STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR,
JPMORGAN CHASE BANK,
TRUSTEE,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
MASTER SERVICER,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
SECURITIES ADMINISTRATOR,
and
EMC MORTGAGE CORPORATION
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2004
Structured Asset Mortgage Investments II Trust 2004-AR8
Mortgage Pass-Through Certificates
Series 2004-AR8
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.01. Definitions...............................................................................2
Section 1.02. Calculation of LIBOR.....................................................................42
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates
Section 2.01. Conveyance of Mortgage Loans to Trustee..................................................44
Section 2.02. Acceptance of Trust Fund by Trustee......................................................46
Section 2.03. Assignment of Interest in the Mortgage Loan Purchase Agreement and in the
Subsequent Mortgage Loan Purchase Agreement(s)...........................................49
Section 2.04. Substitution of Mortgage Loans...........................................................50
Section 2.05. Issuance of Certificates.................................................................51
Section 2.06. Representations and Warranties Concerning the Depositor..................................51
Section 2.07. Conveyance of the Subsequent Mortgage Loans..............................................53
Section 2.08 Covenants of the Master Servicer.........................................................56
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer..........................................................................57
Section 3.02. REMIC-Related Covenants..................................................................58
Section 3.03. Monitoring of Servicers..................................................................58
Section 3.04. Fidelity Bond............................................................................59
Section 3.05. Power to Act; Procedures.................................................................59
Section 3.06. Due-on-Sale Clauses; Assumption Agreements...............................................60
Section 3.07. Release of Mortgage Files................................................................60
Section 3.08. Documents, Records and Funds in Possession of Master Servicer To Be Held for
Trustee..................................................................................61
Section 3.09. Standard Hazard Insurance and Flood Insurance Policies...................................62
Section 3.10. Presentment of Claims and Collection of Proceeds.........................................63
Section 3.11. Maintenance of the Primary Mortgage Insurance Policies...................................63
Section 3.12. Trustee to Retain Possession of Certain Insurance Policies and Documents.................63
Section 3.13. Realization Upon Defaulted Mortgage Loans................................................64
Section 3.14. Compensation for the Servicers and the Master Servicer...................................64
Section 3.15. REO Property.............................................................................64
Section 3.16. Annual Officer's Certificate as to Compliance............................................65
Section 3.17. Annual Independent Accountant's Servicing Report.........................................65
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Section 3.18. Reports Filed with Securities and Exchange Commission....................................66
Section 3.19. EMC......................................................................................67
Section 3.20. UCC......................................................................................67
Section 3.21. Foreclosure Proceedings, and Optional Purchase of Delinquent and Defaulted
Mortgage Loans...........................................................................67
ARTICLE IV
Accounts
Section 4.01. Protected Accounts.......................................................................69
Section 4.02. Distribution Account.....................................................................70
Section 4.03. Permitted Withdrawals and Transfers from the Distribution Account........................71
Section 4.04. Group I Pre-Funding Account and Group I Pre-Funding Reserve Account......................73
Section 4.05. Group I Interest Coverage Account........................................................75
Section 4.06. Group II Pre-Funding Account and Group II Pre-Funding Reserve Account....................76
Section 4.07. Group II Interest Coverage Account.......................................................78
Section 4.08. Distribution of Group I Carryover Shortfall Amount; Group I Carryover Shortfall
Reserve Fund.............................................................................79
Section 4.09. Distribution of Group II Carryover Shortfall Amount; Group II Carryover
Shortfall Reserve Fund...................................................................80
ARTICLE V
Certificates
Section 5.01. Certificates.............................................................................82
Section 5.02. Registration of Transfer and Exchange of Certificates....................................90
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates........................................94
Section 5.04. Persons Deemed Owners....................................................................94
Section 5.05. Transfer Restrictions on Residual Certificates...........................................94
Section 5.06. Restrictions on Transferability of Certificates..........................................95
Section 5.07. ERISA Restrictions.......................................................................96
Section 5.08. Rule 144A Information....................................................................98
Section 5.09. Appointment of Paying Agent and Certificate Registrar....................................98
ARTICLE VI
Payments to Certificateholders
Section 6.01. Distributions on the Certificates........................................................99
Section 6.02. Allocation of Losses....................................................................103
Section 6.03. Payments................................................................................106
Section 6.04. Statements to Certificateholders........................................................106
Section 6.05. Monthly Advances........................................................................110
Section 6.06. Compensating Interest Payments..........................................................110
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ARTICLE VII
The Master Servicer
Section 7.01. Liabilities of the Master Servicer......................................................112
Section 7.02. Merger or Consolidation of the Master Servicer..........................................112
Section 7.03. Indemnification of the Trustee, the Custodian and the Securities Administrator..........112
Section 7.04. Limitations on Liability of the Master Servicer and Others..............................113
Section 7.05. Master Servicer Not to Resign...........................................................114
Section 7.06. Successor Master Servicer...............................................................114
Section 7.07. Sale and Assignment of Master Servicing.................................................115
ARTICLE VIII
Default
Section 8.01. "Event of Default"......................................................................116
Section 8.02. Trustee to Act; Appointment of Successor................................................118
Section 8.03. Notification to Certificateholders......................................................118
Section 8.04. Waiver of Defaults......................................................................119
Section 8.05. List of Certificateholders..............................................................119
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01. Duties of Trustee.......................................................................120
Section 9.02. Certain Matters Affecting the Trustee and the Securities Administrator..................122
Section 9.03. Trustee and Securities Administrator Not Liable for Certificates or Mortgage
Loans...................................................................................124
Section 9.04. Trustee and Securities Administrator May Own Certificates...............................124
Section 9.05. Trustee's and Securities Administrator's Fees and Expenses..............................124
Section 9.06. Eligibility Requirements for Trustee, Paying Agent and Securities Administrator.........125
Section 9.07. Insurance...............................................................................125
Section 9.08. Resignation and Removal of the Trustee and Securities Administrator.....................125
Section 9.09. Successor Trustee, Paying Agent and Successor Securities Administrator..................127
Section 9.10. Merger or Consolidation of Trustee, Paying Agent or Securities Administrator............127
Section 9.11. Appointment of Co-Trustee or Separate Trustee...........................................128
Section 9.12. Federal Information Returns and Reports to Certificateholders; REMIC
Administration..........................................................................129
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ARTICLE X
Termination
Xxxxxxx 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx by the Depositor or its Designee or Liquidation of
the Mortgage Loans......................................................................132
Section 10.02. Additional Termination Requirements.....................................................134
ARTICLE XI
Miscellaneous Provisions
Section 11.01. Intent of Parties.......................................................................136
Section 11.02. Amendment...............................................................................136
Section 11.03. Recordation of Agreement................................................................137
Section 11.04. Limitation on Rights of Certificateholders..............................................138
Section 11.05. Acts of Certificateholders..............................................................139
Section 11.06. GOVERNING LAW...........................................................................140
Section 11.07. Notices.................................................................................140
Section 11.08. Severability of Provisions..............................................................140
Section 11.09. Successors and Assigns..................................................................140
Section 11.10. Article and Section Headings............................................................141
Section 11.11. Counterparts............................................................................141
Section 11.12. Notice to Rating Agencies...............................................................141
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EXHIBITS
Exhibit A-1 - Form of Class A and Class X Certificates
Exhibit A-2 - Form of Class M Certificates
Exhibit A-3 - Form of Class B Certificates
Exhibit A-4 - Form of Class R Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - EverHome Subservicing Agreement
Exhibit H-2 - Countrywide Servicing Agreement
Exhibit H-3 - EverHome Servicing Agreement
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Form of Trustee Limited Power of Attorney
Exhibit L - Form of Subsequent Transfer Instrument
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement, dated as of December 1, 2004, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), JPMorgan Chase Bank, N.A., a banking association
organized under the laws of the United States of America, not in its individual
capacity but solely as trustee (the "Trustee"), Xxxxx Fargo Bank, National
Association, as master servicer (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator"), and
EMC Mortgage Corporation ("EMC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor has acquired the Initial
Mortgage Loans from EMC. On the Closing Date, the Depositor will sell the
Initial Mortgage Loans and certain other property to the Trust Fund and receive
in consideration therefor Certificates evidencing the entire beneficial
ownership interest in the Trust Fund.
On or prior to the related Subsequent Transfer Date, the Depositor will
acquire the related Subsequent Mortgage Loans from EMC. On the related
Subsequent Transfer Date, the Depositor will sell the related Subsequent
Mortgage Loans and certain other property to the Trust Fund.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC I Regular Interests will be designated
"regular interests" in such REMIC and the Class R-I Certificate will be
designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC II Regular Certificates will be designated
"regular interests" in such REMIC and the Class R-II Certificate will be
designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC III to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC III Regular Certificates will be designated
"regular interests" in such REMIC and the Class R-III Certificate will be
designated the "residual interests" in such REMIC.
The Initial Mortgage Loans will have an Outstanding Principal Balance
as of the Cut-off Date, after deducting all Scheduled Principal due on or before
the Cut-off Date, of $782,026,532.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator, EMC and the
Trustee agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless otherwise expressly provided or unless the
context otherwise requires, shall have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan,
as applicable, those customary mortgage master servicing practices of prudent
institutions that master service mortgage loans of the same type and quality as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located, to the extent applicable to the Trustee or the Master Servicer (except
in its capacity as successor to a Servicer).
Account: The Distribution Account, the Group I Pre-Funding Account, the
Group I Pre-Funding Reserve Account, the Group I Interest Coverage Account, the
Group II Pre-Funding Account, the Group II Pre-Funding Reserve Account, the
Group II Interest Coverage Account and the related Protected Account, as the
context may require.
Accrued Certificate Interest: For any Certificate or for any Component
of the Class X-1 Certificates on any Distribution Date, the amount of interest
accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the Current Principal Amount (or Notional Amount, with
respect to the Class X-1 and Class X-2 Certificates) of such Certificate or
Notional Amount of such Component immediately prior to such Distribution Date,
less (i) in the case of a Senior Certificate or a Component of the Class X-1
Certificates, such Certificate's or Component's share of any Net Interest
Shortfall from the Mortgage Loans in the related Loan Group and, after the
Cross-Over Date, the interest portion of any Realized Losses on the related
Mortgage Loans in the related Loan Group to the extent allocated thereto in
accordance with Section 6.02(g), (ii) in the case of a Senior Mezzanine
Certificate, such Certificate's share of any Net Interest Shortfall and the
interest portion of any Realized Losses on the related Mortgage Loans to the
extent allocated thereto in accordance with Section 6.02(g) and (iii) in the
case of a Subordinate Certificate, such Certificate's share of any Net Interest
Shortfall and the interest portion of any Realized Losses on the Mortgage Loans
in the related Loan Group, to the extent allocated thereto in accordance with
Section 6.02(g). Such Net Interest Shortfalls will be allocated among the
Certificates in proportion to the amount of Accrued Certificate Interest that
would have been allocated thereto in the absence of such shortfalls. The amount
of any interest shortfalls (not including Interest Shortfalls or the interest
portion of Realized Losses) with respect to the Mortgage Loans that are not
covered by servicing advances will constitute unpaid Accrued Certificate
Interest and will be distributable to holders of the Certificates entitled to
such amounts on subsequent Distribution Dates, to the extent of the Available
Funds remaining after current interest distributions. Any such amounts so
carried forward will not bear interest. Any Interest Shortfalls will not be
offset by a reduction in the servicing compensation of the Master Servicer, the
Servicers or otherwise, except to the extent of applicable Compensating Interest
Payments. The interest portion of Realized Losses for the Mortgage Loans will be
allocated sequentially, in the following order, to the Class B-6, Class B-5,
Class B-4, Class B-3, Class B-2, Class B-1 and Class M Certificates, and,
following the Cross-over Date, (A) the
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interest portion of Realized Losses on the Group I Mortgage Loans will be
allocated on a pro rata basis to the Class A-1 Certificates, to Component 1X of
the Class X-1 Certificates and to Component 2X of the Class X-1 Certificates to
the extent of the Group I Allocation Fraction thereof and (B) the interest
portion of Realized Losses on the Group II Mortgage Loans will be allocated on a
pro rata basis to the Class A-2A, Class A-2B and Class X-2 Certificates and to
Component 2X of the Class X-1 Certificates to the extent of the Group II
Allocation Fraction thereof. Interest on the Certificates and the Components of
the Class X-1 Certificates shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months; provided, that the initial Interest Accrual
Period for the Adjustable Rate Certificates is only 20 days. An additional 10
days of interest will be paid to the Class X-1 and Class X-2 Certificates as an
additional distribution on the first Distribution Date. No Accrued Certificate
Interest will be payable with respect to any Class or Classes of Certificates
after the Distribution Date on which the outstanding Current Principal Amount or
Notional Amount of such Certificate or Certificates or Notional Amount of a
Component of such Certificate or Certificates has been reduced to zero.
Adjustable Rate Certificates: The Class A-1 Certificates, Class A-2B
Certificates, Class M Certificates, Class B-1 Certificates, Class B-2
Certificates and Class B-3 Certificates.
Aegis: Aegis Mortgage Corporation and its successor in interest.
Aegis AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, among EMC, the
Trustee, EverHome and Aegis.
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto made in accordance with the terms herein.
Allocable Share: With respect to the Senior Mezzanine Certificates and
each Class of Subordinate Certificates:
(a) as to any Distribution Date and amounts distributable pursuant to
clauses (1) and (4) of the definition of Senior Mezzanine and Subordinate
Optimal Principal Amount, the fraction, expressed as a percentage, the numerator
of which is the Current Principal Amount of such Class and the denominator of
which is the aggregate Current Principal Amount of all Classes of the Senior
Mezzanine Certificates and Subordinate Certificates; and
(b) as to any Distribution Date and amounts distributable pursuant to
clauses (2), (3), (5) and (6) of the definition of Senior Mezzanine and
Subordinate Optimal Principal Amount,
(1) for any Distribution Date on which the Senior
Mezzanine Loss and Delinquency Test has been satisfied, as to
the Senior Mezzanine and each Class of Subordinate
Certificates (or, if the Current Principal Amount of the
Senior
3
Mezzanine Certificates has been reduced to zero, the Class of
Subordinate Certificates having the lowest numerical
designation as to which the Class Prepayment Distribution
Trigger shall not be applicable) for which (x) the related
Class Prepayment Distribution Trigger has been satisfied on
such Distribution Date, the fraction, expressed as a
percentage, the numerator of which is the Current Principal
Amount of such Class and the denominator of which is the
aggregate Current Principal Amount of all such Classes of
Senior Mezzanine Certificates and Subordinate Certificates for
which the related Class Prepayment Distribution Trigger has
been satisfied and (y) the related Class Prepayment
Distribution Trigger has not been satisfied on such
Distribution Date, 0%; provided that if on a Distribution
Date, the Current Principal Amount of the Senior Mezzanine
Certificates or any Class of Subordinate Certificates for
which the related Class Prepayment Distribution Trigger was
satisfied on such Distribution Date is reduced to zero, any
amounts distributed pursuant to this clause (b)(1), to the
extent of such Class's remaining Allocable Share, shall be
distributed to the Class of Subordinate Certificates having
the lowest numerical designation and to the Subordinate
Certificates which satisfy the related Class Prepayment
Distribution Trigger in reduction of their respective Current
Principal Amounts, in the order of their numerical Class
designations; and
(2) for any Distribution Date on which the Senior
Mezzanine Loss and Delinquency Test has not been satisfied, as
to the Senior Mezzanine Certificates, 100%, and as to the
Subordinate Certificates, 0%; provided that if on a
Distribution Date, the Current Principal Amount of the Senior
Mezzanine Certificates is reduced to zero, any remaining
amounts distributed pursuant to this clause (b)(2) shall be
distributed to the Classes of Subordinate Certificates which
satisfy the related Class Prepayment Distribution Trigger and
to the Class of Subordinate Certificates having the lowest
numerical designation in reduction of their respective Current
Principal Amounts in the order of their numerical Class
designations.
Applicable Credit Rating: For any long-term deposit or security, a
credit rating of AAA in the case of S&P and Aaa in the case of Moody's (or with
respect to investments in money market funds, a credit rating of "AAAm" or
"AAAm-G", in the case of S&P, and the highest rating given by Moody's for money
market funds, in the case of Moody's). For any short-term deposit or security, a
rating of A-l+ in the case of S&P and P-1 in the case of Moody's.
Applicable State Law: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other state
law whose applicability shall have been brought to the attention of the
Securities Administrator and the Trustee by either (i) an Opinion of Counsel
reasonably acceptable to the Securities Administrator and the Trustee delivered
to it by the Master Servicer or the Depositor, or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.
Appraised Value: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the related Mortgaged
Property based upon the appraisal made at the time of such refinancing or, with
respect to any other Mortgage Loan, the amount set
4
forth as the appraised value of the related Mortgaged Property in an appraisal
made for the mortgage originator in connection with its origination of the
related Mortgage Loan.
Assignment Agreements: The agreements attached hereto as Exhibit I,
whereby the Assigned Loans (as defined therein) and the related Servicing
Agreements were assigned to the Trustee for the benefit of the
Certificateholders.
Assumed Final Distribution Date: May 19, 2035, or if such day is not a
Business Day, the next succeeding Business Day.
Available Funds: With respect to any Distribution Date, the sum of the
Group I Available Funds and the Group II Available Funds for such Distribution
Date.
Average Loss Severity Percentage: With respect to any Distribution Date
and each Loan Group, the percentage equivalent of a fraction, the numerator of
which is the sum of the Loss Severity Percentages for each Mortgage Loan in such
Loan Group which had a Realized Loss and the denominator of which is the number
of Mortgage Loans in the related Loan Group which had Realized Losses.
BancMortgage: BancMortgage, a division of National Bank of Commerce,
and its successor in interest.
BancMortgage AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, among EMC, the
Trustee, EverHome and BancMortgage.
Bankruptcy Code: The United States Bankruptcy Code, as amended, as
codified in 11 U.S.C. ss.ss.101-1330.
Bankruptcy Loss: With respect to any Mortgage Loan, any Deficient
Valuation or Debt Service Reduction related to such Mortgage Loan as reported by
the applicable Servicer to the Master Servicer.
Book-Entry Certificates: Initially, all Classes of Certificates other
than the Private Certificates and the Residual Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or the Federal Reserve is closed or on
which banking institutions in New York City or in any of the jurisdictions in
which the Trustee, the Master Servicer, any Servicer or the Securities
Administrator is located are authorized or obligated by law or executive order
to be closed.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed by the Trustee and
countersigned by the Certificate Registrar in substantially the forms annexed
hereto as Exhibits X-0, X-0, X-0, and A-4 with the blanks therein appropriately
completed.
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Certificate Group: The Group I Senior Certificates and the Group II
Senior Certificates, as applicable.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificate Registrar: The Securities Administrator or any successor
certificate registrar appointed hereunder.
Certificate Registrar Office: The office of the Certificate Registrar
located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: XXXX XX Series 2004-AR8.
Certificateholder: A Holder of a Certificate.
Class: With respect to the Certificates, X-0, X-0X, X-0X, X-0, X-0,
R-I, R-II, R-III, M, X-0, X-0, X-0, X-0, B-5 and B-6.
Class Prepayment Distribution Trigger: For the Senior Mezzanine
Certificates or a Class of Subordinate Certificates for any Distribution Date,
the Class Prepayment Distribution Trigger is satisfied if the fraction
(expressed as a percentage), the numerator of which is the aggregate Current
Principal Amount of such Class and each Class of Certificates subordinate
thereto, if any, and the denominator of which is the Scheduled Principal Balance
of all of the Mortgage Loans as of the related Due Date, equals or exceeds such
percentage calculated as of the Closing Date. If on any Distribution Date the
Current Principal Amount of any Class or Classes of Senior Mezzanine
Certificates and Subordinate Certificates for which the related Class Prepayment
Distribution Trigger was satisfied on such Distribution Date is reduced to zero,
any amounts distributable to such Class or Classes pursuant to clauses (2), (3),
(5) and (6) of the definition of "Senior Mezzanine and Subordinate Optimal
Principal Amount," to the extent of such Class' or Classes' remaining Allocable
Share, shall be distributed to the remaining Class or Classes of Senior
Mezzanine Certificates and Subordinate Certificates in reduction of their
respective Current Principal Amounts, sequentially, in the order of their
numerical class designations.
Class R Certificates: The Class R-I, Class R-II and Class R-III
Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A-4 and evidencing an interest designated as
a "residual interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A-4 and evidencing an interest designated as
a "residual interest" in REMIC II for purposes of the REMIC Provisions.
Class R-III Certificate: Any one of the Class R-III Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as
6
Exhibit A-4 and evidencing an interest designated as a "residual interest" in
REMIC III for purposes of the REMIC Provisions.
Class X-1 Payment: An amount equal to the interest that would have
accrued on the Class A-1, Class M, Class B-1, Class B-2 and Class B-3
Certificates for the period beginning on December 19, 2004 and ending on (but
not including) the Closing Date had interest accrued on such Certificates during
such period. Such amount shall be distributed from Group I Available Funds to
the Class X-1 Certificates on the first Distribution Date.
Class X-2 Payment: An amount equal to the interest that would have
accrued on the Class A-2B Certificates for the period beginning on December 19,
2004 and ending on (but not including) the Closing Date had interest accrued on
such Certificates during such period. Such amount shall be distributed from
Group II Available Funds to the Class X-2 Certificates on the first Distribution
Date.
Closing Date: December 30, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Combined Loan-to-Value Ratio: The fraction, expressed as a percentage,
the numerator of which is the sum of the original principal balance of the
related Mortgage Loan at the date of origination and the principal balance of
the related secondary financing and the denominator of which is the lesser of
the selling price of the Mortgaged Property and its Appraised Value.
Commission: The United States Securities and Exchange Commission.
Compensating Interest Payment: As defined in Section 6.06.
Component: With respect to the Class X-1 Certificates, Component 1X and
Component 2X, as applicable.
Component 1X: Component 1X of the Class X-1 Certificates.
Component 1X Distribution Percentage: The percentage equal to (i) the
Notional Amount of Component 1X immediately prior to the first Distribution Date
divided by (ii) the sum of the Notional Amount of Component 1X and the Notional
Amount of Component 2X immediately prior to that Distribution Date.
Component 2X: Component 2X of the Class X-1 Certificates.
Component 2X Distribution Percentage: The percentage equal to (i) the
Notional Amount of Component 2X immediately prior to the first Distribution Date
divided by (ii) the sum of the Notional Amount of Component 1X and the Notional
Amount of Component 2X immediately prior to that Distribution Date.
Corporate Trust Office: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at 0 Xxx Xxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
7
Institutional Trust Services/Global Debt, SAMI Series II 2004-AR8. With respect
to the Certificate Registrar and the presentment of Certificates for
registration of transfer, exchange or final payment, Xxxxx Fargo Bank, National
Association, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Corporate Trust, XXXX XX Series 2004-AR8, and for all other purposes,
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or for overnight deliveries, 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000), Attention: Corporate Trust, XXXX XX
Series 2004-AR8.
Corresponding Certificate: With respect to (i) REMIC II Regular
Interest A-1, (ii) REMIC II Regular Interest A-2A, (iii) REMIC II Regular
Interest A-2B, (iv) REMIC II Regular Interest M, (v) REMIC II Regular Interest
B-1, (vi) REMIC II Regular Interest B-2, (vii) REMIC II Regular Interest B-3,
(viii) REMIC II Regular Interest B-4, (ix) REMIC II Regular Interest B-5, (x)
REMIC II Regular Interest B-6, and (xi) REMIC II Regular Interest MT-R, (i) the
Class A-1 Certificates, (ii) the Class A-2A Certificates, (iii) the Class A-2B
Certificates, (iv) the Class M Certificates, (v) the Class B-1 Certificates,
(vi) the Class B-2 Certificates, (vii) the Class B-3 Certificates, (viii) the
Class B-4 Certificates, (ix) the Class B-5 Certificates, (x) the Class B-6
Certificates and (xi) the Class R-III Certificates, respectively. With respect
to (i) REMIC I Regular Interests 1A, 1B and ZZZ, (ii) REMIC I Regular Interest
2A, 2B and ZZZ, and (iii) REMIC I Regular Interest ZZZ, (i) REMIC II Regular
Interest A-1, (ii) REMIC II Regular Interests A-2A and A-2B, and (iii) REMIC II
Regular Interests M, X-0, X-0, X-0, X-0, B-5 and B-6.
Countrywide: Countrywide Home Loans Servicing L.P. and its successor in
interest.
Countrywide Servicing Agreement: That certain Seller's Warranties and
Servicing Agreement, dated as of September 1, 2002, by and between EMC, as
purchaser, and Countrywide Home Loans, Inc., as seller and servicer, as amended
pursuant to that certain Amendment Number One, dated as of January 1, 2003, by
and between EMC and Countrywide, and as amended pursuant to that certain
Amendment No. 2, dated as of September 1, 2004, by and between EMC and
Countrywide, collectively as attached hereto as Exhibit H-2, as modified
pursuant to that certain Assignment, Assumption and Recognition Agreement, made
and entered into as of December 30, 2004, among EMC, the Trustee, Countrywide
Home Loans, Inc. and Countrywide.
Cross-Over Date: The first Distribution Date on which the aggregate
Current Principal Amounts of the Senior Mezzanine Certificates and Subordinate
Certificates have been reduced to zero (after giving effect to all related
distributions on such Distribution Date).
Current Principal Amount: With respect to any Certificate (other than
an Interest Only Certificate) as of any Distribution Date, an amount equal to
the initial principal amount of such Certificate on the Closing Date plus, in
the case of a Senior Mezzanine Certificate or a Subordinate Certificate, any
Subsequent Recoveries on the Mortgage Loans added to the Current Principal
Amount of such Certificate pursuant to Section 6.02(h) hereof, as reduced by (i)
all amounts distributed on previous Distribution Dates on such Certificate with
respect to principal, (ii) the principal portion of all Realized Losses on the
Mortgage Loans (other than Realized Losses on the Mortgage Loans resulting from
Debt Service Reductions) allocated prior to such Distribution Date to such
Certificate, taking account of its applicable Loss Allocation Limitation,
8
(iii) in the case of a Senior Mezzanine Certificate, such Certificate's pro rata
share, if any, of the applicable Senior Mezzanine Certificate Writedown Amount
for previous Distribution Dates and (iv) in the case of a Subordinate
Certificate, such Certificate's pro rata share, if any, of the applicable
Subordinate Certificate Writedown Amount for previous Distribution Dates. With
respect to any Class of Certificates (other than the Interest Only
Certificates), the Current Principal Amount thereof will equal the sum of the
Current Principal Amounts of all Certificates in such Class. Notwithstanding the
foregoing, solely for purposes of giving consents, directions, waivers,
approvals, requests and notices, the Class R-I, Class R-II and Class R-III
Certificates after the Distribution Date on which they each receive the
distribution of the last dollar of their respective original principal amount
shall be deemed to have Current Principal Amounts equal to their respective
Current Principal Amounts on the day immediately preceding such Distribution
Date.
Custodial Agreement: An agreement, dated as of the Closing Date, among
the Depositor, the Master Servicer, the Trustee and the Custodian, in
substantially the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank, National Association, or any successor
custodian appointed pursuant to the provisions hereof and of the Custodial
Agreement.
Cut-off Date: December 1, 2004.
Cut-off Date Balance: $782,026,532.
Debt Service Reduction: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then-outstanding indebtedness under such Mortgage Loan secured by such
Mortgage Property, which valuation results from a proceeding initiated under the
Bankruptcy Code or any other similar state law or other proceeding.
Depositor: Structured Asset Mortgage Investments II Inc., a Delaware
corporation, or its successors in interest.
Depository: The Depository Trust Company, the nominee of which is Cede
& Co., and any successor thereto.
Depository Agreement: The meaning specified in Subsection 5.01(a)
hereof.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may
9
include the Trustee), the deposits of which are fully insured by the FDIC to the
extent provided by law.
Determination Date: With respect to any Distribution Date and each
Mortgage Loan, the Determination Date as defined in the related Servicing
Agreement.
Disqualified Organization: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for Xxxxxxx Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) any
Person with respect to which income on any Residual Certificate is attributable
to a foreign permanent establishment or fixed base, within the meaning of an
applicable income tax treaty, of such Person or any other Person, (vi) any
Person that does not satisfy the requirements of United States Treasury
Department Regulation Section 1.860E-1(c) with respect to a transfer of a
noneconomic residual interest, as defined therein, or (vii) any other Person so
designated by the Trustee and the Certificate Registrar based upon an Opinion of
Counsel that the holding of an ownership interest in a Residual Certificate by
such Person may cause any REMIC contained in the Trust or any Person having an
ownership interest in the Residual Certificate (other than such Person) to incur
a liability for any federal tax imposed under the Code that would not otherwise
be imposed but for the transfer of an ownership interest in a Residual
Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
Distribution Account: The trust account or accounts created and
maintained pursuant to Section 4.02, which shall be denominated "Xxxxx Fargo
Bank, National Association, as Paying Agent, for the benefit of the registered
holders of Structured Asset Mortgage Investments II Trust 2004-AR8, Mortgage
Pass-Through Certificates, Series 2004-AR8 - Distribution Account," and which
shall be an Eligible Account.
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 19th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 19th day is not
a Business Day, the Business Day immediately following.
DTC Custodian: The Securities Administrator, and its successors in
interest as custodian for the Depository.
Due Date: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due, if such due date is the first day of a
month, and otherwise is deemed to be the first day of the following month or
such other date specified in the related Servicing
10
Agreement. For purposes of calculating the Net Rates of the Mortgage Loans for
the first Distribution Date, the second preceding Due Date with respect to the
first Distribution Date will be the Cut-off Date.
Due Period: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month immediately preceding
the month in which such Distribution Date occurs and ending at the close of
business on the first day of the month in which such Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1+ or better by S&P and P-1 by Xxxxx'x at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel (obtained by the Person requesting
that the account be held pursuant to this clause (i)(B)) delivered to the
Trustee prior to the establishment of such account, the Certificateholders will
have a claim with respect to the funds in such account and a perfected first
priority security interest against any collateral (which shall be limited to
Permitted Investments, each of which shall mature not later than the Business
Day immediately preceding the Distribution Date next following the date of
investment in such collateral, or the Distribution Date (if such Permitted
Investment is an obligation of the institution that maintains the Distribution
Account)) securing such funds that is superior to claims of any other depositors
or general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies that use of any such account as the
Distribution Account will not have an adverse effect on the then-current ratings
assigned to the Classes of the Certificates then rated by the respective Rating
Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation, or its successor in interest.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: An event of default described in Section 8.01.
EverHome: EverHome Mortgage Company (formerly known as Alliance
Mortgage Company), or its successor in interest.
EverHome AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, among EMC, the Trustee
and EverHome.
EverHome Subservicing Agreement: That certain Subservicing Agreement,
dated as of August 1, 2002, and attached hereto as Exhibit H-1, between EverHome
as servicer and EMC as owner, as modified pursuant to the BancMortgage AAR, the
Platinum AAR, the Metrocities AAR, the Aegis AAR, the Pinnacle AAR, the WinStar
AAR, the Market Street AAR, the Quicken AAR, the Xxxx Financial AAR and the
SouthStar AAR, respectively.
11
EverHome Servicing Agreement: That certain Servicing Agreement, dated
as of March 31, 2003, by and between EMC and EverHome, as attached hereto as
Exhibit H-3, as modified pursuant to the EverHome AAR.
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which the sum of any Liquidation Proceeds with respect to a Liquidated Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan exceeds the sum of (i) the Scheduled Principal Balance
of such Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage
Interest Rate from the Due Date as to which interest was last paid or advanced
(and not reimbursed) to the related Certificateholders up to the Due Date
applicable to the Distribution Date immediately following the calendar month
during which such liquidation occurred plus (iii) related Liquidation Expenses.
Exchange Act: As defined in Section 3.18.
Expiration Notice: The notice to be delivered by the Master Servicer to
the related Servicer and EMC Mortgage Corporation (pursuant to the related
Servicing Agreement), stating that it has received notice from the Certificate
Registrar that (i) the Investor no longer holds all of the Classes of the
Private Certificates or (ii) the Investor has forfeited its rights set forth in
Section 4.15 of the EverHome Servicing Agreement, Section 4.15 of the EverHome
Subservicing Agreement, or Section 4.21 of the Countrywide Servicing Agreement,
as the case may be.
Xxxxxx Mae: Xxxxxx Xxx (also known as Federal National Mortgage
Association) or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
Fiscal Quarter: February 1 through April 30, May 1 through July 31,
August 1 through October 31, or November 1 through January 31, as applicable.
Foreclosure Notice: The notice to be delivered by the related Servicer
to the Master Servicer (pursuant to the related Servicing Agreement) no later
than five Business Days prior to its commencement of foreclosure proceedings
with respect to a Mortgage Loan, of its intention to commence such foreclosure
proceedings.
Fractional Undivided Interest: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount, or Notional
Amount in the case of the Interest Only Certificates, of such Certificate and
the denominator of which is the Current Principal Amount, or Notional Amount in
the case of the Interest Only Certificates, of such Class. With respect to the
Certificates in the aggregate, the fractional undivided interest evidenced by
(i) each class of Residual Certificates will be deemed to equal 0.25%, (ii) each
class of Interest Only Certificates will be deemed to equal 1.0% multiplied by a
fraction, the numerator of which is the Notional
12
Amount of such Certificate and the denominator of which is the aggregate
Notional Amount of such respective Class and (iii) a Certificate of any other
Class will be deemed to equal 98.25% multiplied by a fraction, the numerator of
which is the Current Principal Amount of such Certificate and the denominator of
which is the aggregate Current Principal Amount of all the Certificates;
provided, however, the percentage in clause (iii) above shall be increased by 1%
upon the retirement of each Class of Interest Only Certificates.
Xxxxxxx Mac: Xxxxxxx Mac (also known as Federal Home Loan Mortgage
Corporation), or any successor thereto.
Global Certificate: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule, which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the Minimum Lifetime Mortgage Rate, the Maximum
Lifetime Mortgage Rate and the Periodic Rate Cap) the Mortgage Interest Rate
from such Interest Adjustment Date until the next Interest Adjustment Date.
Group I Allocation Fraction: With respect to any Distribution Date, the
fraction equal to (x) the excess of (a) the aggregate Scheduled Principal
Balances of the Group I Mortgage Loans over (b) the Current Principal Amount of
the Class A-1 Certificates over (y) the excess of (a) the aggregate Scheduled
Principal Balances of the Mortgage Loans over (b) the aggregate Current
Principal Amount of the Senior Certificates (other than the Interest Only
Certificates).
Group II Allocation Fraction: With respect to any Distribution Date,
the fraction equal to (x) the excess of (a) the aggregate Scheduled Principal
Balances of the Group II Mortgage Loans over (b) the Current Principal Amount of
the Class A-2B Certificates over (y) the excess of (a) the aggregate Scheduled
Principal Balances of the Mortgage Loans over (b) the aggregate Current
Principal Amounts of the Senior Certificates (other than the Interest Only
Certificates).
Group I Available Funds or Group II Available Funds: With respect to
any Distribution Date, an amount equal to the aggregate of the following amounts
with respect to the Mortgage Loans in the related Loan Group: (a) all previously
undistributed payments on account of principal collections on the Mortgage Loans
(including the principal portion of Scheduled Payments, Principal Prepayments
and the principal amount of Net Liquidation Proceeds and Subsequent Recoveries
on the Mortgage Loans) and all previously undistributed payments on account of
interest collections on the Mortgage Loans received after the Cut-off Date (or
with respect to the Subsequent Mortgage Loans, the related Subsequent Cut-off
Date, as the case may be) and on or prior to the related Determination Date, in
each case from the Mortgage Loans in the related Loan Group, (b) any Monthly
Advances and Compensating Interest Payments by a Servicer or the Master Servicer
(or by the Trustee, as successor master servicer) with respect to such
Distribution Date, in each case, from the Mortgage Loans in the related Loan
Group, (c) any other miscellaneous amounts remitted by the Master Servicer or a
Servicer pursuant to the
13
related Servicing Agreement, (d) any amounts deposited into the Distribution
Account from the Group I Pre-Funding Reserve Account or the Group I Interest
Coverage Account pursuant to Sections 4.04 or 4.05 of this Agreement, (e) any
amounts deposited in the Distribution Account from the Group II Pre-Funding
Reserve Account or the Group II Interest Coverage Account pursuant to Sections
4.06 or 4.07 of this Agreement, and (f) any amount reimbursed by the Master
Servicer for such Distribution Date in connection with losses on certain
eligible investments, except:
(i) all payments that were due on or before the Cut-off Date
with respect to the Initial Mortgage Loans or, with respect to the
Subsequent Mortgage Loans, all payments that were due on or before the
related Subsequent Cut-off Date, as the case may be;
(ii) all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates
subsequent to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the
extent that, there are any unreimbursed Monthly Advances;
(v) amounts representing Monthly Advances determined to be
Nonrecoverable Advances; and
(vi) any investment earnings on amounts on deposit in the
Distribution Account, the Group I Pre-Funding Account, the Group II
Pre-Funding Account, the Group I Interest Coverage Account and the
Group II Interest Coverage Account and amounts permitted to be
withdrawn from the Distribution Account, the Group I Pre-Funding
Account, the Group II Pre-Funding Account, the Group I Interest
Coverage Account and the Group II Interest Coverage Account pursuant to
this Agreement, and amounts to pay the Master Servicing Fee and the
Servicing Fees or to reimburse any Servicer, the Securities
Administrator, the Trustee, the Custodian or the Master Servicer for
fees and the related Loan Group's pro rata share of reimbursable
expenses as are due under the applicable Servicing Agreement, this
Agreement or the Custodial Agreement and have not been retained by or
paid to such Servicer, the Trustee, the Custodian or the Master
Servicer.
Group I Carryover Shortfall: With respect to the Class A-1, Class M,
Class B-1, Class B-2 and Class B-3 Certificates and any Distribution Date for
which the Pass-Through Rate for such Certificates is equal to the weighted
average of the Net Rates on the related Mortgage Loans, the excess, if any, of
(x) Accrued Certificate Interest on the Class A-1, Class M, Class B-1, Class B-2
or Class B-3 Certificates, as applicable, for such Distribution Date, using the
lesser of (a) LIBOR plus the related Margin, as calculated for such Distribution
Date, and (b) 11.00% per annum, over (y) Accrued Certificate Interest on the
Class A-1, Class M, Class B-1, Class B-2 or
14
Class B-3 Certificates, as applicable, for such Distribution Date at the
weighted average of the Net Rates on the related Mortgage Loans.
Group I Carryover Shortfall Amount: With respect to the Class A-1,
Class M, Class B-1, Class B-2 and Class B-3 Certificates and each Distribution
Date, the sum of (a) the aggregate amount of Group I Carryover Shortfall for
such Class of Certificates on such Distribution Date which is not covered on
such Distribution Date by interest distributions otherwise payable to the Class
X-1 Certificates, plus (b) any Group I Carryover Shortfall Amount for such Class
of Certificates remaining unpaid from the preceding Distribution Date, plus (c)
one month's interest on the amount in clause (b) (based on the number of days in
the preceding Interest Accrual Period) at a rate equal to the lesser of (i)
LIBOR plus the related Margin for such Distribution Date and (ii) 11.00% per
annum.
Group I Carryover Shortfall Reserve Fund: An "outside reserve fund"
within the meaning of Treasury regulation Section 1.860G-2(h), which is not an
asset of any REMIC, ownership of which is evidenced by the Class X-1
Certificates, and which is established and maintained pursuant to Section 4.08.
Group II Carryover Shortfall: With respect to the Class A-2B
Certificates and any Distribution Date for which the Pass-Through Rate for such
Certificates is equal to the weighted average of the Net Rates on the Group II
Mortgage Loans, the excess, if any, of (x) Accrued Certificate Interest on the
Class A-2B Certificates for such Distribution Date, using the lesser of (a)
LIBOR plus the related Margin, as calculated for such Distribution Date, and (b)
11.00% per annum, over (y) Accrued Certificate Interest on the Class A-2B
Certificates for such Distribution Date at the weighted average of the Net Rates
on the Group II Mortgage Loans.
Group II Carryover Shortfall Amount: With respect to the Class A-2B
certificates and each Distribution Date, the sum of (a) the aggregate amount of
Group II Carryover Shortfall for such Class of Certificates on such Distribution
Date which is not covered on such Distribution Date by interest distributions
otherwise payable to the Class X-2 Certificates, plus (b) any Group II Carryover
Shortfall Amount for such Class of Certificates remaining unpaid from the
preceding Distribution Date, plus (c) one month's interest on the amount in
clause (b) (based on the number of days in the preceding Interest Accrual
Period) at a rate equal to the lesser of (i) LIBOR plus the related Margin for
such Distribution Date and (ii) 11.00% per annum.
Group II Carryover Shortfall Reserve Fund: An "outside reserve fund"
within the meaning of Treasury regulation Section 1.860G-2(h), which is not an
asset of any REMIC, ownership of which is evidenced by the Class X-2
Certificates, and which is established and maintained pursuant to Section 4.09.
Group I Interest Coverage Account: The account or sub-account
established and maintained pursuant to Section 4.05(a) and which shall be an
Eligible Account or a sub-account of an Eligible Account.
Group I Interest Coverage Amount: The amount to be paid by the
Depositor to the Paying Agent for deposit in the Group I Interest Coverage
Account on the Closing Date pursuant to Section 4.05, which amount is
$1,542,219.
15
Group II Interest Coverage Account: The account or sub-account
established and maintained pursuant to Section 4.07(a) and which shall be an
Eligible Account or a sub-account of an Eligible Account.
Group II Interest Coverage Amount: The amount to be paid by the
Depositor to the Paying Agent for deposit in the Group II Interest Coverage
Account on the Closing Date pursuant to Section 4.07, which amount is $452,141.
Group I Mortgage Loans: The Mortgage Loans identified as such on the
applicable Mortgage Loan Schedule.
Group II Mortgage Loans: The Mortgage Loans identified as such on the
applicable Mortgage Loan Schedule.
Group I Pre-Funded Amount: The amount to be paid by the Depositor to
the Paying Agent for deposit in the Group I Pre-Funding Account on the Closing
Date, which amount is $171,580,123.
Group II Pre-Funded Amount: The amount to be paid by the Depositor to
the Paying Agent for deposit in the Group II Pre-Funding Account on the Closing
Date, which amount is $46,393,345.
Group I Pre-Funding Account: The account or sub-account established and
maintained pursuant to Section 4.04(a) and which shall be an Eligible Account or
a sub-account of an Eligible Account.
Group I Pre-Funding Reserve Account: The account or sub-account
established and maintained pursuant to Section 4.04(d) and which shall be an
Eligible Account or a sub-account of an Eligible Account.
Group II Pre-Funding Account: The account or sub-account established
and maintained pursuant to Section 4.06(a) and which shall be an Eligible
Account or a sub-account of an Eligible Account.
Group II Pre-Funding Reserve Account: The account or sub-account
established and maintained pursuant to Section 4.06(d) and which shall be an
Eligible Account or a sub-account of an Eligible Account.
Group I Senior Certificates: The Class A-1 Certificates, the Class R-I
Certificates, the Class R-II Certificates and the Class R-III Certificates.
Group II Senior Certificates: The Class A-2A and Class A-2B
Certificates.
Group I Senior Mezzanine and Subordinate Percentage: With respect to
the Group I Mortgage Loans, on any Distribution Date, 100% minus the Group I
Senior Percentage.
Group II Senior Mezzanine and Subordinate Percentage: On any
Distribution Date, 100% minus the Group II Senior Percentage.
16
Group I Senior Mezzanine and Subordinate Prepayment Percentage: For the
Senior Mezzanine Certificates and Subordinate Certificates and with respect to
Loan Group I, on any Distribution Date, 100% minus the Group I Senior Prepayment
Percentage, except that on any Distribution Date after the Current Principal
Amount of the Class A-1 Certificates has been reduced to zero, the Group I
Senior Mezzanine and Subordinate Prepayment Percentage for the Senior Mezzanine
Certificates and the Subordinate Certificates with respect to Loan Group I will
equal 100%.
Group II Senior Mezzanine and Subordinate Prepayment Percentage: For
the Senior Mezzanine Certificates and the Subordinate Certificates and with
respect to Loan Group II, on any Distribution Date, 100% minus the Group II
Senior Prepayment Percentage, except that on any Distribution Date after the
Current Principal Amount of each Class of the Group II Senior Certificates has
been reduced to zero, the Group II Senior Mezzanine and Subordinate Prepayment
Percentage for the Senior Mezzanine Certificates and Subordinate Certificates
with respect to Loan Group II will equal 100%.
Group I Senior Optimal Principal Amount and Group II Senior Optimal
Principal Amount: With respect to each Distribution Date and the Group I Senior
Certificates and the Group II Senior Certificates, respectively, an amount equal
to the sum, without duplication, of the following (but in no event greater than
the aggregate Current Principal Amounts of the Group I Senior Certificates or
the Group II Senior Certificates, as applicable, immediately prior to such
Distribution Date):
(1) the applicable Senior Percentage of all scheduled
payments of principal allocated to the Scheduled Principal
Balance due on each Outstanding Mortgage Loan in the related
Loan Group on the related Due Date as specified in the
amortization schedule at the time applicable thereto (after
adjustments for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period);
(2) the applicable Senior Prepayment Percentage of
the Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group which was the subject of a Principal
Prepayment in full received by the Master Servicer during the
related Prepayment Period;
(3) the applicable Senior Prepayment Percentage of
all Principal Prepayments in part received by the Master
Servicer during the related Prepayment Period with respect to
each Mortgage Loan in the related Loan Group;
(4) the lesser of (a) the applicable Senior
Prepayment Percentage of the sum of (i) all Net Liquidation
Proceeds allocable to principal received in respect of each
Mortgage Loan in the related Loan Group which became a
Liquidated Mortgage Loan during the related Prepayment Period
(other than Mortgage Loans described in the immediately
following clause (ii)) and all Subsequent Recoveries received
in respect of each Liquidated Mortgage Loan in
17
the related Loan Group during the related Due Period and (ii)
the Scheduled Principal Balance of each such Mortgage Loan in
the related Loan Group purchased by an insurer from the
Trustee during the related Prepayment Period pursuant to the
related Primary Mortgage Insurance Policy, if any, or
otherwise; and (b) the applicable Senior Percentage of the sum
of (i) the Scheduled Principal Balance of each Mortgage Loan
in the related Loan Group which became a Liquidated Mortgage
Loan during the related Prepayment Period (other than the
Mortgage Loans described in the immediately following clause
(ii)) and all Subsequent Recoveries received in respect of
each Liquidated Mortgage Loan in the related Loan Group during
the related Due Period and (ii) the Scheduled Principal
Balance of each such Mortgage Loan in the related Loan Group
that was purchased by an insurer from the Trustee during the
related Prepayment Period pursuant to the related Primary
Mortgage Insurance Policy, if any or otherwise; and
(5) the applicable Senior Prepayment Percentage of
the sum of (a) the Scheduled Principal Balance of each
Mortgage Loan in the related Loan Group which was repurchased
by the Seller in connection with such Distribution Date and
(b) the excess, if any, of the Scheduled Principal Balance of
a Mortgage Loan in the related Loan Group that has been
replaced by the Seller with a Substitute Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or, with
respect to the Subsequent Mortgage Loans, a Subsequent
Mortgage Loan Purchase Agreement, as the case may be, in
connection with such Distribution Date over the Scheduled
Principal Balance of such Substitute Mortgage Loan.
Group I Senior Percentage: Initially, 91.75%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group I
Senior Certificates immediately preceding such Distribution Date by the sum of
(i) the aggregate Scheduled Principal Balance of the Group I Mortgage Loans as
of the beginning of the related Due Period, and (ii) the amount on deposit in
the Group I Pre-Funding Account.
Group II Senior Percentage: Initially, 91.75%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group II Senior Certificates immediately preceding such Distribution Date by the
sum of (i) the aggregate Scheduled Principal Balance of the Group II Mortgage
Loans as of the beginning of the related Due Period, and (ii) the amount on
deposit in the Group II Pre-Funding Account.
Group I Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group I Senior Prepayment Percentage
--------------------------------------- ---------------------------------------------------------
January 19, 2005 - December 19, 2014 100%
18
January 19, 2015 - December 19, 2015 Group I Senior Percentage plus 70% of the Group I
Senior Mezzanine and Subordinate Percentage
January 19, 2016 - December 19, 2016 Group I Senior Percentage plus 60% of the Group I
Senior Mezzanine and Subordinate Percentage
January 19, 2017 - December 19, 2017 Group I Senior Percentage plus 40% of the Group I
Senior Mezzanine and Subordinate Percentage
January 19, 2018 - December 19, 2018 Group I Senior Percentage plus 20% of the Group I
Senior Mezzanine and Subordinate Percentage
January 19, 2019 and thereafter Group I Senior Percentage
In addition, no reduction of the Group I Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balances
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amounts of the Senior Mezzanine Certificates and the Subordinate Certificates,
does not exceed 50%; and (B) cumulative Realized Losses on the Mortgage Loans do
not exceed (a) 30% of the Original Senior Mezzanine and Subordinate Principal
Balance if such Distribution Date occurs between and including January 2015 and
December 2015, (b) 35% of the Original Senior Mezzanine and Subordinate
Principal Balance if such Distribution Date occurs between and including January
2016 and December 2016, (c) 40% of the Original Senior Mezzanine and Subordinate
Principal Balance if such Distribution Date occurs between and including January
2017 and December 2017, (d) 45% of the Original Senior Mezzanine and Subordinate
Principal Balance if such Distribution Date occurs between and including January
2018 and December 2018, and (e) 50% of the Original Senior Mezzanine and
Subordinate Principal Balance if such Distribution Date occurs during or after
January 2019.
In addition, if on any Distribution Date the current weighted average
Senior Mezzanine and Subordinate Percentages are equal to or greater than two
times the initial weighted average Senior Mezzanine and Subordinate Percentages
and (a) the aggregate Scheduled Principal Balances of the Mortgage Loans
delinquent 60 days or more (including for this purpose any such Mortgage Loans
in foreclosure and such Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last six
months, as a percentage of the sum of the aggregate Current Principal Amount of
the Senior Mezzanine Certificates and Subordinate Certificates, does not exceed
50% and (b)(i) on or prior to the Distribution Date in December 2007, cumulative
Realized Losses on the Mortgage Loans as of the end of the related Prepayment
Period do not exceed 20% of the Original Senior Mezzanine and Subordinate
Principal Balance and (ii) after the Distribution Date in December 2007,
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 30% of the Original Senior Mezzanine and
Subordinate Principal Balance,
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then, in each case, the Group I Senior Prepayment Percentage for such
Distribution Date will equal the Group I Senior Percentage; provided, however,
if on such Distribution Date the current weighted average Senior Mezzanine and
Subordinate Percentages is equal to or greater than two times the initial
weighted average Senior Mezzanine and Subordinate Percentages for the Group I
Senior Certificates on or prior to the Distribution Date in December 2007 and
the above delinquency and loss tests are met, then the Group I Senior Prepayment
Percentage for such Distribution Date will equal the Group I Senior Percentage
plus 50% of the Group I Senior Mezzanine and Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator of which is the aggregate Current Principal Amounts of
the Group I Senior Certificates immediately preceding such Distribution Date,
and the denominator of which is the sum of (i) the Scheduled Principal Balance
of the Group I Mortgage Loans as of the beginning of the related Due Period and
(ii) the amount on deposit in the Group I Pre-Funding Account, exceeds such
percentage as of the Cut-off Date, then the Senior Prepayment Percentage with
respect to the Group I Senior Certificates for such Distribution Date will equal
100%.
Group II Senior Prepayment Percentage: On any Distribution Date
occurring during the periods set forth below, as follows:
Period (dates inclusive) Group II Senior Prepayment Percentage
--------------------------------------- - -------------------------------------------------------
January 19, 2005 - December 19, 2014 100%
January 19, 2015 - December 19, 2015 Group II Senior Percentage plus 70% of the Group II
Senior Mezzanine and Subordinate Percentage
January 19, 2016 - December 19, 2016 Group II Senior Percentage plus 60% of the Group II
Senior Mezzanine and Subordinate Percentage
January 19, 2017 - December 19, 2017 Group II Senior Percentage plus 40% of the Group II
Senior Mezzanine and Subordinate Percentage
January 19, 2018 - December 19, 2018 Group II Senior Percentage plus 20% of the Group II
Senior Mezzanine and Subordinate Percentage
January 19, 2019 and thereafter Group II Senior Percentage
In addition, no reduction of the Group II Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balances
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amounts of the Senior Mezzanine Certificates and Subordinate Certificates, does
not exceed 50%; and (B) cumulative Realized Losses on the Mortgage Loans do not
exceed (a) 30% of the Original Senior
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Mezzanine and Subordinate Principal Balance if such Distribution Date occurs
between and including January 2015 and December 2015, (b) 35% of the Original
Senior Mezzanine and Subordinate Principal Balance if such Distribution Date
occurs between and including January 2016 and December 2016, (c) 40% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including January 2017 and December 2017, (d) 45% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including January 2018 and December 2018, and (e) 50% of
the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs during or after January 2019.
In addition, if on any Distribution Date the current weighted average
Senior Mezzanine and Subordinate Percentages is equal to or greater than two
times the initial weighted average Senior Mezzanine and Subordinate Percentages,
and (a) the aggregate Scheduled Principal Balances of the Mortgage Loans
delinquent 60 days or more (including for this purpose any such Mortgage Loans
in foreclosure and such Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last six
months, as a percentage of the sum of the aggregate Current Principal Amount of
the Senior Mezzanine Certificates and Subordinate Certificates, does not exceed
50% and (b)(i) on or prior to the Distribution Date in December 2007, cumulative
Realized Losses on the Mortgage Loans as of the end of the related Prepayment
Period do not exceed 20% of the Original Senior Mezzanine and Subordinate
Principal Balance and (ii) after the Distribution Date in December 2007,
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 30% of the Original Senior Mezzanine and
Subordinate Principal Balance, then, in each case, the Group II Senior
Prepayment Percentage for such Distribution Date will equal the Group II Senior
Percentage; provided, however, if on such Distribution Date the current weighted
average Senior Mezzanine and Subordinate Percentages is equal to or greater than
two times the initial weighted average Senior Mezzanine and Subordinate
Percentage, for the Group II Senior Certificates on or prior to the Distribution
Date in December 2007 and the above delinquency and loss tests are met, then the
Group II Senior Prepayment Percentage for such Distribution Date will equal the
Group II Senior Percentage plus 50% of the Group II Senior Mezzanine and
Subordinate Percentage.
Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator of which is the aggregate Current Principal Amount of
the Group II Senior Certificates immediately preceding such Distribution Date,
and the denominator of which is the Scheduled Principal Balance of the Group II
Mortgage Loans as of the beginning of the related Due Period, exceeds such
percentage as of the Cut-off Date, then the Senior Prepayment Percentage with
respect to the Group II Senior Certificates for such Distribution Date will
equal 100%.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Master Servicer or the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Fractional Undivided Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.
21
Indemnified Persons: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator and their respective officers, directors,
agents and employees and, with respect to the Trustee, any separate co-trustee
and its officers, directors, agents and employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material indirect financial
interest in the Depositor or the Master Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is not connected with the Depositor or
the Master Servicer or any Affiliate of the Depositor or the Master Servicer as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Initial Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust
Fund, as identified in the applicable Mortgage Loan Schedule, including a
mortgage loan the property securing which has become an REO Property.
Institutional Accredited Investor: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property, other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument, and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses. including the
related Servicer's costs and expenses incurred in connection with presenting
claims under the related Insurance Policies.
Interest Accrual Period: With respect to each Distribution Date, for
each Class of Certificates (other than the Adjustable Rate Certificates), the
calendar month preceding the month in which such Distribution Date occurs. With
respect to each Distribution Date and the Adjustable Rate Certificates, the
period commencing on the 19th day of the preceding calendar month (or in the
case of the first Distribution Date, the Closing Date), to the 18th day of the
month of that Distribution Date.
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Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
Interest Determination Date: With respect to each Distribution Date and
the Adjustable Rate Certificates, the second LIBOR Business Day immediately
preceding the commencement of the related Interest Accrual Period.
Interest Only Certificates: The Class X-1 and Class X-2 Certificates.
Interest Shortfall: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) Partial Principal Prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the amount of such prepayment and (ii) the amount of
interest for the calendar month of such prepayment (adjusted to the applicable
Net Rate) received at the time of such prepayment;
(b) Principal Prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the Scheduled Principal Balance of such Mortgage Loan
immediately prior to such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a Principal Prepayment in
full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a Principal Prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a Principal Prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the Mortgagor
as limited by application of the Relief Act or similar state laws.
Interim Certification: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
Investment Letter: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
Investor: KKR Financial Corp., for so long as (i) such Person holds all
of the Classes of the Private Certificates and (ii) has not forfeited its rights
set forth in Section 4.15 of the EverHome Servicing Agreement, Section 4.15 of
the EverHome Subservicing Agreement, or Section 4.21 of the Countrywide
Servicing Agreement, as the case may be.
Lender-Paid PMI Rate: With respect to any Mortgage Loan covered by a
lender-paid Primary Mortgage Insurance Policy, the premium to be paid by the
applicable Servicer out of
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interest collections on the related Mortgage Loan, as stated in the related
Mortgage Loan Schedule.
LIBOR: With respect to any Distribution Date, the arithmetic mean of
the London interbank offered rate quotations for one-month U.S. dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.
LIBOR Business Day: A day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the related Servicer has certified
(in accordance with Section 3.07) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which the related Servicer has certified that such Mortgage Loan has
become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the related
Servicer or the Master Servicer in connection with the liquidation of such
Mortgage Loan and the related Mortgaged Property, such expenses including (a)
property protection expenses, (b) property sales expenses, (c) foreclosure and
sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with the liquidation
of a Mortgage Loan.
Liquidation Proceeds: Amounts received by the related Servicer in
connection with the liquidation of a defaulted Mortgage Loan, whether through
trustee's sale, foreclosure sale, Insurance Proceeds, condemnation proceeds or
otherwise.
Loan Group: Loan Group I or Loan Group II, as applicable.
Loan Group I: The group of Mortgage Loans designated as belonging to
Loan Group I on the applicable Mortgage Loan Schedule.
Loan Group II: The group of Mortgage Loans designated as belonging to
Loan Group II on the applicable Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at origination and the denominator of which is the
Original Value of the related Mortgaged Property.
Loss Allocation Limitation: The meaning specified in Section 6.02(c)
hereof.
Loss Severity Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a
24
Mortgage Loan and the denominator of which is the Scheduled Principal Balance of
such Mortgage Loan immediately prior to the liquidation of such Mortgage Loan.
Lost Notes: The original Mortgage Notes that have been lost, as
indicated on the applicable Mortgage Loan Schedule.
Margin: With respect to the Class A-1 Certificates, initially 0.340%
per annum, and starting on the first Distribution Date after the first possible
Optional Termination Date and on each Distribution Date thereafter, 0.680% per
annum. With respect to the Class A-2B Certificates, 0.380% per annum, and
starting on the first Distribution Date after the First possible Optional
Termination Date and on each Distribution Date thereafter, 0.760% per annum.
With respect to the Class M Certificates, initially 0.450% per annum, and
starting on the first Distribution Date after the first possible Optional
Termination Date and on each Distribution Date thereafter, 0.675% per annum.
With respect to the Class B-1 Certificates, initially 0.550% per annum, and
starting on the first Distribution Date after the first possible Optional
Termination Date and on each Distribution Date thereafter, 0.825% per annum.
With respect to the Class B-2 Certificates, initially 0.950% per annum, and
starting on the first Distribution Date after the first possible Optional
Termination Date and on each Distribution Date thereafter, 1.425% per annum.
With respect to the Class B-3 Certificates, initially 1.600% per annum, and
starting on the first Distribution Date after the first possible Optional
Termination Date and on each Distribution Date thereafter, 2.240% per annum.
Market Street: Market Street Mortgage Corporation and its successor in
interest.
Market Street AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, among EMC, the
Trustee, EverHome and Market Street.
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank, National
Association and, thereafter, its respective successors in interest who meet the
qualifications of a successor Master Servicer as set forth in this Agreement.
Master Servicer Certification: A written certification covering
servicing of the Mortgage Loans by all Servicers and signed by an officer of the
Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time, provided that if after the Closing Date
(a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Commission or any statement of a division thereof, or (c) any
future releases, rules and regulations are published by the Commission from time
to time pursuant to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case
affects the form or substance of the required certification and results in the
required certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Depositor following a negotiation in good faith to
determine how to comply with any such new requirements.
25
Master Servicing Compensation: The meaning specified in Section 3.14.
Master Servicing Fee: The meaning specified in Section 3.14.
Master Servicing Fee Rate: For each Mortgage Loan, 0.0025% per annum.
Maximum Lifetime Mortgage Rate: As to each Mortgage Loan, the rate, if
any, set forth in the related Mortgage Note and indicated on the related
Mortgage Loan Schedule, that is the maximum level to which a Mortgage Interest
Rate can adjust in accordance with its terms, regardless of changes in the
applicable Index.
Metrocities: Metrocities Mortgage LLC and its successor in interest.
Metrocities AAR: That certain Assignment, Assumption and Recognition
Agreement made and entered into as of December 30, 2004, by and among EMC, the
Trustee, EverHome and Metrocities.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
Minimum Lifetime Mortgage Rate: As to each Mortgage Loan, the rate, if
any, set forth in the related Mortgage Note and indicated on the related
Mortgage Loan Schedule, that is the minimum level to which a Mortgage Interest
Rate can adjust in accordance with its terms, regardless of changes in the
applicable Index.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof, or as
nominee for any subsequent assignee of the originator pursuant to an assignment
of mortgage to MERS.
Monthly Advance: An advance of principal or interest required to be
made by a Servicer pursuant to the related Servicing Agreement or the Master
Servicer pursuant to Section 6.05.
Monthly Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note, or in the case of an REO Property, would otherwise
have been payable under the related Mortgage Note.
Moody's: Xxxxx'x Investors Service, Inc. and its successor in interest.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage
26
File pursuant to this Agreement, the Mortgage Loan Purchase Agreement or a
Subsequent Mortgage Loan Agreement, as the case may be.
Mortgage Interest Rate: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the applicable Mortgage Loan Schedule.
Mortgage Loan: An Initial Mortgage Loan or a Subsequent Mortgage Loan.
Any Mortgage Loan that was intended by the parties hereto to be transferred to
the Trust Fund as indicated by the related Mortgage Loan Schedule which is in
fact not so transferred for any reason including, without limitation, a breach
of a representation or warranty with respect thereto, shall continue to be a
Mortgage Loan hereunder until the Repurchase Price with respect thereto has been
paid to the Trust Fund.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement,
dated as of December 30, 2004, between EMC, as seller, and Structured Asset
Mortgage Investments II Inc., as purchaser, and all amendments thereof and
supplements thereto, attached hereto as Exhibit J.
Mortgage Loan Schedule: The schedule attached hereto as Exhibit B with
respect to the Initial Mortgage Loans, and the schedule attached as Exhibit I to
the related Subsequent Transfer Instrument with respect to the related
Subsequent Mortgage Loans, each as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans or the addition of Subsequent
Mortgage Loans pursuant to this Agreement, the Mortgage Loan Purchase Agreement
or a Subsequent Mortgage Loan Purchase Agreement, as the case may be.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Interest Shortfall: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the related Servicer in accordance with the related Servicing Agreement or
this Agreement, (ii) unreimbursed advances by the related Servicer and Monthly
Advances made with respect to such Mortgage Loan and the related Mortgaged
Property, and (iii) any other amounts payable to the related Servicer under the
related Servicing Agreement.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate less the related Servicing Fee Rate, the Master Servicing Fee Rate and the
Lender-Paid PMI Rate, if any, attributable thereto, in each case expressed as
per annum rate.
27
Non-Foreclosure Notice: The notice to be delivered by the related
Servicer to the Master Servicer (pursuant to the related Servicing Agreement) in
the event that the related Servicer determines not to proceed with foreclosure
proceedings with respect to a Mortgage Loan that becomes 60 days' or more
delinquent, pursuant to which notice the related Servicer shall specify that it
does not intend to proceed with such foreclosure proceedings and shall state
such other action as it intends to take with respect to such Mortgage Loan.
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the related Servicer and (ii) which, in the
good faith judgment of the Master Servicer, the Trustee or the related Servicer,
as the case may be, will not or, in the case of a proposed advance or Monthly
Advance, would not, be ultimately recoverable by the Master Servicer, the
Trustee (as successor Master Servicer) or the related Servicer from Liquidation
Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for which
such advance or Monthly Advance was made or is proposed to be made.
Notional Amount: The Notional Amount of the Class X-1 Certificates is
equal to the sum of the Notional Amount of Component 1X and the Notional Amount
of Component 2X. On any Distribution Date, the Notional Amount of Component 1X
of the Class X-1 Certificates is equal to the Current Principal Amount of the
Class A-1 Certificates (before taking into account the payment of principal on
such Certificates on such Distribution Date). On any Distribution Date, the
Notional Amount of Component 2X of the Class X-1 Certificates is equal to the
aggregate Current Principal Amounts of the Class M Certificates, the Class B-1
Certificates, the Class B-2 Certificates and the Class B-3 Certificates (in each
case before taking into account the payment of principal on such Certificates on
such Distribution Date).
Offered Certificate: Any Senior Certificate, any Senior Mezzanine
Certificate or any Offered Subordinate Certificate.
Offered Subordinate Certificates: The Class B-1, Class B-2 and Class
B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer or
the Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.
One-Month LIBOR: A per annum rate equal to the average of interbank
offered rates for one-month U.S. dollar-denominated deposits in the London
market based on quotations of major banks as published in The Wall Street
Journal and most recently available as of the time specified in the related
Mortgage Note.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to each addressee of such opinion and who, unless required to be
Independent (an "Opinion of Independent Counsel"), may be internal counsel for
EMC, the Master Servicer or the Depositor.
Optional Termination Date: Any Distribution Date on or after which the
Scheduled Principal Balance (before giving effect to distributions to be made on
such Distribution Date) of
28
the Mortgage Loans is less than or equal to 10% of the sum of (i) the Cut-off
Date Balance, (ii) the Group I Pre-Funded Amount and (iii) the Group II
Pre-Funded Amount.
Original Senior Mezzanine and Subordinate Principal Balance: The
aggregate Current Principal Amount of the Senior Mezzanine Certificates and
Subordinate Certificates as of the Closing Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except if either clause (i) or clause (ii) is unavailable, then the other may be
used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, then Original Value may be determined from other sources reasonably
acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan with a Scheduled Principal Balance greater than zero which, prior to such
Due Date, was not the subject of a Principal Prepayment in full, did not become
a Liquidated Mortgage Loan and was not purchased or replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Pass-Through Rate: As to each Class of Certificates and the REMIC I
Regular Interests and the REMIC II Regular Interests, the rate of interest
determined as provided with respect thereto, in Section 5.01(c). Any monthly
calculation of interest at a stated rate shall be based upon annual interest at
such rate divided by twelve.
Xxxx Financial: Xxxx Financial, LLC, and its successor in interest.
Xxxx Financial AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, by and among EMC, the
Trustee, EverHome and Xxxx Financial.
Paying Agent: The Securities Administrator or any successor paying
agent appointed hereunder.
Periodic Rate Cap: As to each Mortgage Loan, the rate, if any, set
forth in the related Mortgage Note and indicated on the related Mortgage Loan
Schedule, that is the maximum adjustment that can be made to the Mortgage
Interest Rate on each Interest Adjustment Date in accordance with its terms,
regardless of changes in the applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment
of which are fully guaranteed by the United States of America or any agency or
instrumentality of the Xxxxxx
00
Xxxxxx xx Xxxxxxx the obligations of which are backed by the full faith and
credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances (which shall each have a maturity of not more than 90 days and, in
the case of bankers' acceptances, shall in no event have an original maturity of
more than 365 days or a remaining maturity of more than 30 days) issued by any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (including the Trustee or the
Master Servicer or its Affiliates acting in its commercial banking capacity) and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term debt
rating and/or the long-term unsecured debt obligations of such depository
institution or trust company at the time of such investment or contractual
commitment providing for such investment have the Applicable Credit Rating or
better from each Rating Agency and (b) any other demand or time deposit or
certificate of deposit that is fully insured by the Federal Deposit Insurance
Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or guaranteed by
an agency or instrumentality of the United States of America, the obligations of
which are backed by the full faith and credit of the United States of America,
in either case entered into with a depository institution or trust company
(acting as principal) described in clause (ii)(a) above where the Trustee holds
the security therefor; provided that such repurchase obligations shall have a
remaining maturity of not more than 365 days;
(iv) securities bearing interest or sold at a discount issued
by any corporation (including the Trustee or the Master Servicer or its
Affiliates) incorporated under the laws of the United States of America or any
state thereof that have the Applicable Credit Rating or better from each Rating
Agency at the time of such investment or contractual commitment providing for
such investment; provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that investments
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as part of the Trust to exceed 10% of the aggregate
Outstanding Principal Balances of all the Mortgage Loans and Permitted
Investments held as part of the Trust;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof) having
the Applicable Credit Rating or better from each Rating Agency at the time of
such investment; provided, that such commercial paper shall have a remaining
maturity of not more than 365 days;
(vi) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating Agency as
evidenced in writing by each Rating Agency to the Trustee; and
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(viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including any such
fund for which the Trustee or Master Servicer or any affiliate of the Trustee or
Master Servicer acts as a manager or an advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par; provided,
further, that, if rated, any such obligation or security shall not have an "r"
highlighter affixed to its rating.
Permitted Transferee: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Physical Certificates: The Residual Certificates and the Private
Certificates.
Pinnacle: Pinnacle Financial Corporation, or its successor in interest.
Pinnacle AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, by and among EMC, the
Trustee, EverHome and Pinnacle.
Platinum: Platinum Home Mortgage Corp., and its successor in interest.
Platinum AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, among EMC, the Trustee
and EverHome.
Pre-Funding Period: The period from the Closing Date until the earliest
of (i) the date on which the amounts on deposit in the Group I Pre-Funding
Account and the Group II Pre-Funding Account (in each case, exclusive of
investment income) is reduced to zero or (ii) March 28, 2005.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms of the related Mortgage Note.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date is the period as is provided with respect thereto in the
related Servicing Agreement.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security
31
Instrument, if any, or any replacement policy therefor through the related
Interest Accrual Period for such Class relating to a Distribution Date.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of (or proceeds with respect to) principal on a Mortgage Loan which is
received in advance of its scheduled Due Date to the extent that it is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment,
including Insurance Proceeds and Repurchase Proceeds, but excluding the
principal portion of Net Liquidation Proceeds received at the time a Mortgage
Loan becomes a Liquidated Mortgage Loan.
Private Certificates: Any Class B-4, Class B-5 or Class B-6
Certificate.
Prospectus: The Prospectus, dated December 20, 2004, relating to the
offering of the Offered Certificates.
Prospectus Supplement: The Prospectus Supplement, dated December 28,
2004, relating to the offering of the Offered Certificates.
Protected Account: An account or accounts established and maintained
for the benefit of Certificateholders by each Servicer with respect to the
related Mortgage Loans and with respect to REO Property serviced by such
Servicer pursuant to the related Servicing Agreement, and which is an Eligible
Account.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as its
claims-paying ability is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Quicken: Quicken Loans Inc., and its successor in interest.
Quicken AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, by and among EMC, the
Trustee, EverHome and Quicken.
Rating Agencies: Each of S&P and Xxxxx'x. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (i) a Mortgage Loan, a Bankruptcy Loss,
and (ii) a Liquidated Mortgage Loan, an amount (not less than zero nor greater
than the Scheduled
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Principal Balance of such Mortgage Loan) equal to (x) the Outstanding Principal
Balance of such Liquidated Mortgage Loan plus accrued and unpaid interest
thereon at the Mortgage Interest Rate through the last day of the month of such
liquidation, less (y) the Net Liquidation Proceeds with respect to such
Liquidated Mortgage Loan and the related Mortgaged Property that are allocated
to principal. In addition, to the extent the Paying Agent receives from the
related Servicer Subsequent Recoveries with respect to any Mortgage Loan, the
amount of the Realized Loss with respect to that Mortgage Loan will be reduced
to the extent such recoveries are applied to reduce the Current Principal Amount
of any Class or Classes of Certificates on any Distribution Date. As to any
Mortgage Loan which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, then
"Realized Loss" is the difference between the principal balance of such Mortgage
Loan outstanding immediately prior to such Deficient Valuation and the principal
balance of such Mortgage Loan as reduced by the Deficient Valuation.
Record Date: With respect to each Distribution Date and each Class of
Certificates (other than the Adjustable Rate Certificates), the close of
business on the last Business Day of the month next preceding the month in which
the related Distribution Date occurs. With respect to each Distribution Date and
the Adjustable Rate Certificates, the 18th day of the month of such Distribution
Date.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
Relief Act: The Servicemembers' Civil Relief Act or similar state law.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act or
similar state laws.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) the Protected Accounts, (iii)
any REO Property relating to the Mortgage Loans, (iv) the rights with respect to
the Servicing Agreements, (v) the rights with respect to the Assignment
Agreements, (vi) such funds or assets as from time to time are deposited in the
Distribution Account and belonging to the Trust Fund (exclusive of the Group I
Pre-Funding Account, the Group I Pre-Funding Reserve Account, the Group I
Interest Coverage Account, the Group I Carryover Shortfall Reserve Fund, the
Group II Pre-Funding Account, the Group II Pre-Funding Reserve Account, the
Group II Interest Coverage Account and the Group II Carryover Shortfall Reserve
Fund) and (vii) any proceeds of the foregoing.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Regular Interests: The REMIC I Regular Interests, with such
terms as described in Section 5.01(c).
REMIC I Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A", equal to the
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ratio between, with respect to each such REMIC I Regular Interest, the excess of
(x) the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Loan Group over (y) the Current Principal Amount of the Senior
Certificates in the related Loan Group.
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests.
REMIC II Interests: The REMIC II Regular Interests and the Class R-II
Certificates.
REMIC II Regular Interests: The REMIC II Regular Interests, with such
terms as described in Section 5.01(c).
REMIC III: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC II Regular Interests.
REMIC III Interests: The REMIC III Regular Certificates and the Class
R-III Certificates.
REMIC III Regular Certificates: The REMIC III Regular Interests, with
such terms as described in Section 5.01(c).
REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC while any
regular interest in such REMIC is outstanding, (ii) result in a tax on
prohibited transactions with respect to any REMIC or (iii) constitute a taxable
contribution to any REMIC after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law relating
to REMICs, which appear at Sections 860A through 860G of the Code, and related
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Property: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement, a Subsequent Mortgage Loan Purchase
Agreement or Article II or Section 3.21 of this Agreement, an amount equal to
the sum of (i) (A) 100% of the Outstanding Principal Balance of such Mortgage
Loan as of the date of repurchase (or if the related Mortgaged Property was
acquired with respect thereto, 100% of the Outstanding Principal Balance of such
Mortgage Loan as of the date of the acquisition), plus (B) accrued but unpaid
interest on the Outstanding Principal Balance of such Mortgage Loan at the
related Mortgage Interest Rate, through and including the last day of the month
of repurchase, and reduced by (C) any portion of the Master Servicing
Compensation, Servicing Fee and Monthly Advances relating to such Mortgage Loan
and advances payable to the purchaser of such Mortgage Loan, and (ii) any costs
and damages incurred by the Trust in connection with any violation of such
Mortgage Loan of any predatory or abusive lending laws.
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Repurchase Proceeds: The Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller or any cash deposit in connection
with the substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement or the related Servicing Agreement with respect to such Mortgage Loan.
Residual Certificates: Any of the Class R Certificates.
Responsible Officer: Any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and any other officer
of the Trustee to whom a matter arising hereunder may be referred.
Rule 144A: Rule 144A promulgated under the Securities Act.
Rule 144A Certificate: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
and its successors in interest.
Scheduled Payment: With respect to any Mortgage Loan and any Due
Period, the scheduled payment or payments of principal and interest due during
such Due Period on such Mortgage Loan which either is payable by a Mortgagor in
such month under the related Mortgage Note or, in the case of REO Property,
would otherwise have been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Scheduled Principal Balance: With respect to any Mortgage Loan or
related REO Property on any Distribution Date, the principal balance thereof as
of the Cut-off Date (with respect to the Initial Mortgage Loans) or the related
Subsequent Cut-off Date (with respect to the Subsequent Mortgage Loans), as the
case may be, minus the sum of (1) the principal portion of the scheduled Monthly
Payments due from Mortgagors with respect to such Mortgage Loan during each Due
Period ending prior to such Distribution Date, irrespective of any delinquency
in its payment, (2) all Principal Prepayments with respect to such Mortgage Loan
received prior to or during the related Prepayment Period, and all Net
Liquidation Proceeds to the extent applied by the related Servicer as recoveries
of principal in accordance with this Agreement or the related Servicing
Agreement that were received by the related Servicer as of the close of business
on the last day of the Prepayment Period related to such Distribution Date and
(3) any
35
Realized Loss thereon incurred prior to or during the related Prepayment Period;
provided that the Scheduled Principal Balance of any Liquidated Mortgage Loan is
zero.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association, and
its successor in interest, and any successor securities administrator appointed
as herein provided.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE
SECURITIES ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT
BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE
TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR THAT SUCH REOFFER, RESALE, PLEDGE
OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE
ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED [in the case of a Residual Certificate
or a Private Certificate] UNLESS THE OPINION OF COUNSEL REQUIRED BY SECTION 5.07
OF THE POOLING AND SERVICING AGREEMENT IS PROVIDED [in the case of the Class
B-4, Class B-5 and Class B-6 Certificates]:, UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT
RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR
CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING,
36
BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00,
XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
FIDUCIARY DUTIES ON THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE
MASTER SERVICER, ANY SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED
BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE
EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON
BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR."
Security Instrument: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.
Seller: EMC Mortgage Corporation, as seller under the Mortgage Loan
Purchase Agreement and each Subsequent Mortgage Loan Purchase Agreement.
Senior Certificates: The Group I Senior Certificates, the Group II
Senior Certificates, the Class X-1 Certificates, the Class X-2 Certificates and
the Residual Certificates.
Senior Mezzanine Certificates: The Class M Certificates.
Senior Mezzanine Certificate Writedown Amount: As to any Distribution
Date on or after which the aggregate Current Principal Amounts of the
Subordinate Certificates has been reduced to zero, the amount by which (a) the
sum of the Current Principal Amounts of all of the Certificates other than the
Interest Only Certificates (after giving effect to the distribution of principal
and the allocation of applicable Realized Losses on the Mortgage Loans on a pro
rata basis in reduction of the Current Principal Amounts of such Certificates on
such Distribution Date) exceeds (b) the Scheduled Principal Balances of the
Mortgage Loans on the Due Date related to such Distribution Date.
Senior Mezzanine Loss and Delinquency Test: On any Distribution Date,
the Senior Mezzanine Loss and Delinquency Test is satisfied if, as of the last
day of the month preceding such Distribution Date, (A) the aggregate Scheduled
Principal Balances of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Senior Mezzanine Certificates and Subordinate
Certificates, does not exceed 50%; and (B) cumulative Realized Losses on the
Mortgage Loans do not exceed (a) 30% of the Original Senior Mezzanine and
Subordinate Principal Balance if such Distribution Date occurs between and
including January 2015 and December 2015, (b) 35% of the Original Senior
Mezzanine and Subordinate Principal Balance if such Distribution Date occurs
between and including January 2016 and December 2016, (c) 40% of the Original
Senior Mezzanine and Subordinate Principal Balance if such Distribution Date
occurs between and including January 2017 and December 2017, (d) 45% of the
Original Senior Mezzanine and Subordinate Principal Balance if such Distribution
Date occurs between and including January 2018 and December 2018, and (e) 50% of
the Original Senior Mezzanine and Subordinate Principal Balance if such
Distribution Date occurs during or after January 19, 2019.
37
Senior Mezzanine and Subordinate Optimal Principal Amount: With respect
to the Senior Mezzanine Certificates and Subordinate Certificates and as to any
Distribution Date, an amount equal to the sum, without duplication, of the
following for the Group I Mortgage Loans and the Group II Mortgage Loans (but in
no event greater than the aggregate Current Principal Amounts of the Senior
Mezzanine Certificates and Subordinate Certificates immediately prior to such
Distribution Date):
(1) the applicable Senior Mezzanine and Subordinate
Percentage of the principal portion of all Monthly Payments
due on each Outstanding Mortgage Loan in the related Loan
Group on the related Due Date, as specified in the
amortization schedule at the time applicable thereto (after
adjustment for previous Principal Prepayments but before any
adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period);
(2) the applicable Senior Mezzanine and Subordinate
Prepayment Percentage of the Scheduled Principal Balance of
each Mortgage Loan in the related Loan Group that was the
subject of a Principal Prepayment in full during the related
Prepayment Period;
(3) the applicable Senior Mezzanine and Subordinate
Prepayment Percentage of all partial prepayments of principal
received during the applicable Prepayment Period for each
Mortgage Loan in the related Loan Group;
(4) the excess, if any, of (A) all Net Liquidation
Proceeds with respect to the Mortgage Loans allocable to
principal received during the related Prepayment Period in
respect of each Liquidated Mortgage Loan in the related Loan
Group over (B) the sum of the amounts distributable pursuant
to clause (4) of the definition of Group I Senior Optimal
Principal Amount or Group II Senior Optimal Principal Amount,
as the case may be, on such Distribution Date;
(5) the applicable Senior Mezzanine and Subordinate
Prepayment Percentage of the sum of (a) the Scheduled
Principal Balance of each Mortgage Loan or related REO
Property in the related Loan Group which was repurchased with
respect to such Distribution Date and (b) the excess, if any,
of the Scheduled Principal Balance of a Mortgage Loan that has
been replaced with a Substitute Mortgage Loan pursuant to
Section 2.04 of this Agreement, the Mortgage Loan Purchase
Agreement or a Subsequent Mortgage Loan Purchase Agreement, as
the case may be, with respect to such Distribution Date over
the Scheduled Principal Balance of such Substitute Mortgage
Loan; and
(6) on the Distribution Date on which the Current
Principal Amounts of the related Senior Certificates (other
than the Interest Only Certificates) have all been reduced to
zero, 100% of any applicable Senior Optimal Principal Amount.
38
After the aggregate Current Principal Amounts of the Senior
Mezzanine Certificates and Subordinate Certificates has been reduced to
zero, the Senior Mezzanine and Subordinate Optimal Principal Amount
shall be zero.
Senior Mezzanine and Subordinate Percentage: The Group I Senior
Mezzanine and Subordinate Percentage or the Group II Senior Mezzanine and
Subordinate Percentage.
Senior Mezzanine and Subordinate Prepayment Percentage: The Group I
Senior Mezzanine and Subordinate Prepayment Percentage or the Group II Senior
Mezzanine and Subordinate Prepayment Percentage.
Senior Optimal Principal Amount: The Group I Senior Optimal Principal
Amount or the Group II Senior Optimal Principal Amount.
Senior Percentage: The Group I Senior Percentage or the Group II Senior
Percentage.
Senior Prepayment Percentage: The Group I Senior Prepayment Percentage
or the Group II Senior Prepayment Percentage.
Servicer: With respect to each Mortgage Loan, any of EverHome and
Countrywide, as set forth in the applicable Mortgage Loan Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the 18th
day of each month, or if such day is not a Business Day, the preceding Business
Day.
Servicing Agreement(s): The EverHome Subservicing Agreement, the
EverHome Servicing Agreement and the Countrywide Servicing Agreement, as
applicable.
Servicing Fee: As to any Mortgage Loan and a Distribution Date, an
amount equal to the product of (i) the Scheduled Principal Balance of such
Mortgage Loan as of the Due Date in the month preceding the month in which such
Distribution Date occurs and (ii) the applicable Servicing Fee Rate, or, in the
event of any payment of interest that accompanies a Principal Prepayment in full
during the related Due Period made by the Mortgagor immediately prior to such
prepayment, interest at the Servicing Fee Rate on the Scheduled Principal
Balance of such Mortgage Loan for the period covered by such payment of
interest.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate
(including, as applicable, any additional servicing fees) as set forth in the
applicable Mortgage Loan Schedule.
Servicing Officer: As defined in the related Servicing Agreement.
Six-Month LIBOR: A per annum rate equal to the average of interbank
offered rates for six-month U.S. dollar-denominated deposits in the London
market based on quotations of major banks as published in The Wall Street
Journal and as most recently available as of the time specified in the related
Mortgage Note.
SouthStar: SouthStar Funding LLC and/or HomeStar Mortgage Services, LLC
and/or their respective successors in interest, as the case may be.
39
SouthStar AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, among EMC, the
Trustee, EverHome and SouthStar.
Startup Day: December 30, 2004.
Subordinate Certificates: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
Subordinate Certificate Writedown Amount: With respect to the
Subordinate Certificates, the amount by which (a) the sum of the Current
Principal Amounts of all of the Certificates other than the Interest Only
Certificates (after giving effect to the distribution of principal collections
on the Mortgage Loans and the allocation of applicable Realized Losses on the
Mortgage Loans on a pro rata basis in reduction of the Current Principal Amounts
of such Certificates on such Distribution Date) exceeds (b) the Scheduled
Principal Balances of the Mortgage Loans on the Due Date related to such
Distribution Date.
Subsequent Cut-off Date: With respect to those Subsequent Mortgage
Loans sold to the Trust Fund pursuant to a Subsequent Transfer Instrument, the
later of (i) the first day of the month in which the related Subsequent Transfer
Date occurs or (ii) the date of origination of such Mortgage Loan.
Subsequent Mortgage Loan Purchase Agreement: The agreement(s) between
EMC, as seller, and Structured Asset Mortgage Investments II Inc., as purchaser,
and all amendments thereof and supplements thereto, regarding the transfer of
Subsequent Mortgage Loans by EMC to Structured Asset Mortgage Investments II
Inc.
Subsequent Mortgage Loans: The Group I Mortgage Loans which will be
acquired by the Trust during the Pre-Funding Period with amounts on deposit in
the Group I Pre-Funding Account and the Group II Mortgage Loans which will be
acquired by the Trust during the Pre-Funding Period with amounts on deposit in
the Group II Pre-Funding Account, which Mortgage Loans will be held as part of
the Trust Fund.
Subsequent Recoveries: As of any Distribution Date, amounts received
during the related Due Period by the related Servicer specifically related to a
Liquidated Mortgage Loan or disposition of an REO property prior to the related
Prepayment Period that result in a Realized Loss on a Mortgage Loan, after
liquidation or disposition of such Mortgage Loan.
Subsequent Transfer Date: With respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Mortgage Loans are sold to
the Trust Fund.
Subsequent Transfer Instrument: Each Subsequent Transfer Instrument,
dated as of a Subsequent Transfer Date, executed by the Trustee at the written
direction of the Seller and substantially in the form attached hereto as Exhibit
L, by which Subsequent Mortgage Loans are transferred to the Trust Fund.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to the related Servicing Agreement, the Mortgage Loan Purchase
Agreement, a Subsequent Mortgage
40
Loan Purchase Agreement or Section 2.04 of this Agreement, as applicable, in
each case, (i) which has an Outstanding Principal Balance not greater nor
materially less than the Mortgage Loan for which it is to be substituted; (ii)
which has a Mortgage Interest Rate and Net Rate not less than, and not
materially greater than, such Mortgage Loan; (iii) which has a maturity date not
materially earlier or later than such Mortgage Loan and not later than the
latest maturity date of any Mortgage Loan; (iv) which is of the same property
type and occupancy type as such Mortgage Loan; (v) which has a Loan-to-Value
Ratio not greater than the Loan-to-Value Ratio of such Mortgage Loan; (vi) which
(to the extent applicable) has a Combined Loan-to-Value Ratio not greater than
the Combined Loan-to-Value Ratio of such Mortgage Loan; (vii) which is current
in payment of principal and interest as of the date of substitution; (viii) as
to which the payment terms do not vary in any material respect from the payment
terms of the Mortgage Loan for which it is to be substituted; (ix) which has a
Gross Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than
those of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and has a Minimum Lifetime Mortgage Rate
no lower than that of such Mortgage Loan; and (x) which is not secured by
Mortgaged Property located in (A) the State of New Jersey, if such Mortgage Loan
was originated on or after November 27, 2003 or (B) the State of New Mexico, if
such Mortgage Loan was originated on or after January 1, 2004.
Tax Administration and Tax Matters Person: The person designated as
"tax matters person" in the manner provided under Treasury regulation ss.
1.860F-4(d) and temporary Treasury regulation ss. 301.6231(a)(7)-1T. The
Securities Administrator or any successor thereto or assignee thereof shall
serve as tax administrator hereunder and as agent for the Tax Matters Person.
The Holder of each Class of Residual Certificates shall be the Tax Matters
Person for the related REMIC, as more particularly set forth in Section 9.12
hereof.
Termination Costs: The costs and expenses related to the termination of
any Servicer, the appointment of a successor servicer or the transfer and
assumption of servicing with respect to the related Servicing Agreement,
including, without limitation, the items set forth in Section 3.03(c).
Trust Fund or Trust: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).
Trustee: JPMorgan Chase Bank, N.A., and its successor in interest, or
any successor trustee appointed as herein provided.
Uncertificated Principal Balance: With respect to any REMIC I Regular
Interest or REMIC II Regular Interest as of any Distribution Date, the initial
principal amount of such Regular Interest, reduced by (i) all amounts
distributed on previous Distribution Dates on such Regular Interest with respect
to principal, (ii) the principal portion of all Realized Losses on the Mortgage
Loans allocated prior to such Distribution Date to such Regular Interest, taking
account of the Loss Allocation Limitation and (iii) in the case of a REMIC II
Regular Interest for which the Corresponding Certificate is a Senior Mezzanine
Certificate or a Subordinate Certificate, such Regular Interest's pro rata
share, if any, of the applicable Senior Mezzanine Certificate Writedown Amount
or Subordinate Certificate Writedown Amount allocated to such Corresponding
Certificate for previous Distribution Dates.
41
Underlying Seller: With respect to each Mortgage Loan, Countrywide Home
Loans, Inc., EverHome, BancMortgage, Platinum, Quicken, WinStar, Market Street,
Aegis, Pinnacle, Xxxx Financial, Metrocities or SouthStar, as indicated on the
applicable Mortgage Loan Schedule.
Uninsured Cause: Any cause of damage to a Mortgaged Property or related
REO Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
or flood insurance policies required to be maintained pursuant to the related
Servicing Agreement, without regard to whether or not such policy is maintained.
United States Person: A citizen or individual resident of the United
States, a corporation or partnership (including an entity treated as a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States or any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations), provided that, for purposes solely of the Class R Certificates, no
partnership or other entity treated as a partnership for United States federal
income tax purposes shall be treated as a United States Person unless all
persons that own an interest in such partnership, either directly or through any
entity that is not a corporation for United States federal income tax purposes,
are United States Persons, or an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
such trust and one or more such United States Persons have the authority to
control all substantial decisions of such trust or if the Trust was in existence
on August 20, 1996 and properly elected to continue to be treated as such a
United States Person.
WinStar: Summit Mortgage Partners, Inc., and its successor in interest.
WinStar AAR: That certain Assignment, Assumption and Recognition
Agreement, made and entered into as of December 30, 2004, among EMC, the
Trustee, EverHome and WinStar.
Section 1.02. Calculation of LIBOR. LIBOR applicable to the calculation
of the Pass-Through Rate on the Adjustable Rate Certificates for any Interest
Accrual Period will be determined on each Interest Determination Date. On each
Interest Determination Date, LIBOR shall be established by the Securities
Administrator and, as to any Interest Accrual Period, will equal the rate for
one month United States dollar deposits that appears on the Telerate Screen Page
3750 as of 11:00 a.m., London time, on such Interest Determination Date.
"Telerate Screen Page 3750" means the display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks). If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, LIBOR shall be so
established by use of such other service for displaying LIBOR or comparable
rates as may be reasonably selected by the Securities Administrator), the rate
will be the Reference Bank Rate. The "Reference Bank Rate" will be determined on
the basis of the rates at which deposits in U.S. dollars are offered by the
reference banks (which shall be any three major banks that are engaged in
transactions in the London interbank market, selected by the Securities
Administrator) as of 11:00 a.m., London time, on the Interest Determination Date
to prime banks in the London interbank market for a period of one month in
amounts approximately equal to the aggregate
42
Current Principal Amount of the Adjustable Rate Certificates, then outstanding.
The Securities Administrator will request the principal London office of each of
the reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations
rounded up to the nearest whole multiple of 0.03125%. If on such date fewer than
two quotations are provided as requested, the rate will be the arithmetic mean
of the rates quoted by one or more major banks in New York City, selected by the
Securities Administrator, as of 11:00 a.m., New York City time, on such date for
loans in U.S. dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Current Principal Amount of the
Adjustable Rate Certificates, then outstanding. If no such quotations can be
obtained, the rate will be LIBOR for the prior Distribution Date; provided,
however, if, under the priorities described above, LIBOR for a Distribution Date
would be based on LIBOR for the previous Distribution Date for the third
consecutive Distribution Date, the Securities Administrator shall select an
alternative comparable index (over which the Securities Administrator has no
control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of LIBOR by the Securities Administrator on any Interest
Determination Date and the Securities Administrator's subsequent calculation of
the Pass-Through Rate applicable to the Adjustable Rate Certificates for the
relevant Interest Accrual Period, in the absence of manifest error, will be
final and binding. Promptly following each Interest Determination Date, the
Securities Administrator shall supply the Master Servicer with the results of
its determination of LIBOR on such date.
43
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. Conveyance of Mortgage Loans to Trustee. (a) The
Depositor, concurrently with the execution and delivery of this Agreement,
sells, transfers and assigns to the Trust without recourse all its right, title
and interest in and to (i) the Mortgage Loans identified in the applicable
Mortgage Loan Schedule, including all interest and principal due with respect to
the Initial Mortgage Loans after the Cut-off Date and all interest and principal
due with respect to the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, as the case may be, but excluding any payments of principal and
interest due on or prior to the Cut-off Date with respect to the Initial
Mortgage Loans, and excluding any principal and interest due on or prior to the
related Subsequent Cut-off Date with respect to the applicable Subsequent
Mortgage Loans, as the case may be, (ii) such assets as shall from time to time
be credited or are required by the terms of this Agreement to be credited to the
Distribution Account, the Group I Pre-Funding Account, the Group I Interest
Coverage Account, the Group II Pre-Funding Account and the Group II Interest
Coverage Account, (iii) such assets relating to the Mortgage Loans as from time
to time may be held by the related Servicer in Protected Accounts and the Paying
Agent in the Distribution Account for the benefit of the Paying Agent on behalf
of the Certificateholders, (iv) any REO Property, (v) the Required Insurance
Policies and any amounts paid or payable by the insurer under any Insurance
Policy (to the extent the mortgagee has a claim thereto), (vi) the Mortgage Loan
Purchase Agreement and each Subsequent Mortgage Loan Purchase Agreement, to the
extent provided in Subsection 2.03(a), (vii) the rights with respect to the
Servicing Agreements as assigned to the Trustee on behalf of the
Certificateholders by the Assignment Agreements, and (viii) any proceeds of the
foregoing. Although it is the intent of the parties to this Agreement that the
conveyance of the Depositor's right, title and interest in and to the Mortgage
Loans and other assets in the Trust Fund pursuant to this Agreement shall
constitute a purchase and sale and not a loan, in the event that such conveyance
is deemed to be a loan, it is the intent of the parties to this Agreement that
the Depositor shall be deemed to have granted to the Trustee a first priority
perfected security interest in all of the Depositor's right, title and interest
in, to and under the Mortgage Loans and other assets in the Trust Fund, and that
this Agreement shall constitute a security agreement under applicable law.
(b) In connection with the above sale, transfer and assignment, the
Depositor hereby deposits with the Trustee, or the Custodian, as its agent, as
described in the Mortgage Loan Purchase Agreement, with respect to each Initial
Mortgage Loan, and as described in the related Subsequent Mortgage Loan Purchase
Agreement, with respect to each Subsequent Mortgage Loan, (i) the original
Mortgage Note, including any riders thereto, endorsed without recourse to the
order of the Trustee and showing an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee, or a lost note
affidavit with indemnity, together with a copy of the related Mortgage Note,
(ii) the original Security Instrument (noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan if
the Mortgage Loan is a MOM Loan), which shall have been recorded (or if the
original is not available, a copy), with evidence of such recording indicated
thereon (or if clause (x) in the proviso below applies, shall be in recordable
form), (iii) unless the Mortgage Loan is registered on the MERS(R) System, a
certified copy of the assignment (which may be in the form of a blanket
assignment if permitted in the jurisdiction in which the Mortgaged Property is
44
located) to "JPMorgan Chase Bank, N.A., as Trustee," with evidence of recording
with respect to each Mortgage Loan in the name of the Trustee thereon (or if
clause (x) in the proviso below applies or for Mortgage Loans with respect to
which the related Mortgaged Property is located in a state other than Maryland
or an Opinion of Counsel has been provided as set forth in this Section 2.01(b),
shall be in recordable form), (iv) all intervening assignments of the Security
Instrument, if applicable and only to the extent available to the Depositor with
evidence of recording thereon, (v) the original or a copy of the policy or
certificate of primary mortgage guaranty insurance, to the extent available, if
any, (vi) the original policy of title insurance or mortgagee's certificate of
title insurance or commitment or binder for title insurance and (vii) originals
of all assumption and modification agreements, if applicable and available;
provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Depositor in time to permit their delivery as specified
above, the Depositor may deliver, or cause to be delivered, a true copy thereof
with a certification by the Depositor, the applicable Servicer or the title
company issuing the related commitment for title insurance, on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; (y) in lieu of the Security
Instrument, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from the Depositor, to such effect) the Depositor may deliver,
or cause to be delivered, photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) the Depositor shall not
be required to deliver intervening assignments or Mortgage Note endorsements
between the related Underlying Seller and EMC Mortgage Corporation, between EMC
Mortgage Corporation and the Depositor, and between the Depositor and the
Trustee; and provided, further, however, that, in the case of Initial Mortgage
Loans which have been prepaid in full after the Cut-off Date and prior to the
Closing Date, and that, in the case of Subsequent Mortgage Loans which have been
prepaid in full after the related Subsequent Cut-off Date and prior to the
related Subsequent Transfer Date, the Depositor, in lieu of delivering the above
documents, may deliver to the Trustee or the Custodian, as its agent, a
certification to such effect and shall deposit all amounts paid in respect of
such Initial Mortgage Loans in the Distribution Account on the Closing Date or
paid in respect of such Subsequent Mortgage Loans in the Distribution Account on
the related Subsequent Transfer Date, as the case may be. The Depositor shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) to the Trustee or the Custodian,
as its agent, promptly after they are received. The Depositor shall cause, at
its expense, the assignment of the related Security Instrument to the Trustee to
be recorded not later than 180 days after the Closing Date with respect to the
Initial Mortgage Loans, and not later than 180 days after the related Subsequent
Transfer Date, with respect to the applicable Subsequent Mortgage Loans, as the
case may be, unless (1) such recordation is not required by the Rating Agencies,
(2) an Opinion of Counsel has been provided to the Trustee (with a copy to the
Custodian) which states that recordation of such Security Instrument is not
required to protect the interests of the Certificateholders in the related
Mortgage Loans or (3) MERS is identified on the related Security Instrument or
on a properly recorded assignment of such Security Instrument as
45
mortgagee of record solely as nominee for Depositor and its successors and
assigns; provided, however, that each assignment shall be submitted for
recording by the Depositor in the manner described above, at no expense to the
Trust or the Trustee, or the Custodian, as its agent, upon the earliest to occur
of: (i) reasonable direction by the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust, (ii)
the occurrence of an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Depositor, (iv) the rating of The Bear
Xxxxxxx Companies Inc. falls below Baa3, (v) the occurrence of a servicing
transfer as described in Section 8.02 hereof, or (vi) with respect to any one
assignment of Mortgage, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Depositor fails to pay the cost of
recording the assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust in accordance with
Section 9.05.
Section 2.02. Acceptance of Trust Fund by Trustee. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Depositor and receipt of, subject to further review and the exceptions which may
be noted pursuant to the procedures described below, and declares that it holds,
the documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. On the Closing Date, with
respect to the Initial Mortgage Loans, and on the related Subsequent Transfer
Date, with respect to the Subsequent Mortgage Loans, the Custodian shall
acknowledge, with respect to each Mortgage Loan by an Initial Certification
substantially in the form of Exhibit One to the Custodial Agreement, receipt of
the Mortgage File, but without review of such Mortgage File, except to the
extent necessary to confirm that such Mortgage File contains the related
Mortgage Note or a lost note affidavit in lieu thereof. No later than 90 days
after the Closing Date (or, with respect to the Subsequent Mortgage Loans, no
later than 90 days after the related Subsequent Transfer Date, or, with respect
to any Substitute Mortgage Loan, within five Business Days after the receipt by
the Trustee or Custodian thereof), the Trustee agrees, for the benefit of the
Certificateholders, to review or cause to be reviewed by the Custodian on its
behalf (under the Custodial Agreement), each Mortgage File delivered to it and
to execute and deliver, or cause to be executed and delivered, to the Depositor
and the Trustee an Interim Certification substantially in the form annexed as
Exhibit Two to the Custodial Agreement. In conducting such review, the Trustee
or Custodian will ascertain whether all required documents have been executed
and received, and based on the related Mortgage Loan Schedule, whether those
documents relate, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans it has received, as
identified in the related Mortgage Loan Schedule. In performing any such review,
the Trustee or the Custodian, as its agent, may conclusively rely on the
purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. If the Trustee or the Custodian,
as its agent, finds any document constituting part of the Mortgage File not to
have been executed or received, or to be unrelated to the Initial Mortgage Loans
identified in Exhibit B, or to be unrelated to the Subsequent Mortgage Loans
identified on Exhibit I to the related Subsequent Transfer Instrument, as the
case may be, or to appear to be defective on its face, then the Trustee or the
Custodian, as its agent, shall promptly notify the Seller. In accordance with
the Mortgage Loan Purchase Agreement (or the related Subsequent Mortgage Loan
Purchase Agreement, with respect to the Subsequent Mortgage Loans), the Seller
shall correct or cure any
46
such defect within ninety (90) days from the date of notice from the Trustee or
the Custodian, as its agent, of the defect and, if the Seller fails to correct
or cure the defect within such period, and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Trustee or the Custodian, as its agent, shall enforce the Seller's
obligation pursuant to the Mortgage Loan Purchase Agreement or the related
Subsequent Mortgage Loan Purchase Agreement, as applicable, to, within 90 days
from the Trustee's or the Custodian's notification, provide a Substitute
Mortgage Loan (if within two years of the Closing Date) or purchase such
Mortgage Loan at the Repurchase Price; provided that, if such defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy thereof,
because the originals of such documents or a certified copy have not been
returned by the applicable jurisdiction, then the Seller shall not be required
to purchase such Mortgage Loan if the Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date with respect to the Initial Mortgage Loans, and in no event
later than 360 days after the related Subsequent Transfer Date, with respect to
the Subsequent Mortgage Loans, as applicable. The foregoing repurchase
obligation shall not apply in the event that the Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the jurisdiction because such document has not been returned
by such office; provided that the Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate of the Seller or a Servicing Officer confirming that such documents
have been accepted for recording, and delivery to the Trustee or the Custodian,
as its agent, shall be effected by the Seller within thirty days of its receipt
of the original recorded document.
(b) No later than 180 days after the Closing Date (or, with respect to
any Subsequent Mortgage Loan, no later than 180 days after the related
Subsequent Transfer Date, or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or the Custodian
thereof), the Trustee or the Custodian, as its agent, will review, for the
benefit of the Certificateholders, the Mortgage Files delivered to it and will
execute and deliver or cause to be executed and delivered to the Depositor and
the Trustee a Final Certification substantially in the form annexed as Exhibit
Three to the Custodial Agreement. In conducting such review, the Trustee or the
Custodian, as its agent, will ascertain whether an original of each document
required to be recorded has been returned from the recording office with
evidence of recording thereon or a certified copy has been obtained from the
recording office. If the Trustee or the Custodian, as its agent, finds any
document constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Initial Mortgage Loans identified in Exhibit B
or the Subsequent Mortgage Loans identified on Exhibit I to the related
Subsequent Transfer Instrument, as the case may be, or to appear defective on
its face, the Trustee or the Custodian, as its agent, shall promptly notify the
Seller (provided, however, that with respect to those documents described in
subsection (b)(iv), (b)(v) and (b)(vii) of Section 2.01, the Trustee's and the
Custodian's obligations shall extend only to the documents actually delivered to
the Trustee or Custodian pursuant to such subsections). In accordance with the
Mortgage Loan Purchase Agreement, with respect to the Initial Mortgage Loans,
and in accordance with the Subsequent Mortgage Loan Purchase Agreement, with
respect to the Subsequent Mortgage Loans, the Seller
47
shall correct or cure any such defect or EMC shall deliver to the Trustee an
Opinion of Counsel to the effect that such defect does not materially or
adversely affect the interests of Certificateholders in such Mortgage Loan
within 90 days from the date of notice from the Trustee of the defect and if the
Seller is unable to cure such defect within such period, and if such defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, then the Trustee shall enforce the Seller's obligation
under the Mortgage Loan Purchase Agreement (or the related Subsequent Mortgage
Loan Purchase Agreement, with respect to the Subsequent Mortgage Loans) to,
within 90 days from the Trustee's or Custodian's notification, provide a
Substitute Mortgage Loan (if within two years of the Closing Date) or purchase
such Mortgage Loan at the Repurchase Price; provided that, if such defect would
cause the Mortgage Loan to be other than a "qualified mortgage" as defined in
Section 860G(a)(3) of the Code, any such cure, repurchase or substitution must
occur within 90 days from the date such breach was discovered; provided,
further, however, that if such defect relates solely to the inability of the
Seller to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy thereof, because the originals of such documents or
a certified copy have not been returned by the applicable jurisdiction, then the
Seller shall not be required to purchase such Mortgage Loan if the Seller
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date with respect to the Initial
Mortgage Loans, and in no event later than 360 days after the related Subsequent
Transfer Date, with respect to the Subsequent Mortgage Loans, as applicable. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Seller within thirty days of its receipt of the
original recorded document.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to the
Paying Agent the applicable Repurchase Price for deposit in the Distribution
Account and the Seller shall provide to the Master Servicer, the Paying Agent
and the Trustee written notification detailing the components of the Repurchase
Price. Upon deposit of the Repurchase Price in the Distribution Account, the
Depositor shall notify the Trustee and the Trustee or the Custodian, as its
agent (upon receipt of a Request for Release in the form of Exhibit D attached
hereto with respect to such Mortgage Loan), shall release to the Seller the
related Mortgage File and the Trustee shall execute and deliver all instruments
of transfer or assignment, without recourse, furnished to it by the Seller as
are necessary to vest in the Seller title to and rights under the related
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is received by the Paying Agent.
The Trustee shall amend the related Mortgage Loan Schedule, which was previously
delivered to it by the Depositor in a form agreed to between the Depositor and
the Trustee, to reflect such repurchase and shall promptly notify the Rating
Agencies and the Master Servicer of such amendment. The obligation of the Seller
to repurchase any Mortgage Loan as to which such a defect in a constituent
document exists shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
48
Section 2.03. Assignment of Interest in the Mortgage Loan Purchase
Agreement and in the Subsequent Mortgage Loan Purchase Agreement(s). (a) The
Depositor hereby assigns to the Trustee, on behalf of the Certificateholders,
all of its right, title and interest in the Mortgage Loan Purchase Agreement
(and in the related Subsequent Mortgage Loan Purchase Agreement, with respect to
the Subsequent Mortgage Loans), including but not limited to the Depositor's
rights and obligations pursuant to the Servicing Agreements (noting that the
Seller has retained the right in the event of breach of the representations,
warranties and covenants, if any, with respect to the related Mortgage Loans of
the related Servicer under the related Servicing Agreement to enforce the
provisions thereof and to seek all or any available remedies). The obligations
of the Seller to substitute or repurchase, as applicable, a Mortgage Loan shall
be the Trustee's and the Certificateholders' sole remedy for any breach thereof.
At the request of the Trustee, the Depositor shall take such actions as may be
necessary to enforce the above right, title and interest on behalf of the
Trustee and the Certificateholders or shall execute such further documents as
the Trustee may reasonably require in order to enable the Trustee to carry out
such enforcement.
(b) If the Depositor, the Securities Administrator or the Trustee
discovers a breach of any of the representations and warranties set forth in the
Mortgage Loan Purchase Agreement (or the related Subsequent Mortgage Loan
Purchase Agreement, with respect to the Subsequent Mortgage Loans), which breach
materially and adversely affects the value of the interests of
Certificateholders or the Trustee in the related Mortgage Loan, the party
discovering the breach shall give prompt written notice of the breach to the
other parties. The Seller, within 90 days of its discovery or receipt of notice
that such breach has occurred (whichever occurs earlier), shall cure the breach
in all material respects or, subject to the Mortgage Loan Purchase Agreement (or
the related Subsequent Mortgage Loan Purchase Agreement, with respect to the
Subsequent Mortgage Loans) or Section 2.04 of this Agreement, as applicable,
shall purchase the Mortgage Loan or any property acquired with respect thereto
from the Trustee; provided, however, that if there is a breach of any
representation set forth in the Mortgage Loan Purchase Agreement (or the related
Subsequent Mortgage Loan Purchase Agreement, with respect to the Subsequent
Mortgage Loans) or Section 2.04 of this Agreement, as applicable, and the
Mortgage Loan or the related property acquired with respect thereto has been
sold, then the Seller shall pay, in lieu of the Repurchase Price, any excess of
the Repurchase Price over the Net Liquidation Proceeds received upon such sale.
(If the Net Liquidation Proceeds exceed the Repurchase Price, any excess shall
be paid to the Seller, to the extent not required by law to be paid to the
related borrower.) Any such purchase by the Seller shall be made by providing an
amount equal to the Repurchase Price to the Paying Agent for deposit in the
Distribution Account and written notification detailing the components of such
Repurchase Price to the Trustee, the Paying Agent and the Master Servicer. The
Depositor shall notify the Trustee and submit to the Trustee or the Custodian,
as its agent, a Request for Release in the form of Exhibit D attached hereto,
and the Trustee shall release, or the Trustee shall cause the Custodian to
release, to the Seller, the related Mortgage File and the Trustee shall execute
and deliver all instruments of transfer or assignment furnished to it by the
Seller, without recourse, as are necessary to vest in the Seller title to and
rights under the Mortgage Loan or any property acquired with respect thereto.
Such purchase shall be deemed to have occurred on the date on which the
Repurchase Price in available funds is received by the Securities Administrator.
The Trustee shall amend the related Mortgage Loan Schedule to reflect such
repurchase and shall promptly notify the Master Servicer and the Rating Agencies
of such amendment. Enforcement of the obligation of the Seller to purchase (or
49
substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04. Substitution of Mortgage Loans. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement (or the related Subsequent
Mortgage Loan Purchase Agreement, with respect to the Subsequent Mortgage Loans)
or Sections 2.02 or 2.03 of this Agreement, the Seller may, no later than the
date by which such purchase by the Seller would otherwise be required, tender to
the Trustee a Substitute Mortgage Loan accompanied by a certificate of an
authorized officer of the Seller that such Substitute Mortgage Loan conforms to
the requirements set forth in the definition of "Substitute Mortgage Loan" in
the Mortgage Loan Purchase Agreement, the related Subsequent Mortgage Loan
Purchase Agreement or this Agreement, as applicable; provided, however, that
substitution pursuant to the Mortgage Loan Purchase Agreement (or the related
Subsequent Mortgage Loan Purchase Agreement, with respect to the Subsequent
Mortgage Loans) or Section 2.04 of this Agreement, as applicable, in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day; provided, further, that if the breach of a
Mortgage Loan representation or warranty would cause such Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
then any such substitution must occur within 90 days from the date the breach
was discovered. The Trustee or the Custodian, as its agent, shall examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify the
Seller in writing, within five Business Days after receipt, whether or not the
documents relating to the Substitute Mortgage Loan satisfy the requirements of
the fourth sentence of Subsection 2.02(a). Within two Business Days after such
notification, the Seller shall provide to the Paying Agent for deposit in the
Distribution Account the amount, if any, by which the Outstanding Principal
Balance as of the next preceding Due Date of the Mortgage Loan for which
substitution is being made, after giving effect to Scheduled Principal due on
such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by the Seller of the Repurchase Price for the purchase of a
Mortgage Loan by the Seller. After such notification to the Seller and, if any
such excess exists, upon receipt of such deposit, the Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage Loan
hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Fund and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property of
the Trust Fund. Upon acceptance of the Substitute Mortgage Loan (and delivery to
the Trustee or Custodian of a Request for Release for such Mortgage Loan), the
Trustee (or the Custodian, as its agent) shall release to the Seller the
Mortgage File related to any Mortgage Loan released pursuant to the Mortgage
Loan Purchase Agreement (or the related Subsequent Mortgage Loan Purchase
Agreement, with respect to the
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Subsequent Mortgage Loans) or Section 2.04 of this Agreement, as applicable, and
the Trustee shall execute and deliver all instruments of transfer or assignment,
without recourse, in form as provided to it as are necessary to vest in the
Seller title to and rights under any Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement (or the related Subsequent Mortgage Loan
Purchase Agreement, with respect to the Subsequent Mortgage Loans) or Section
2.04 of this Agreement, as applicable. The Seller shall deliver the documents
related to the Substitute Mortgage Loan in accordance with the provisions of the
Mortgage Loan Purchase Agreement (or the related Subsequent Mortgage Loan
Purchase Agreement, with respect to the Subsequent Mortgage Loans) or
Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable, with the date
of acceptance of the Substitute Mortgage Loan deemed to be the Closing Date (or
the related Subsequent Transfer Date, with respect to the Subsequent Mortgage
Loans) for purposes of the time periods set forth in those Subsections. The
representations and warranties set forth in the Mortgage Loan Purchase Agreement
(or the related Subsequent Mortgage Loan Purchase Agreement, with respect to the
Subsequent Mortgage Loans) shall be deemed to have been made by the Seller with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Trustee. The Securities Administrator shall amend the
related Mortgage Loan Schedule to reflect such substitution and shall provide a
copy of such amended Mortgage Loan Schedule to the Master Servicer, the Trustee
and the Rating Agencies.
Section 2.05. Issuance of Certificates. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
Fund and, concurrently therewith, has signed, and the Certificate Registrar has
countersigned and delivered to the Depositor, in exchange therefor, Certificates
in such authorized denominations representing such Fractional Undivided
Interests as the Depositor has requested. The Trustee agrees that it will hold
the Mortgage Loans and such other assets as may from time to time be delivered
to it segregated on the books of the Trustee in trust for the benefit of the
Certificateholders.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests and the other assets of REMIC II for the
benefit of the holders of the REMIC II Interests. The Trustee acknowledges
receipt of the REMIC I Regular Interests (which are uncertificated) and the
other assets of REMIC II and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC II
Certificates.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC II Regular Interests, and the other assets of REMIC III for the
benefit of the holders of the REMIC III Certificates. The Trustee acknowledges
receipt of the REMIC II Regular Interests (which are uncertificated) and the
other assets of REMIC III and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC III
Certificates.
Section 2.06. Representations and Warranties Concerning the Depositor.
The Depositor hereby represents and warrants to the Trustee, the Master Servicer
and the Securities Administrator as follows:
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(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Depositor's business as
presently conducted or on the Depositor's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(ii) the Depositor has full corporate power to own its
property, to carry on its business as presently conducted and to enter
into and perform its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Depositor; and neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Depositor or its properties or the
articles of incorporation or by-laws of the Depositor, except those
conflicts, breaches or defaults which would not reasonably be expected
to have a material adverse effect on the Depositor's ability to enter
into this Agreement and to consummate the transactions contemplated
hereby;
(iv) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by
the other parties hereto, constitutes a valid and binding obligation of
the Depositor enforceable against it in accordance with its terms
(subject to applicable bankruptcy and insolvency laws and other similar
laws affecting the enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened against the Depositor,
before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions
contemplated by this Agreement or (ii) with respect to any other matter
which in the judgment of the Depositor will be determined adversely to
the Depositor and will, if determined adversely to the Depositor,
materially and adversely affect the Depositor's ability to enter into
this Agreement or perform its obligations under this Agreement; and the
Depositor is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement; and
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(vii) immediately prior to the transfer and assignment thereof
to the Trustee, each Mortgage Note and each Mortgage was not subject to
an assignment or pledge, and the Depositor had good and marketable
title to and was the sole owner thereof and had full right to transfer
and sell the Mortgage Loans to the Trustee free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest.
Section 2.07. Conveyance of the Subsequent Mortgage Loans. (a) Subject
to the conditions set forth in paragraph (b) below, in consideration of the
Paying Agent's delivery on the related Subsequent Transfer Date to or upon the
written order of the Depositor of all or a portion of the balance of funds in
the Group I Pre-Funding Account and/or the Group II Pre-Funding Account, as the
case may be, the Seller shall, on such Subsequent Transfer Date, sell, transfer,
assign, set over and convey without recourse to the Trust Fund (but subject to
the other terms and provisions of this Agreement) all of the right, title and
interest of the Seller in and to (i) the Subsequent Mortgage Loans identified on
the Mortgage Loan Schedule attached to the related Subsequent Transfer
Instrument delivered by the Seller on such Subsequent Transfer Date, (ii) all
interest accruing thereon on and after the related Subsequent Cut-off Date and
all collections in respect of interest and principal due after the related
Subsequent Cut-off Date and (iii) all items with respect to such Subsequent
Mortgage Loans to be delivered pursuant to Section 2.01 and the other items in
the related Mortgage Files; provided, however, that the Seller reserves and
retains all right, title and interest in and to principal received and interest
accruing on such Subsequent Mortgage Loans prior to the related Subsequent
Cut-off Date. The transfer to the Trustee on behalf of the Trust for deposit in
the Group I mortgage pool and/or the Group II mortgage pool, as the case may be,
by the Seller of the Subsequent Mortgage Loans identified on such Mortgage Loan
Schedule shall be absolute and is intended by the Seller, the Trustee, the
Depositor, the Securities Administrator and the Certificateholders to constitute
and to be treated as a sale of such Subsequent Mortgage Loans by the Seller to
the Trust Fund. The related Mortgage File for each Subsequent Mortgage Loan
shall be delivered to the Trustee or the Custodian, as its agent, at least three
(3) Business Days prior to the related Subsequent Transfer Date.
The purchase price paid by the Trustee from amounts released from the
Group I Pre-Funding Account and/or the Group II Pre-Funding Account, as the case
may be, shall be one-hundred percent (100%) of the aggregate Scheduled Principal
Balances of the Subsequent Mortgage Loans so transferred (as identified on the
related Mortgage Loan Schedule provided by the Seller).
This Agreement shall constitute a fixed-price purchase contract in
accordance with Section 860G(a)(3)(A)(ii) of the Code.
(b) The Seller shall transfer to the Trustee on behalf of the Trust for
deposit in the Group I mortgage pool and/or the Group II mortgage pool, as the
case may be, the related Subsequent Mortgage Loans and the other property and
rights related thereto as described in paragraph (a) above, and the Paying Agent
shall release funds from the Group I Pre-Funding Account and/or the Group II
Pre-Funding Account, as the case may be, only upon the satisfaction of each of
the following conditions on or prior to the related Subsequent Transfer Date:
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(i) the Depositor shall have delivered to the Trustee a duly
executed Subsequent Transfer Instrument, which shall include a Mortgage
Loan Schedule listing the related Subsequent Mortgage Loans, and the
Depositor shall cause to be delivered a computer file containing such
Mortgage Loan Schedule to the Trustee and the Master Servicer at least
three (3) Business Days prior to the related Subsequent Transfer Date;
(ii) the Depositor shall have furnished to the Master
Servicer, no later than three Business Days prior to the related
Subsequent Transfer Date, (x) if the servicer or servicers of such
Subsequent Mortgage Loans are existing Servicers, then a written
acknowledgement of each such Servicer that it is servicing such
Subsequent Mortgage Loans pursuant to the related Servicing Agreement,
or (y) if the servicer or servicers are not existing Servicers, then a
Servicing Agreement and Assignment, Assumption and Recognition
Agreement with respect to such servicer or servicers in form and
substance reasonably satisfactory to the Master Servicer;
(iii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, substantially in the
form attached hereto as Exhibit L, the Depositor shall not be insolvent
nor shall it have been rendered insolvent by such transfer, nor shall
it be aware of any pending insolvency with respect to it;
(iv) such sale and transfer shall not result in a material
adverse tax consequence to the Trust Fund or the Certificateholders;
(v) the Pre-Funding Period shall not have terminated;
(vi) the Depositor shall not have selected the Subsequent
Mortgage Loans in a manner that it believes to be adverse to the
interests of the Certificateholders; and
(vii) the Depositor shall have delivered to the Trustee a
Subsequent Transfer Instrument confirming the satisfaction of the
conditions precedent specified in this Section 2.07 and, pursuant to
such Subsequent Transfer Instrument, assigned to the Trustee without
recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the related Subsequent
Mortgage Loan Purchase Agreement, to the extent of the related
Subsequent Mortgage Loans.
(c) Any conveyance of Subsequent Mortgage Loans on a Subsequent
Transfer Date is subject to certain conditions including, but not limited to,
the following:
(i) Each such Subsequent Mortgage Loan must satisfy the
representations and warranties specified in the related Subsequent
Transfer Instrument and this Agreement;
(ii) The Depositor will not select such Subsequent Mortgage
Loans in a manner that it believes to be adverse to the interests of
the Certificateholders;
(iii) The Depositor will deliver certain Opinions of Counsel
with respect to the validity of the conveyance of such Subsequent
Mortgage Loans;
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(iv) As of the related Subsequent Cut-off Date, each such
Subsequent Mortgage Loan will satisfy the following criteria:
(1) Such Subsequent Mortgage Loan may not be 30 or
more days delinquent as of the last day of the month preceding
the related Subsequent Cut-off Date;
(2) The original term to stated maturity of such
Subsequent Mortgage Loan will not be less than 180 months and
will not exceed 360 months;
(3) Each Subsequent Mortgage Loan must be a One-Month
LIBOR or Six-Month LIBOR adjustable rate Mortgage Loan with a
first lien on the related Mortgaged Property;
(4) No Subsequent Mortgage Loan will have a first
payment date occurring after March 1, 2005;
(5) The latest maturity date of any Subsequent
Mortgage Loan will be no later than February 1, 2035;
(6) Such Subsequent Mortgage Loan will have a credit
score of not less than 620;
(7) Such Subsequent Mortgage Loan will have a Gross
Margin as of the related Subsequent Cut-Off Date ranging from
approximately 1.000% per annum to approximately 4.250% per
annum;
(8) Such Subsequent Mortgage Loan will have a Maximum
Lifetime Mortgage Rate as of the related Subsequent Cut-Off
Date greater than 8.375%; and
(9) Such Subsequent Mortgage Loan shall have been
underwritten in accordance with underwriting guidelines as set
forth in the Prospectus Supplement.
(d) As of the related Subsequent Cut-off Date, the Subsequent Mortgage
Loans in the aggregate will satisfy the following criteria:
(i) Have a weighted average Gross Margin ranging from 1.900%
to 2.100% per annum;
(ii) Have a weighted average credit score greater than 718;
(iii) Have no less than 91.91% of the related Mortgaged
Properties be owner occupied;
(iv) Have no less than 61.23% of the related Mortgaged
Properties be single family detached or planned unit developments;
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(v) Have no more than 30.84% of the Subsequent Mortgage Loans
be cash-out refinance;
(vi) Have all of the Subsequent Mortgage Loans with a
Loan-to-Value Ratio greater than 80% be covered by a Primary Mortgage
Insurance Policy;
(vii) Have a weighted average Maximum Lifetime Mortgage Rate
greater than or equal to 11.966%; and
(viii) Be acceptable to the Rating Agencies.
Section 2.08 Covenants of the Master Servicer. The Master Servicer
covenants to the Depositor, the Securities Administrator and the Trustee, as
follows:
(i) it shall comply in the performance of its obligations
under this Agreement;
(ii) no written information, certificate of an officer,
statement furnished in writing or written report prepared by the Master
Servicer pursuant to this Agreement and delivered to the Securities
Administrator, the Depositor, any affiliate of the Depositor or the
Trustee will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the information, certificate,
statement or report not misleading; and
(iii) it shall (only in its capacity as successor servicer
pursuant to a Servicing Agreement) accurately and fully provide
information regarding payment performance of the Mortgagors to the
nationally recognized credit repositories, to the extent such reporting
remains customary and prudent in the servicing of mortgage loans
similar to the Mortgage Loans.
Nothing in this Section shall derogate from the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors, and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer. The Master Servicer shall, from and
after the Closing Date, supervise, monitor and oversee the obligation of the
Servicers to service and administer their respective Mortgage Loans in
accordance with the terms of the related Servicing Agreement and shall have full
power and authority to do any and all things which it may deem necessary or
desirable in connection with such master servicing and administration. In
performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices. Furthermore, the Master
Servicer shall oversee and consult with each Servicer as necessary from
time-to-time to carry out the Master Servicer's obligations hereunder, shall
receive, review and evaluate all reports, information and other data provided to
the Master Servicer by each Servicer and shall cause each Servicer to perform
and observe the covenants, obligations and conditions to be performed or
observed by such Servicer under the related Servicing Agreement. The Master
Servicer shall independently and separately monitor each Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the related Servicer's
and Master Servicer's records, and based on such reconciled and corrected
information, the Master Servicer shall provide such information to the
Securities Administrator as shall be necessary in order for it to prepare the
statements specified in Section 6.04, and prepare any other information and
statements required to be forwarded by the Master Servicer hereunder. The Master
Servicer shall reconcile the results of its Mortgage Loan monitoring with the
actual remittances of the related Servicer to the Distribution Account pursuant
to the related Servicing Agreement.
The Trustee shall furnish each Servicer and the Master Servicer with
any powers of attorney, in substantially the form attached hereto as Exhibit K,
and other documents in form as provided to it necessary or appropriate to enable
such Servicer and the Master Servicer to service and administer the related
Mortgage Loans and REO Property.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.
The Trustee shall execute and deliver to the related Servicer and the
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
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Section 3.02. REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Depositor, the Servicers or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion, prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement, a Subsequent
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, accept any contribution to any REMIC after the Startup Day without
receipt of a REMIC Opinion. In addition, the Trustee shall comply with all of
the requirements of Treasury Regulation ss. 1.860F-2(a)(2), including, without
limitation, the requirement that each REMIC account for items of income and
ownership of assets in a manner that respects the separate existence of each
REMIC.
Section 3.03. Monitoring of Servicers. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Depositor the compliance by the
Servicers with their respective duties under the related Servicing Agreement. In
the review of each Servicer's activities, the Master Servicer may rely upon an
officer's certificate of such Servicer (or similar document signed by an officer
of the Servicer) with regard to such Servicer's compliance with the terms of the
related Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that such Servicer should be terminated in accordance with
the related Servicing Agreement, or that a notice should be sent pursuant to the
related Servicing Agreement with respect to the occurrence of an event that,
unless cured, would constitute grounds for such termination, the Master Servicer
shall notify the Depositor and the Trustee thereof and the Master Servicer shall
issue such notice or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or cause
the Trustee to enter into a new Servicing Agreement with a successor Servicer
selected by the Master Servicer; provided, however, it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of the related
Servicing Agreement and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the extent that the
Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
the related Servicing Agreement (including,
58
without limitation, (i) all legal costs and expenses and all due diligence costs
and expenses associated with an evaluation of the potential termination of a
Servicer as a result of an event of default by such Servicer and (ii) all costs
and expenses associated with the complete transfer of servicing, including all
servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the successor servicer to service the Mortgage Loans in accordance with
the related Servicing Agreement) are not fully and timely reimbursed by the
terminated Servicer, the Master Servicer shall be entitled to reimbursement of
such costs and expenses from the Distribution Account.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement, including any related Assignment Agreement. The Master Servicer shall
enforce the obligation of each Servicer pursuant to the related Servicing
Agreement to provide it with the annual officer's certificate of compliance and
annual independent accountants' servicing reports, as well as back-up
certifications to each Master Servicer Certification pursuant to Section 3.18.
(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicers, if any, that
it replaces.
Section 3.04. Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The amount of coverage to be maintained by the Master Servicer with respect to
the blanket fidelity bond policy shall be $50,000,000 per occurrence, and, with
respect to the errors and omissions insurance policy, shall be $20,000,000 per
occurrence.
Section 3.05. Power to Act; Procedures. The Master Servicer shall
master service the Mortgage Loans and shall have full power and authority,
subject to the REMIC Provisions and the provisions of Article X hereof, to do
any and all things that it may deem necessary or desirable in connection with
the master servicing and administration of the Mortgage Loans, including but not
limited to the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit a Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC hereunder to fail to qualify as
a REMIC or result in the imposition of a tax upon the Trust Fund (including but
not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) unless the Master Servicer has received an
59
Opinion of Counsel (but not at the expense of the Master Servicer) to the effect
that the contemplated action will not cause any REMIC hereunder to fail to
qualify as a REMIC or result in the imposition of a tax upon any REMIC
hereunder. The Trustee shall furnish the Master Servicer, upon written request
from a Servicing Officer, with any powers of attorney empowering the Master
Servicer or the related Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to appear in,
prosecute or defend any court action relating to the Mortgage Loans or the
Mortgaged Property, in accordance with the related Servicing Agreement and this
Agreement, and the Trustee shall execute and deliver such other documents as the
Master Servicer may request, to enable the Master Servicer to master service and
administer the Mortgage Loans and carry out its duties hereunder, in each case
in accordance with Accepted Master Servicing Practices (and the Trustee shall
have no liability for misuse of any such powers of attorney by the Master
Servicer or a Servicer). If the Master Servicer or the Trustee has been advised
that it is likely that the laws of the state in which action is to be taken
prohibit such action if taken in the name of the Trustee or that the Trustee
would be adversely affected under the "doing business" or tax laws of such state
if such action is taken in its name, then the Master Servicer shall join with
the Trustee in the appointment of a co-trustee pursuant to Section 9.11 hereof.
In the performance of its duties hereunder, the Master Servicer shall be an
independent contractor and shall not, except in those instances where it is
taking action in the name of the Trustee, be deemed to be the agent of the
Trustee.
The Trustee shall execute and deliver to the related Servicer any court
pleadings, requests for trustee's sale or other documents necessary or desirable
or relating to (i) the foreclosure or trustee's sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the related Mortgage Note or related Mortgage; (iii) obtaining a deficiency
judgment against the related Mortgagor; or (iv) enforcing any other rights or
remedies provided by a Mortgage Note or related Mortgage or otherwise available
at law or equity.
Section 3.06. Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the related Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
related Servicer to enforce such clauses in accordance with the related
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 related Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the related Servicing Agreement.
Section 3.07. Release of Mortgage Files. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the related Servicer of
a notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
such Servicer will (and if such Servicer does not, then the Master Servicer
may), if required under the related Servicing Agreement, promptly furnish to the
Custodian, on behalf of the Trustee, two copies of a certification substantially
in the form of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the related Protected Account
maintained by
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such Servicer pursuant to Section 4.01 or by such Servicer pursuant to the
related Servicing Agreement have been or will be so deposited) and shall request
that the Custodian, on behalf of the Trustee, deliver to such Servicer the
related Mortgage File. Upon receipt of such certification and request, the
Custodian, on behalf of the Trustee, shall promptly release the related Mortgage
File to the related Servicer, and the Trustee and Custodian shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, the related Servicer is authorized to give, as agent for the Trustee,
as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the related Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the related Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by the related Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of the related Servicer or the Master Servicer, and delivery to the
Custodian, on behalf of the Trustee, of two copies of a Request for Release
signed by a Servicing Officer substantially in the form of Exhibit D (or in a
mutually agreeable electronic format which will, in lieu of a signature on its
face, originate from a Servicing Officer), release the related Mortgage File
held in its possession or control to such Servicer or the Master Servicer, as
applicable. Such trust receipt shall obligate the related Servicer or the Master
Servicer to return the Mortgage File to the Custodian on behalf of the Trustee
when the need therefor by such Servicer or the Master Servicer no longer exists,
unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
Mortgage File shall be released by the Custodian, on behalf of the Trustee, to
the related Servicer or the Master Servicer.
(c) The Master Servicer hereby covenants that it shall not alter the
codes referenced in Section 4(c) of the Mortgage Loan Purchase Agreement or in
Section 4(c) of any Subsequent Mortgage Loan Purchase Agreement, with respect to
any Mortgage Loan during the term of this Agreement, unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
Section 3.08. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
(a) The Master Servicer shall transmit and the Servicers (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or the Servicers from time to time as are required by the terms
hereof, or in the case of the Servicers, the related Servicing Agreement, to be
delivered to the Trustee or Custodian. Any funds received by the Master Servicer
or by the related Servicer in respect of any Mortgage Loan or which otherwise
are collected by the Master Servicer or by such Servicer as Liquidation Proceeds
or Insurance
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Proceeds in respect of any Mortgage Loan shall be held for the benefit of the
Trustee and the Certificateholders subject to the Master Servicer's right to
retain the Master Servicing Compensation and other amounts provided in this
Agreement, and to the right of such Servicer to retain its Servicing Fee and
other amounts as provided in the related Servicing Agreement. The Master
Servicer shall, and (to the extent provided in the related Servicing Agreement)
shall cause the Servicers to, provide access to information and documentation
regarding the Mortgage Loans to the Trustee, the Securities Administrator and
their respective agents and accountants at any time upon reasonable request and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and the Servicers shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the related Servicing Agreement.
Section 3.09. Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer under the related Servicing Agreement to maintain or
cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreement. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
related Servicing Agreement and that no earthquake or other additional insurance
is to be required of any Mortgagor or to be maintained on property acquired in
respect of a defaulted Mortgage Loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Section 4.01, any amounts collected by a Servicer or
the Master Servicer under any insurance policies (other than amounts to be
applied to the restoration or repair of the property subject to the related
Mortgage or released to the Mortgagor in accordance with the related Servicing
Agreement) shall be deposited into the Distribution Account, subject to
withdrawal pursuant to Section 4.03. Any cost incurred by the Master Servicer or
the related 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
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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 Sections 4.01 and 4.03.
Section 3.10. Presentment of Claims and Collection of Proceeds. The
Master Servicer shall (to the extent provided in the Servicing Agreements) cause
each Servicer to prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Distribution Account upon receipt, except
that any amounts realized that are to be applied to the repair or restoration of
the related Mortgaged Property as a condition precedent to the presentation of
claims on the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).
Section 3.11. Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit a Servicer (to the
extent such action is prohibited under the related Servicing Agreement) to take,
any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer (to the extent
required under the related Servicing Agreement) to keep in force and effect (to
the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance) primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit a
Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer
(to the extent required under the related Servicing Agreement) to present, on
behalf of the Trustee and the Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Any amounts
collected by the Master Servicer or the related Servicer under any Primary
Mortgage Insurance Policies shall be deposited in the Distribution Account,
subject to withdrawal pursuant to Section 4.03.
Section 3.12. Trustee to Retain Possession of Certain Insurance
Policies and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of any
Primary Mortgage Insurance Policies, or certificate of insurance, if applicable,
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts distributable
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in respect of the Certificates have been distributed in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee (or the Custodian, as directed
by the Trustee), upon the execution or receipt thereof the originals of any
Primary Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the related Servicing Agreement.
Section 3.14. Compensation for the Servicers and the Master Servicer.
The Master Servicer will be entitled to the sum of (i) the Master
Servicing Fee Rate multiplied by the Scheduled Principal Balance of each related
Mortgage Loan as of the Due Date in the month preceding the month in which the
related Distribution Date occurs (the "Master Servicing Fee") and (ii) all
income and gain realized from any investment of funds in the Distribution
Account with respect to the related Distribution Date (clauses (i) and (ii)
collectively, the "Master Servicing Compensation"). Servicing compensation in
the form of assumption fees, if any, late payment charges, as collected, if any,
or otherwise (but not including any prepayment premium or penalty) shall be
retained by the related Servicer and shall not be deposited in the related
Protected Account. The Master Servicer will be entitled to retain, as additional
compensation, any interest remitted by the related Servicer in connection with a
Principal Prepayment in full or otherwise in excess of amounts required to be
remitted to the Distribution Account. The Master Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor except as provided in this
Agreement.
Section 3.15. REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
Servicing Agreements, cause the related Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall cause the related
Servicer to protect and conserve such REO Property in the manner and to the
extent required by the related Servicing Agreement, in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
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(b) The Master Servicer shall, to the extent required by the Servicing
Agreements, cause the related Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the related
Protected Account.
(c) The Master Servicer and the related Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Master Servicing Fee or Servicing Fees from Liquidation Proceeds
received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Monthly Advances as well as any unpaid
Master Servicing Fee 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) To the extent provided in the Servicing Agreements, the Liquidation
Proceeds from the final disposition of the REO Property, net of any payment to
the Master Servicer and the related Servicer as provided above, shall be
deposited in the related Protected Account on or prior to the Determination Date
in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the
Distribution Account on the next succeeding Servicer Remittance Date.
Section 3.16. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 1 of each year, commencing on March 1, 2005, an
Officer's Certificate, certifying that with respect to the year ending December
31 of the prior year: (i) such Servicing Officer has reviewed the activities of
such Master Servicer during the preceding calendar year or portion thereof and
its performance under this Agreement, (ii) to the best of such Servicing
Officer's knowledge, based on such review, such Master Servicer has performed
and fulfilled its duties, responsibilities and obligations under this Agreement
in all material respects throughout such year, or, if there has been a default
in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, and (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that a Servicer has failed to
perform any of its duties, responsibilities and obligations under the related
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 3.17. Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent
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certified public accountants to furnish a statement to the Trustee, the Rating
Agencies and the Depositor on or before March 1 of each year, commencing on
March 1, 2005, to the effect that, with respect to the most recently ended
fiscal year, such firm has examined certain records and documents relating to
the Master Servicer's performance of its servicing obligations under this
Agreement and pooling and servicing and trust agreements in material respects
similar to this Agreement and to each other and that, on the basis of such
examination conducted substantially in compliance with the Audit Program for
Mortgages Serviced for Xxxxxxx Mac or the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Master Servicer's
activities have been conducted in compliance with this Agreement, or that such
examination has disclosed no material items of noncompliance except for (i) such
exceptions as such firm believes to be immaterial, (ii) such other exceptions as
are set forth in such statement and (iii) such exceptions that the Uniform
Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages Serviced by Xxxxxxx Mac requires it to report. Copies of such
statements shall be provided by the Master Servicer to any Certificateholder
upon request, or by the Trustee at the expense of the Master Servicer if the
Master Servicer shall fail to provide such copies. If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.
Section 3.18. Reports Filed with Securities and Exchange Commission.
(a) Within 15 days after each Distribution Date, the Securities Administrator
shall, in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("XXXXX"), a Form 8-K (or other
comparable form containing the same or comparable information, or other
information mutually agreed upon) with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30 in any year, the Securities Administrator shall, in accordance with
industry standards and only if instructed by the Depositor, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to (i)
March 15, 2005 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 15 of each year thereafter, the Master Servicer shall
provide the Securities Administrator with a Master Servicer Certification,
together with a copy of the annual independent accountant's servicing report and
annual statement of compliance of each Servicer, in each case, required to be
delivered pursuant to the related Servicing Agreement, and, if applicable, the
annual statement of compliance and the annual independent accountant's servicing
report to be delivered by the Master Servicer pursuant to Sections 3.16 and
3.17. Prior to (i) March 31, 2005, or such earlier filing date as may be
required by the Commission, and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, March 31 of each year thereafter, or such earlier
filing date as may be required by the Commission, the Securities Administrator
shall prepare and file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust. Such Form 10-K shall include the Master
Servicer Certification and other documentation provided by the Master Servicer
pursuant to the second preceding sentence. The Depositor hereby grants to the
Securities Administrator a limited power of attorney to execute and file each
such document on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to the
Securities Administrator, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement and the Mortgage Loans as the Securities Administrator reasonably
deems
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appropriate to prepare and file all necessary reports with the Commission.
The Securities Administrator shall have no responsibility to file any items
other than those specified in this Section 3.18; provided, however, the
Securities Administrator will cooperate with the Depositor in connection with
any additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) The Master Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Master Servicer's
obligations under this Section 3.18 or the Master Servicer's negligence, bad
faith or willful misconduct in connection therewith. Fees and expenses incurred
by the Master Servicer in connection with this Section 3.18 shall not be
reimbursable from the Trust Fund.
Section 3.19. EMC. On the Closing Date, EMC will receive from the
Depositor a payment of $5,000.
Section 3.20. UCC. The Depositor shall inform the Trustee in writing of
any Uniform Commercial Code financing statements that were filed on the Closing
Date and each Subsequent Transfer Date in connection with the Trust with stamped
recorded copies of such financing statements to be delivered to the Trustee
promptly upon receipt by the Depositor. The Trustee agrees to monitor and notify
the Depositor if any continuation statements for such Uniform Commercial Code
financing statements need to be filed. If directed by the Depositor in writing,
the Trustee will file any such continuation statements solely at the expense of
the Depositor. The Depositor shall file any financing statements or amendments
thereto required by any change in the Uniform Commercial Code.
Section 3.21. Foreclosure Proceedings, and Optional Purchase of
Delinquent and Defaulted Mortgage Loans. (a) For so long as (i) the Investor
holds all of the Classes of the Private Certificates and (ii) has not forfeited
its rights set forth in Section 4.15 of the EverHome Servicing Agreement,
Section 4.15 of the EverHome Subservicing Agreement or Section 4.21 of the
Countrywide Servicing Agreement, as the case may be, the Master Servicer shall
promptly notify the Investor of its receipt of any Foreclosure Notice and any
Non-Foreclosure Notice.
(b) From and after the date of the Expiration Notice, EMC Mortgage
Corporation shall have the rights set forth in clauses (c), (d) and (e) below.
(c) With respect to any Mortgage Loan which as of the first day of a
Fiscal Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase such Mortgage Loan from the Trust
at a price equal to the Repurchase Price; provided, however, (i) that such
Mortgage Loan is still 90 days or more delinquent or is an REO Property as of
the date of such purchase and (ii) this purchase option, if not theretofore
exercised, shall terminate on the date prior to the last day of the related
Fiscal Quarter. This purchase option, if not exercised, shall not be thereafter
reinstated unless the delinquency is cured and the Mortgage Loan thereafter
again becomes 90 days or more delinquent or becomes an REO Property, in which
case the option shall again become exercisable as of the first day of the
related Fiscal Quarter.
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(d) In addition, EMC shall, at its option, purchase any Mortgage Loan
from the Trust if the first Due Date for such Initial Mortgage Loan is
subsequent to the Cut-off Date, or if the first Due Date for such Subsequent
Mortgage Loan is subsequent to the related Subsequent Cut-off Date, as the case
may be, and the initial Monthly Payment with respect to such Mortgage Loan is
not made within thirty (30) days of such Due Date. Such purchase shall be made
at a price equal to the Repurchase Price.
(e) If at any time EMC remits to the Paying Agent a payment for deposit
in the Distribution Account covering the amount of the Repurchase Price for such
a Mortgage Loan, and EMC provides to the Trustee and the Master Servicer a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Distribution Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of EMC, without
recourse, to EMC which shall succeed to all the Trustee's right, title and
interest in and to such Mortgage Loan, and all security and documents relative
thereto. Such assignment shall be an assignment outright and not for security.
EMC will thereupon own such Mortgage Loan, and all such security and documents,
free of any further obligation to the Trustee or the Certificateholders with
respect thereto.
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ARTICLE IV
Accounts
Section 4.01. Protected Accounts. (a) The Master Servicer shall enforce
the obligation of each respective Servicer to establish and maintain a Protected
Account in accordance with the related Servicing Agreement, with records to be
kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into which
Protected Account shall be deposited, within 48 hours (or as of such other time
specified in the related Servicing Agreement) of receipt thereof, all
collections of principal and interest on any Mortgage Loan and with respect to
any REO Property received by the related Servicer, including Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances made from
such Servicer's own funds (less servicing compensation as permitted by the
related Servicing Agreement) and all other amounts to be deposited in the
related Protected Account. Each Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by this Agreement. To the extent provided in the related
Servicing Agreement, the related Protected Account shall be held in a Designated
Depository Institution and segregated as a trust account on the books of such
institution in the name of the Trustee for the benefit of Certificateholders.
(b) To the extent provided in a Servicing Agreement, amounts on deposit
in the related Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Distribution Account, and shall be held until required for such
deposit. The income earned from Permitted Investments made pursuant to this
Section 4.01 shall be paid to the related Servicers under the related Servicing
Agreement, and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the related Servicer. Each Servicer (to the extent provided in the
related Servicing Agreement) shall deposit the amount of any such loss in the
related Protected Account within two Business Days of receipt of notification of
such loss but not later than the second Business Day prior to the Distribution
Date on which the moneys so invested are required to be distributed to the
Certificateholders.
(c) To the extent provided in a Servicing Agreement and subject to this
Article IV, on or before each Servicer Remittance Date, the Master Servicer
shall (if acting as a successor servicer to a Servicer), or shall cause the
related Servicer to, withdraw or shall cause to be withdrawn from the related
Protected Account, and shall immediately deposit or cause to be deposited in the
Distribution Account, amounts representing the following collections and
payments (other than with respect to principal of or interest on the Initial
Mortgage Loans due on or before the Cut-off Date, and other than with respect to
principal of or interest on the Subsequent Mortgage Loans due on or before the
related Subsequent Cut-off Date, as the case may be) with respect to each
Mortgage Loan serviced by it:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the related Servicer pursuant to
the related Servicing Agreement which were due on or before the related
Due Date, net of the amount thereof
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comprising the related Servicing Fee or any fees with respect to any
lender-paid primary mortgage insurance policy;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the related Servicer with respect to such Mortgage Loans in
the related Prepayment Period (or, in the case of Subsequent
Recoveries, during the related Due Period), with interest to the date
of prepayment or liquidation, net of the amount thereof comprising the
related Servicing Fee;
(iii) Partial Principal Prepayments received by the related
Servicer for such Mortgage Loans in the related Prepayment Period;
(iv) All funds collected and received in connection with the
operation of any REO Property, and Liquidation Proceeds received upon
the final disposition of any REO Property (net of any unreimbursed
Monthly Advances, other advances of the related Servicer or Master
Servicer with respect thereto, and unpaid Master Servicing Fee and
related Servicing Fees with respect thereto); and
(v) Any amount to be used as a Monthly Advance.
(d) Withdrawals may be made from a Protected Account only to make
remittances as provided in Section 4.01(c); to reimburse the Master Servicer or
the related Servicer for Monthly Advances which have been recovered by
subsequent collection from the related Mortgagor; to remove amounts deposited in
error; to remove fees, charges or other such amounts deposited on a temporary
basis; or to clear and terminate the account at the termination of this
Agreement in accordance with Section 10.01. As provided in Section 4.01(c),
certain amounts otherwise due to the related Servicers may be retained by them
and need not be deposited in the Distribution Account.
Section 4.02. Distribution Account. (a) The Paying Agent shall
establish and maintain in the name of the Paying Agent, for the benefit of the
Certificateholders, the Distribution Account as a segregated trust account or
accounts.
(b) All amounts deposited to the Distribution Account shall be held by
the Paying Agent in the name of the Paying Agent in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Paying Agent. The Distribution Account
shall be an Eligible Account. The Distribution Account and the funds deposited
therein shall not be subject to, and shall be protected from, all claims, liens,
and encumbrances of any creditors or depositors of the Trustee, the Paying
Agent, the Securities Administrator or the Master Servicer (whether made
directly, or indirectly through a liquidator or receiver of the Trustee, the
Paying Agent, the Securities Administrator or the Master Servicer). The amount
at any time credited to the Distribution Account shall, if invested, be invested
in the name of the Trustee, in such Permitted Investments selected by the Master
Servicer. All Permitted Investments shall mature or be subject to redemption or
withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Paying
Agent or, if such
70
obligor is any other Person, the Business Day preceding such Distribution Date.
All investment earnings from Permitted Investments in the Distribution Account
from time to time shall be for the account of the Master Servicer. The Master
Servicer shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Distribution Account on each Distribution Date. If
there is any loss on a Permitted Investment or demand deposit, the Master
Servicer shall promptly remit the amount of the loss to the Paying Agent, who
shall deposit such amount in the Distribution Account. With respect to the
Distribution Account and the funds deposited therein, the Paying Agent shall
take such action as may be necessary to ensure that the Certificateholders shall
be entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Paying Agent) as provided by 12 U.S.C. ss.
92a(e), and applicable regulations pursuant thereto, if applicable, or any
applicable comparable state statute applicable to state chartered banking
corporations.
Section 4.03. Permitted Withdrawals and Transfers from the Distribution
Account. (a) The Paying Agent will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to the related Servicing
Agreement or this Agreement or as the Securities Administrator has instructed
hereunder for the following purposes:
(i) to reimburse the Master Servicer or the related Servicer
for any Monthly Advance of its own funds or any advance of such Master
Servicer's or Servicer's own funds, the right of the Master Servicer or
a Servicer to reimbursement pursuant to this subclause (i) being
limited to amounts received on a particular Mortgage Loan (including,
for this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late payments or recoveries of
the principal of or interest on such Mortgage Loan respecting which
such Monthly Advance or advance was made;
(ii) to reimburse the Master Servicer or the related Servicer
from Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master Servicer or
the related Servicer in good faith in connection with the restoration
of the related Mortgaged Property which was damaged by an Uninsured
Cause or in connection with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or the related Servicer
from Insurance Proceeds relating to a particular Mortgage Loan for
insured expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer or the related Servicer from Liquidation
Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to such Mortgage Loan; provided that the Master
Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any
amounts with respect to such Mortgage Loan were paid as Excess
Liquidation Proceeds pursuant to clause (x) of this Subsection 4.03(a)
to the Master Servicer, and (ii) such Liquidation Expenses were not
included in the computation of such Excess Liquidation Proceeds;
71
(iv) to pay the Master Servicer or the related Servicer, as
appropriate, from Liquidation Proceeds or Insurance Proceeds received
in connection with the liquidation of any Mortgage Loan, the amount
which the Master Servicer or the related Servicer would have been
entitled to receive under subclause (xi) of this Subsection 4.03(a) as
servicing compensation on account of each defaulted Scheduled Payment
on such Mortgage Loan if paid in a timely manner by the related
Mortgagor;
(v) to pay the Master Servicer or the related Servicer from
the Repurchase Price for any Mortgage Loan, the amount which the Master
Servicer or the related Servicer would have been entitled to receive
under subclause (xi) of this Subsection 4.03(a) as servicing
compensation;
(vi) to reimburse the Master Servicer or the related Servicer
for advances of funds, and the right to reimbursement pursuant to this
subclause being limited to amounts received on the related Mortgage
Loan (including, for this purpose, the Repurchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late
recoveries of the payments for which such advances were made;
(vii) to reimburse the Master Servicer or the related Servicer
for any Monthly Advance or advance, after a Realized Loss has been
allocated with respect to the related Mortgage Loan, if the Monthly
Advance or advance has not been reimbursed pursuant to clauses (i) and
(vi);
(viii) to pay the Master Servicer as set forth in Section
3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections
3.03, 7.04(c) and 7.04 (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not
retained by the related Servicer;
(xi) to reimburse or pay a Servicer any such amounts as are
due thereto under the related Servicing Agreement and have not been
retained by or paid to such Servicer, to the extent provided in the
related Servicing Agreement;
(xii) to reimburse or pay the Trustee, the Securities
Administrator or the Custodian for fees, expenses, costs and
liabilities incurred by and reimbursable or payable to it pursuant to
this Agreement and not otherwise reimbursable or payable to it;
(xiii) to remove amounts deposited in error;
(xiv) to clear and terminate the Distribution Account pursuant
to Section 10.01; and
(xv) on the first Distribution Date, to withdraw an amount
equal to the Class X-1 Payment and the Class X-2 Payment from the
Distribution Account and distribute such amount to the holders of the
Class X-1 Certificates and the Class X-2 Certificates, respectively.
72
(b) The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vii), inclusive, and (x).
(c) On each Distribution Date, the Paying Agent shall distribute the
Available Funds to the extent on deposit in the Distribution Account for each
Loan Group to the Holders of the Certificates in accordance with distribution
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Distribution Date and determined by the Securities
Administrator in accordance with Section 6.01.
Section 4.04. Group I Pre-Funding Account and Group I Pre-Funding
Reserve Account.(a) No later than the Closing Date, the Paying Agent shall
establish and maintain a segregated trust account or sub-account of a trust
account, which shall be titled "Group I Pre-Funding Account, JPMorgan Chase
Bank, N.A., as trustee for the registered holders of Structured Asset Mortgage
Investments II Trust 2004-AR8, Mortgage Pass-Through Certificates, Series
2004-AR8" (the "Group I Pre-Funding Account"). The Group I Pre-Funding Account
shall be an Eligible Account or a sub-account of an Eligible Account. The Paying
Agent shall, promptly upon receipt, deposit in the Group I Pre-Funding Account
and retain therein the Group I Pre-Funded Amount remitted on the Closing Date to
the Paying Agent by the Depositor. Funds deposited in the Group I Pre-Funding
Account shall be held in trust by the Paying Agent for the Class A-1
Certificateholders for the uses and purposes set forth herein.
(b) The Paying Agent will invest funds deposited in the Group I
Pre-Funding Account as directed by the Depositor or its designee in writing in
Permitted Investments with a maturity date (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Paying
Agent or an Affiliate of the Paying Agent manages or advises such investment, or
(ii) no later than the date on which such funds are required to be withdrawn
from such account or sub-account of a trust account pursuant to this Agreement,
if the Paying Agent or an Affiliate of the Paying Agent manages or advises such
investment (or, if no written direction is received by the Paying Agent from the
Depositor, then funds in such account shall remain uninvested). For federal
income tax purposes, the Depositor or its designee shall be the owner of the
Group I Pre-Funding Account and shall report all items of income, deduction,
gain or loss arising therefrom. All income and gain realized from investment of
funds deposited in the Group I Pre-Funding Account shall be transferred to the
Group I Interest Coverage Account at the following times: (i) on the Business
Day immediately preceding each Distribution Date, if a Person other than the
Paying Agent or an Affiliate of the Paying Agent manages or advises such
investment, or on each Distribution Date, if the Paying Agent or an Affiliate of
the Paying Agent manages or advises such investment, (ii) on the Business Day
immediately preceding each Subsequent Transfer Date, if a Person other than the
Paying Agent or an Affiliate of the Paying Agent manages or advises such
investment, or on each Subsequent Transfer Date, if the Paying Agent or an
Affiliate of the Paying Agent manages or advises such investment or (iii) within
one (1) Business Day of the Paying Agent's receipt thereof. Such transferred
funds shall not constitute income and gain for purposes of Section 4.05(b)
hereof. The Depositor or its designee shall deposit in the Group I Pre-Funding
Account the amount of any net loss incurred in respect of any such Permitted
Investment immediately upon realization of such loss without any right of
73
reimbursement therefor. At no time will the Group I Pre-Funding Account be an
asset of any REMIC created hereunder.
(c) Amounts on deposit in the Group I Pre-Funding Account shall be
withdrawn by the Paying Agent as follows:
(i) On any Subsequent Transfer Date, the Paying Agent shall
withdraw from the Group I Pre-Funding Account an amount equal to 100%
of the Scheduled Principal Balances of the Group I Subsequent Mortgage
Loans transferred and assigned to the Trustee on such Subsequent
Transfer Date, and shall pay such amount to or upon the order of the
Seller upon satisfaction of the conditions set forth in Section 2.07
with respect to such transfer and assignment;
(ii) If the amount on deposit in the Group I Pre-Funding
Account (exclusive of investment income) has not been reduced to zero
by the close of business on the date of termination of the Pre-Funding
Period, then at the close of business on such date, the Paying Agent
shall deposit into the Group I Pre-Funding Reserve Account any amounts
remaining in the Group I Pre-Funding Account (exclusive of investment
income) for distribution in accordance with the terms hereof;
(iii) To withdraw any amount not required to be deposited in
the Group I Pre-Funding Account or deposited therein in error; and
(iv) Upon the earliest of (i) the reduction of the Current
Principal Amount of the Certificates to zero or (ii) the termination of
this Agreement in accordance with Section 10.01, to withdraw (and
deposit in the Group I Pre-Funding Reserve Account) any amount
remaining on deposit in the Group I Pre-Funding Account for payment to
the Class A-1 Certificateholders, and any remaining amount shall
thereafter be paid to the Depositor.
Withdrawals pursuant to clauses (i), (ii) and (iv) shall be treated as
contributions of cash to REMIC I on the date of withdrawal.
(d) No later than the Closing Date, the Paying Agent shall establish
and maintain a segregated trust account or a sub-account of a trust account,
which shall be titled "Group I Pre-Funding Reserve Account, JPMorgan Chase Bank,
N.A., as trustee for the registered holders of Structured Asset Mortgage
Investments II Trust 2004-AR8, Mortgage Pass-Through Certificates, Series
2004-AR8" (the "Group I Pre-Funding Reserve Account"). The Group I Pre-Funding
Reserve Account shall be an Eligible Account or a sub-account of an Eligible
Account. The Paying Agent shall, at the close of business on the day of the
termination of the Pre-Funding Period, deposit in the Group I Pre-Funding
Reserve Account and retain therein any funds remaining in the Group I
Pre-Funding Account at the close of business on such day. Funds deposited in the
Group I Pre-Funding Reserve Account shall be held in trust by the Paying Agent
for the Certificateholders for the uses and purposes set forth herein.
(e) The Paying Agent shall not invest funds deposited in the Group I
Pre-Funding Reserve Account. The Group I Pre-Funding Reserve Account and any
funds on deposit therein shall be assets of REMIC I. The funds on deposit in the
Group I Pre-Funding Reserve Account
74
shall, on the Distribution Date immediately following the termination of the
Pre-Funding Period, be transferred by the Paying Agent to the Distribution
Account to be included as part of principal distributions to the Class A-1
Certificateholders on such Distribution Date.
Section 4.05. Group I Interest Coverage Account. (a) No later than the
Closing Date, the Paying Agent shall establish and maintain a segregated trust
account or a sub-account of a trust account, which shall be titled "Group I
Interest Coverage Account, JPMorgan Chase Bank, N.A., as trustee for the
registered holders of Structured Asset Mortgage Investments II Trust 2004-AR8,
Mortgage Pass-Through Certificates, Series 2004-AR8" (the "Group I Interest
Coverage Account"). The Group I Interest Coverage Account shall be an Eligible
Account or a sub-account of an Eligible Account. The Paying Agent shall,
promptly upon receipt, deposit in the Group I Interest Coverage Account and
retain therein the Group I Interest Coverage Amount remitted on the Closing Date
to the Paying Agent by the Depositor, and all income and gain realized from
investment of funds deposited in the Group I Pre-Funding Account as set forth in
Section 4.04(b). Funds deposited in the Group I Interest Coverage Account shall
be held in trust by the Paying Agent for the Certificateholders for the uses and
purposes set forth herein.
(b) For federal income tax purposes, the Class X-1 Certificateholders
shall be the owner of the Group I Interest Coverage Account and shall report all
items of income, deduction, gain or loss arising therefrom. At no time will the
Group I Interest Coverage Account be an asset of any REMIC created hereunder.
All income and gain realized from investment of funds deposited in the Group I
Interest Coverage Account, which investment shall be made solely upon the
written direction of the Class X-1 Certificateholders, shall be for the sole and
exclusive benefit of the Class X-1 Certificateholders and shall be remitted by
the Paying Agent to the Class X-1 Certificateholders no later than the first
Distribution Date following receipt of such income and gain by the Paying Agent.
If no written direction with respect to such investment shall be received by the
Paying Agent from the Class X-1 Certificateholders, then funds in such Account
shall remain uninvested. The Class X-1 Certificateholders shall deposit in the
Group I Interest Coverage Account the amount of any net loss incurred in respect
of any such Permitted Investment immediately upon realization of such loss.
(c) On each Distribution Date during the Pre-Funding Period and on the
day of termination of the Pre-Funding Period, the Paying Agent shall withdraw
from the Group I Interest Coverage Account and deposit in the Distribution
Account an amount equal to 30 days' interest on the excess, if any, of the Group
I Pre-Funded Amount over the aggregate Scheduled Principal Balance of Group I
Subsequent Mortgage Loans that both (i) had a Due Date during the Due Period
relating to such Distribution Date or the Distribution Date following the end of
the Pre-Funding Period, as applicable, and (ii) had a Subsequent Cut-off Date
prior to the first day of the month in which such Distribution Date occurs, at a
per annum rate equal to the weighted average of the Net Rates of those Group I
Subsequent Mortgage Loans. Such withdrawal and deposit shall be treated as a
contribution of cash by the Depositor to REMIC I on the date thereof.
Immediately following any such withdrawal and deposit, and immediately following
the conveyance of any Group I Subsequent Mortgage Loans to the Trust on any
Subsequent Transfer Date, the Paying Agent shall withdraw from the Group I
Interest Coverage Account and remit to the Depositor or its designee an amount
equal to the excess, if any, of the amount remaining in such Group I Interest
Coverage Account over the amount that would be required to be withdrawn
therefrom (assuming sufficient funds therein) pursuant to the second preceding
sentence on each
75
subsequent Distribution Date, if any, that will occur during the Pre-Funding
Period or on the day of termination of the Pre-Funding Period, if no Group I
Subsequent Mortgage Loans were acquired by the Trust Fund after the end of the
Prepayment Period relating to the current Distribution Date or the Distribution
Date following the end of the Pre-Funding Period, as applicable.
(d) Upon the earliest of (i) the Distribution Date immediately
following the end of the Pre-Funding Period, (ii) the reduction of the principal
balances of the Certificates to zero or (iii) the termination of this Agreement
in accordance with Section 10.01, any amount remaining on deposit in the Group I
Interest Coverage Account after distributions pursuant to paragraph (c) above
shall be withdrawn by the Paying Agent and paid to the Depositor or its
designee.
Section 4.06. Group II Pre-Funding Account and Group II Pre-Funding
Reserve Account. (a) No later than the Closing Date, the Paying Agent shall
establish and maintain a segregated trust account or sub-account of a trust
account, which shall be titled "Group II Pre-Funding Account, JPMorgan Chase
Bank, N.A., as trustee for the registered holders of Structured Asset Mortgage
Investments II Trust 2004-AR8, Mortgage Pass-Through Certificates, Series
2004-AR8" (the "Group II Pre-Funding Account"). The Group II Pre-Funding Account
shall be an Eligible Account or a sub-account of an Eligible Account. The Paying
Agent shall, promptly upon receipt, deposit in the Group II Pre-Funding Account
and retain therein the Group II Pre-Funded Amount remitted on the Closing Date
to the Paying Agent by the Depositor. Funds deposited in the Group II
Pre-Funding Account shall be held in trust by the Paying Agent for the Class
A-2A and Class A-2B Certificateholders for the uses and purposes set forth
herein.
(b) The Paying Agent will invest funds deposited in the Group II
Pre-Funding Account as directed by the Depositor or its designee in writing in
Permitted Investments with a maturity date (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Paying
Agent or an Affiliate of the Paying Agent manages or advises such investment, or
(ii) no later than the date on which such funds are required to be withdrawn
from such account or sub-account of a trust account pursuant to this Agreement,
if the Paying Agent or an Affiliate of the Paying Agent manages or advises such
investment. For federal income tax purposes, the Depositor or its designee shall
be the owner of the Group II Pre-Funding Account and shall report all items of
income, deduction, gain or loss arising therefrom. All income and gain realized
from investment of funds deposited in the Group II Pre-Funding Account shall be
transferred to the Group II Interest Coverage Account at the following times:
(i) on the Business Day immediately preceding each Distribution Date, if a
Person other than the Paying Agent or an Affiliate of the Paying Agent manages
or advises such investment, or on each Distribution Date, if the Paying Agent or
an Affiliate of the Paying Agent manages or advises such investment, (ii) on the
Business Day immediately preceding each Subsequent Transfer Date, if a Person
other than the Paying Agent or an Affiliate of the Paying Agent manages or
advises such investment, or on each Subsequent Transfer Date, if the Paying
Agent or an Affiliate of the Paying Agent manages or advises such investment or
(iii) within one (1) Business Day of the Paying Agent's receipt thereof. Such
transferred funds shall not constitute income and gain for purposes of Section
4.07(b) hereof. The Depositor or its designee shall deposit in the Group II
Pre-Funding Account the amount of any net loss incurred in respect of any such
Permitted Investment
76
immediately upon realization of such loss without any right of reimbursement
therefor. At no time will the Group II Pre-Funding Account be an asset of any
REMIC created hereunder.
(c) Amounts on deposit in the Group II Pre-Funding Account shall be
withdrawn by the Paying Agent as follows:
(i) On any Subsequent Transfer Date, the Paying Agent shall
withdraw from the Group II Pre-Funding Account an amount equal to 100%
of the Scheduled Principal Balances of the Group II Subsequent Mortgage
Loans transferred and assigned to the Paying Agent for deposit in the
Group II mortgage pool on such Subsequent Transfer Date and pay such
amount to or upon the order of the Depositor upon satisfaction of the
conditions set forth in Section 2.07 with respect to such transfer and
assignment;
(ii) If the amount on deposit in the Group II Pre-Funding
Account (exclusive of investment income) has not been reduced to zero
by the close of business on the date of termination of the Pre-Funding
Period, then at the close of business on such date, the Paying Agent
shall deposit into the Group II Pre-Funding Reserve Account any amounts
remaining in the Group II Pre-Funding Account (exclusive of investment
income) for distribution in accordance with the terms hereof;
(iii) To withdraw any amount not required to be deposited in
the Group II Pre-Funding Account or deposited therein in error; and
(iv) Upon the earliest of (i) the reduction of the Current
Principal Amount of the Certificates to zero or (ii) the termination of
this Agreement in accordance with Section 10.01, to withdraw (and
deposit in the Group II Pre-Funding Reserve Account) any amount
remaining on deposit in the Group II Pre-Funding Account for payment to
the Class A-2A and Class A-2B Certificateholders, and any remaining
amount shall thereafter be paid to the Depositor.
Withdrawals pursuant to clauses (i), (ii) and (iv) shall be treated as
contributions of cash to REMIC I on the date of withdrawal.
(d) No later than the Closing Date, the Paying Agent shall establish
and maintain a segregated trust account or a sub-account of a trust account,
which shall be titled "Group II Pre-Funding Reserve Account, JPMorgan Chase
Bank, N.A., as trustee for the registered holders of Structured Asset Mortgage
Investments II Trust 2004-AR8, Mortgage Pass-Through Certificates, Series
2004-AR8" (the "Group II Pre-Funding Reserve Account"). The Group II Pre-Funding
Reserve Account shall be an Eligible Account or a sub-account of an Eligible
Account. The Paying Agent shall, at the close of business on the day of the
termination of the Pre-Funding Period, deposit in the Group II Pre-Funding
Reserve Account and retain therein any funds remaining in the Group II
Pre-Funding Account at the close of business on such day. Funds deposited in the
Group II Pre-Funding Reserve Account shall be held in trust by the Paying Agent
for the Certificateholders for the uses and purposes set forth herein.
(e) The Paying Agent shall not invest funds deposited in the Group II
Pre-Funding Reserve Account. The Group II Pre-Funding Reserve Account and any
funds on deposit therein shall be assets of REMIC I. The funds on deposit in the
Group II Pre-Funding Reserve Account
77
shall, on the Distribution Date immediately following the termination of the
Pre-Funding Period, be transferred by the Paying Agent to the Distribution
Account to be included as part of principal distributions to the Class A-2A and
Class A-2B Certificateholders on such Distribution Date.
Section 4.07. Group II Interest Coverage Account. (a) No later than the
Closing Date, the Paying Agent shall establish and maintain a segregated trust
account or a sub-account of a trust account, which shall be titled "Group II
Interest Coverage Account, JPMorgan Chase Bank, N.A., as trustee for the
registered holders of Structured Asset Mortgage Investments II Trust 2004-AR8,
Mortgage Pass-Through Certificates, Series 2004-AR8" (the "Group II Interest
Coverage Account"). The Group II Interest Coverage Account shall be an Eligible
Account or a sub-account of an Eligible Account. The Paying Agent shall,
promptly upon receipt, deposit in the Group II Interest Coverage Account and
retain therein the Group II Interest Coverage Amount remitted on the Closing
Date to the Paying Agent by the Depositor. Funds deposited in the Group II
Interest Coverage Account shall be held in trust by the Paying Agent for the
Class A-2A and Class A-2B Certificateholders for the uses and purposes set forth
herein.
(b) For federal income tax purposes, the Class X-2 Certificateholders
shall be the owner of the Group II Interest Coverage Account and shall report
all items of income, deduction, gain or loss arising therefrom. At no time will
the Group II Interest Coverage Account be an asset of any REMIC created
hereunder. All income and gain realized from investment of funds deposited in
the Group II Interest Coverage Account, which investment shall be made solely
upon the written direction of the Class X-2 Certificateholders, shall be for the
sole and exclusive benefit of the Class X-2 Certificateholders and shall be
remitted by the Paying Agent to the Class X-2 Certificateholders no later than
the first Business Day following receipt of such income and gain by the Paying
Agent. The Class X-2 Certificateholders shall deposit in the Group II Interest
Coverage Account the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss.
(c) On each Distribution Date during the Pre-Funding Period and on the
day of termination of the Pre-Funding Period, the Paying Agent shall withdraw
from the Group II Interest Coverage Account and deposit in the Distribution
Account an amount equal to 30 days' interest on the excess, if any, of the Group
II Pre-Funded Amount over the aggregate Scheduled Principal Balance of Group II
Subsequent Mortgage Loans that both (i) had a Due Date during the Due Period
relating to such Distribution Date or the Distribution Date following the end of
the Pre-Funding Period, as applicable, and (ii) had a Subsequent Cut-off Date
prior to the first day of the month in which such Distribution Date occurs, at a
per annum rate equal to the weighted average of the Net Rates of those
Subsequent Mortgage Loans. Such withdrawal and deposit shall be treated as a
contribution of cash by the Depositor to REMIC I on the date thereof.
Immediately following any such withdrawal and deposit, and immediately following
the conveyance of any Group II Subsequent Mortgage Loans to the Trust on any
Subsequent Transfer Date, the Paying Agent shall withdraw from the Group II
Interest Coverage Account and remit to the Depositor or its designee an amount
equal to the excess, if any, of the amount remaining in such Group II Interest
Coverage Account over the amount that would be required to be withdrawn
therefrom (assuming sufficient funds therein) pursuant to the second preceding
sentence on each subsequent Distribution Date, if any, that will occur during
the Pre-Funding Period or on the day of termination of the Pre-Funding Period,
if no Group II Subsequent Mortgage Loans were acquired by the Trust Fund after
the end of the Prepayment Period relating
78
to the current Distribution Date or the Distribution Date following the end of
the Pre-Funding Period, as applicable.
(d) Upon the earliest of (i) the Distribution Date immediately
following the end of the Pre-Funding Period, (ii) the reduction of the principal
balances of the Certificates to zero or (iii) the termination of this Agreement
in accordance with Section 10.01, any amount remaining on deposit in the Group
II Interest Coverage Account after distributions pursuant to paragraph (c) above
shall be withdrawn by the Paying Agent and paid to the Depositor or its
designee.
Section 4.08. Distribution of Group I Carryover Shortfall Amount; Group
I Carryover Shortfall Reserve Fund.
(a) On the Closing Date, the Paying Agent shall establish and maintain
in its name, in trust for the benefit of Class A-1, Class M, Class B-1, Class
B-2 and Class B-3 Certificates, the Group I Carryover Shortfall Reserve Fund.
The Paying Agent shall, promptly upon receipt, deposit in the Group I Carryover
Shortfall Reserve Fund an amount equal to $5,000 to be remitted on the Closing
Date to the Paying Agent by the Depositor. On each Distribution Date, the Paying
Agent shall transfer from the Distribution Account to the Group I Carryover
Shortfall Reserve Fund the amounts specified pursuant to Section 6.01(a)(A) and
(B). On each Distribution Date, to the extent required, the Paying Agent shall
make withdrawals from the Group I Carryover Shortfall Reserve Fund and use the
amounts in the Group I Carryover Shortfall Reserve Fund to make distributions to
the Class A-1, Class M, Class B-1, Class B-2 and Class B-3 Certificates, in an
amount equal to the amount of any Group I Carryover Shortfall Amount on such
Certificate. Any such amounts transferred shall be treated for federal tax
purposes as amounts distributed by REMIC III to the Class X-1 Certificateholders
as transferee thereof. For federal tax return and information reporting
purposes, the rights of the Holders of the Class A-1, Class M, Class B-1, Class
B-2 and Class B-3 Certificates to receive such distributions shall be assigned a
value determined by the Depositor and reported by it to the Securities
Administrator.
(b) The Group I Carryover Shortfall Reserve Fund shall be an Eligible
Account. Amounts held in the Group I Carryover Shortfall Reserve Fund from time
to time shall continue to constitute assets of the Trust Fund, but not of the
REMICs, until released from the Group I Carryover Shortfall Reserve Fund
pursuant to this Section 4.08. The Group I Carryover Shortfall Reserve Fund
constitutes an "outside reserve fund" within the meaning of Treasury Regulation
ss. 1.860G-2(h) and is not an asset of the REMICs. The Class X-1
Certificateholders shall be the owners of the Group I Carryover Shortfall
Reserve Fund, and for all federal tax purposes, amounts transferred by the
REMICs to the Group I Carryover Shortfall Reserve Fund shall be treated as
amounts distributed by the REMICs to the Class X-1 Certificateholders. The
Paying Agent shall keep records that accurately reflect the funds on deposit in
the Group I Carryover Shortfall Reserve Fund.
(c) The Paying Agent will invest funds deposited in the Group I
Carryover Shortfall Reserve Fund as directed by the Class X-1 Certificateholders
in writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Paying Agent or an Affiliate of the Paying Agent manages or advises
such
79
investment, or (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Paying Agent
or an Affiliate of the Paying Agent manages or advises such investment. If no
written direction with respect to such investment shall be received by the
Paying Agent from the Class X-1 Certificateholders, then funds in such Account
shall remain uninvested. All income and gain realized from investment of funds
deposited in the Group I Carryover Shortfall Reserve Fund shall be for the sole
and exclusive benefit of the Class X-1 Certificateholders and shall be remitted
by the Paying Agent to the Class X-1 Certificateholders no later than the first
Business Day following receipt of such income and gain by the Paying Agent. The
Class X-1 Certificateholders shall deposit in the Group I Carryover Shortfall
Reserve Fund the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss without any right
of reimbursement therefor.
Section 4.09. Distribution of Group II Carryover Shortfall Amount;
Group II Carryover Shortfall Reserve Fund. (a) On the Closing Date, the Paying
Agent shall establish and maintain in its name, in trust for the benefit of the
Class A-2B Certificates, the Group II Carryover Shortfall Reserve Fund. The
Paying Agent shall, promptly upon receipt, deposit in the Group II Carryover
Shortfall Reserve Fund an amount equal to $5,000 to be remitted on the Closing
Date to the Paying Agent by the Depositor. On each Distribution Date, the Paying
Agent shall transfer from the Distribution Account to the Group II Carryover
Shortfall Reserve Fund the amounts specified pursuant to Section 6.01(a)(B). On
each Distribution Date, to the extent required, the Paying Agent shall make
withdrawals from the Group II Carryover Shortfall Reserve Fund and use the
amounts in the Group II Carryover Shortfall Reserve Fund to make distributions
to the Class A-2B Certificates, in an amount equal to the amount of any Group II
Carryover Shortfall Amount on such Certificate. Any such amounts transferred
shall be treated for federal tax purposes as amounts distributed by REMIC II to
the Class X-2 Certificateholders as transferee thereof. For federal tax return
and information reporting purposes, the rights of the Holders of the Class A-2B
Certificates to receive such distributions shall be assigned a value determined
by the Depositor and reported by it to the Securities Administrator.
(b) The Group II Carryover Shortfall Reserve Fund shall be an Eligible
Account. Amounts held in the Group II Carryover Shortfall Reserve Fund from time
to time shall continue to constitute assets of the Trust Fund, but not of the
REMICs, until released from the Group II Carryover Shortfall Reserve Fund
pursuant to this Section 4.09. The Group II Carryover Shortfall Reserve Fund
constitutes an "outside reserve fund" within the meaning of Treasury Regulation
ss. 1.860G-2(h) and is not an asset of the REMICs. The Class X-2
Certificateholders shall be the owners of the Group II Carryover Shortfall
Reserve Fund, and for all federal tax purposes, amounts transferred by the
REMICs to the Group II Carryover Shortfall Reserve Fund shall be treated as
amounts distributed by the REMICs to the Class X-2 Certificateholders. The
Paying Agent shall keep records that accurately reflect the funds on deposit in
the Group II Carryover Shortfall Reserve Fund.
(c) The Paying Agent will invest funds deposited in the Group II
Carryover Shortfall Reserve Fund as directed by the Class X-2 Certificateholders
in writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Paying Agent or an Affiliate of the Paying Agent manages or advises
such
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investment, or (ii) no later than the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if the Paying
Agent or an Affiliate of the Paying Agent manages or advises such investment. If
no written direction with respect to such investment shall be received by the
Paying Agent from the Class X-2 Certificateholders, then funds in such Account
shall remain uninvested. All income and gain realized from investment of funds
deposited in the Group II Carryover Shortfall Reserve Fund shall be for the sole
and exclusive benefit of the Class X-2 Certificateholders and shall be remitted
by the Paying Agent to the Class X-2 Certificateholders no later than the first
Business Day following receipt of such income and gain by the Paying Agent. The
Class X-2 Certificateholders shall deposit in the Group II Carryover Shortfall
Reserve Fund the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss without any right
of reimbursement therefor.
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ARTICLE V
Certificates
Section 5.01. Certificates (a) The Depository and the Depositor have
entered into a Depository Agreement dated as of the Closing Date (the
"Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Subsection
5.01(b), the Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Certificate Registrar except to a
successor to the Depository; (ii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iii) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (iv)
the Certificate Registrar, as agent of the Depositor, shall deal with the
Depository as representative of such Certificate Owners of the respective Class
of Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Certificate Registrar, as
agent of the Depositor, may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Certificate Registrar cause such Class
to become Global Certificates, the Certificate Registrar and the Depositor will
take such action as may be reasonably required to cause the Depository to accept
such Class or Classes for trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Depositor advises the Certificate Registrar in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository and (B) the Certificate Registrar or the
Depositor is unable to locate a qualified successor within 30 days or (ii) the
Depositor at its option advises the Certificate Registrar, as agent of the
Depositor, in writing that it elects to terminate the book-entry system through
the Depository, the Certificate Registrar, as agent of the Depositor, shall
request that the Depository notify all Certificate Owners of the occurrence of
any such event and of the availability of definitive, fully registered
Certificates to Certificate Owners requesting the same. Upon surrender to the
Certificate Registrar, as agent of the Depositor, of the Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Certificate Registrar shall issue the definitive Certificates.
In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its option
request a definitive Certificate evidencing
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such Certificate Owner's interest in the related Class of Certificates. In order
to make such request, such Certificate Owner shall, subject to the rules and
procedures of the Depository, provide the Depository or the related Depository
Participant with directions for the Certificate Registrar to exchange or cause
the exchange of the Certificate Owner's interest in such Class of Certificates
for an equivalent interest in fully registered definitive form. Upon receipt by
the Certificate Registrar, as agent of the Depositor, of instructions from the
Depository directing the Certificate Registrar to effect such exchange (such
instructions to contain information regarding the Class of Certificates and the
Current Principal Balance or Notional Amount, as applicable, being exchanged,
the registered holder of and delivery instructions for the definitive
Certificate, and any other information reasonably required by the Certificate
Registrar), (i) the Certificate Registrar shall execute and deliver, in
accordance with the registration and delivery instructions provided by the
Depository, a Definitive Certificate evidencing such Certificate Owner's
interest in such Class of Certificates and (ii) the Certificate Registrar shall
execute a new Book-Entry Certificate reflecting the reduction in the aggregate
Current Principal Balance or Notional Amount, as applicable, of such Class of
Certificates by the amount of the definitive Certificates.
Neither the Depositor nor the Certificate Registrar shall be liable for
any delay in the delivery of any instructions required pursuant to this Section
5.01(b) and may conclusively rely on, and shall be protected in relying on, such
instructions.
(c) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC I and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(i) and (y) the Class R-I Certificates, which are hereby
designated as the single "residual interest" in REMIC I.
The REMIC I Regular Interests and the Class R-I Certificate will have
the following designations, initial balances and pass-through rates:
REMIC I Interest Initial Balance Pass-Through Related Group
Rate
1A $7,424.62 (1) Group I
1B $89,999.60 (2) Group I
2A $825.40 (1) Group II
2B $10,000.40 (3) Group II
ZZZ $999,891,699.98 (1) N/A
Class R-I $50.00 (2) Group I
(1) The weighted average of the Net Rates of the Mortgage Loans (as of
the second preceding Due Date), weighted on the basis of the respective
Scheduled Principal Balance of each such Mortgage Loan as of the beginning of
the Due Period immediately preceding the related Distribution Date.
(2) The weighted average of the Net Rates of the Group I Mortgage Loans
(as of the second preceding Due Date), weighted on the basis of the respective
Scheduled Principal Balance of each such Mortgage Loan as of the beginning of
the Due Period immediately preceding the related Distribution Date.
(3) The weighted average of the Net Rates of the Group II Mortgage
Loans (as of the second preceding Due Date), weighted on the basis of the
respective Scheduled Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
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Distributions of principal shall be deemed to be made from amounts
received on the Mortgage Loans to the REMIC I Regular Interests, first, so as to
keep the Uncertificated Principal Balance of each REMIC I Regular Interest
ending with the designation "B" equal to 0.01% of the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan Group; second, to
each REMIC I Regular Interest ending with the designation "A," so that the
Uncertificated Principal Balance of each such REMIC I Regular Interest is equal
to 0.01% of the excess of (x) the aggregate Scheduled Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the Current Principal Amount
of the Senior Certificates in the related Loan Group (except that if any such
excess is a larger number than in the preceding distribution period, the least
amount of principal shall be distributed to such REMIC I Regular Interests such
that the REMIC I Subordinated Balance Ratio is maintained); and third, any
remaining principal to REMIC I Regular Interest ZZZ. Realized Losses on the
Mortgage Loans 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 I Regular Interest ending with the designation "B" equal to 0.01% of
the aggregate Scheduled Principal Balance of the Mortgage Loans in the related
Loan Group; second, to each REMIC I Regular Interest ending with the designation
"A," so that the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Scheduled
Principal Balance of the Mortgage Loans in the related Loan Group over (y) the
Current Principal Amount of the Senior Certificates in the related Loan Group
(except that if any such excess is a larger number than in the preceding
distribution period, the least amount of Realized Losses on the Mortgage Loans
shall be applied to such REMIC I Regular Interests such that the REMIC I
Subordinated Balance Ratio is maintained); and third, any remaining Realized
Losses on the Mortgage Loans shall be allocated to REMIC I Regular Interest ZZZ.
(ii) REMIC II will be evidenced by (x) the REMIC II Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC II and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(ii) and (y) the Class R-II Certificate, which is hereby
designated as the single "residual interest" in REMIC II.
The REMIC II Regular Interests and the Class R-II Certificate will have
the following designations, initial balances and pass-through rates:
REMIC II Interest Initial Balance Pass-Through Rate Related Group
A-1 $825,749,800 (1) Group I
A-2A $42,375,000 (2) Group II
A-2B $49,375,000 (2) Group II
MT-R $50.00 (1) Group I
M $15,500,000 (3) N/A
B-1 $21,500,000 (3) N/A
B-2 $15,500,000 (3) N/A
B-3 $11,000,000 (3) N/A
B-4 $5,500,000 (3) N/A
B-5 $4,000,000 (3) N/A
B-6 $9,500,000 (3) N/A
Class R-II $50 (1) Group I
(1) The weighted average of the Net Rates of the Group I Mortgage Loans
(as of the second preceding Due Date), weighted on the basis of the respective
Scheduled Principal Balance of each such Mortgage Loan as of the beginning of
the Due Period immediately preceding the related Distribution Date.
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(2) The weighted average of the Net Rates of the Group II Mortgage
Loans (as of the second preceding Due Date), weighted on the basis of the
respective Scheduled Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
(3) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I Regular Interests 1A and 2A, weighted on the basis
of the Uncertificated Principal Balance of each such REMIC I Regular Interest
immediately preceding the related Distribution Date, provided that for purposes
of that weighted average, the Pass-Through Rate of each such REMIC I Regular
Interest shall be subject to a cap and a floor equal to the Pass-Through Rate of
the REMIC I Regular Interest from the related Group ending with the designation
"B".
Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC II Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.
(iii) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
Designation Initial Principal/ Pass-Through Rate
Notional Amount
A-1 $825,749,800 (1)
A-2A $ 42,375,000 (2)
A-2B $ 49,375,000 (3)
X-1 $889,249,800 (4)
X-2 $ 49,375,000 (5)
R-I $50.00 (6)
R-II $50.00 (6)
R-III $50.00 (6)
M $ 15,500,000 (7)
B-1 $ 21,500,000 (8)
B-2 $ 15,500,000 (9)
B-3 $ 11,000,000 (10)
B-4 $ 5,500,000 (11)
B-5 $ 4,000,000 (11)
B-6 $ 9,500,050 (11)
(1) The Class A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.340%, (ii) 11.00% per annum and (iii) the weighted average
of the Net Rates of the Group I Mortgage Loans (as of the second preceding Due
Date), weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date; provided that, on such Distribution
Dates, for federal income tax purposes such Certificates will bear interest at a
rate equivalent to the foregoing, with the weighted average of the Net Rates of
the Group I Mortgage Loans expressed as the weighted average of the Pass-Through
Rate on REMIC II Regular Interest A-1, weighted on the basis of the
Uncertificated Principal Balance of such REMIC II Regular Interest immediately
preceding the related Distribution Date. The Pass-Through Rate with respect to
the first Interest Accrual Period is 2.760% per annum.
(2) The Class A-2A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group II
Mortgage Loans (as of the second preceding Due Date), weighted on the basis of
the respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date;
provided that, on such Distribution Dates, for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of the Group II Mortgage Loans expressed as
the weighted average of the Pass-Through Rate on REMIC II Regular Interest A-2A,
weighted on the basis of the Uncertificated Principal Balance of
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such REMIC II Regular Interest immediately preceding the related Distribution
Date. The Pass-Through Rate with respect to the first Interest Accrual Period is
3.822% per annum.
(3) The Class A-2B certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.380%, (ii) 11.00% per annum and (iii) the weighted average
of the Net Rates of the Group II Mortgage Loans (as of the second preceding Due
Date), weighted on the basis of the respective Scheduled Principal Balances of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date; provided that, on such Distribution
Dates, for federal income tax purposes such Certificates will bear interest at a
rate equivalent to the foregoing, with the weighted average of the Net Rates of
the Group II Mortgage Loans expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Xxxxxxxx X-0X, weighted on the basis of
the Uncertificated Principal Balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual Period is 3.140% per annum.
(4) The Class X-1 Certificates will consist of two non-separately
transferable components, Component 1X and Component 2X. Component 1X will bear
interest at a variable Pass-Through Rate equal to the greater of (i) zero and
(ii) the excess of (x) the weighted average of the Net Rates of the Group I
Mortgage Loans (as of the second preceding Due Date), over (y) the Pass-Through
Rate on the Class A-1 Certificates, based on a Notional Amount equal to the
Current Principal Amount of the Class A-1 Certificates. Component 2X will bear
interest at a variable Pass-Through Rate equal to the greater of (i) zero and
(ii) the excess of (x) the weighted average of the Net Rates of each Loan Group
(as of the second preceding Due Date), weighted in proportion to the results of
subtracting from the aggregate Scheduled Principal Balance of each Loan Group
the Current Principal Amount of the related Class of Senior Certificates
immediately prior to the related Distribution Date, over (y) the weighted
average of the Pass-Through Rates on the Class M, Class B-1, Class B-2 and Class
B-3 Certificates, based on a Notional Amount equal to the aggregate Current
Principal Amounts of the Class M, Class B-1, Class B-2 and Class B-3
Certificates. The Pass-Through Rate for the Class X-1 Certificates with respect
to the first Interest Accrual Period is 0.871% per annum, which excludes the
Class X-1 Payment to be made to the Class X-1 Certificates on the first
Distribution Date. The amount of interest payable to the Class X-1 Certificates
will be reduced by any amounts necessary to fund the Group I Carryover Shortfall
Reserve Fund to pay any Group I Carryover Shortfall Amount to the Class A-1,
Class M, Class B-1, Class B-2 and Class B-3 Certificates on the related
Distribution Date.
(5) The Class X-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the greater of (i) zero and (ii) the excess of (x)
the weighted average of the Net Rates of the Group II Mortgage Loans (as of the
second preceding Due Date), weighted in proportion to the results of subtracting
from the aggregate Scheduled Principal Balances of the Group II Mortgage Loans
the aggregate Current Principal Amounts of the Class A-2A and Class A-2B
Certificates immediately prior to the related Distribution Date, over (y) the
Pass-Through Rate on the Class A-2B Certificates, based on a Notional Amount
equal to the Current Principal Amount of the Class A-2B Certificates. The
Pass-Through Rate for the Class X-2 Certificates with respect to the first
Interest Accrual Period is 0.825% per annum, which excludes the Class X-2
Payment to be made to the Class X-2 Certificates on the first Distribution Date.
The amount of interest payable to the Class X-2 Certificates will be reduced by
any amounts necessary to fund the Group II Carryover Shortfall Reserve Fund to
pay any Group II Carryover Shortfall Amount to the Class A-2B Certificates on
the related Distribution Date.
(6) The Class R-I, Class R-II and Class R-III Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of the Group I Mortgage Loans (as of the second preceding Due Date).
The Pass-Through Rate with respect to the first Interest Accrual Period is
3.662% per annum.
(7) The Class M Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.450% , (ii) 11.00% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date),
weighted in proportion to the results of subtracting from the aggregate
Scheduled Principal Balance of each Loan Group, the Current Principal Amount of
the related Class of Senior Certificates immediately prior to the related
Distribution Date; provided that for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of each Loan Group expressed as the weighted
average of the Pass-Through Rates on REMIC II Regular Interests M, X-0, X-0,
X-0, X-0, B-5 and B-6, weighted on the basis of the Uncertificated
86
Principal Balance of each such REMIC II Regular Interest immediately preceding
the related Distribution Date. The Pass-Through Rate with respect to the first
Interest Accrual Period is 2.870% per annum.
(8) The Class B-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.550%, (ii) 11.00% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date),
weighted in proportion to the results of subtracting from the aggregate
Scheduled Principal Balance of each Loan Group, the Current Principal Amount of
the related Class of Senior Certificates immediately prior to the related
Distribution Date; provided that for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of each Loan Group expressed as the weighted
average of the Pass-Through Rates on REMIC II Regular Interests M, X-0, X-0,
X-0, X-0, B-5 and B-6, weighted on the basis of the Uncertificated Principal
Balance of each such REMIC II Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate with respect to the first Interest
Accrual Period is 2.970% per annum.
(9) The Class B-2 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 0.950%, (ii) 11.00% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date),
weighted in proportion to the results of subtracting from the aggregate
Scheduled Principal Balance of each Loan Group, the Current Principal Amount of
the related Class of Senior Certificates immediately prior to the related
Distribution Date; provided that for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of each Loan Group expressed as the weighted
average of the Pass-Through Rates on REMIC II Regular Interests M, X-0, X-0,
X-0, X-0, B-5 and B-6, weighted on the basis of the Uncertificated Principal
Balance of each such REMIC II Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate with respect to the first Interest
Accrual Period is 3.370% per annum.
(10) The Class B-3 Certificates will bear interest at a variable
Pass-Through Rate equal to the least of (i) One-Month LIBOR plus a margin
initially equal to 1.600%, (ii) 11.00% per annum and (iii) the weighted average
of the Net Rates of each Loan Group (as of the second preceding Due Date),
weighted in proportion to the results of subtracting from the aggregate
Scheduled Principal Balance of each Loan Group, the Current Principal Amount of
the related Class of Senior Certificates immediately prior to the related
Distribution Date; provided that for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, with the
weighted average of the Net Rates of each Loan Group expressed as the weighted
average of the Pass-Through Rate on REMIC II Regular Interests M, X-0, X-0, X-0,
X-0, B-5 and B-6, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC II Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate with respect to the first Interest
Accrual Period is 4.020% per annum.
(11) The Class B-4, Class B-5 and Class B-6 Certificates will bear
interest at a variable Pass-Through Rate equal to the weighted average of the
Net Rates of each Loan Group (as of the second preceding Due Date), weighted in
proportion to the results of subtracting from the aggregate Scheduled Principal
Balance of each Loan Group, the Current Principal Amount of the related Class of
Senior Certificates immediately prior to the related Distribution Date; provided
that for federal income tax purposes such Certificates will bear interest at a
rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rates on REMIC II Regular Interests M, X-0, X-0, X-0, X-0, B-5 and
B-6, weighted on the basis of the Uncertificated Principal Balance of each such
REMIC II Regular Interest immediately preceding the related Distribution Date.
The Pass-Through Rate with respect to the first Interest Accrual Period is
3.693% per annum.
Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC I Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests, REMIC II Regular Interests and the Certificates.
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(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount (or Notional Amount, in the
case of the Interest Only Certificates) of such Class applicable to such
Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0, X-0 and A-4. On original issuance, the Trustee shall sign,
and the Certificate Registrar shall countersign and deliver the Certificates at
the direction of the Depositor. Pending the preparation of definitive
Certificates of any Class, the Trustee may sign and the Certificate Registrar
may countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Certificate Registrar Office, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and the Certificate Registrar shall countersign and deliver
in exchange therefor a like aggregate principal amount, in authorized
denominations for such Class, of definitive Certificates of the same Class.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits as definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates) and the
Senior Mezzanine Certificates, $1,000 and in each case increments of $1.00 in
excess thereof, and (ii) in the case of the Offered Subordinate Certificates,
$25,000 and increments of $1.00 in excess thereof, except that one Certificate
of each such Class may be issued in a different amount so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Current Principal Amount or Notional Amount, as the case may be, of such Class
on the Closing Date. On the Closing Date, the Trustee shall execute, and the
Certificate Registrar shall countersign, Physical Certificates all in an
aggregate principal amount that shall equal the Current Principal Amount or
Notional Amount, as the case may be, of such Class on the Closing Date. The
Private Certificates shall be issued in certificated fully-registered form in
minimum dollar denominations of $25,000 and integral multiples of $1.00 in
excess thereof, except that one Private Certificate of each such Class may be
issued in a different amount so that the sum of the denominations of all
outstanding Private Certificates of such Class shall equal the Current Principal
Amount or Notional Amount, as the case may be, of such Class on the Closing
Date. The Residual Certificates shall each be issued in certificated
fully-registered form in the denomination of $50, $50 and $50, respectively.
Each Class of Global Certificates, if any, shall be issued in fully registered
form in minimum dollar denominations of $50,000 and integral multiples of $1.00
in excess thereof, except that one Certificate of each Class may be in a
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different denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount or Notional
Amount, as the case may be, of such Class on the Closing Date. On the Closing
Date, the Trustee shall execute and the Certificate Registrar shall countersign
(i) in the case of each Class of Offered Certificates, the Certificate in the
entire Current Principal Amount or Notional Amount, as the case may be, of the
respective Class and (ii) in the case of each Class of Private Certificates,
Individual Certificates all in an aggregate principal amount or notional amount,
as the case may be, that shall equal the Current Principal Amount or Notional
Amount, as the case may be, of each such respective Class on the Closing Date.
The Certificates referred to in clause (i) and, if at any time there are to be
Global Certificates, the Global Certificates, shall be delivered by the
Depositor to the Depository or, pursuant to the Depository's instructions, shall
be delivered by the Depositor on behalf of the Depository to and deposited with
the DTC Custodian. The Trustee shall sign the Certificates by facsimile or
manual signature and the Certificate Registrar shall countersign them by manual
signature on behalf of the Trustee by one or more authorized signatories, each
of whom shall be Responsible Officers of the Trustee or its agent and the
Certificate Registrar or its agent, as applicable. A Certificate bearing the
manual and facsimile signatures of individuals who were the authorized
signatories of the Trustee or its agent or the Certificate Registrar or its
agent, as applicable, at the time of issuance shall bind the Trustee and the
Certificate Registrar, notwithstanding that such individuals or any of them have
ceased to hold such positions prior to the delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Certificate Registrar or its
agent, and such countersignature upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly executed
and delivered hereunder. All Certificates issued on the Closing Date shall be
dated the Closing Date. All Certificates issued thereafter shall be dated the
date of their countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each REMIC shall have a tax year
that is a calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each REMIC to timely
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual Certificates,
whether upon original issuance or upon issuance of any other Certificate of any
such Class in exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE
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INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED TRANSFEREE
PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO THE TRUSTEE, THE
CERTIFICATE REGISTRAR, THE MASTER SERVICER AND THE SECURITIES ADMINISTRATOR AND
ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF
CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A
NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND WILL
NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE
CERTIFICATE REGISTRAR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
TRUSTEE.
The following legend shall be placed upon the Private Certificates,
whether upon original issuance or upon issuance of any other Certificate of any
such Class in exchange therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFEREE CERTIFIES OR REPRESENTS THAT THE
PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
EXEMPTION ("PTCE") 84-14, XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II)
WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE OR UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS
PROVIDED.
Section 5.02. Registration of Transfer and Exchange of Certificates(a)
The Certificate Registrar shall maintain at its Certificate Registrar Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
(b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose,
the Trustee shall sign, and the Certificate Registrar shall countersign and
deliver, in the name of the designated transferee or transferees, a new
Certificate of a like Class and aggregate Fractional Undivided Interest, but
bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the
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transfer of such Certificate set forth in the Securities Legend and agrees that
it will transfer such a Certificate only as provided herein. In addition to the
provisions of Subsection 5.02(h), the following restrictions shall apply with
respect to the transfer and registration of transfer of an Individual
Certificate to a transferee that takes delivery in the form of an Individual
Certificate:
(i) The Certificate Registrar shall register the transfer of
an Individual Certificate if the requested transfer is being made to a
transferee who has provided the Certificate Registrar with a Rule 144A
Certificate or comparable evidence as to its QIB status.
(ii) The Certificate Registrar shall register the transfer of
any Individual Certificate if (x) the transferor has advised the
Certificate Registrar in writing that the Certificate is being
transferred to an Institutional Accredited Investor, and (y) prior to
the transfer the transferee furnishes to the Certificate Registrar an
Investment Letter (and the Certificate Registrar shall be fully
protected in so doing), provided that, if based upon an Opinion of
Counsel to the effect that the delivery of (x) and (y) above are not
sufficient to confirm that the proposed transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other applicable
laws, the Certificate Registrar shall as a condition of the
registration of any such transfer require the transferor to furnish
such other certifications, legal opinions or other information prior to
registering the transfer of an Individual Certificate as shall be set
forth in such Opinion of Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Subsection 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor,
such transferee shall be required to take delivery in the form of an
Individual Certificate or Certificates and the Certificate Registrar
shall register such transfer only upon compliance with the provisions
of Subsection 5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in
the form of an Individual Certificate or Certificates of such Class,
except as set forth in clause (i) above, the Certificate Registrar
shall register such transfer only upon compliance with the provisions
of Subsection 5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the
Certificate Registrar shall register such transfer if the transferee
has provided the Trustee with a Rule 144A Certificate or comparable
evidence as to its QIB status.
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(iv) No restrictions shall apply with respect to the transfer
or registration of transfer of a beneficial interest in the Global
Certificate of a Class to a transferee that takes delivery in the form
of a beneficial interest in the Global Certificate of such Class;
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate
as are sufficient to establish that it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial interest
in a Global Certificate of a Class for an Individual Certificate or Certificates
of such Class, an exchange of an Individual Certificate or Certificates of a
Class for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with this Subsection 5.02(e) and in accordance with the rules of the
Depository:
(i) A holder of a beneficial interest in a Global Certificate
of a Class may at any time exchange such beneficial interest for an
Individual Certificate or Certificates of such Class.
(ii) A holder of an Individual Certificate or Certificates of
a Class may exchange such Certificate or Certificates for a beneficial
interest in the Global Certificate of such Class if such holder
furnishes to the Certificate Registrar a Rule 144A Certificate or
comparable evidence as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Certificate Registrar shall cancel such Individual
Certificate and shall (or shall request the Depository to) endorse on the
schedule affixed to the applicable Global Certificate (or on a continuation of
such schedule affixed to the Global Certificate and made a part thereof) or
otherwise make in its books and records an appropriate notation evidencing the
date of such exchange or transfer and an increase in the certificate balance of
the Global Certificate equal to the certificate balance of such Individual
Certificate exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual
Certificate of such Class as provided herein, the Certificate Registrar
shall (or shall request the Depository to) endorse on the schedule
affixed to such Global Certificate (or on a continuation of such
schedule affixed to such Global Certificate and made a part thereof) or
otherwise make in its books and records an appropriate notation
evidencing the date of such exchange or transfer and a decrease in the
certificate balance of such Global Certificate equal to the certificate
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balance of such Individual Certificate issued in exchange therefor or
upon transfer thereof.
(g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or of
a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(g) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Certificate Registrar Office, or at the office of any transfer agent,
together with an executed instrument of assignment and transfer satisfactory in
form and substance to the Certificate Registrar in the case of transfer and a
written request for exchange in the case of exchange. The holder of a beneficial
interest in a Global Certificate may, subject to the rules and procedures of the
Depository, cause the Depository (or its nominee) to notify the Certificate
Registrar (as agent of the Depositor) in writing of a request for transfer or
exchange of such beneficial interest for an Individual Certificate or
Certificates. Following a proper request for transfer or exchange, the
Certificate Registrar shall, within five Business Days of such request made at
such the Certificate Registrar Office, sign, countersign and deliver at the
Certificate Registrar Office, to the transferee (in the case of transfer) or
holder (in the case of exchange) or send by first class mail at the risk of the
transferee (in the case of transfer) or holder (in the case of exchange) to such
address as the transferee or holder, as applicable, may request, an Individual
Certificate or Certificates, as the case may require, for a like aggregate
Fractional Undivided Interest and in such authorized denomination or
denominations as may be requested. The presentation for transfer or exchange of
any Individual Certificate shall not be valid unless made at the Certificate
Registrar Office by the registered holder in person, or by a duly authorized
attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency; provided, however, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the
Depositor as indicated to the Trustee in writing. Whenever any Certificates are
so surrendered for exchange, the Trustee shall sign and the Certificate
Registrar shall countersign and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
(j) If the Certificate Registrar so requires, every Certificate
presented or surrendered for transfer or exchange shall be duly endorsed by, or
be accompanied by a written instrument of transfer, with a signature guarantee,
in form satisfactory to the Certificate Registrar, duly executed by the holder
thereof or his or her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or
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governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
(l) The Certificate Registrar shall cancel all Certificates surrendered
for transfer or exchange but shall retain such Certificates in accordance with
its standard retention policy or for such further time as is required by the
record retention requirements of the Exchange Act, and thereafter may destroy
such Certificates.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates. (a) If
(i) any mutilated Certificate is surrendered to the Certificate Registrar, or
the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Certificate Registrar, the Master Servicer, the Securities Administrator and
the Trustee such security or indemnity as it may require to save it harmless,
and (iii) the Certificate Registrar has not received notice that such
Certificate has been acquired by a third Person, the Trustee shall sign and the
Certificate Registrar shall countersign and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and Fractional Undivided Interest but in each case bearing a
different number. The mutilated, destroyed, lost or stolen Certificate shall
thereupon be canceled of record by the Certificate Registrar and shall be of no
further effect and evidence no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03,
the Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Certificate
Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Paying Agent, the
Certificate Registrar, the Trustee and any agent of the Depositor, the Paying
Agent, the Certificate Registrar, or the Trustee may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 6.01 and for all other
purposes whatsoever. Neither the Depositor, the Paying Agent, the Certificate
Registrar the Trustee nor any agent of the Depositor, the Paying Agent, the
Certificate Registrar or the Trustee shall be affected by notice to the
contrary. No Certificate shall be deemed duly presented for a transfer effective
on any Record Date unless the Certificate to be transferred is presented no
later than the close of business on the third Business Day preceding such Record
Date.
Section 5.05. Transfer Restrictions on Residual Certificates. (a)
Residual Certificates, or interests therein, may not be transferred without the
prior express written consent of the Tax Matters Person and the Depositor. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Depositor, the Certificate Registrar and the Trustee with an
affidavit that the proposed transferee is a Permitted Transferee (and, unless
the Tax Matters Person and the Depositor consent to the transfer to a person who
is not a U.S. Person, an affidavit that it is a U.S. Person) as provided in
Subsection 5.05(b).
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(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Certificate Registrar, the Trustee and the Depositor an
affidavit in the form attached hereto as Exhibit E stating, among other things,
that as of the date of such transfer (i) such transferee is a Permitted
Transferee and that (ii) such transferee is not acquiring such Residual
Certificate for the account of any person who is not a Permitted Transferee. The
Tax Matters Person shall not consent to a transfer of a Residual Certificate if
it has actual knowledge that any statement made in the affidavit issued pursuant
to the preceding sentence is not true. Notwithstanding any transfer, sale or
other disposition of a Residual Certificate to any Person who is not a Permitted
Transferee, such transfer, sale or other disposition shall be deemed to be of no
legal force or effect whatsoever and such Person shall not be deemed to be a
Holder of a Residual Certificate for any purpose hereunder, including, but not
limited to, the receipt of distributions thereon. If any purported transfer
shall be in violation of the provisions of this Subsection 5.05(b), then the
prior Holder thereof shall, upon discovery that the transfer of such Residual
Certificate was not in fact permitted by this Subsection 5.05(b), be restored to
all rights as a Holder thereof retroactive to the date of the purported
transfer. None of the Trustee, the Certificate Registrar, the Tax Matters Person
or the Depositor shall be under any liability to any Person for any registration
or transfer of a Residual Certificate that is not permitted by this Subsection
5.05(b) or for making payments due on such Residual Certificate to the purported
Holder thereof or taking any other action with respect to such purported Holder
under the provisions of this Agreement so long as the written affidavit referred
to above was received with respect to such transfer, and the Tax Matters Person,
the Trustee and the Depositor, as applicable, had no knowledge that it was
untrue. The prior Holder shall be entitled to recover from any purported Holder
of a Residual Certificate that was in fact not a Permitted Transferee under this
Subsection 5.05(b) at the time it became a Holder all payments made on such
Residual Certificate. Each Holder of a Residual Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this Subsection 5.05(b) and to any amendment of this Agreement deemed necessary
(whether as a result of new legislation or otherwise) by counsel of the Tax
Matters Person or the Depositor to ensure that the Residual Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Residual Certificates will not cause the imposition of a tax
upon the Trust or cause any REMIC to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person and the Depositor shall have
consented in writing (which consent may be withheld in the Tax Matters Person's
or the Depositor's sole discretion), the Residual Certificates (including a
beneficial interest therein) may not be purchased by or transferred to any
person who is not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Securities Administrator to act as
its agent with respect to all matters concerning the tax obligations of the
Trust.
Section 5.06. Restrictions on Transferability of Certificates. (a) No
offer, sale, transfer or other disposition (including pledge) of any Certificate
shall be made by any Holder thereof unless registered under the Securities Act,
or an exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the
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prospective transferee (other than the Depositor) of such Certificate signs and
delivers to the Certificate Registrar an Investment Letter, if the transferee is
an Institutional Accredited Investor, in the form set forth as Exhibit F-l
hereto, or a Rule 144A Certificate, if the transferee is a QIB, in the form set
forth as Exhibit F-2 hereto. Notwithstanding the provisions of the immediately
preceding sentence, no restrictions shall apply with respect to the transfer or
registration of transfer of a beneficial interest in any Certificate that is a
Global Certificate of a Class to a transferee that takes delivery in the form of
a beneficial interest in the Global Certificate of such Class, provided that
each such transferee shall be deemed to have made such representations and
warranties contained in the Rule 144A Certificate as are sufficient to establish
that it is a QIB. In the case of a proposed transfer of any Certificate to a
transferee other than a QIB, the Certificate Registrar may require an Opinion of
Counsel that such transaction is exempt from the registration requirements of
the Securities Act. The cost of such opinion shall not be an expense of the
Trustee or the Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend. The
Trustee and the Securities Administrator shall comply with the requirements of
Treasury Regulations xx.xx. 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to
the furnishing of information.
Section 5.07. ERISA Restrictions. (a) Subject to the provisions of
Subsection 5.07(b), no Residual Certificates or Private Certificates may be
acquired directly or indirectly by, or on behalf of, an employee benefit plan or
other retirement arrangement which is subject to Title I of ERISA and/or Section
4975 of the Code, unless the proposed transferee provides either (i) the
Trustee, the Certificate Registrar, the Master Servicer and the Securities
Administrator with an Opinion of Counsel satisfactory to the Trustee, the
Certificate Registrar, the Master Servicer and the Securities Administrator,
which opinion will not be at the expense of the Trustee, the Master Servicer or
the Securities Administrator, that the purchase of such Certificates by or on
behalf of such Plan is permissible under applicable law, will not constitute or
result in the assets of the Trust being deemed to be "plan assets" subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code, will
not result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code and will not subject the Trustee, the Certificate
Registrar, the Master Servicer, the Depositor, any Servicer or the Securities
Administrator to any obligation in addition to those undertaken in the Agreement
or (ii) in the case of the Class B-4, Class B-5 and Class B-6 Certificates, a
representation or certification to the Trustee and the Certificate Registrar
(upon which each of the Trustee and the Certificate Registrar is authorized to
rely) to the effect that the proposed transfer and/or holding of such a
Certificate and the servicing, management and operation of the Trust: (I) will
not result in a prohibited transaction under Section 406 of ERISA or Section
4975 of the Code unless it is covered under an individual or class prohibited
transaction exemption, including but not limited to Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 84-14 (Class Exemption for Plan
Asset Transactions Determined by Independent Qualified Professional Asset
Managers); PTCE 91-38 (Class Exemption for Certain Transactions Involving Bank
Collective Investment Funds); PTCE 90-1 (Class Exemption for Certain
Transactions Involving Insurance Company Pooled Separate Accounts), PTCE 95-60
(Class Exemption for Certain Transactions Involving Insurance Company General
Accounts), and PTCE 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers), or Section 401(c) of ERISA and the
regulations promulgated thereunder; (II) will not constitute or result in the
assets of the Trust being deemed to be "plan assets" subject to the prohibited
transaction provisions of ERISA or Section 4975 of
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the Code; and (III) will not subject the Depositor, the Certificate Registrar,
the Securities Administrator, any Servicer, the Master Servicer or the Trustee
to any obligation in addition to those undertaken in the Agreement.
(b) Each beneficial owner of a Class M, Class B-1, Class B-2 or Class
B-3 Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or investing with "Plan Assets", (ii) it has
acquired and is holding such Certificate in reliance on Prohibited Transaction
Exemption 97-34, as amended (the "Exemption"), and that it understands that
there are certain conditions to the availability of the Exemption, including
that the certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by S&P, Fitch or Xxxxx'x Investors Service, Inc., and
the certificate is so rated or (iii) (1) it is an insurance company, (2) the
source of funds used to acquire or hold the certificate or interest therein is
an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the applicable conditions of
PTCE 95-60 have been satisfied.
(c) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that, in the case of the Class B-4, Class B-5 and
Class B-6 Certificates, either: (i) it is not acquiring an interest in such
Certificate directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which is subject to Title I of ERISA and/or
Section 4975 of the Code, or (ii) the transfer and/or holding of an interest in
such Certificate to that Person and the subsequent servicing, management and/or
operation of the Trust and its assets: (I) will not result in any prohibited
transaction unless it is covered under an individual or class prohibited
transaction exemption, including, but not limited to, XXXX 00-00, XXXX 00-00,
XXXX 00-0, XXXX 95-60 or PTCE 96-23, or Section 401(c) of ERISA and the
regulations promulgated thereunder; (II) will not constitute or result in the
assets of the Trust being deemed to be "plan assets" subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code; and (III) will not
subject the Depositor, the Certificate Registrar, the Securities Administrator,
any Servicer, the Master Servicer or the Trustee to any obligation in addition
to those undertaken in the Agreement.
(d) Neither the Trustee, the Certificate Registrar, the Master Servicer
nor the Securities Administrator will be required to monitor, determine or
inquire as to compliance with the transfer restrictions with respect to the
Global Certificates or any Book-Entry Certificate. Any attempted or purported
transfer of any Certificate in violation of the provisions of Subsections (a) or
(b) above shall be void ab initio and such Certificate shall be considered to
have been held continuously by the prior permitted Certificateholder. Any
transferor of any Certificate in violation of such provisions, shall indemnify
and hold harmless the Trustee, the Certificate Registrar, the Securities
Administrator and the Master Servicer from and against any and all liabilities,
claims, costs or expenses incurred by the Trustee, the Certificate Registrar,
the Securities Administrator or the Master Servicer as a result of such
attempted or purported transfer. Neither the Trustee nor the Certificate
Registrar shall have any liability for transfer of any such Global Certificates
or any Book-Entry Certificates in or through book-entry facilities of any
Depository or between or among Depository Participants or Certificate Owners
made in violation of the transfer restrictions set forth herein.
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Section 5.08. Rule 144A Information. For so long as any Certificates
are outstanding and are "restricted securities" within the meaning of Rule
144(a)(3) of the Securities Act: (1) the Depositor will provide or cause to be
provided to any holder of such Certificates and any prospective purchaser
thereof designated by such a holder, upon the request of such holder or
prospective purchaser, the information required to be provided to such holder or
prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (2) the
Depositor shall update such information from time to time in order to prevent
such information from becoming false and misleading and will take such other
actions as are necessary to ensure that the safe harbor exemption from the
registration requirements of the Securities Act under Rule 144A is and will be
available for resales of such Certificates conducted in accordance with Rule
144A.
Section 5.09. Appointment of Paying Agent and Certificate Registrar.
Xxxxx Fargo Bank, National Association, as Securities Administrator, shall act
as the initial Paying Agent and Certificate Registrar for so long as it is also
the Master Servicer. Each of the Paying Agent and the Certificate Registrar may
resign upon thirty (30) days' prior written notice to the Trustee; provided
hereto that no such resignation shall be effective until the appointment of a
successor paying agent or certificate registrar. In the event the Paying Agent
and/or the Certificate Registrar resigns or is removed by the Trustee for cause,
the Trustee may appoint a successor paying agent or certificate registrar, as
applicable. The Trustee shall cause such successor paying agent, if other than
the Trustee or the Master Servicer or the Securities Administrator, to execute
and deliver to the Trustee an instrument in which such paying agent shall agree
with the Trustee that such paying agent will hold all sums held by it for the
payment to Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums have been paid to the Certificateholders.
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ARTICLE VI
Payments to Certificateholders
Section 6.01. Distributions on the Certificates. (a) Interest and
principal on the Certificates will be distributed monthly on each Distribution
Date, commencing in January 2005, in an aggregate amount equal to the Available
Funds for such Distribution Date.
On the first Distribution Date, the Paying Agent will, prior to the
distribution of Available Funds to any Certificate, distribute the Class X-1
Payment to the Class X-1 Certificates, as follows:
(i) from Group I Available Funds, an amount equal to the
product of (x) the Class X-1 Payment and (y) the Component 1X
Distribution Percentage;
(ii) from Group II Available Funds, an amount equal to the
product of (x) the Class X-1 Payment and (y) the Component 2X
Distribution Percentage.
On the first Distribution Date, the Paying Agent will, prior to the
distribution of Available Funds to any Certificate, distribute the Class X-2
Payment to the Class X-2 Certificates, pro rata.
(A) On each Distribution Date, the Group I Available Funds (or on the
first Distribution Date, the Group I Available Funds remaining following the
distribution of the Class X-1 Payment to the Class X-1 Certificates) will be
distributed to the Group I Senior Certificates and the Class X-1 Certificates as
follows:
first, to the Group I Senior Certificates and Component 1X of
the Class X-1 Certificates, the Accrued Certificate Interest on each
such Class or Component of Certificates for such Distribution Date, and
to Component 2X of the Class X-1 Certificates, the Group I Allocation
Fraction of Accrued Certificate Interest on such Component for such
Distribution Date, pro rata, based on the Accrued Certificate Interest
owed to each such Class or Component of Certificates; provided,
however, that the amount of Accrued Certificate Interest paid to the
Class X-1 Certificates in respect of Component 1X will be reduced by
the aggregate amount of any Group I Carryover Shortfall Amounts on the
Class A-1 Certificates, and that the amount of Accrued Certificate
Interest paid to the Class X-1 Certificates pursuant to this clause in
respect of Component 2X will be reduced by the Group I Allocation
Fraction of any Group I Carryover Shortfall Amounts on the Class M,
Class B-1, Class B-2 and Class B-3 Certificates, in each case for that
Distribution Date, which will be deposited into the Group I Carryover
Shortfall Reserve Fund. In addition, Accrued Certificate Interest on
such Class A-1 Certificates and each such Component of the Class X-1
Certificates is subject to reduction in the event of certain Net
Interest Shortfalls allocable thereto. Any Net Interest Shortfalls
shall be allocated among such Class A-1 Certificates and Components of
the Class X-1 Certificates in accordance with the provisions of Section
6.02(g);
second, to the extent of remaining Group I Available Funds, to
the Group I Senior Certificates and Component 1X and Component 2X of
the Class X-1 Certificates, the
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Accrued Certificate Interest thereon pursuant to clause first remaining
undistributed from previous Distribution Dates (other than, with
respect to Component 1X and Component 2X of the Class X-1 Certificates,
any amounts pursuant to clause first deposited into the Group I
Carryover Shortfall Reserve Fund), pro rata, based on the undistributed
Accrued Certificate Interest owed to each such Class or Component of
Certificates;
third, to the extent of remaining Group I Available Funds, to
the Class R Certificates, pro rata, in reduction of the respective
Current Principal Amounts thereof, the Group I Senior Optimal Principal
Amount for such Distribution Date, until the respective Current
Principal Amounts of such Classes have been reduced to zero; and
fourth, to the extent of remaining Group I Available Funds, to
the Class A-1 Certificates, in reduction of the Current Principal
Amount thereof, the remaining Group I Senior Optimal Principal Amount
for such Distribution Date, until the Current Principal Amount of such
Class has been reduced to zero.
(B) On each Distribution Date, the Group II Available Funds (or on the
first Distribution Date, the Group II Available Funds following the distribution
of the Class X-2 Payment to the Class X-2 Certificates) will be distributed to
the Class A-2A, Class A-2B, Class X-1 and Class X-2 Certificates as follows:
first, to the Class A-2A, Class A-2B and Class X-2
Certificates, the Accrued Certificate Interest on each such Class of
Certificates for such Distribution Date, and to Component 2X of the
Class X-1 Certificates, the Group II Allocation Fraction of Accrued
Certificate Interest on such Component for such Distribution Date, pro
rata, based on the Accrued Certificate Interest owed to each such Class
or Component of Certificates; provided, however, that the amount of
Accrued Certificate Interest paid to the Class X-2 Certificates will be
reduced by the aggregate amount of any Group II Carryover Shortfall
Amounts on the Class A-2B Certificates for that Distribution Date,
which will be deposited into the Group II Carryover Shortfall Reserve
Fund; and provided, that the amount of Accrued Certificate Interest
paid to the Class X-1 Certificates pursuant to this clause in respect
of Component 2X will be reduced by the Group II Allocation Fraction of
any Group I Carryover Shortfall Amounts on the Class M, Class B-1,
Class B-2 and Class B-3 Certificates, for that Distribution Date, which
will be deposited into the Group I Carryover Shortfall Reserve Fund. In
addition, Accrued Certificate Interest on the Class A-2A, Class A-2B
and Class X-2 Certificates and on Component 2X of the Class X-1
Certificates is subject to reduction in the event of certain Net
Interest Shortfalls allocable thereto. Any Net Interest Shortfalls
shall be allocated among the Class A-2A, Class A-2B and Class X-2
Certificates and on Component 2X of the Class X-1 Certificates in
accordance with the provisions of Section 6.02(g);
second, to the extent of remaining Group II Available Funds,
to the Class A-2A, Class A-2B and Class X-2 Certificates and to
Component 2X of the Class X-1 Certificates, any Accrued Certificate
Interest thereon pursuant to clause first remaining undistributed from
previous Distribution Dates (other than, with respect to the Class X-2
Certificates, any amounts pursuant to clause first deposited into the
Group II Carryover Shortfall Reserve Fund, and other than, with respect
to Component 2X of the Class X-1
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Certificates, any amounts pursuant to clause first deposited into the
Group I Carryover Shortfall Reserve Fund), pro rata, based on the
undistributed Accrued Certificate Interest owed to each such Class or
Component of Certificates; and
third, to the extent of remaining Group II Available Funds, to
the Class A-2A and Class A-2B Certificates, in reduction of the
respective Current Principal Amounts thereof, the Group II Senior
Optimal Principal Amount for such Distribution Date, until the
respective Current Principal Amounts of each such Class of Certificates
has been reduced to zero.
(C) Except as provided in paragraphs (E) and (F) below, on each
Distribution Date on or prior to the Cross-Over Date, an amount equal to the sum
of the remaining Group I Available Funds and Group II Available Funds after the
distributions in (A) and (B) above will be distributed to the Class M
Certificates, up to an amount equal to and in the following order: (a) the
Accrued Certificate Interest thereon for such Distribution Date, (b) any Accrued
Certificate Interest thereon remaining undistributed from previous Distribution
Dates and (c) such Class of Certificates' Allocable Share for such Distribution
Date, in each case, to the extent of the sum of the remaining Group I Available
Funds and Group II Available Funds.
(D) Except as provided in paragraphs (E) and (F) below, on each
Distribution Date on or prior to the Cross-Over Date, an amount equal to the sum
of the remaining Group I Available Funds and Group II Available Funds after the
distributions in (A), (B) and (C) above will be distributed sequentially, in the
following order, to the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5
and Class B-6 Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon for such
Distribution Date, (b) any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates and (c) such Class's Allocable
Share for such Distribution Date, in each case, to the extent of the remaining
Group I Available Funds and Group II Available Funds.
(E) On each Distribution Date prior to the Cross-Over Date but after
the reduction of the Current Principal Amount of any of the Group I Senior
Certificates or Group II Senior Certificates to zero, the remaining Class or
Classes of Senior Certificates (other than the Interest Only Certificates) will
be entitled to receive on a pro rata basis in reduction of their Current
Principal Amounts, in addition to any Principal Prepayments related to such
remaining Senior Certificates' respective Loan Group allocated to such Senior
Certificates, 100% of the Principal Prepayments on any Mortgage Loan in the Loan
Group relating to the fully repaid Class or Classes of Senior Certificates
(other than the Interest Only Certificates); provided, however, that if (A) the
weighted average of the Senior Mezzanine and Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Senior Mezzanine and Subordinate Percentages and (B) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Senior Mezzanine Certificates and Subordinate
Certificates, does not exceed 100%, then the additional allocation of Principal
Prepayments to the Group I Senior Certificates or Group II Senior Certificates
in accordance with this clause (E) will not be made and 100% of the Principal
Prepayments on any Mortgage Loan in the Loan
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Group relating to the fully prepaid Class or Classes of Senior Certificates
(other than the Interest Only Certificates) will be allocated on a pro rata
basis to the Senior Mezzanine Certificates and Subordinate Certificates.
(F) If on any Distribution Date the aggregate Current Principal Amount
of the Group I Senior Certificates or Group II Senior Certificates would be
greater than the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Loan Group and any Senior Mezzanine Certificates and Subordinate
Certificates are still outstanding, in each case after giving effect to
distributions to be made on such Distribution Date, then (i) 100% of amounts
otherwise allocable to the Senior Mezzanine Certificates and Subordinate
Certificates in respect of principal collections on the Mortgage Loans will be
distributed to the Group I Senior Certificates or Group II Senior Certificates,
as applicable, on a pro rata basis in reduction of the Current Principal Amounts
thereof, until the aggregate Current Principal Amounts of such Class or Classes
of Senior Certificates, as applicable, is an amount equal to the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Loan Group, and
(ii) the Accrued Certificate Interest otherwise allocable to the Senior
Mezzanine Certificates and Subordinate Certificates on such Distribution Date
will be reduced, if necessary, and distributed on a pro rata basis to such Class
or Classes of Senior Certificates in an amount equal to the Accrued Certificate
Interest for such Distribution Date on the excess of (x) the aggregate Current
Principal Amounts of such Class or Classes of Senior Certificates over (y) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan
Group. Any such reduction in the Accrued Certificate Interest on the Senior
Mezzanine Certificates and Subordinate Certificates will be allocated on a pro
rata basis in reverse order of the numerical designations of the Subordinate
Certificates, commencing with the Class B-6 Certificates, and then will be
allocated to the Class M Certificates.
(b) If, after distributions have been made pursuant to priorities
first, second and third of clause (A) above or priorities first and second of
clause (B) above on any Distribution Date, the remaining Group I Available Funds
or Group II Available Funds, respectively, are less than the Group I Senior
Optimal Principal Amount and Group II Senior Optimal Principal Amount,
respectively, then such respective amounts shall be reduced, and such remaining
funds will be distributed to the related Senior Certificates (other than the
Interest Only Certificates) on the basis of such reduced amounts.
(c) "Pro rata" principal distributions among Classes of Certificates
will be made in proportion to the then Current Principal Amount of such Classes.
"Pro rata" interest distributions among Classes of Certificates on any
Distribution Date will be made in proportion to the Accrued Certificate Interest
payable on such Distribution Date.
(d) On each Distribution Date, any Available Funds remaining after
payment of interest and principal to the Classes of Certificates entitled
thereto, as described above, will be distributed to the Class R-III
Certificates; provided that if on any Distribution Date there are any Group I
Available Funds or Group II Available Funds remaining after payment of interest
and principal to a Class or Classes of Certificates entitled thereto, such
amounts will be distributed to the other Classes of Senior Certificates (other
than the Interest Only Certificates), pro rata, based upon their Current
Principal Amounts, until all amounts due to all such Classes of Senior
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Certificates (other than the Interest Only Certificates) have been paid in full,
before any amounts are distributed to the Class R-III Certificates.
(e) On each Distribution Date, any amounts in the Group I Carryover
Shortfall Reserve Fund will be distributed, in the following order, first to the
Class A-1 Certificates, pro rata, and then sequentially to the Class M, Class
B-1, Class B-2 and Class B-3 Certificates, in each case up to an amount equal to
any Group I Carryover Shortfall Amounts with respect to such Class of
Certificates.
On each Distribution Date, any amounts in the Group II Carryover
Shortfall Reserve Fund will be distributed to the Class A-2B Certificates, up to
an amount equal to any Group II Carryover Shortfall Amounts with respect to such
Class of Certificates.
(f) No Accrued Certificate Interest will be payable with respect to any
Class or Classes of Certificates after the Distribution Date on which the
Current Principal Amount of such Certificate or Certificates or Notional Amount
of a Component of such Certificate or Certificates has been reduced to zero.
(g) (i) If on any Distribution Date the Group I Available Funds or
Group II Available Funds for the Group I Senior Certificates or Group II Senior
Certificates, respectively, in any Certificate Group is less than the Accrued
Certificate Interest on the related Senior Certificates for such Distribution
Date prior to reduction for Net Interest Shortfalls and the interest portion of
Realized Losses on the related Mortgage Loans, the shortfall will be allocated
among the holders of each Class of related Senior Certificates in such
Certificate Group and the applicable Components of the Class X-1 Certificates in
proportion to the respective amounts of Accrued Certificate Interest for such
Distribution Date that would have been allocated thereto in the absence of such
Net Interest Shortfall and/or Realized Losses on the related Mortgage Loans for
such Distribution Date. In addition, the amount of any interest shortfalls (not
including Interest Shortfalls or the interest portion of Related Losses) with
respect to the Mortgage Loans in the related Loan Group that are not covered by
servicing advances will constitute unpaid Accrued Certificate Interest and will
be distributable to holders of the Certificates of the related Classes entitled
to such amounts on subsequent Distribution Dates, to the extent of the related
Loan Group's Available Funds after current interest distributions as required
herein. Any such amounts so carried forward will not bear interest. Any interest
shortfalls will not be offset by a reduction in the servicing compensation of
the Master Servicer, the Servicers or otherwise, except to the extent of
applicable Compensating Interest Payments.
(h) The expenses and fees of the Trust shall be paid by each of the
REMICs, to the extent that such expenses relate to the assets of each of such
respective REMICs, and all other expenses and fees of the Trust shall be paid
pro rata by each of the REMICs.
Section 6.02. Allocation of Losses. (a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any
Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month.
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(b) With respect to any Certificates (other than the Interest Only
Certificates) on any Distribution Date, the principal portion of each Realized
Loss on a Mortgage Loan shall be allocated as follows:
first, to the Class B-6 Certificates until the Current
Principal Amount thereof has been reduced to zero;
second, to the Class B-5 Certificates until the Current
Principal Amount thereof has been reduced to zero;
third, to the Class B-4 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Current
Principal Amount thereof has been reduced to zero;
fifth, to the Class B-2 Certificates until the Current
Principal Amount thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until the Current
Principal Amount thereof has been reduced to zero;
seventh, to the Class M Certificates until the Current
Principal Amount thereof has been reduced to zero; and
eighth, to each Class of the Senior Certificates (other than
the Interest Only Certificates) in the related Certificate Group, pro
rata based upon their respective Current Principal Amounts.
(c) Notwithstanding the foregoing clause (b), no such allocation of any
Realized Loss on the Mortgage Loans shall be made on a Distribution Date to (i)
the Senior Mezzanine Certificates or any Class or Classes of Subordinate
Certificates to the extent that such allocation would result in the reduction of
the aggregate Current Principal Amounts of all Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Mortgage Loans on such date, to an amount
less than the aggregate Scheduled Principal Balance of all of the Mortgage Loans
as of the first day of the month of such Distribution Date and (ii) the Senior
Certificates in a Certificate Group to the extent that such allocation would
result in the reduction of the aggregate Current Principal Amounts of all the
Certificates in such Certificate Group as of such Distribution Date, after
giving effect to all distributions and prior allocations of Realized Losses on
the Mortgage Loans in the related Loan Group on such date, to an amount less
than the aggregate Scheduled Principal Balance of all of the Mortgage Loans in
such Loan Group as of the first day of the month of such Distribution Date (each
such limitation in clause (i) and (ii), the "Loss Allocation Limitation").
(d) The principal portion of any Realized Losses on the Mortgage Loans
allocated to a Class of Certificates (other than the Interest Only Certificates)
shall be allocated among the Certificates of such Class (other than the Interest
Only Certificates) in proportion to their respective Current Principal Amounts.
Once a Certificate Group been reduced to zero, the
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principal portion of Realized Losses on the Mortgage Loans in the related
Certificate Group (if any) that are not allocated to the Senior Mezzanine
Certificates or the Subordinate Certificates pursuant to Section 6.02(b) will be
allocated to the Senior Certificate of the other Certificate Groups, pro rata,
based upon their respective Current Principal Amounts. The principal portion of
any allocation of Realized Losses on the Mortgage Loans shall be accomplished by
reducing the Current Principal Amount of the related Certificates on the related
Distribution Date.
(e) Realized Losses on the Mortgage Loans shall be allocated on the
Distribution Date in the month following the month in which such loss was
incurred and, in the case of the principal portion thereof, after giving effect
to distributions made on such Distribution Date.
(f) On each Distribution Date, the Securities Administrator shall
determine and notify the Paying Agent of the Senior Mezzanine Certificate
Writedown Amount and the Subordinate Certificate Writedown Amount. Any such
Senior Mezzanine Certificate Writedown Amount or Subordinate Certificate
Writedown Amount shall effect a corresponding reduction in the Current Principal
Amount of (i) with respect to the Subordinate Certificate Writedown Amount, if
prior to the Cross-Over Date, the Subordinate Certificates, in the reverse order
of their numerical Class designations, (ii) with respect to the Senior Mezzanine
Certificate Writedown Amount, if prior to the Cross-Over Date, the Senior
Mezzanine Certificates and (iii) from and after the Cross-Over Date, the Senior
Certificates (other than the Interest Only Certificates), which reduction shall
occur on such Distribution Date after giving effect to distributions made on
such Distribution Date.
(g) Any Net Interest Shortfalls on the Mortgage Loans will be allocated
among the Classes of Certificates in proportion to the respective amounts of
Accrued Certificate Interest that would have been allocated thereto in the
absence of such Net Interest Shortfalls for such Distribution Date. The interest
portion of any Realized Losses with respect to the Group I Mortgage Loans or
Group II Mortgage Loans occurring on or prior to the Cross-Over Date will not be
allocated among any Certificates, but will reduce the amount of Group I
Available Funds or Group II Available Funds, respectively, on the related
Distribution Date. As a result of the subordination of the Senior Mezzanine
Certificates and Subordinate Certificates in right of distribution, such
Realized Losses on the Mortgage Loans will be borne first by the Subordinate
Certificates in inverse order of their numerical Class designations, and then by
the Senior Mezzanine Certificates. Following the Cross-Over Date, (A) the
interest portion of Realized Losses on the Group I Mortgage Loans will be
allocated on a pro rata basis to the Class A-1 Certificates, to Component 1X of
the Class X-1 Certificates and to Component 2X of the Class X-1 Certificates to
the extent of the Group I Allocation Fraction thereof, and (B) the interest
portion of Realized Losses on the Group II Mortgage Loans will be allocated on a
pro rata basis to the Class A-2A, Class A-2B and Class X-2 Certificates and to
Component 2X of the Class X-1 Certificates to the extent of the Group II
Allocation Fraction thereof.
(h) In addition, in the event that the Paying Agent receives any
Subsequent Recoveries on the Mortgage Loans from a Servicer, the Paying Agent
shall deposit such funds into the Distribution Account pursuant to Section
4.01(c)(ii). If, after taking into account such Subsequent Recoveries on the
Mortgage Loans, the amount of a Realized Loss on a Mortgage Loan is reduced, the
amount of such Subsequent Recoveries will be applied to increase the Current
Principal Amount of the Senior Mezzanine Certificates, and thereafter to
increase the
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Current Principal Amount of the Class or Classes of Subordinate Certificates
with the highest payment priority, to which Realized Losses on the Mortgage
Loans have been allocated, but not by more than the amount of Realized Losses on
the Mortgage Loans previously allocated to the Senior Mezzanine Certificates or
to that Class or Classes of Subordinate Certificates pursuant to Section 6.02.
The amount of any Subsequent Recoveries on the Mortgage Loans following the
application set forth in the immediately preceding sentence will be applied to
sequentially increase the Current Principal Amount of the Subordinate
Certificates, beginning with the Class of Subordinate Certificates with the next
highest payment priority, up to the amount of such Realized Losses on the
Mortgage Loans previously allocated to the Senior Mezzanine Certificates or to
such Class or Classes of Certificates pursuant to this Section 6.02. Holders of
such Certificates will not be entitled to any payments in respect of Accrued
Certificate Interest on the amount of such increases for any Interest Accrual
Period preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied to the Current Principal Amount of each Senior
Mezzanine Certificate, and to the Current Principal Amount of each Subordinate
Certificate of such Class, in accordance with its respective Fractional
Undivided Interest.
Section 6.03. Payments (a) On each Distribution Date, other than the
final Distribution Date, the Paying Agent shall distribute, to the extent of
funds then on deposit in the Distribution Account, to each Certificateholder of
record on the directly preceding Record Date the Certificateholder's pro rata
share of its Class (based on the aggregate Fractional Undivided Interest
represented by such Holder's Certificates) of all amounts required to be
distributed on such Distribution Date to such Class, based on information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator shall calculate the amount to be distributed to each Class and,
based on such amounts, the Securities Administrator shall determine the amount
to be distributed to each Certificateholder. All of the Securities
Administrator's calculations of payments shall be based solely on information
provided to the Securities Administrator by the Master Servicer. The Securities
Administrator shall not be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the Paying
Agent on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder by wire transfer to a United States dollar
account maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; provided, however,
that the final payment in respect of each Class of Certificates will be made
only upon presentation and surrender of such respective Certificates at the
office or agency of the Paying Agent specified in the notice to
Certificateholders of such final payment.
Section 6.04. Statements to Certificateholders. (a) Concurrently with
each distribution to Certificateholders, the Securities Administrator shall make
available to the parties hereto and each Certificateholder via the Securities
Administrator's internet website as set forth below, the following information,
expressed with respect to clauses (i) through (vii) in the aggregate and as a
Fractional Undivided Interest representing an initial Current Principal Amount
of $1,000, in the
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case of the Interest Only Certificates, a Notional Amount of $1,000, or in the
case of the Residual Certificates, an initial Current Principal Amount of $50:
(i) the Current Principal Amount or Notional Amount, as
applicable, of each Class of Certificates immediately prior to such
Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related
Interest Accrual Period;
(iv) any Group I Carryover Shortfall, any Group I Carryover
Shortfall Amounts, any Group II Carryover Shortfall, any Group II
Carryover Shortfall Amounts, the Net Interest Shortfall and any other
adjustments to interest at the related Pass-Through Rate necessary to
account for any difference between interest accrued and aggregate
interest distributed with respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on
each Class of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;
(vii) the Current Principal Amount or Notional Amount of each
Class of Certificates after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating
Interest Payments and outstanding unreimbursed advances by the Master
Servicer or the Trustee included in such distribution, separately
stated for each Loan Group;
(ix) the aggregate amount of any Realized Losses on the
Mortgage Loans (listed separately for each category of Realized Loss
and for each Loan Group) and Subsequent Recoveries on the Mortgage
Loans during the related Prepayment Period and cumulatively since the
Cut-off Date with respect to the Initial Mortgage Loans, and
cumulatively since the related Subsequent Cut-off Date with respect to
the Subsequent Mortgage Loans, as the case may be, and the amount and
source (separately identified) of any distribution in respect thereof
included in such distribution;
(x) with respect to each Mortgage Loan which incurred a
Realized Loss during the related Prepayment Period, (i) the loan
number, (ii) the Scheduled Principal Balance of such Initial Mortgage
Loan as of the Cut-off Date or such Subsequent Mortgage Loan as of the
related Subsequent Cut-off Date, as the case may be, (iii) the
Scheduled Principal Balance of such Mortgage Loan as of the beginning
of the related Due Period, (iv) the Net Liquidation Proceeds with
respect to such Mortgage Loan and (v) the amount of the Realized Loss
with respect to such Mortgage Loan;
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(xi) with respect to each Loan Group, the amount of Scheduled
Principal and Principal Prepayments (including but separately
identifying the principal amount of principal prepayments, Insurance
Proceeds, the purchase price in connection with the purchase of
Mortgage Loans, cash deposits in connection with substitutions of
Mortgage Loans and Net Liquidation Proceeds) and the number and
principal balance of Mortgage Loans purchased or substituted for during
the relevant period and cumulatively since the Cut-off Date with
respect to the Initial Mortgage Loans, and cumulatively since the
related Subsequent Cut-off Date with respect to the Subsequent Mortgage
Loans, as the case may be;
(xii) the number of Mortgage Loans (excluding REO Property) in
each Loan Group remaining in the Trust Fund as of the end of the
related Prepayment Period;
(xiii) information for each Loan Group and in the aggregate
regarding any Mortgage Loan delinquencies as of the end of the related
Prepayment Period, including the aggregate number and aggregate
Outstanding Principal Balance of Mortgage Loans (a) delinquent 30 to 59
days on a contractual basis, (b) delinquent 60 to 89 days on a
contractual basis, and (c) delinquent 90 or more days on a contractual
basis, in each case as of the close of business on the last day of the
immediately preceding month;
(xiv) for each Loan Group, the number of Mortgage Loans in the
foreclosure process as of the end of the related Due Period and the
aggregate Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group, the number and aggregate Outstanding
Principal Balance of all Mortgage Loans as to which the Mortgaged
Property was REO Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal
Balance of the related Mortgage Loan and (B) accrued interest through
the date of foreclosure, minus (C) foreclosure expenses) of any REO
Property in each Loan Group; provided that, in the event that such
information is not available to the Securities Administrator on the
Distribution Date, such information shall be furnished promptly after
it becomes available;
(xvii) the amount of Realized Losses on the Mortgage Loans
allocated to each Class of Certificates since the prior Distribution
Date and in the aggregate for all prior Distribution Dates;
(xviii) the Average Loss Severity Percentage for each Loan
Group;
(xix) the then applicable Group I Senior Percentage and Group
II Senior Percentage, Group I Senior Prepayment Percentage and Group II
Senior Prepayment Percentage, Group I Senior Mezzanine and Subordinate
Percentage and Group II Senior Mezzanine and Subordinate Percentage,
and Group I Senior Mezzanine and Subordinate Prepayment Percentage and
Group II Senior Mezzanine and Subordinate Prepayment Percentage; and
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(xx) the amount withdrawn from the Group I Pre-Funding Account
and from the Group I Interest Coverage Account, respectively, and used
to make payments to Class A-1 Certificateholders on that Distribution
Date, the amount remaining on deposit in the Group I Pre-Funding
Account and in the Group I Interest Coverage Account, respectively,
following such Distribution Date, and the amount withdrawn from the
Group I Pre-Funding Account and used to buy Group I Subsequent Mortgage
Loans prior to such Distribution Date;
(xxi) the amount withdrawn from the Group II Pre-Funding
Account and from the Group II Interest Coverage Account, respectively,
and used to make payments to Class A-2B Certificateholders on that
Distribution Date, the amount remaining on deposit in the Group II
Pre-Funding Account and in the Group II Interest Coverage Account,
respectively, following such Distribution Date, and the amount
withdrawn from the Group II Pre-Funding Account and used to buy Group
II Subsequent Mortgage Loans prior to such Distribution Date;
(xxii) with respect to each Mortgage Loan which is purchased
by the Investor pursuant to Section 4.15 or Section 4.21, as the case
may be, of the related Servicing Agreement, (i) the loan number, (ii)
the Scheduled Principal Balance of such Initial Mortgage Loan as of the
Cut-off Date or such Subsequent Mortgage Loan as of the related
Subsequent Cut-off Date, as the case may be, (iii) the Scheduled
Principal Balance of such Mortgage Loan as of the beginning of the
related Due Period, (iv) the purchase price paid by the Investor with
respect to such Mortgage Loan and (v) the amount of the Realized Loss
with respect to such Mortgage Loan; and
(xxiii) the amount of any Subsequent Recovery on the Mortgage
Loans for such Distribution Date, and the amount by which the Current
Principal Amount of the Senior Mezzanine Certificates and each Class of
Subordinate Certificates was increased as a result thereof.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.
The Securities Administrator may make available each month, to any
interested party, the monthly statement to Certificateholders via the Securities
Administrator's website initially located at "xxx.xxxxxxx.xxx." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (000) 000-0000. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the Securities Administrator's customer service desk
and indicating such. The Securities Administrator shall have the right to change
the way such reports are distributed in order to make such distribution more
convenient and/or more accessible to the parties, and the Securities
Administrator shall provide timely and adequate notification to all parties
regarding any such change.
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To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at xxx.xxxxxxxx.xxx/xxx. Assistance in using
the Trustee's website service can be obtained by calling the Trustee's customer
service desk at (000) 000-0000.
(b) By March 31 of each year beginning in 2005, the Trustee will
furnish such report to each Holder of the Certificates of record at any time
during the prior calendar year as to the aggregate of amounts reported pursuant
to subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advise
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator
pursuant to the requirements of the Code.
Section 6.05. Monthly Advances. Pursuant to the related Servicing
Agreement, each Servicer will make Monthly Advances. Each such Monthly Advance
shall be remitted to the Distribution Account no later than 1:00 p.m. Eastern
time on the Distribution Account Deposit Date in immediately available funds.
Subject to the Master Servicer's recoverability determination, in the event that
the related Servicer fails to make a required Monthly Advance, the Master
Servicer shall be required to remit the amount of such Monthly Advance to the
Distribution Account. The Master Servicer shall be obligated to make any such
Monthly Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it has
made a Nonrecoverable Advance or that a proposed Monthly Advance or a lesser
portion of such Monthly Advance would constitute a Nonrecoverable Advance, on
the related Distribution Account Deposit Date the Master Servicer shall deliver
(i) to the Paying Agent for the benefit of the Certificateholders funds
constituting the remaining portion of such Monthly Advance, if applicable, and
(ii) to the Trustee an Officer's Certificate setting forth the basis for such
determination.
The Master Servicer and each Servicer shall be entitled to be
reimbursed from the Distribution Account for all Monthly Advances of its own
funds made pursuant to this Section as provided in Section 4.03. The obligation
to make Monthly Advances with respect to any Mortgage Loan shall continue until
such Mortgage Loan is paid in full or the related Mortgaged Property or related
REO Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trust Fund pursuant to any applicable provision
of this Agreement, except as otherwise provided in this Section 6.05.
Subject to and in accordance with the provisions of Article VIII
hereof, in the event the Master Servicer fails to make such Monthly Advance,
then the Trustee, as the successor Master Servicer, shall be obligated to make
such Monthly Advance, subject to the provisions of this Section 6.05.
Section 6.06. Compensating Interest Payments. Upon timely notice by the
Paying Agent, the Master Servicer shall deposit in the Distribution Account not
later than each
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Distribution Account Deposit Date an amount equal to the lesser of (i) the sum
of the amounts required to be paid by each Servicer under the related Servicing
Agreement with respect to subclauses (a) and (b) of the definition of Interest
Shortfall with respect to the Mortgage Loans for the related Distribution Date,
and not so paid by such Servicers and (ii) the Master Servicing Compensation for
such Distribution Date (such amount, the "Compensating Interest Payment"). The
Master Servicer shall not be entitled to any reimbursement of any Compensating
Interest Payment.
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ARTICLE VII
The Master Servicer
Section 7.01. Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02. Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03. Indemnification of the Trustee, the Custodian and the
Securities Administrator. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement or the Certificates (i)
related to the Master Servicer's failure to perform its duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect to
any such claim or legal action (or pending or threatened claim or legal action),
the Indemnified Person shall have given the Master Servicer and the Depositor
written notice thereof promptly after the Indemnified Person shall have, with
respect to such claim or legal action, knowledge thereof. The Indemnified
Person's failure to give such notice shall not affect the Indemnified Person's
right to indemnification hereunder, except to the extent that the Master
Servicer is materially prejudiced by such failure to give notice. This indemnity
shall survive the resignation or removal of the Trustee, the Master Servicer,
the Custodian or the Securities Administrator and the termination of this
Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Subsection (a) above.
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(c) The Securities Administrator agrees to indemnify the Indemnified
Persons (other than the Securities Administrator) for, and to hold them harmless
against, any loss, liability or expense (including reasonable legal fees and
disbursements of counsel) incurred on their part (i) in connection with, arising
out of, or relating to the Securities Administrator's failure to prepare and
file a Form 10-K in accordance with Section 3.18, (ii) by reason of the
Securities Administrator's willful misfeasance, bad faith or gross negligence in
the performance of its obligations pursuant to Section 3.18 or (iii) by reason
of the Securities Administrator's reckless disregard of its obligations pursuant
to Section 3.18 (including, without limitation, in respect of any powers of
attorney furnished to the Securities Administrator), provided, in each case,
that with respect to any such claim or legal action (or pending or threatened
claim or legal action), an Indemnified Person shall have given the Securities
Administrator written notice thereof promptly after such Indemnified Person
shall have knowledge with respect to such claim or legal action. The Indemnified
Person's failure to give such notice shall not affect the Indemnified Person's
right to indemnification hereunder. This indemnity shall survive the resignation
or removal of the Trustee, the Master Servicer or the Securities Administrator
and the termination of this Agreement.
Section 7.04. Limitations on Liability of the Master Servicer and
Others. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or the Servicing Agreements
(except to the extent that the Master Servicer is indemnified by the related
Servicer thereunder), other than (i) any such loss, liability or expense related
to the Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as
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applicable, or by reason of reckless disregard of obligations and duties
hereunder or under the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Distribution Account as
provided by Section 4.03. Nothing in this Subsection 7.04(d) shall affect the
Master Servicer's obligation to supervise, or to take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Section 3.01.
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions
of any Servicer, except as otherwise expressly provided herein.
Section 7.05. Master Servicer Not to Resign. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel to such effect delivered to the Trustee. No such resignation
by the Master Servicer shall become effective until EMC or the Trustee or a
successor to the Master Servicer reasonably satisfactory to the Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.
Section 7.06. Successor Master Servicer. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, EMC or the Trustee may make such arrangements for the
compensation of such successor Master Servicer out of payments on the Mortgage
Loans as EMC or the Trustee and such successor Master Servicer shall agree. If
the successor Master Servicer does not agree that such market value is a fair
price, such successor Master Servicer shall obtain two quotations of market
value from third parties actively engaged in the servicing of single-family
mortgage loans. Notwithstanding the foregoing, the compensation payable to a
successor master servicer may not exceed the compensation which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act as Master Servicer hereunder.
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Section 7.07. Sale and Assignment of Master Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and EMC may terminate
the Master Servicer without cause and select a new Master Servicer; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person or shall be an Affiliate of a Person which
shall be qualified to service mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac; (b)
shall have a net worth of not less than $10,000,000 (unless otherwise approved
by each Rating Agency pursuant to clause (ii) below); (c) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the Trustee);
and (d) shall execute and deliver to the Trustee an agreement, in form and
substance reasonably satisfactory to the Trustee, which contains an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by it as Master Servicer
under this Agreement and any custodial agreement from and after the effective
date of such agreement; (ii) each Rating Agency shall be given prior written
notice of the identity of the proposed successor to the Master Servicer and each
Rating Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; (iii) the Master
Servicer assigning and delegating its rights and obligations hereunder shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
Counsel, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by EMC, EMC shall pay the terminated Master Servicer a
termination fee equal to 0.25% of the aggregate Scheduled Principal Balance of
the Mortgage Loans at the time the master servicing of the Mortgage Loans is
transferred to the successor Master Servicer. No such assignment or delegation
shall affect any liability of the Master Servicer arising prior to the effective
date thereof.
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ARTICLE VIII
Default
Section 8.01. "Event of Default" wherever used herein, means any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) and only with respect to
the defaulting Master Servicer:
(i) The Master Servicer fails to deposit in the Distribution
Account any amount so required by it to be deposited pursuant to this
Agreement (other than any Monthly Advance), and such failure continues
unremedied for a period of three Business Days after the date upon
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any
material respect any other material covenants and agreements set forth
in this Agreement to be performed by it, which covenants and agreements
materially affect the rights of Certificateholders, and such failure
continues unremedied for a period of 60 days (or, in the case of a
breach of its obligation to provide a Master Servicer Certification
pursuant to Section 3.18, for a period of five days) after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee
or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or
an involuntary case is commenced against the Master Servicer under any
applicable insolvency or reorganization statute and the petition is not
dismissed within 60 days after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to pay
its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute, makes
an assignment for the benefit of its creditors, or voluntarily suspends
payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Sections 7.05 or 7.07;
or
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(vi) The Master Servicer fails to deposit, or cause to be
deposited, on the Distribution Date in the Distribution Account any
Monthly Advance (other than a Nonrecoverable Advance) required to be
made with respect to such Distribution Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee, if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of EMC, may terminate
all of the rights and obligations (but not the liabilities) of the Master
Servicer under this Agreement and in and to the Mortgage Loans and/or the REO
Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02 and to
bankruptcy, insolvency or similar laws, if applicable, automatically and without
further action pass to and be vested in the Trustee pursuant to this Section
8.01; and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer as attorney-in-fact or
otherwise, any and all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master Servicer's rights and obligations hereunder, including, without
limitation, the transfer to the Trustee of (i) the property and amounts which
are then or should be part of the Trust or which thereafter become part of the
Trust, and (ii) originals or copies of all documents of the Master Servicer
reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties hereunder. In addition to any other amounts which are then, or,
notwithstanding the termination of its activities under this Agreement, may
become payable to the Master Servicer under this Agreement, the Master Servicer
shall be entitled to receive, out of any amount received on account of a
Mortgage Loan or related REO Property, that portion of such payments which it
would have received as reimbursement under this Agreement if notice of
termination had not been given. The termination of the rights and obligations of
the Master Servicer shall not affect any obligations incurred by the Master
Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in clause (vi)
of this Section 8.01 shall occur, the Trustee shall, by notice in writing to the
Master Servicer, which may be delivered by telecopy, immediately terminate all
of the rights and obligations of the Master Servicer thereafter arising under
this Agreement, but without prejudice to any rights it may have as a
Certificateholder or to reimbursement of Monthly Advances and other advances of
its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
taken prior to the distribution on the relevant Distribution Date.
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Section 8.02. Trustee to Act; Appointment of Successor. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; provided, however, that EMC shall have the right to
either (a) immediately assume the duties of the Master Servicer or (b) select a
successor Master Servicer; provided, further, however, that the Trustee shall
have no obligation whatsoever with respect to any liability (other than advances
deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to all funds relating to the
Mortgage Loans which the Master Servicer would have been entitled to retain if
the Master Servicer had continued to act hereunder, except for those amounts due
the Master Servicer as reimbursement permitted under this Agreement for advances
previously made or expenses previously incurred. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint or petition a court of competent jurisdiction to
appoint any established housing and home finance institution which is a Xxxxxx
Xxx- or Xxxxxxx Mac-approved servicer, and with respect to a successor to the
Master Servicer only having a net worth of not less than $10,000,000, as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the Trustee shall obtain a letter from each Rating Agency that
the ratings, if any, of such Rating Agency on each of the Certificates will not
be downgraded, qualified or withdrawn as a result of the selection of the
successor to the Master Servicer. Pending appointment of a successor to the
Master Servicer hereunder, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the Mortgage Loans as it and such successor shall agree; provided, however, that
the provisions of Section 7.06 shall apply, no such compensation shall be in
excess of that permitted the Trustee under this Subsection 8.02(a), and that
such successor shall undertake and assume the obligations of the Trustee to pay
compensation to any third Person acting as an agent or independent contractor in
the performance of master servicing responsibilities hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of all other provisions of this Agreement and the respective
Servicing Agreements relating to the Master Servicer, including the provisions
of Article VII, however, shall apply to it in its capacity as successor Master
Servicer.
Section 8.03. Notification to Certificateholders. Upon any termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to
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Certificateholders at their respective addresses appearing in the Certificate
Register, and to the Rating Agencies.
Section 8.04. Waiver of Defaults. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default known to the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund may, on behalf of all Certificateholders,
waive any default by the Master Servicer in the performance of its obligations
hereunder and the consequences thereof, except a default in the making of or the
causing to be made of any required distribution on the Certificates, which
default may only be waived by Holders of Certificates evidencing Fractional
Undivided Interests aggregating 100% of the Trust Fund. Upon any such waiver of
a past default, such default shall be deemed to cease to exist, and any Event of
Default arising therefrom shall be deemed to have been timely remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived. The Trustee shall give notice of any such waiver to the
Rating Agencies.
Section 8.05. List of Certificateholders. Upon written request of three
or more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
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ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01. Duties of Trustee. (a) The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, and the Securities Administrator each
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee and the Securities
Administrator, respectively. If an Event of Default has occurred and has not
been cured or waived, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and subject to Section 8.02(b) use the same
degree of care and skill in their exercise, as a prudent person would exercise
under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Master Servicer; and provided,
further, that neither the Trustee nor the Securities Administrator shall be
responsible for the accuracy or verification of any calculation provided to it
pursuant to this Agreement.
(c) On each Distribution Date, the Paying Agent shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.01 and 10.01 herein based on
the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee and the Securities
Administrator shall be determined solely by the express provisions of
this Agreement, neither the Trustee nor the Securities Administrator
shall be liable except for the performance of their respective duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee or the Securities Administrator and, in the absence
of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the
requirements of this Agreement;
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(ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee or an officer of the Securities Administrator,
respectively, unless it shall be proved that the Trustee or the
Securities Administrator, respectively, was negligent in ascertaining
the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the directions of
the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Trust Fund, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power
conferred upon the Trustee or the Securities Administrator,
respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee's Corporate Trust Office
shall have actual knowledge thereof. In the absence of such notice, the
Trustee may conclusively assume there is no such default or Event of
Default;
(v) The Trustee shall not in any way be liable by reason of
any insufficiency in any Account held by or in the name of Trustee
unless it is determined by a court of competent jurisdiction that the
Trustee's gross negligence or willful misconduct was the primary cause
of such insufficiency (except to the extent that the Trustee is obligor
and has defaulted thereon);
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities
Administrator be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost
profits), even if the Trustee or the Securities Administrator,
respectively, has been advised of the likelihood of such loss or damage
and regardless of the form of action; and
(vii) None of the Securities Administrator, EMC or the Trustee
shall be responsible for the acts or omissions of the other, the Master
Servicer or any Servicer, it being understood that this Agreement shall
not be construed to render them partners, joint venturers or agents of
one another.
Neither the Trustee nor the Securities Administrator shall be required
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under the Servicing Agreements, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the
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rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Paying Agent and
required to be deposited in the Distribution Account, the Group I Pre-Funding
Account, the Group I Pre-Funding Reserve Account and the Group I Interest
Coverage Account, as the case may be, pursuant to this Agreement will be
promptly so deposited by the Master Servicer or the Paying Agent, as applicable.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02. Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and
shall be protected in acting or refraining from acting in reliance on
any resolution, certificate of a Depositor, Master Servicer or
Servicer, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel, and any advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection with respect to
any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel:
(iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement, other than its obligation to give
notices pursuant to this Agreement, or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
Nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee's Corporate Trust Office has actual
knowledge (which has not been cured or waived), subject to Section
8.02(b), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their
exercise, as a prudent person would exercise under the circumstances in
the conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiver of all Events of Default which may have
occurred, neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for any action
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taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall
be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund, and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee or the Securities Administrator, as applicable, reasonably
assured to the Trustee or the Securities Administrator, as applicable,
by the security afforded to it by the terms of this Agreement. The
Trustee or the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall
be paid by the Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or through Affiliates, agents or attorneys; provided,
however, that the Trustee may not appoint any agent to perform its
custodial functions with respect to the Mortgage Files or paying agent
functions under this Agreement without the express written consent of
the Master Servicer, which consent will not be unreasonably withheld or
delayed. Neither the Trustee nor the Securities Administrator shall be
liable or responsible for the misconduct or negligence of any of the
Trustee's or the Securities Administrator's agents or attorneys or a
custodian or paying agent appointed hereunder by the Trustee or the
Securities Administrator with due care and, when required, with the
consent of the Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem
the nature of any action required on its part, other than a payment or
transfer under Subsection 4.01(b) or Section 4.02, to be unclear, the
Trustee or the Securities Administrator, respectively, may require
prior to such action that it be provided by the Depositor with
reasonable further instructions;
(viii) The right of the Trustee or the Securities
Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor
the Securities Administrator shall be accountable for other than its
negligence, negligent failure to act or willful misconduct in the
performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety with respect to the
execution of the trust created hereby or the powers granted hereunder,
except as provided in Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall
have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the
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repurchase of any Mortgage Loan by the Seller pursuant to this
Agreement, the Mortgage Loan Purchase Agreement or the related
Subsequent Mortgage Loan Purchase Agreement, as applicable, or the
eligibility of any Mortgage Loan for purposes of this Agreement.
Section 9.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature of the Trustee, and the countersignature
of the Certificate Registrar, on the Certificates) shall be taken as the
statements of the Depositor, and neither the Trustee nor the Securities
Administrator shall have any responsibility for their correctness. Neither the
Trustee nor the Securities Administrator makes any representation as to the
validity or sufficiency of the Certificates (other than the signature of the
Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee of the obligation to review the Mortgage Files
pursuant to Sections 2.02 and 2.04. The Trustee's signature on the Certificates
shall be solely in its capacity as Trustee and shall not constitute the
Certificates an obligation of the Trustee in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement,
other than any continuation statements required to be filed by the Trustee
pursuant to Section 3.20.
Section 9.04. Trustee and Securities Administrator May Own
Certificates. Each of the Trustee and the Securities Administrator, in its
individual capacity or in any capacity other than as Trustee or Securities
Administrator hereunder, may become the owner or pledgee of any Certificates
with the same rights it would have if it were not the Trustee or the Securities
Administrator, as applicable, and may otherwise deal with the parties hereto.
Section 9.05. Trustee's and Securities Administrator's Fees and
Expenses. The fees and expenses of the Trustee and the Securities Administrator
shall be paid in accordance with a side letter agreement. In addition, the
Trustee and the Securities Administrator will be entitled to recover from the
Distribution Account pursuant to Section 4.03 all reasonable out-of-pocket
expenses, disbursements and advances and the expenses of the Trustee and the
Securities Administrator, respectively, or any of their respective directors,
officers, employees or agents in connection with any Event of Default, any
breach of this Agreement or any claim or legal action
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(including any pending or threatened claim or legal action) incurred or made by
the Trustee or the Securities Administrator, respectively, or any of their
respective directors, officers, employees or agents in the administration of the
trusts hereunder (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, disbursement or advance
as may arise from its or their negligence, negligent failure to act or
intentional misconduct or which is the responsibility of the Certificateholders
or the Trust Fund hereunder. If funds in the Distribution Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor. Such compensation and reimbursement
obligation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust.
Section 9.06. Eligibility Requirements for Trustee, Paying Agent and
Securities Administrator. The Trustee and any successor Trustee, the Paying
Agent and any successor Paying Agent and the Securities Administrator and any
successor Securities Administrator shall during the entire duration of this
Agreement be a state bank or trust company or a national banking association
organized and doing business under the laws of such state or the United States
of America, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the
Trustee, rated "BBB" or higher by S&P with respect to their long-term rating and
rated "BBB" or higher by S&P and "Baa2" or higher by Xxxxx'x with respect to any
outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee, successor Paying Agent or successor Securities Administrator
other than pursuant to Section 9.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies. If
the Trustee publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee, the Paying Agent or the Securities Administrator
shall cease to be eligible in accordance with the provisions of this Section
9.06, the Trustee, the Paying Agent or the Securities Administrator, as
applicable, shall resign immediately in the manner and with the effect specified
in Section 9.08.
Section 9.07. Insurance. The Trustee, the Paying Agent and the
Securities Administrator, at their own expense, shall at all times maintain and
keep in full force and effect: (i) fidelity insurance, (ii) theft of documents
insurance and (iii) forgery insurance (which may be collectively satisfied by a
"Financial Institution Bond" and/or a "Bankers' Blanket Bond"). All such
insurance shall be in amounts, with standard coverage and subject to
deductibles, as are customary for insurance typically maintained by banks or
their affiliates which act as custodians for investor-owned mortgage pools. A
certificate of an officer of the Trustee, the Paying Agent or the Securities
Administrator as to the Trustee's, the Paying Agent's or the Securities
Administrator's, respectively, compliance with this Section 9.07 shall be
furnished to any Certificateholder upon reasonable written request.
Section 9.08. Resignation and Removal of the Trustee and Securities
Administrator. (a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Depositor and the Master Servicer,
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with a copy to the Rating Agencies. Upon receiving such notice of resignation,
the Depositor shall promptly appoint a successor Trustee or successor Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the resigning Trustee or
Securities Administrator, as applicable, and the successor Trustee or Securities
Administrator, as applicable. If no successor Trustee or Securities
Administrator shall have been so appointed and have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Trustee or
Securities Administrator may petition any court of competent jurisdiction for
the appointment of a successor Trustee or Securities Administrator.
(b) If at any time (i) the Trustee, the Paying Agent or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
Section 9.06 and shall fail to resign after written request therefor by the
Depositor, (ii) the Trustee, the Paying Agent or the Securities Administrator
shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or
a receiver of the Trustee, the Paying Agent or the Securities Administrator, as
applicable, or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee, the Paying Agent or the Securities
Administrator, as applicable, or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Securities
Administrator or the Trust Fund is located, and (B) the imposition of such tax
would be avoided by the appointment of a different trustee or securities
administrator, then the Depositor shall promptly remove the Trustee, or shall be
entitled to remove the Paying Agent or the Securities Administrator, as
applicable, and appoint a successor Trustee, Paying Agent or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Master Servicer, the Trustee,
the Paying Agent or Securities Administrator, as applicable, so removed, and the
successor Trustee, Paying Agent or Securities Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee, the Paying Agent or the Securities Administrator and appoint a
successor Trustee, Paying Agent or Securities Administrator by written
instrument or instruments, in sextuplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, the Paying Agent, the Master Servicer, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator or the Paying Agent is removed), and the Trustee,
Paying Agent or Securities Administrator so removed and the successor so
appointed. Notice of any removal of the Trustee or the Securities Administrator
shall be given to each Rating Agency by the Master Servicer or the successor
trustee, or by the Securities Administrator or the successor securities
administrator, as applicable. In the event that the Trustee, the Paying Agent or
the Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee,
successor Paying Agent or successor Securities Administrator, in excess of the
amount paid to the predecessor Trustee, predecessor Paying Agent or predecessor
Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee, the Paying Agent or the
Securities Administrator and appointment of a successor Trustee, Paying Agent or
Securities Administrator pursuant to any of the provisions of this Section 9.08
shall become effective except upon
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appointment of and acceptance of such appointment by the successor Trustee,
Paying Agent or Securities Administrator as provided in Section 9.09.
Section 9.09. Successor Trustee, Paying Agent and Successor Securities
Administrator. (a) Any successor Trustee, Paying Agent or Securities
Administrator appointed as provided in Section 9.08 shall execute, acknowledge
and deliver to the Depositor and to its predecessor Trustee, Paying Agent or
Securities Administrator, as applicable, and the Master Servicer an instrument
accepting such appointment hereunder. The resignation or removal of the
predecessor Trustee, Paying Agent or Securities Administrator shall then become
effective and such successor Trustee, Paying Agent or Securities Administrator,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Trustee, Paying Agent or Securities
Administrator herein. The predecessor Trustee, Paying Agent or Securities
Administrator shall, after its receipt of payment of its outstanding fees and
expenses with respect hereunder, promptly deliver to the successor Trustee,
Paying Agent or Securities Administrator, as applicable, all assets and records
of the Trust held by it hereunder, and the Depositor and the predecessor
Trustee, Paying Agent or Securities Administrator, as applicable, shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Trustee, Paying Agent or Securities Administrator, as applicable, all such
rights, powers, duties and obligations.
(b) No successor Trustee, Paying Agent or Securities Administrator
shall accept appointment as provided in this Section 9.09 unless at the time of
such acceptance such successor Trustee, Paying Agent or Securities Administrator
shall be eligible under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee, Paying Agent
or Securities Administrator as provided in this Section 9.09, the successor
Trustee, Paying Agent or Securities Administrator shall mail notice of the
succession of such Trustee, Paying Agent or Securities Administrator hereunder
to all Certificateholders at their addresses as shown in the Certificate
Register and to the Rating Agencies. EMC shall pay the cost of any such mailing
by the successor Trustee, Paying Agent or Securities Administrator.
Section 9.10. Merger or Consolidation of Trustee, Paying Agent or
Securities Administrator. Any state bank or trust company or national banking
association into which the Trustee, the Paying Agent or the Securities
Administrator may be merged or converted or with which it may be consolidated,
or any state bank or trust company or national banking association resulting
from any merger, conversion or consolidation to which the Trustee, the Paying
Agent or the Securities Administrator, respectively, shall be a party, or any
state bank or trust company or national banking association succeeding to all or
substantially all of the corporate trust business of the Trustee, the Paying
Agent or the Securities Administrator, respectively, shall be the successor of
the Trustee, the Paying Agent or the Securities Administrator, respectively,
hereunder, provided such state bank or trust company or national banking
association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
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Section 9.11. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 9.11, such powers, duties,
obligations, rights and trusts as the Depositor and the Trustee may consider
necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within
15 days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee (except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master Servicer) and
required to be conferred on such co-trustee shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, or its agent or
attorney-in-fact, with full power and authority, to do any lawful act under or
with respect to this Agreement on its behalf and in its name. If any separate
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trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Depositor and the Trustee acting jointly may at any time accept the resignation
of or remove any separate trustee or co-trustee.
Section 9.12. Federal Information Returns and Reports to
Certificateholders; REMIC Administration. (a) For federal income tax purposes,
the taxable year of each of REMIC I, REMIC II and REMIC III shall be a calendar
year and the Securities Administrator shall maintain or cause the maintenance of
the books of each such REMIC on the accrual method of accounting.
(b) (i) The Securities Administrator shall prepare and file or cause to
be filed with the Internal Revenue Service, and the Trustee shall sign, Federal
tax information returns or elections required to be made hereunder with respect
to each REMIC, the Trust Fund, if applicable, and the Certificates, containing
such information and at the times and in the manner as may be required by the
Code or applicable Treasury regulations, and shall furnish to each Holder of
Certificates at any time during the calendar year for which such returns or
reports are made such statements or information at the times and in the manner
as may be required thereby, including, without limitation, reports relating to
interest, original issue discount and market discount or premium (using a
constant prepayment assumption of 20% CPR). The Securities Administrator shall
apply for an Employee Identification Number from the IRS under Form SS-4 or any
other acceptable method for all tax entities. In connection with the foregoing,
the Securities Administrator shall timely prepare and file, and the Trustee
shall sign, IRS Form 8811, and updated versions thereof, as required, which
shall provide the name and address of the person who can be contacted to obtain
information required to be reported to the holders of regular interests in each
REMIC. The Trustee shall make elections to treat each REMIC hereunder as a REMIC
(which elections shall apply to the taxable period ending December 31, 2004 and
each calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe (and, if applicable, under applicable state and local
law), and as described by the Securities Administrator. The Trustee shall sign
all tax information returns filed pursuant to this Section 9.12 and any other
returns as may be required by the Code. The Holder of the largest percentage
interest of the Class R-I Certificate is hereby designated as the "Tax Matters
Person" (within the meaning of Treas. Reg. ss.1.860F-4(d)) for REMIC I, the
Holder of the largest percentage interest of the Class R-II Certificate is
hereby designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
ss. 1.860F-4(d)) for REMIC II, and the Holder of the largest percentage interest
of the Class R-III Certificate is hereby designated as the "Tax Matters Person"
(within the meaning of Treas. Reg. ss. 1.860F-4(d)) for REMIC III. The
Securities Administrator is hereby designated and appointed as the agent of each
such Tax Matters Person. Any Holder of a Residual Certificate will by acceptance
thereof appoint the Securities Administrator as agent and attorney-in-fact for
the purpose of acting as Tax Matters Person for each REMIC during such time as
the Securities Administrator does not own any such Residual Certificate. In the
event that the Code or applicable Treasury regulations prohibit the Trustee from
signing tax or information returns or other statements, or the Securities
Administrator from acting as agent for the Tax Matters Person, each of the
Trustee and the
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Securities Administrator shall take whatever action that in its sole good faith
judgment is necessary for the proper filing of such information returns or for
the provision of a Tax Matters Person for each REMIC, including designation of
the Holder of a Residual Certificate to sign such returns or act as Tax Matters
Person for each REMIC. Each Holder of a Residual Certificate shall be bound by
this Section.
(ii) The Securities Administrator shall, to the extent that
they are under its control, conduct matters relating to the assets of
any REMIC hereunder at all times that any Certificates are outstanding
so as to maintain its status as a REMIC under the REMIC Provisions. The
Securities Administrator shall not knowingly or intentionally take any
action or omit to take any action that would cause the termination of
the REMIC status of any REMIC hereunder. The Securities Administrator
shall not permit the creation of any interests in REMIC III other than
the Certificates. The Securities Administrator shall not receive any
amount representing a fee or other compensation for services (except as
otherwise permitted by this Agreement). The Securities Administrator
shall not receive any income attributable to any asset which is neither
a "qualified mortgage" nor a "permitted investment" within the meaning
of the REMIC Provisions. The Securities Administrator shall not receive
any contributions to any REMIC hereunder after the Startup Day that
would be subject to tax under Section 860G(d) of the Code. The
Securities Administrator shall not dispose of any assets of any REMIC
hereunder at a gain if such disposition would be a "prohibited
transaction" within the meaning of Section 860F(a)(2) of the Code. As
agent of each Tax Matters Person, the Securities Administrator shall,
as and when necessary and appropriate, represent the related REMIC in
any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of such REMIC, enter
into settlement agreements with any governmental taxing agency, extend
any statute of limitations relating to any tax item of such REMIC, and
otherwise act on behalf of such REMIC in relation to any tax matter or
controversy involving it.
(c) The Securities Administrator shall provide, upon request and
receipt of reasonable compensation, such information as required in Section
860D(a)(6)(B) of the Code to the Internal Revenue Service, to any Person
purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee holding
an interest in a pass-through entity described in Section 860E(e)(6) of the
Code, or any record holder of which is not a transferee permitted by Section
5.05(b) (or which is deemed by statute to be an entity with a disqualified
member) and otherwise shall comply with all of the requirements of Section
860E(e) of the Code.
(d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee
and the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that
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the Trustee or the Securities Administrator reasonably believes are applicable
under the Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Trustee or the Securities Administrator withholds
any amount from interest or original issue discount payments or advances thereof
to any Certificateholder pursuant to federal withholding requirements, the
Trustee or the Securities Administrator shall, together with its monthly report
to such Certificateholders, indicate such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs, including, without
limitation, any reasonable attorneys fees, imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer as a result of a breach of the
Trustee's covenants or the Securities Administrator's covenants, respectively,
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.
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ARTICLE X
Termination
Xxxxxxx 00.00. Xxxxxxxxxxx Xxxx Xxxxxxxxxx by the Depositor or its
Designee or Liquidation of the Mortgage Loans. (a) Subject to Section 10.02, the
respective obligations and responsibilities of the Depositor, the Trustee, the
Paying Agent, the Master Servicer, EMC and the Securities Administrator created
hereby, other than the obligation of the Paying Agent to make payments to
Certificateholders as hereinafter set forth, shall terminate upon the earlier
of:
(i) in accordance with Section 10.01(c), the repurchase by or
at the direction of the Depositor or its designee of all of the
Mortgage Loans and all related REO Property remaining in the Trust at a
price (the "Termination Purchase Price") equal to the sum of (a) 100%
of the Outstanding Principal Balance of each Mortgage Loan (other than
a Mortgage Loan related to REO Property) as of the date of repurchase,
net of the principal portion of any unreimbursed Monthly Advances made
by the purchaser, together with interest at the applicable Mortgage
Interest Rate accrued but unpaid to, but not including, the first day
of the month of repurchase, (b) the appraised value of any related REO
Property, less the good faith estimate of the Depositor of liquidation
expenses to be incurred in connection with its disposal thereof (but
not more than the Outstanding Principal Balance of the related Mortgage
Loan, together with interest at the applicable Mortgage Interest Rate
accrued on that balance but unpaid to, but not including, the first day
of the month of repurchase), such appraisal to be calculated by an
appraiser mutually agreed upon by the Depositor and the Trustee at the
expense of the Depositor, (c) unreimbursed out-of pocket costs of the
related Servicer and the Master Servicer, including unreimbursed
servicing advances and the principal portion of any unreimbursed
Monthly Advances, made on the Mortgage Loans prior to the exercise of
such repurchase right, (d) any costs and damages incurred by the Trust
in connection with any violation of such Mortgage Loan of any predatory
or abusive lending laws and (e) any unreimbursed costs and expenses of
the Trustee and the Securities Administrator payable pursuant to
Section 9.05; or
(ii) the later of (A) the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage
Loan remaining in the Trust Fund and (B) the disposition of all
property acquired with respect to any Mortgage Loan; provided, however,
that in the event that an advance has been made, but not yet recovered,
at the time of such termination, the Person having made such advance
shall be entitled to receive, notwithstanding such termination, any
payments received subsequent thereto with respect to which such advance
was made; or
(iii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement.
(b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
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(c) The right of the Depositor or its designee to repurchase all of the
assets of the Trust Fund pursuant to Subsection 10.01(a)(i) above shall be
exercisable only if (i) the aggregate Scheduled Principal Balance of the
Mortgage Loans at the time of any such repurchase is less than or equal to 10%
of the sum of (x) the Cut-off Date Balance, (y) the Group I Pre-Funded Amount,
and (z) the Group II Pre-Funded Amount, or (ii) the Depositor, based upon an
Opinion of Counsel addressed to the Depositor, the Trustee and the Securities
Administrator, has determined that the REMIC status of a REMIC hereunder has
been lost or that a substantial risk exists that such REMIC status will be lost
for the then-current taxable year. At any time thereafter, in the case of (i) or
(ii) above, the Depositor may elect to terminate REMIC I, REMIC II or REMIC III
at any time, and upon such election, the Depositor or its designee shall
repurchase all of the assets of the Trust Fund as described in Subsection
10.01(a)(i) above.
(d) The Paying Agent shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Paying Agent for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Paying Agent
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Paying Agent therein specified.
(e) If the option of the Depositor to repurchase or cause the
repurchase of all of the assets of the Trust Fund as described in Subsection
10.01 (a)(i) above is exercised, the Depositor and/or its designee shall deliver
to the Paying Agent for deposit in the Distribution Account, by the Business Day
prior to the applicable Distribution Date, an amount equal to the Termination
Purchase Price. Upon presentation and surrender of the Certificates by the
Certificateholders, the Paying Agent shall distribute to the Certificateholders,
as directed by the Securities Administrator in writing, an amount determined as
follows: with respect to each Certificate (other than the Class R Certificates
and the Interest Only Certificates), the outstanding Current Principal Amount,
plus with respect to each Certificate (other than the Class R Certificates), one
month's interest thereon at the applicable Pass-Through Rate; and with respect
to the Class R Certificates, the percentage interest evidenced thereby
multiplied by the difference, if any, between the above described repurchase
price and the aggregate amount to be distributed to the Holders of the
Certificates (other than the Class R Certificates). If the proceeds with respect
to the Group I Mortgage Loans are not sufficient to pay all of the Group I
Senior Certificates in full, any such deficiency will be allocated first, to the
Subordinate Certificates, in inverse order of their numerical designation, then
to the Senior Mezzanine Certificates, and then to the Group I Senior
Certificates, in each case on a pro rata basis. If the proceeds with respect to
the Group II Mortgage Loans are not sufficient to pay all of the Group II Senior
Certificates in full, any such deficiency will be allocated first, to the
Subordinate Certificates, in inverse order of their numerical designation, then
to the Senior Mezzanine Certificates, and then to the Group II Senior
Certificates, in each case on a pro rata basis. Upon deposit of the required
repurchase price and following such final Distribution Date relating thereto,
the Trustee shall release promptly to the Depositor and/or its designee the
Mortgage Files for the remaining applicable Mortgage Loans,
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and the Accounts with respect thereto shall terminate, subject to the Paying
Agent's obligation to hold any amounts payable to Certificateholders in trust
without interest pending final distributions pursuant to Subsection 10.01(f) and
(g). After final distributions pursuant to Section 10.01(f) and (g) to all
Certificateholders, any other amounts remaining in the Accounts will belong to
the Depositor.
(f) Upon the presentation and surrender of the Certificates, the Paying
Agent shall distribute to the remaining Certificateholders, pursuant to the
written direction of the Securities Administrator and in accordance with their
respective interests, all distributable amounts remaining in the Distribution
Account.
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Paying Agent shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice not all the Certificates shall have been
surrendered for cancellation, the Paying Agent may take appropriate steps, or
appoint any agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain subject to
this Agreement.
Section 10.02. Additional Termination Requirements. (a) If the option
of the Depositor to repurchase all the Mortgage Loans under Subsection
10.01(a)(i) above is exercised, the Trust Fund and each of REMIC I, REMIC II and
REMIC III shall be terminated in accordance with the following additional
requirements, unless the Trustee has been furnished with an Opinion of Counsel
to the effect that the failure of the Trust to comply with the requirements of
this Section 10.02 will not (i) result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code on REMIC I, REMIC II or
REMIC III or (ii) cause any REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date, at
the written direction of the Depositor, the Trustee, as agent for the
respective Tax Matters Persons, shall adopt a plan of complete
liquidation of REMIC I, REMIC II and REMIC III provided to it by the
Depositor meeting the requirements of a "qualified liquidation" under
Section 860F of the Code and any regulations thereunder;
(ii) the Depositor shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the
time of making of the final payment on the Certificates, the Trustee
shall sell or otherwise dispose of all of the remaining assets of the
Trust Fund in accordance with the terms hereof; and
(iii) at or after the time of adoption of such a plan of
complete liquidation of any of REMIC I, REMIC II and REMIC III and at
or prior to the final Distribution Date relating thereto, the Trustee
shall sell for cash all of the assets of the Trust to or at the
direction of the Depositor, and REMIC I, REMIC II and REMIC III, as
applicable, shall terminate at such time.
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(b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of the
related REMIC upon the written request of the Depositor and to take such action
in connection therewith as may be reasonably requested by the Depositor and (ii)
appoint the Depositor as their attorney-in-fact, with full power of
substitution, for purposes of adopting such a plan of complete liquidation. The
Trustee shall adopt such plan of liquidation by filing the appropriate statement
on the final tax return of each REMIC. Upon complete liquidation or final
distribution of all of the assets of the Trust Fund, the Trust Fund and each of
REMIC I, REMIC II and REMIC III shall terminate.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01. Intent of Parties. The parties intend that each of REMIC
I, REMIC II and REMIC III shall be treated as a REMIC for federal income tax
purposes and that the provisions of this Agreement should be construed in
furtherance of this intent.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the Seller
to the Depositor, and by the Depositor to the Trust be, and be construed as, an
absolute sale thereof to the Depositor or the Trust, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the Trust.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York, (ii) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Seller or the
Depositor, as applicable, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired, (iii) the possession by the Trustee or the
Custodian of the Mortgage Notes and such other items of property as may be
perfected by possession pursuant to Section 9-313 (or comparable provision) of
the applicable Uniform Commercial Code shall be deemed to be "possession by the
secured party" for purposes of effecting the security interest pursuant to such
section of the applicable Uniform Commercial Code and other applicable law. Any
assignment of the Seller and the Depositor shall also be deemed to be an
assignment of any security interest created hereby.
Each of the Seller and the Depositor for the benefit of the
Certificateholders shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the assets of the Trust Fund, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Agreement.
Section 11.02. Amendment. (a) This Agreement may be amended from time
to time by EMC, the Depositor, the Master Servicer, the Securities Administrator
and the Trustee, and the Servicing Agreements may be amended from time to time
by EMC, the Master Servicer and the Trustee, without notice to or the consent of
any of the Certificateholders, to (i) cure any ambiguity, (ii) conform the terms
hereof to the disclosure in the Prospectus or the Prospectus Supplement, (iii)
correct or supplement any provisions herein that may be defective or
inconsistent with any other provisions herein, (iv) comply with any changes in
the Code or (v) make any other provisions with respect to matters or questions
arising under this Agreement or the Servicing Agreements which shall not be
inconsistent with the provisions of this Agreement; provided, however, that with
regard to clauses (iv) and (v) of this Section 11.02(a), such action shall not,
as evidenced by an Opinion of Independent Counsel, addressed to the Trustee,
adversely affect in any material respect the interests of any Certificateholder.
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(b) This Agreement may also be amended from time to time by EMC, the
Master Servicer, the Depositor, the Securities Administrator and the Trustee,
and the Servicing Agreements may also be amended from time to time by the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund or of the applicable Class or Classes, if such amendment affects only
such Class or Classes, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or the
Servicing Agreements or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all Certificates then
outstanding, or (iii) cause REMIC I, REMIC II or REMIC III to fail to qualify as
a REMIC for federal income tax purposes, as evidenced by an Opinion of
Independent Counsel which shall be provided to the Trustee other than at the
Trustee's expense. Notwithstanding any other provision of this Agreement, for
purposes of the giving or withholding of consents pursuant to Section 11.02(b),
Certificates registered in the name of or held for the benefit of the Depositor,
the Securities Administrator, the Master Servicer, or the Trustee or any
Affiliate thereof shall be entitled to vote their Fractional Undivided Interests
with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of such amendment or written notification of the substance
of such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee and the Securities Administrator may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's or the
Securities Administrator's own respective rights, duties or immunities under
this Agreement.
Section 11.03. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation at the expense of the Trust upon the request in
writing of a Certificateholder, but only if such direction is accompanied by an
Opinion of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such
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recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
Section 11.04. Limitation on Rights of Certificateholders. (a) The
death or incapacity of any Certificateholder shall not terminate this Agreement
or the Trust, nor entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Depositor, the Securities Administrator, the Master Servicer or any successor to
any such parties unless (i) such Certificateholder previously shall have given
to the Trustee a written notice of a continuing default, as herein provided,
(ii) the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs and expenses and liabilities to be
incurred therein or thereby, and (iii) the Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of
any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
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Section 11.05. Acts of Certificateholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Depositor. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the
Depositor, if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Depositor, the Securities Administrator, the Master Servicer nor
any successor to any such parties shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of the holder of any Certificate shall bind every future
holder of the same Certificate and the holder of every Certificate issued upon
the registration of transfer or exchange thereof, if applicable, or in lieu
thereof with respect to anything done, omitted or suffered to be done by the
Trustee, the Securities Administrator, the Depositor, the Master Servicer or any
successor to any such party in reliance thereon, whether or not notation of such
action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 11.02(b) and except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which the
Trustee knows to be so owned shall be so disregarded. Certificates which have
been pledged in good faith to the Trustee, the Securities Administrator, the
Depositor, the Master Servicer or any Affiliate thereof may be regarded as
outstanding if the pledgor establishes to the satisfaction of the Trustee the
pledgor's right to act with respect to such Certificates and that the pledgor is
not an Affiliate of the Trustee, the Securities Administrator, the Depositor, or
the Master Servicer, as the case may be.
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Section 11.06. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 11.07. Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of EMC Mortgage Xxxxxxxxxxx, XXX Mortgage Corporation, 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice President - Servicing, telecopier
number (000) 000-0000, or to such other address as may hereafter be furnished to
the other parties hereto in writing; (iv) in the case of the Master Servicer,
Paying Agent or Securities Administrator, Xxxxx Fargo Bank, National
Association, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 and for overnight delivery to
0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (Attention: XXXX XX 2004-AR8),
telecopier no.: (000) 000-0000, or such other address as may hereafter be
furnished to the other parties hereto in writing; (v) in the case of the
Certificate Registrar, the Certificate Registrar Office; or (vi) in the case of
the Rating Agencies, Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Standard & Poor's Rating Service, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, Attention: Residential Mortgage Surveillance, or such
other address as may be furnished to the parties hereto in writing. Any notice
delivered to the Depositor, the Master Servicer, the Securities Administrator,
EMC or the Trustee under this Agreement shall be effective only upon receipt.
Any notice required or permitted to be mailed to a Certificateholder, unless
otherwise provided herein, shall be given by first-class mail, postage prepaid,
at the address of such Certificateholder as shown in the Certificate Register.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
Section 11.08. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.09. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
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Section 11.10. Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 11.12. Notice to Rating Agencies. The Trustee shall promptly
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
1. Any material change or amendment to this Agreement or a Servicing
Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the Trustee
or the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Distribution Account.
[Signature page follows]
141
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer,
the Securities Administrator and EMC Mortgage Corporation have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC., as Depositor
By: /s/ Xxxxx Xxxxxxxxxxx
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, as Trustee
By: /s/ Pei Xxx Xxxxx
Name: Pei Xxx Xxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Senior Vice President
Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04, 2.07 and 9.09(c)
in its capacity as Seller
EMC MORTGAGE CORPORATION, as Seller
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Senior Vice President
/s/ Xxxxx X. Xxxxx
-------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 2004 before me, a notary public in and for
said State, personally appeared Xxxxx Xxxxxxxxxxx, known to me to be a Vice
President of Structured Asset Mortgage Investments II Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxxxx Xxxxxxxx
----------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 2004 before me, a notary public in and for
said State, personally appeared Pei Xxx Xxxxx, known to me to be an Assistant
Vice President of JPMorgan Chase Bank, N.A., the banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said banking association, and acknowledged to me that
such banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxxx
-------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of December, 2004 before me, a notary public in and for
said State, personally appeared Xxxx Xxxxxxx, known to me to be a Senior Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx X. Xxxxx
------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 30th day of December, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx, known to me to be an Assistant
Vice President of Xxxxx Fargo Bank, National Association, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxx
-----------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 30th day of December, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx, known to me to be an Assistant
Vice President of Xxxxx Fargo Bank, National Association, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Xxxxx Xxxxxx
-----------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 30th day of December, 2004 before me, a notary public in and for
said State, personally appeared Xxxx Xxxxxxx, known to me to be a Senior Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx X. Xxxxx
------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS [A-_] [X-_] CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THE [CURRENT PRINCIPAL] [NOTIONAL] AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS [HEREON] AND REALIZED LOSSES [ON THE
MORTGAGE LOANS AS SET FORTH IN THE AGREEMENT (AS DEFINED BELOW)] [ALLOCABLE
HERETO] . ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
[CURRENT PRINCIPAL] [NOTIONAL] AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM
THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS [CURRENT PRINCIPAL] [NOTIONAL] AMOUNT BY INQUIRY OF XXXXX FARGO BANK,
NATIONAL ASSOCIATION, AS CERTIFICATE REGISTRAR (THE "CERTIFICATE REGISTRAR")
WITH RESPECT HERETO.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate No.__ Pass-Through Rate: Variable
Class [A-__] [X-_] [Senior]
Date of Pooling and Servicing Agreement and Cut-off Date: Aggregate Initial [Current Principal] [Notional] Amount
December 1, 2004 of this Class of Certificates as of the Cut-off Date:
$____________
First Distribution Date: Initial [Current Principal] [Notional Amount] of this
January 19, 2005 Certificate as of the Cut-off Date: $____________
Master Servicer: CUSIP: 86359L____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 19, 2035
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-AR8
evidencing a fractional undivided interest in the
distributions allocable to the Class [A-_] [X-_] Certificates
with respect to a Trust Fund consisting primarily of a pool of
one- to four-family adjustable rate mortgage loans sold by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of first lien, adjustable rate mortgage loans
secured by one- to four-family residences and individual condominium units
(collectively,
A-1-2
the "Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc.
("XXXX XX"). The Initial Mortgage Loans were sold on the Closing Date, and the
Subsequent Mortgage Loans will be sold on the related Subsequent Transfer Date,
by EMC Mortgage Corporation ("EMC") to XXXX XX. Xxxxx Fargo Bank, National
Association ("Xxxxx Fargo") will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among XXXX XX, as depositor (the "Depositor"), EMC Mortgage
Corporation, Xxxxx Fargo, as Master Servicer and securities administrator and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a summary of certain of
the pertinent of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
[Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at the per annum Pass-Through Rate set forth in
the Agreement.]
[This Certificate consists of two components, Component 1X and
Component 2X. The Components are not separately transferable.
On the First Distribution Date specified above, the Paying Agent will,
prior to the distribution of Available Funds to any Certificate, distribute the
Class X-1 Payment to the Class X-1 Certificates, pro rata, as follows:
(i) from Group I Available Funds, an amount equal to the product of (x)
the Class X-1 Payment and (y) the Component 1X Distribution Percentage; and
(ii) from Group II Available Funds, an amount equal to the product of
(x) the Class X-1 Payment and (y) the Component 2X Distribution Percentage.
Thereafter, interest on this Certificate will accrue during the month prior to
the month in which a Distribution Date (as hereinafter defined) occurs on the
Notional Amount hereof at a per annum Pass-Through Rate which varies by
Component as follows:
(A) Component 1X will bear interest at a Pass-Through Rate equal to the
greater of (i) zero and (ii) the excess of (x) the weighted average of the Net
Rates of the Group I Mortgage Loans (as of the second preceding Due Date) over
(y) the Pass-Through Rate on the Class A-1 Certificates, based on a Notional
Amount equal to the Current Principal Amount of the Class A-1 Certificates.
(B) Component 2X will bear interest at a Pass-Through Rate equal to the
greater of (i) zero and (ii) the excess of (x) the weighted average of the Net
Rates of each Loan Group (as of the second preceding Due Date), weighted in
proportion to the results of subtracting from the aggregate Scheduled Principal
Balance of each Loan Group the Current Principal Amount of the related Class of
Senior Certificates, immediately prior to the related Distribution Date, over
(y) the weighted average of the Pass-Through Rates on the Class M, Class B-1,
Class B-2 and Class
X-0-0
X-0 Certificates, based on a Notional Amount equal to the aggregate Current
Principal Amounts of the Class M, Class B-1, Class B-2 and Class B-3
Certificates.]
[On the First Distribution Date specified above, the Paying Agent will,
prior to the distribution of Available Funds to any Certificate, distribute the
Class X-2 Payment to the Class X-2 Certificates, pro rata.
Thereafter, interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Notional Amount hereof at a per annum Pass-Through Rate equal to the
greater of (i) zero and (ii) the excess of (x) the weighted average of the Net
Rates of the Group II Mortgage Loans (as of the second preceding Due Date),
weighted in proportion to the results of subtracting from the aggregate
Scheduled Principal Balance of the Group II Mortgage Loans the aggregate Current
Principal Amounts of the Class A-2A and Class A-2B Certificates immediately
prior to the related Distribution Date (as defined below), over (y) the
Pass-Through Rate on the Class A-2B certificates, based on a Notional Amount
equal to the Current Principal Amount of the Class A-2B Certificates.]
The Paying Agent will distribute on the 19th day of each month, or, if
such 19th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered [at
the close of business on the last Business Day of the calendar month preceding
the month] [on the 18th day of the month] of such Distribution Date, an amount
equal to the product of the Fractional Undivided Interest evidenced by this
Certificate and the amount (of interest and principal, if any) required to be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the first Distribution Date
in the month immediately following the month of the latest scheduled maturity
date of any Mortgage Loan and is not likely to be the date on which the [Current
Principal] [Notional] Amount of this Class of Certificates will be reduced to
zero.
Distributions on this Certificate will be made by the Paying Agent by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests,
by notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial [Current Principal] [Notional] Amount of this Certificate is
set forth above. The Current [Principal] [Notional] Amount hereof will be
reduced to the extent of distributions allocable to principal hereon and any
Realized Losses allocable hereto as set forth in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fifteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee, the Master Servicer nor the
A-1-4
Certificate Registrar is liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee, the Master Servicer and the Certificate
Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof whether or
not notation of such action is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor , the Master Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of Depositor, the Master Servicer, the Trustee, the Certificate Registrar
or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon (i) the later
of the (A) final payment or other liquidation (or
A-1-5
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and (B) disposition of all property acquired with respect to any Mortgage
Loan, (ii) the payment to Certificateholders of all amounts required to be paid
to them under the Agreement, or (iii) the optional repurchase by the party named
in the Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only (A) if (i) the aggregate Scheduled Principal Balance of the Mortgage Loans
at the time of any such repurchase is less than or equal to 10% of the sum of
(x) the Cut-off Date Balance, (y) the Group I Pre-Funded Amount and (z) the
Group II Pre-Funded Amount, or (ii) the Depositor, based upon an Opinion of
Counsel, has determined that the REMIC status of any REMIC under the Agreement
has been lost or a substantial risk exists that such REMIC status will be lost
for the then-current taxable year, and (B) following the satisfaction of certain
additional termination requirements specified in the Agreement. The exercise of
such right will effect the early retirement of the Certificates. In no event,
however, will the Trust Fund created by the Agreement continue beyond the
expiration of 21 years after the death of certain persons identified in the
Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
[Signature page follows]
A-1-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 30, 2004 JPMORGAN CHASE BANK, N.A.,
not in its individual capacity
but solely as Trustee
By:
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-__] [X-_] Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:
------------------------------------
Authorized Signatory
A-1-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to
_____________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-0
XXXXXXX X-0
CLASS M CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS
CERTIFICATE REGISTRAR (THE "CERTIFICATE REGISTRAR") WITH RESPECT HERETO.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
A-2-1
Pass-Through Rate: Variable
Class M Senior Mezzanine
Date of Pooling and Servicing Agreement and Cut-off Date: Aggregate Initial Current Principal Amount of this
December 1, 2004 Class of Certificates as of the Cut-off Date:
$10,362,100
First Distribution Date: Initial Current Principal Amount of this Certificate as
January 19, 2005 of the Cut-off Date:
$10,362,100
Master Servicer: CUSIP: 86359L GN 3
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 19, 2035
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-AR8
evidencing a fractional undivided interest in the
distributions allocable to the Class M Certificates with
respect to a Trust Fund consisting primarily of a pool of one-
to four-family adjustable interest rate mortgage loans sold by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer or the Certificate Registrar referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any
governmental entity or by Structured Asset Mortgage Investments II Inc., the
Master Servicer or the Certificate Registrar or any of their affiliates or any
other person. None of Structured Asset Mortgage Investments II Inc., the Master
Servicer, the Certificate Registrar or any of their affiliates will have any
obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of first lien, adjustable rate mortgage
A-2-2
loans secured by one- to four-family residences and individual condominium units
(collectively, the "Mortgage Loans") sold by Structured Asset Mortgage
Investments II Inc. ("XXXX XX"). The Initial Mortgage Loans were sold on the
Closing Date, and the Subsequent Mortgage Loans will be sold on the related
Subsequent Transfer Date, by EMC Mortgage Corporation ("EMC") to XXXX XX. Xxxxx
Fargo Bank, National Association ("Xxxxx Fargo") will act as master servicer of
the Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement, dated as of the Cut-off Date
specified above (the "Agreement"), among XXXX XX, as depositor (the
"Depositor"), EMC Mortgage Corporation, Xxxxx Fargo, as Master Servicer and
securities administrator and JPMorgan Chase Bank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at a per annum Pass-Through Rate equal to the
least of (i) One-Month LIBOR plus a margin initially equal to 0.450%, (ii)
11.00% per annum and (iii) the weighted average of the Net Rates of each Loan
Group, weighted in proportion to the results of subtracting from the aggregate
Scheduled Principal Balance of each Loan group the Current Principal amount of
the related Class of Senior Certificates (as of the second preceding Due Date).
The Paying Agent will distribute on the 19th day of each month, or, if such 19th
day is not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered on the 18th day of
the month of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount (of
interest and principal, if any) required to be distributed to the Holders of
Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Paying Agent by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests,
by notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial Current Principal Amount of this Certificate is set forth
above. The Current Principal Amount hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fifteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
A-2-3
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee nor the Certificate Registrar is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof, whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Depositor, the Master Servicer, the Trustee, the Certificate
Registrar or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the
A-2-4
Agreement) shall terminate upon (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired with
respect to any Mortgage Loan, (ii) the payment to Certificateholders of all
amounts required to be paid to them under the Agreement, or (iii) the optional
repurchase by the party named in the Agreement of all the Mortgage Loans and
other assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only (A) if (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans at the time of any such repurchase is
less than or equal to 10% of the sum of (x) the Cut-off Date Balance, (y) the
Group I Pre-Funded Amount and (z) the Group II Pre-Funded Amount, or (ii) the
Depositor, based upon an Opinion of Counsel, has determined that the REMIC
status of any REMIC under the Agreement has been lost or a substantial risk
exists that such REMIC status will be lost for the then-current taxable year,
and (B) following the satisfaction of certain additional termination
requirements specified in the Agreement. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
Fund created by the Agreement continue beyond the expiration of 21 years after
the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
[Signature page follows]
A-2-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 30, 2004
JPMORGAN CHASE BANK, N.A., not
in its individual capacity but
solely as Trustee
By:
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class M Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:
------------------------------------
Authorized Signatory
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to
______________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-0
XXXXXXX X-0
CLASS B-__ CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES [AND] THE SENIOR MEZZANINE CERTIFICATES [AND THE CLASS B-_
CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF XXXXX FARGO BANK, NATIONAL ASSOCIATION, AS
CERTIFICATE REGISTRAR (THE "CERTIFICATE REGISTRAR") WITH RESPECT HERETO.
[For Class B-1, CLASS B-2 And CLASS B-3 Certificates] [UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE CERTIFICATE REGISTRAR OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[For Class B-1, CLASS B-2 And Class B-3 Certificates] [EACH BENEFICIAL
OWNER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE OR
INTEREST HEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR INVESTING WITH
ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED FROM TIME TO TIME
("EXEMPTION"), AND THAT IT
A-3-1
UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE
EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH,
INC. OR XXXXX'X INVESTORS SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR
(III) (1) IT IS AN INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR
HOLD THE CERTIFICATE OR INTEREST HEREIN IS AN "INSURANCE COMPANY GENERAL
ACCOUNT", AS SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 95-60, AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE
BEEN SATISFIED.]
[For Class B-4, CLASS B-5 And CLASS B-6 Certificates] [THIS CERTIFICATE
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A
"QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A
QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR"
WITHIN THE MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME
WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE
REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.]
[For Class B-4, CLASS B-5 And CLASS B-6 Certificates] [THIS CERTIFICATE
MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE
BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES
OR
A-3-2
REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT
RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR
CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO,
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 84-14, XXXX 00-00, XXXX 00-0,
XXXX 95-60 OR PTCE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE
MASTER SERVICER, THE CERTIFICATE REGISTRAR, ANY SERVICER OR THE TRUSTEE, WHICH
WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE, OR UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS
PROVIDED.]
A-3-3
Pass-Through Rate: Variable
Class B-__ Subordinate
Date of Pooling and Servicing Agreement and Cut-off Date: Aggregate Initial Current Principal Amount of this
December 1, 2004 Class of Certificates as of the Cut-off Date:
$______________
First Distribution Date: Initial Current Principal Amount of this Certificate as
January 19, 2005 of the Cut-off Date: $______________
Master Servicer: CUSIP: 86359L_____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 19, 2035
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-AR8
evidencing a fractional undivided interest in the
distributions allocable to the Class B-__ Certificates with
respect to a Trust Fund consisting primarily of a pool of one-
to four-family adjustable interest rate mortgage loans sold by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that [Cede & Co.] [Bear Xxxxxxx Securities Corp.] is the
registered owner of the Fractional Undivided Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") generally consisting of first lien,
adjustable rate mortgage loans secured by one- to four-family residences and
A-3-4
individual condominium units (collectively, the "Mortgage Loans") sold by
Structured Asset Mortgage Investments II Inc. ("XXXX XX"). The Initial Mortgage
Loans were sold on the Closing Date, and the Subsequent Mortgage Loans will be
sold on the related Subsequent Transfer Date, by EMC Mortgage Corporation
("EMC") to XXXX XX. Xxxxx Fargo Bank, National Association ("Xxxxx Fargo") will
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement, dated as
of the Cut-off Date specified above (the "Agreement"), among XXXX XX, as
depositor (the "Depositor"), EMC Mortgage Corporation, Xxxxx Fargo, as Master
Servicer and securities administrator and JPMorgan Chase Bank, N.A., as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Current Principal Amount hereof at the per annum Pass-Through Rate set forth in
the Agreement. The Paying Agent will distribute on the 19th day of each month,
or, if such 19th day is not a Business Day, the immediately following Business
Day (each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered [on
the last Business Day of the month next preceding] [on the 18th day of] the
month of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount (of
interest and principal, if any) required to be distributed to the Holders of
Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Paying Agent by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests,
by notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial Current Principal Amount of this Certificate is set forth
above. The Current Principal Amount hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
[For Class B-1, Class B-2 and Class B-3 Certificates] [Each beneficial
owner of this Certificate or any interest herein shall be deemed to have
represented, by virtue of its acquisition or holding of this certificate or
interest herein, that either (i) it is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended or section 4975
of the Internal Revenue Code of 1986, as amended ("Plan"), or investing with
assets of a Plan or (ii) it has acquired and is holding such certificate in
reliance on Prohibited Transaction Exemption 90-30, as amended from time to time
("Exemption"), and that it understands that
A-3-5
there are certain conditions to the availability of the Exemption, including
that the certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by Standard & Poor's, Fitch, Inc. or Xxxxx'x
Investors Service, Inc., and the certificate is so rated or (iii) (1) it is an
insurance company, (2) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account", as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.]
[For Class B-4, Class B-5 and Class B-6 Certificates] [No transfer of
this Certificate shall be made unless the transfer is made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), and an effective registration or qualification under
applicable state securities laws, or is made in a transaction that does not
require such registration or qualification, and is made in accordance with
Section 5.02 of the Agreement. In the event that such transfer is to be made the
Certificate Registrar shall register such transfer if: (i) made to a transferee
who has provided the Certificate Registrar and the Trustee with evidence as to
its QIB status; or (ii) (A) the transferor has advised the Trustee and the
Certificate Registrar in writing that the Certificate is being transferred to an
Institutional Accredited Investor and (B) prior to such transfer the transferee
furnishes to the Trustee and the Certificate Registrar an Investment Letter; or
(iii) based upon an Opinion of Counsel to the effect that (A) and (B) above are
met sufficient to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and other applicable laws.]
Neither the Depositor nor the Certificate Registrar nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Certificate Registrar, the Securities Administrator, the Depositor,
EMC and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
[For Class B-4, Class B-5 and Class B-6 Certificates] [This Certificate
may not be acquired directly or indirectly by, or on behalf of, an employee
benefit plan or other retirement arrangement which is subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended, unless the transferee certifies
or represents that the proposed transfer and holding of this Certificate and the
servicing, management and operation of the Trust and its assets: (i) will not
result in any prohibited transaction under Section 406 of ERISA or Section 4975
of the Code which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 84-14 (Class Exemption for Plan
Asset Transactions Determined by Independent Qualified Professional Asset
Managers); PTCE 91-38 (Class Exemption for Certain Transactions Involving Bank
Collective Investment Funds); PTCE 90-1 (Class Exemption for Certain
Transactions Involving Insurance Company Pooled Separate Accounts); PTCE 95-60
(Class Exemption for Certain Transactions Involving Insurance Company General
Accounts); and PTCE 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers), or Section 401(c) of ERISA and
A-3-6
the regulations promulgated thereunder; (ii) will not constitute or result in
the assets of the Trust being deemed to be "plan assets" subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code; and
(iii) will not give rise to any additional obligations on the part of the
Depositor, the Securities Administrator, any Servicer, the Master Servicer, the
Certificate Registrar or the Trustee in addition to those undertaken in the
Agreement, which will be deemed represented by an owner of a Book-Entry
Certificate or a Global Certificate, or unless the opinion specified in Section
5.07 of the Agreement is provided.]
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fifteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee nor the Certificate Registrar is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the Depositor and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Fractional Undivided Interests
thereof). Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in lieu hereof, whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate Registrar for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more
A-3-7
new Certificates evidencing the same Class and in the same aggregate Fractional
Undivided Interest, as requested by the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Certificate
Registrar, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Certificate Registrar, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon (i) the later
of the (A) final payment or other liquidation (or Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and (B) disposition of all
property acquired with respect to any Mortgage Loan, (ii) the payment to
Certificateholders of all amounts required to be paid to them under the
Agreement, or (iii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only (A) if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than or equal to 10% of the sum of (x) the Cut-off
Date Balance, (y) the Group I Pre-Funded Amount and (z) the Group II Pre-Funded
Amount, or (ii) the Depositor, based upon an Opinion of Counsel, has determined
that the REMIC status of any REMIC under the Agreement has been lost or a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year, and (B) following the satisfaction of certain additional
termination requirements specified in the Agreement. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an authorized
signatory of the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
[Signature page follows]
A-3-8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 30, 2004
JPMORGAN CHASE BANK, N.A., not in
its individual capacity but solely
as Trustee
By:
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-__ Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:
------------------------------------
Authorized Signatory
A-3-9
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to
______________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
X-0-00
XXXXXXX X-0
CLASS R-__ CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON, A PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED ORGANIZATION (AS
DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE CERTIFICATE REGISTRAR AND THE
TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO THE TRUSTEE, THE DEPOSITOR, THE
MASTER SERVICER, THE CERTIFICATE REGISTRAR AND THE SECURITIES ADMINISTRATOR, AND
ON WHICH THEY MAY RELY, IN A FORM SATISFACTORY TO THE TRUSTEE AND THE
CERTIFICATE REGISTRAR, THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE
AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I)
WILL NOT CONSTITUTE OR RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE
"PLAN ASSETS" SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR
SECTION 4975 OF THE CODE; (II) WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE; (III) IS
PERMISSIBLE UNDER APPLICABLE LAW; AND (IV) WILL NOT SUBJECT THE DEPOSITOR, THE
SECURITIES ADMINISTRATOR, THE MASTER SERVICER, THE CERTIFICATE REGISTRAR, ANY
SERVICER OR THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT (AS DEFINED HEREIN).
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE OBTAINS THE PRIOR WRITTEN CONSENT OF
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC. AND THE SECURITIES ADMINISTRATOR
AND PROVIDES A TRANSFER AFFIDAVIT TO THE TAX MATTERS PERSON, THE SELLER, THE
CERTIFICATE REGISTRAR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE
UNITED STATES (AS DEFINED IN SECTION 7701 OF THE CODE), ANY STATE (AS DEFINED IN
SECTION 7701 OF THE CODE) OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF
THE UNITED STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING
(OTHER THAN
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AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES
ARE SUBJECT TO TAX AND, EXCEPT FOR XXXXXXX MAC OR ANY SUCCESSOR THERETO, A
MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT),
(B) ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION (AS DEFINED IN
SECTION 7701 OF THE CODE), OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (C) ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES
DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON
UNRELATED BUSINESS TAXABLE INCOME), (D) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C) OR (D) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION")
OR (E) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER
IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE
SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
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Certificate No. 1 Pass-Through Rate: Variable
Class R-__ Senior
Date of Pooling and Servicing Agreement and Cut-off Date: Aggregate Initial Current Principal Amount of this
December 1, 2004 Class of Certificates as of the Cut-off Date: $50.00
First Distribution Date: Initial Current Principal Amount of this Certificate as
January 19, 2005 of the Cut-off Date: $50.00
Master Servicer: CUSIP: 86359L_____
Xxxxx Fargo Bank, National Association
Assumed Final Distribution Date:
May 19, 2035
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2004-AR8
evidencing a fractional undivided interest in the
distributions allocable to the Class R-__ Certificates with
respect to a Trust Fund consisting primarily of a pool of one-
to four-family adjustable interest rate mortgage loans sold by
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset Mortgage
Investments II Inc., the Master Servicer, the Certificate Registrar or the
Trustee referred to below or any of their affiliates or any other person.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental entity or by Structured Asset Mortgage Investments
II Inc., the Master Servicer, the Certificate Registrar or the Trustee or any of
their affiliates or any other person. None of Structured Asset Mortgage
Investments II Inc., the Master Servicer or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Certificates.
This certifies that Bear, Xxxxxxx Securities Corp. is the registered
owner of the Fractional Undivided Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of first lien, adjustable rate
mortgage loans secured by one- to four-family residences and individual
condominium units (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments II Inc. ("XXXX XX"). The Initial Mortgage Loans were sold
on the Closing Date, and
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the Subsequent Mortgage Loans will be sold on the related Subsequent Transfer
Date, by EMC Mortgage Corporation ("EMC") to XXXX XX. Xxxxx Fargo Bank, National
Association ("Xxxxx Fargo") will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among XXXX XX, as depositor (the "Depositor"), EMC Mortgage
Corporation, Xxxxx Fargo, as Master Servicer and securities administrator and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
current Principal Amount at a per annum Pass-Through Rate equal to the weighted
average of the Net Rates of the Group I Mortgage Loans (as of the second
preceding Due Date). The Paying Agent will distribute on the 19th day of each
month, or, if such 19th day is not a Business Day, the immediately following
Business Day (each, a "Distribution Date"), commencing on the First Distribution
Date specified above, to the Person in whose name this Certificate is registered
on the 18th day of the month of such Distribution Date, an amount equal to the
product of the Fractional Undivided Interest evidenced by this Certificate and
the amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the first Distribution Date in the month immediately
following the month of the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Current Principal Amount of this
Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Paying Agent by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests,
by notifying the Paying Agent in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Paying Agent for that purpose and designated in such
notice. The Initial Current Principal Amount of this Certificate is set forth
above. The Current Principal Amount hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any ownership interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
ownership interest in this Certificate will be conditioned upon the delivery to
XXXX XX, the Securities Administrator, the Trustee and the Certificate Registrar
of, among other things, an affidavit to the effect that it is a United States
Person and Permitted Transferee, (iii) any attempted or purported transfer of
any ownership interest in this Certificate in violation of such restrictions
will be absolutely null and void and will vest no rights in the purported
transferee, and (iv) if any person other than a person that is a United States
Person and a Permitted Transferee acquires any ownership interest in this
Certificate in violation of such
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restrictions, then the Depositor will have the right, in its sole discretion and
without notice to the Holder of this Certificate, to sell this Certificate to a
purchaser selected by the Depositor, or any affiliate of the Depositor, on such
terms and conditions as the Depositor may impose.
This Certificate may not be acquired directly or indirectly by, or on
behalf of, an employee benefit plan or other retirement arrangement which is
subject to title I of the Employee Retirement Income Security Act of 1974, as
amended, and/or Section 4975 of the Internal Revenue Code of 1986, as amended,
unless the proposed transferee provides the Certificate Registrar and the
Trustee with an opinion of counsel addressed to the Trustee, the Certificate
Registrar, the Master Servicer and the Securities Administrator and on which
they may rely (which shall not be at the expense of the Trustee, the Certificate
Registrar, the Master Servicer or the Securities Administrator) which is
acceptable to the Certificate Registrar and the Trustee, that the purchase of
this Certificate will not result in or constitute a nonexempt prohibited
transaction, is permissible under applicable law and will not give rise to any
additional fiduciary obligations on the part of the Depositor, the Master
Servicer, the Securities Administrator, the Certificate Registrar or the
Trustee.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in
fifteen Classes. The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee nor the Certificate Registrar is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee and the Certificate Registrar.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor and
the Trustee with the consent of the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund
(or in certain cases, Holders of Certificates of affected Classes evidencing
such percentage of the Fractional Undivided Interests thereof). Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Certificate
Registrar upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Certificate
A-4-5
Registrar for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Fractional Undivided Interest will be issued to
the designated transferee.
By accepting this Certificate, the purchaser hereof agrees to be a Tax
Matters Person and appoints the Securities Administrator to act as its agent
with respect to all matters concerning the tax obligations of the Trust.
The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Fractional Undivided Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Certificate
Registrar, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Certificate Registrar, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon (i) the later
of the (A) final payment or other liquidation (or Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and (B) disposition of all
property acquired with respect to any Mortgage Loan, (ii) the payment to
Certificateholders of all amounts required to be paid to them under the
Agreement, or (iii) the optional repurchase by the party named in the Agreement
of all the Mortgage Loans and other assets of the Trust Fund in accordance with
the terms of the Agreement. Such optional repurchase may be made only (A) if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than or equal to 10% of the sum of (x) the Cut-off
Date Balance, (y) the Group I Pre-Funded Amount and (z) the Group II Pre-Funded
Amount, or (ii) the Depositor, based upon an Opinion of Counsel, has determined
that the REMIC status of any REMIC under the Agreement has been lost or a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year, and (B) following the satisfaction of certain additional
termination requirements specified in the Agreement. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.
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Unless this Certificate has been countersigned by an authorized
signatory of the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
[Signature page follows]
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: December 30, 2004 JPMORGAN CHASE BANK, N.A.,
not in its individual capacity
but solely as Trustee
By:
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-__ Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Certificate
Registrar
By:
------------------------------------
Authorized Signatory
A-4-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Fractional Undivided
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to
_____________________________________________.
This information is provided by __________________, the assignee named
above, or ________________________, as its agent.
A-4-9
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[PROVIDED UPON REQUEST]
EXHIBIT C
[RESERVED]
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004
RE: Pooling and Servicing Agreement dated as of
December 1, 2004, among Structured Asset Mortgage Investments II Inc.,
EMC Mortgage Corporation, Xxxxx Fargo
Bank, National Association and
JPMorgan Chase Bank, N.A.
as Trustee
In connection with the administration of the Mortgage Loans (as defined
in the Agreement) held by you pursuant to the above-captioned Pooling and
Servicing Agreement (the "Agreement"), we request the release, and hereby
acknowledge receipt, of the Mortgage File (as defined in the Agreement) for the
Mortgage Loan described below, for the reason indicated. The release of such
Mortgage File will not invalidate any insurance coverage provided in respect of
such Mortgage Loan under any of the Insurance Policies (as defined in the
Agreement).
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage paid in full and proceeds have been
deposited into the Custodial Account
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation
_____ 5. Nonliquidation Reason:
----------------------------
_____ 6. California Mortgage Loan paid in full
By:
-------------------------------
Authorized Signatory
Issuer:
---------------------------
Address:
--------------------------
Date:
-----------------------------
EXHIBIT E
FORM OF AFFIDAVIT PURSUANT TO SECTION 860E(E)(4)
Affidavit pursuant to Section
860E(e)(4) of the Internal Revenue Code
of 1986, as amended, and for other
purposes
STATE OF )
: ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ______] [the United States], on behalf of which
he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investments II Trust 2004-AR8, Mortgage Pass-Through Certificates, Series
2004-AR8, Class R-I, Class R-II and Class R-III Certificates (the "Residual
Certificates") for the account of a disqualified organization; (iii) it consents
to any amendment of the Pooling and Servicing Agreement that shall be deemed
necessary by Structured Asset Mortgage Investments II Inc. (upon advice of
counsel) to constitute a reasonable arrangement to ensure that the Residual
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificates unless
(a) it has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same four representations and (b) as of
the time of the transfer, it does not have actual knowledge that such affidavit
is false.
3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership, either directly or through any entity that is not a corporation for
United States federal income tax purposes, are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.
4. That the Investor's taxpayer identification number is
______________________.
5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
8. The Investor is not an employee benefit plan or other plan subject
to the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or an investment manager, named
fiduciary or a trustee of any such plan, or any other Person acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
such plan.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.
[NAME OF INVESTOR]
By:
-------------------------------------
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt
of distributions]
Address of Investor
for receipt of tax information:
E-2
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _________, 20___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of ___________________, 20___.
E-3
EXHIBIT F-1
FORM OF INVESTMENT LETTER
___________________[Date]
[DEPOSITOR]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments II Trust 2004-AR8,
Mortgage Pass-Through Certificates Series 2004-AR8 (the
"Certificates"), including the [Class B-4, Class B-5, Class
B-6] Certificates (the "Privately Offered Certificates")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
applicable state securities or "Blue Sky" laws, and are being sold to us in a
transaction that is exempt from the registration requirements of such laws;
(ii) any information we desired concerning the Certificates, including
the Privately Offered Certificates, the trust in which the Certificates
represent the entire beneficial ownership interest (the "Trust") or any other
matter we deemed relevant to our decision to purchase Privately Offered
Certificates has been made available to us;
(iii) we are able to bear the economic risk of investment in Privately
Offered Certificates; we are an institutional "accredited investor" as defined
in Section 501(a) of Regulation D promulgated under the Act and a sophisticated
institutional investor;
(iv) we are acquiring Privately Offered Certificates for our own
account, not as nominee for any other person, and not with a present view to any
distribution or other disposition of the Privately Offered Certificates;
(v) we agree the Privately Offered Certificates must be held
indefinitely by us (and may not be sold, pledged, hypothecated or in any way
disposed of) unless subsequently registered under the Act and any applicable
state securities or "Blue Sky" laws or an exemption from the registration
requirements of the Act and any applicable state securities or "Blue Sky" laws
is available;
(vi) we agree that in the event that at some future time we wish to
dispose of or exchange any of the Privately Offered Certificates (such
disposition or exchange not being currently foreseen or contemplated), we will
not transfer or exchange any of the Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser (as defined below), (2) if
required by the Pooling and Servicing Agreement (as defined below), a letter to
substantially the same effect as either this letter or, if the Eligible
Purchaser is a Qualified Institutional Buyer as defined under Rule 144A of the
Act, the Rule 144A and Related Matters Certificate in the form attached as
Exhibit F-2 to the Pooling and Servicing Agreement (as defined below) (or such
other documentation as may be acceptable to the Trustee and the Certificate
Registrar (each such term as defined below)) is executed promptly by the
purchaser and delivered to the addressees hereof and (3) all offers or
solicitations in connection with the sale, whether directly or through any agent
acting on our behalf, are limited only to Eligible Purchasers and are not made
by means of any form of general solicitation or general advertising whatsoever;
and
(B) if the Privately Offered Certificate is not registered under the
Act (as to which we acknowledge you have no obligation), the Privately Offered
Certificate is sold in a transaction that does not require registration under
the Act and any applicable state securities or "blue sky" laws and, if JPMorgan
Chase Bank, N.A. (the "Trustee") or Xxxxx Fargo Bank, National Association (the
"Certificate Registrar") so requests, a satisfactory Opinion of Counsel (as
defined in the Pooling and Servicing Agreement) is furnished to such effect,
which Opinion of Counsel shall be an expense of the transferor or the
transferee;
(vii) we agree to be bound by all of the terms (including those
relating to restrictions on transfer) of the Pooling and Servicing Agreement,
pursuant to which the Trust was formed; we have reviewed carefully and
understand the terms of the Pooling and Servicing Agreement;
(viii) we either: (i) are not acquiring the Privately Offered
Certificate directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, and/or Section 4975 of the
Internal Revenue Code of 1986, as amended, or (ii) are providing a
representation or an Opinion of Counsel to the effect that the proposed transfer
and/or holding of a Privately Offered Certificate and the servicing, management
and/or operation of the Trust and its assets: (I) will not result in any
prohibited transaction unless it is covered under an individual or prohibited
transaction class exemption, including, but not limited to, Class Prohibited
Transaction Exemption ("PTCE") 84-14, XXXX 00-00, XXXX 00-0, XXXX 95-60, PTCE
96-23 or Section 401(c) of ERISA and the regulations promulgated thereunder;
(II) will not constitute or result in the assets of the Trust being deemed to be
"plan assets" subject to the prohibited transaction provisions of ERISA or
Section 4975 of the Code; and (III) will not give rise to any
F-1-2
additional fiduciary duties on the part of the Seller, the Master Servicer, the
Certificate Registrar, the Securities Administrator, any Servicer or the
Trustee.
(ix) We understand that each of the [Class B-4, Class B-5 and Class
B-6] Certificates bears, and will continue to bear, a legend to substantially
the following effect: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A
PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A
QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH
CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM
TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE SECURITIES ACT OR ANY
ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING
NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE AND THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY
IN THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE AND THE
CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE AND THE
CERTIFICATE REGISTRAR THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION. NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 5.07 OF THE AGREEMENT OR ANY OPINION OR COUNSEL SATISFACTORY TO THE
MASTER SERVICER, THE TRUSTEE, THE CERTIFICATE REGISTRAR AND THE SECURITIES
ADMINISTRATOR THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE, WILL NOT RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE, THE CERTIFICATE
REGISTRAR, THE SELLER, ANY SERVICER OR THE SECURITIES ADMINISTRATOR TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT."
F-1-3
"Eligible Purchaser" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of December 1, 2004, among
Structured Asset Mortgage Investments II Inc., EMC Mortgage Corporation, Xxxxx
Fargo Bank, National Association and JPMorgan Chase Bank, N.A., as Trustee (the
"Pooling and Servicing Agreement').
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.
Very truly yours,
[PURCHASER]
By:
------------------------------------
(Authorized Officer)
[By:
------------------------------------
Attorney-in-fact]
F-1-4
NOMINEE ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:
------------------------------------
(Authorized Officer)
[By:
------------------------------------
Attorney-in-fact]
F-1-5
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
______________________[Date]
[DEPOSITOR]
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Structured Asset Mortgage Investments II Trust 2004-AR8,
Mortgage Pass-Through Certificates, Series 2004-AR8 Class B-4,
Class B-5 and Class B-6 Certificates (the "Privately Offered
Certificates")
Dear Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible
securities (excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to a
repurchase agreement and swaps), as described below:
Date: ______________, 20__ (must be on or after the close of its most
recent fiscal year)
Amount: $ _____________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the
following entities:
F-2-1
(i) an insurance company as defined in Section 2(a)(13) of the
Act1; or
(ii) an investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), or any
"business development company" as defined in Section 2(a)(48) of the
Investment Company Act; or
(iii) a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; or
(iv) a plan (i) established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or
its political subdivisions, the laws of which permit the purchase of
securities of this type, for the benefit of its employees and (ii) the
governing investment guidelines of which permit the purchase of
securities of this type; or
(v) a "business development company" as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
(vi) a corporation (other than a U.S. bank, savings and loan
association or equivalent foreign institution), partnership,
Massachusetts or similar business trust, or an organization described
in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;
or
(vii) a U.S. bank, savings and loan association or equivalent
foreign institution, which has an audited net worth of at least $25
million as demonstrated in its latest annual financial statements; or
(viii) an investment adviser registered under the Investment
Advisers Act; or
b. greater than $10 million, and the undersigned is a broker-dealer
registered with the Securities and Exchange Commission ("SEC"); or
c. less than $10 million, and the undersigned is a broker-dealer
registered with the SEC and will only purchase Rule 144A securities in
transactions in which it acts as a riskless principal (as defined in Rule 144A);
or
d. less than $100 million, and the undersigned is an investment company
registered under the Investment Company Act of 1940, which, together with one or
more registered investment companies having the same or an affiliated investment
adviser, owns at least $100 million of eligible securities; or
________________
1 A purchase by an insurance company for one or more of its "separate
accounts", as defined by Section 2(a)(37) of the Investment Company Act of
1940, as amended, which are neither registered nor required to be
registered thereunder, shall be deemed to be a purchase for the account of
such insurance company.
F-2-2
e. less than $100 million, and the undersigned is an entity, all the
equity owners of which are "qualified institutional buyers."
The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) a person
reasonably believed to be a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501(a) of the Act, in a transaction that otherwise does not
constitute a public offering.
The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached as Exhibit F-1 to
the Pooling and Servicing Agreement, dated as of December 1, 2004, among
Structured Asset Mortgage Investments II Inc., EMC Mortgage Corporation, Xxxxx
Fargo Bank, National Association and JPMorgan Chase Bank, N.A., as Trustee,
pursuant to Certificates were issued.
The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, and/or
Section 4975 of the Internal Revenue Code of 1986, as amended, or (ii) is
providing a representation or an opinion of counsel to the effect that the
proposed transfer and/or holding of a Privately Offered Certificate and the
servicing, management and/or operation of the Trust and its assets: (I) will not
result in any prohibited transaction unless it is covered under an individual or
class prohibited transaction exemption, including, but not limited to, Class
Prohibited Transaction Exemption ("PTCE") 84-14, XXXX 00-00, XXXX 00-0, XXXX
95-60, PTCE 96-23 or Section 401(c) of ERISA and the regulations to be
promulgated thereunder; (II) will not constitute or result in the assets of the
Trust being deemed to be "plan assets" subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code; and (III) will not give rise to
any additional fiduciary duties on the part of the Depositor, the Master
Servicer, the Certificate Registrar, the Securities Administrator, any Servicer
or the Trustee.
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):
F-2-3
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned purchaser (the
"Purchaser") on the ____ day of ___________, 20___.
Very truly yours,
[PURCHASER]
By:
------------------------------------
(Authorized Officer)
[By:
------------------------------------
Attorney-in-fact]
F-2-4
NOMINEE ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By:
------------------------------------
(Authorized Officer)
[By:
------------------------------------
Attorney-in-fact]
F-2-5
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement"), dated as of December 30, 2004, by and among JPMORGAN
CHASE BANK, N.A., as trustee (including its successors under the Pooling and
Servicing Agreement defined below, the "Trustee"), STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as depositor (together with any successor in interest, the
"Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, as master servicer and
securities administrator (together with any successor in interest or successor
under the Pooling and Servicing Agreement referred to below, the "Master
Servicer") and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as custodian (together
with any successor in interest or any successor appointed hereunder, the
"Custodian").
WITNESSETH THAT:
WHEREAS, the Depositor, the Master Servicer, the Trustee and EMC
Mortgage Corporation (the "Seller") have entered into a Pooling and Servicing
Agreement, dated as of December 1, 2004, relating to the issuance of Structured
Asset Mortgage Investments II Trust 2004-AR8, Mortgage Pass-Through
Certificates, Series 2004-AR8 (as in effect on the date of this agreement, the
"Original Pooling and Servicing Agreement," and as amended and supplemented from
time to time, the "Pooling and Servicing Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for
the purposes of receiving and holding certain documents and other instruments
delivered by (i) the Depositor or the Master Servicer under the Pooling and
Servicing Agreement and (ii) the related Servicer under their respective
Servicing Agreements, all upon the terms and conditions and subject to the
limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Depositor, the
Master Servicer and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.
ARTICLE II
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1 Custodian to Act as Agent: Acceptance of Mortgage Files.
The Custodian, as the duly appointed agent of the Trustee for these purposes,
acknowledges, and on each Subsequent Transfer Date, the Custodian, as the duly
appointed agent of the Trustee, will acknowledge (subject to any exceptions
noted in the Initial Certification referred to in Section
2.3(a)) receipt of the Mortgage Files relating to the Mortgage Loans identified
on Schedule 1 attached hereto (as such Schedule shall be updated from time to
time) (the "Mortgage Files") and declares that it holds and will hold such
Mortgage Files as agent for the Trustee, in trust, for the use and benefit of
all present and future Certificateholders.
Section 2.2 Recordation of Assignments. If any Mortgage File includes
one or more assignments of Mortgage to the Trustee in a state which is
specifically excluded from the Opinion of Counsel delivered by the Seller to the
Trustee and the Custodian pursuant to the provisions of Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Depositor for the purpose of recording it in the appropriate
public office for real property records, and the Depositor, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.
Section 2.3 Review of Mortgage Files.
(a) On or prior to the Closing Date, with respect to the
Initial Mortgage Loans, and on or prior to each Subsequent Transfer Date, with
respect to the related Subsequent Mortgage Loans, in accordance with Section
2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver to the
Depositor and the Trustee an Initial Certification in the form annexed hereto as
Exhibit One evidencing receipt (subject to any exceptions noted therein) of a
Mortgage File for each of the Mortgage Loans listed on Schedule 1 attached
hereto (the "Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date (or, within 90 days of
a Subsequent Transfer Date, with respect to the related Subsequent Mortgage
Loans, or, with respect to any Substitute Mortgage Loans, within 5 Business Days
after the receipt by the Custodian thereof), the Custodian agrees, for the
benefit of Certificateholders, to review, in accordance with the provisions of
Section 2.02 of the Pooling and Servicing Agreement, each such document, and
shall execute and deliver to the Depositor and the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all
such documents have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. The
Custodian shall be under no duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face.
(c) Not later than 180 days after the Closing Date (or not
later than 180 days after a Subsequent Transfer Date, with respect to the
related Subsequent Mortgage Loans, or, with respect to any Substitute Mortgage
Loans, within 5 Business Days after the receipt by the Custodian thereof), the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and execute and deliver to the Depositor and the
Trustee (and if the Custodian is not also the Master Servicer, then to the
Master Servicer) a Final Certification in the form annexed hereto as Exhibit
Three evidencing the completeness of the Mortgage Files.
G-2
(d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans then contained in the Mortgage Files.
Section 2.4 Notification of Breaches of Representations and Warranties.
Upon discovery by the Custodian of a breach of any representation or warranty
made by the Depositor as set forth in the Pooling and Servicing Agreement with
respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall give
prompt written notice to the Company, the applicable Servicer and the Trustee.
Section 2.5 Custodian to Cooperate: Release of Mortgage Files. Upon
receipt of written notice from the Trustee that the Mortgage Loan Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and that the Repurchase Price therefor has been deposited in the
Distribution Account, and a Request for Release (as defined below), the
Custodian agrees to promptly release to the Mortgage Loan Seller the related
Mortgage File.
Upon the Custodian's receipt of a request for release (a "Request for
Release") substantially in the form of Exhibit D to the Pooling and Servicing
Agreement signed by a Servicing Officer of the related Servicer stating that it
has received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees to
promptly release to such Servicer the related Mortgage File. The Depositor shall
deliver to the Custodian, and the Custodian agrees to accept, the Mortgage Note
and other documents constituting the Mortgage File with respect to any
Substitute Mortgage Loan, which documents the Custodian will review to the
extent provided in Article II of the Pooling and Servicing Agreement.
From time to time as is appropriate for the servicing or foreclosure of
any Mortgage Loan, including, for this purpose, collection under any Primary
Mortgage Insurance Policy, the related Servicer shall (or, if the related
Servicer does not, then the Master Servicer may) deliver to the Custodian a
Request for Release signed by a Servicing Officer requesting that possession of
all of the Mortgage File be released to such Servicer and certifying as to the
reason for such release and that such release will not invalidate any insurance
coverage provided in respect of the Mortgage Loan under any of the Insurance
Policies. Upon receipt of the foregoing, the Custodian shall deliver the
Mortgage File to the related Servicer. The related Servicer shall cause each
Mortgage File or any document therein so released to be returned to the
Custodian when the need therefor by such Servicer no longer exists, unless (i)
the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Distribution Account or (ii) the
Mortgage File or such document has been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of
G-3
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the related
Servicer has delivered to the Custodian a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
At any time that a Servicer or the Master Servicer is required to
deliver to the Custodian a Request for Release, such Servicer or the Master
Servicer shall deliver two copies of the Request for Release if delivered in
hard copy or such Servicer or the Master Servicer may furnish such Request for
Release electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed the Request for Release. In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, the assignment of mortgage and the related
Mortgage Note shall be returned to the related Servicer or the Master Servicer,
as applicable, for execution and endorsement, respectively, pursuant to a power
of attorney from the Trustee and for delivery to the Seller. If the related
Servicer or the Master Servicer does not have a power of attorney from the
Trustee to execute the applicable assignment and to endorse the Mortgage Note,
such Request for Release shall be accompanied by an assignment of mortgage,
without recourse, executed by the Trustee to the Seller and the related Mortgage
Note shall be endorsed without recourse by the Trustee and be returned to the
related Servicer or the Master Servicer, as applicable, for delivery to the
Seller. In connection with any Request for Release of a Mortgage File because of
the payment in full of a Mortgage Loan and if the related Servicer or the Master
Servicer does not have a power of attorney from the Trustee to execute the
applicable certificate of satisfaction or similar instrument, such Request for
Release shall be accompanied by a certificate of satisfaction or other similar
instrument to be executed by or on behalf of the Trustee and returned to the
related Servicer or the Master Servicer, as applicable.
Section 2.6 Assumption Agreements. In the event that any assumption
agreement, substitution of liability agreement or sale of servicing agreement is
entered into with respect to any Mortgage Loan subject to this Agreement in
accordance with the terms and provisions of the Pooling and Servicing Agreement,
the Master Servicer, to the extent provided in the related Servicing Agreement,
shall cause the related Servicer to notify the Custodian that such assumption
agreement, substitution of liability agreement or sale of servicing agreement
has been completed by forwarding to the Custodian the original of such
assumption agreement, substitution of liability agreement or sale of servicing
agreement, which shall be added to the related Mortgage File and, for all
purposes, shall be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting parts thereof.
ARTICLE III
CONCERNING THE CUSTODIAN
Section 3.1 Custodian a Bailee and Agent of the Trustee. With respect
to each Mortgage Note and other documents constituting each Mortgage File which
are delivered to the Custodian, the Custodian is exclusively the bailee and
agent of the Trustee and has no instructions to hold any Mortgage Note or
Mortgage File for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of
G-4
Section 2.5 of this Agreement, no Mortgage Note or Mortgage File shall be
delivered by the Custodian to the Depositor, the Seller, any Servicer or the
Master Servicer or otherwise released from the possession of the Custodian.
Section 3.2 Reserved.
Section 3.3 Custodian May Own Certificates. The Custodian in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Custodian.
Section 3.4 Master Servicer to Pay Custodian's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith, to the extent that such cost or expense is
indemnified by the Depositor pursuant to the Pooling and Servicing Agreement.
Section 3.5 Custodian May Resign; Trustee May Remove Custodian. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Mortgage Files itself and give prompt notice thereof to the
Depositor, the Master Servicer, the Servicers and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time with the consent of
the Master Servicer. In such event, the Trustee shall appoint, or petition a
court of competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority, shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with any
Servicer or the Depositor.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Depositor and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Depositor and the
Master Servicer.
G-5
Section 3.6 Merger or Consolidation of Custodian. Any Person into which
the Custodian may be merged or converted or with which it may be consolidated,
or any Person resulting from any merger, conversion or consolidation to which
the Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the Custodian hereunder (provided such
Person shall satisfy the requirements set forth in Section 3.7), without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 3.7 Representations of the Custodian. The Custodian hereby
represents, and any successor Custodian hereunder shall represent, that it is a
depository institution subject to supervision or examination by a federal or
state authority, has a combined capital and surplus of at least $15,000,000 and
is qualified to do business in the jurisdictions in which it will hold any
Mortgage File.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.1 Notices. All notices, requests, consents and demands and
other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 4.2 Amendments. No modification or amendment of or supplement
to this Agreement shall be valid or effective unless the same is in writing and
signed by all parties hereto, and neither the Depositor, the Master Servicer nor
the Trustee shall enter into any amendment hereof except as permitted by the
Pooling and Servicing Agreement. The Trustee shall give prompt notice to the
Custodian of any amendment or supplement to the Pooling and Servicing Agreement
and furnish the Custodian with written copies thereof.
Section 4.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, WHICH SHALL APPLY HERETO).
Section 4.4 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Depositor and at the Trust's expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel reasonably satisfactory to the Depositor to the effect that the failure
to effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.
G-6
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 4.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
[Signature page follows]
G-7
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: JPMORGAN CHASE BANK, N.A., as Trustee
By:
0 Xxx Xxxx Xxxxx, 0xx Xxxxx Name:
Xxx Xxxx, Xxx Xxxx 00000 Title:
Attention: Institutional Trust Services,
Global Debt
XXXX XX Series 2004-AR8
Telecopy: (000) 000-0000
Address: STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 By:
Name:
Title:
Address: XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Master Servicer
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
By:
Name:
Title:
Address: XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Custodian
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxxx, Xxxxxxxxx 00000 By:
Name:
Title:
X-0
XXXXX XX XXX XXXX )
: ss:
COUNTY OF NEW YORK )
On the 30th day of December 2004 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a
_________________of JPMorgan Chase Bank, N.A., a banking association organized
under the laws of the United States of America that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said banking association and acknowledged to me that such banking association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
[SEAL]
X-0
XXXXX XX XXXXXXXX )
: ss:
COUNTY OF XXXXXX )
On the 30th day of December 2004 before me, a notary public in and for
said State, personally appeared _________________, known to me to be an _______
of Xxxxx Fargo Bank, National Association, a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national banking association, and acknowledged to
me that such national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
[SEAL]
X-00
XXXXX XX XXX XXXX )
: ss:
COUNTY OF NEW YORK )
On the 30th day of December 2004 before me, a notary public in and for
said State, personally appeared _________________, known to me to be a
_________________ of Structured Asset Mortgage Investments II Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
[Notarial Seal]
X-00
XXXXX XX XXXXXXXX )
: ss:
COUNTY OF XXXXXX )
On the 30th day of December 2004 before me, a notary public in and for
said State, personally appeared ____________, known to me to be a ______________
of Xxxxx Fargo Bank, National Association, one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
[Notarial Seal]
G-12
SCHEDULE 1
MORTGAGE LOANS
G-13
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
December 30, 2004
JPMorgan Chase Bank, N.A.
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc., Series 2004-AR8
Re: Custodial Agreement, dated as of December 30, 2004, by and
among JPMorgan Chase Bank, N.A., Structured Asset Mortgage
Investments II Inc. and Xxxxx Fargo Bank, National Association
relating to Structured Asset Mortgage Investments II Trust
2004-AR8, Mortgage Pass-Through Certificates, Series 2004-AR8
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement, and subject to Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
G-14
Schedule A to Exhibit One
Exceptions
G-15
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
_______ __, 20__
JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc., Series 2004-AR8
Re: Custodial Agreement, dated as of December 30, 2004, by and
among JPMorgan Chase Bank, N.A., Structured Asset Mortgage
Investments II Inc. and Xxxxx Fargo Bank, National Association
relating to Structured Asset Mortgage Investments II Trust
2004-AR8, Mortgage Pass-Through Certificates, Series 2004-AR8
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Mortgage File to the extent required pursuant to Section 2.01 of the
Pooling and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
G-16
Schedule A to Exhibit Two
Exceptions
G-17
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
_______ __, 20__
JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004
Structured Asset Mortgage Investments II Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Asset Mortgage Investments II Inc., Series 2004-AR8
Re: Custodial Agreement, dated as of December 30, 2004, by and
among JPMorgan Chase Bank, N.A., Structured Asset Mortgage
Investments II Inc. and Xxxxx Fargo Bank, National Association
relating to Structured Asset Mortgage Investments II Trust
2004-AR8, Mortgage Pass-Through Certificates, Series 2004-AR8
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, and it has reviewed the Mortgage File and the Mortgage Loan Schedule
and has determined that an original of each document related thereto required to
be recorded has been returned from the related recording office with evidence of
recording thereon, or a certified copy has been obtained from the related
recording office, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
G-18
EXHIBIT H-1
EMC MORTGAGE CORPORATION AND EVERHOME MORTGAGE COMPANY
SUBSERVICING AGREEMENT
DATED AS OF AUGUST 1, 2002
EXHIBIT H-2
COUNTRYWIDE HOME LOANS, INC. AND
EMC MORTGAGE CORPORATIOPN
SELLER'S WARRANTIES AND SERVICING AGREEMENT
DATED AS OF SEPTEMBER 1, 2002, AS AMENDED
EXHIBIT H-3
EMC MORTGAGE CORPORATION AND
EVERHOME MORTGAGE COMPANY
SERVICING AGREEMENT
DATED AS OF MARCH 31, 2003
EXHIBIT I
ASSIGNMENT AGREEMENTS
(Available upon request)
EXHIBIT J
MORTGAGE LOAN PURCHASE AGREEMENT
(Available upon request)
EXHIBIT K
FORM OF TRUSTEE LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that JPMorgan Chase Bank, N.A., a banking
association organized under the laws of the United States of America,
having a place of business at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
X.X. 00000, as Trustee (and in no personal or other representative
capacity) under the Pooling and Servicing Agreement, dated as of
December 1, 2004, by and among Structured Asset Mortgage Investments II
Inc., the Trustee, Xxxxx Fargo Bank, National Association and EMC
Mortgage Corporation (as amended, restated, supplemented or otherwise
modified from time to time, the "Agreement"; capitalized terms not
defined herein have the definitions assigned to such terms in the
Agreement), relating to the Structured Asset Mortgage Investments II
Trust 2004-AR8, Mortgage Pass-Through Certificates, Series 2004-AR8,
hereby appoints _______________, in its capacity as a Servicer under
the Agreement, as the Trustee's true and lawful Special
Attorney-in-Fact, in the Trustee's name, place and stead and for the
Trustee's benefit, but only in its capacity as Trustee aforesaid, to
perform all acts and execute all documents as may be customary,
necessary and appropriate to effectuate the following enumerated
transactions in respect of any mortgage, deed of trust, promissory note
or real estate owned from time to time owned (beneficially or in title,
whether the Trustee is named therein as mortgagee or beneficiary or has
become mortgagee or beneficiary by virtue of endorsement, assignment or
other conveyance) or held by or registered to the Trustee (directly or
through custodians or nominees), or in respect of which the Trustee has
a security interest or other lien, all as provided under the applicable
Agreement and only to the extent the respective Trustee has an interest
therein under the Agreement, and in respect of which the Servicer is
acting as servicer pursuant to the Agreement (the "Mortgage
Documents").
This appointment shall apply to the following enumerated transactions under the
Agreement only:
1. The modification or re-recording of any Mortgage Document for the purpose of
correcting it to conform to the original intent of the parties thereto or to
correct title errors discovered after title insurance was issued and where such
modification or re-recording does not adversely affect the lien under the
Mortgage Document as insured.
2. The subordination of the lien under a Mortgage Document to an easement in
favor of a public utility company or a state or federal agency or unit with
powers of eminent domain including, without limitation, the execution of partial
satisfactions/releases, partial reconveyances and the execution of requests to
trustees to accomplish same.
3. The conveyance of the properties subject to a Mortgage Document to the
applicable mortgage insurer, or the closing of the title to the property to be
acquired as real estate so owned, or conveyance of title to real estate so
owned.
4. The completion of loan assumption and modification agreements in respect of
Mortgage Documents.
5. The full or partial satisfaction/release of a Mortgage Document or full
conveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related note.
6. The assignment of any Mortgage Document, in connection with the repurchase of
the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage Document upon payment and discharge of all
sums secured thereby in conjunction with the refinancing thereof, including,
without limitation, the assignment of the related note.
8. With respect to a Mortgage Document, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial foreclosure
or termination, cancellation or rescission of any such foreclosure, including,
without limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a deed of trust,
in accordance with state law and the deed of trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage Document or state law to
expeditiously complete said transactions in paragraphs 8(a)
through 8(e), above.
9. Demand, xxx for, recover, collection and receive each and every sum of money,
debt, account and interest (which now is, or hereafter shall become due and
payable) belonging to or claimed by the Trustee under the Mortgage Documents,
and to use or take any lawful means for recovery thereof by legal process or
otherwise.
10. Endorse on behalf of the Trustee all checks, drafts and/or negotiable
instruments made payable to the Trustee in respect of the Mortgage Documents.
K-2
The Trustee gives the Special Attorney-in-Fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by this
Limited Power of Attorney, subject to the terms and conditions set forth in the
Agreement including the standard of care applicable to servicers in the
Agreement, and hereby does ratify and confirm what such Special Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
IN WITNESS WHEREOF, the Trustee has caused its corporate name and seal to be
hereto signed and affixed and these presents to be acknowledged by its duly
elected and authorized officer this ___ day of ___ , 2004.
JPMORGAN CHASE BANK, N.A., AS TRUSTEE
By:
--------------------------------------
Name:
Title:
WITNESS: WITNESS:
------------------------------ ----------------------------------------
Name: Name:
Title: Title:
XXXXX XX XXX XXXX
XX
XXXXXX XX XXX XXXX
Xx ______________, 2004, before me, the undersigned, a Notary Public in
and for said state, personally appeared __________________, personally known to
me to be the person whose name is subscribed to the within instrument and to be
a duly authorized and acting Senior Vice President of JPMorgan Chase Bank, N.A.,
and such person acknowledged to me that such person executed the within
instrument in such person's authorized capacity as a Senior Vice President of
JPMorgan Chase Bank, N.A., and that by such signature on the within instrument
the entity upon behalf of which such person acted executed the instrument.
WITNESS my hand and official seal.
------------------------------
Notary Public
K-3
EXHIBIT L
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument (the "Instrument"),
dated _______ __, 2005 (the "Instrument"), between Structured Asset Mortgage
Investments II Inc., as seller (the "Seller"), and JPMorgan Chase Bank, N.A., as
trustee of Structured Asset Mortgage Investments II Trust 2004-AR8 Mortgage
Pass-Through Certificates, Series 2004-AR8, as purchaser (the "Trustee"), and
pursuant to the Pooling and Servicing Agreement, dated as of December 1, 2004
(the "Pooling and Servicing Agreement"), among the Seller, as the seller, Xxxxx
Fargo Bank, National Association, as master servicer and securities
administrator, EMC Mortgage Corporation and the Trustee, as trustee, the Seller
and the Trustee agree to the sale by the Seller and the purchase by the Trustee
in trust, on behalf of the Trust, of the Subsequent Mortgage Loans listed on the
Schedule of Mortgage Loans attached to this Instrument as Exhibit I hereto (the
"Subsequent Mortgage Loans").
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
Section 1. Conveyance of Subsequent Mortgage Loans.
(a) The Seller does hereby sell, transfer, assign, set over and convey
to the Trustee in trust, on behalf of the Trust, without recourse, all of its
right, title and interest in and to the Subsequent Mortgage Loans, and including
all amounts due or accruing on the Subsequent Mortgage Loans on and after
_____________ __, 2005 (the "Subsequent Cut-off Date"), and all items with
respect to the Subsequent Mortgage Loans to be delivered pursuant to Section
2.07 of the Pooling and Servicing Agreement; provided, however, that the Seller
reserves and retains all right, title and interest in and to amounts due on the
Subsequent Mortgage Loans prior to the Subsequent Cut-off Date. The Seller,
contemporaneously with the delivery of this Instrument, has delivered or caused
to be delivered to the Trustee each item with respect to the Subsequent Mortgage
Loans set forth in Section 2.01 of the Pooling and Servicing Agreement and the
other items in the related Mortgage Files. The transfer to the Trustee by the
Seller of the Subsequent Mortgage Loans shall be absolute and is intended by the
Seller, EMC Mortgage Corporation, the Master Servicer, the Securities
Administrator, the Trustee and the Certificateholders to constitute and to be
treated as a sale of the Subsequent Mortgage Loans by the Seller to the Trust
Fund.
(b) The Seller, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Seller in, to and under the Subsequent Mortgage Loan
Purchase Agreement, dated as of ___________ __, 2005, between EMC Mortgage
Corporation, as seller, and the Seller, as purchaser (the "Purchase Agreement").
(c) Additional terms of the sale are set forth on Attachment A hereto.
Section 2. Representations and Warranties; Conditions Precedent.
(a) The Seller hereby confirms that each of the conditions precedent
and the representations and warranties set forth in Section 2.07 of the Pooling
and Servicing Agreement are satisfied as of the date hereof.
(b) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
Section 3. Recordation of Instrument.
To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of the
counties or other comparable jurisdictions in which any or all of the properties
subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the Master
Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Subsequent Mortgage Loans.
Section 4. Governing Law.
This Instrument 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 giving
effect to principles of conflicts of law.
Section 5. Counterparts.
This Instrument may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
[The remainder of this page has been intentionally left blank]
L-2
Section 6. Successors and Assigns.
This Instrument shall inure to the benefit of and be binding upon the
Seller and the Trustee and their respective successors and assigns.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Seller
By:
------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, N.A., as Trustee
By:
------------------------------------
Name:
Title:
L-3
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
(Provided Upon Request)
ATTACHMENT A
ADDITIONAL SALE TERMS
