STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
JPMORGAN CHASE BANK,
TRUSTEE
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION,
SELLER
----------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2004
----------------------------------------------------------
Structured Asset Mortgage Investments II Inc.
Bear Xxxxxxx ALT-A Trust 2004-8, Mortgage Pass-Through Certificates
Series 2004-8
iv
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee......................46
Section 2.02 Acceptance of Mortgage Loans by Trustee......................48
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement....................................................50
Section 2.04 Substitution of Mortgage Loans...............................51
Section 2.05 Issuance of Certificates.....................................52
Section 2.06 Representations and Warranties Concerning the Depositor......53
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer..............................................55
Section 3.02 REMIC-Related Covenants......................................56
Section 3.03 Monitoring of Servicers......................................56
Section 3.04 Fidelity Bond................................................57
Section 3.05 Power to Act; Procedures.....................................57
Section 3.06 Due-on-Sale Clauses; Assumption Agreements...................58
Section 3.07 Release of Mortgage Files....................................58
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee..............................59
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.......60
Section 3.10 Presentment of Claims and Collection of Proceeds.............60
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.......61
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents.......................................61
Section 3.13 Realization Upon Defaulted Mortgage Loans....................62
Section 3.14 Compensation for the Master Servicer.........................62
Section 3.15 REO Property.................................................62
Section 3.16 Annual Officer's Certificate as to Compliance................63
Section 3.17 Annual Independent Accountant's Servicing Report.............63
Section 3.18 Reports Filed with Securities and Exchange Commission........64
Section 3.19 EMC..........................................................65
Section 3.20 UCC..........................................................65
Section 3.21 Optional Purchase of Defaulted Mortgage Loans................65
ARTICLE IV
Accounts
Section 4.01 Protected Accounts...........................................66
Section 4.02 Master Servicer Collection Account...........................67
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account..................................68
Section 4.04 Distribution Account.........................................69
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account.........................................69
Section 4.06 Reserve Fund.................................................71
Section 4.07 Class XP Reserve Account.....................................72
ARTICLE V
Certificates
Section 5.01 Certificates.................................................73
Section 5.02 Registration of Transfer and Exchange of Certificates........80
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............84
Section 5.04 Persons Deemed Owners........................................84
Section 5.05 Transfer Restrictions on Residual Certificates...............84
Section 5.06 Restrictions on Transferability of Certificates..............85
Section 5.07 ERISA Restrictions...........................................86
Section 5.08 Rule 144A Information........................................87
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates............................88
Section 6.02 Allocation of Losses.........................................92
Section 6.03 Payments.....................................................92
Section 6.04 Statements to Certificateholders.............................92
Section 6.05 Monthly Advances.............................................95
Section 6.06 Compensating Interest Payments...............................95
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer...........................97
Section 7.02 Merger or Consolidation of the Master Servicer...............97
Section 7.03 Indemnification of the Trustee, the Master Servicer and
the Securities Administrator.................................97
Section 7.04 Limitations on Liability of the Master Servicer and
Others.......................................................98
Section 7.05 Master Servicer Not to Resign................................99
Section 7.06 Successor Master Servicer....................................99
Section 7.07 Sale and Assignment of Master Servicing......................99
ARTICLE VIII
Default
Section 8.01 Events of Default...........................................101
Section 8.02 Trustee to Act; Appointment of Successor....................103
Section 8.03 Notification to Certificateholders..........................104
Section 8.04 Waiver of Defaults..........................................104
Section 8.05 List of Certificateholders..................................104
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee...........................................105
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator...............................................107
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans..............................109
Section 9.04 Trustee and Securities Administrator May Own Certificates...109
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses....................................................109
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator...............................................110
Section 9.07 Insurance...................................................110
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator...............................................110
Section 9.09 Successor Trustee and Successor Securities Administrator....111
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator...............................................112
Section 9.11 Appointment of Co-Trustee or Separate Trustee...............112
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration....................113
ARTICLE X
Termination
Xxxxxxx 00.00 Xxxxxxxxxxx Xxxx Xxxxxxxxxx by EMC or its Designee or
Liquidation of the Mortgage Loans...........................116
Section 10.02 Additional Termination Requirements.........................118
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties...........................................120
Section 11.02 Amendment...................................................120
Section 11.03 Recordation of Agreement....................................121
Section 11.04 Limitation on Rights of Certificateholders..................121
Section 11.05 Acts of Certificateholders..................................122
Section 11.06 Governing Law...............................................123
Section 11.07 Notices.....................................................123
Section 11.08 Severability of Provisions..................................124
Section 11.09 Successors and Assigns......................................124
Section 11.10 Article and Section Headings................................124
Section 11.11 Counterparts................................................124
Section 11.12 Notice to Rating Agencies...................................124
APPENDIX
Appendix 1 - Calculation of Class Y Principal Reduction Amount
EXHIBITS
Exhibit A-1 - Form of Class I-A Certificates
Exhibit A-2 - Form of Class II-A Certificates
Exhibit A-3 - Form of Class M Certificates
Exhibit A-4 - Form of Class B Certificates
Exhibit A-5 - Form of Class R Certificates
Exhibit A-6 - Form of Class B-IO Certificates
Exhibit A-7 - Form of Class XP 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 F-3 - Form of Transferor Representation Letter
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - Chevy Chase Servicing Agreements
Exhibit H-2 - Countrywide Servicing Agreements
Exhibit H-3 - EMC Servicing Agreement
Exhibit X-0 - XxxxXxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxx X-0 - XxxxxXxxxx Servicing Agreement
Exhibit H-6 - National City Servicing Agreement
Exhibit X-0 - Xxxxxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxx X-0 - Xxxxxxxxxx Servicing Agreement
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Form of Trustee Limited Power of Attorney
7
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of July 1, 2004, among Structured
Asset Mortgage Investments II Inc., a Delaware corporation, as seller (the
"Depositor"), JPMorgan Chase Bank, a New York banking corporation, 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 acquired the Mortgage Loans
from EMC. On the Closing Date, the Depositor will sell the Mortgage Loans and
certain other property to the Trust Fund and receive in consideration therefor,
Certificates evidencing the entire beneficial ownership interest in the Trust
Fund.
The Trustee on behalf of the Trust shall make an election for the assets
constituting REMIC I to be treated for federal income tax purposes as a REMIC.
On the Startup Day, the REMIC I Regular Interests will be designated "regular
interests" in such REMIC and the Class R-I Certificate will be designated the
sole class of "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the REMIC I
Regular Interests, which constitute REMIC II to be treated for federal income
tax purposes as a REMIC. On the Startup Day, the REMIC II Regular Interests will
be designated "regular interests" in such REMIC and the Class R-II Certificate
will be designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the REMIC II
Regular Interests, which constitute REMIC III to be treated for federal income
tax purposes as a REMIC. On the Startup Day, the REMIC III Regular Interests
will be designated "regular interests" in such REMIC and the Class R-III
Certificate will be designated the "residual interests" in such REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $812,377,915.14. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator, EMC and the Trustee agree as
follows:
1
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases, unless
otherwise expressly provided or unless the context otherwise requires, shall
have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage servicing practices of prudent
mortgage servicing institutions that master service mortgage loans of the same
type and quality as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located, to the extent applicable to the Trustee or the
Master Servicer (except in its capacity as successor to a Servicer), or (y) as
provided in the applicable Servicing Agreement, to the extent applicable to any
Servicer, but in no event below the standard set forth in clause (x).
Account: The Master Servicer Collection Account, the Distribution Account,
the Protected Account or the Class XP Reserve Account, as the context may
require.
Affiliate: As to any Person, any other Person controlling, controlled by
or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
Aggregate Expense Rate: With respect to any Mortgage Loan, the sum of the
Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Applicable Credit Rating: For any long-term deposit or security, a credit
rating of AAA in the case of S&P or Aaa in the case of 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, or a rating of
A-l+ in the case of S&P or Prime-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.
Applied Realized Loss Amount: With respect to any Distribution Date and a
Class of Certificates (other than the Class B-IO Certificates and the Residual
Certificates), the sum of the
2
Realized Losses with respect to the Mortgage Loans, which are to be applied in
reduction of the Certificate Principal Balance of such Class of Certificates
pursuant to this Agreement in an amount equal to the amount, if any, by which,
(i) the aggregate Certificate Principal Balance of all of the Certificates
(after all distributions of principal on such Distribution Date) exceeds (ii)
the aggregate Stated Principal Balance of all of the Mortgage Loans for such
Distribution Date. The Applied Realized Loss Amount shall be allocated to first
to the Class B-2 Certificates, the Class B-1 Certificates, the Class M-2
Certificates and the Class M-1 Certificates, in that order (so long as their
respective Certificate Principal Balances have not been reduced to zero), and
thereafter Realized Losses with respect to the Group I Mortgage Loans shall be
allocated to the Class I-A Certificates and Realized Losses with respect to the
Group II Mortgage Loans shall be allocated to the Class II-A Certificates. If on
any Distribution Date less than all Realized Losses are allocated to the
Subordinate Certificates, the portion of Realized Losses remaining to be
allocated to Senior Certificates shall be allocated pro rata to the Class I-A
Certificates and Class II-A Certificates in accordance with the amount of
Realized Losses incurred in the respective Loan Groups during the related Due
Period.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assignment Agreements: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit of
the Certificateholders.
Assumed Final Distribution Date: September 25, 2034, or if such day is not
a Business Day, the next succeeding Business Day.
Available Funds: With respect to each Distribution Date, the aggregate of
Principal Funds and Interest Funds for such Distribution Date.
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C.ss.ss.101-1330.
Basis Risk Shortfall: With respect to any Distribution Date and each Class
of Offered Certificates, the excess, if any, of (a) the amount of Current
Interest that such Class would have been entitled to receive on such
Distribution Date had the applicable Pass-Though Rate been calculated at a per
annum rate equal to the lesser of (i) One-Month LIBOR plus the related Margin
and (ii) 11.50% over (b) the amount of Current Interest on such Class of Offered
Certificates calculated using a Pass-Though Rate equal to the applicable Net
Rate Cap for such Distribution Date.
Basis Risk Shortfall Carry Forward Amount: With respect to any
Distribution Date and each Class of Offered Certificates, Basis Risk Shortfalls
for all previous Distribution Dates not previously paid from any source
including the Excess Cashflow and payments under the Cap Contracts, together
with interest thereon at a rate equal to the related Pass-Through Rate for such
Class of Offered Certificates for such Distribution Date.
3
Book-Entry Certificates: Initially, all Classes of Certificates other than
the Class B-IO, Class XP and the Residual Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which the New York Stock Exchange or Federal Reserve is closed or on which
banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, Custodian, any Servicer or the Securities Administrator are authorized
or obligated by law or executive order to be closed.
Calendar Quarter: January 1 through March 31, April 1 through June 30,
July 1 through September 30, or October 1 through December 31, as applicable.
Cap Contract: With respect to any of the Class I-A, Class II-A, Class M-1,
Class M-2, Class B-1, Class B-2 Certificates, the respective cap contracts,
dated July 30, 2004, between the Trustee, on behalf of the Class I-A, Class
II-A, Class M-1, Class M-2, Class B-1 or Class B-2 Certificateholders, as the
case may be, and Bear Xxxxxxx Financial Products Inc.
Cap Contract Payment Amount: With respect to any Distribution Date and a
Cap Contract, the amounts received from such Cap Contract, if any, on such
Distribution Date.
Certificate: Any mortgage pass-through certificate evidencing a beneficial
ownership interest in the Trust Fund signed and countersigned by the Trustee in
substantially the forms annexed hereto as Exhibits X-0, X-0, X-0, X-0, X-0, A-6
and A-7, with the blanks therein appropriately completed.
Certificate Group: With respect to (i) Loan Group I, the Class I-A
Certificates and (ii) Loan Group II, the Class II-A Certificates.
Certificate Owner: Any Person who is the beneficial owner of a Certificate
registered in the name of the Depository or its nominee.
Certificate Principal Balance: With respect to any Certificate (other than
Class B-IO Certificates or Class R Certificates) as of any Distribution Date,
the initial principal amount of such Certificate plus, with respect to the
Subordinate Certificates, any Subsequent Recoveries added to the Certificate
Principal Amount of such Certificates pursuant to Section 6.02(b) hereof, minus
the sum of (i) all amounts distributed on previous Distribution Dates on such
Certificate with respect to principal and (ii) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates. With respect to
any such Class of Certificates, the Certificate Principal Balance thereof will
equal the sum of the Certificate Principal Balances of all Certificates in such
Class.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder: A Holder of a Certificate.
Chevy Chase: Chevy Chase Bank, F.S.B., and any successor in interest
thereto.
4
Chevy Chase Servicing Agreements: The Purchase, Warranties and Servicing
Agreement, dated as of March 1, 2001, and the Purchase, Warranties and Servicing
Agreement, dated as of July 1, 2001, each between EMC and Chevy Chase, and each
as attached hereto as Exhibit H-1.
Class: With respect to the Certificates, I-A, II-A, R-I, R-II, R-III,
X-0, X-0, X-0, X-0, XP and B-IO.
Class I-A Principal Distribution Amount: The product of the Class A
Principal Distribution Amount and a fraction, the numerator of which is the
Principal Funds for Loan Group I for such Distribution Date and the denominator
of which is the Principal Funds for both Loan Groups for such Distribution Date.
Class II-A Principal Distribution Amount: The product of the Class A
Principal Distribution Amount and a fraction, the numerator of which is the
Principal Funds for Loan Group II for such Distribution Date and the denominator
of which is the Principal Funds for both Loan Groups for such Distribution Date.
Class A Certificates: The Class I-A and Class II-A Certificates.
Class A Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the aggregate Certificate Principal
Balance of the Class A Certificates immediately prior to such Distribution Date
over (ii) the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date over (b) the product of (1) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date and (2) the sum of (x) 11.40% and (y) the Current Specified
Overcollateralization Percentage for such Distribution Date.
Class B Certificates: The Class B-1 Certificates and Class B-2
Certificates.
Class B-IO Advances: As defined in Section 6.01(b).
Class B-IO Certificates: The Class B-IO-P and Class B-IO-I
Certificates.
Class B-IO Distribution Amount: With respect to any Distribution Date, the
Current Interest for the Class B-IO Certificate for such Distribution Date
(which shall be deemed distributable to the REMIC III Regular Interest B-IO-I);
provided, however, that on and after the Distribution Date on which the
aggregate Certificate Principal Balance of Class I-A, Class II-A, Class M-1,
Class M-2, Class B-1 or Class B-2 Certificates has been reduced to zero, the
Class B-IO Distribution Amount shall include the Overcollateralization Amount
(which shall be deemed distributable, first, to the REMIC III Regular Interest
B-IO-I in respect of accrued and unpaid interest thereon until such accrued and
unpaid interest shall have been reduced to zero and, thereafter, to the REMIC
III Regular Interest B-IO-P in respect of the principal balance thereof).
Class B-IO Pass-Through Rate: The Class B-IO Certificates will bear
interest at a per annum rate equal to the percentage equivalent of a fraction,
the numerator of which is the sum of the amounts calculated pursuant to clauses
(i) through (xii) below, and the denominator of which
5
is the aggregate Uncertificated Principal Balance of the REMIC II Regular
Interests. For purposes of calculating the Pass-Through Rate for the Class B-IO
Certificates, the numerator is equal to the sum of the following components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT1
minus the related Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT2
minus the related Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LT2;
(iii)the Uncertificated Pass-Through Rate for REMIC II Regular Interest
LT4 minus twice the related Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC II Regular
Interest LT4.
(iv) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT5
minus the related Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LT5;
(v) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT6
minus the related Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LT6;
(vi) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT8
minus twice the related Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC II Regular
Interest LT8;
(vii)the Uncertificated Pass-Through Rate for REMIC II Regular Interest
LT-Y1 minus the related Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC II Regular
Interest LT-Y1; and
(viii)the Uncertificated Pass-Through Rate for REMIC II Regular Interest
LT-Y2 minus the related Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC II Regular
Interest LT-Y2.
Class B-1 Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the Certificate Principal Balance of
the Class B-1 Certificates immediately prior to such Distribution Date over (ii)
the excess of (a) the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over (b) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(2) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (3) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date) and (4) the product of
(x)
6
the aggregate Stated Principal Balance for such Distribution Date and (y) the
sum of 1.60% and the Current Specified Overcollateralization Percentage for such
Distribution Date.
Class B-2 Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the Certificate Principal Balance of
the Class B-2 Certificates immediately prior to such Distribution Date over (ii)
the excess of (a) the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over (b) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(2) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (3) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (4) the Certificate
Principal Balance of the Class B-1 Certificates (after taking into account the
payment of the Class B-1 Principal Distribution Amount on such Distribution
Date) and (5) the product of (x) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the Current Specified
Overcollateralization Percentage for such Distribution Date.
Class M Certificates: The Class M-1 and Class M-2 Certificates.
Class M-1 Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the Certificate Principal Balance of
the Class M-1 Certificates immediately prior to such Distribution Date over (ii)
the excess of (a) the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over (b) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date)
and (2) the product of (x) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the sum of (I) 6.80% and (II)
the Current Specified Overcollateralization Percentage for such Distribution
Date.
Class M-2 Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the Certificate Principal Balance of
the Class M-2 Certificates immediately prior to such Distribution Date over (ii)
the excess of (a) the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over (b) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(2) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (3) the product of (x) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (y) the
sum of (I) 3.20% and (II) the Current Specified Overcollateralization Percentage
for such Distribution Date.
Class R Certificates: The Class R-I, R-II and 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-5
7
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-5 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 Exhibit A-5 and evidencing an interest designated as
a "residual interest" in REMIC III for purposes of the REMIC Provisions.
Class XP Reserve Account: The account established and maintained by the
Master Servicer pursuant to Section 4.07 hereof.
Closing Date: July 30, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payment: As defined in Section 6.06.
Corporate Trust Office: The designated office of the Trustee where at any
particular time its corporate trust business with respect to this Agreement
shall be 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: Institutional Trust Services/Global Debt, Structured Asset Mortgage
Investments II Inc., Bear Xxxxxxx ALT-A Trust 2004-8, or at such other address
as the Trustee may designate from time to time.
Corresponding Certificate: With respect to:
(i) REMIC III Regular Interest I-A, the Class I-A Certificates,
(ii) REMIC III Regular Interest II-A, the Class II-A Certificates,
(iii) REMIC III Regular Interest M1, the Class M-1 Certificates,
(iv) REMIC III Regular Interest M2, the Class M-2 Certificates,
(v) REMIC III Regular Interest B, the Class B Certificates,
(vi) REMIC III Regular Interest XP, the Class XP Certificates, and
(vii)REMIC III Regular Interest B-IO-I and REMIC III Regular Interest
B-IO-P, the Class B-IO Certificates.
Countrywide: Countrywide Home Loans, Inc., and its successor in
interest.
8
Countrywide Servicing Agreement: The Sale and Servicing Agreement, dated
as of October 30, 2002, as amended, between EMC and Countrywide, as attached
hereto as Exhibit H-2.
Current Interest: As of any Distribution Date, with respect to each Class
of Certificates (other than the Class XP Certificates and the Class R
Certificates), (i) the interest accrued on the Certificate Principal Balance or
Notional Amount, as applicable, during the related Interest Accrual Period at
the applicable Pass-Through Rate plus any amount previously distributed with
respect to interest for such Certificate that has been recovered as a voidable
preference by a trustee in bankruptcy minus (ii) the sum of (a) any Prepayment
Interest Shortfall for such Distribution Date, to the extent not covered by
Compensating Interest Payments and (b) any shortfalls resulting from the
application of the Relief Act during the related Due Period; provided, however,
that for purposes of calculating Current Interest for any such Class, amounts
specified in clauses (ii)(a) and (ii)(c) hereof for any such Distribution Date
shall be allocated first to the Class B-IO Certificates and the Residual
Certificates in reduction of amounts otherwise distributable to such
Certificates on such Distribution Date and then any excess shall be allocated to
each other Class of Certificates pro rata based on the respective amounts of
interest accrued pursuant to clause (i) hereof for each such Class on such
Distribution Date.
Current Specified Overcollateralization Percentage: For any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
Overcollateralization Target Amount, and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans for 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, and any successor
custodian appointed pursuant to the provisions hereof and of the Custodial
Agreement.
Cut-off Date: July 1, 2004.
Cut-off Date Balance: $812,377,915.14.
Debt Service Reduction: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the
Mortgaged Property by a court of competent jurisdiction in an amount less than
the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
Delinquent: A Mortgage Loan is "Delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the last day of the month immediately succeeding the month
9
in which such payment was due. For example, a Mortgage Loan with a payment due
on December 1 that remained unpaid as of the close of business on January 31
would then be considered to be 30 to 59 days delinquent. Similarly for "60 days
delinquent," "90 days delinquent" and so on.
Depositor: Structured Asset Mortgage Investments II Inc., a Delaware
corporation, and any successor thereto.
Depository: The Depository Trust Company, the nominee of which is Cede
& Co., and any successor thereto.
Depository Agreement: The meaning specified in Section 5.01(a) hereof.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the Determination
Date as defined in the related Servicing Agreement.
Disqualified Organization: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the Xxxxxxx Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an ownership interest in a Residual Certificate by such Person
may cause any 2004-8 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 4.04 hereof, which shall be denominated "JPMorgan Chase
Bank, as Trustee f/b/o
10
holders of Structured Asset Mortgage Investments II Inc., Bear Xxxxxxx ALT-A
Trust 2004-8, Mortgage Pass-Through Certificates, Series 2004-8 - Distribution
Account."
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
DTC Custodian: JPMorgan Chase Bank, 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 Agreement.
Due Period: With respect to any Distribution Date and each Mortgage Loan,
the period commencing on the second day of the month preceding the month in
which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1 or better by Standard & Poor's and P-1 by Moody's 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 (ii))
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 Rating Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation, and any successor thereto.
11
EMC Servicing Agreement: The Servicing Agreement, dated as of July 1,
2004, between Structured Asset Mortgage Investments II Inc. and EMC, as
attached hereto as Exhibit H-3.
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), and any successor thereto.
EverHome Servicing Agreement: The Servicing Agreement, dated as of June 1,
2003, between EverHome and EMC, attached hereto as Exhibit H-4.
Excess Cashflow: With respect to any Distribution Date, the Remaining
Excess Spread for such Distribution Date; provided, however, that the Excess
Cashflow shall include Principal Funds on and after the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A, Class M-1,
Class M-2, Class B-1 and Class B-2 Certificates has been reduced to zero (other
than Principal Funds otherwise distributed to the Holders of Class A, Class M-1,
Class M-2, Class B-1 and Class B-2 Certificates on such Distribution Date).
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
Excess Spread: With respect to any Distribution Date, the excess, if any,
of (i) the Interest Funds for such Distribution Date over (ii) the sum of the
Current Interest on the Offered Certificates and Interest Carry Forward Amounts
on the Class A Certificates, in each case for such Distribution Date.
Extra Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (i) the excess, if any, of the Overcollateralization Target
Amount for such Distribution Date over the Overcollateralization Amount for such
Distribution Date and (ii) the Excess Spread for such Distribution Date.
Xxxxxx Xxx: Federal National Mortgage Association, and any successor
thereto.
FDIC: Federal Deposit Insurance Corporation, and any successor thereto.
Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
Fitch: Fitch Ratings, and any successor thereto.
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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 Certificate Principal Balance of such Certificate and
the denominator of which is the Certificate Principal Balance of such Class.
With respect to the Certificates in the aggregate, the fractional undivided
interest evidenced by (i) each Residual Certificate will be deemed to equal
0.3333% multiplied by the percentage interest of such Residual Certificate, (ii)
the Class B-IO Certificates will be deemed to equal 1.00% and (iii) a
Certificate of any other Class will be deemed to equal 98% multiplied by a
fraction, the numerator of which is the Certificate Principal Balance of such
Certificate and the denominator of which is the aggregate Certificate Principal
Balance of all the Certificates other than the Class B-IO Certificates.
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, and 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).
GreenPoint: GreenPoint Mortgage Funding, Inc., and any successor
thereto.
GreenPoint Servicing Agreement: The Purchase, Warranties and Servicing
Agreement, dated as of September 1, 2003, between GreenPoint and EMC attached
hereto as Exhibit H-5.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
Group I Net WAC Rate: With respect to any Distribution Date, the weighted
average of the Net Rates on the Mortgage Loans in Loan Group I, weighted on the
basis of the Stated Principal Balances thereof for the preceding Distribution
Date, adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis.
Group I Principal Distribution Amount: The product of the Principal
Distribution Amount and a fraction, the numerator of which is the Principal
Funds for Loan Group I for such Distribution Date and the denominator of which
is the Principal Funds for both Loan Groups for such Distribution Date.
Group II Net WAC Rate: With respect to any Distribution Date, the weighted
average of the Net Rates on the Mortgage Loans in Loan Group II, weighted on the
basis of the Stated Principal Balances thereof for the preceding Distribution
Date, adjusted to an effective rate reflecting the accrual of interest on an
actual/360 basis.
Group II Principal Distribution Amount: The product of the Principal
Distribution Amount and a fraction, the numerator of which is the Principal
Funds for Loan Group II for such
13
Distribution Date and the denominator of which is the Principal Funds for both
Loan Groups for such Distribution Date.
Group II Senior Percentage: The aggregate Certificate Balance of the Class
II-A Certificates divided by the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group II.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Sections 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 or the Trustee or any
Affiliate thereof shall be deemed not to be outstanding and the Fractional
Undivided Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Fractional Undivided Interests
necessary to effect any such consent has been obtained.
Indemnified Persons: The Trustee, the Master Servicer, the Custodian and
the Securities Administrator, and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material indirect financial
interest in the Depositor or the Master Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is not connected with the Depositor or
the Master Servicer or any Affiliate as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Institutional Accredited Investor: Any Person meeting the requirements of
Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or any
entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property other than amounts required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note or
Security Instrument and other than amounts used to repair or restore the
Mortgaged Property or proceeds that represent
14
reimbursement of the related Servicer's costs and expenses incurred in
connection with presenting claims under the related Insurance Policy.
Interest Accrual Period: With respect to each Class of Certificates (other
than the Class XP Certificates and Residual Certificates), the period from and
including the preceding Distribution Date (or, in the case of the first
Distribution Date, from the Closing Date) to and including the day prior to the
current Distribution Date.
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 Carryforward Amount: As of any Distribution Date and with respect
to each Class of Certificates (other than the Class XP Certificates, Class B-IO
Certificates and Residual Certificates), the sum of (i) the excess of (a) the
Current Interest for such Class with respect to prior Distribution Dates over
(b) the amount actually distributed to such Class of Certificates with respect
to interest on or after such prior Distribution Dates and (ii) interest thereon
(to the extent permitted by applicable law) at the applicable Pass-Through Rate
for such Class for the related Interest Accrual Period including the Interest
Accrual Period relating to such Distribution Date.
Interest Funds: For any Distribution Date and a Loan Group (i) the sum,
without duplication, of (a) all scheduled interest collected in respect to the
related Mortgage Loans during the related Due Period less the related Servicing
Fee, (b) all Monthly Advances relating to interest with respect to the related
Mortgage Loans made on or prior to the related Distribution Account Deposit
Date, (c) all Compensating Interest Payments with respect to the related
Mortgage Loans and required to be remitted by the Master Servicer pursuant to
this Agreement or the related Servicer pursuant to the related Servicing
Agreement with respect to such Distribution Date, (d) Liquidation Proceeds with
respect to the related Mortgage Loans collected during the related Prepayment
Period (or, in the case of Subsequent Recoveries, during the related Due
Period), to the extent such Liquidation Proceeds relate to interest, (e) all
amounts relating to interest with respect to each related Mortgage Loan
purchased by EMC pursuant to Sections 2.02 and 2.03 or by the Depositor pursuant
to Section 3.21 during the related Due Period and (f) all amounts in respect of
interest paid by EMC pursuant to Section 10.01 in respect to the related Loan
Group, in each case to the extent remitted by EMC or the related Servicer, as
applicable, to the Distribution Account pursuant to this Agreement or the
related Servicing Agreement minus (ii) all amounts relating to interest required
to be reimbursed pursuant to Sections 4.01, 4.03 and 4.05 or as otherwise set
forth in this Agreement and allocated to the related Loan Group.
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.
15
Lender-Paid PMI Rate: With respect to each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the related
insurer, as stated in the Mortgage Loan Schedule.
LIBOR Business Day: Any day other than a Saturday or a Sunday or a day on
which banking institutions in the city of London, England are required or
authorized by law to be closed.
LIBOR Determination Date: With respect to each Class of Offered
Certificates and for the first Interest Accrual Period, July 29, 2004. With
respect to each Class of Offered Certificates and any Interest Accrual Period
thereafter, the second LIBOR Business Day preceding the commencement of such
Interest Accrual Period.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Servicer or the Master Servicer has determined that all amounts it expects to
recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the date
on which the Servicer or the Master Servicer has certified that such Mortgage
Loan has become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Servicer,
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 liquidation.
Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise, and Subsequent
Recoveries.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
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 Mortgage Loan Schedule.
Loan Group II: The group of Mortgage Loans designated as belonging to Loan
Group II on the Mortgage Loan Schedule.
Lost Notes: The original Mortgage Notes that have been lost, as indicated
on the Mortgage Loan Schedule.
16
Margin: With respect to any Distribution Date on or prior to the first
possible Optional Termination Date and (i) with respect to the Class I-A
Certificates, 0.35% per annum, (ii) with respect to the Class II-A Certificates,
0.34% per annum, (iii) with respect to the Class M-1 Certificates, 0.61% per
annum, (iv) with respect to the Class M-2 Certificates, 1.15% per annum, (v)
with respect to the Class B-1 Certificates, 1.90% per annum and (vi) with
respect to the Class B-2 Certificates, 1.90% per annum; and with respect to any
Distribution Date after the first possible Optional Termination Date and (i)
with respect to the Class I-A Certificates, 0.70% per annum, (ii) with respect
to the Class II-A Certificates, 0.68% per annum, (iii) with respect to the Class
M-1 Certificates, 0.915% per annum, (iv) with respect to the Class M-2
Certificates, 1.725% per annum, (v) with respect to the Class B-1 Certificates,
2.85% per annum and (vi) with respect to the Class B-2 Certificates, 2.85% per
annum.
Marker Rate: With respect to the Class B-IO Certificates or the REMIC III
Regular Interest B-IO-I and any Distribution Date, in relation to the REMIC II
Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, a per annum rate equal to two
(2) times the weighted average of the Uncertificated REMIC II Pass-Through Rates
for REMIC II Regular Interest LT2 and REMIC II Regular Interest LT3. With
respect to the Class B-IO Certificates or the REMIC III Regular Interest B-IO-I
and any Distribution Date, in relation to the REMIC II Regular Interests LT5,
LT6, LT7, LT8 and LT-Y2, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC II Pass-Through Rates for REMIC II Regular
Interest LT6 and REMIC II Regular Interest LT7.
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank, National
Association and, thereafter, its respective successors in interest who meet the
qualifications of the Servicing Agreements and this Agreement.
Master Servicer Certification: A written certification covering servicing
of the Mortgage Loans by all Servicers and signed by an officer of the Master
Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from
time to time, and (ii) the February 21, 2003 Statement by the Staff of the
Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Depositor following a negotiation in good faith to
determine how to comply with any such new requirements.
Master Servicer Collection Account: The trust account or accounts created
and maintained pursuant to Section 4.02, which shall be denominated "JPMorgan
Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage Investments II
Inc., Bear Xxxxxxx ALT-A
17
Trust 2004-8, Mortgage Pass-Through Certificates, Series 2004-8 - Master
Servicer Collection Account," and which shall be an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Material Defect: The meaning specified in Section 2.02(b).
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
MERS System: The system of recording transfers of Mortgage Loans
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS System.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Advance: An advance of principal or interest required to be made
by the applicable Servicer pursuant to the related Servicing Agreement or the
Master Servicer pursuant to Section 6.05.
Monthly Delinquency Percentage: With respect to a Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of the Mortgage Loans that are 60 days or more
Delinquent or are in bankruptcy or foreclosure or are REO Properties for such
Distribution Date and the denominator of which is the aggregate Stated Principal
Balance of Mortgage Loans for such Distribution Date.
Moody's: Xxxxx'x Investors Service, Inc., and any successor in interest.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the Mortgage Loan Schedule.
18
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule (which shall include, without
limitation with respect to each Mortgage Loan, each related Mortgage Note,
Mortgage and Mortgage File and all rights appertaining thereto), including a
mortgage loan the property securing which has become an REO Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of July 30, 2004, between EMC, as seller, and Structured Asset Mortgage
Investments II Inc., as purchaser, and all amendments thereof and supplements
thereto, attached as Exhibit J.
Mortgage Loan Schedule: The schedule attached hereto as Exhibit B with
respect to the Mortgage Loans and divided into Loan Groups, as amended from time
to time to reflect the repurchase or substitution of Mortgage Loans pursuant to
this Agreement or the Mortgage Loan Purchase Agreement, 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.
National City: National City Mortgage Co. and its successor in
interest.
National City Servicing Agreement: The Purchase, Warranties and Servicing
Agreement, dated as of October 1, 2001, between EMC and National City, attached
hereto as Exhibit H-6.
Net Interest Shortfall: With respect to any Distribution Date, the
Prepayment 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 by the
Master Servicer or the Servicer in accordance with the related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the Master
Servicer or the Servicer and Monthly Advances.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest Rate
in effect from time to time less the Aggregate Expense Rate (expressed as a per
annum rate).
Net Rate Cap: For any Distribution Date and (i) each of the Class I-A and
the Class II-A Certificates, the weighted average of the Net Rates of the
Mortgage Loans in the related Loan Group as of the beginning of the related Due
Period, weighted on the basis of the Stated Principal Balances thereof as of the
preceding Distribution Date, as adjusted to an effective rate reflecting the
accrual of interest on the basis of a 360-day year and the actual number of days
elapsed in the related Interest Accrual Period and (ii) each of the Class M
Certificates and the Class B Certificates, the weighted average of the Net Rates
on the Mortgage Loans in each Loan Group,
19
weighted in proportion to the results of subtracting from the aggregate Stated
Principal Balance of each Loan Group, the Certificate Principal Balance of the
related classes of Senior Certificates, as adjusted to an effective rate
reflecting the accrual of interest on the basis of a 360-day year and the actual
number of days elapsed in the related Interest Accrual Period. For federal
income tax purposes, the Net Rate Cap (a) with respect to the Class I-A
Certificates, is equal to the Uncertificated REMIC II Pass-Through Rate for the
REMIC II Regular Interests LT1, LT2 and LT-Y1, (b) with respect to the Class
II-A Certificates, is equal to the Uncertificated Pass-Through Rate for the
REMIC II Regular Interests LT5, LT6 and LT-Y2 and (c) with respect to the Class
M Certificates and Class B Certificates is the weighted average of the
Uncertificated REMIC II Pass-Through Rates on the LT-Y1 and LT-Y2 REMIC II
Regular Interests, weighted on the basis of their respective Uncertificated
Principal Balances.
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the applicable Servicer and (ii) which, in the
good faith judgment of the Master Servicer, the Trustee or the applicable
Servicer, will not or, in the case of a proposed advance or Monthly Advance,
would not, be ultimately recoverable by the Master Servicer, the Trustee (as
successor Master Servicer) or the applicable Servicer from Liquidation Proceeds,
Insurance Proceeds or future payments on the Mortgage Loan for which such
advance or Monthly Advance was made.
Notional Amount: The Notional Amount of the Class B-IO Certificates
immediately prior to any Distribution Date is equal to the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular Interests.
Offered Certificate: Any Senior Certificate or Offered Subordinate
Certificate.
Offered Subordinate Certificate: Any of the Class M-1, Class M-2, Class
B-1 or Class B-2 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: With respect to any Interest Accrual Period, the rate
determined by the Securities Administrator on the related LIBOR Determination
Date on the basis of the rate for U.S. dollar deposits for one month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
LIBOR Determination Date; provided that the parties hereto acknowledge that
One-Month LIBOR for the first Interest Accrual Period shall equal 1.48% per
annum. 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, such
other service for displaying One-Month LIBOR or comparable rates as may be
reasonably selected by the Securities Administrator), One-Month LIBOR for the
applicable Interest Accrual Period will be the Reference Bank Rate. If no such
quotations can be obtained by the Securities Administrator and no Reference Bank
Rate is
20
available, One-Month LIBOR will be One-Month LIBOR applicable to the preceding
Interest Accrual Period.
Opinion of Counsel: A written opinion of counsel who is or are acceptable
to the Trustee and who, unless required to be Independent (an "Opinion of
Independent Counsel"), may be internal counsel for EMC, the Master Servicer or
the Depositor.
Optional Termination Date: The Distribution Date on which the aggregate
Stated Principal Balance of all of the Mortgage Loans is equal to or less than
20% of the aggregate Stated Principal Balance of all of the Mortgage Loans as of
the Cut-off Date.
Original Subordinate Principal Balance: The sum of the aggregate
Certificate Principal Balances of each Class of Subordinate Certificates as of
the Closing Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
which, prior to such Due Date, was not the subject of a Principal Prepayment in
full, did not become a Liquidated Mortgage Loan and was not purchased or
replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Overcollateralization Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate Certificate Principal
Balance of the Offered Certificates on such Distribution Date (after taking into
account the payment of principal other than any Extra Principal Distribution
Amount on such Certificates).
Overcollateralization Target Amount: $2,843,323.
Pass-Through Rate: As to each Class of Certificates, 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).
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
21
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:
(1) direct obligations of, and obligations the timely payment of
which are fully guaranteed by the United States of America or any agency
or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of
America;
(2) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof (including the Trustee or the Master Servicer or its Affiliates
acting in its commercial banking capacity) and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or the short-term debt rating and/or the long-term
unsecured debt obligations of such depository institution or trust company
at the time of such investment or contractual commitment providing for
such investment have the Applicable Credit Rating or better from each
Rating Agency and (b) any other demand or time deposit or certificate of
deposit that is fully insured by the Federal Deposit Insurance
Corporation;
(3) 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;
(4) 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;
(5) 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;
(6) a Reinvestment Agreement issued by any bank, insurance company
or other corporation or entity;
22
(7) 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
(8) 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 the Master Servicer or any affiliate of the
Trustee or the Master Servicer acts as a manager or an advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par.
Permitted Transferee: Any Person other than a Disqualified Organization or
an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Physical Certificates: The Residual Certificates and the Private
Certificates.
Plan: The meaning specified in Section 5.07(a).
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
Prepayment Charge Loan: Any Mortgage Loan for which a Prepayment Charge
may be assessed and to which such Prepayment Charge the Class XP Certificates
are entitled, as indicated on the Mortgage Loan Schedule.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.21 or
10.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Rate on the Stated Principal Balance of such Mortgage Loan
immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected in connection
with such Principal Prepayment or such liquidation proceeds less the sum of (a)
any Prepayment Charges and (b) the related Servicing Fee.
Prepayment Period: With respect to a Distribution Date is the immediately
preceding calendar month in the case
23
of the Mortgage Loans for which EMC is the Servicer and in the case of the
Mortgage Loans for which EMC is not the Servicer such period as is provided in
the related Servicing Agreement with respect to the related Servicer.
Primary Mortgage Insurance Policy: A policy underwriting primary mortgage
insurance.
Principal Distribution Amount: With respect to each Distribution Date, an
amount equal to sum of (i) the sum of the Principal Funds for both Loan Groups
for such Distribution Date and (ii) any Extra Principal Distribution Amount for
such Distribution Date.
Principal Funds: With respect to any Distribution Date and each Loan
Group, (i) the sum, without duplication, of (a) all scheduled principal
collected on the Mortgage Loans in the related Loan Group during the related Due
Period, (b) all Monthly Advances relating to principal made on the Mortgage
Loans in the related Loan Group on or before the Distribution Account Deposit
Date, (c) Principal Prepayments on the Mortgage Loans in the related Loan Group,
exclusive of prepayment charges or penalties, collected during the related
Prepayment Period, (d) the Stated Principal Balance of each Mortgage Loan in the
related Loan Group that was purchased by the Seller pursuant to Section 2.02,
2.03 or 3.21 during the related Due Period, (e) the aggregate of all
Substitution Adjustment Amounts in connection with the substitution of Mortgage
Loans in the related Loan Group pursuant to Section 2.04 during the related Due
Period, (f) amounts in respect of principal paid by EMC pursuant to Section
10.01 and (g) all Liquidation Proceeds collected during the related Prepayment
Period (or, in the case of Subsequent Recoveries, during the related Due Period)
on Mortgage Loans in the related Loan Group, to the extent such Liquidation
Proceeds relate to principal, in each case to the extent remitted by EMC or the
related Servicer to the Distribution Account pursuant to this Agreement or the
related Servicing Agreement minus (ii) all amounts required to be reimbursed
pursuant to Sections 4.01, 4.03 and 4.05 or as otherwise set forth in this
Agreement.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment, including Insurance Proceeds
and the Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
Private Certificate: Any Class XP Certificate, Class B-IO Certificate
or Class R Certificate.
Prospectus: The prospectus, dated May 14, 2004, as supplemented by the
prospectus supplement dated July 29, 2004, relating to the offering of the
Certificates.
Protected Account: An account established and maintained for the benefit
of Certificateholders by each Servicer with respect to the related Mortgage
Loans and with respect to REO Property pursuant to the respective Servicing
Agreements.
QIB: A Qualified Institutional Buyer as defined in Rule 144A promulgated
under the Securities Act.
24
Qualified Insurer: Any insurance company duly qualified as such under the
laws of the state or states in which the related Mortgaged Property or Mortgaged
Properties is or are located, duly authorized and licensed in such state or
states to transact the type of insurance business in which it is engaged and
approved as an insurer by the Master Servicer, so long as the claims paying
ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Rating Agencies: S&P and Moody's.
Realized Loss: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan and the related
Mortgaged Property; provided, however, that in the event the Master Servicer
receives 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 Subsequent Recoveries are applied to reduce the Certificate
Principal Balance of any Class of Certificates on any Distribution Date.
Record Date: For each Class of Certificates, the Business Day preceding
the applicable Distribution Date so long as such Class of Certificates remains
in book-entry form; and otherwise, the close of business on the last Business
Day of the month immediately preceding the month of such Distribution Date.
Reference Bank: A leading bank selected by the Securities Administrator
that is engaged in transactions in Eurodollar deposits in the international
Eurocurrency market.
Reference Bank Rate: With respect to any Interest Accrual Period, the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related interest determination date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of all Classes of Offered Certificates for such
Interest Accrual Period, provided that at least two such Reference Banks provide
such rate. If fewer than two offered rates appear, the Reference Bank Rate will
be the arithmetic mean, rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%, 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 Certificate
Principal Balance of all Classes of Offered Certificates.
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 laws.
25
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.
Remaining Excess Spread: With respect to any Distribution Date, the
excess of the related Excess Spread over the related Extra Principal
Distribution Amount.
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) amounts on deposit in the
Master Servicer Collection Account related to the Mortgage Loans, (iii) any REO
Property relating to the Mortgage Loans, (iv) the rights of the Trust with
respect the Mortgage Loans under any related Servicing Agreement, (v) the rights
of the Trust with respect the Mortgage Loans under any related Assignment
Agreement or insurance policy and (vi) any proceeds of the foregoing, but not
including the Cap Contract or any proceeds thereof.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Realized Loss: Realized Losses on Group I Loans and Group II Loans
shall be allocated to the REMIC I Regular Interests as follows: (1) The interest
portion of Realized Losses on Group I Loans, if any, shall be allocated among
the REMIC I Y-1 and REMIC I Z-1 Regular Interests pro rata according to the
amount of interest accrued but unpaid thereon, in reduction thereof and (2) the
interest portion of Realized Losses on Group II Loans, if any, shall be
allocated among the REMIC I Y-2 and REMIC I Z-2 Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction
thereof. Any interest portion of such Realized Losses in excess of the amount
allocated pursuant to the preceding sentence shall be treated as a principal
portion of Realized Losses not attributable to any specific Mortgage Loan in
such Loan Group and allocated pursuant to the succeeding sentences. The
principal portion of Realized Losses with respect to Loan Group I and Loan Group
II shall be allocated to the REMIC I Regular Interests as follows: (1) The
principal portion of Realized Losses on Group I Loans shall be allocated, first,
to the REMIC I Y-1 Regular Interest to the extent of the REMIC I Y-1 Principal
Reduction Amount in reduction of the Uncertificated Principal Balance of such
REMIC I Regular Interest and, second, the remainder, if any, of such principal
portion of such Realized Losses shall be allocated to the REMIC I Z-1 Regular
Interest in reduction of the Uncertificated Principal Balance thereof and (2)
the principal portion of Realized Losses on Group II Loans shall be allocated,
first, to the REMIC I Y-2 Regular Interest to the extent of the REMIC I Y-2
Principal Reduction Amount in reduction of the Uncertificated Principal Balance
of such Regular Interest and, second, the remainder, if any, of such principal
portion of such Realized Losses shall be allocated to the REMIC I Z-2 Regular
Interest in reduction of the Uncertificated Principal Balance thereof.
REMIC I Regular Interests: REMIC I Y-1 Regular Interest, REMIC I Y-2
Regular Interest, REMIC I Z-1 Regular Interest and REMIC I Z-2 Regular Interest.
REMIC I Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the Class Y-1 Regular
Interests and Class Y-2
26
Regular Interests, respectively, will be reduced on such Distribution Date by
the allocation of Realized Losses and the distribution of principal, determined
as described in Appendix 1.
REMIC I Y Regular Interests: The REMIC I Y-1 Regular Interest and REMIC I
Y-2 Regular Interest.
REMIC II Y-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the REMIC II Y-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
REMIC II Y-1 Regular Interest on such Distribution Date.
REMIC I Y-1 Regular Interest: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Y-1 Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in Section 5.01(c).
REMIC I Y-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the REMIC I Y-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
REMIC I Y-2 Regular Interest on such Distribution Date.
REMIC I Y-2 Regular Interest: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Y-2 Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in Section 5.01(c).
REMIC I Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the REMIC I Z-1
Regular Interests and REMIC I Z-2 Regular Interests, respectively, will be
reduced on such Distribution Date by the allocation of Realized Losses and the
distribution of principal, which shall be in each case the excess of (A) the sum
of (x) the excess of the REMIC I Available Distribution Amount for the related
Loan Group (i.e. the "related Loan Group" for the REMIC I Z-1 Regular Interest
is Loan Group I and the "related Loan Group" for the REMIC I Z-2 Regular
Interest is Loan Group II) over the sum of the amounts thereof distributable (i)
in respect of interest on such REMIC I Z Regular Interest and the related REMIC
I Y Regular Interest and (iv) to such REMIC I Z Regular Interest and the related
REMIC I Y Regular Interest pursuant to clause (c)(i) of the definition of "REMIC
I Distribution Amount" and (y) the amount of Realized Losses allocable to
principal for the related Loan Group over (B) the REMIC I Y Principal Reduction
Amount for the related Loan Group.
REMIC I Z Regular Interests: The REMIC II Z-1 Regular Interest and REMIC I
Z-2 Regular Interest.
27
REMIC I Z-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the REMIC I Z-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
REMIC I Z-1 Regular Interest on such Distribution Date.
REMIC I Z-1 Regular Interest: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Z-1 Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in Section 5.01(c).
REMIC I Z-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the REMIC I Z-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
REMIC I Z-2 Regular Interest on such Distribution Date.
REMIC I Z-2 Regular Interest: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. REMIC I Z-2 Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in Section 5.01(c).
REMIC I Available Distribution Amount: For each Loan Group for any
----------------------------------------
Distribution Date, the sum of the Principal Funds and Interest Funds for such
Loan Group
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and the Class R-1 Residual Interest in the following amounts and
priority:
(a) To the extent of the REMIC I Available Distribution Amount for Loan
Group I:
(i) first, to REMIC I Y-1 and REMIC I Z-1 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Regular
Interests remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
(ii) second, to the REMIC I Y-1 and REMIC I Z-1 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Classes for the
current Distribution Date, pro rata according to their respective
Uncertificated Accrued Interest;
(iii) third, to the REMIC I Y-1 and REMIC I Z-1 Regular Interests,
the REMIC I Y-1 Principal Distribution Amount and the REMIC I Z-1
Principal Distribution Amount, respectively.
(b) To the extent of the REMIC I Available Distribution Amount for Loan
Group II:
28
(i) first, to the REMIC I Y-2 and REMIC I Z-2 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Classes
remaining unpaid from previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts;
(ii) second, to the REMIC I Y-2 and REMIC I Z-2 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Classes for the
current Distribution Date, pro rata according to their respective
Uncertificated Accrued Interest; and
(iii) third, to the REMIC I Y-2 and REMIC I Z-2 Regular Interests,
the REMIC I Y-2 Principal Distribution Amount and the REMIC I Z-2
Principal Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amounts for Group
I and Group II for such Distribution Date remaining after payment of the amounts
pursuant to paragraphs (a) and (b) of this definition of "REMIC I Distribution
Amount":
(i) first, to each Class of REMIC I Y and REMIC I Z Regular
Interests, pro rata according to the amount of unreimbursed Realized
Losses allocable to principal previously allocated to each such Regular
Interest, the aggregate amount of any distributions to the Certificates as
reimbursement of such Realized Losses on such Distribution Date pursuant
to clauses Third through Fifth in Section 6.01(a); provided, however, that
any amounts distributed pursuant to this paragraph (c)(i) of this
definition of "REMIC I Distribution Amount" shall not cause a reduction in
the Uncertificated Principal Balances of any of the REMIC I Y and REMIC I
Z Regular Interests; and
(ii) second, to the Class R-I Certificates, any remaining amount.
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 Available Distribution Amount: For each Loan Group and a
Distribution Date, the sum of the Principal Funds and Interest Funds for such
Loan Group.
REMIC II Distribution Amount:
(i) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC II to REMIC
III on account of the REMIC II Regular Interests related to Loan Group
I:
(1) to the extent of the REMIC II Available Distribution
Amount related to Loan Group I, to REMIC III as the holder of
REMIC II Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, pro
rata, in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus
29
(B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates;
(2) to the extent of prepayment charges received with
respect to the Loan Group I Loans, the amount of prepayment
charges distributable to the Class XP Certificates from amounts
collected with respect to Loan Group I Loans to the REMIC II
Regular Interest LT-Y1; and
(3) on each Distribution Date, to REMIC III as the holder of
the REMIC II Regular Interests, in an amount equal to the
remainder of the REMIC II Available Distribution Amount related
to Loan Group I after the distributions made pursuant to clauses
(1) and (2) above, allocated as follows (except as provided
below):
(A) in respect of the REMIC II Regular Interests LT2, LT3,
LT4 and LT-Y1, their respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT1 any
remainder until the Uncertificated Principal Balance thereof is
reduced to zero;
(C) any remainder in respect of the REMIC II Regular
Interests LT2, LT3 and LT4, pro rata according to their
respective Uncertificated Principal Balances as reduced by the
distributions deemed made pursuant to (A) above, until their
respective Uncertificated Principal Balances are reduced to zero;
and
(D) any remaining amounts of the REMIC II Available
Distribution Amount related to Loan Group I to the Holders of the
Class R-II Certificates.
(ii) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC II to REMIC
III on account of the REMIC II Regular Interests related to Loan Group
II:
(1) to the extent of the REMIC II Available Distribution
Amount related to Loan Group II, to REMIC III as the holder of
REMIC II Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, pro
rata, in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution
Dates;
(2) to the extent of prepayment charges received with
respect to the Loan Group II Loans, the amount of prepayment
charges distributable to the Class XP Certificates from amounts
collected with respect to Loan Group II Loans to the REMIC II
Regular Interest LT-Y2; and
30
(3) on each Distribution Date, to REMIC III as the holder of
the REMIC II Regular Interests, in an amount equal to the
remainder of the REMIC II Available Distribution Amount related
to Loan Group II after the distributions made pursuant to clauses
(1) and (2) above, allocated as follows (except as provided
below):
(A) in respect of the REMIC II Regular Interests LT6, LT7,
LT8 and LT-Y2, their respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT5 any
remainder until the Uncertificated Principal Balance thereof is
reduced to zero;
(C) any remainder in respect of the REMIC II Regular
Interests LT6, LT7 and LT8, pro rata according to their
respective Uncertificated Principal Balances as reduced by the
distributions deemed made pursuant to (A) above, until their
respective Uncertificated Principal Balances are reduced to zero;
and
(D) any remaining amounts of the Group II REMIC II Available
Distribution Amount related to Loan Group II to the Holders of
the Class R-II Certificates.
REMIC II Principal Reduction Amounts: For any Distribution Date, the
amounts by which the principal balances of the REMIC II Regular Interests LT1,
LT2, LT3, LT4, LT5, LT6, LT7, LT8, LT-Y1 and LT-Y2, respectively, will be
reduced on such Distribution Date by the allocation of Realized Losses and the
distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
Y1 = the aggregate principal balance of the REMIC II Regular Interests LT1
and LT-Y1 after distributions on the prior Distribution Date.
Y2 = the principal balance of the REMIC II Regular Interest LT2 after
distributions on the prior Distribution Date.
Y3 = the principal balance of the REMIC II Regular Interest LT3 after
distributions on the prior Distribution Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4 after
distributions on the prior Distribution Date (note: Y3 = Y4).
AY1 = the combined REMIC II Regular Interest LT1 and LT-Y1 Principal
Reduction Amount. Such amount shall be allocated first to LT-Y1 up to the Class
Y1 Principal Reduction Amound and thereafter the remainder shall be allocated to
LT1.
31
AY2 = the REMIC I Regular Interest LT2 Principal Reduction Amount.
AY3 = the REMIC I Regular Interest LT3 Principal Reduction Amount.
AY4 = the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of the REMIC I Regular Interests LT1,
LT2, LT3, LT4 and LT-Y1 after distributions and the allocation of Realized
Losses on the prior Distribution Date.
P1 = the aggregate principal balance of the REMIC I Regular Interests LT1,
LT2, LT3, LT4 and LT-Y1 after distributions and the allocation of Realized
Losses to be made on such Distribution Date.
AP = P0 - P1 = the aggregate of the REMIC I Regular Interests LT1, LT2,
LT3, LT4 and LT-Y1 Principal Reduction Amounts, which
= the aggregate of the principal portions of Realized Losses to be
allocated, and the principal distributions to be made with respect to the Group
I Mortgage Loans on such Distribution Date (including principal distributed in
respect of accrued and unpaid interest on the Class B-IO Certificates for prior
Distribution Dates).
R0 = the Group I Net WAC Rate (stated as a monthly rate) after giving
effect to amounts distributed and Realized Losses allocated on the prior
Distribution Date.
R1 = the Group I Net WAC Rate (stated as a monthly rate) after giving
effect to amounts to be distributed and Realized Losses to be allocated on such
Distribution Date.
a = (Y2 + Y3)/P0. The initial value of a on the Closing Date for use on
the first Distribution Date shall be 0.0001.
a0 = the lesser of (A) the sum for all Classes of Class I-A Certficates,
other than the Class B-IO Certificates, of the product for each Class of (i) the
monthly interest rate (as limited by the Group I Net WAC Rate, if applicable)
for such Class applicable for distributions to be made on such Distribution Date
and (ii) the aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on the prior Distribution
Date and (B) R0*P0.
a1 = the lesser of (A) the sum for all Classes of Class I-A Certficates,
other than the Class B-IO Certificates, of the product for each Class of (i) the
monthly interest rate (as limited by the Group I Net WAC Rate, if applicable)
for such Class applicable for distributions to be made on the next succeeding
Distribution Date and (ii) the aggregate Certificate Principal Balance for such
Class after distributions and the allocation of Realized Losses to be made on
such Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
32
AY1 = AP - AY2 - AY3 - AY4;
AY2 = (a/2){( a0R1 - a1R0)/R0R1};
AY3 = aAP - AY2; and
AY4 = AY3.
if both AY2 and AY3, as so determined, are non-negative numbers.
Otherwise:
(1) If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = XX - XX0 - XX0 - XX0.
(2) If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a1R0P0 - a0R1P1}/{2R1R0P1 - a1R0};
AY4 = AY3; and
AY1 = XX - XX0 - XX0 - XX0.
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
Y5 = the aggregate principal balance of the REMIC II Regular Interests LT5
and LT-Y2 after distributions on the prior Distribution Date.
Y6 = the principal balance of the REMIC II Regular Interest LT6 after
distributions on the prior Distribution Date.
Y7 = the principal balance of the REMIC II Regular Interest LT7 after
distributions on the prior Distribution Date.
Y8 = the principal balance of the REMIC II Regular Interest LT8 after
distributions on the prior Distribution Date (note: Y7 = Y8).
AY5 = the aggregate of the REMIC II Regular Interest LT5 and LT-Y-2
Principal Reduction Amounts. Such amount shall be allocated first to LT-Y2 up to
the Class Y2 Principal Reduction Amound and thereafter the remainder shall be
allocated to LT5.
33
AY6 = the REMIC II Regular Interest LT6 Principal Reduction Amount.
AY7 = the REMIC II Regular Interest LT7 Principal Reduction Amount.
AY8 = the REMIC II Regular Interest LT8 Principal Reduction Amount.
Q0 = the aggregate principal balance of the REMIC II Regular Interests
LT5, LT6, LT7, LT8 and LT-Y-2 after distributions and the allocation of Realized
Losses on the prior Distribution Date.
Q1 = the aggregate principal balance of the REMIC II Regular Interests
LT5, LT6, LT7, LT8 and LT-Y2 after distributions and the allocation of Realized
Losses to be made on such Distribution Date.
AQ = Q0 - Q1 = the aggregate of the REMIC II Regular Interests LT5, LT6,
LT7, LT8 and LT-Y2 Principal Reduction Amounts, which
= the aggregate of the principal portions of Realized Losses to be
allocated, and the principal distributions to be made with respect to the Group
II Mortgage Loans on such Distribution Date (including principal distributed in
respect of accrued and unpaid interest on the Class B-IO Certificates for prior
Distribution Dates).
S0 = the Group II Net WAC Rate (stated as a monthly rate) after giving
effect to amounts distributed and Realized Losses allocated on the prior
Distribution Date.
S1 = the Group II Net WAC Rate (stated as a monthly rate) after giving
effect to amounts to be distributed and Realized Losses to be allocated on such
Distribution Date.
a = (Y6 + Y7)/Q0. The initial value of a on the Closing Date for use on
the first Distribution Date shall be 0.0001.
A0 = the lesser of (A) the sum for all Classes of Class II-A Certficates
other than the Class B-IO Certificates of the product for each Class of (i) the
monthly interest rate (as limited by the Group II Net WAC Rate, if applicable)
for such Class applicable for distributions to be made on such Distribution Date
and (ii) the aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on the prior Distribution
Date and (B) S0*Q0.
A1 = the lesser of (A) the sum for all Classes of Class II-A Certficates
other than the Class B-IO Certificates of the product for each Class of (i) the
monthly interest rate (as limited by the Group II Net WAC Rate, if applicable)
for such Class applicable for distributions to be made on the next succeeding
Distribution Date and (ii) the aggregate Certificate Principal Balance for such
Class after distributions and the allocation of Realized Losses to be made on
such Distribution Date and (B) S1*Q1.
Then, based on the foregoing definitions:
AY5 = AQ - AY6 - AY7 - AY8;
34
AY6 = (a/2){(A0S1 - A1S0)/S0S1};
AY7 = aAQ - AY6; and
AY8 = AY7.
if both AY6 and AY7, as so determined, are non-negative numbers.
Otherwise:
(1) If AY6, as so determined, is negative, then
AY6 = 0;
AY7 = a{A1S0Q0 - A0S1Q1}/{A1S0};
AY8 = AY7; and
AY5 = AQ - AY6 - AY7 - AY8.
(2) If AY7, as so determined, is negative, then
AY7 = 0;
AY6 = a{A1S0Q0 - A0S1Q1}/{2S1S0Q1 - A1S0};
AY8 = AY7; and
AY5 = AQ - AY6 - AY7 - AY8.
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
REMIC II Realized Loss: Realized Losses on Group I Loans and Group II
Loans shall be allocated to the REMIC II Regular Interests as follows: (1) The
interest portion of Realized Losses on Group I Loans, if any, shall be allocated
among the LT1, LT2, LT4 and LT-Y1 REMIC II Regular Interests pro rata according
to the amount of interest accrued but unpaid thereon, in reduction thereof and
(2) the interest portion of Realized Losses on Group II Loans, if any, shall be
allocated among the LT5, LT6, LT8 and LT-Y2 REMIC II Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction
thereof. Any interest portion of such Realized Losses in excess of the amount
allocated pursuant to the preceding sentence shall be treated as a principal
portion of Realized Losses not attributable to any specific Mortgage Loan in
such Loan Group and allocated pursuant to the succeeding sentences. The
principal portion of Realized Losses with respect to Loan Group I and Loan Group
II shall be allocated to the REMIC II Regular Interests as follows: (1) The
principal portion of Realized Losses on Group I Loans shall be allocated, first,
to the LT-Y1 REMIC II Regular Interest to the extent that such losses were
allocated to the Y-1 REMIC I Regular Interest in reduction of the Uncertificated
Principal Balance thereof, second, to the LT2, LT3 and LT4 REMIC II Regular
Interests pro-rata according to their respective REMIC II Principal Reduction
Amounts to the extent thereof in reduction of the Uncertificated Principal
Balance of such
35
REMIC II Regular Interests and, third, the remainder, if any, of such principal
portion of such Realized Losses shall be allocated to the LT1 REMIC II Regular
Interest in reduction of the Uncertificated Principal Balance thereof and (2)
the principal portion of Realized Losses on Group II Loans shall be allocated,
first, to the LT-Y2 REMIC II Regular Interest to the extent that such losses
were allocated to the Y-2 REMIC I Regular Interest in reduction of the
Uncertificated Principal Balance thereof, second, to the LT6, LT7 and LT8 REMIC
II Regular Interests pro-rata according to their respective REMIC II Principal
Reduction Amounts to the extent thereof in reduction of the Uncertificated
Principal Balance of such REMIC II Regular Interests and, third, the remainder,
if any, of such principal portion of such Realized Losses shall be allocated to
the LT5 REMIC II Regular Interest in reduction of the Uncertificated Principal
Balance thereof.
REMIC II Regular Interests: REMIC II Regular Interest LT1, REMIC II
Regular Interest LT2, REMIC II Regular Interest LT3, REMIC II Regular Interest
LT4, REMIC II Regular Interest LT5, REMIC II Regular Interest LT6, REMIC II
Regular Interest LT7, REMIC II Regular Interest LT8, REMIC II Regular Interest
LT-Y1 and REMIC II Regular Interest LT-Y2.
REMIC II Regular Interest LT1: A regular interest in REMIC II that is held
as an asset of REMIC IIII, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT1
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT1 on such Distribution Date.
REMIC II Regular Interest LT2: A regular interest in REMIC II that is held
as an asset of REMIC IIII, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT2
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT2 on such Distribution Date.
REMIC II Regular Interest LT3: A regular interest in REMIC II that is held
as an asset of REMIC III, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT3
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT3 on such Distribution Date.
36
REMIC II Regular Interest LT4: A regular interest in REMIC II that is held
as an asset of REMIC III, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT4
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT4 on such Distribution Date.
REMIC II Regular Interest LT5: A regular interest in REMIC II that is held
as an asset of REMIC III, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT5 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT5
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT5 on such Distribution Date.
REMIC II Regular Interest LT6: A regular interest in REMIC II that is held
as an asset of REMIC III, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT6 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT6
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT6 on such Distribution Date.
REMIC II Regular Interest LT7: A regular interest in REMIC II that is held
as an asset of REMIC III, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT7 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT7
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT7 on such Distribution Date.
REMIC II Regular Interest LT8: A regular interest in REMIC II that is held
as an asset of REMIC III, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT8 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT8
Principal Reduction Amount for
37
such Distribution Date over the Realized Losses allocated to the REMIC II
Regular Interest LT8 on such Distribution Date.
REMIC II Regular Interest LT-Y1: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT-Y1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT-Y1
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT-Y1 on such Distribution Date.
REMIC II Regular Interest LT-Y2: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT-Y2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT-Y2
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest LT-Y2 on such Distribution Date.
REMIC III: That group of assets contained in the Trust Fund designated as
a REMIC consisting of the REMIC II Regular Interests.
REMIC III Regular Certificates: As defined in Section 5.01(c).
REMIC III Realized Losses: Realized Losses allocated to and in reduction
of the Overcollateralization shall be deemed to first reduce the principal
balance of the REMIC III Regular Interest B-IO-P until such balance shall have
been reduced to zero and thereafter to reduce the accrued and unpaid interest on
the REMIC III Regular Interest B-IO-I. Realized Losses allocated to the
Certificates in reduction of the interest or principal attributes thereof shall
be deemed allocated to the corresponding REMIC III Regular Interests in
reduction of the corresponding attributes thereof.
REMIC Opinion: An Opinion of Independent Counsel, to the effect that the
proposed action described therein would not, under the REMIC Provisions, (i)
cause any 2004-8 REMIC to fail to qualify as a REMIC while any regular interest
in such 2004-8 REMIC is outstanding, (ii) result in a tax on prohibited
transactions with respect to any 2004-8 REMIC or (iii) constitute a taxable
contribution to any 2004-8 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.
38
REO Property: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement or Article II of this Agreement, an
amount equal to the excess of (i) the sum of (a) 100% of the Outstanding
Principal Balance of such Mortgage Loan as of the date of repurchase (or if the
related Mortgaged Property was acquired with respect thereto, 100% of the
Outstanding Principal Balance at the date of the acquisition), (b) accrued but
unpaid interest on the Outstanding Principal Balance at the related Mortgage
Interest Rate, through and including the last day of the month of repurchase and
(c) any costs and damages (if any) incurred by the Trust in connection with any
violation of such Mortgage Loan of any predatory or abusive lending laws over
(ii) any portion of the Master Servicing Compensation, Monthly Advances and
advances payable to the purchaser of the Mortgage Loan.
Repurchase Proceeds: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller and any cash deposit in connection
with the substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto as
Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
Reserve Fund: The separate trust account created and maintained by the
Trustee pursuant to Section 4.06 hereof.
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.
Rolling Three-Month Delinquency Average: With respect to a Distribution
Date, the average of the Monthly Delinquency Percentages for that Distribution
Date and each of the immediately preceding two Distribution Dates.
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.
39
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
and any successor thereto.
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 Due
Period 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.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association, and
any successor thereto, or any successor securities administrator appointed as
herein provided.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY 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 OR (2) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR
ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT (A
"PLAN") THAT 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 (THE "CODE"), or by a person using "PLAN assets" of a Plan,
UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL
40
FOR THE BENEFIT OF THE TRUSTEE, MASTER SERVICER AND THE SECURITIES ADMINISTRATOR
AND ON WHICH THEY MAY RELY WHICH IS SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975
OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE
SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.
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, as Seller under the Mortgage Loan Purchase Agreement.
Senior Certificates: The Class A Certificates.
Senior Enhancement Percentage: As to each Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of (i)
the aggregate of the Certificate Principal Balance of the Class M-1, Class M-2,
Class B-1 and Class B-2 Certificates and (ii) the Overcollateralization Amount,
in each case after taking into account the distribution of the related Principal
Distribution Amounts on such Distribution Date, and the denominator of which is
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date .
Servicer: With respect to each Mortgage Loan, Chevy Chase, Countrywide,
EMC, EverHome, GreenPoint, National City, SouthTrust or Xxxxxxxxxx, and any
successor thereto.
Servicer Remittance Date: With respect to each Mortgage Loan, the date
set forth in the related Servicing Agreement.
Servicing Agreements: The Chevy Chase Servicing Agreements, Countrywide
Servicing Agreement, EMC Servicing Agreement, EverHome Servicing Agreement,
GreenPoint Servicing Agreement, National City Servicing Agreement, SouthTrust
Servicing Agreement and Xxxxxxxxxx Servicing Agreement.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Stated Principal Balance of such Mortgage Loan
for the Distribution Date preceding such Distribution Date and (ii) the
applicable Servicing Fee Rate.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set forth
in the Mortgage Loan Schedule.
SouthTrust: SouthTrust Mortgage Corporation, and its successor in
interest.
SouthTrust Servicing Agreement: The Purchase, Warranties and Servicing
Agreement dated as of November 1, 2002, between EMC and SouthTrust, attached
hereto as Exhibit H-7.
41
Startup Day: July 30, 2004.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property and any Distribution Date, the Outstanding Principal Balance thereof as
of the Cut-off Date minus the sum of (i) the principal portion of the Scheduled
Payments due with respect to such Mortgage Loan during each Due Period ending
prior to such Distribution Date (and irrespective of any delinquency in their
payment), (ii) all Principal Prepayments with respect to such Mortgage Loan
received prior to or during the related Prepayment Period, and all Liquidation
Proceeds to the extent applied by the related Servicer as recoveries of
principal in accordance with this Agreement or the applicable Servicing
Agreement with respect to such Mortgage Loan, 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 (iii) any Realized Losses on such Mortgage
Loan incurred prior to or during the related Prepayment Period. The Stated
Principal Balance of a Liquidated Mortgage Loan equals zero. References herein
to the Stated Principal Balance of a Loan Group at any time shall mean the
aggregate Stated Principal Balance of all Mortgage Loans in such Loan Group.
Stepdown Date: The earlier to occur of (i) the Distribution Date on which
the Certificate Principal Balance of the Class A Certificates has been reduced
to zero and (ii) the later to occur of (a) the Distribution Date in August 2007
and (b) the first Distribution Date on which the sum of the aggregate
Certificate Principal Balance of the Class M-1, Class M-2, Class B-1 and Class
B-2 Certificates and the Overcollateralization Amount divided by the Stated
Principal Balance of the Mortgage Loans for such Distribution Date is greater
than or equal to 12.10%.
Subordinate Balance: For each Loan Group, for any Distribution Date, the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
in such Loan Group over the aggregate Certificate Principal Balance of the Class
A Certificates related to that Loan Group.
Subordinate Certificates: The Class M-1 Certificates, Class M-2
Certificates, Class B-1 Certificates, Class B-2 Certificates, Class XP
Certificates, Class B-IO Certificates and Residual Certificates.
Subordinate Balance Percentage: For each Loan Group, fraction, stated as a
percentage, whose numerator is the Subordinate Balance for such Loan Group and
whose denominator is the sum of the Subordinate Balances for Loan Group I and
Loan Group II.
Subsequent Recoveries: As of any Distribution Date, amounts received
during the related Due Period by the Master Servicer (net of any related
expenses permitted to be reimbursed pursuant to Section 4.03) or surplus amounts
held by the Master Servicer to cover estimated expenses (including, but not
limited to, recoveries in respect of the representations and warranties made by
the Seller pursuant to the Mortgage Loan Purchase Agreement) in respect of a
Liquidated Mortgage Loan or the disposition of an REO Property prior to the
related Prepayment Period that resulted in a Realized Loss, after liquidation or
disposition of such Mortgage Loan.
42
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee pursuant
to the related Servicing Agreement, the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, in each case, (i) which has an
Outstanding Principal Balance not greater nor materially less than the Mortgage
Loan for which it is to be substituted; (ii) which has a Mortgage Interest Rate
and Net Rate not less than, and not materially greater than, such Mortgage Loan;
(iii) which has a maturity date not materially earlier or later than such
Mortgage Loan and not later than the latest maturity date of any Mortgage Loan;
(iv) which is of the same property type and occupancy type as such Mortgage
Loan; (v) which has a Loan-to-Value Ratio not greater than the Loan-to-Value
Ratio of such Mortgage Loan; (vi) which is current in payment of principal and
interest as of the date of substitution; (vii) as to which the payment terms do
not vary in any material respect from the payment terms of the Mortgage Loan for
which it is to be substituted and (viii) which has a Gross Margin, Periodic Rate
Cap and Maximum Lifetime Mortgage Rate no less than those of such Mortgage Loan,
has the same Index and interval between Interest Adjustment Dates as such
Mortgage Loan, and a Minimum Lifetime Mortgage Rate no lower than that of such
Mortgage Loan.
Substitution Adjustment Amount: The amount, if any, required to be paid by
the Seller to the Trustee for deposit in the Distribution Account pursuant to
Section 2.04 in connection with the substitution of a Mortgage Loan.
Tax Administration and Tax Matters Person: The Securities Administrator
and any successor thereto or assignee thereof shall serve as tax administrator
hereunder and as agent for the Tax Matters Person. The Holder of the largest
percentage interest of each Class of Residual Certificates shall be the Tax
Matters Person for the related REMIC, as more particularly set forth in Section
9.12 hereof.
Termination Purchase Price: The price, calculated as set forth in Section
10.01, to be paid in connection with the repurchase of the Mortgage Loans
pursuant to Section 10.01.
Trigger Event: A Trigger Event exists with respect to a Distribution Date
on or after the Stepdown Date if either (i) the related Rolling Three-Month
Delinquency Average exceeds 50% of the related Senior Enhancement Percentage or
(ii) the percentage of the cumulative amount of Realized Losses on the Mortgage
Loans as of such date of determination is greater than the applicable percentage
listed below of the aggregate Stated Principal Balances of the Mortgage Loans as
of the Closing Date:
Months Percentage
37 - 48 0.70%
49 - 60 1.10%
61 - 72 1.45%
73 + 1.70%
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).
43
Trustee: JPMorgan Chase Bank, and any successor thereto, or any successor
trustee appointed as herein provided.
2004-8 REMIC: Any of REMIC I, REMIC II and REMIC III.
Uncertificated Accrued Interest: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the related
Uncertificated Pass-Through Rate for such Distribution Date, accrued on the
Uncertificated Principal Balance or Uncertificated Notional Amount, as
applicable, immediately prior to such Distribution Date. Uncertificated Accrued
Interest for the Uncertificated Regular Interests shall accrue on the basis of a
360-day year consisting of twelve 30-day months. For purposes of calculating the
amount of Uncertificated Accrued Interest for the REMIC I Regular Interests for
any Distribution Date, any Prepayment Interest Shortfalls and Relief Act
Shortfalls (to the extent not covered by Compensating Interest) (i) relating to
the Mortgage Loans in Loan Group I for any Distribution Date shall be allocated
among REMIC I Regular Interests Y-1 and Z-1 and (ii) relating to the Mortgage
Loans in Loan Group II for any Distribution Date shall be allocated among REMIC
I Regular Interests Y-2 and Z-2, pro rata, based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application of this
sentence. For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC II Regular Interests for any Distribution Date, any
Prepayment Interest Shortfalls and Relief Act Shortfalls (to the extent not
covered by Compensating Interest) (i) relating to the Mortgage Loans in Loan
Group I for any Distribution Date shall be allocated among REMIC II Regular
Interests LT1, LT2, LT3, LT4 and LT-Y1 and (ii) relating to the Mortgage Loans
in Loan Group II for any Distribution Date shall be allocated among REMIC II
Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, pro rata, based on, and to the
extent of, Uncertificated Accrued Interest, as calculated without application of
this sentence.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I Pass-Through
Rate or the Uncertificated REMIC II Pass-Through Rate, as the case may be.
Uncertificated Principal Balance: With respect to each REMIC Regular
Interest, the principal amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Section 5.01 as its initial Uncertificated Principal Balance. On each
Distribution Date, the Uncertificated Principal Balance of each such REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 5.01 and
shall be further reduced on such Distribution Date by Realized Losses as
provided by the definitions of REMIC I Realized Losses and REMIC II Realized
Losses. The Uncertificated Principal Balance of each REMIC Regular Interest
shall never be less than zero.
Uncertificated REMIC I Pass-Through Rate: With respect to any Distribution
Date and (i) REMIC I Regular Interest Y-1 and REMIC I Regular Interest Z-1, the
weighted average of the Net Rates of the Mortgage Loans in Loan Group I and (ii)
REMIC I Regular Interest Y-2 and REMIC I Regular Interest Z-2, the weighted
average of the Net Rates of the Mortgage Loans in Loan Group II.
44
Uncertificated REMIC II Pass-Through Rate: With respect to any
Distribution Date and (i) REMIC II Regular Interests LT1, LT2 and LT-Y1, the
weighted average of the Net Rates of the Mortgage Loans in Loan Group I, (ii)
REMIC II Regular Interests LT5, LT6 and LT-Y2, the weighted average of the Net
Rates of the Mortgage Loans in Loan Group II, (iii) REMIC II Regular Interests
LT3 and LT7, zero (0.00%), (v) REMIC II Regular Interest LT4, twice the weighted
average of the Net Rates of the Mortgage Loans in Loan Group I and (vi) REMIC II
Regular Interest LT8, twice the weighted average of the Net Rates of the
Mortgage Loans in Loan Group II,.
Uninsured Cause: Any cause of damage to a Mortgaged Property or related
REO Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
Unpaid Realized Loss Amount: With respect to any Distribution Date and a
Class of Offered Certificates, is the excess of (i) Applied Realized Loss
Amounts with respect to such Class over (ii) the sum of all distributions in
reduction of the Applied Realized Loss Amounts on all previous Distribution
Dates. Any amounts distributed to a class of Offered Certificates in respect of
any Unpaid Realized Loss Amount will not be applied to reduce the Certificate
Principal Balance of such Class.
Xxxxxxxxxx: Union Federal Bank of Indianapolis, and its successor in
interest.
Xxxxxxxxxx Servicing Agreement: The Amended and Restated Forward
Commitment Flow Mortgage Loan Purchase and Servicing Agreement, dated as of
March 4, 2003, between EMC and Xxxxxxxxxx, attached hereto as Exhibit H-8.
45
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 Mortgage
Loans after the Cut-off Date, but excluding any payments of principal and
interest due on or prior to the Cut-off Date; (ii) such assets as shall from
time to time be credited or are required by the terms of this Agreement to be
credited to the Master Servicer Collection Account, (iii) such assets relating
to the Mortgage Loans as from time to time may be held by the Servicers in
Protected Accounts, the Master Servicer in the Master Servicer Collection
Account and the Trustee in the Distribution Account for the benefit of the
Trustee 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 to the extent provided in Section 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, (viii)
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 and (ix) any
proceeds of the foregoing. Although it is the intent of the parties to this
Agreement that the conveyance of the Depositor's right, title and interest in
and to the Mortgage Loans and other assets in the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan, in the event that
such conveyance is deemed to be a loan, it is the intent of the parties to this
Agreement that the Depositor shall be deemed to have granted to the Trustee a
first priority perfected security interest in all of the Depositor's right,
title and interest in, to and under the Mortgage Loans and other assets in the
Trust Fund, and that this Agreement shall constitute a security agreement under
applicable law.
(b) In connection with the above transfer and assignment, the Depositor
hereby deposits with the Trustee or the Custodian, as its agent, with respect to
each Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee, or lost
note affidavit together with a copy of the related Mortgage Note;
(ii) the original Mortgage and, if the related Mortgage Loan is a MOM
Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the
original is not available, a copy), with evidence of such recording
indicated thereon (or if clause (X) in the proviso below applies, shall be
in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy of the
assignment (which may be in the form of a blanket assignment if permitted
in the
46
jurisdiction in which the Mortgaged Property is located) to "JPMorgan Chase
Bank, 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, Tennessee,
South Carolina, Mississippi and Florida, 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 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 a true copy thereof with a certification by the
Depositor, on the face of such copy, substantially as follows: "Certified to be
a true and correct copy of the original, which has been transmitted for
recording"; (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 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 of the Mortgage Loans
and EMC, between EMC and the Depositor, and between the Depositor and the
Trustee; and provided, further, however, that in the case of Mortgage Loans
which have been prepaid in full after the Cut-off Date and prior to the Closing
Date, the Depositor, in lieu of delivering the above documents, may deliver to
the Trustee or the Custodian, as its agent, a certification to such effect and
shall deposit all amounts paid in respect of such Mortgage Loans in the Master
Servicer Collection Account on the Closing Date. The Depositor shall deliver
such original documents (including any original documents as to which certified
copies had previously been delivered) to the Trustee or the Custodian, as its
agent, promptly after they are received. The Depositor shall cause, at its
expense, the assignment of the Security Instrument to the Trustee to be recorded
not later than 180 days after the Closing Date unless such (a) recordation is
not required by the Rating Agencies or an Opinion of Counsel has been provided
to the Trustee (with a copy to the Custodian) which states that recordation of
such Security Instrument is not required to protect the interests of the
Certificateholders in the related Mortgage Loans or (b) MERS is
47
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as the mortgagee of record solely as nominee for Depositor and its successor 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 and (iv) the occurrence of a
servicing transfer as described in Section 8.02 hereof. 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 Mortgage Loans by Trustee. (a)The Trustee
acknowledges the sale, transfer and assignment of the Trust to it by the
Depositor and receipt of, subject to further review and the exceptions which may
be noted pursuant to the procedures described below, and declares that it holds,
the documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. On the Closing Date, the
Custodian, with respect to the Mortgage Loans, shall acknowledge with respect to
each Mortgage Loan by an Initial Certification receipt of the Mortgage File, but
without review of such Mortgage File, except to the extent necessary to confirm
that such Mortgage File contains the related Mortgage Note or lost note
affidavit. No later than 90 days after the Closing Date (or with respect to any
Substitute Mortgage Loan, within five Business Days after the receipt by the
Trustee or Custodian thereof), the Trustee agrees, for the benefit of the
Certificateholders, to review or cause to be reviewed by the Custodian on its
behalf (under the Custodial Agreement), each Mortgage File delivered to it and
to execute and deliver, or cause to be executed and delivered, to the Depositor
and the Trustee an Interim Certification. In conducting such review, the Trustee
or Custodian will ascertain whether all required documents have been executed
and received, and based on the Mortgage Loan Schedule, whether those documents
relate, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans it has received, as identified in
the Mortgage Loan Schedule. In performing any such review, the Trustee or the
Custodian, as its agent, may conclusively rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If the Trustee or the Custodian, as its agent, finds any
document constituting part of the Mortgage File not to have been executed or
received, or to be unrelated to the Mortgage Loans identified in Exhibit B, or
to appear to be defective on its face, the Trustee or the Custodian, as its
agent, shall promptly notify the Seller. In accordance with the Mortgage Loan
Purchase Agreement, the Seller shall correct or cure any such defect within
ninety 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 within 90 days from the Trustee's or the
Custodian's notification, to purchase such Mortgage Loan at the
48
Repurchase Price; provided that, if such defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from the date such
breach was discovered; provided, however, that if such defect relates solely to
the inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy because the originals of
such documents, or a certified copy have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if
the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Seller within thirty days of its receipt of the
original recorded document.
(b) No later than 180 days after the Closing Date (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. In conducting
such review, the Trustee or the Custodian, as its agent, will ascertain whether
an original of each document required to be recorded has been returned from the
recording office with evidence of recording thereon or a certified copy has been
obtained from the recording office. If the Trustee or the Custodian, as its
agent, finds any document constituting part of the Mortgage File has not been
received, or to be unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified in
Exhibit B, or to appear defective on its face (a "Material Defect"), the Trustee
or the Custodian, as its agent, shall promptly notify the Seller (provided,
however, that with respect to those documents described in Sections 2.01(b)(iv),
(v) and (vii), the Trustee's obligations shall extend only to the documents
actually delivered pursuant to such Sections). In accordance with the Mortgage
Loan Purchase Agreement, the Seller shall correct or cure any such defect within
90 days from the date of notice from the Trustee or the Custodian, as its agent,
of the Material Defect and if the Seller is unable to cure such defect within
such period, and if such defect materially and adversely affects the interests
of the Certificateholders in the related Mortgage Loan, the Trustee shall
enforce the Seller's obligation under the Mortgage Loan Purchase Agreement to
provide a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase such Mortgage Loan at the Repurchase Price; provided, however, 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, that if such defect relates solely to the
inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy, because the originals of
such documents or a certified copy, have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan,
if the Seller
49
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Sections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Repurchase Price for deposit in the Master Servicer
Collection Account and the Seller shall provide to the Trustee written
notification detailing the components of the Repurchase Price. Upon deposit of
the Repurchase Price in the Master Servicer Collection Account, the Depositor
shall notify the Trustee and the 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, representation or warranty, furnished to it by the
Seller as are necessary to vest in the Seller title to and rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is received by the Trustee. The
Trustee shall amend the Mortgage Loan Schedule, which was previously delivered
to it by the Depositor in a form agreed to between the Depositor and the
Trustee, to reflect such repurchase and shall promptly notify the Rating
Agencies and the Master Servicer of such amendment. The obligation of the Seller
to repurchase any Mortgage Loan as to which such a defect in a constituent
document exists shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement. (a)The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to 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 Master Servicer or the Trustee discovers a breach
of any of the representations and warranties set forth in the Mortgage Loan
Purchase Agreement, which breach materially and adversely affects the value of
the interests of Certificateholders or the Trustee in the related Mortgage Loan,
the party discovering the breach shall give prompt written notice of the breach
to the other parties. The Seller, within 90 days of its discovery or receipt of
notice that such breach has occurred (whichever occurs earlier), shall cure the
breach in all material respects or, subject to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, shall purchase the
Mortgage Loan or any property acquired with respect thereto from the Trustee;
provided, however, that if there is a breach of any representation set forth in
the Mortgage Loan Purchase Agreement, and the Mortgage Loan or the related
property acquired with respect thereto has been sold, then the Seller shall pay,
in lieu of the
50
Repurchase Price, any excess of the Repurchase Price over the Net Liquidation
Proceeds received upon such sale. If the Net Liquidation Proceeds exceed the
Repurchase Price, any excess shall be paid to the Seller to the extent not
required by law to be paid to the borrower. Any such purchase by the Seller
shall be made by providing an amount equal to the Repurchase Price to the Master
Servicer for deposit in the Master Servicer Collection Account and written
notification detailing the components of such Repurchase Price. The Depositor
shall notify the Trustee and submit to the Trustee or the Custodian, as its
agent, a Request for Release, 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, representation or
warranty as are necessary to vest in the Seller title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Securities Administrator shall
amend the Mortgage Loan Schedule to reflect such repurchase and shall promptly
notify the Trustee and the Rating Agencies of such amendment. Enforcement of the
obligation of the Seller to purchase (or substitute a Substitute Mortgage Loan
for) any Mortgage Loan or any property acquired with respect thereto (or pay the
Repurchase Price as set forth in the above proviso) as to which a breach has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of this
Agreement, the Seller may, no later than the date by which such purchase by the
Seller would otherwise be required, tender to the Trustee a Substitute Mortgage
Loan accompanied by a certificate of an authorized officer of the Seller that
such Substitute Mortgage Loan conforms to the requirements set forth in the
definition of "Substitute Mortgage Loan" in the Mortgage Loan Purchase Agreement
or this Agreement, as applicable; provided, however, that substitution pursuant
to the Mortgage Loan Purchase Agreement or this Section 2.04, as applicable, in
lieu of purchase shall not be permitted after the termination of the two-year
period beginning on the Startup Day; provided, further, that if the breach would
cause the Mortgage Loan to be other than a "qualified mortgage" as defined in
Section 860G(a)(3) of the Code, any such cure or substitution must occur within
90 days from the date the breach was discovered. The 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 Section 2.02(a). Within two
Business Days after such notification, the Seller shall provide to the Trustee
for deposit in the Distribution Account the amount, if any, by which the
Outstanding Principal Balance as of the next preceding Due Date of the Mortgage
Loan for which substitution is being made, after giving effect to 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
51
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 shall release to the Seller the related Mortgage
File related to any Mortgage Loan released pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, and shall
execute and deliver all instruments of transfer or assignment, without recourse,
representation or warranty in form as provided to it as are necessary to vest in
the Seller title to and rights under any Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable. The Seller shall deliver the documents related to the Substitute
Mortgage Loan in accordance with the provisions of the Mortgage Loan Purchase
Agreement or Sections 2.01(b) and 2.02(b) of this Agreement, as applicable, with
the date of acceptance of the Substitute Mortgage Loan deemed to be the Closing
Date for purposes of the time periods set forth in such Sections. The
representations and warranties set forth in the Mortgage Loan Purchase Agreement
shall be deemed to have been made by the Seller with respect to each Substitute
Mortgage Loan as of the date of acceptance of such Mortgage Loan by the Trustee.
The Master Servicer shall amend the Mortgage Loan Schedule to reflect such
substitution and shall provide a copy of such amended Mortgage Loan Schedule to
the Trustee and the Rating Agencies.
Section 2.05 Issuance of Certificates. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
Fund and, concurrently therewith, has signed, and countersigned and delivered to
the Depositor, in exchange therefor, Certificates in such authorized
denominations representing such Fractional Undivided Interests as the Depositor
has requested. The Trustee agrees that it will hold the Mortgage Loans and such
other assets as may from time to time be delivered to it segregated on the books
of the Trustee in trust for the benefit of the Certificateholders.
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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(1) 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;
(2) 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;
(3) 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;
(4) 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;
(5) 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);
(6) 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
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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
(7) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each Mortgage were not subject to an
assignment or pledge, and the Depositor had good and marketable title
to and was the sole owner thereof and had full right to transfer and
sell such Mortgage Loan to the Trustee free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer. (a)The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the applicable
Servicing 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 applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers to the Protected Account
pursuant to the applicable Servicing Agreements.
(b) The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney, in substantially the form attached hereto as Exhibit K,
and other documents in form as provided to it necessary or appropriate to enable
the Servicers and the Master Servicer to service and administer the related
Mortgage Loans and REO Property.
(c) 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.
(d) 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
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remedies provided by the Mortgage Note or Security Instrument or otherwise
available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each 2004-8 REMIC
shall exist, the Trustee and the Securities Administrator shall act in
accordance herewith to assure continuing treatment of such 2004-8 REMIC as a
REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Depositor, the related Servicer or the Master Servicer to
assure such continuing treatment. In particular, the Trustee shall not (a) sell
or permit the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has
received a REMIC Opinion prepared at the expense of the Trust; and (b) other
than with respect to a substitution pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 or contributions pursuant to Section 4.08(c) and
4.09(c) of this Agreement, as applicable, accept any contribution to any 2004-8
REMIC after the Startup Day without receipt of a REMIC Opinion.
Section 3.03 Monitoring of Servicers. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Depositor the compliance by
each Servicer with its duties under the related Servicing Agreement. In the
review of each Servicer's activities, the Master Servicer may rely upon an
officer's certificate of the Servicer with regard to such Servicer's compliance
with the terms of its Servicing Agreement. In the event that the Master
Servicer, in its judgment, determines that a Servicer should be terminated in
accordance with its Servicing Agreement, or that a notice should be sent
pursuant to such Servicing Agreement with respect to the occurrence of an event
that, unless cured, would constitute grounds for such termination, the Master
Servicer shall notify the Depositor and the Trustee thereof and the Master
Servicer shall issue such notice or take such other action as it deems
appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of
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servicing by the Master Servicer with respect to any Servicing Agreement
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of the Servicer as a result of an event of default by such Servicer
and (ii) all costs and expenses associated with the complete transfer of
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account.
The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
If the Master Servicer acts as Servicer, it will not assume liability for
the representations and warranties of the Servicer, if any, that it replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any 2004-8 REMIC to fail to qualify as a
REMIC or result in the imposition of a tax upon the Trust (including but not
limited to the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code and the tax on contributions to a REMIC set forth in Section 860G(d)
of the Code) unless the Master Servicer has received an Opinion of Counsel (but
not at the expense of the Master Servicer) to the effect that the contemplated
action will not cause any 2004-8 REMIC to fail to qualify as a REMIC or result
in the imposition of a tax upon any 2004-8 REMIC, as the case may be. The
Trustee shall furnish the Master Servicer, upon written request
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from a Servicing Officer, with any powers of attorney empowering the Master
Servicer or any Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with the applicable Servicing Agreement and this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files. Upon becoming aware of the payment
in full of any Mortgage Loan, or the receipt by any Servicer of a notification
that payment in full has been escrowed in a manner customary for such purposes
for payment to Certificateholders on the next Distribution Date, the Servicer
will, if required (or if the Servicer does not, the Master Servicer may) under
the applicable Servicing Agreement, promptly furnish to the Custodian, on behalf
of the Trustee, two copies of a certification substantially in the form of
Exhibit D hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the applicable Servicer
pursuant to Section 4.01 or by the applicable Servicer pursuant to its Servicing
Agreement have been or will be so deposited) and shall request that the
Custodian, on behalf of the Trustee, deliver to the applicable Servicer the
related Mortgage File. Upon receipt of such certification and request, the
Custodian, on behalf of the Trustee, shall promptly release the related Mortgage
File to the applicable Servicer and the Trustee and Custodian shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, each Servicer is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction or
assignment, as the case may be, shall
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be delivered to the Person or Persons entitled thereto against receipt therefor
of such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case may
be, shall be chargeable to the Protected Account.
From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan and in accordance with the applicable Servicing Agreement, the
Trustee shall execute such documents as shall be prepared and furnished to the
Trustee by a Servicer or the Master Servicer (in form reasonably acceptable to
the Trustee) and as are necessary to the prosecution of any such proceedings.
The Custodian, on behalf of the Trustee, shall, upon the request of a Servicer
or the Master Servicer, and delivery to the Custodian, on behalf of the Trustee,
of two copies of a request for release signed by a Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer), release the related Mortgage File held in its possession or
control to the Servicer or the Master Servicer, as applicable. Such trust
receipt shall obligate the Servicer or the Master Servicer to return the
Mortgage File to the Custodian on behalf of the Trustee, when the need therefor
by the Servicer or the Master Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the Mortgage File shall be
released by the Custodian, on behalf of the Trustee, to the Servicer or the
Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.
The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
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All Mortgage Files and funds collected or held by, or under the control of,
the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
For each Mortgage Loan, the Master Servicer shall enforce any obligation of
the Servicers under the related Servicing Agreements to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of the related Servicing
Agreements. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in the applicable
Servicing Agreement and that no earthquake or other additional insurance is to
be required of any Mortgagor or to be maintained on property acquired in respect
of a defaulted loan, other than pursuant to such applicable laws and regulations
as shall at any time be in force and as shall require such additional insurance.
Pursuant to Section 4.01 and 4.02, any amounts collected by the Servicers
or the Master Servicer, or by any Servicer, under any insurance policies (other
than amounts to be applied to the restoration or repair of the property subject
to the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.02 and 4.03. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in the applicable Servicing Agreement)
cause the related Servicer to, prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies and take such
actions (including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Master Servicer Collection Account upon
receipt, except that any amounts realized that are to be applied to the repair
or restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
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The Master Servicer shall not take, or permit any Servicer (to the extent
such action is prohibited under the applicable Servicing Agreement) to take, any
action that would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of 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 any Servicer (to the extent
required under the related Servicing Agreement) to, cancel or refuse to renew
any such Primary Mortgage Insurance Policy that is in effect at the date of the
initial issuance of the Mortgage Note and is required to be kept in force
hereunder except in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable.
The Master Servicer agrees to present, or to cause each Servicer (to the
extent required under the related Servicing Agreement) to present, on behalf of
the Trustee and the Certificateholders, claims to the insurer under any Primary
Mortgage Insurance Policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any Primary Mortgage Insurance
Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01 and 4.02,
any amounts collected by the Master Servicer or any Servicer under any Primary
Mortgage Insurance Policies shall be deposited in the Master Servicer Collection
Account, subject to withdrawal pursuant to Section 4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and
Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall retain
possession and custody of the originals (to the extent available) of any Primary
Mortgage Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or the Custodian, as directed by the
Trustee), upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments, all in accordance with the
applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer.
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The Master Servicer will be entitled to all income and gain realized from
any investment of funds in the Master Servicer Collection Account and the
Distribution Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer will be
entitled to retain, as additional compensation, any interest remitted by a
Servicer in connection with a Principal Prepayment in full or otherwise in
excess of amounts required to be remitted to the Distribution Account (such
amounts together with the amounts specified in the first sentence of this
Section 3.14, the "Master Servicing Compensation"). 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.
In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall be
issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" (unless such result would maximize the Trust
Fund's after-tax return on such property) or cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code.
The Master Servicer shall, to the extent required by the related Servicing
Agreement, cause the applicable Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the Protected
Account.
The Master Servicer and the applicable Servicer, upon the final disposition
of any REO Property, shall be entitled to reimbursement for any related
unreimbursed Monthly Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
To the extent provided in the related Servicing Agreement, the Liquidation
Proceeds from the final disposition of the REO Property, net of any payment to
the Master Servicer and the applicable Servicer as provided above shall be
deposited in the Protected Account on or prior to the Determination Date in the
month following receipt thereof and be remitted by wire transfer in immediately
available funds to the Master Servicer for deposit into the related Master
Servicer Collection Account on the next succeeding Servicer Remittance Date.
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Section 3.16 Annual Officer's Certificate as to Compliance.
The Master Servicer shall deliver to the Trustee and the Rating Agencies on
or before March 1 of each year, commencing on March 1, 2005, an Officer's
Certificate, certifying that with respect to the period ending December 31 of
the prior year: (i) such Servicing Officer has reviewed the activities of such
Master Servicer during the preceding calendar year or portion thereof and its
performance under this Agreement, (ii) to the best of such Servicing Officer's
knowledge, based on such review, such Master Servicer has performed and
fulfilled its duties, responsibilities and obligations under this Agreement in
all material respects throughout such year, or, if there has been a default in
the fulfillment of any such duties, responsibilities or obligations, specifying
each such default known to such Servicing Officer and the nature and status
thereof, (iii) nothing has come to the attention of such Servicing Officer to
lead such Servicing Officer to believe that any Servicer has failed to perform
any of its duties, responsibilities and obligations under its Servicing
Agreement in all material respects throughout such year, or, if there has been a
material default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.
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 certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Depositor on or
before March 1 of each year, commencing on March 1, 2005 to the effect that,
with respect to the most recently ended fiscal year, such firm has examined
certain records and documents relating to the Master Servicer's performance of
its servicing obligations under this Agreement and pooling and servicing and
trust agreements in material respects similar to this Agreement and to each
other and that, on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for Xxxxxxx Mac or the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in compliance
with this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Xxxxxxx Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies. If
such report discloses exceptions that are material, the Master Servicer shall
advise the Trustee whether such exceptions have been or are susceptible of cure,
and will take prompt action to do so.
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Section 3.18 Reports Filed with Securities and Exchange Commission. Within
15 days after each Distribution Date, the Securities Administrator shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("XXXXX"), a Form 8-K (or other comparable
form containing the same or comparable information or other information mutually
agreed upon) with a copy of the statement to the Trustee who shall make
available a copy of the monthly statement to the Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30 in each 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 independent
accountant's servicing report and annual statement of compliance to be delivered
by the Master Servicer pursuant to Sections 3.16 and 3.17. Prior to (i) March
31, 2005, or such earlier filing date as may be required by the Commission, and
(ii) unless and until a Form 15 Suspension Notice shall have been filed, March
31 of each year thereafter, or such earlier filing date as may be required by
the Commission, the Securities Administrator shall prepare and file a Form 10-K,
in substance conforming to industry standards, with respect to the Trust. Such
Form 10-K shall include the Master Servicer Certification and other
documentation provided by the Master Servicer pursuant to the second preceding
sentence. The Depositor hereby grants to the Securities Administrator a limited
power of attorney to execute and file each such document on behalf of the
Depositor. Such power of attorney shall continue until either the earlier of (i)
receipt by the Securities Administrator from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust
Fund. The Depositor agrees to promptly furnish to the Securities Administrator,
from time to time upon request, such further information, reports and financial
statements within its control related to this Agreement and the Mortgage Loans
as the Securities Administrator reasonably deems appropriate to prepare and file
all necessary reports with the Commission. The Securities Administrator shall
have no responsibility to file any items other than those specified in this
Section 3.18; provided, however, the Securities Administrator will cooperate
with the Depositor in connection with any additional filings with respect to the
Trust Fund as the Depositor deems necessary under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Fees and expenses incurred by the
Securities Administrator in connection with this Section 3.18 shall not be
reimbursable from the Trust Fund.
Section 3.19 EMC. On the Closing Date, EMC will receive from the Depositor
a payment of $5,000.
Section 3.20 UCC. The Depositor shall inform the Trustee in writing of any
Uniform Commercial Code financing statements that were filed on the Closing Date
in connection with the Trust with stamped recorded copies of such financing
statements to be delivered to the Trustee promptly upon receipt by the
Depositor. The Trustee agrees to monitor and notify the Depositor if any
continuation statements for such Uniform Commercial Code financing statements
need to be filed. If directed by the Depositor in writing, the Trustee will file
any such
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continuation statements solely at the expense of the Depositor. The Depositor
shall file any financing statements or amendments thereto required by any change
in the Uniform Commercial Code..
Section 3.21 Optional Purchase of Defaulted Mortgage Loans.
With respect to any Mortgage Loan which as of the first day of a Calendar
Quarter is delinquent in payment by 90 days or more or is an REO Property, 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 Calendar Quarter.
This purchase option, if not exercised, shall not be thereafter reinstated
unless the delinquency is cured and the Mortgage Loan thereafter again becomes
90 days or more delinquent or becomes an REO Property, in which case the option
shall again become exercisable as of the first day of the related Calendar
Quarter.
If at any time EMC remits to the Master Servicer a payment for deposit in
the Master Servicer Collection Account covering the amount of the Repurchase
Price for such a Mortgage Loan, and EMC provides to the Trustee a certification
signed by a Servicing Officer stating that the amount of such payment has been
deposited in the Master Servicer Collection Account, then the Trustee shall
execute the assignment of such Mortgage Loan to EMC at the request of EMC
without recourse, representation or warranty and EMC shall succeed to all of the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. EMC will thereupon own such Mortgage, and all
such security and documents, free of any further obligation to the Trustee or
the Certificateholders with respect thereto.
ARTICLE IV
Accounts
Section 4.01 Protected Accounts. (a)The Master Servicer shall enforce the
obligation of each Servicer to establish and maintain a Protected Account in
accordance with the applicable Servicing Agreement, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 48 hours (or as of such other time specified in the
related Servicing Agreement) of receipt all collections of principal and
interest on any Mortgage Loan and with respect to any REO Property received by a
Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, and advances made from the Servicer's own funds (less servicing
compensation as permitted by the applicable Servicing Agreement in the case of
any Servicer) and all other amounts to be deposited in the Protected Account.
The Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the related Servicing Agreement, the Protected Account
shall be held in a Designated Depository Institution and segregated on the books
of such institution in the name of the Trustee for the benefit of
Certificateholders.
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(b) To the extent provided in the related Servicing Agreement, amounts
on deposit in a Protected Account may be invested in Permitted Investments
in the name of the Trustee for the benefit of Certificateholders and,
except as provided in the preceding paragraph, not commingled with any
other funds, such Permitted Investments 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 Master Servicer Collection
Account, and shall be held until required for such deposit. The income
earned from Permitted Investments made pursuant to this Section 4.01 shall
be paid to the related Servicer under the applicable Servicing Agreement,
and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be
the risk of the related Servicer. The related Servicer (to the extent
provided in the Servicing Agreement) shall deposit the amount of any such
loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior
to the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and
subject to this Article IV, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited
in the Master Servicer Collection Account amounts representing the
following collections and payments (other than with respect to principal of
or interest on the Mortgage Loans due on or before the Cut-off Date) with
respect to each Loan Group:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Servicers pursuant to the
Servicing Agreements which were due during or before the related Due
Period, net of the amount thereof comprising the Servicing Fees;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Servicers 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
Servicing Fees;
(iii) Partial Principal Prepayments received by the Servicers for
such Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as an Monthly Advance.
(d) Withdrawals may be made from an Account only to (i) make
remittances as provided in Section 4.01(c), 4.02 and 4.03, (ii) reimburse
the Master Servicer or a Servicer for Monthly Advances which have been
recovered by subsequent collection from the related Mortgagor; (iii) remove
amounts deposited in error; to remove fees, charges or other such amounts
deposited on a temporary basis; or (iv) clear and terminate such account at
the termination of this Agreement in accordance with Section 10.01. As
provided in Sections 4.01(c) and 4.02(b) certain amounts otherwise due to
the Servicers may be retained by them and need not be deposited in the
Master Servicer Collection Account.
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Section 4.02 Master Servicer Collection Account. (a)The Master Servicer
shall establish and maintain in the name of the Trustee, for the benefit of the
Certificateholders, the Master Servicer Collection Account as a segregated trust
account or accounts. The Master Servicer Collection Account shall be an Eligible
Account. The Master Servicer will deposit in the Master Servicer Collection
Account as identified by the Master Servicer and as received by the Master
Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds received by
or on behalf of the Master Servicer or which were not deposited in a
Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans purchased
by the Seller pursuant to Section 2.02 or 2.03, any amounts which are to be
treated pursuant to Section 2.04 of this Agreement as the payment of such a
Repurchase Price, the Repurchase Price with respect to any Mortgage Loans
purchased by EMC pursuant to Section 3.21, and all proceeds of any Mortgage
Loans or property acquired with respect thereto repurchased by EMC or its
designee pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master Servicer
and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Sections 4.05(a)(i) through
(iv) and (vi) through (xii) with respect to the Securities Administrator and the
Master Servicer, need not be credited by the Master Servicer or the related
Servicer to the Distribution Account or the Master Servicer Collection Account,
as applicable. In the event that the Master Servicer shall deposit or cause to
be deposited to the Distribution Account any amount not required to be credited
thereto, the Trustee, upon receipt of a written request therefor signed by a
Servicing Officer of the Master Servicer, shall promptly transfer such amount to
the Master Servicer, any provision herein to the contrary notwithstanding.
The amount at any time credited to the Master Servicer Collection Account
shall be invested, in the name of the Trustee, or its nominee, for the benefit
of the Certificateholders, in Permitted Investments as directed by Master
Servicer. All Permitted Investments shall mature or
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be subject to redemption or withdrawal on or before, and shall be held until,
the next succeeding Distribution Account Deposit Date. Any and all investment
earnings on amounts on deposit in the Master Servicer Collection Account from
time to time shall be for the account of the Master Servicer. The Master
Servicer from time to time shall be permitted to withdraw or receive
distribution of any and all investment earnings from the Master Servicer
Collection Account. The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any
such loss in the Master Servicer Collection Account within two Business Days of
receipt of notification of such loss but not later than the second Business Day
prior to the Distribution Date on which the moneys so invested are required to
be distributed to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account. (a)The Master Servicer will, from time to time on demand of
a Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 10.01 and
remove amounts from time to time deposited in error.
On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer, the Securities Administrator or the Custodian pursuant to
Sections 3.03, 7.04 and 9.05 and (ii) any amounts payable to the Master Servicer
as set forth in Section 3.14.
In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
No later than 3:00 p.m. New York time on each Distribution Account Deposit
Date, the Master Servicer will transfer all Available Funds on deposit in the
Master Servicer Collection Account with respect to the related Distribution Date
to the Trustee for deposit in the Distribution Account.
Section 4.04 Distribution Account. (a)The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Distribution Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Trustee and held by the Trustee in trust in
its Corporate Trust Office, and the Distribution Account and the funds deposited
therein shall not be subject to, and shall be protected from, all claims, liens,
and encumbrances of any creditors or depositors of the
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Trustee or the Master Servicer (whether made directly, or indirectly through a
liquidator or receiver of the Trustee or the Master Servicer). The Distribution
Account shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) held in cash or fully insured by the FDIC to
the maximum coverage provided thereby or (ii) invested in the name of the
Trustee, in such Permitted Investments selected by the Master Servicer or
deposited in demand deposits with such depository institutions as selected by
the Master Servicer, provided that time deposits of such depository institutions
would be a Permitted Investment. All Permitted Investments shall mature or be
subject to redemption or withdrawal on or before, and shall be held until, the
next succeeding Distribution Date if the obligor for such Permitted Investment
is the Trustee or, if such obligor is any other Person, the Business Day
preceding such Distribution Date. All investment earnings on amounts on deposit
in the Distribution Account or benefit from funds uninvested therein from time
to time shall be for the account of the Master Servicer. The Master Servicer
shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Master Servicer shall
remit the amount of the loss to the Trustee who shall deposit such amount in the
Distribution Account. With respect to the Distribution Account and the funds
deposited therein, the Master Servicer shall take such action as may be
necessary to ensure that the Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against the
estate of the Trustee) as provided by 12 U.S.C. 92a(e), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.
Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account. (a)The Trustee will, from time to time on demand of the Master Servicer
or the Securities Administrator, make or cause to be made such withdrawals or
transfers from the Distribution Account as the Master Servicer has designated
for such transfer or withdrawal pursuant to this Agreement and the Servicing
Agreements or as the Securities Administrator has instructed hereunder for the
following purposes (limited in the case of amounts due the Master Servicer to
those not withdrawn from the Master Servicer Collection Account in accordance
with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any Monthly
Advance of its own funds, the right of the Master Servicer or a Servicer to
reimbursement pursuant to this subclause (i) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds)
which represent late payments or recoveries of the principal of or interest
on such Mortgage Loan with respect to which such Monthly Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for
amounts expended by the Master Servicer or such Servicer in good faith in
connection with the restoration of the related Mortgaged Property which was
damaged by an Uninsured Cause or in connection with the liquidation of such
Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such
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Mortgage Loan and to reimburse the Master Servicer or such Servicer from
Liquidation Proceeds from a particular Mortgage Loan for Liquidation
Expenses incurred with respect to such Mortgage Loan; provided that the
Master Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any amounts
with respect to such Mortgage Loan were paid as Excess Liquidation Proceeds
pursuant to clause (xi) of this Section 4.03(a) to the Master Servicer and
(ii) such Liquidation Expenses were not included in the computation of such
Excess Liquidation Proceeds;
(iv) to pay the Master Servicer or any Servicer, as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with the
liquidation of any Mortgage Loan, the amount which it or such Servicer
would have been entitled to receive under clause (ix) of this Section
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 any Servicer from the Repurchase
Price for any Mortgage Loan, the amount which it or such Servicer would
have been entitled to receive under clause (ix) of this Section 4.03(a) as
servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances of
funds (other than Monthly Advances) made with respect to the Mortgage
Loans, and the right to reimbursement pursuant to this clause 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 any Servicer for any Monthly
Advance or advance, after a Realized Loss has been allocated with respect
to the related Mortgage Loan if the Monthly Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi) of this Section 4.03(a);
(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 (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 any Servicer any such amounts as are due
thereto under the applicable Servicing Agreement and have not been retained
by or paid to the Servicer, to the extent provided in the related Servicing
Agreement;
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(xii) to reimburse the Trustee, the Securities Administrator or the
Custodian for expenses, costs and liabilities incurred by or reimbursable
to it pursuant to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 10.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to clauses (i) through (vi)
and (viii) or with respect to any such amounts which would have been covered by
such clauses had the amounts not been retained by the Master Servicer without
being deposited in the Distribution Account under Section 4.02(b).
Reimbursements made pursuant to clauses (ix), (xi) and (xii) will be allocated
between the Loan Groups pro rata based on the aggregate Stated Principal
Balances of the Mortgage Loans in each Loan Group.
(c) On each Distribution Date, the Trustee shall distribute the Interest
Funds and Principal Funds to the extent on deposit in the Distribution Account
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 4.06 Reserve Fund. (a)On or before the Closing Date, the Trustee
shall establish a Reserve Fund on behalf of the Holders of the Offered
Certificates. The Reserve Fund must be an Eligible Account. The Reserve Fund
shall be entitled "Reserve Fund, JPMorgan Chase Bank as Trustee for the benefit
of holders of Structured Asset Mortgage Investments II Inc., Bear Xxxxxxx ALT-A
Trust 2004-8, Mortgage Pass-Through Certificates, Series 2004-8, Class I-A,
Class II-A, Class M-1, Class M-2, Class B-1 and Class B-2". The Trustee shall
demand payment of all money payable by Bear Xxxxxxx Financial Products Inc. (the
"Counterparty") under the Cap Contracts. The Trustee shall deposit in the
Reserve Fund all payments received by it from the Counterparty pursuant to the
Cap Contracts and, prior to distribution of such amounts pursuant to Section
6.01(a), all payments described under the sixth and seventh clause of Section
6.01(a). On each Distribution Date, the Trustee shall remit amounts received by
it from the Counterparty to the Holders of the applicable Offered Certificates
in the manner provided in Section 6.01(b).
(b) The Reserve Fund is an "outside reserve fund" within the meaning of
Treasury Regulation '1.860G-2(h) and shall be an asset of the Trust Fund but not
an asset of any 2004-8 REMIC. The Trustee on behalf of the Trust shall be the
nominal owner of the Reserve Fund. The Class B-IO Certificateholder shall be the
beneficial owner of the Reserve Fund, subject to the power of the Trustee to
distribute amounts under Section 6.01(b) and the sixth and seventh clause of
Section 6.01(a). For federal income tax purposes, amounts distributed to
Certificateholders pursuant to the sixth and seventh clause of Section 6.01(a)
will be treated as first distributed to the Class B-IO Certificates and then
paid from the Class B-IO Certificateholders to the applicable holders of the
Offered Certificates. Amounts in the Reserve Fund shall, at the direction of the
Class B-IO Certificateholder, be held either uninvested in a trust or deposit
account of the Trustee with no liability for interest or other compensation
thereon or invested in Permitted Investments that mature no later than the
Business Day prior to the next succeeding Distribution Date. The Trustee shall
distribute all net income and gain from such
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investments in the Reserve Fund to the Class B-IO Certificateholder, not as a
distribution in respect of any interest in any 2004-8 REMIC, on each
Distribution Date. All amounts earned on amounts on deposit in the Reserve Fund
shall be taxable to the Class B-IO Certificateholder. Any losses on such
investments shall be deposited in the Reserve Fund by the Class B-IO
Certificateholder out of its own funds immediately as realized.
Section 4.07 Class XP Reserve Account. (a)The Master Servicer shall
establish and maintain with itself a separate, segregated trust account, which
shall be an Eligible Account, titled "Reserve Account, Xxxxx Fargo Bank,
National Association, as Master Servicer f/b/o Bear Xxxxxxx ALT-A Trust 2004-8,
Mortgage Pass-Through Certificates, Series 2004-8, Class XP". On the Closing
Date, the Depositor shall deposit $100 into the Class XP Reserve Account. Funds
on deposit in the Class XP Reserve Account shall be held in trust by the Master
Servicer for the holder of the Class XP Certificate.
(b) The amount on deposit in the Class XP Reserve Account shall be held
uninvested. On the earlier of (x) the Business Day prior to the Distribution
Date on which all the assets of the Trust Fund are repurchased as described in
Section 10.01(a) and (y) the Business Day prior to the Distribution Date
immediately following the Prepayment Period during which the last Prepayment
Charge on the Mortgage Loans is payable by the related Mortgagor, which
Prepayment Period is the month of June 2010, the Master Servicer shall withdraw
the amount on deposit in the Class XP Reserve Account and remit such amount to
the Trustee and provide instruction to the Trustee to pay such amount to the
Class XP Certificate in reduction of the Certificate Principal Balance thereof.
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ARTICLE V
Certificates
Section 5.01 Certificates. (a)The Depository, the Depositor and the Trustee
have entered into a Depository Agreement dated as of the Closing Date (the
"Depository Agreement"). Except for the Residual Certificates, the Private
Certificates and the Individual Certificates and as provided in Section 5.01(b),
the Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to a successor to the
Depository; (ii) ownership and transfers of registration of such Certificates on
the books of the Depository shall be governed by applicable rules established by
the Depository; (iii) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (iv) the Trustee shall
deal with the Depository as representative of such Certificate Owners of the
respective Class of Certificates for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Depositor will take such action as may
be reasonably required to cause the Depository to accept such Class or Classes
for trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor within 30 days or (ii) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates.
In addition, if an Event of Default has occurred and is continuing, each
Certificate Owner materially adversely affected thereby may at its option
request a definitive Certificate evidencing such Certificate Owner's interest in
the related Class of Certificates. In order to make such
73
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 Trustee 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 Trustee of
instructions from the Depository directing the Trustee to effect such exchange
(such instructions to contain information regarding the Class of Certificates
and the Current Principal Balance being exchanged, the Depository Participant
account to be debited with the decrease, the registered holder of and delivery
instructions for the definitive Certificate, and any other information
reasonably required by the Trustee), (i) the Trustee shall instruct the
Depository to reduce the related Depository Participant's account by the
aggregate Current Principal Balance of the definitive Certificate, (ii) the
Trustee 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
(iii) the Trustee shall execute a new Book-Entry Certificate reflecting the
reduction in the aggregate Current Principal Balance of such Class of
Certificates by the amount of the definitive Certificates.
Neither the Depositor nor the Trustee 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) 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 (y) the Class R-II
Certificates, which are hereby designated as the single class of "residual
interests" in REMIC II. On each Distribution Date, the Trustee shall cause the
REMIC II Distribution Amount to be distributed by REMIC II to REMIC III on
account of the REMIC II Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R-II Certificates, as the
case may be, in the amounts and with the priorities set forth in the definition
of REMIC II Distribution Amount.
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The REMIC II Regular Interests and the Class R-II Certificates will have
the following designations and pass-through rates:
Initial
Uncertificated REMIC Uncertificated Latest Possible
Designation II Pass Through Rate Principal Balance Maturity Date(3)
----------- ----------------- ----------------- ----------------
LT1 Variable(1) $623,745,859.12 September 25, 2034
LT2 Variable(1) $11,510.12 September 25, 2034
LT3 0.00% $50,907.00 September 25, 2034
LT4 Variable(1) $50,907.00 September 25, 2034
LT5 Variable(1) $188,077,921.58 September 25, 2034
LT6 Variable(1) $3,015.23 September 25, 2034
LT7 0.00% $15,805.43 September 25, 2034
LT8 Variable(1) $15,805.43 September 25, 2034
LT-Y1(2) Variable(1) $312,080.75 September 25, 2034
LT-Y2(2) Variable(1) $94,103.33 September 25, 2034
R-II 0.00% $0.00 September 25, 2034
------------------
(1) Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
(2) LT-Y1 will have the same interest rate, principal balance, Principal
Reduction Amount and allocation of Realized Losses as the REMIC I
Regular Interest Y-1. LT-Y2 will have the same interest rate, principal
balance, Principal Reduction Amount and allocation of Realized Losses
as the REMIC I Regular Interest Y-2. LT-Y1 and LT-Y2 shall be entitled
to receive any prepayment penalties received by the Master Servicer
with respect to the Mortgage Loans in the related Loan Group and
ultimately payable to the Class XP Certificates.
(3) Solely for purposes of Section 1.860G 1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC II
Regular Interest.
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 (y) the Class R-I
Certificates, which is hereby designated as the single class of "residual
interests" in REMIC I. On each Distribution Date, the Trustee shall cause the
REMIC I Distribution Amount to be distributed by REMIC I to REMIC II on account
of the REMIC I Regular Interests or withdrawn from the Distribution Account and
distributed to the holders of the Class R-I Certificates, as the case may be ,
in the amounts and with the priorities set forth in the definition of REMIC I
Distribution Amount.
The REMIC I Regular Interests and the Class R-I Certificates will have the
following designations and pass-through rates:
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Initial
Uncertificated REMIC Uncertificated Assumed Final
Designation I Pass Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
Y-1 Variable(2) $312,080.75 September 25, 2034
Y-2 Variable(2) $94,103.33 September 25, 2034
Z-1 Variable(2) $623,859,183.25 September 25, 2034
Z-2 Variable(2) $188,112,547.67 September 25, 2034
R-I 0% $0.00 September 25, 2034
------------------
(1)Solely for purposes of Section 1.860G 1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each REMIC I Regular Interest.
(2)Calculated in accordance with the definition of "Uncertificated REMIC I Pass
Through Rate" herein. Y-1 shall also be entitled to receive any prepayment
penalties received by the Master Servicer with respect to the Mortgage Loans
in Loan Group I and ultimately payable to the Class XP Certificates. Y-2
shall be entitled to receive any prepayment penalties received by the Master
Servicer with respect to the Mortgage Loans in Loan Group II and ultimately
payable to the Class XP Certificates.
REMIC III will be evidenced by (x) the Certificates (other than the Class R
Certificates) (the "REMIC III Regular Certificates") exclusive of the rights, if
any, of such Certificates to payments of Basis Risk Carryforward Amounts or
payments from the Cap Contract, which are hereby designated as the "regular
interests" in REMIC III and have the principal balances and accrue interest at
the Pass-Through Rates equal to those set forth in this Section 5.01(c) and (y)
the Class R-III Certificate, which is hereby designated as the single "residual
interest" in REMIC III.
The Classes of the Certificates shall have the following designations,
initial principal amounts and Pass-Through Rates:
Designation Initial Principal Amount Pass Through Rate
----------- ------------------------ -----------------
I-A $586,409,000 (1)
II-A $176,820,000 (2)
M-1 $18,684,000 (3)
M-2 $14,623,000 (4)
B-1 $6,500,000 (5)
B-2 $6,498,500 (6)
XP $100 (7)
B-IO $2,843,415 (8)
R-I $0 (9)
R-II $0 (9)
R-III $0 (9)
--------------------
(1) The Class I-A Certificates will bear interest at a rate equal to the
least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The Pass-Through Rate with respect to the first Interest
Accrual Period is 1.83% per annum.
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(2) The Class II-A Certificates will bear interest at a rate equal to the
least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The Pass-Through Rate with respect to the first Interest
Accrual Period is 1.82% per annum.
(3) The Class M-1 Certificates will bear interest at a rate equal to the
least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The Pass-Through Rate with respect to the first Interest
Accrual Period is 2.09% per annum.
(4) The Class M-2 Certificates will bear interest at a rate equal to the
least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The Pass-Through Rate with respect to the first Interest
Accrual Period is 2.63% per annum.
(5) The Class B-1 Certificates will bear interest at a rate equal to the
least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The Pass-Through Rate with respect to the first Interest
Accrual Period is 3.38% per annum.
(6) The Class B-2 Certificates will bear interest at a rate equal to the
least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and (iii) the
related Net Rate Cap. The Pass-Through Rate with respect to the first Interest
Accrual Period is 3.38% per annum.
(7) The Class XP Certificates will not bear any interest. It will be
entitled to receive prepayment penalties collected with respect to the Mortgage
Loans.
(8) The Class B-IO Certificates will bear interest at a per annum rate
equal to the Class B-IO Pass-Through Rate on its Notional Amount. The Class B-IO
Certificates will be comprised of two REMIC III regular interests, a principal
only regular interest designated B-IO-P and an interest only regular interest
designated B-IO-I, which will be entitled to distributions as set forth herein.
(9) The Class R-I, Class R-II and Class R-III Certificates will not bear
any interest.
(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 III Regular
Interests and the Certificates.
(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 (i) each such Class of Certificates (other than
the Class B-IO Certificates), interest shall be calculated, on the basis of a
360-day year and the actual number of days elapsed in the related Interest
Accrual Period, based upon the respective Pass-Through Rate set forth, or
determined as provided, above and the Certificate Principal Balance of such
Class applicable to such Distribution Date. With respect to each Distribution
Date and the Class B-IO Certificates, interest shall be calculated, on the basis
of a 360-day year consisting of twelve 30-day months, based upon the respective
Pass-Through Rate set forth, or determined as provided, above and the Notional
Amount of such Class applicable to such Distribution Date.
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(f) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0, X-0, X-0, X-0, X-0 and A-7. On original issuance, the Trustee
shall sign, countersign and shall deliver them at the direction of the
Depositor. Pending the preparation of definitive Certificates of any Class, the
Trustee may sign and countersign temporary Certificates that are printed,
lithographed or typewritten, in authorized denominations for Certificates of
such Class, substantially of the tenor of the definitive Certificates in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers or authorized signatories
executing such Certificates may determine, as evidenced by their execution of
such Certificates. If temporary Certificates are issued, the Depositor will
cause definitive Certificates to be prepared without unreasonable delay. After
the preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a single
Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $25,000
and in each case increments of $1,000 in excess thereof, and (ii) in the case of
the Subordinate Certificates, $25,000 and increments of $1,000 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 Certificate Principal Balance of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign Physical Certificates all in an aggregate principal amount that
shall equal the Certificate Principal Balance of such Class on the Closing Date.
The Residual Certificates shall each be issued in certificated fully-registered
form. Each Class of Global Certificates, if any, shall be issued in fully
registered form in minimum dollar denominations of $50,000 and integral
multiples of $1.00 in excess thereof, except that one Certificate of each Class
may be in a different denomination so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Certificate Principal
Balance of such Class on the Closing Date. On the Closing Date, the Trustee
shall execute and countersign (i) in the case of each Class of Offered
Certificates, the Certificate in the entire Certificate Principal Balance of the
respective Class and (ii) in the case of each Class of Private Certificates,
Individual Certificates all in an aggregate principal amount that shall equal
the Certificate Principal Balance of each such respective Class on the Closing
Date. The Certificates referred to in clause (i) and if at any time there are to
be Global Certificates, the Global Certificates shall be delivered by the
Depositor to the Depository or pursuant to the Depository's instructions, shall
be delivered by the Depositor on behalf of the Depository to and deposited with
the DTC Custodian. The Trustee shall sign the Certificates by facsimile or
manual signature and countersign them by manual signature on behalf of the
Trustee by one or more authorized signatories, each of whom shall be Responsible
Officers of the Trustee or its agent. A Certificate bearing the manual and
facsimile signatures of
78
individuals who were the authorized signatories of the Trustee or its agent at
the time of issuance shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate the
manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
2004-8 REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each 2004-8 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 2004-8 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:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) 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, A MAJORITY OF ITS
BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF EITHER 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 UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE
(INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION
79
1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION
775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A),
(B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (F) 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.
Section 5.02 Registration of Transfer and Exchange of Certificates. (a)The
Trustee shall maintain at its Corporate Trust Office a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided.
(b) Subject to Section 5.01(a) and, in the case of any Global Certificate
or Physical Certificate upon the satisfaction of the conditions set forth below,
upon surrender for registration of transfer of any Certificate at any office or
agency of the Trustee maintained for such purpose, the Trustee shall sign,
countersign and shall deliver, in the name of the designated transferee or
transferees, a new Certificate of a like Class and aggregate Fractional
Undivided Interest, but bearing a different number. (c) By acceptance of an
Individual Certificate, whether upon original issuance or subsequent transfer,
each holder of such a Certificate acknowledges the restrictions on the transfer
of such Certificate set forth in the Securities Legend and agrees that it will
transfer such a Certificate only as provided herein. In addition to the
provisions of Section 5.02(h), the following restrictions shall apply with
respect to the transfer and registration of transfer of an Individual
Certificate to a transferee that takes delivery in the form of an Individual
Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who has
provided the Trustee with a Rule 144A Certificate or comparable evidence as
to its QIB status.
(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing that
the Certificate is being transferred to
80
an Institutional Accredited Investor along with facts surrounding the
transfer as set forth in Exhibit F-3 hereto; and (y) prior to the transfer
the transferee furnishes to the Trustee an Investment Letter (and the
Trustee shall be fully protected in so doing), provided that, if based upon
an Opinion of Counsel addressed to the Trustee to the effect that the
delivery of (x) and (y) above are not sufficient to confirm that the
proposed transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act and other applicable laws, the Trustee shall as a condition of the
registration of any such transfer require the transferor to furnish such
other certifications, legal opinions or other information prior to
registering the transfer of an Individual Certificate as shall be set forth
in such Opinion of Counsel.
(d) 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 Section 5.02(h),
the rules of the Depository and the following:
(i) In the case of a beneficial interest in the Global Certificate
being transferred to an Institutional Accredited Investor, such transferee
shall be required to take delivery in the form of an Individual Certificate
or Certificates and the Trustee shall register such transfer only upon
compliance with the provisions of Section 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 Trustee shall register such transfer
only upon compliance with the provisions of Section 5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class being
transferred to a transferee that takes delivery in the form of a beneficial
interest in a Global Certificate of such Class, the Trustee shall register
such transfer if the transferee has provided the Trustee with a Rule 144A
Certificate or comparable evidence as to its QIB status.
(iv) No restrictions shall apply with respect to the transfer or
registration of transfer of a beneficial interest in the Global Certificate
of a Class to a transferee that takes delivery in the form of a beneficial
interest in the Global Certificate of such Class; provided that each such
transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that
it is a QIB.
(e) Subject to Section 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
81
Depository) may be made only in accordance with Section 5.02(h), the rules of
the Depository and the following:
(i) A holder of a beneficial interest in a Global Certificate of
a Class may at any time exchange such beneficial interest for an
Individual Certificate or Certificates of such Class.
(ii) A holder of an Individual Certificate or Certificates of a
Class may exchange such Certificate or Certificates for a beneficial
interest in the Global Certificate of such Class if such holder
furnishes to the Trustee a Rule 144A Certificate or comparable
evidence as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Trustee shall cancel such Individual Certificate
and shall (or shall request the Depository to) endorse on the schedule affixed
to the applicable Global Certificate (or on a continuation of such schedule
affixed to the Global Certificate and made a part thereof) or otherwise make in
its books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate
exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial interest
in a Global Certificate of a Class for an Individual Certificate of such
Class as provided herein, the Trustee shall (or shall request the
Depository to) endorse on the schedule affixed to such Global Certificate
(or on a continuation of such schedule affixed to such Global Certificate
and made a part thereof) or otherwise make in its books and records an
appropriate notation evidencing the date of such exchange or transfer and a
decrease in the certificate balance of such Global Certificate equal to the
certificate balance of such Individual Certificate issued in exchange
therefor or upon transfer thereof.
(g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or of
a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in this
Section 5.02, the holder of any Individual Certificate may transfer or exchange
the same in whole or in part (in an initial certificate balance equal to the
minimum authorized denomination set forth in Section 5.01(g) or any integral
multiple of $1,000 in excess thereof) by surrendering such Certificate at the
Corporate Trust Office, or at the office of any transfer agent, together with an
executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the
82
Depository, cause the Depository (or its nominee) to notify the Trustee in
writing of a request for transfer or exchange of such beneficial interest for an
Individual Certificate or Certificates. Following a proper request for transfer
or exchange, the Trustee shall, within five Business Days of such request made
at the Corporate Trust Office, sign, countersign and deliver at the Corporate
Trust Office, to the transferee (in the case of transfer) or holder (in the case
of exchange) or send by first class mail at the risk of the transferee (in the
case of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office by the
registered holder in person, or by a duly authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class and aggregate
Fractional Undivided Interest, upon surrender of the Certificates to be
exchanged at the Corporate Trust Office; provided, however, that no Certificate
may be exchanged for new Certificates unless the original Fractional Undivided
Interest represented by each such new Certificate (i) is at least equal to the
minimum authorized denomination or (ii) is acceptable to the Depositor as
indicated to the Trustee in writing. Whenever any Certificates are so
surrendered for exchange, the Trustee shall sign and countersign and the Trustee
shall deliver the Certificates which the Certificateholder making the exchange
is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or surrendered
for transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer, with a signature guarantee, in form satisfactory
to the Trustee, duly executed by the holder thereof or his or her attorney duly
authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer or
exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. (a) If (i)
any mutilated Certificate is surrendered to the Trustee, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.
83
(b) Upon the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any duplicate Certificate issued pursuant to this Section 5.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 6.01 and for all other purposes
whatsoever. Neither the Depositor, the Trustee nor any agent of the Depositor or
the Trustee shall be affected by notice to the contrary. No Certificate shall be
deemed duly presented for a transfer effective on any Record Date unless the
Certificate to be transferred is presented no later than the close of business
on the third Business Day preceding such Record Date.
Section 5.05 Transfer Restrictions on Residual Certificates. (a)Residual
Certificates, or interests therein, may not be transferred without the prior
express written consent of the Tax Matters Person and the Depositor, which
cannot be unreasonably withheld. As a prerequisite to such consent, the proposed
transferee must provide the Tax Matters Person, the Depositor and the Trustee
with an affidavit that the proposed transferee is a Permitted Transferee (and,
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 Section 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the 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 Section 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 Section 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Depositor shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Section 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
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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
Section 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 Section 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 2004-8 REMIC to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person shall have consented in writing (which
consent may be withheld in the Tax Matters Person'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 if it is the Holder of the largest percentage interest of
such Certificate, and appoints the Securities Administrator to act as its agent
with respect to all matters concerning the tax obligations of the Trust.
Section 5.06 Restrictions on Transferability of Certificates. (a)No offer,
sale, transfer or other disposition (including pledge) of any Certificate shall
be made by any Holder thereof unless registered under the Securities Act, or an
exemption from the registration requirements of the Securities Act and any
applicable state securities or "Blue Sky" laws is available and the prospective
transferee (other than the Depositor) of such Certificate signs and delivers to
the Trustee an Investment Letter, if the transferee is an Institutional
Accredited Investor, in the form set forth as Exhibit F-l hereto, or a Rule 144A
Certificate, if the transferee is a QIB, in the form set forth as Exhibit F-2
hereto. Notwithstanding the provisions of the immediately preceding sentence, no
restrictions shall apply with respect to the transfer or registration of
transfer of a beneficial interest in any Certificate that is a Global
Certificate of a Class to a transferee that takes delivery in the form of a
beneficial interest in the Global Certificate of such Class provided that each
such transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that it is
a QIB. In the case of a proposed transfer of any Certificate to a transferee
other than a QIB, the Trustee may require an Opinion of Counsel that such
transaction is exempt from the registration requirements of the Securities Act.
The cost of such opinion shall not be an expense of the Trustee or the Trust
Fund.
(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions. (a)Subject to the provisions of subsection
(b), no Residual Certificates or Private Certificates may be acquired directly
or indirectly by, or on behalf of, an employee benefit plan or other retirement
arrangement (a "Plan") that is subject to Title I of ERISA and/or Section 4975
of the Code, or by a person using "plan assets" of a Plan, unless the proposed
transferee provides the Trustee with an Opinion of Counsel for the benefit of
the Trustee, the Master Servicer and the Securities Administrator and on which
they may rely
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which is the satisfactory to the Trustee, 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 a
nonexempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee, the Master Servicer or the Securities
Administrator to any obligation in addition to those undertaken in the
Agreement.
(b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that it is not acquiring an interest in such
Certificate directly or indirectly by, or on behalf of, or with "plan assets"
of, an employee benefit plan or other retirement arrangement which is subject to
Title I of ERISA and/or Section 4975 of the Code.
(c) Each beneficial owner of a Class M-1, Class M-2, Class B-1 or Class B-2
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) such Certificate is rated at least "BBB-" or its equivalent by
Fitch, S&P or Xxxxx'x, (ii) such beneficial owner is not a Plan or investing
with "plan assets" of any Plan, or (iii) (1) it is an insurance company, (2) the
source of funds used to acquire or hold the certificate or interest therein is
an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.
(d) None of the Trustee, the Master Servicer, or the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of Sections (a), (b) or (c) 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 Master
Servicer and the Securities Administrator from and against any and all
liabilities, claims, costs or expenses incurred by the Trustee, the Master
Servicer or the Securities Administrator as a result of such attempted or
purported transfer. The Trustee shall have no liability for transfer of any such
Global Certificates in or through book-entry facilities of any Depository or
between or among Depository Participants or Certificate Owners made in violation
of the transfer restrictions set forth herein.
Section 5.08 Rule 144A Information. For so long as any Private Certificates
are outstanding, (1) the Depositor will provide or cause to be provided to any
holder of such Private 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 Private Certificates conducted in accordance with Rule 144A.
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ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates. (a)On each Distribution
Date, an amount equal to the Interest Funds and Principal Funds for such
Distribution Date shall be withdrawn by the Trustee from the Distribution
Account to the extent of funds on deposit therein and distributed as directed in
accordance with distribution instructions provided to it by the Securities
Administrator for such Distribution Date, in the following order of priority:
First, Interest Funds will be distributed, in the following manner and
order of priority:
1. From Interest Funds in respect of:
(a) Loan Group I, to the Class I-A Certificates, the Current
Interest and then any Interest Carry Forward Amount for such Class;
and
(b) Loan Group II, to the Class II-A Certificates, the Current
Interest and then any Interest Carry Forward Amount for
such Class;
2. From remaining Interest Funds in respect of:
(a) Loan Group I, to the Class II-A Certificates, the Current
Interest and any Interest Carry Forward Amount for such Class to the
extent not paid in clauses 1(b) above; and
(b) Loan Group II, to the Class I-A Certificates, the Current
Interest and any Interest Carry Forward Amount for such Class to the
extent not paid in clauses 1(a) above;
3. From remaining Interest Funds in respect of both Loan Groups, to
the Class M-1, the Class M-2, Class B-1 and Class B-2 Certificates,
sequentially, in that order, the Current Interest for each such Class;
4. Any Excess Spread, to the extent necessary to cause the
Overcollateralization Amount to equal to the Overcollateralization Target
Amount, will be the Extra Principal Distribution Amount and will be
included as part of the Principal Distribution Amount and distributed in
accordance with second (A) and (B) below; and
5. Any Remaining Excess Spread will be applied as Excess Cashflow
pursuant to clauses Third through Twelfth below.
On any Distribution Date, any shortfalls resulting from the application of
the Relief Act and any Prepayment Interest Shortfalls to the extent not covered
by Compensating Interest Payments will be allocated as set forth in the
definition of Current Interest herein.
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Second, to pay as principal on the Certificates entitled to payments of
principal, in the following order of priority:
(A) For each Distribution Date (i) prior to the Stepdown Date or (ii) on
which a Trigger Event is in effect, from the Principal Funds and the Extra
Principal Distribution Amount for such Distribution Date:
1. (a) To the Class I-A Certificates, an amount equal to the Group I
Principal Distribution Amount will be distributed until the Certificate
Principal Balance thereof is reduced to zero; and
(b) To the Class II-A Certificates, an amount equal to the Group
II Principal Distribution Amount will be distributed until the Certificate
Principal Balance thereof is reduced to zero;
2. To the Class M-1 Certificates, any remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero;
3. To the Class M-2 Certificates, any remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero;
4. To the Class B-1 Certificates, any remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero; and
5. To the Class B-2 Certificates, any remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero;
(B) For each Distribution Date on or after the Stepdown Date, so long as a
Trigger Event is not in effect, from the Principal Funds and the Extra
Principal Distribution Amount for such Distribution Date:
1. (a) To the Class I-A Certificates, an amount equal to the Class
I-A Principal Distribution Amount will be distributed, until the
Certificate Principal Balance thereof is reduced to zero; and
(b) To the Class II-A Certificates, an amount equal to the Class
II-A Principal Distribution Amount will be distributed, until the
Certificate Principal Balance thereof is reduced to zero;
2. To the Class M-1 Certificates, from any remaining Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, until
the Certificate Principal Balance thereof is reduced to zero;
3. To the Class M-2 Certificates, from any remaining Principal
Distribution Amount, the Class M-2 Principal Distribution Amount, until
the Certificate Principal Balance thereof is reduced to zero;
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4. To the Class B-1 Certificates, from any remaining Principal
Distribution Amount, the Class B-1 Principal Distribution Amount, until
the Certificate Principal Balance thereof is reduced to zero; and
5. To the Class B-2 Certificates, from any remaining Principal
Distribution Amount, the Class B-2 Principal Distribution Amount, until
the Certificate Principal Balance thereof is reduced to zero.
Notwithstanding the provisions of clauses Second (A) and (B) above, if on
any Distribution Date the Certificates in a Certificate Group are no longer
outstanding, the portion of the Principal Distribution Amount or the related
Class A Principal Distribution Amount, as applicable, otherwise allocable to
such Certificate Group will be distributed to the Class of Certificates in the
other Certificate Group until the Certificate Principal Balance of each such
Class is reduced to zero.
Third, from any remaining Excess Cashflow, the following amounts to the
Class A Certificates, pro rata among the Classes based on the amount due: (a)
any Interest Carry Forward Amount to the extent not paid pursuant to clause
First 1 and 2 above and then (b) any Unpaid Realized Loss Amount, in each case
for such Class for such Distribution Date;
Fourth, from any remaining Excess Cashflow, the following amounts to the
Class M-1 Certificates: (a) any Interest Carry Forward Amount and then (b) any
Unpaid Realized Loss Amount, in each case for such Class for such Distribution
Date;
Fifth, from any remaining Excess Cashflow, the following amounts to the
Class M-2 Certificates: (a) any Interest Carry Forward Amount and then (b) any
Unpaid Realized Loss Amount, in each case for such Class for such Distribution
Date;
Sixth, from any remaining Excess Cashflow, the following amounts to the
Class B-1 Certificates: (a) any Interest Carry Forward Amount and then (b) any
Unpaid Realized Loss Amount, in each case for such Class for such Distribution
Date;
Seventh, from any remaining Excess Cashflow, the following amounts to the
Class B-2 Certificates: (a) any Interest Carry Forward Amount and then (b) any
Unpaid Realized Loss Amount, in each case for such Class for such Distribution
Date;
Eighth, from any remaining Excess Cashflow, to each Class of Class A
Certificates, any Basis Risk Shortfall and any Basis Risk Shortfall Carryforward
Amount for each such Class for such Distribution Date, pro rata based on the
Basis Risk Shortfall and Basis Risk Shortfall Carryforward Amount owed to such
Class;
Ninth, from any remaining Excess Cashflow, to the Class M-1, Class M-2,
Class B-1 and Class B-2 Certificates, in that order, any Basis Risk Shortfall
and any Basis Risk Shortfall Carryforward Amount, in each case for such Class
for such Distribution Date;
Tenth, from any remaining Excess Cashflow, to the Class B-IO Certificates,
the Class B-IO Distribution Amount;
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Eleventh, from any remaining Excess Cashflow, to the Class B-IO
Certificates, any unreimbursed Class B-IO Advanced Amounts; and
Twelfth, any remaining amounts to the Residual Certificates.
All payments of amounts in respect of Basis Risk Shortfall or Basis Risk
Shortfall Carryforward Amount made pursuant to the provisions of this paragraph
(a) shall, for federal income tax purposes, be deemed to have been distributed
from REMIC III to the holder of the Class B-IO Certificates and then paid
outside of any 2004-8 REMIC to the recipients thereof pursuant to an interest
rate cap contract. By accepting their Certificates the holders of the
Certificates agree so to treat such payments for purposes of filing their income
tax returns.
(b) On each Distribution Date, the related Cap Contract Payment Amount with
respect to such Payment Date shall be distributed in the following order of
priority, in each case to the extent of amounts available:
(i) first, to the holders of the related Class of Certificates, the
payment of any Basis Risk Shortfall or Basis Risk Shortfall Carry Forward
Amount for such Distribution Date, to the extent not covered by Excess
Cashflow for such Distribution Date;
(ii) second, from any remaining amounts, the payment of an amount
equal to any Current Interest and Interest Carry Forward Amount for the
related Class of Certificates to the extent not covered by Interest Funds
or Excess Cashflow on such Distribution Date;
(iii) third, from any remaining amounts, available from the Cap
Contracts relating to the Class I-A Certificates and Class II-A
Certificates, to the Class M-1, the Class M-2, the Class B-1 and the Class
B-2 Certificates, in that order, to the extent not paid pursuant to clauses
(i) or (ii) above; and
(iv) to the Class B-IO Certificates, any remaining amount.
All Cap Contract Payment Amounts made with respect to Current Interest and
Interest Carry Forward Amounts will be treated, for federal income tax purposes,
as reimbursable advances ("Class B-IO Advances") made from the holder of the
Class B-IO Certificates. Such Class B-IO Advances will be paid back to the
holder of the Class B-IO Certificate pursuant to Section 6.01(a).
(c) On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Prepayment Charge Loans received during the related Prepayment
Period will be withdrawn from the Distribution Account and distributed by the
Trustee to the Class XP Certificates and shall not be available for distribution
to the holders of any other Class of Certificates. The payment of such
Prepayment Charges shall not reduce the Certificate Principal Balance of the
Class XP Certificates. In addition, as provided in Section 4.07 hereof, on the
Distribution Date immediately following the Prepayment Period in which the last
Prepayment Charge is collectible on the Prepayment Charge Loans, which
Prepayment Period is the month of June 2010, the Trustee shall distribute the
amount on deposit in the Class XP Reserve Account to
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the Class XP Certificates in reduction of the Certificate Principal Balance
thereof until the Certificate Principal Balance thereof is reduced to zero.
(d) The expenses and fees of the Trust shall be paid by each of the 2004-8
REMICs, to the extent that such expenses relate to the assets of each of such
respective 2004-8 REMICs, and all other expenses and fees of the Trust shall be
paid pro rata by each of the 2004-8 REMICs.
Section 6.02 Allocation of Losses; Subsequent Recoveries. (a) On or prior
to each Determination Date, the Master Servicer shall determine the amount of
any Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month. Any Realized Losses with respect to the
Mortgage Loans shall be applied on each Distribution Date after the
distributions provided for in Section 6.01, in reduction of the Certificate
Principal Balance of the Class or Classes of Certificates to the extent provided
in the definition of Applied Realized Loss Amount.
(b) In addition, in the event that the Master Servicer receives any
Subsequent Recoveries from a Servicer, the Master Servicer shall deposit such
funds into the Master Servicer Collection Account pursuant to Section
4.01(c)(ii). If, after taking into account such Subsequent Recoveries, the
amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries
will be applied to increase the Certificate Principal Balance of the Class of
Subordinate Certificates with the highest payment priority to which Applied
Realized Loss Amounts have been allocated, but not by more than the amount of
Applied Realized Loss Amounts previously allocated to that Class of Subordinate
Certificates. The amount of any remaining Subsequent Recoveries will be applied
to sequentially increase the Certificate Principal Balance of the Subordinate
Certificates, beginning with the Class of Subordinate Certificates with the next
highest payment priority, up to the amount of such Applied Realized Loss Amounts
previously allocated to such Class or Classes of Certificates. Holders of such
Certificates will not be entitled to any payments in respect of Current Interest
on the amount of such increases for any Interest Accrual Period preceding the
Distribution Date on which such increase occurs. Any such increases shall be
applied to the Certificate Principal Balance of each Subordinate Certificate of
such Class in accordance with its respective Fractional Undivided Interest.
Section 6.03 Payments. (a)On each Distribution Date, other than the final
Distribution Date, the Trustee shall distribute to each Certificateholder of
record 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.
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(b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Trustee on or
before the fifth Business Day preceding the Record Date of written instructions
from a Certificateholder by wire transfer to a United States dollar account
maintained by the payee at any United States depository institution with
appropriate facilities for receiving such a wire transfer; provided, however,
that the final payment in respect of each Class of Certificates will be made
only upon presentation and surrender of such respective Certificates at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final payment.
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 Certificate Principal
Balance of $1,000, in the case of the Class B-IO Certificates, a Notional Amount
of $1,000:
(i) the Certificate Principal Balance or Notional Amount of each Class
of Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on each
applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related Interest
Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to interest
at the related Pass-Through Rate necessary to account for any difference
between interest accrued and aggregate interest distributed with respect to
each Class of Certificates;
(v) the amount of the distribution allocable to interest on each Class
of Certificates;
(vi) the Pass-Through Rates for each Class of Certificates with
respect to such Distribution Date;
(vii) the Certificate Principal Balance 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 Servicer or the
Master Servicer included in such distribution, separately stated for each
Loan Group;
(ix) the aggregate amount of any Realized Losses (listed separately
for each category of Realized Loss and for each Loan Group) during the
related Prepayment Period and cumulatively since the Cut-off Date and the
amount and source (separately identified) of any distribution in respect
thereof included in such distribution;
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(x) with respect to each Mortgage Loan which incurred a Realized Loss
during the related Prepayment Period, (i) the loan number, (ii) the Stated
Principal Balance of such Mortgage Loan as of the Cut-off Date, (ii) the
Stated Principal Balance of such Mortgage Loan for such Distribution Date,
(iii) the Net Liquidation Proceeds with respect to such Mortgage Loan and
(iv) the amount of the Realized Loss with respect to such Mortgage Loan;
(xi) with respect to each Loan Group, the amount of Scheduled
Principal and Principal Prepayments, (including but separately identifying
the principal amount of principal prepayments, Insurance Proceeds, the
purchase price in connection with the purchase of Mortgage Loans, cash
deposits in connection with substitutions of Mortgage Loans and Net
Liquidation Proceeds) and the number and principal balance of Mortgage
Loans purchased or substituted for during the relevant period and
cumulatively since the Cut-off Date;
(xii) the number of Mortgage Loans (excluding REO Property) in each
Loan Group remaining in the Trust Fund as of the end of the related
Prepayment Period;
(xiii)information for each Loan Group in the aggregate regarding any
Mortgage Loan delinquencies as of the end of the related Prepayment Period,
including the aggregate number and aggregate Outstanding Principal Balance
of Mortgage Loans (a) delinquent 30 to 59 days on a contractual basis, (b)
delinquent 60 to 89 days on a contractual basis, and (c) delinquent 90 or
more days on a contractual basis, in each case as of the close of business
on the last Business Day of the immediately preceding month;
(xiv) for each Loan Group the number of Mortgage Loans in the
foreclosure process as of the end of the related Due Period and the
aggregate Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group the number and aggregate Outstanding
Principal Balance of all Mortgage Loans as to which the Mortgaged Property
was REO Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal Balance
of the Mortgage Loan, (B) accrued interest through the date of foreclosure
and (C) foreclosure expenses) of any REO Property in each Loan Group;
provided that, in the event that such information is not available to the
Securities Administrator on the Distribution Date, such information shall
be furnished promptly after it becomes available;
(xvii)the amount of Realized Losses allocated to each Class of
Certificates since the prior Distribution Date and in the aggregate for all
prior Distribution Dates;
(xviii) the Interest Carry Forward Amount and any Basis Risk Shortfall
Carry Forward Amount for each Class of Certificates;
(xix) the amount of such distribution to Holders of each Class
allocable to interest and the portion thereof, if any, provided by the Cap
Contracts;
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(xx) the cumulative amount of Applied Realized Loss Amounts to date;
and
(xxi) whether a Trigger Event exists.
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.
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) Within a reasonable period of time after the end of the preceding
calendar year beginning in 2005, the Trustee will furnish such report to each
Holder of the Certificates of record at any time during the prior calendar year
as to the aggregate of amounts reported pursuant to subclauses (a)(ii) and
(a)(v) above with respect to the Certificates, plus information with respect to
the amount of servicing compensation and such other customary information as the
Securities Administrator may determine and advises the Trustee to be necessary
and/or to be required by the Internal Revenue Service or by a federal or state
law or rules or regulations to enable such Holders to prepare their tax returns
for such calendar year. Such obligations shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Securities Administrator or the Trustee pursuant to the requirements of the
Code.
Section 6.05 Monthly Advances. If the Scheduled Payment on a Mortgage Loan
that was due on a related Due Date and is Delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account which will be used for an
advance with respect to such Mortgage Loan, the Master Servicer will deposit in
the Master Servicer Collection Account not later than the Distribution Account
Deposit Date immediately preceding the related Distribution Date an amount equal
to such deficiency, net of the Servicing Fee for such Mortgage Loan except to
the extent the Master
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Servicer determines any such advance to be a Nonrecoverable Advance. Subject to
the foregoing, the Master Servicer shall continue to make such advances through
the date that the related Servicer is required to do so under its Servicing
Agreement. If the Master Servicer deems an advance to be a Nonrecoverable
Advance, on the Distribution Account Deposit Date, the Master Servicer shall
present an Officer's Certificate to the Trustee (i) stating that the Master
Servicer elects not to make a Monthly Advance in a stated amount and (ii)
detailing the reason it deems the advance to be a Nonrecoverable Advance.
Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the sum
of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to Prepayment Interest Shortfalls for the
related Distribution Date, and not so paid by the related 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.
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.
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.
Any Person into which the Master Servicer may be merged or consolidated, or
any corporation resulting from any merger or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 7.03 Indemnification of the Trustee, the Master Servicer and the
Securities Administrator. (a)The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, the Servicing Agreements, the
Assignment Agreements or the Certificates or the powers of attorney delivered by
the Trustee hereunder (i) related to the
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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 Trustee shall have given the Master Servicer and the Depositor written
notice thereof promptly after the Trustee shall have with respect to such claim
or legal action knowledge thereof. The Trustee's failure to deliver any such
notice shall not affect the Trustee's right to indemnification hereunder, except
to the extent the Master Servicer is materially prejudiced by such failure to
give notice. This indemnity shall survive the resignation or removal of the
Trustee, Master Servicer or the Securities Administrator and the termination of
this Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Section (a) above.
Section 7.04 Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee
or agent of the Master Servicer or the Custodian shall be indemnified by the
Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of
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reckless disregard of obligations and duties hereunder or under the Custodial
Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall
be entitled to be reimbursed therefor out of the Master Servicer Collection
Account as provided by Section 4.03. Nothing in this Section 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(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required 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 which shall be qualified to service mortgage
loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; (iii) the Master Servicer assigning and selling the
master servicing shall deliver to the Trustee an Officer's Certificate and an
Opinion of Independent Counsel addressed to the Trustee, each stating that all
conditions precedent to such action under this Agreement have been completed and
such action is permitted by and complies with the terms of this Agreement; and
(iv) in the event the Master Servicer is terminated without cause by EMC, EMC
shall pay the terminated Master Servicer a termination fee equal to 0.25% of the
aggregate Stated Principal Balance of the Mortgage Loans at the time the master
servicing of the Mortgage Loans is transferred to the successor Master Servicer.
No such assignment or delegation shall affect any liability of the Master
Servicer arising prior to the effective date thereof.
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ARTICLE VIII
Default
Section 8.01 Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to
this Agreement (other than a Monthly Advance), and such failure continues
unremedied for a period of three Business Days after the date upon which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any material
respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues
unremedied for a period of 60 days after the date on which written notice
of such failure, properly requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or to the Master Servicer
and the Trustee by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order is unstayed and in
effect for a period of 60 consecutive days, or an involuntary case is
commenced against the Master Servicer under any applicable insolvency or
reorganization statute and the petition is not dismissed within 60 days
after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to the Master Servicer or substantially all of its property; or the Master
Servicer admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable insolvency
or reorganization statute, makes an assignment for the benefit of its
creditors, or voluntarily suspends payment of its obligations;
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07; or
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(vi) The Master Servicer fails to deposit, or cause to be deposited,
in the Distribution Account any Monthly Advance (other than a
Nonrecoverable Advance) by 5:00 p.m. New York City time on the Distribution
Account Deposit Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of 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 the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in clause
(vi) of this Section 8.01 shall occur, the Trustee shall, by notice in writing
to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance, the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
prior to the distribution on the relevant Distribution Date.
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Section 8.02 Trustee to Act; Appointment of Successor. (a)Upon the receipt
by the Master Servicer of a notice of termination pursuant to Section 8.01 or an
Opinion of Independent Counsel pursuant to Section 7.05 to the effect that the
Master Servicer is legally unable to act or to delegate its duties to a Person
which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; provided, however, that 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 compensation which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act hereunder, except for those amounts due the Master Servicer as
reimbursement permitted under this Agreement for advances previously made or
expenses previously incurred. Notwithstanding the above, the Trustee may, if it
shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution which is a Xxxxxx Mae- or
Xxxxxxx Mac-approved servicer, and with respect to a successor to the Master
Servicer only, having a net worth of not less than $10,000,000, as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the Trustee shall obtain a letter from each Rating Agency that
the ratings, if any, on each of the Certificates will not be lowered as a result
of the selection of the successor to the Master Servicer. Pending appointment of
a successor to the Master Servicer hereunder, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on the Mortgage Loans as it and such successor shall
agree; provided, however, that the provisions of Section 7.06 shall apply, the
compensation shall not be in excess of that to which the Master Servicer would
have been entitled to if the Master Servicer had continued to act hereunder, and
that such successor shall undertake and assume the obligations of the Trustee to
pay compensation to any third Person acting as an agent or independent
contractor in the performance of master servicing responsibilities hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
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
actually known to a Responsible Officer of the Trustee, unless such Event of
Default shall have been cured, notice of each such Event of Default. The Holders
of Certificates evidencing Fractional Undivided Interests aggregating not less
than 51% of the Trust Fund may, on behalf of all Certificateholders, waive any
default by the Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made any required distribution on the Certificates, which default may only
be waived by Holders of Certificates evidencing Fractional Undivided Interests
aggregating 100% of the Trust Fund. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.
Section 8.05 List of Certificateholders. Upon written request of three or
more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Trustee will afford such Certificateholders access during business hours to the
most recent list of Certificateholders held by the Trustee.
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ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee. (a)The Trustee, prior to the occurrence of
an Event of Default and after the curing or waiver of all Events of Default
which may have occurred, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. If an Event of Default has occurred and has not been cured or
waived, the Trustee shall exercise such of the rights and powers vested in it by
this Agreement, and subject to Section 8.02(b) use the same degree of care and
skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished hereunder; provided, further, that neither the Trustee nor
the Securities Administrator shall be responsible for the accuracy or
verification of any calculation provided to it pursuant to this Agreement.
(c) On each Distribution Date, the Trustee shall make monthly distributions
and the final distribution to the Certificateholders from funds in the
Distribution Account as provided in Sections 6.01 and 10.01 herein based solely
on the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
neither the Trustee nor the Securities Administrator shall be liable except
for the performance of their respective duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee or the
Securities Administrator and, in the absence of bad faith on the part of
the Trustee or the Securities Administrator, respectively, the Trustee or
the Securities Administrator, respectively, may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the requirements
of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer
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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;
(vii) None of the Securities Administrator, the Depositor, the Master
Servicer, EMC or the Trustee shall be responsible for the acts or omissions
of the other, it being understood that this Agreement shall not be
construed to render them partners, joint venturers or agents of one
another; and
(viii)Neither the Trustee nor the Securities Administrator shall be
required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require the
Trustee or the Securities Administrator to perform, or be responsible for
the manner of performance of, any of the obligations of the Master Servicer
under the Agreement, except during such time, if any, as the Trustee shall
be the successor to, and be vested with the rights, duties, powers and
privileges of, the Master Servicer in accordance with the terms of this
Agreement.
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(e) All funds received by the Master Servicer and the Trustee and required
to be deposited in the Master Servicer Collection Account or the Distribution
Account, as the case may be, pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(a) 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;
(b) 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;
(c) Neither the Trustee nor the Securities Administrator shall be under any
obligation to exercise any of the trusts or powers vested in it by this
Agreement, other than its obligation to give notices pursuant to this Agreement,
or to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the Certificateholders
pursuant to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby.
Nothing contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default of which a Responsible Officer of the
Trustee has actual knowledge (which has not been cured or waived), 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;
(d) Prior to the occurrence of an Event of Default hereunder and after the
curing or waiver of all Events of Default which may have occurred, neither the
Trustee nor the Securities Administrator shall be liable in its individual
capacity for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(e) 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,
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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;
(f) The Trustee and the Securities Administrator may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or
through Affiliates, agents or attorneys; provided, however, that the Trustee may
not appoint any agent to perform its custodial functions with respect to the
Mortgage Files or paying agent functions under this Agreement without the
express written consent of the Master Servicer, which consent will not be
unreasonably withheld. Neither the Trustee nor the Securities Administrator
shall be liable or responsible for the misconduct or negligence of any of the
Trustee's or the Securities Administrator's agents or attorneys or a custodian
or paying agent appointed hereunder by the Trustee or the Securities
Administrator with due care and, when required, with the consent of the Master
Servicer;
(g) Should the Trustee or the Securities Administrator deem the nature of
any action required on its part, other than a payment or transfer under Section
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;
(h) The right of the Trustee or the Securities Administrator to perform any
discretionary act enumerated in this Agreement shall not be construed as a duty,
and neither the Trustee nor the Securities Administrator shall be accountable
for other than its negligence or willful misconduct in the performance of any
such act;
(i) 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 Section 9.07; and
(j) Neither the Trustee nor the Securities Administrator shall have any
duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Mortgage Loan by the Seller pursuant
to the Mortgage Loan Purchase Agreement or this 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 and countersignature of the Trustee 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
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representation as to the validity or sufficiency of the Certificates (other
than the signature and countersignature of the Trustee on the Certificates) or
of any Mortgage Loan except as expressly provided in Sections 2.02 and 2.05
hereof; provided, however, that the foregoing shall not relieve the Trustee of
the obligation to review the Mortgage Files pursuant to Sections 2.02 and 2.04.
The Trustee's signature and countersignature (or countersignature of its agent)
on the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
Neither the Trustee nor 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 filed by the Trustee pursuant to Section
3.20.
Section 9.04 Trustee and Securities Administrator May Own Certificates. The
Trustee and the Securities Administrator in its individual capacity or in any
capacity other than as Trustee hereunder may become the owner or pledgee of any
Certificates with the same rights it would have if it were not Trustee or the
Securities Administrator, as applicable, and may otherwise deal with the parties
hereto.
Section 9.05 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 between the Trustee and the
Master Servicer. In addition, the Trustee and the Securities Administrator will
be entitled to recover from the Master Servicer Collection Account pursuant to
Section 4.03 all reasonable out-of-pocket expenses, disbursements and advances
and the expenses of the Trustee and the Securities Administrator, respectively,
in connection with any Event of Default, any breach of this Agreement or any
claim or legal action (including any pending or threatened claim or legal
action) incurred or made by the Trustee or the Securities Administrator,
respectively, in the administration of the trusts hereunder (including the
reasonable compensation, expenses and disbursements of its counsel) except any
such expense, disbursement or advance as may arise from its negligence or
intentional misconduct or which is the responsibility of the Certificateholders.
If funds in the Master Servicer Collection Account are insufficient therefor,
the Trustee and the Securities Administrator shall recover such expenses from
the Depositor. 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.
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Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by Fitch with respect to their long-term
rating and rated "BBB" or higher by Standard & Poor's and "Baa2" or higher by
Moody's with respect to any outstanding long-term unsecured unsubordinated debt,
and, in the case of a successor Trustee or successor Securities Administrator
other than pursuant to Section 9.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies. If
the Trustee publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee or the Securities Administrator shall cease to be
eligible in accordance with the provisions of this Section 9.06, the Trustee or
the Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07 Insurance. The Trustee and the Securities Administrator, at
their own expense, shall at all times maintain and keep in full force and
effect: (i) fidelity insurance, (ii) theft of documents insurance and (iii)
forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance shall be
in amounts, with standard coverage and subject to deductibles, as are customary
for insurance typically maintained by banks or their affiliates which act as
custodians for investor-owned mortgage pools. A certificate of an officer of the
Trustee or the Securities Administrator as to the Trustee's or the Securities
Administrator's, respectively, compliance with this Section 9.07 shall be
furnished to any Certificateholder upon reasonable written request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator. (a)The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Depositor and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, the successor Trustee or Securities Administrator, as applicable.
If no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator.
(b) If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Depositor or if at any time the
Trustee or the Securities Administrator shall
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become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or the Securities Administrator, as applicable, or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or the Securities Administrator, as applicable, or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor shall promptly remove the Trustee, or shall be
entitled to remove the Securities Administrator, as applicable, and appoint a
successor Trustee or Securities Administrator, as applicable, by written
instrument, in triplicate, one copy of which instrument shall be delivered to
each of the Trustee or Securities Administrator, as applicable, so removed, the
successor Trustee or Securities Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may at any time remove the
Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Depositor, the Master
Servicer, the Securities Administrator (if the Trustee is removed), the Trustee
(if the Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed. In the event that the
Trustee or Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee or
successor Securities Administrator, in excess of the amount paid to the
predecessor Trustee or predecessor Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
(a)Any successor Trustee or Securities Administrator appointed as provided in
Section 9.08 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Trustee or Securities Administrator an instrument accepting such
appointment hereunder. The resignation or removal of the predecessor Trustee or
Securities Administrator shall then become effective and such successor Trustee
or Securities Administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee or
Securities Administrator herein. The predecessor Trustee or Securities
Administrator shall after payment of its outstanding fees and expenses promptly
deliver to the successor Trustee or Securities Administrator, as applicable, all
assets and records of the Trust held by it hereunder, and the Depositor and the
predecessor Trustee or Securities Administrator, as applicable, shall execute
and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor
Trustee or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
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(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. EMC shall pay
the cost of any mailing by the successor Trustee or Securities Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee.
(a)Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 9.11, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor Trustee under Section 9.06 hereunder and
no notice to Certificateholders of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 9.08 hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee
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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, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with full
power and authority, to do any lawful act under or with respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
(g) No trustee under this Agreement shall be personally liable by reason of
any act or omission of another trustee under this Agreement. The Depositor and
the Trustee acting jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Section 9.12 Federal Information Returns and Reports to Certificateholders;
REMIC Administration. (a)For federal income tax purposes, the taxable year of
each 2004-8 REMIC shall be a calendar year and the Securities Administrator
shall maintain or cause the maintenance of the books of each such 2004-8 REMIC
on the accrual method of accounting.
(b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each 2004-8 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 mortgaged property that is abandoned or foreclosed, receipt of
mortgage interests in kind in a trade or business, a cancellation of
indebtedness, interest, original issue discount and market discount or premium
(using a constant prepayment assumption of 25% CPR). The Securities
Administrator will apply for an Employee
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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, 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 2004-8 REMIC (the "REMIC Reporting Agent"). The
Trustee shall make elections to treat each 2004-8 REMIC as a REMIC (which
elections shall apply to the taxable period ending December 31, 2003 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe, and as described by the Securities Administrator. The
Trustee shall sign all tax information returns filed pursuant to this Section
and any other returns as may be required by the Code. The Holder of the largest
percentage interest in the Class R-I Certificate is hereby designated as the
"Tax Matters Person" (within the meaning of Treas. Reg. "1.860F-4(d)) for REMIC
I, the Holder of the largest percentage interest in the Class R-II Certificate
is hereby designated as the "Tax Matters Person" for REMIC II and the Holder of
the largest percentage interest in the Class R-III Certificate is hereby
designated as the "Tax Matters Person" for REMIC III. The Securities
Administrator is hereby designated and appointed as the agent of each such Tax
Matters Person. Any Holder of a Residual Certificate will by acceptance thereof
appoint the Securities Administrator as agent and attorney-in-fact for the
purpose of acting as Tax Matters Person for each 2004-8 REMIC during such time
as the Securities Administrator does not own any such Residual Certificate. In
the event that the Code or applicable Treasury regulations prohibit the Trustee
from signing tax or information returns or other statements, or the Securities
Administrator from acting as agent for the Tax Matters Person, the Trustee and
the Securities Administrator shall take whatever action that in its sole good
faith judgment is necessary for the proper filing of such information returns or
for the provision of a tax matters person, including designation of the Holder
of the largest percentage interest in a Residual Certificate to sign such
returns or act as tax matters person. Each Holder of a Residual Certificate
shall be bound by this Section.
(c) The Securities Administrator shall provide upon request and receipt of
reasonable compensation, such information as required in Section 860D(a)(6)(B)
of the Code to the Internal Revenue Service, to any Person purporting to
transfer a Residual Certificate to a Person other than a transferee permitted by
Section 5.05(b), and to any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate, organization described in
Section 1381 of the Code, or nominee holding an interest in a pass-through
entity described in Section 860E(e)(6) of the Code, any record holder of which
is not a transferee permitted by Section 5.05(b) (or which is deemed by statute
to be an entity with a disqualified member).
(d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue
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discount on the Mortgage Loans, that the Trustee or the Securities Administrator
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants and the Securities Administrator's covenants, respectively,
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.
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ARTICLE X
Termination
Xxxxxxx 00.00 Xxxxxxxxxxx Xxxx Xxxxxxxxxx by EMC or its Designee or
Liquidation of the Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities of the Depositor, the Trustee, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate upon:
(i) the repurchase by or at the direction of EMC or its designee of
all 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 EMC, (c) unreimbursed out-of
pocket costs of the Master Servicer, including unreimbursed servicing
advances and the principal portion of any unreimbursed Monthly Advances,
made on the Mortgage Loans prior to the exercise of such repurchase right
and (d) any unreimbursed costs and expenses of the Trustee and the
Securities Administrator payable pursuant to Section 9.05;
(ii) the later of 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 or 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 EMC or its designee to repurchase all the assets of the
Trust Fund described in Section 10.01(a)(i) above shall be exercisable only if
(i) the aggregate Stated Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than 20% of the Cut-off Date Balance or (ii) the
Depositor, based upon an Opinion of Counsel, has determined that the REMIC
status of any 2004-8 REMIC 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 any 2004-8 REMIC at any time, and upon such election, the Depositor or
its designee, shall purchase in accordance with Section 10.01(a)(i) above all
the assets of the Trust Fund.
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the l5th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Trustee therein specified.
(e) If the option of EMC to repurchase or cause the repurchase of all
assets of the Trust Fund described in Section 10.01(a)(i) above is exercised,
EMC and/or its designee shall deliver to the Trustee for deposit in the
Distribution Account, by the Business Day prior to the applicable Distribution
Date, an amount equal to the Termination Purchase Price. Upon presentation and
surrender of the Certificates by the Certificateholders, the Trustee shall
distribute to the Certificateholders an amount determined as follows: with
respect to each Certificate (other than the Class R Certificates), the
outstanding Certificate Principal Balance, plus with respect to each Certificate
(other than the Class R Certificates), one month's interest thereon at the
applicable Pass-Through Rate; and with respect to the Class R Certificates, the
percentage interest evidenced thereby multiplied by the difference, if any,
between the above described repurchase price and the aggregate amount to be
distributed to the Holders of the Certificates (other than the Class R
Certificates). If the proceeds with respect to the Mortgage Loans are not
sufficient to pay all of the Senior Certificates in full, any such deficiency
will be allocated first, to the Subordinate Certificates, in inverse order of
their numerical designation, and then to the Senior Certificates. Upon deposit
of the required repurchase price and following such final Distribution Date, the
Trustee shall release promptly to EMC and/or its designee the Mortgage Files for
the remaining applicable Mortgage Loans, and the Accounts with respect thereto
shall terminate, subject to the Trustee's obligation to hold any amounts payable
to Certificateholders in trust without interest pending final distributions
pursuant to Section 10.01(g). Any other amounts remaining in the Accounts will
belong to EMC.
(f) In the event that this Agreement is terminated by reason of the payment
or liquidation of all Mortgage Loans or the disposition of all property acquired
with respect to all Mortgage Loans under Section 10.01(a)(ii) above, the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
all distributable amounts remaining in the Master
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Servicer Collection Account. Upon the presentation and surrender of the
Certificates, the Trustee shall distribute to the remaining Certificateholders,
pursuant to the written direction of the Securities Administrator and in
accordance with their respective interests, all distributable amounts remaining
in the Distribution Account. Upon deposit by the Master Servicer of such
distributable amounts, and following such final Distribution Date, the Trustee
shall release promptly to EMC or its designee the Mortgage Files for the
remaining Mortgage Loans, and the Master Servicer Collection Account and the
Distribution Account shall terminate, subject to the Trustee's obligation to
hold any amounts payable to the Certificateholders in trust without interest
pending final distributions pursuant to this Section 10.01(f).
(g) If not all of the Certificateholders shall surrender their Certificates
for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02 Additional Termination Requirements. (a)If the option of EMC
to repurchase all the Mortgage Loans under Section 10.01(a)(i) above is
exercised, the Trust Fund and each 2004-8 REMIC shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been furnished with an Opinion of Counsel addressed to the Trustee to the effect
that the failure of the Trust to comply with the requirements of this Section
10.02 will not (i) result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code on each 2004-8 REMIC or
(ii) cause any 2004-8 REMIC to fail to qualify as a 2004-8 REMIC at any time
that any Regular Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date, at the
written direction of EMC, the Trustee, as agent for the respective Tax
Matters Persons, shall adopt a plan of complete liquidation of each 2004-8
REMIC the case of a termination under Section 10.01(a)(i). Such plan, which
shall be provided to the Trustee by EMC, shall meet the requirements of a
"qualified liquidation" under Section 860F of the Code and any regulations
thereunder.
(ii) EMC 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 2004-8 REMIC and at or prior to the final Distribution
Date, the Trustee shall sell for cash all of the assets of the Trust to or
at the direction of EMC, and each 2004-8 REMIC, 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
2004-8 REMIC upon the written request of EMC, and to take such action in
connection therewith as may be reasonably requested by the Depositor and (ii)
appoint EMC 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 2004-8 REMIC. Upon complete liquidation or final distribution
of all of the assets of the Trust Fund, the Trust Fund and each 2004-8 REMIC
shall terminate.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties. The parties intend that each 2004-8 REMIC
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.
Notwithstanding any other express or implied agreement to the contrary, the
Depositor, the Master Servicer, the Securities Administrator, EMC, the Trustee,
each recipient of the related Prospectus Supplement and, by its acceptance
thereof, each holder of a Certificate, agrees and acknowledges that each party
hereto has agreed that each of them and their employees, representatives and
other agents may disclose, immediately upon commencement of discussions, to any
and all persons the tax treatment and tax structure of the Certificates and the
2004-8 REMICs, the transactions described herein and all materials of any kind
(including opinions and other tax analyses) that are provided to any of them
relating to such tax treatment and tax structure except where confidentiality is
reasonably necessary to comply with the securities laws of any applicable
jurisdiction. For purposes of this paragraph, the terms "tax treatment" and "tax
structure" have the meanings set forth in Treasury Regulation Sections
1.6011-4(c), 301.6111-2(c) and 301.6112-1(d).
Section 11.02 Amendment. (a) This Agreement may be amended from time to
time by the Company, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee, without notice to or the consent of any of the
Certificateholders, to (i) cure any ambiguity, (ii) correct or supplement any
provisions herein that may be defective or inconsistent with any other
provisions herein, (iii) conform any provisions herein to the provisions in the
Prospectus, (iv) comply with any changes in the Code or (v) make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; provided,
however, that with respect to clauses (iv) and (v) of this Section 11.02(a),
such action shall not, as evidenced by an Opinion of Independent Counsel,
addressed to the Trustee, adversely affect in any material respect the interests
of any Certificateholder.
(b) This Agreement may also be amended from time to time by the Company,
the Master Servicer, the Depositor, the Securities Administrator and the
Trustee, with the consent of the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund or of the
applicable Class or Classes, if such amendment affects only such Class or
Classes, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding, or (iii) cause any 2004-8 REMIC to fail to
qualify as a REMIC for federal income tax purposes, as evidenced by an Opinion
of Independent Counsel addressed to the Trustee which shall be provided to the
Trustee other than at the Trustee's expense. Notwithstanding any other provision
of this Agreement, for purposes of the giving or withholding of consents
pursuant to this Section 11.02(b), Certificates registered in the name of or
held for the benefit of the Depositor,
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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 Section 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 addressed to
the Trustee stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee and the Securities Administrator may,
but shall not be obligated to, enter into any such amendment which affects the
Trustee's or the Securities Administrator's own respective rights, duties or
immunities under this Agreement.
Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation, at the expense of the Trust upon the request in
writing of a Certificateholder, but only if such direction is accompanied by an
Opinion of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.
Section 11.04 Limitation on Rights of Certificateholders. (a)The death or
incapacity of any Certificateholder shall not terminate this Agreement or the
Trust, nor entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to establish the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholders be under
any liability to any third Person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
119
(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 Master
Servicer, the Securities Administrator 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.
Section 11.05 Acts of Certificateholders. (a)Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Depositor. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the
Depositor, if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Securities Administrator, the Depositor, the Master Servicer nor
any successor to any such parties shall be affected by any notice to the
contrary.
120
(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.
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, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (iv) in
the case of the Master Servicer or Securities Administrator, Xxxxx Fargo Bank,
National Association, X.X. Xxx 00, Xxxxxxxx Xxxxxxxx 00000 (or, in the case of
overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000)
(Attention: XXXXXX 0000-0), xxxxxxxxx no.: (000) 000-0000, or such other address
as may hereafter be furnished to the other parties hereto in writing; or (v) in
the case of the Rating Agencies, Xxxxx'x Investors Service, Inc., 00 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., 55
000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000. Any notice delivered to the Depositor,
the Master Servicer, the Securities Administrator or the Trustee under this
Agreement shall be effective only upon receipt. Any notice required or permitted
to be mailed to a Certificateholder, unless otherwise provided herein, shall be
given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given when mailed, whether or not the Certificateholder receives
such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section headings
herein are for convenience of reference only, and shall not limited or otherwise
affect the meaning hereof. The Trustee shall promptly provide notice to each
Rating Agency with respect to each of the following of which a Responsible
Officer of the Trustee has actual knowledge:
1. Any material change or amendment to this Agreement or the Servicing
Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the Trustee or
the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection Account or
the Distribution Account.
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IN WITNESS WHEREOF, the Depositor, the Trustee, EMC, the Master Servicer
and the Securities Administrator have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Depositor
By: /s/ Xxxxx Xxxxxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxxxxx
Title:Vice President
JPMORGAN CHASE BANK, as Trustee
By: /s/Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title:Trust Officer
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/ Xxx Xxxxxxxx
--------------------------
Name: Xxx Xxxxxxxx
Title:Executive Vice President
123
Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)
in its capacity as Seller
EMC MORTGAGE CORPORATION
By: /s/ Xxx Xxxxxxxx
--------------------------
Name: Xxx Xxxxxxxx
Title:Executive Vice President
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of July, 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.
Notary Public
/s/ Xxxxxxxx Xxxxxxxx
[Notarial Seal]
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of July, 2004 before me, a notary public in and for said
State, personally appeared Xxxxx X. Xxxxxxx, known to me to be a Trust Officer
of JPMorgan Chase Bank, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
/s/ Xxxxxxxx X. Xxxxx
[Notarial Seal]
000
XXXXX XX XXXXXXXX )
) ss.:
COUNTY OF XXXXXX )
On the 30th day of July, 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.
Notary Public
/s/ Xxxxx X. Xxxxxx
[Notarial Seal]
000
XXXXX XX XXXXXXXX )
) ss.:
COUNTY OF XXXXXX )
On the 30th day of July, 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.
Notary Public
/s/ Xxxxx X. Xxxxxx
[Notarial Seal]
000
XXXXX XX XXXXX )
) ss.:
COUNTY OF DALLAS )
On the 30th day of July, 2004 before me, a notary public in and for said
State, personally appeared Xxx Xxxxxxxx, known to me to be an Executive Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
/s/ Xxxxxxx Xxxxxx
129
