
any event which is in fact such a default is received by the Trustee at
the address provided in Section 11.07, and such notice references the
Holders of the Certificates and this Agreement; and
(iv) With respect to expenditures which would constitute
"unanticipated expenses" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii) if paid
82
by the Trust Fund, no provision of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Master
Servicer under this Agreement except, with respect to the Trustee,
during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Master
Servicer in accordance with the terms of this Agreement.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided, however,
that the Trustee shall use its best efforts to remit to the Master Servicer upon
receipt any such complaint, claim, demand, notice or other document (i) which is
delivered to the Corporate Trust Office of the Trustee, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains information
sufficient to permit the Trustee to make a determination that the real property
to which such document relates is a Mortgaged Property.
(e) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of 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.
(f) Subject to Section 4.04, the Trustee shall not be held liable
by reason of any insufficiency in any account (including without limitation the
Collection Account and the Certificate Account) held by or on behalf of the
Trustee resulting from any investment loss on any Eligible Investment included
therein (except to the extent that the Trustee is the obligor and has defaulted
thereon).
(g) Except as otherwise provided herein, the Trustee shall have no
duty (A) to see to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any re-recording, re-filing or
re-depositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund other than from funds available in the
Collection Account or the Certificate Account, or (D) to confirm or verify the
contents of any reports or certificates of the Master Servicer delivered to the
Trustee pursuant to this Agreement believed by the Trustee, as applicable, to be
genuine and to have been signed or presented by the proper party or parties.
83
(h) The Trustee shall not be liable in its individual capacity for
an error of judgment made in good faith by a Responsible Officer or other
officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.
(i) Notwithstanding anything in this Agreement to the contrary,
the Trustee shall not be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits),
even if the Trustee has been advised of the likelihood of such loss or damage
and regardless of the form of action.
Section 6.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 6.01:
(i) The Trustee may request, and may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors, Opinion of Counsel or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) The Trustee may consult with counsel and any advice
of its counsel 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;
(iii) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, 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 (provided the same
appears regular on its face), unless requested in writing to do so by
Holders of at least a majority in Class Principal Amount (or Class
Notional Amount) of each Class of Certificates; 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 or payment of such estimated expenses
as a condition to proceeding. The reasonable expense thereof shall be
paid by the Holders requesting such investigation;
(v) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, custodians, or attorneys, which agents, custodians or
attorneys shall have any and all of the rights, powers, duties and
obligations of the Trustee conferred on them by such appointment
provided that the Trustee shall continue to be responsible for its
duties and obligations hereunder to the extent provided herein, and
provided further that the Trustee shall not be responsible for
84
any misconduct or negligence on the part of any such agent or attorney
appointed with due care by the Trustee;
(vi) 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, in each case 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;
(vii) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act; and
(viii) The Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust Fund created hereby or
the powers granted hereunder.
Section 6.03. Trustee Not Liable for Certificates.
The Trustee makes no representations as to the validity or sufficiency
of this Agreement or of the Certificates (other than the certificate of
authentication on the Certificates) or of any Mortgage Loan, or related document
save that the Trustee represents that, assuming due execution and delivery by
the other parties hereto, this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and binding obligation, enforceable
against it in accordance with its terms except that such enforceability may be
subject to (A) applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally, and (B) general
principles of equity regardless of whether such enforcement is considered in a
proceeding in equity or at law. The Trustee shall not be accountable for the use
or application by the Depositor of funds paid to the Depositor in consideration
of the assignment of the Mortgage Loans to the Trust Fund by the Depositor or
for the use or application of any funds deposited into the Collection Account,
the Certificate Account, any Escrow Account or any other fund or account
maintained with respect to the Certificates. The Trustee shall not be
responsible for the legality or validity of this Agreement or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
or intended to be issued hereunder. Except as otherwise provided herein, the
Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder or to
record this Agreement.
Section 6.04. Trustee May Own Certificates.
The Trustee and any Affiliate or agent of the Trustee in its individual
or any other capacity may become the owner or pledgee of Certificates and may
transact banking and trust with the other parties hereto with the same rights it
would have if it were not Trustee or such agent.
Section 6.05. Eligibility Requirements for Trustee.
85
The Trustee hereunder shall at all times be (i) an institution insured
by the FDIC and (ii) a corporation or national banking association, organized
and doing business under the laws of any State or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority. If such corporation or national
banking association publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purposes of this Section, the combined capital and
surplus of such corporation or national banking association 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 provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.06.
Section 6.06. Resignation and Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor and the
Master Servicer. Upon receiving such notice of resignation, the Depositor will
promptly appoint a successor trustee by written instrument, one copy of which
instrument shall be delivered to the resigning Trustee, one copy to the
successor trustee and one copy to the Master Servicer. If no successor trustee
shall have been so appointed and shall have accepted appointment within 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.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a 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, (iii) a tax is
imposed or threatened with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund held by the Trustee is located, or (iv) the continued
use of the Trustee would result in a downgrading of the rating by the Rating
Agencies of any Class of Certificates with a rating, then the Depositor shall
remove the Trustee and appoint a successor trustee by written instrument, one
copy of which instrument shall be delivered to the Trustee so removed, one copy
to the successor trustee and one copy to the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Amount (or
Class Notional Amount) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee and the Depositor remove the Trustee by such
written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor,
one copy to the Trustee so removed and one copy to the Master Servicer; the
Depositor shall thereupon use its best efforts to appoint a mutually acceptable
successor trustee in accordance with this Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon (i) payment of all
86
unpaid amounts owed to the Trustee and (ii) acceptance of appointment by the
successor trustee as provided in Section 6.07.
Section 6.07. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 6.06
shall execute, acknowledge and deliver to the Depositor, the Master Servicer 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, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee. The predecessor trustee (or its custodian) shall deliver to
the successor trustee (or assign to the successor trustee its interest under
each Custodial Agreement, to the extent permitted thereunder) all Mortgage Files
and documents and statements related to each Mortgage Files held by it
hereunder, and shall duly assign, transfer, deliver and pay over to the
successor trustee the entire Trust Fund, together with all necessary instruments
of transfer and assignment or other documents properly executed necessary to
effect such transfer and such of the record or copies thereof maintained by the
predecessor trustee in the administration hereof as may be requested by the
successor trustee and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Master Servicer and the
predecessor trustee shall execute and deliver such other instruments and do such
other things as may reasonably be required to more fully and certainly vest and
confirm in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in
this Section unless at the time of such appointment such successor trustee shall
be eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Master Servicer shall mail notice of the
succession of such trustee and to all Holders of Certificates at their addresses
as shown in the Certificate Register and to the Rating Agencies. The expenses of
such mailing shall be borne by the Master Servicer.
Section 6.08. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Persons succeeding
to the business of the Trustee, shall be the successor to the Trustee 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 that such Person shall be eligible under the provisions of Section
6.05.
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or the Certificateholders evidencing more than 50% of the
Class Principal Amount (or Class Notional Amount) of each Class of Certificates
shall each have the power from time to time to appoint one or more Persons to
act either as co-trustees jointly with the Trustee, or as
87
separate trustees, or as custodians, for the purpose of holding title to,
foreclosing or otherwise taking action with respect to any Mortgage Loan outside
the state where the Trustee has its principal place of business where such
separate trustee or co-trustee is necessary or advisable (or the Trustee has
been advised by the Master Servicer that such separate trustee or co-trustee is
necessary or advisable) under the laws of any state in which a property securing
a Mortgage Loan is located or for the purpose of otherwise conforming to any
legal requirement, restriction or condition in any state in which a property
securing a Mortgage Loan is located or in any state in which any portion of the
Trust Fund is located. The separate trustees, co-trustees, or custodians so
appointed shall be trustees or custodians for the benefit of all the
Certificateholders and shall have such powers, rights and remedies as shall be
specified in the instrument of appointment; provided, however, that no such
appointment shall, or shall be deemed to, constitute the appointee an agent of
the Trustee. The obligation of the Trustee to make Advances pursuant to Section
5.04 and 6.14 hereof shall not be affected or assigned by the appointment of a
co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to
the extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred
upon the Trustee in respect of the receipt, custody and payment of
moneys shall be exercised solely by the Trustee;
(ii) all other 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, co-trustee, or custodian jointly, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed 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, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally
liable by reason of any act or omission of any other Trustee or
custodian hereunder; and
(iv) the Trustee or the Certificateholders evidencing more
than 50% of the Aggregate Voting Interests of the Certificates may at
any time accept the resignation of or remove any separate trustee,
co-trustee or custodian, so appointed by it or them, if such
resignation or removal does not violate the other terms of this
Agreement.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. 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
88
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.
(d) Any separate trustee, co-trustee or custodian 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. The Trustee shall not
be responsible for any action or inaction of any separate trustee, co-trustee or
custodian. If any separate trustee, co-trustee or custodian shall die, become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 6.05 hereunder and no notice to Certificateholders of the appointment
shall be required under Section 6.07 hereof.
(f) The Trustee agrees to instruct the co-trustees, if any, to the
extent necessary to fulfill the Trustee's obligations hereunder.
(g) The Trust Fund shall pay the reasonable compensation of the
co-trustees to the extent, and in accordance with the standards, specified in
Section 6.12 hereof (which compensation shall not reduce any compensation
payable to the Trustee under such Section).
Section 6.10. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents
which shall be authorized to act on behalf of the Trustee in authenticating
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 a corporation 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.
(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 with the provisions of this Section
6.10, the Trustee may appoint a successor
89
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 6.10. 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, if paid by the
Trustee, it shall be a reimbursable expense to the extent provided in Section
6.12.
Section 6.11. Indemnification of Trustee.
The Trustee and its respective directors, officers, employees and
agents shall be entitled to indemnification from the Trust Fund for any loss,
liability or expense incurred in connection with any legal proceeding or
incurred without negligence or willful misconduct on their part, arising out of,
or in connection with, the acceptance or administration of the trusts created
hereunder or in connection with the performance of their duties hereunder or
under the Certificates, any Custodial Agreement or any Servicing Agreement,
including any applicable fees and expenses payable pursuant to Section 6.12 and
the costs and expenses of defending themselves against any claim in connection
with the exercise or performance of any of their powers or duties hereunder,
provided that:
(i) with respect to any such claim, the Trustee shall
have given the Depositor, the Master Servicer and the Holders written
notice thereof promptly after the Trustee shall have knowledge thereof;
provided that failure to so notify shall not relieve the Trust Fund of
the obligation to indemnify the Trustee; however, any reasonable delay
by the Trustee to provide written notice to the Depositor, the Master
Servicer and the Holders promptly after the Trustee shall have obtained
knowledge of a claim shall not relieve the Trust Fund of the obligation
to indemnify the Trustee under this Section 6.11;
(ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Depositor in
preparing such defense; and
(iii) notwithstanding anything to the contrary in this
Section 6.11, the Trust Fund shall not be liable for settlement of any
such claim by the Trustee entered into without the prior consent of the
Depositor, which consent shall not be unreasonably withheld; and
(iv) the Trust Fund's indemnification obligations
hereunder shall be limited to losses, liability, costs or expenses,
payments made by the Trust Fund which would constitute "unanticipated
expenses" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii).
The provisions of this Section 6.11 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense under
any environmental law.
Section 6.12. Fees and Expenses of Trustee and Custodian.
90
The Trustee shall be entitled to (a) the Trustee Fee and (b) all
reasonable expenses, disbursements and advancements incurred or made by the
Trustee in accordance with this Agreement (including fees and expenses of its
counsel and all persons not regularly in its employment), except any such
expenses, disbursements and advancements that either (i) arise from its
negligence, bad faith or willful misconduct or (ii) do not constitute
"unanticipated expenses" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii). The Custodian shall be compensated as separately agreed with
the Depositor.
Section 6.13. Collection of Monies.
Except as otherwise expressly provided in this Agreement, the Trustee
may demand payment or delivery of, and shall receive and collect, all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement. The Trustee shall hold all such money and property received by it as
part of the Trust Fund and shall distribute it as provided in this Agreement. If
the Trustee shall not have timely received amounts to be remitted with respect
to the Mortgage Loans from the Master Servicer, the Trustee shall request the
Master Servicer to make such distribution as promptly as practicable or legally
permitted. If the Trustee shall subsequently receive any such amount, it may
withdraw such request.
Section 6.14. Events of Default; Trustee To Act; Appointment of
Successor.
(a) The occurrence of any one or more of the following events
shall constitute an "Event of Default":
(i) Any failure by the Master Servicer to furnish the
Trustee the Mortgage Loan data sufficient to prepare the reports
described in Section 4.03(a) which continues unremedied for a period of
two (2) Business Days after the date upon which written notice of such
failure shall have been given to such Master Servicer by the Trustee or
to such Master Servicer, the Trustee by the Holders of not less than
25% of the Class Principal Amount (or Class Notional Amount) of each
Class of Certificates affected thereby; or
(ii) Any failure on the part of the Master Servicer duly
to observe or perform in any material respect any other of the
covenants or agreements on the part of such Master Servicer contained
in this Agreement which continues unremedied for a period of 30 days
(or 15 days, in the case of a failure to maintain any Insurance Policy
required to be maintained pursuant to this Agreement) after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to such Master Servicer by the Trustee,
or to such Master Servicer and the Trustee by the Holders of not less
than 25% of the Class Principal Amount (or Class Notional Amount) of
each Class of Certificates affected thereby; or
(iii) 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 Master Servicer, and such decree or order shall have
remained in force
91
undischarged or unstayed for a period of 60 days or any Rating Agency
reduces or withdraws or threatens to reduce or withdraw the rating of
the Certificates because of the financial condition or loan servicing
capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment
of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities, voluntary
liquidation or similar proceedings of or relating to such Master
Servicer or of or relating to all or substantially all of its property;
or
(v) The Master 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; or
(vi) The Master Servicer shall be dissolved, or shall
dispose of all or substantially all of its assets, or consolidate with
or merge into another entity or shall permit another entity to
consolidate or merge into it, such that the resulting entity does not
meet the criteria for a successor servicer as specified in Section 9.27
hereof; or
(vii) If a representation or warranty set forth in Section
9.14 hereof shall prove to be incorrect as of the time made in any
respect that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of
which such representation or warranty was incorrect shall not have been
eliminated or cured within 60 days after the date on which written
notice of such incorrect representation or warranty shall have been
given to the Master Servicer by the Trustee, or to the Master Servicer
and the Trustee by the Holders of not less than 25% of the Aggregate
Certificate Principal Amount of each Class of Certificates; or
(viii) A sale or pledge of the any of the rights of the
Master Servicer hereunder or an assignment of this Agreement by the
Master Servicer or a delegation of the rights or duties of the Master
Servicer hereunder shall have occurred in any manner not otherwise
permitted hereunder and without the prior written consent of the
Trustee and Certificateholders holding more than 50% of the Class
Principal Amount (or Class Notional Amount) of each Class of
Certificates;
(ix) The Master Servicer has notice or actual knowledge
that any Servicer at any time is not either an FNMA- or FHLMC- approved
Seller/Servicer, and the Master Servicer has not terminated the rights
and obligations of such Servicer under the applicable Servicing
Agreement and replaced such Servicer with an FNMA- or FHLMC-approved
servicer within 60 days of the date the Master Servicer receives such
notice or actual knowledge; or
(x) Any failure of the Master Servicer to remit to the
Trustee any payment required to be made to the Trustee for the benefit
of Certificateholders under the terms of this Agreement, including any
Advance, on any Deposit Date, which such failure continues unremedied
for a period of one Business Day after the date upon which notice of
such failure shall have been given to the Master Servicer by the
Trustee.
92
If an Event of Default described in clauses (i) through (ix) of this
Section 6.14 shall occur, then, in each and every case, subject to applicable
law, so long as any such Event of Default shall not have been remedied within
any period of time prescribed by this Section 6.14, the Trustee, by notice in
writing to the Master Servicer may, and shall, if so directed by
Certificateholders evidencing more than 50% of the Class Principal Amount (or
Class Notional Amount) of each Class of Certificates, terminate all of the
rights and obligations of the Master Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. If an Event of Default described in
clause (x) of this Section 6.14 shall occur, then, in each and every case,
subject to applicable law, so long as such Event of Default shall not have been
remedied within the time period prescribed by clause (x) of this Section 6.14,
the Trustee, by notice in writing to the Master Servicer, shall promptly
terminate all of the rights and obligations of the Master Servicer hereunder and
in and to the Mortgage Loans and the proceeds thereof. On or after the receipt
by the Master Servicer of such written notice, all authority and power of the
Master Servicer, and only in its capacity as Master Servicer under this
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee pursuant to and under the terms of this
Agreement; and the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the defaulting Master Servicer as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents or otherwise. The
defaulting Master Servicer agrees to cooperate with the Trustee in effecting the
termination of the defaulting Master Servicer's responsibilities and rights
hereunder as Master Servicer including, without limitation, notifying Servicers
of the assignment of the master servicing function and providing the Trustee or
its designee all documents and records in electronic or other form reasonably
requested by it to enable the Trustee or its designee to assume the defaulting
Master Servicer's functions hereunder and the transfer to the Trustee for
administration by it of all amounts which shall at the time be or should have
been deposited by the defaulting Master Servicer in the Collection Account
maintained by such defaulting Master Servicer and any other account or fund
maintained with respect to the Certificates or thereafter received with respect
to the Mortgage Loans. The Master Servicer being terminated shall bear all costs
of a master servicing transfer, including but not limited to those of the
Trustee reasonably allocable to specific employees and overhead, legal fees and
expenses, accounting and financial consulting fees and expenses, and costs of
amending the Agreement, if necessary. The Trustee shall be entitled to be
reimbursed from the Master Servicer (or by the Trust Fund, if the Master
Servicer is unable to fulfill its obligations hereunder) for all costs
associated with the transfer of servicing from the predecessor Master Servicer,
including, without limitation, any costs or expenses associated with the
complete transfer of all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to enable the
Trustee to master service the Mortgage Loans properly and effectively. If the
terminated Master Servicer does not pay such reimbursement within thirty (30)
days of its receipt of an invoice therefor, such reimbursement shall be an
expense of the Trust and the Trustee shall be entitled to withdraw such
reimbursement from amounts on deposit in the Certificate Account pursuant to
Section 4.04; provided that the terminated Master Servicer shall reimburse the
Trust for any such expense incurred by the Trust.
93
Notwithstanding the termination of its activities as Master Servicer,
each terminated Master Servicer shall continue to be entitled to reimbursement
to the extent provided in Section 4.02(i), (ii), (iii), (iv), (v), (vi), (vii),
(ix) and (xi) to the extent such reimbursement relates to the period prior to
such Master Servicer's termination.
If any Event of Default shall occur of which a Responsible Officer of
the Trustee has actual knowledge, the Trustee shall promptly notify the Rating
Agencies of the nature and extent of such Event of Default. The Trustee shall
immediately give written notice to the Master Servicer upon such Master
Servicer's failure to remit funds on the Deposit Date.
(b) Within 90 days of the time the Master Servicer receives a
notice of termination from the Trustee pursuant to Section 6.14(a) or the
Trustee receives the resignation of the Master Servicer evidenced by an Opinion
of Counsel pursuant to Section 9.28, the Trustee, unless another master servicer
shall have been appointed, shall be the successor in all respects to the Master
Servicer in its capacity as such under this Agreement and the transactions set
forth or provided for herein and shall have all the rights and powers and be
subject to all the responsibilities, duties and liabilities relating thereto and
arising thereafter placed on the Master Servicer hereunder, including the
obligation to make Advances; provided, however, that any failure to perform such
duties or responsibilities caused by the Master Servicer's or the Trustee's
failure to provide information required by this Agreement shall not be
considered a default by the Trustee hereunder. In addition, the Trustee shall
have no responsibility for any act or omission of the Master Servicer prior to
the issuance of any notice of termination and within a period of time not to
exceed 90 days after the issuance of any notice of termination pursuant to
Section 6.14(a) or Section 9.28. The Trustee shall have no liability relating to
the representations and warranties of the Master Servicer set forth in Section
9.14. In the Trustee's capacity as such successor, the Trustee shall have the
same limitations on liability herein granted to the Master Servicer. As
compensation therefor, the Trustee shall be entitled to receive all compensation
payable to the Master Servicer under this Agreement, including the Master
Servicing Fee.
(c) Notwithstanding the above, the Trustee may, if it shall be
unwilling to continue 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 servicer, master servicer, servicing or
mortgage servicing institution having a net worth of not less than $15,000,000
and meeting such other standards for a successor master servicer as are set
forth in this Agreement, as the successor to such Master Servicer in the
assumption of all of the responsibilities, duties or liabilities of a master
servicer, like the Master Servicer. Any entity designated by the Trustee as a
successor master servicer may be an Affiliate of the Trustee; provided, however,
that, unless such Affiliate meets the net worth requirements and other standards
set forth herein for a successor master servicer, the Trustee, in its individual
capacity shall agree, at the time of such designation, to be and remain liable
to the Trust Fund for such Affiliate's actions and omissions in performing its
duties hereunder. In connection with 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; provided,
however, that no such compensation shall be in excess of that permitted to the
Master Servicer hereunder. The Trustee and such successor shall take such
actions, consistent with this Agreement, as shall be necessary to effectuate any
such succession and may make other arrangements with respect to the servicing to
be conducted hereunder which are not inconsistent herewith. The Master Servicer
shall
94
cooperate with the Trustee and any successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder
including, without limitation, notifying Mortgagors of the assignment of the
master servicing functions and providing the Trustee and successor master
servicer, as applicable, all documents and records in electronic or other form
reasonably requested by it to enable it to assume the Master Servicer's
functions hereunder and the transfer to the Trustee or such successor master
servicer, as applicable, all amounts which shall at the time be or should have
been deposited by the Master Servicer in the Collection Account and any other
account or fund maintained with respect to the Certificates or thereafter be
received with respect to the Mortgage Loans. Neither the Trustee nor any other
successor master servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof caused by (i) the failure of the Master Servicer to deliver,
or any delay in delivering, cash, documents or records to it, (ii) the failure
of the Master Servicer to cooperate as required by this Agreement, (iii) the
failure of the Master Servicer to deliver the Mortgage Loan data to the Trustee
as required by this Agreement or (iv) restrictions imposed by any regulatory
authority having jurisdiction over the Master Servicer.
Section 6.15. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event
of Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as trustee
of an express trust, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 6.16. Waiver of Defaults.
35% or more of the Aggregate Voting Interests of Certificateholders may
waive any default or Event of Default by the Master Servicer in the performance
of its obligations hereunder, except that a default in the making of any
required deposit to the Certificate Account that would result in a failure of
the Trustee to make any required payment of principal of or interest on the
Certificates may only be waived with the consent of 100% 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 6.17. Notification to Holders.
Upon termination of the Master Servicer or appointment of a successor
to the Master Servicer, in each case as provided herein, the Trustee shall
promptly mail notice thereof by first
95
class mail to the Certificateholders at their respective addresses appearing on
the Certificate Register. The Trustee shall also, within 45 days after the
occurrence of any Event of Default known to a Responsible Officer of the
Trustee, give written notice thereof to the Certificateholders, unless such
Event of Default shall have been cured or waived prior to the issuance of such
notice and within such 45-day period.
Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default.
Subject to the provisions of Section 8.01 hereof, during the
continuance of any Event of Default, Holders of Certificates evidencing not less
than 25% of the Class Principal Amount (or Class Notional Amount) of each Class
of Certificates may direct 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; provided, however, that
the Trustee shall be under no obligation to pursue any such remedy, or to
exercise any of the trusts or powers vested in it by this Agreement (including,
without limitation, (i) the conducting or defending of any administrative action
or litigation hereunder or in relation hereto and (ii) the terminating of the
Master Servicer or any successor master servicer from its rights and duties as
master servicer hereunder) at the request, order or direction of any of the
Certificateholders, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the cost, expenses and
liabilities which may be incurred therein or thereby; and, provided further,
that, subject to the provisions of Section 8.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee, in accordance with
an Opinion of Counsel, determines that the action or proceeding so directed may
not lawfully be taken or if the Trustee in good faith determines that the action
or proceeding so directed would involve it in personal liability or be unjustly
prejudicial to the non-assenting Certificateholders.
Section 6.19. Action Upon Certain Failures of the Master Servicer and
Upon Event of Default.
In the event that a Responsible Officer of the Trustee shall have
actual knowledge of any action or inaction of the Master Servicer that would
become an Event of Default upon the Master Servicer's failure to remedy the same
after notice, the Trustee shall give notice thereof to the Master Servicer. For
all purposes of this Agreement, in the absence of actual knowledge by a
Responsible Officer of the Trustee, the Trustee shall not be deemed to have
knowledge of any failure of the Master Servicer or any other Event of Default
unless notified in writing by the Depositor, the Master Servicer or a
Certificateholder.
Section 6.20. Preparation of Tax Returns and Other Reports.
(a) The Trustee shall prepare or cause to be prepared on behalf of
the Trust Fund, based upon information calculated in accordance with this
Agreement pursuant to instructions given by the Depositor, and the Trustee shall
file, federal tax returns and appropriate state income tax returns and such
other returns as may be required by applicable law relating to the Trust Fund,
and shall file any other documents to the extent required by applicable state
tax law (to the extent such documents are in the Trustee's possession. The
Trustee shall forward copies to the Depositor of all such returns and Form 1099
supplemental tax information and such other
96
information within the control of the Trustee as the Depositor may reasonably
request in writing, and shall forward to each Certificateholder such forms and
furnish such information within the control of the Trustee as are required by
the Code and the REMIC Provisions to be furnished to them, and will prepare and
distribute Certificateholders Form 1099 (supplemental tax information) (or
otherwise furnish information within the control of the Trustee) to the extent
required by applicable law. The Master Servicer will indemnify the Trustee for
any liability of or assessment against the Trustee, as applicable, resulting
from any error in any of such tax or information returns directly resulting from
errors in the information provided by such Master Servicer.
(b) The Trustee shall prepare and file with the Internal Revenue
Service ("IRS"), on behalf of each of REMIC 1, REMIC 2, REMIC 3, REMIC 4 and
the Upper Tier REMIC, an application on IRS Form SS-4. The Trustee, upon receipt
from the IRS of the Notice of Taxpayer Identification Number Assigned for each
REMIC, shall promptly forward copies of such notice to the Master Servicer and
the Depositor. The Trustee will file an IRS Form 8811 for the REMICs created
hereunder.
(c) The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Thereafter, within 15 days after each
Distribution Date, the Trustee shall, in accordance with industry standards,
file with the Securities and Exchange Commission (the "Commission") via the
Electronic Data Gathering and Retrieval System (XXXXX), a Form 8-K with a copy
of the statement to the Certificateholders for such Distribution Date as an
exhibit thereto. Prior to January 31, 2004, the Trustee shall, in accordance
with industry standards, file a Form 15 Suspension Notification with respect to
the Trust Fund, if applicable. Prior to March 31, 2004, the Trustee shall file
(but will not execute) a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. The Depositor hereby grants to the
Trustee a limited power of attorney to execute and file each such document on
behalf of the Depositor. Such power of attorney shall continue until either the
earlier of (i) receipt by the Trustee from the Depositor of written termination
of such power of attorney and (ii) the termination of the Trust Fund. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports, and financial statements within its
control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. In addition, the Form 10-K shall include the certification required
pursuant to Rule 13a-14 under the Securities and Exchange Act of 1934, as
amended (the "Form 10-K Certification") signed by an appropriate party or
parties (which Form 10-K Certification the Trustee shall not be required to
sign). The Trustee shall have no responsibility to file any items other than
those specified in this section.
(d) If so requested, the Trustee shall sign a certification (in
the form attached hereto as Exhibit M) for the benefit of the Person(s) signing
the Form 10-K Certification regarding certain aspects of such Form 10-K
Certification (provided, however, that the Trustee shall not be required to
undertake an analysis of the accountant's report attached as an exhibit to the
Form 10-K).
(e) If so requested, the Master Servicer shall sign a
certification for the benefit of the Person(s) signing the Form 10-K
Certification regarding certain aspects of such Form 10-K
97
Certification (provided, however, that the Master Servicer shall not be required
to undertake an analysis of the accountant's report attached as an exhibit to
the Form 10-K).
(f) Each person (including their officers or directors) that signs
any Form 10-K Certification shall be entitled to indemnification from the Trust
Fund for any liability or expense incurred by it in connection with such
certification, other than any liability or expense attributable to such Person's
own bad faith, negligence or willful misconduct. The provisions of this
subsection shall survive any termination of this Agreement and the resignation
or removal of such Person.
ARTICLE VII
PURCHASE AND TERMINATION
OF THE TRUST FUND
Section 7.01. Termination of Trust Fund Upon Repurchase or Liquidation
of All Mortgage Loans.
(a) The respective obligations and responsibilities of the Trustee
and the Master Servicer created hereby (other than the obligation of the Trustee
to make payments to Certificateholders as set forth in Section 7.02, the
obligation of the Master Servicer to make a final remittance to the Trustee for
deposit into the Certificate Account pursuant to Section 4.02 and the
obligations of the Master Servicer to the Trustee pursuant to Sections 9.10 and
9.14), shall terminate on the earlier of (i) the final payment or other
liquidation of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the sale of all remaining property held
by the Trust Fund in accordance with Section 7.01(b); provided, however, that in
no event shall the Trust Fund 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. Any termination of the Trust Fund shall be carried
out in such a manner so that the termination of each REMIC included therein
shall qualify as a "qualified liquidation" under the REMIC Provisions.
(b) On any Distribution Date occurring after the date on which the
aggregate Scheduled Principal Balance of the Mortgage Loans in the Trust Fund is
less than 10% of the Principal Balance of the Mortgage Loans in the Trust Fund
(determined in the aggregate rather than by pool) as of the Cut-off Date, the
Master Servicer may, upon written direction to the Trustee, cause the Trustee to
sell (or arrange for the sale of) the assets of the Trust Fund. Upon the
repurchase of the Mortgage Loans in the Trust Fund, the Master Servicer shall,
upon written direction to the Trustee, cause each REMIC included in the Trust
Fund to adopt a plan of complete liquidation pursuant to Section 7.03 hereof to
sell all of its property. The property of the Trust Fund shall be sold at a
price (the "Repurchase Price") equal to: (i) 100% of the unpaid principal
balance of each Mortgage Loan on the day of such purchase plus interest accrued
thereon at the applicable Mortgage Rate with respect to any Mortgage Loan to the
Due Date in the Due Period immediately preceding the related Distribution Date
to the date of such repurchase, (ii) the amount of any costs and damages
incurred by the Trust Fund as a result of any violation of any applicable
federal, state or local predatory or abusive lending law arising
98
from or in connection with the origination of any Mortgage Loan purchased by the
Master Servicer pursuant to this Section 7.01(b), (iii) the fair market value of
any REO Property and any other property held by the Trust Fund, such fair market
value to be determined by an appraiser or appraisers appointed by the Master
Servicer with the consent of the Trustee and (iv) any unreimbursed Servicing
Advances with respect to each Mortgage Loan in the Trust Fund and all amounts
due and owing to the Trustee and the Master Servicer or for which the Trustee or
the Master Servicer is entitled to reimbursement pursuant to this Agreement.
Upon the repurchase of the Mortgage Loans, the Trust Fund shall terminate in
accordance with the terms of this Agreement.
Section 7.02. Procedure Upon Termination of Trust Fund.
(a) Notice of any termination pursuant to the provisions of
Section 7.01, specifying the Distribution Date upon which the final distribution
shall be made, shall be given promptly by the Trustee by first class mail to
Certificateholders mailed (x) no later than five Business Days after the Trustee
has received notice from the Master Servicer of its intent to exercise its right
to cause the termination of the Trust Fund pursuant to Section 7.01(b) or (y)
upon the final payment or other liquidation of the last Mortgage Loan or REO
Property in the Trust Fund. Such notice shall specify (A) the Distribution Date
upon which final distribution on the Certificates of all amounts required to be
distributed to Certificateholders pursuant to Section 5.02 will be made upon
presentation and surrender of the Certificates at the Corporate Trust Office,
and (B) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distribution being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Depositor and the Certificate Registrar at
the time such notice is given to Holders of the Certificates. Upon any such
termination, the duties of the Certificate Registrar with respect to the
Certificates shall terminate and the Trustee shall terminate, or request the
Master Servicer to terminate, the Collection Account it maintains, the
Certificate Account and any other account or fund maintained with respect to the
Certificates, subject to the Trustee's obligation hereunder to hold all amounts
payable to Certificateholders in trust without interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the remaining Certificateholders concerning surrender of such Certificates, and
the cost thereof shall be paid out of the amounts distributable to such Holders.
If within two years after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall, subject to applicable state law
relating to escheatment, hold all amounts distributable to such Holders for the
benefit of such Holders. No interest shall accrue on any amount held by the
Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section.
(c) Any reasonable expenses incurred by the Trustee in connection
with any termination or liquidation of the Trust Fund shall be paid from
proceeds received from the
99
liquidation of the Trust Fund, but only to the extent that such expenses
constitute "unanticipated expenses" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii).
Section 7.03. Additional Requirements under the REMIC Provisions.
(a) Any termination of the Trust Fund shall be effected in
accordance with the following additional requirements, unless the Trustee seeks
(at the request of the Master Servicer), and subsequently receives, an Opinion
of Counsel (at the expense of the Master Servicer), addressed to the Trustee to
the effect that the failure of the Trust Fund to comply with the requirements of
this Section 7.03 will not (i) result in the imposition of taxes on any REMIC
under the REMIC Provisions or (ii) cause any REMIC established hereunder to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Trustee shall sell all of the assets of the Trust Fund for
cash and, within 90 days of such sale, shall distribute the
proceeds of such sale to the Certificateholders in complete
liquidation of the Trust Fund, REMIC 1, REMIC 2, REMIC 3,
REMIC 4 and the Upper Tier REMIC; and
(ii) The Trustee shall attach a statement to the final Federal
income tax return for each of REMIC 1, REMIC 2, REMIC 3, REMIC
4 and the Upper Tier REMIC stating that pursuant to
Treasury Regulation Section 1.860F-1, the first day of the
90-day liquidation period for each such REMIC was the date on
which the Trustee sold the assets of the Trust Fund.
(b) By its acceptance of a Residual Certificate, each Holder
thereof hereby (i) authorizes the Trustee to take the action described in
paragraph (a) above and (ii) agrees to take such other action as may be
necessary to facilitate liquidation of each REMIC created under this Agreement,
which authorization shall be binding upon all successor Residual
Certificateholders.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of this
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Master Servicer or
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.
100
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing 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 an Event
of Default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less than 25% of the Class
Principal Amount (or Class Notional Amount) of Certificates of each Class shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the cost, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for sixty
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 and
no direction inconsistent with such written request has been given such Trustee
during such sixty-day period by such Certificateholders; 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 shall have any right in any manner whatever by virtue or by
availing of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, 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
benefit of all Certificateholders. 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.
Section 8.02. Access to List of Holders.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter
referred to as "Applicants") apply in writing to the Trustee, and such
application states that the Applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants reasonable access during the normal
business hours of the Trustee to the most recent list of Certificateholders held
by the Trustee or shall, as an alternative, send, at the Applicants' expense,
the written communication proffered by the Applicants to all Certificateholders
at their addresses as they appear in the Certificate Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Master Servicer, the Certificate Registrar and the Trustee that neither the
Depositor, the Master Servicer, the Certificate Registrar nor the Trustee shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was derived.
101
Section 8.03. Acts of Holders of Certificates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders or Certificate Owner, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where expressly required herein, to the Master Servicer. Such instrument or
instruments (as the action embodies therein and evidenced thereby) are herein
sometimes referred to as an "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agents shall be sufficient for any purpose of this Agreement
and conclusive in favor of the Trustee and Master Servicer, if made in the
manner provided in this Section. Each of the Trustee and Master Servicer shall
promptly notify the other of receipt of any such instrument by it, and shall
promptly forward a copy of such instrument to the other.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the individual
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Certificates (whether or not such
Certificates shall be overdue and notwithstanding any notation of ownership or
other writing thereon made by anyone other than the Trustee) shall be proved by
the Certificate Register, and the Trustee, the Master Servicer and the Depositor
shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Certificate shall bind
every future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Master Servicer in reliance thereon, whether or not notation of
such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer.
The Certificateholders, by their purchase and acceptance of the
Certificates, appoint Aurora Loan Services Inc., as Master Servicer. For and on
behalf of the Depositor, the Trustee
102
and the Certificateholders, the Master Servicer shall master service the
Mortgage Loans in accordance with the provisions of this Agreement and the
provisions of the applicable Servicing Agreement.
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors
and Omissions Insurance Policy.
(a) The Master Servicer, at its expense, shall maintain in effect
a Fidelity Bond and an Errors and Omissions Insurance Policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The Errors and
Omissions Insurance Policy and the Fidelity Bond shall be in such form and
amount that would meet the requirements of FNMA or FHLMC if it were the
purchaser of the Mortgage Loans. The Master Servicer shall (i) require each
Servicer to maintain an Errors and Omissions Insurance Policy and a Fidelity
Bond in accordance with the provisions of the applicable Servicing Agreement,
(ii) cause each Servicer to provide to the Master Servicer certificates
evidencing that such policy and bond is in effect and to furnish to the Master
Servicer any notice of cancellation, non-renewal or modification of the policy
or bond received by it, as and to the extent provided in the applicable
Servicing Agreement, and (iii) furnish copies of the certificates and notices
referred to in clause (ii) to the Trustee upon its request. The Fidelity Bond
and Errors and Omissions Insurance Policy may be obtained and maintained in
blanket form.
(b) The Master Servicer shall promptly report to the Trustee any
material changes that may occur in the Master Servicer Fidelity Bond or the
Master Servicer Errors and Omissions Insurance Policy and shall furnish to the
Trustee, on request, certificates evidencing that such bond and insurance policy
are in full force and effect. The Master Servicer shall promptly report to the
Trustee all cases of embezzlement or fraud, if such events involve funds
relating to the Mortgage Loans. The total losses, regardless of whether claims
are filed with the applicable insurer or surety, shall be disclosed in such
reports together with the amount of such losses covered by insurance. If a bond
or insurance claim report is filed with any of such bonding companies or
insurers, the Master Servicer shall promptly furnish a copy of such report to
the Trustee. Any amounts relating to the Mortgage Loans collected by the Master
Servicer under any such bond or policy shall be promptly remitted by the Master
Servicer to the Trustee for deposit into the Certificate Account. Any amounts
relating to the Mortgage Loans collected by any Servicer under any such bond or
policy shall be remitted to the Master Servicer to the extent provided in the
applicable Servicing Agreement.
Section 9.03. Master Servicer's Financial Statements and Related
Information.
For each year this Agreement is in effect, the Master Servicer shall
submit to the Trustee, each Rating Agency and the Depositor a copy of its annual
unaudited financial statements on or prior to the last day of February of each
year commencing on February 28, 2004. Such financial statements shall include a
balance sheet, income statement, statement of retained earnings, statement of
additional paid-in capital, statement of changes in financial position and all
related notes and schedules and shall be in comparative form, certified by a
nationally recognized firm of Independent Accountants to the effect that such
statements were examined and prepared in
103
accordance with generally accepted accounting principles applied on a basis
consistent with that of the preceding year.
Section 9.04. Power to Act; Procedures.
(a) The Master Servicer shall master service the Mortgage Loans
and shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article X hereof, and each Servicer shall have full power and
authority (to the extent provided in the applicable Servicing Agreement) to do
any and all things that it may deem necessary or desirable in connection with
the servicing and administration of the Mortgage Loans, including but not
limited to the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the applicable Servicing Agreement, as applicable; provided
that the Master Servicer shall not take, or knowingly permit any Servicer to
take, any action that is inconsistent with or prejudices the interests of the
Trust Fund or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor, the Trustee and the Certificateholders under this
Agreement. The Master Servicer further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name or
in the name of any Servicer, when the Master Servicer or a Servicer, as the case
may be, believes it is appropriate in its best judgment to register any Mortgage
Loan with MERS, or cause the removal from the registration of any Mortgage Loan
on the MERS system, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. The Master Servicer shall represent and protect the
interests of the Trust Fund in the same manner as it protects its own interests
in mortgage loans in its own portfolio in any claim, proceeding or litigation
regarding a Mortgage Loan and shall not make or knowingly permit any Servicer to
make any modification, waiver or amendment of any term of any Mortgage Loan that
would cause any REMIC included in the Trust Fund to fail to qualify as a REMIC
or result in the imposition of any tax under Section 860F(a) or Section 860G(d)
of the Code. Without limiting the generality of the foregoing, the Master
Servicer in its own name or in the name of a Servicer, and each Servicer, to the
extent such authority is delegated to such Servicer by the Master Servicer under
the applicable Servicing Agreement, is hereby authorized and empowered by the
Trustee when the Master Servicer or a Servicer, as the case may be, believes it
appropriate in its best judgment and in accordance with Accepted Servicing
Practices and the applicable Servicing Agreement, to execute and deliver, on
behalf of itself and the Certificateholders, 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 Mortgaged Properties. The Trustee shall furnish
the Master Servicer or a Servicer, upon request, with any powers of attorney
prepared by the Master Servicer or such Servicer empowering the Master Servicer
or such Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to
104
the Mortgage Loans or the Mortgaged Property, in accordance with the applicable
Servicing Agreement and this Agreement, and the Trustee shall execute and
deliver such other documents, as the Master Servicer may request, necessary or
appropriate to enable the Master Servicer to master service the Mortgage Loans
and carry out its duties hereunder and to allow each Servicer to service the
Mortgage Loans, in each case in accordance with Accepted Servicing Practices
(and the Trustee shall have no liability for misuse of any such powers of
attorney by the Master Servicer or the applicable Servicer). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of the
state in which action is to be taken prohibit such action if taken in the name
of the Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, then
upon request of the Trustee, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 6.09 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.
(b) In master servicing and administering the Mortgage Loans, the
Master Servicer shall employ procedures and exercise the same care that it
customarily employs and exercises in master servicing and administering loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with this Agreement. Consistent with the
foregoing, the Master Servicer may, and may permit any Servicer to, in its
discretion (i) waive any late payment charge or any prepayment charge or penalty
interest in connection with the prepayment of a Mortgage Loan and (ii) extend
the due dates for payments due on a Mortgage Note for a period not greater than
120 days; provided, however, that the maturity of any Mortgage Loan shall not be
extended past the date on which the final payment is due on the latest maturing
Mortgage Loan as of the Cut-off Date. In the event of any extension described in
clause (ii) above, the Master Servicer shall make or cause to be made Advances
on the related Mortgage Loan in accordance with the provisions of Section 5.04
on the basis of the amortization schedule of such Mortgage Loan without
modification thereof by reason of such extension. Notwithstanding anything to
the contrary in this Agreement, the Master Servicer shall not, unless default by
the related Mortgagor is, in the reasonable judgment of the Master Servicer or
the related Servicer, reasonably foreseeable, make or knowingly permit such
Servicer to make any modification, waiver or amendment of any material term of
any Mortgage Loan unless the Master Servicer or the related Servicer shall have
provided or caused to be provided to the Trustee an Opinion of Counsel (at the
expense of the party seeking the modification) in writing to the effect that
such modification, waiver or amendment would not be treated as giving rise to a
new debt instrument for federal income tax purposes and would not adversely
affect the status of any REMIC provided for herein.
Section 9.05. Servicing Agreements Between the Master Servicer and
Servicers; Enforcement of Servicers' Obligations.
(a) Each Servicing Agreement requires the applicable Servicer to
service the Mortgage Loans in accordance with the provisions thereof. References
in this Agreement to actions taken or to be taken by the Master Servicer include
such actions taken or to be taken by a Servicer pursuant to a Servicing
Agreement. Any fees, costs and expenses and other amounts payable to such
Servicers shall be deducted from amounts remitted to the Master Servicer by the
105
applicable Servicer (to the extent permitted by the applicable Servicing
Agreement) and shall not be an obligation of the Trust, the Trustee or the
Master Servicer.
(b) The Master Servicer shall not be required to (i) take any
action with respect to the servicing of any Mortgage Loan that the related
Servicer is not required to take under the related Servicing Agreement and (ii)
cause a Servicer to take any action or refrain from taking any action if the
related Servicing Agreement does not require the Servicer to take such action or
refrain from taking such action; in both cases notwithstanding any provision of
this Agreement that requires the Master Servicer to take such action or cause
the Servicer to take such action.
(c) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall use its reasonable best efforts to
enforce the obligations of each Servicer under the related Servicing Agreement
and shall, upon its obtaining actual knowledge of the failure of a Servicer to
perform its obligations in accordance with the related Servicing Agreement, to
the extent that the non-performance of any such obligations would have a
material adverse effect on a Mortgage Loan, the Trust Fund or
Certificateholders, terminate the rights and obligations of such Servicer
thereunder to the extent and in the manner permitted by the related Servicing
Agreement and either act as servicer of the related Mortgage Loans or enter into
a Servicing Agreement with a successor Servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Servicing
Agreements and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Master Servicer, in
its good faith business judgment, would require were it the owner of the related
Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at
its own expense, and shall be reimbursed therefor initially 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 (ii) from a specific recovery of costs, expenses or attorneys' fees
against the party against whom such enforcement is directed, and then, to the
extent that such amounts are insufficient to reimburse the Master Servicer for
the costs of such enforcement or (iii) from the Collection Account.
Section 9.06. Collection of Taxes, Assessments and Similar Items.
(a) To the extent provided in the applicable Servicing Agreement,
the Master Servicer shall cause each Servicer to establish and maintain one or
more custodial accounts at a depository institution (which may be a depository
institution with which the Master Servicer or any Servicer establishes accounts
in the ordinary course of its servicing activities), the accounts of which are
insured to the maximum extent permitted by the FDIC (each, an "Escrow Account")
and shall deposit therein any collections of amounts received with respect to
amounts due for taxes, assessments, water rates, Standard Hazard Insurance
Policy premiums or any comparable items for the account of the Mortgagors.
Withdrawals from any Escrow Account may be made (to the extent amounts have been
escrowed for such purpose) only in accordance with the applicable Servicing
Agreement. Each Servicer shall be entitled to all investment income not required
to be paid to Mortgagors on any Escrow Account maintained by such Servicer. The
Master Servicer shall make (or cause to be made) to the extent provided in the
applicable Servicing Agreement advances to the extent necessary in order to
effect timely payment of taxes, water rates, assessments, Standard Hazard
Insurance Policy premiums or comparable items in
106
connection with the related Mortgage Loan (to the extent that the Mortgagor is
required, but fails, to pay such items), provided that it has determined that
the funds so advanced are recoverable from escrow payments, reimbursement
pursuant to Section 4.02(v) or otherwise.
(b) Costs incurred by the Master Servicer or by Servicers in
effecting the timely payment of taxes and assessments on the properties subject
to the Mortgage Loans may be added to the amount owing under the related
Mortgage Note where the terms of the Mortgage Note so permit; provided, however,
that the addition of any such cost shall not be taken into account for purposes
of calculating the distributions to be made to Certificateholders. Such costs,
to the extent that they are unanticipated expenses within the meaning of
Treasury Regulations Section 1.860G-1(b)(3)(ii) shall be recoverable by the
Master Servicer pursuant to Section 4.02(v).
Section 9.07. Termination of Servicing Agreements; Successor
Servicers.
(a) The Master Servicer shall be entitled to terminate the rights
and obligations of any Servicer under the applicable Servicing Agreement in
accordance with the terms and conditions of such Servicing Agreement and without
any limitation by virtue of this Agreement; provided, however, that in the event
of termination of any Servicing Agreement by the Master Servicer or the related
Servicer, the Master Servicer shall either act as Servicer of the related
Mortgage Loans, or enter into a Servicing Agreement with a successor Servicer.
(b) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces. The Master Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties made
by the terminated Servicer in respect of the related Mortgage Loans, and in the
event of any such assumption by the successor Servicer, the Trustee or the
Master Servicer, as applicable, may, in the exercise of its business judgment,
release the terminated Servicer from liability for such representations and
warranties.
Section 9.08. Master Servicer Liable for Enforcement.
Notwithstanding any Servicing Agreement, the Master Servicer shall
remain obligated and liable to the Trustee and the Certificateholders in
accordance with the provisions of this Agreement, to the extent of its
obligations hereunder, without diminution of such obligation or liability by
virtue of such Servicing Agreements or arrangements. The Master Servicer shall
use commercially reasonable efforts to ensure that the Mortgage Loans are
serviced in accordance with the provisions of this Agreement and shall use
commercially reasonable efforts to enforce the provisions of each Servicing
Agreement for the benefit of the Certificateholders. The Master Servicer shall
be entitled to enter into any agreement with the Servicers for indemnification
of the Master Servicer and nothing contained in this Agreement shall be deemed
to limit or modify such indemnification. Except as expressly set forth herein,
the Master Servicer shall have no liability for the acts or omissions of any
Servicer in the performance by such Servicer of its obligations under the
related Servicing Agreement.
Section 9.09. No Contractual Relationship Between Servicers and
Trustee or Depositor.
Any Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Servicer in
its capacity as such and not as an
107
originator shall be deemed to be between such Servicer, the Seller, the Master
Servicer, and, except to the extent expressly provided therein, the Trustee and
the Depositor shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to such Servicer except
as set forth in Section 9.10 hereof.
Section 9.10. Assumption of Servicing Agreement by Trustee.
(a) In the event the Master Servicer shall for any reason no
longer be the Master Servicer (including by reason of any Event of Default under
this Agreement), after a period not to exceed ninety days after the issuance of
any notice of termination pursuant to Section 6.14 or Section 9.28, as
applicable, the Trustee, or a successor master servicer appointed by it in
accordance with Section 6.14, shall assume all of the rights and obligations of
such Master Servicer hereunder and under each Servicing Agreement entered into
with respect to the Mortgage Loans. The Trustee, its designee or any successor
master servicer appointed by the Trustee shall be deemed to have assumed all of
the Master Servicer's interest herein and therein to the same extent as if such
Servicing Agreement had been assigned to the assuming party, except that the
Master Servicer shall not thereby be relieved of any liability or obligations of
the Master Servicer under such Servicing Agreement accruing prior to its
replacement as Master Servicer, and shall be liable to the Trustee, and hereby
agrees to indemnify and hold harmless the Trustee from and against all costs,
damages, expenses and liabilities (including reasonable attorneys' fees)
incurred by the Trustee as a result of such liability or obligations of the
Master Servicer and in connection with the Trustee's assumption (but not its
performance, except to the extent that costs or liability of the Trustee are
created or increased as a result of negligent or wrongful acts or omissions of
the Master Servicer prior to its replacement as Master Servicer) of the Master
Servicer's obligations, duties or responsibilities thereunder; provided that the
Master Servicer shall not indemnify or hold harmless the Trustee against
negligent or willful misconduct of the Trustee.
(b) The Master Servicer that has been terminated shall, upon
request of the Trustee but at the expense of such Master Servicer or at the
expense of the Trust Fund, deliver to the assuming party all documents and
records relating to each Servicing Agreement and the related Mortgage Loans and
an accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of each Servicing Agreement
to the assuming party.
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements.
(a) To the extent provided in the applicable Servicing Agreement,
to the extent Mortgage Loans contain enforceable due-on-sale clauses, and to the
extent that the Master Servicer has knowledge of the conveyance of a Mortgaged
Property, the Master Servicer shall use its reasonable best efforts to cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
108
(b) The Master Servicer or the related Servicer, as the case may
be, shall be entitled to approve a request from a Mortgagor for the granting of
an easement thereon in favor of another Person or any alteration or demolition
of the related Mortgaged Property if it has determined, exercising its good
faith business judgment in the same manner as it would if it were the owner of
the related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be materially adversely affected
thereby. Any fee collected by the Master Servicer or the related Servicer for
processing such a request will be retained by the Master Servicer or such
Servicer as additional servicing compensation.
Section 9.12. Release of Mortgage Files.
(a) Upon (i) becoming aware of the payment in full of any Mortgage
Loan, (ii) the receipt by the Master Servicer of a notification that payment in
full has been or will be escrowed in a manner customary for such purposes, or
(iii) in the case of a Mortgage Loan as to which the related Mortgaged Property
is located in California, receipt by the Master Servicer of notification from
the applicable Servicer that the Servicer reasonably expects that payment in
full will be received promptly, the Master Servicer will, or will cause the
applicable Servicer to, promptly notify the Trustee (or the applicable
Custodian) 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 that are required to be deposited in the Collection Account maintained
by the Master Servicer pursuant to Section 4.01 have been or will be so
deposited) of a Servicing Officer and shall request the Trustee or the
applicable Custodian, to deliver to the applicable Servicer the related Mortgage
File. In lieu of sending a hard copy certification of a Servicing Officer, the
Master Servicer may, or may cause the Servicer to, deliver the request for
release in a mutually agreeable electronic format. To the extent that such a
request, on its face, originates from a Servicing Officer, no signature shall be
required. Upon receipt of such certification and request, the Trustee or the
applicable Custodian, shall promptly release the related Mortgage File to the
applicable Servicer and neither the Trustee nor the Custodian shall have any
further responsibility with regard to such Mortgage File. The Master Servicer is
authorized, and each Servicer, to the extent such authority is delegated to such
Servicer by the Master Servicer under the applicable Servicing Agreement, is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of, or other legal proceedings relating to, any Mortgage Loan and in
accordance with Accepted Servicing Practices and the applicable Servicing
Agreement, the Trustee shall execute such pleadings, request for trustee's sale
or other documents as shall be prepared and furnished to the Trustee by the
Master Servicer, or by a Servicer (in form reasonably acceptable to the Trustee)
and as are necessary to the prosecution of any such proceedings. The Trustee or
the Custodian, shall, upon request of the Master Servicer, or of a Servicer, and
delivery to the Trustee or the applicable Custodian, of a trust receipt signed
by a Servicing Officer substantially in the form annexed hereto as Exhibit C or
in the form annexed to the applicable Custodial Agreement as Exhibit C,
109
release the related Mortgage File held in its possession or control to the
Master Servicer (or the applicable Servicer). Such trust receipt shall obligate
the Master Servicer or applicable Servicer to return the Mortgage File to the
Trustee or Custodian, as applicable, when the need therefor by the Master
Servicer or applicable Servicer no longer exists unless (i) the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that herein above specified, the trust receipt shall be
released by the Trustee or the Custodian, as applicable, to the Master Servicer
(or the applicable Servicer) or (ii) the Mortgage File has been delivered
directly or through a Servicer to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered directly or
through a Servicer to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Section 9.13. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit, or cause the applicable
Servicer to transmit, to the Trustee such documents and instruments coming into
the possession of the Master Servicer or such Servicer from time to time as are
required by the terms hereof to be delivered to the Trustee. Any funds received
by the Master Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer or by a Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall be held for
the benefit of the Trustee and the Certificateholders subject to the Master
Servicer's right to retain or withdraw from the Collection Account the Master
Servicing Fee and other amounts provided in this Agreement, and to the right of
each Servicer to retain its Servicing Fee and other amounts as provided in the
applicable Servicing Agreement. The Master Servicer shall, and shall (to the
extent provided in the applicable Servicing Agreement) cause each Servicer to,
provide access to information and documentation regarding the Mortgage Loans to
the Trustee, its agents and accountants at any time upon reasonable request and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under
the control of, the Master Servicer, or any Servicer, in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Master
Servicer, or by such Servicer, for and on behalf of the Trustee and the
Certificateholders and shall be and remain the sole and exclusive property of
the Trustee; provided, however, that the Master Servicer and each Servicer shall
be entitled to setoff against, and deduct from, any such funds any amounts that
are properly due and payable to the Master
110
Servicer or such Servicer under this Agreement or the applicable Servicing
Agreement and shall be authorized to remit such funds to the Trustee in
accordance with this Agreement.
(c) The Master Servicer hereby acknowledges that concurrently with
the execution of this Agreement, the Trustee shall own or, to the extent that a
court of competent jurisdiction shall deem the conveyance of the Mortgage Loans
from the Seller to the Depositor not to constitute a sale, the Trustee shall
have a security interest in the Mortgage Loans and in all Mortgage Files
representing such Mortgage Loans and in all funds now or hereafter held by, or
under the control of, a Servicer or the Master Servicer that are collected by
such Servicer or the Master Servicer in connection with the Mortgage Loans,
whether as scheduled installments of principal and interest or as full or
partial prepayments of principal or interest or as Liquidation Proceeds or
Insurance Proceeds or otherwise, and in all proceeds of the foregoing and
proceeds of proceeds (but excluding any fee or other amounts to which such
Servicer is entitled under the applicable Servicing Agreement, or the Master
Servicer or the Depositor is entitled to hereunder); and the Master Servicer
agrees that so long as the Mortgage Loans are assigned to and held by the
Trustee, all documents or instruments constituting part of the Mortgage Files,
and such funds relating to the Mortgage Loans which come into the possession or
custody of, or which are subject to the control of, the Master Servicer or any
Servicer shall be held by the Master Servicer or such Servicer for and on behalf
of the Trustee as the Trustee's agent and bailee for purposes of perfecting the
Trustee's security interest therein as provided by the applicable Uniform
Commercial Code or other laws.
(d) The Master Servicer agrees that it shall not, and shall not
authorize any Servicer to, create, incur or subject any Mortgage Loans, or any
funds that are deposited in any custodial account, Escrow Account or the
Collection Account, or any funds that otherwise are or may become due or payable
to the Trustee, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, nor assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan or any funds collected on, or
in connection with, a Mortgage Loan.
Section 9.14. Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the
Depositor and the Trustee, for the benefit of the Certificateholders, as of the
Closing Date that:
(i) it is validly existing and in good standing under the
jurisdiction of its formation, and as Master Servicer has full power
and authority to transact any and all business contemplated by this
Agreement and to execute, deliver and comply with its obligations under
the terms of this Agreement, the execution, delivery and performance of
which have been duly authorized by all necessary corporate action on
the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative decree
or order to which it is subject or (C) constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or
111
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is
bound or to which any of its assets are subject, which violation,
default or breach would materially and adversely affect the Master
Servicer's ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due
authorization, execution and delivery hereof by the other respective
parties hereto, a legal, valid and binding obligation of the Master
Servicer, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights in general, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding
in equity or at law);
(iv) the Master Servicer is not in default with respect to
any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency to the extent that any
such default would materially and adversely affect its performance
hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and adversely
affect its ability as Master Servicer to perform its obligations under
this Agreement or that requires the consent of any third person to the
execution of this Agreement or the performance by the Master Servicer
of its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the
Master Servicer's knowledge, threatened against the Master Servicer
which would prohibit its entering into this Agreement or performing its
obligations under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the
primary business of which is the servicing of conventional residential
mortgage loans, is an FNMA- and FHLMC- approved seller/servicer;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of or compliance by the
Master Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations and orders (if any) as have been obtained;
(ix) the consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Master
Servicer; and
(x) the Master Servicer has obtained an Errors and
Omissions Insurance Policy and a Fidelity Bond in accordance with
Section 9.02, each of which is in full force and effect, and each of
which provides at least such coverage as is required hereunder.
112
(b) It is understood and agreed that the representations and
warranties set forth in this Section 9.14 shall survive the execution and
delivery of this Agreement. The Master Servicer shall indemnify the Depositor
and the Trustee and hold them harmless against any loss, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Master Servicer's
representations and warranties contained in Section 9.14(a). Notwithstanding
anything in this Agreement to the contrary, the Master Servicer shall not be
liable for special, indirect or consequential losses or damages of any kind
whatsoever (including, but not limited to, lost profits). It is understood and
agreed that the enforcement of the obligation of the Master Servicer set forth
in this Section to indemnify the Depositor and the Trustee as provided in this
Section constitutes the sole remedy (other than as set forth in Section 6.14) of
the Depositor and the Trustee, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or arising
out of the breach of any representations and warranties made in this Section
shall accrue upon discovery of such breach by either the Depositor, the Master
Servicer or the Trustee or notice thereof by any one of such parties to the
other parties.
(c) It is understood and agreed that the representations and
warranties of the Depositor set forth in Sections 2.03(a)(i) through (vi) shall
survive the execution and delivery of this Agreement. The Depositor shall
indemnify the Master Servicer and hold it harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of the Depositor's
representations and warranties contained in Sections 2.03(a)(i) through (vi). It
is understood and agreed that the enforcement of the obligation of the Depositor
set forth in this Section to indemnify the Master Servicer as provided in this
Section constitutes the sole remedy of the Master Servicer respecting a breach
by the Depositor of the representations and warranties in Sections 2.03(a)(i)
through (vi).
Any cause of action against the Depositor relating to or arising out of
the breach of the representations and warranties made in Sections 2.03(a)(i)
through (vi) shall accrue upon discovery of such breach by either the Depositor
or the Master Servicer or notice thereof by any one of such parties to the other
parties.
Section 9.15. Closing Certificate and Opinion.
On or before the Closing Date, the Master Servicer shall cause to be
delivered to the Depositor and Xxxxxx Brothers Inc. an Opinion of Counsel, dated
the Closing Date, in form and substance reasonably satisfactory to the Depositor
and Xxxxxx Brothers Inc., as to the due authorization, execution and delivery of
this Agreement by the Master Servicer and the enforceability thereof.
Section 9.16. Standard Hazard and Flood Insurance Policies.
113
For each Mortgage Loan (other than a Cooperative Loan), the Master
Servicer shall maintain, or cause to be maintained by each Servicer, standard
fire and casualty insurance and, where applicable, flood insurance, all in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. It is understood and agreed that such insurance shall
be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
Pursuant to Section 4.01, any amounts collected by the Master Servicer,
or by any Servicer, under any insurance policies maintained pursuant to this
Section 9.16 (other than amounts to be applied to the restoration or repair of
the property subject to the related Mortgage or released to the Mortgagor in
accordance with the Master Servicer's or the Servicer's normal servicing
procedures and Accepted Servicing Practices) shall be deposited into the
Collection Account, subject to withdrawal pursuant to Section 4.02. Any cost
incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.02(v).
Section 9.17. Presentment of Claims and Collection of Proceeds.
The Master Servicer shall, or shall cause each Servicer (to the extent
provided in the applicable Servicing Agreement) to, prepare and present on
behalf of the Trustee and the Certificateholders all claims under the Insurance
Policies with respect to the Mortgage Loans, and take such actions (including
the negotiation, settlement, compromise or enforcement of the insured's claim)
as shall be necessary to realize recovery under such policies. Any proceeds
disbursed to the Master Servicer (or disbursed to a Servicer and remitted to the
Master Servicer) in respect of such policies or bonds shall be promptly
deposited in the Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property or release to the Mortgagor in accordance with the Master
Servicer's or the Servicer's normal servicing procedures need not be so
deposited (or remitted).
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or knowingly permit any
Servicer (consistent with the applicable Servicing Agreement) to take, any
action that would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. To the extent that coverage is
available, the Master Servicer shall use its best reasonable efforts to keep in
force and effect, or to cause each Servicer to keep in force and effect (to the
extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any
114
Servicer to, cancel or refuse to renew any such Primary Mortgage Insurance
Policy that is in effect at the date of the initial issuance of the Certificates
and is required to be kept in force hereunder except as required by a applicable
law or in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each
Servicer to present, on behalf of the Trustee and the Certificateholders, claims
to the insurer under any Primary Mortgage Insurance Policies and, in this
regard, to take such reasonable action as shall be necessary to permit recovery
under any Primary Mortgage Insurance Policies respecting defaulted Mortgage
Loans. Pursuant to Section 4.01, any amounts collected by the Master Servicer or
any Servicer under any Primary Mortgage Insurance Policies shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 4.02.
Section 9.19. Trustee To Retain Possession of Certain Insurance
Policies and Documents.
The Trustee (or its custodian, if any, as directed by the Trustee),
shall retain possession and custody of the originals of the Primary Mortgage
Insurance Policies or certificate of insurance if applicable and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or its custodian, if any, as directed by
the Trustee), upon the execution or receipt thereof the originals of the Primary
Mortgage Insurance Policies and any certificates of renewal thereof, and such
other documents or instruments that constitute portions of the Mortgage File
that come into the possession of the Master Servicer from time to time.
Section 9.20. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall use its reasonable best efforts to, or to
cause each Servicer to, foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the applicable Servicing Agreement. Alternatively, the Master
Servicer may take, or authorize any Servicer to take, other actions in respect
of a defaulted Mortgage Loan, which may include (i) accepting a short sale (a
payoff of the Mortgage Loan for an amount less than the total amount
contractually owed in order to facilitate a sale of the Mortgaged Property by
the Mortgagor) or permitting a short refinancing (a payoff of the Mortgage Loan
for an amount less than the total amount contractually owed in order to
facilitate refinancing transactions by the Mortgagor not involving a sale of the
Mortgaged Property), (ii) arranging for a repayment plan or (iii) agreeing to a
modification in accordance with Section 9.04. In connection with such
foreclosure or other conversion or action, the Master Servicer shall, consistent
with Section 9.18, follow such practices and procedures as it shall reasonably
determine to be in the best interests of the Trust Fund and the
Certificateholders and which shall be consistent with its customary practices in
performing its general mortgage servicing activities;
115
provided that the Master Servicer shall not be liable in any respect hereunder
if the Master Servicer is acting in connection with any such foreclosure or
other conversion or action in a manner that is consistent with the provisions of
this Agreement. Neither the Master Servicer, nor any Servicer, shall be required
to expend its own funds or incur other reimbursable charges in connection with
any foreclosure, or attempted foreclosure which is not completed, or toward the
correction of any default on a related senior mortgage loan, or towards the
restoration of any property unless it shall determine (i) that such restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to the Certificateholders after reimbursement to itself for such expenses
or charges and (ii) that such expenses and charges will be recoverable to it
through Liquidation Proceeds or Insurance Proceeds (as provided in Section
4.02).
Section 9.21. Compensation to the Master Servicer.
The Master Servicer shall (i) be entitled, at its election, either (a)
to pay itself the Master Servicing Fee, as reduced pursuant to Section 5.05, in
respect of the Mortgage Loans out of any Mortgagor payment on account of
interest prior to the deposit of such payment in the Collection Account it
maintains or (b) to withdraw from the Collection Account, subject to Section
5.05, the Master Servicing Fee to the extent permitted by Section 4.02(iv). The
Master Servicer shall also be entitled, at its election, either (a) to pay
itself the Master Servicing Fee in respect of each delinquent Mortgage Loan
master serviced by it out of Liquidation Proceeds in respect of such Mortgage
Loan or other recoveries with respect thereto to the extent permitted in Section
4.02 or (b) to withdraw from the Collection Account it maintains the Master
Servicing Fee in respect of each Liquidated Mortgage Loan to the extent of such
Liquidation Proceeds or other recoveries, to the extent permitted by Section
4.02. Servicing compensation in the form of assumption fees, if any, late
payment charges, as collected, if any, or otherwise shall be retained by the
Master Servicer (or the applicable Servicer) and shall not be deposited in the
Collection Account. If the Master Servicer does not retain or withdraw the
Master Servicing Fee from the Collection Account as provided herein, the Master
Servicer shall be entitled to direct the Trustee to pay the Master Servicing Fee
to such Master Servicer by withdrawal from the Certificate Account to the extent
that payments have been received with respect to the applicable Mortgage Loan.
The Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement. Pursuant to Section
4.01(e), all income and gain realized from any investment of funds in the
Collection Account shall be for the benefit of the Master Servicer as additional
compensation. The provisions of this Section 9.21 are subject to the provisions
of Section 6.14(b).
Section 9.22. REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the
Certificateholders. The Master Servicer shall use its reasonable best efforts to
sell, or, to the extent provided in the applicable Servicing Agreement, cause
the applicable Servicer to sell, any REO Property as expeditiously as possible
and in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable, but in all events within the time period,
and subject to the conditions set forth in Article X hereof. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall protect and
conserve,
116
or cause the applicable Servicer to protect and conserve, such REO Property in
the manner and to such extent required by the applicable Servicing Agreement,
subject to Article X hereof.
(b) The Master Servicer shall deposit or cause to be deposited all
funds collected and received by it, or recovered from any Servicer, in
connection with the operation of any REO Property in the Collection Account.
(c) The Master Servicer and the applicable Servicer, upon the
final disposition of any REO Property, shall be entitled to reimbursement for
any related unreimbursed Advances as well as any unpaid Master Servicing Fees or
Servicing Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided, that (without limitation of any
other right of reimbursement that the Master Servicer or any Servicer shall have
hereunder) any such unreimbursed Advances as well as any unpaid Master Servicing
Fees or Servicing Fees may be reimbursed or paid, as the case may be, prior to
final disposition, out of any net rental income or other net amounts derived
from such REO Property.
(d) The Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the applicable Servicer
as provided above, shall be deposited in the Collection Account on or prior to
the Determination Date in the month following receipt thereof (and the Master
Servicer shall provide prompt written notice to the Trustee upon such deposit)
and be remitted by wire transfer in immediately available funds to the Trustee
for deposit into the Certificate Account on the next succeeding Deposit Date.
Section 9.23. [Reserved].
Section 9.24. Reports to the Trustee.
(a) Not later than 30 days after each Distribution Date, the
Master Servicer shall forward to the Trustee a statement, deemed to have been
certified by a Servicing Officer, setting forth the status of the Collection
Account maintained by the Master Servicer as of the close of business on the
related Distribution Date, indicating that all distributions required by this
Agreement to be made by the Master Servicer have been made (or if any required
distribution has not been made by the Master Servicer, specifying the nature and
status thereof) and showing, for the period covered by such statement, the
aggregate of deposits into and withdrawals from the Collection Account
maintained by the Master Servicer. Copies of such statement shall be provided by
the Master Servicer to the Depositor, Attention: Contract Finance, and, upon
request, any Certificateholders (or by the Trustee at the Master Servicer's
expense if the Master Servicer shall fail to provide such copies (unless (i) the
Master Servicer shall have failed to provide the Trustee with such statement or
(ii) the Trustee shall be unaware of the Master Servicer's failure to provide
such statement)).
(b) Not later than two Business Days following each Distribution
Date, the Master Servicer shall deliver to the Person designated by the
Depositor, in a format consistent with other electronic loan level reporting
supplied by the Master Servicer in connection with similar transactions, "loan
level" information with respect to the Mortgage Loans as of the related
Determination Date, to the extent that such information has been provided to the
Master Servicer by the Servicers or by the Depositor.
117
(c) All information, reports and statements prepared by the Master
Servicer under this Agreement shall be based on information supplied to the
Master Servicer by the Servicers without independent verification thereof and
the Master Servicer shall be entitled to rely on such information.
Section 9.25. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the
Rating Agencies five Business Days after March 15 of each year commencing in
March 2004, an Officer's Certificate, certifying that with respect to the period
ending on the immediately preceding December 31; (i) such Servicing Officer has
reviewed the activities of such Master Servicer during the preceding calendar
year or portion thereof and its performance under this Agreement; (ii) to the
best of such Servicing Officer's knowledge, based on such review, such Master
Servicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement in all material respects throughout such year,
or, if there has been a default in the fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof, (iii) nothing has come to
the attention of such Servicing Officer to lead such Servicing Officer to
believe that any Servicer has failed to perform any of its duties,
responsibilities and obligations under its Servicing Agreement in all material
respects throughout such year, or, if there has been a material default in the
performance or fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, and (iv) the Master Servicer has received from each Servicer
such Servicer's annual certificate of compliance and a copy of such Servicer's
annual audit report, in each case to the extent required under the applicable
Servicing Agreement, or, if any such certificate or report has not been received
by the Master Servicer, the Master Servicer is using its best reasonable efforts
to obtain such certificate or report.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 9.26. Annual Independent Accountants' Servicing Report.
If the Master Servicer has, during the course of any fiscal year,
directly serviced any of the Mortgage Loans, then the Master Servicer at its
expense shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and the
Depositor on or before the last day of February of each year commencing on March
15, 2004, to the effect that, with respect to the most recently ended fiscal
year, such firm has examined certain records and documents relating to the
Master Servicer's performance of its servicing obligations under this Agreement
and pooling and servicing and trust agreements in material respects similar to
this Agreement and to each other and that, on the basis of such examination
conducted substantially in compliance with the audit program for mortgages
serviced for FHLMC or the Uniform Single Attestation Program for Mortgage
Bankers, such firm is of the opinion that the Master Servicer's activities have
been conducted in compliance with this Agreement, or that such examination has
disclosed no material items of noncompliance
118
except for (i) such exceptions as such firm believes to be immaterial, (ii) such
other exceptions as are set forth in such statement and (iii) such exceptions
that the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages Serviced by FHLMC requires it to report. Copies of such
statements shall be provided to any Certificateholder upon request by the Master
Servicer, or by the Trustee at the expense of the Master Servicer if the Master
Servicer shall fail to provide such copies. If such report discloses exceptions
that are material, the Master Servicer shall advise the Trustee whether such
exceptions have been or are susceptible of cure, and will take prompt action to
do so.
To the extent that the Master Servicer receives an Annual Independent
Accountants' Servicing Report from any Servicer, the Master Servicer shall
forward a copy of such report to the Trustee. If the report is not received from
the Servicer, the Trustee may request that the Master Servicer contact the
applicable Servicer to obtain such report. The Master Servicer will not be
liable for the failure of a Servicer to provide such report.
Section 9.27. Merger or Consolidation.
Any Person into which the Master Servicer may be merged or
consolidated, or any Person resulting from any merger, conversion, other change
in form or consolidation to which the Master Servicer shall be a party, or any
Person succeeding to the business of the Master Servicer, shall be the successor
to the Master 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 resulting
Person to the Master Servicer shall be a Person that shall be qualified and
approved to service mortgage loans for FNMA or FHLMC and shall have a net worth
of not less than $15,000,000.
Section 9.28. Resignation of Master Servicer.
Except as otherwise provided in Sections 9.27 and 9.29 hereof, the
Master Servicer shall not resign from the obligations and duties hereby imposed
on it unless it or the Trustee determines that the Master Servicer's duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
and cannot be cured. Any such determination permitting the resignation of the
Master Servicer shall be evidenced by an Opinion of Counsel that shall be
Independent to such effect delivered to the Trustee. In the event such
determination of ineligibility of the Master Servicer to continue in the
capacity of master servicer is made by the Master Servicer, no such resignation
shall become effective until a period of time not to exceed ninety days after
the Trustee receives written notice thereof from the Master Servicer and until
the Trustee shall have assumed, or a successor master servicer shall have been
appointed by the Trustee and until such successor shall have assumed, the Master
Servicer's responsibilities and obligations under this Agreement. Notice of such
resignation shall be given promptly by the Master Servicer to the Depositor.
Section 9.29. Assignment or Delegation of Duties by the Master
Servicer.
Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract
119
with, or authorize or appoint any other Person to perform any of the duties,
covenants or obligations to be performed by the Master Servicer hereunder;
provided, however, that the Master Servicer shall have the right without the
prior written consent of the Trustee, the Depositor or the Rating Agencies to
delegate or assign to or subcontract with or authorize or appoint an Affiliate
of the Master Servicer to perform and carry out any duties, covenants or
obligations to be performed and carried out by the Master Servicer hereunder. In
no case, however, shall any such delegation, subcontracting or assignment to an
Affiliate of the Master Servicer relieve the Master Servicer of any liability
hereunder. Notice of such permitted assignment shall be given promptly by the
Master Servicer to the Depositor and the Trustee. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Master Servicing Fees and other compensation
payable to the Master Servicer pursuant hereto, including amounts payable to or
permitted to be retained or withdrawn by the Master Servicer pursuant to Section
9.21 hereof, shall thereafter be payable to such successor master servicer.
Section 9.30. Limitation on Liability of the Master Servicer and
Others.
(a) The Master Servicer undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Master Servicer from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that the duties
and obligations of the Master Servicer shall be determined solely by the express
provisions of this Agreement, the Master Servicer 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 Master Servicer and, in absence of bad faith on the part
of the Master Servicer, the Master Servicer 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 Master Servicer and
conforming to the requirements of this Agreement.
(c) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master 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 Master
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in its
performance of its duties or by reason of reckless disregard for its obligations
and duties under this Agreement. The Master Servicer and any director, officer,
employee or agent of the Master Servicer shall be entitled to indemnification by
the Trust Fund and will be held harmless against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of his or its
duties hereunder or by reason of reckless disregard of his or its obligations
and duties hereunder. The Master Servicer and any director, officer, employee or
agent of the Master Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer shall be under no obligation to appear
in, prosecute or defend
120
any legal action that is not incidental to its duties to master service the
Mortgage Loans in accordance with this Agreement and that in its opinion may
involve it in any expenses or liability; provided, however, that the Master
Servicer may in its sole discretion undertake any such action that it may deem
necessary or desirable in respect to this Agreement and the rights and duties of
the parties hereto and the interests of the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund
and the Master Servicer shall be entitled to be reimbursed therefor out of the
Collection Account it maintains as provided by Section 4.02. Notwithstanding
anything herein to the contrary, neither the Master Servicer nor the Trustee
shall have any liability for the servicing of the Additional Collateral,
including, without limitation, the perfection, continuation, partial release,
release, termination, realization upon, substitution, foreclosure, sale, or any
other matter with respect to the Additional Collateral, or the enforcement of
the Additional Collateral Servicing Agreement.
Section 9.31. Indemnification; Third-Party Claims.
The Master Servicer agrees to indemnify the Depositor and the Trustee,
and hold them harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses that the Depositor and the Trustee may sustain as a
result of the failure of the Master Servicer to perform its duties and master
service the Mortgage Loans in compliance with the terms of this Agreement. The
Depositor and the Trustee shall immediately notify the Master Servicer if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans entitling the Depositor and the Trustee to indemnification hereunder,
whereupon the Master Servicer shall assume 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 or
them in respect of such claim.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC and Grantor Trust Administration.
(a) As set forth in the Preliminary Statement hereto, the Trustee
shall elect REMIC status in accordance with the REMIC Provisions with respect to
each of REMIC 1, REMIC 2, REMIC 3, REMIC 4 and the Upper Tier REMIC. The Trustee
shall make such elections on Forms 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. For the purposes of such elections,
each of the REMIC 1 Regular Interests is hereby designated as a regular interest
in REMIC 1. Each of the REMIC 2 Regular Interests is hereby designated as a
regular interest in REMIC 2. Each of the REMIC 3 Regular Interests is hereby
designated as a regular interest in REMIC 3. Each REMIC 4 Regular Interest is
hereby designated as a regular interest in REMIC 4. Each REMIC 5 Regular
Interest is hereby designated as a regular interest in the Upper Tier REMIC. The
Class LT1-R Interest is hereby designated as the sole residual interest in REMIC
1. The Class LT2-R Interest is hereby designated as the sole residual interest
in REMIC 2. The Class LT3-R Interest is hereby designated as the sole residual
interest in REMIC 3. The Class
121
LT4-R Interest is hereby designated as the sole residual interest in REMIC 4.
The REMIC 5 Residual Interest is hereby designated as the sole residual interest
in the Upper Tier REMIC. The Class R Certificate evidences ownership of the
Class LT1-R Interest , the Class LT2-R Interest, the Class LT3-R Interest, the
Class LT4-R Interest and the REMIC 5 Residual Interest. It is the intention of
the parties hereto that the segregated pool of assets consisting of any
collections of Prepayment Penalty Amounts with respect to Pool 1 constitute a
grantor trust for federal income tax purposes. The Trustee, by its execution and
delivery hereof, acknowledges the assignment to it of the Grantor Trust I Assets
and declares that it holds and will hold such assets in trust for the exclusive
use and benefit of all present and future Holders of the Class P-I Certificates.
It is the intention of the parties hereto that the segregated pool of assets
consisting of any collections of Prepayment Penalty Amounts with respect to Pool
2 and Pool 5 constitute a grantor trust for federal income tax purposes. The
Trustee, by its execution and delivery hereof, acknowledges the assignment to it
of the Grantor Trust II Assets and declares that it holds and will hold such
assets in trust for the exclusive use and benefit of all present and future
Holders of the Class P-II Certificates. It is the intention of the parties
hereto that the segregated pool of assets consisting of any collections of
Prepayment Penalty Amounts with respect to Pool 4 constitute a grantor trust for
federal income tax purposes. The Trustee, by its execution and delivery hereof,
acknowledges the assignment to it of the Grantor Trust III Assets and declares
that it holds and will hold such assets in trust for the exclusive use and
benefit of all present and future Holders of the Class P-III Certificates. The
rights of Holders of the Class P-I, Class P-II and Class P-III Certificates to
receive distributions from the proceeds of the Grantor Trust I Assets, Grantor
Trust II Assets and Grantor Trust III Assets, respectively, and all ownership
interests of such Holders in and to such distributions, shall be as set forth in
this Agreement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 86OG(a)(9) of the Code. The latest
possible maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) is the
"Latest Possible Maturity Date".
(c) The Trustee shall pay any and all tax related expenses (not
including taxes) of each REMIC and the Grantor Trusts, including but not limited
to any professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to such REMICs or the Grantor Trusts that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Trustee in
fulfilling its duties hereunder (including its duties as tax return preparer).
The Trustee shall be entitled to reimbursement from the Certificate Account of
the expenses to the extent (x) provided in clause (i) above and (y) such
expenses are "unanticipated expenses" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii).
(d) The Trustee shall prepare, sign and file, all of each REMIC's
federal and state tax and information returns as such REMIC's direct
representative. The Trustee shall prepare, sign and file all of the tax returns
in respect of the Grantor Trusts. The Trustee shall comply with such requirement
by filing Form 1041. The expenses of preparing and filing such returns shall be
borne by the Trustee. If any Disqualified Organization acquires any Ownership
Interest in a Residual Certificate, then the Trustee will upon request provide
to the Internal Revenue Service, and to the persons specified in Sections
860E(e)(3) and (6) of the Code, such information as
122
required in Section 860D(a)(6)(B) of the Code needed to compute the tax imposed
under Section 860E(e) of the Code on transfers of residual interests to
disqualified organizations and the Trustee will be reimbursed by the Trust for
all expenses incurred therewith provided that such expenses are "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii).
(e) The Trustee or its designee shall perform on behalf of each
REMIC and the Grantor Trusts all reporting and other tax compliance duties that
are the responsibility of such REMIC or the Grantor Trusts under the Code, the
REMIC Provisions, or other compliance guidance issued by the Internal Revenue
Service or any state or local taxing authority. Among its other duties, if
required by the Code, the REMIC Provisions, or other such guidance, the Trustee
shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any disqualified person or organization
and (ii) to the Certificateholders such information or reports as are required
by the Code or REMIC Provisions.
(f) The Trustee, the Master Servicer and the Holders of
Certificates shall take any action or cause each REMIC to take any action
necessary to create or maintain the status of such REMIC as a REMIC under the
REMIC Provisions and shall assist each other as necessary to create or maintain
such status. Neither the Trustee, the Master Servicer nor the Holder of any
Residual Certificate shall take any action, cause any REMIC to take any action
or fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of such REMIC as a REMIC or (ii) result in the imposition of a tax upon
such REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee and the Master Servicer have received an Opinion of
Counsel (at the expense of the party seeking to take such action) to the effect
that the contemplated action will not endanger such status or result in the
imposition of such a tax. In addition, prior to taking any action with respect
to any REMIC or the assets therein, or causing such REMIC to take any action,
which is not expressly permitted under the terms of this Agreement, any Holder
of a Residual Certificate will consult with the Trustee and the Master Servicer,
or their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to such REMIC, and no
such Person shall take any such action or cause such REMIC to take any such
action as to which the Trustee or the Master Servicer has advised it in writing
that an Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any
and all taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in such REMIC or, if no such amounts are available, out of other
amounts held in the Collection Account, and shall reduce amounts otherwise
payable to holders of regular interests in such REMIC, as the case may be.
(h) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to each REMIC on a calendar year and on an
accrual basis.
123
(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Qualified
Substitute Mortgage Loans.
(j) Neither the Trustee nor the Master Servicer shall enter into
any arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) Upon the request of any Rating Agency, the Trustee shall
deliver to such Rating Agency an Officer's Certificate stating the Trustee's
compliance with the provisions of this Section 10.01.
(l) It is intended that the rights of the Class 4-A, Class B1,
Class B2, Class B3, Class B4, Class B5 and Class B6 Certificates to receive
payments in respect of Basis Risk Shortfalls shall be treated as rights in
respect of interest rate cap contracts written by the Class 4-AX and Class 4-PAX
Certificateholders in favor of the holders of the Class 4-A, Class B1, Class B2,
Class B3, Class B4, Class B5 and Class B6 Certificates and shall be accounted
for as property separate and apart from the REMIC 5 Regular Interests
represented by the Class 4-A, Class B1, Class B2, Class B3, Class B4, Class B5
and Class B6 Certificates. This provision is intended to comply with the
requirements of Treasury Regulations Section 1.860G-2(i) for the treatment of
property rights coupled with regular interests to be separately respected and
shall be interpreted consistently with such regulation. The Holders of the Class
4-A, Class B1, Class B2, Class B3, Class B4, Class B5 , Class B6 Certificates
agree, by their acceptance of such Certificates, that they will take tax
reporting positions that allocate no more than a nominal value to the right to
receive payments in respect of Basis Risk Shortfalls. The Holders of the Class
4-AX Certificates and the Class 4-PAX Certificates agree, by their acceptance of
such Certificates, to take tax reporting positions consistent with allocations
by the Holders of the Class 4-A, Class B1, Class B2, Class B3, Class B4, Class
B5 and Class B6 Certificates of no more than a nominal value to the right to
receive payments in respect of Basis Risk Shortfalls. For information reporting
purposes, it will be assumed that such rights have no more than a nominal value.
Each payment made to the Class 4-A, Class B1, Class B2, Class B3, Class B4,
Class B5 or Class B6 Certificates in respect of Basis Risk Shortfalls shall be
treated for federal income tax purposes as having been distributed to the Class
4-AX Certificates or the Class 4-PAX Certificates, as the case may be, and then
paid by the holders of the Class 4-AX Certificates or the Class 4-PAX
Certificates, as the case may be, to the holders of the relevant Class 4-A,
Class B1, Class B2, Class B3, Class B4, Class B5 or Class B6 Certificates. Each
holder or beneficial owner of a Class 4-A, Class 4-AX, Class 4-PAX, Class B1,
Class B2, Class B3, Class B4, Class B5 or Class B6 Certificate, by virtue of its
acquisition of such Certificate or a beneficial interest in such Certificate,
agrees to adopt tax reporting positions consistent with the characterization of
payments made to the Class 4-A, Class B1, Class B2, Class B3, Class B4, Class B5
and Class B6 Certificates in respect of Basis Risk Shortfalls as payments in
respect of interest rate cap agreements written by the holders of the Class 4-AX
Certificates and Class 4-PAX Certificates. The parties hereto intend that the
REMIC 5 Regular Interests represented by each of the Class 4-AX Certificates and
Class 4-PAX Certificates, together with the related obligations to make payments
to the Class 4-A, Class B1, Class B2, Class B3, Class B4, Class B5 and Class B6
Certificates shall be treated as two separate grantor trusts under the Code and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish to the holders of
the Class 4-AX Certificates and Class 4-PAX Certificates information regarding
their share of the items of income, gain, loss and deduction of
124
such grantor trusts and (ii) file or cause to be filed with the Internal Revenue
Service Forms 1041 (together with any necessary attachments) or such other forms
as may be applicable and (iii) comply with such information reporting
obligations with respect to payments from such grantor trusts as may be
applicable under the Code or other applicable tax laws.
Section 10.02. Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of each REMIC pursuant to Article VII of this
Agreement, (iv) a substitution pursuant to Article II of this Agreement, or (v)
a repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for any REMIC, nor sell or dispose of any investments in the
Certificate Account for gain, nor accept any contributions to any REMIC after
the Closing Date, unless it has received an Opinion of Counsel (at the expense
of the party causing such sale, disposition, or substitution) that such
disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of such REMIC as a REMIC or of the Certificates other than
the Residual Certificates as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such REMIC to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.
Section 10.03. Indemnification with Respect to Certain Taxes and Loss
of REMIC Status.
In the event that a REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Trustee of its duties and obligations set forth
herein, the Trustee shall indemnify the Holder of the Residual Certificate
against any and all losses, claims, damages, liabilities or expenses ("Losses")
resulting from such negligence; provided, however, that the Trustee shall not be
liable for any such Losses attributable to the action or inaction of the Master
Servicer, the Depositor, or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual Certificate on which the Trustee has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Trustee
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Trustee of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).
Section 10.04. REO Property.
125
(a) Notwithstanding any other provision of this Agreement, the
Master Servicer, acting on behalf of the Trustee hereunder, shall not (except to
the extent provided in the applicable Servicing Agreement), permit any Servicer
to, rent, lease, or otherwise earn income on behalf of any REMIC with respect to
any REO Property which might cause such REO Property to fail to qualify as
"foreclosure" property within the meaning of section 860G(a)(8) of the Code or
result in the receipt by any REMIC of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the Master Servicer has advised, or has caused the applicable Servicer to
advise, the Trustee in writing to the effect that, under the REMIC Provisions,
such action would not adversely affect the status of any REMIC as a REMIC and
any income generated for such REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The Master Servicer shall make, or shall cause the applicable
Servicer to make, reasonable efforts to sell any REO Property for its fair
market value. In any event, however, the Master Servicer shall, or shall cause
the applicable Servicer to, dispose of any REO Property within three years from
the end of the calendar year of its acquisition by the Trust Fund unless the
Trustee has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, the applicable REMIC may hold REO
Property for a longer period without adversely affecting the REMIC status of
such REMIC or causing the imposition of a Federal or state tax upon such REMIC.
If the Trustee has received such an extension, then (a) the Trustee shall
provide a copy of such extension to the Master Servicer and (b) the Trustee, or
the Master Servicer, acting on its behalf hereunder, shall, or shall cause the
applicable Servicer to, continue to attempt to sell the REO Property for its
fair market value for such period longer than three years as such extension
permits (the "Extended Period"). If the Trustee has not received such an
extension and the Trustee, or the Master Servicer acting on behalf of the
Trustee hereunder, or the applicable Servicer is unable to sell the REO Property
within 33 months after its acquisition by the Trust Fund or if the Trustee has
received such an extension, and the Trustee, or the Master Servicer acting on
behalf of the Trustee hereunder, is unable to sell the REO Property within the
period ending three months before the close of the Extended Period, the Master
Servicer shall, or shall cause the applicable Servicer to, before the end of the
three year period or the Extended Period, as applicable, (i) purchase such REO
Property at a price equal to the REO Property's fair market value or (ii)
auction the REO Property to the highest bidder (which may be the Master
Servicer) in an auction reasonably designed to produce a fair price prior to the
expiration of the three-year period or the Extended Period, as the case may be.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 11.02. Entire Agreement.
126
This Agreement contains the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.
Section 11.03. Amendment.
(a) This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee, without notice to or the consent
of any of the Holders, (i) to cure any ambiguity, (ii) to cause the provisions
herein to conform to or be consistent with or in furtherance of the statements
made with respect to the Certificates, the Trust Fund or this Agreement in any
Offering Document; or to correct or supplement any provision herein which may be
inconsistent with any other provisions herein, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement or
(iv) to add, delete, or amend any provisions to the extent necessary or
desirable to comply with any requirements imposed by the Code and the REMIC
Provisions. No such amendment effected pursuant to the preceding sentence shall,
as evidenced by an Opinion of Counsel, adversely affect the status of any REMIC
created pursuant to this Agreement, nor shall such amendment effected pursuant
to clause (iii) of such sentence adversely affect in any material respect the
interests of any Holder. Prior to entering into any amendment without the
consent of Holders pursuant to this paragraph, the Trustee may require an
Opinion of Counsel (at the expense of the party requesting such amendment) to
the effect that such amendment is permitted under this paragraph. Any such
amendment shall be deemed not to adversely affect in any material respect any
Holder, if the Trustee receives written confirmation from each Rating Agency
that such amendment will not cause such Rating Agency to reduce, qualify or
withdraw the then current rating assigned to the Certificates (and any Opinion
of Counsel requested by the Trustee in connection with any such amendment may
rely expressly on such confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of not less than 66 2/3% of the Class Principal Amount (or Percentage Interest)
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
this Agreement or of modifying in any manner the rights of the Holders;
provided, however, that no such amendment shall be made unless the Trustee
receives an Opinion of Counsel, at the expense of the party requesting the
change, that such change will not adversely affect the status of any REMIC as a
REMIC or cause a tax to be imposed on such REMIC; and provided further, 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 or (ii)
reduce the aforesaid percentages of Class Principal Amount (or Percentage
Interest) of Certificates of each Class, the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of the
Class Principal Amount (or Class Notional Amount) of each Class of Certificates
affected thereby. For purposes of this paragraph, references to "Holder" or
"Holders" shall be deemed to include, in the case of any Class of Book-Entry
Certificates, the related Certificate Owners.
127
(c) Promptly after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Holder, the Depositor and to the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under
this Section 11.03 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 Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
(e) Notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to any amendment of any Servicing
Agreement except pursuant to the standards provided in this Section with respect
to amendment of this Agreement.
Section 11.04. Voting Rights.
Except to the extent that the consent of all affected
Certificateholders is required pursuant to this Agreement, with respect to any
provision of this Agreement requiring the consent of Certificateholders
representing specified percentages of aggregate outstanding Certificate
Principal Amount (or Notional Amount), Certificates owned by the Depositor, the
Master Servicer, the Trustee or any Servicer or Affiliates thereof are not to be
counted so long as such Certificates are owned by the Depositor, the Master
Servicer, the Trustee or any Servicer or Affiliates thereof.
Section 11.05. Provision of Information.
(a) For so long as any of the Certificates of any Series or Class
are "restricted securities" within the meaning of Rule 144(a)(3) under the Act,
each of the Depositor and the Trustee agree to cooperate with each other to
provide to any Certificateholders and to any prospective purchaser of
Certificates designated by such Certificateholder, upon the request of such
Certificateholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Act. Any reasonable, out-of-pocket expenses
incurred by the Trustee in providing such information shall be reimbursed by the
Depositor.
(b) The Trustee will make available to any person to whom a
Prospectus was delivered, upon the request of such person specifying the
document or documents requested, (i) a copy (excluding exhibits) of any report
on Form 8-K or Form 10-K filed with the Securities and Exchange Commission
pursuant to Section 6.20(c) and (ii) a copy of any other document incorporated
by reference in the Prospectus to the extent such document is in the possession
of the Trustee. Any reasonable out-of-pocket expenses incurred by the Trustee in
providing copies of such documents shall be reimbursed by the Depositor.
(c) On each Distribution Date, the Trustee shall make available to
the Depositor a copy of the report delivered to Certificateholders pursuant to
Section 4.03.
Section 11.06. Governing Law.
128
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 WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW).
Section 11.07. Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered to such party at the
relevant address, facsimile number or electronic mail address set forth below
(or at such other address, facsimile number or electronic mail address as such
party may designate from time to time by written notice in accordance with this
Section 11.07): received by (a) in the case of the Depositor, Structured Asset
Securities Corporation, 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx Xxxx, (b) in the case of the Trustee, JPMorgan Chase Bank, 4 New
Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Institutional Trust
Services, SASCO 2003-24A and (c) in the case of the Master Servicer, Aurora Loan
Services Inc., 0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000;
Attention: Master Servicing or as to each party such other address as may
hereafter be furnished by such party to the other parties in writing. Any notice
required or permitted to be mailed to a Holder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice.
Section 11.08. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.09. Indulgences; No Waivers.
Neither the failure nor any delay on the part of a party to exercise
any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of any
other right, remedy, power or privilege, nor shall any waiver of any right,
remedy, power or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed
by the party asserted to have granted such waiver.
Section 11.10. Headings Not To Affect Interpretation.
The headings contained in this Agreement are for convenience of
reference only, and they shall not be used in the interpretation hereof.
129
Section 11.11. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except to
the extent specified in Section 11.14.
Section 11.12. Special Notices to the Rating Agencies.
(a) The Depositor shall give prompt notice to the Rating Agencies
of the occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section
11.03;
(ii) any Assignment by the Master Servicer of its rights
hereunder or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in
Section 6.14;
(iv) any notice of termination given to the Master
Servicer pursuant to Section 6.14 and any resignation of the Master
Servicer hereunder;
(v) the appointment of any successor to any Master
Servicer pursuant to Section 6.14; and
(vi) the making of a final payment pursuant to Section
7.02.
(b) All notices to the Rating Agencies provided for this Section
shall be in writing and sent by first class mail, telecopy or overnight courier,
as follows:
If to Moody's, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to S&P, to:
Standard & Poor's
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(c) The Trustee shall provide or make available to the Rating
Agencies reports prepared pursuant to Section 4.03. In addition, the Trustee
shall, at the expense of the Trust Fund, make available to each Rating Agency
such information as such Rating Agency may reasonably request regarding the
Certificates or the Trust Fund, to the extent that such information is
reasonably available to the Trustee.
130
Section 11.13. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
Section 11.14. Transfer of Servicing.
The Seller agrees that it shall provide written notice to the Trustee
and the Master Servicer thirty days prior to any transfer or assignment by the
Seller of its rights under any Servicing Agreement or of the servicing
thereunder or delegation of its rights or duties thereunder or any portion
thereof to any Person other than the initial Servicer under such Servicing
Agreement; provided that the Seller shall not be required to provide prior
notice of any transfer of servicing that occurs within three months following
the Closing Date to an entity that is a Servicer on the Closing Date. In
addition, the ability of the Seller to transfer or assign its rights and
delegate its duties under a Servicing Agreement or to transfer the servicing
thereunder to a successor servicer shall be subject to the following conditions:
(i) Such successor servicer must be qualified to service
loans for FNMA or FHLMC;
(ii) Such successor servicer must satisfy the
seller/servicer eligibility standards in the applicable Servicing
Agreement, exclusive of any experience in mortgage loan origination,
and must be reasonably acceptable to the Master Servicer, whose
approval shall not be unreasonably withheld;
(iii) Such successor servicer must execute and deliver to
the Trustee and the Master Servicer an agreement, in form and substance
reasonably satisfactory to the Trustee and the Master Servicer, that
contains an assumption by such successor servicer of the due and
punctual performance and observance of each covenant and condition to
be performed and observed by the applicable Servicer under the
applicable Servicing Agreement or, in the case of a transfer of
servicing to a party that is already a Servicer pursuant to this
Agreement, an agreement to add the related Mortgage Loans to the
Servicing Agreement already in effect with such Servicer;
(iv) If the successor servicer is not a Servicer of
Mortgage Loans at the time of such transfer, there must be delivered to
the Trustee a letter from each Rating Agency to the effect that such
transfer of servicing will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Certificates;
(v) The Seller shall, at its cost and expense, take such
steps, or cause the terminated Servicer to take such steps, as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the Mortgage Loans to such successor servicer, including,
but not limited to, the following: (A) to the extent required by the
terms of the Mortgage Loans and by applicable federal and state laws
and regulations, the Seller shall cause the prior Servicer to timely
mail to each obligor under a Mortgage Loan any required notices or
disclosures describing the transfer of servicing of the Mortgage Loans
to the successor servicer; (B) prior to the effective date of such
transfer of servicing, the Seller shall cause the prior Servicer to
transmit to any related insurer
131
notification of such transfer of servicing; (C) on or prior to the
effective date of such transfer of servicing, the Seller shall cause
the prior Servicer to deliver to the successor servicer all Mortgage
Loan Documents and any related records or materials; (D) on or prior to
the effective date of such transfer of servicing, the Seller shall
cause the prior Servicer to transfer to the successor servicer, or, if
such transfer occurs after a Remittance Date but before the next
succeeding Deposit Date, to the Master Servicer, all funds held by the
applicable Servicer in respect of the Mortgage Loans; (E) on or prior
to the effective date of such transfer of servicing, the Seller shall
cause the prior Servicer to, after the effective date of the transfer
of servicing to the successor servicer, continue to forward to such
successor servicer, within one Business Day of receipt, the amount of
any payments or other recoveries received by the prior Servicer, and to
notify the successor servicer of the source and proper application of
each such payment or recovery; and (F) the Seller shall cause the prior
Servicer to, after the effective date of transfer of servicing to the
successor servicer, continue to cooperate with the successor servicer
to facilitate such transfer in such manner and to such extent as the
successor servicer may reasonably request.
132
IN WITNESS WHEREOF, the Depositor, the Trustee and the Master Servicer
have caused their names to be signed hereto by their respective officers
hereunto duly authorized as of the day and year first above written.
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK,
as Trustee
By:
-------------------------------------
Name: Pei Xxx Xxxxx
Title: Trust Officer
AURORA LOAN SERVICES INC.,
as Master Servicer
By:
-------------------------------------
Name: E. Xxxx Xxxxxxxxxx
Title: Executive Vice President
Solely for purposes of Section 11.14,
accepted and agreed to by:
XXXXXX BROTHERS HOLDINGS INC.
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
EXHIBIT A
FORMS OF CERTIFICATES
[INTENTIONALLY OMITTED]
EXHIBIT B-1
FORM OF INITIAL CERTIFICATION
---------------
Date
JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Securities Corporation
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Aurora Loan Services Inc.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of July 1,
2003 among Structured Asset Securities Corporation, as
Depositor, Aurora Loan Services Inc., as Master Servicer and
JPMorgan Chase Bank, as Trustee, with respect to Structured
Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 2003-24A
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Trust Agreement, subject to
review of the contents thereof, the undersigned, as Custodian on behalf of the
Trustee, hereby certifies that it (or its custodian) has received the documents
listed in Section 2.01(b) of the Trust Agreement for each Mortgage File
pertaining to each Mortgage Loan listed on Schedule A, to the Trust Agreement,
subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Trust
Agreement. This Certificate is subject in all respects to the terms of Section
2.02 of the Trust Agreement and the Trust Agreement sections cross-referenced
therein.
[Custodian], on behalf of
JPMORGAN CHASE BANK,
as Trustee
By:
-------------------------------------
Name:
Title:
EXHIBIT B-2
FORM OF INTERIM CERTIFICATION
---------------
Date
JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Securities Corporation
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Aurora Loan Services Inc.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of July 1,
2003 among Structured Asset Securities Corporation, as
Depositor, Aurora Loan Services Inc., as Master Servicer and
JPMorgan Chase Bank, as Trustee, with respect to Structured
Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 2003-24A
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on Schedule I hereto) it (or its custodian) has
received the applicable documents listed in Section 2.01(b) of the Trust
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents identified above and has
determined that each such document appears regular on its face and appears to
relate to the Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement including, but not limited
to, Section 2.02(b).
[Custodian], on behalf of
JPMORGAN CHASE BANK, as
Trustee
By:
-------------------------------------
Name:
Title:
EXHIBIT B-3
FORM OF FINAL CERTIFICATION
---------------
Date
JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Securities Corporation
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Aurora Loan Services Inc.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of July 1,
2003 among Structured Asset Securities Corporation, as
Depositor, Aurora Loan Services Inc., as Master Servicer and
JPMorgan Chase Bank, as Trustee, with respect to Structured
Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 2003-24A
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on Schedule I hereto) it (or its custodian) has
received the applicable documents listed in Section 2.01(b) of the Trust
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement.
[Custodian], on behalf of
JPMORGAN CHASE BANK,
as Trustee
By:
-------------------------------------
Name:
Title:
EXHIBIT B-4
FORM OF ENDORSEMENT
Pay to the order of JPMorgan Chase Bank, as trustee (the "Trustee")
under the Trust Agreement dated as of July 1, 2003, among Structured Asset
Securities Corporation, as Depositor, Aurora Loan Services Inc., as Master
Servicer and JPMorgan Chase Bank, as Trustee relating to Structured Asset
Securities Corporation Mortgage Pass-Through Certificates, Series 2003-24A,
without recourse.
----------------------------------------
[current signatory on note]
By:
-------------------------------------
Name:
Title:
EXHIBIT C
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
---------------
Date
[Addressed to Trustee
or, if applicable, custodian]
In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of July 1, 2003 among
Structured Asset Securities Corporation, as Depositor, Aurora Loan Services
Inc., as Master Servicer and JPMorgan Chase Bank, as Trustee (the "Trust
Agreement"), the undersigned Master Servicer hereby requests a release of the
Mortgage File held by you as Trustee with respect to the following described
Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
1. Mortgage Loan paid in full. (The Master Servicer hereby certifies that
all amounts received in connection with the loan have been or will be
credited to the Collection Account or the Certificate Account
(whichever is applicable) pursuant to the Trust Agreement.)
2. The Mortgage Loan is being foreclosed.
3. Mortgage Loan substituted. (The Master Servicer hereby certifies that a
Qualifying Substitute Mortgage Loan has been assigned and delivered to
you along with the related Mortgage File pursuant to the Trust
Agreement.)
4. Mortgage Loan repurchased. (The Master Servicer hereby certifies that
the Purchase Price has been credited to the Collection Account or the
Certificate Account (whichever is applicable) pursuant to the Trust
Agreement.)
5. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Trust Agreement and
will be returned to you within ten (10) days of our receipt of the Mortgage
File, except if the Mortgage Loan has
been paid in full, or repurchased or substituted for a Qualifying Substitute
Mortgage Loan (in which case the Mortgage File will be retained by us
permanently) and except if the Mortgage Loan is being foreclosed (in which case
the Mortgage File will be returned when no longer required by us for such
purpose).
Capitalized terms used herein shall have the meanings ascribed to them
in the Trust Agreement.
-------------------------------------
[Name of Master Servicer]
By:
----------------------------------
Name:
Title: Servicing Officer
C-2
EXHIBIT D-1
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn,
deposes and says:
That he [she] is [title of officer] ________________________ of [name of
Purchaser] _________________________________________ (the "Purchaser"), a
_______________________ [description of type of entity] duly organized and
existing under the laws of the [State of __________] [United States], on behalf
of which he [she] makes this affidavit.
1. That the Purchaser's Taxpayer Identification Number is ______________.
2. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as
amended (the "Code") and will not be a "disqualified organization" as
of __________________ [date of transfer], and that the Purchaser is not
acquiring a Residual Certificate (as defined in the Agreement) for the
account of, or as agent (including a broker, nominee, or other
middleman) for, any person or entity from which it has not received an
affidavit substantially in the form of this affidavit. For these
purposes, a "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 (other than an instrumentality if all of its activities are
subject to tax and a majority of its board of directors is not selected
by such governmental entity), any cooperative organization furnishing
electric energy or providing telephone service to persons in rural
areas as described in Code Section 1381(a)(2)(C), any "electing large
partnership" within the meaning of Section 775 of the Code, or any
organization (other than a farmers' cooperative described in Code
Section 521) that is exempt from federal income tax unless such
organization is subject to the tax on unrelated business income imposed
by Code Section 511.
3. That the Purchaser is not, and on __________________ [date of transfer]
will not be, an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
Section 4975 of the Code or substantially similar rules under state,
local or federal law ("Similar Law"), the trustee of any such plan or a
person acting on behalf of any such plan or investing the assets of any
such plan to acquire a Residual Certificate.
4. That the Purchaser hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") among Structured Asset Securities
Corporation, JPMorgan Chase Bank, as Trustee and Aurora Loan Services
Inc., as Master Servicer, dated as of July 1, 2003, no transfer of a
Residual Certificate shall be permitted to be made to any person unless
the Depositor and the Trustee have received a certificate from such
transferee containing the representations in paragraphs 2, 3 and 4
hereof.
5. That the Purchaser does not hold REMIC residual securities as nominee
to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating
organizations (such entity, a "Book-Entry Nominee").
6. That the Purchaser does not have the intention to impede the assessment
or collection of any federal, state or local taxes legally required to
be paid with respect to such Residual Certificate, and that the
Purchaser has provided financial statements or other financial
information requested by the transferor in connection with the transfer
of the Residual Certificate in order to permit the transferor to assess
the financial capability of the Purchaser to pay such taxes.
7. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge
that the requirements set forth in paragraph 2, paragraph 5 or
paragraph 9 hereof are not satisfied or that the Purchaser has reason
to believe does not satisfy the requirements set forth in paragraph 6
hereof, and (ii) without obtaining from the prospective Purchaser an
affidavit substantially in this form and providing to the Trustee a
written statement substantially in the form of Exhibit D-2 to the
Agreement.
8. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any
cash flows generated by the interest and that it intends to pay taxes
associated with holding such Residual Certificate as they become due.
9. That the Purchaser (i) is a U.S. Person or (ii) is a Non-U.S. Person
that holds a Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the
transferor and the Trustee with an effective Internal Revenue Service
Form W-8 ECI (Certificate of Foreign Person's Claim for Exemption From
Withholding on Income Effectively Connected with the Conduct of a Trade
or Business in the United States) or successor form at the time and in
the manner required by the Code. "Non-U.S. Person" means any person
other than (i) a citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the
District of Columbia; (iii) a partnership (or entity treated as a
partnership for tax purposes) organized in the United States or under
the laws of the United States or of any state thereof, including, for
this purpose, the District of Columbia (unless provided otherwise by
future Treasury regulations); (iv) an estate whose income is includible
in gross income for United States income tax purposes regardless of its
source; (v) a trust, if a court within the United States is able to
exercise
D-2
primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions
of the trust or; (vi) and, to the extent provided in Treasury
regulations, certain trusts in existence prior to August 20, 1996 that
are treated as United States persons prior to such date and elect to
continue to be treated as United States persons.
10. That the Purchaser agrees to such amendments of the Trust Agreement as
may be required to further effectuate the restrictions on transfer of
any Residual Certificate to such a "disqualified organization," an
agent thereof, a Book-Entry Nominee, or a person that does not satisfy
the requirements of paragraph 6 and paragraph 9 hereof.
11. That the Purchaser consents to the designation of the Trustee as its
agent to act as "tax matters person" of the Trust Fund pursuant to the
Trust Agreement.
Terms used in this transfer affidavit which are not otherwise defined
herein have the respective meanings assigned thereto in the Trust Agreement.
D-3
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________, 20__.
--------------------------------------
[name of Purchaser]
By:
-----------------------------------
Name:
Title:
Personally appeared before me the above-named [name of
officer] ________________, known or proved to me to be the same person who
executed the foregoing instrument and to be the [title of officer]
_________________ of the Purchaser, and acknowledged to me that he [she]
executed the same as his [her] free act and deed and the free act and deed of
the Purchaser.
Subscribed and sworn before me this _____ day of __________,
20__.
NOTARY PUBLIC
---------------------------------
COUNTY OF_____________________
STATE OF_______________________
My commission expires the _____ day of __________, 20__.
X-0
XXXXXXX X-0
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
-------------------
Date
Re: Structured Asset Securities Corporation Mortgage
Pass-Through Certificates, Series 2003-24A
_______________________ (the "Transferor") has reviewed the
attached affidavit of _____________________________ (the "Transferee"), and has
no actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 6 thereof is not true, and has 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 a Residual Certificate. In addition, the Transferor has
conducted a reasonable investigation at the time of the transfer and found that
the Transferee had historically paid its debts as they came due and 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:
EXHIBIT E
SERVICING AGREEMENTS
See Exhibits 99.2-99.5
EXHIBIT F
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 2003-24A
Reference is hereby made to the Trust Agreement (the "Trust
Agreement"), dated as of July 1, 2003 among Structured Asset Securities
Corporation, as Depositor, Aurora Loan Services Inc., as Master Servicer and
JPMorgan Chase Bank, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Trust Agreement.
This letter relates to $_________ initial Certificate
Principal Amount of Class Certificates which are held in the form of Definitive
Certificates registered in the name of (the "Transferor"). The Transferor has
requested a transfer of such Definitive Certificates for Definitive Certificates
of such Class registered in the name of [insert name of transferee].
In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such Certificates are being
transferred in accordance with (i) the transfer restrictions set forth in the
Trust Agreement and the Certificates and (ii) Rule 144A under the Securities Act
to a purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its own
account or for the account of a "qualified institutional buyer", which purchaser
is aware that the sale to it is being made in reliance upon Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Placement Agent and the Depositor.
----------------------------------------
[Name of Transferor]
By:
-------------------------------------
Name:
Title:
Dated: __________________, ________
EXHIBIT G
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
-------------------
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 2003-24A (the "Privately Offered Certificates") of
Structured Asset Securities Corporation (the "Depositor") which are held in the
form of Definitive Certificates, we confirm that:
1. We understand that the Privately Offered Certificates have not been,
and will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be sold except as permitted
in the following sentence. We agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, that if we
should sell any Privately Offered Certificates within two years of the
later of the date of original issuance of the Privately Offered
Certificates or the last day on which such Privately Offered
Certificates are owned by the Depositor or any affiliate of the
Depositor (which includes the Placement Agent) we will do so only (A)
to the Depositor, (B) to "qualified institutional buyers" (within the
meaning of Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act ("QIBs"), (C) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act, or (D)
to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
that is not a QIB (an "Institutional Accredited Investor") which, prior
to such transfer, delivers to the Trustee under the Trust Agreement
(the "Trust Agreement"), dated as of July 1, 2003 among Structured
Asset Securities Corporation, as Depositor, Aurora Loan Services Inc.,
as Master Servicer and JPMorgan Chase Bank, as Trustee, a signed letter
in the form of this letter; and we further agree, in the capacities
stated above, to provide to any person purchasing any of the Privately
Offered Certificates from us a notice advising such purchaser that
resales of the Privately Offered Certificates are restricted as stated
herein.
2. We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor,
we will be required to furnish to the Trustee and the Depositor a
certification from such transferee in the form hereof to confirm that
the proposed sale is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. We further understand that the Privately Offered
Certificates purchased by us will bear a legend to the foregoing
effect.
3. We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are
acting are each able to bear the economic risk of such investment.
4. We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or
for one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
5. We have received such information as we deem necessary in order to make
our investment decision.
6. If we are acquiring ERISA-Restricted Certificates, we understand that
in accordance with ERISA, the Code, Similar Law and the Underwriter's
Exemption, no Plan and no person acting on behalf of such a Plan may
acquire such Certificate except in accordance with Section 3.03(d) of
the Trust Agreement.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Trust Agreement.
You and the Depositor are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
----------------------------------
[Purchaser]
By
-------------------------------
Name:
Title:
G-2
EXHIBIT H
[FORM OF ERISA TRANSFER AFFIDAVIT]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is the ______________________ of (the "Investor"), a
[corporation duly organized] and existing under the laws of __________,
on behalf of which he makes this affidavit.
2. The Investor either (x) is not, and on ___________ [date of transfer]
will not be, an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") or substantially similar rules under state, local or other
federal law ("Similar Law"), the trustee of any such plan or a person
acting on behalf of any such plan or investing the assets of any such
plan; or (y) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, is an insurance company that is
purchasing the Certificate with funds contained in an "insurance
company general account" as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60 and the purchase and holding
of the Certificate are covered under Sections I and III of PTCE 95-60.
3. The Investor hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") among Structured Asset Securities
Corporation, as Depositor, Aurora Loan Services Inc., as Master
Servicer and JPMorgan Chase Bank, as Trustee, dated as of July 1, 2003,
no transfer of the ERISA-Restricted Certificates (other than the Class
R Certificate) shall be permitted to be made to any person unless the
Depositor and Trustee have received a certificate from such transferee
in the form hereof or an opinion of counsel as provided herein.
4. Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Trust Agreement.
IN WITNESS WHEREOF, the Investor has caused this instrument to
be executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________, 20__.
----------------------------------------
[Investor]
By:
-------------------------------------
Name:
Title:
ATTEST:
-----------------------------
STATE OF )
) ss.:
COUNTY OF )
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 that he executed the same as his free act and deed and the free act
and deed of the Investor.
Subscribed and sworn before me this _____ day of ___________
20___.
----------------------------------
NOTARY PUBLIC
My commission expires the
____ day of __________, 20__.
H-2
EXHIBIT I
MONTHLY REMITTANCE ADVICE
[INTENTIONALLY OMITTED]
EXHIBIT J
MONTHLY ELECTRONIC DATA TRANSMISSION
[INTENTIONALLY OMITTED]
EXHIBIT K
CUSTODIAL AGREEMENTS
[INTENTIONALLY OMITTED]
EXHIBIT L-1
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER FROM RESTRICTED GLOBAL SECURITY
TO REGULATION S GLOBAL SECURITY
(Transfers pursuant to Section 3.03(h)(B)
of the Agreement)
Re: Structured Asset Securities Corporation Mortgage Loan
Trust Mortgage Pass-Through Certificates, Series
2003-24A
Reference is hereby made to the Trust Agreement (the "Agreement") among
Structured Asset Securities Corporation, as Depositor, Aurora Loan Services
Inc., as Master Servicer and JPMorgan Chase Bank, as Trustee, dated as of July
1, 2003. Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
This letter relates to U.S. $ ___________aggregate principal amount of
Securities which are held in the form of a Restricted Global Security with DTC
in the name of [name of transferor] ___________ (the "Transferor") to effect the
transfer of the Securities in exchange for an equivalent beneficial interest in
a Regulation S Global Security.
In connection with such request, the Transferor does hereby certify
that such transfer has been effected in accordance with the transfer
restrictions set forth in the Agreement and the Securities and in accordance
with Rule 904 of Regulation S, and that:
a. the offer of the Securities was not made to a person
in the United States;
b. at the time the buy order was originated, the
transferee was outside the United States or the Transferor and
any person acting on its behalf reasonably believed that the
transferee was outside the United States;
c. no directed selling efforts have been made in
contravention of the requirements of Rule 903 or 904 of
Regulation S, as applicable;
d. the transaction is not part of a plan or scheme to
evade the registration requirements of the United States
Securities Act of 1933, as amended; and
e. the transferee is not a U.S. person (as defined in
Regulation S).
L-1-1
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
-----------------------------------
[Name of Transferor]
By:
--------------------------------
Name:
Title:
Date:____________________,____
X-0-0
XXXXXXX X-0
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL SECURITY
TO RESTRICTED GLOBAL SECURITY
(Transfers pursuant to Section 3.03(h)(C)
of the Agreement)
Re: Structured Asset Securities Corporation Mortgage
Pass-Through Certificates, Series 2003-24A
Reference is hereby made to the Trust Agreement (the "Agreement") among
Structured Asset Securities Corporation, as Depositor, Aurora Loan Services
Inc., as Master Servicer and JPMorgan Chase Bank, as Trustee, dated as of July
1, 2003. Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
This letter relates to U.S. $ ____________aggregate principal amount of
Securities which are held in the form of a Regulations S Global Security in the
name of [name of transferor] ____________(the "Transferor") to effect the
transfer of the Securities in exchange for an equivalent beneficial interest in
a Restricted Global Security.
In connection with such request, and in respect of such Securities, the
Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Agreement and the
Securities and (ii) Rule 144A under the United States Securities Act of 1933, as
amended, to a transferee that the Transferor reasonably believes is purchasing
the Securities for its own account or an account with respect to which the
transferee exercises sole investment discretion, the transferee and any such
account is a qualified institutional buyer within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
-----------------------------------
[Name of Transferor]
By:
--------------------------------
Name:
Title:
Date:____________________,____
L-2-1
EXHIBIT M
FORM OF CERTIFICATION TO BE PROVIDED TO
THE DEPOSITOR AND THE MASTER SERVICER BY THE TRUSTEE
Structured Asset Securities Corporation
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Aurora Loan Services Inc.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Re: Structured Asset Securities Corporation,
Mortgage Pass-Through Certificates, Series 2003-24A
Reference is made to the Trust Agreement, dated as of July 1, 2003 (the "Trust
Agreement"), by and among JPMorgan Chase Bank, as trustee (the "Trustee"),
Aurora Loan Services, Inc., as master servicer (the "Master Servicer"), and
Structured Asset Securities Corporation, as depositor (the "Depositor"). The
Trustee hereby certifies to the Depositor and the Master Servicer, and its
respective officers, directors and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:
(i) The Trustee has reviewed the annual report on Form 10-K for the fiscal
year [[ ]], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual
report, relating to the above referenced trust;
(ii) Based solely upon the information provided to us by the Master
Servicer, the information set forth in the reports referenced in (i)
above does not contain any untrue statement of material fact; and
(iii) Based on my knowledge, the distribution information required to be
provided by the Trustee under the Trust Agreement is included in these
reports.
Date:
JPMorgan Chase Bank, as Trustee
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
1
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
SCHEDULE B
EMPLOYEE MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
SCHEDULE C
AX MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
SCHEDULE D
PAX MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
